World economic recovery continued to gain momentum in 2017 with GDP growth accelerating in most major economies. Hong Kong’s export performance rebounded well from a low base in most overseas markets. Rising consumer confidence and business confidence in the developed world have continued to support growth. Growth in the US has been driven by both private consumption and equipment investment. In the EU, economic growth has surpassed expectations, propelled by private consumption amid lowering unemployment, while investment has also showed signs of picking up thanks to low borrowing costs and the loose monetary stance of European central banks. Japanese economic growth also edged up, supported by stronger exports. In China, growth remained stable driven by both domestic and external demand; while the developing economies of Asia as a whole continued to be the world’s most dynamic region.

Against this background, Hong Kong’s total exports surged by 8.3% year-on-year in the period Jan-Oct 2017, following a decline of 0.5% for the whole of 2016. This rebound was broadly based across major markets. Amongst Hong Kong’s traditional markets, exports to the US, the EU and Japan all grew to varying degrees during the period Jan-Oct 2017. The rebound in exports to China and ASEAN may partly be due to intra-regional shipments picking up. As developed markets recovered, cross-border trade along the global value chains received a boost, thereby increasing Hong Kong exports to the Chinese mainland and ASEAN. There was also a rise in exports to the emerging European economies, Latin America and Africa, where economic performance was partly supported by the stabilising commodity market.

Electronics exports increased by 9.9% in the first 10 months of 2017, on top of a 2.5% increase in 2016. They constitute about 66% of Hong Kong’s total exports. Thanks to the surge in demand for electronic and video games, exports of toys were the biggest gainer, growing 30.1% in the first 10 months of 2017, while household electrical appliance exports also showed a significant increase of 8.8%. While exports of watches and clocks have showed signs of improvement in recent months, they still saw a dip of 5.3% over the period. Facing competition from other production bases, exports of clothing also recorded a decline.

Higher unit values of Hong Kong exports also contributed to the growing sales value. Although unit values fell 1.7% in 2016, they increased by 1.7% over the first nine months of 2017. Improving overseas demand, along with steadier commodity prices and continued rising labour costs on the mainland, served to support export prices.

Above is the abstract from the article "Hong Kong Export Outlook for 2018: Continued World Recovery Supports a Favourable Environment for Exports" , published by the Hong Kong Trade Development Council on 8 December 2017. To read the full article, please visit here.