Exports from Hong Kong will grow 5% year-on-year by value while the HKTDC Export Index has risen for three consecutive quarters from a record low of 16.0 to 36.2, said the Hong Kong Trade Development Council (HKTDC) recently.
In addition, about 60% of those surveyed quarterly for the index anticipate sales will increase or remain unchanged in the coming year, according to HKTDC.
While local businesses still have to contend with weakened global demand, disrupted supply chains and elevated protectionism, business operations are expected to begin to revert to a more normal level when the COVID-19 vaccine becomes available, allowing the world economy to stabilise and rebound, said HKTDC Director of Research Nicholas Kwan.
“Hong Kong exports have more room to grow with the new opportunities arising from China’s ‘dual circulation’ policy and the development of the Guangdong-Hong Kong-Macao Greater Bay Area, coupled with the implementation of a free trade agreement between Hong Kong and the Association of Southeast Asian Nations (ASEAN) bloc, and the Regional Comprehensive Economic Partnership (RCEP) which promotes inter-regional trade,” Kwan noted.
The HKTDC has also made an upward revision to its estimates for this year’s total exports, from -10% to -3%, attributing to improvement to exporters’ fast switch to online sales platform to connect with buyers.
Strongest rebound from jewellery
The HKTDC Export Index rose 11.1 points to 36.2 in the fourth quarter with a broad improvement across all major industries, HKTDC pointed out.
The organisation conducts a survey every quarter, interviewing 500 local exporters from six major industries including machinery, electronics, jewellery, watches and clocks, toys and clothing to gauge their business confidence on near-term export prospects.
The readings of the HKTDC Export Index indicate an optimistic or pessimistic outlook, with 50 as the dividing line.
The strongest rebound was seen in the jewellery sector, leaping from 20.1 to 33.0, said HKTDC Assistant Principal Economist (Greater China) Alice Tsang.
“However, the index remains in contraction territory, indicating that uncertainties have cast a shadow on the short-term export outlook,” she noted.
Among other issues, the survey showed that the pandemic (54.9%), declining global demand (23.8%) and escalated trade tensions between the US and China (9.6%) are the major concerns for Hong Kong exporters, she added.
In terms of major markets, Hong Kong exporters are more confident in China (48.4), Japan (47.3) and ASEAN (47.2), while the outlook for European Union (44.0) and the US (44.4) is less promising, survey results indicate.
Aside from the main index, all subsidiary indexes revealed an upward trend, showing signs of improvement in trade value, procurement and employment, HKTDC said.
Manufacturers show agility
More than 80% of survey respondents said they had been adversely affected by the pandemic over the past three months, with order-size reduction (56.9%), order cancellations (22.3%) and price bargaining (14.0%) cited as the most common downside factors. In response to these challenges, compared with last quarter, an increasing number of local exporters have cutunit prices (27.6%), downsized business (21.8%) or lowered the minimum order quantity (15.5%).
Meanwhile, Hong Kong companies have shown agility in finding new opportunities such as developing online sales channels (21.8%) and new product categories (13.8%), as well as expanding into the retail market in the mainland and diversifying sales to other overseas markets (3.8%), survey results indicate.
