General

According to customs data, in the first 10 months, the overall export value and import value of Hong Kong's goods fell by 4.4% and 3.7% respectively year on year, and the tangible trade deficit was 315.5 billion yuan (Hong Kong dollars, the same below), equivalent to 7.6% of the import value of goods.

According to customs data, Hong Kong's exports have fallen for six consecutive times. After a year-on-year decline of 9.1% in September, the decline in October expanded to double digits. The export fell 10.4% in a single month, with a value of 374.7 billion yuan.

The value of imported goods also accelerated to decline. The trade volume in October was 395.5 billion yuan, down 11.9% year on year, 4.1 percentage points more than the decline of 7.8% in September. The tangible trade deficit in a single month reached 20.9 billion yuan, equivalent to 5.3% of the value of imported goods.

A Hong Kong government spokesman said that Hong Kong's export performance would continue to be under great pressure in the future: "High inflation in major advanced economies and further tightening of monetary policy will continue to depress global demand in the short term."

Exports fell for six months in a row

As a highly export-oriented economy, exports are one of the three engines of Hong Kong's economy, and the local economic situation is closely related to the external environment. Once there is any disturbance in the periphery, Hong Kong will naturally find it difficult to "stand alone".

For a long time, the mainland has been Hong Kong's largest export and source of goods. According to customs data, in 2021, Hong Kong's imports and exports to the mainland will reach 5385.446 billion yuan, accounting for 52.45%.

Since this year, repeated outbreaks in the mainland have affected the import and export of goods with Hong Kong. Work stoppages in some cities have also led to a decrease in goods available for transit through Hong Kong.

According to customs data, Hong Kong's exports and imports of goods to the mainland fell 12.9% and 18.3% respectively in October; In the first 10 months, the total trade volume of the mainland was 390.551 billion yuan, down 9.86%.

The ports in the Greater Bay Area, which have close contact with Hong Kong, also showed different degrees of decline. In the first three quarters, imports and exports from Shenzhen and Dongguan to Hong Kong fell by 12.9% and 3.4% respectively; In the first 10 months, the import and export volume of Guangzhou and Foshan to Hong Kong decreased by 2.9% and 1.5% respectively.

In addition to the mainland, foreign trade to various regions in Asia has also generally declined. From January to October, the import and export volume to Japan was 293.027 billion yuan, down 8.72%; For South Korea, it was 315.688 billion yuan, down 2.75%.

Mapping of Hong Kong's foreign trade performance in the first 10 months: Interface News Great Bay Area

Asia's performance was sluggish, while Europe and the United States also fell back. According to customs data, Hong Kong's exports to Europe and the United States also showed a downward trend in October this year. Germany and the United States, in particular, fell 21.1% and 19.5% year on year.

Although Europe and the United States ushered in the "Black Friday" and Christmas sales season, it did not have a boost to local retail, and the demand for Chinese products slowed down.

According to the latest report "Shopping Trend in Peak Season" released by research company Pack and Retail Economics in October, the non food product expenditure this Christmas is expected to decrease by 43 billion pounds compared with last year. Among them, the countries that will reduce spending most are the United Kingdom (22%), Spain (14%) and Italy (12.3%).

The Shopping Trend in the Peak Season predicts that consumers will reduce their consumption during Black Friday and Christmas. It is estimated that the largest reduction in consumption category in Europe is clothing (26%); Followed by electronic products (22.3%), toys (20.9%) and household goods (19.8%).

According to the Huaxia Times, Christmas orders in the second half of the year were nearly 30% less than those in previous years. With the year end promotion approaching, toys and sports goods decreased by 45%, clothing by 38%, footwear by 20%, and consumer goods dropped significantly.

This also corresponds to the serious decline in Hong Kong's exports. In October this year, the export volume of communication, recording and audio equipment and instruments decreased by 15.5 billion yuan, down 22.7% year on year; The export volume of electric machinery, instruments and appliances and parts decreased by 9.5 billion yuan, down 5.1%.

High inflation, interest rate hikes by the Federal Reserve, tightening monetary policy and other factors are the main reasons for the cold on Black Friday and Christmas, which also put great pressure on Hong Kong's export performance.

Hong Kong Financial Secretary Chen Maobo also released a blog on September 25, saying that Hong Kong is an all-round open economy, which is bound to be affected in many ways in the face of peripheral economic conditions. The international financial market continues to fluctuate, and it is expected that Hong Kong's exports will be further pressured.

In addition, since the outbreak of the conflict between Russia and Ukraine, the United States, the European Union and the United Kingdom have successively launched trade sanctions against Russian energy and other commodities. In order to ensure food supply, more and more countries have taken measures to restrict the export of food and other foods.

Hong Kong, which is highly extroverted, is also affected by worsening peripheral factors. Since April, the volume of foreign trade transactions has been falling continuously. In August this year, the decline of Hong Kong's exports expanded to 14.3%, the worst performance since January 2020 (down 22.7%).

A spokesman for the Hong Kong government said that the value of commodity exports fell significantly year on year in October, despite the deterioration of the peripheral environment and the continued obstruction of cross-border land transport. Exports to the mainland, the United States and the European Union recorded double-digit declines, while exports to most other major Asian markets weakened.

Estimated negative GDP growth for the whole year

The inhibition of import and export also has a significant impact on local GDP.

Hong Kong's four pillar industries include trade and logistics, financial services, professional, industrial and commercial support services, and tourism. The latter two industries have not yet recovered from the severe impact of the epidemic. The decline of import and export trade directly affects the logistics industry and poses pressure on GDP.

According to the statistics of the Hong Kong Government Statistics Office, Hong Kong's GDP in the second and third quarters was 668.074 billion yuan and 689.915 billion yuan, down 1.3% and 4.5% year on year.

Over the same period, the import and export volume of goods also accelerated to decline. The export fell by 8.4% and 15.6% respectively in the two quarters, while the import fell by 5.9% and 16.1% respectively.

According to the third quarter of Hong Kong's GDP, the exports of goods and services in the second quarter and the third quarter (calculated by the quarter on quarter volume in 2020) were 1202.467 billion yuan and 1229.552 billion yuan respectively. The imports of goods and services were 1240938 million yuan and 1196741 million yuan respectively. From the performance of the third quarter, the current import and export trade is even worse than the same period when the epidemic broke out in 2020.

Chen Maobo said at the event on October 6 that Hong Kong's exports fell for four consecutive months due to the weakness of the peripheral economy. With the rising interest rate of Hong Kong, it is difficult for the local economy to perform well in the short term. It is estimated that it will record negative growth throughout the year.

Despite the decline in foreign trade, Chen Maobo stressed that Hong Kong still has many opportunities, such as the shift of the global economic center to the east, the steady development of China and the rapid economic development of the ten ASEAN countries, and the close relationship between Hong Kong and Asian countries.

It is worth noting that Hong Kong's foreign trade with ASEAN countries has risen against the trend this year. According to customs data, exports to Singapore and Vietnam increased by 23.5% and 17.4% respectively in the first 10 months; In terms of imports in the same period, Vietnam, Malaysia and the Philippines increased by 30.4%, 10.9% and 6.3%.

On November 29, the Hong Kong Customs and the Mainland Customs signed a memorandum of understanding on deepening the cooperation between the AEO (Economic Operators Recognized by the Customs) in the Guangdong Hong Kong Macao Greater Bay Area. At present, 80 Hong Kong local companies have obtained AEO certification, providing customs clearance convenience for goods worth 79 billion yuan, accounting for 8% of the total import and export value.

Qiu Yinghua, Director of the Hong Kong Commerce and Economic Bureau, pointed out that the AEO plan can facilitate the flow of legitimate goods, and will continue to support the customs to expand the mutual recognition network and promote the convenient flow of the Great Bay Area. In addition, the Commerce and Economic Council will strive to join RCEP as soon as possible, hoping to bring greater trade space to different industries in Hong Kong.

In addition, since the second half of the year, the Hong Kong government has relaxed the quarantine policy for inbound passengers to stimulate the export of services. The third quarter magazine showed that Hong Kong's service output in the third quarter totaled 132.043 billion yuan, an increase of more than 11 billion yuan compared with 120.751 billion yuan in the second quarter.