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Analysis: HK's First Half Trade Performance Remarkable
Hong Kong's external trade performance in the first half of 2000 was quite remarkable, and the prospect for the second quarter is also promising given China's impending entry into the World Trade Organization, an economist said in Beijing Tuesday.
Even allowing for the fact that the improvement was powered by a surge in demand for the mainland's re-export through Hong Kong, the notable trade rise was still a solid outcome, said Ian K Perkin, chief economist of the Hong Kong General Chamber of Commerce.
Giving an overall picture of Hong Kong's strong external trade performance, Perkin noted that in current dollar terms, both Hong Kong's exports and imports reached record levels in the opening six months of the year.
Export hit 721.2 billion HK dollars (92.46 billion US dollars), and imports soared to 769.9 billion HK dollars (98.7 billion US dollars), pipping the 1997 peak of 768 billion HK dollars (98.46 billion US dollars), he said.
Noting that the pace of growth for all segments in the first half was the best since 1995, Perkin said Hong Kong registered a 18.5 percent growth for the total exports, 19.8 percent for re-export, 9.8 percent for domestic exports and 21.5 percent for imports.
"The growth in re-export trade is hardly surprising given China 's own exports surged 38.3 percent to 114.5 billion US dollars in the opening six months and imports were up 36.2 percent to 102. 1 billion US dollars," said Perkin.
Given such a strong performance overall, it is hardly surprising that Hong Kong's Financial Secretary Donald Tsang Yam- kuen declared that the economy would "have a quite impressive performance" in the second quarter of the year, said Perkin. The economist also warned that it may be unfavorable factors for Hong Kong to maintain the pace of trade growth.
The pace of import growth is faster than total exports, so that the resulting higher merchandise deficit will become a drag on economic growth sometime in the near term future, despite the offsetting services trade surplus, he said.
"Much will depend on whether demand for the mainland goods is maintained in the US, Europe and the East Asia region in the coming months, especially if the US economy continues to slow after the normal summer lull is over," he added.
But the economist believed the imminent prospect of China's formal entry into the WTO could be enough to continue to boost Hong Kong and the Chinese trade during the remainder of this year and into 2001.
The prospect of a more open China in the near term as a result of China's WTO entry may encourage more traders from around the world to enter the Hong Kong market sooner than later to ensure their position ahead of the formal entry.
"This could help both exports from and imports to China moving through the Hong Kong Special Administrative Region, " he said.
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