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Impacts on Export Could Become More Apparent amid Trade Conflicts Continue

According to the external merchandise trade statistics released by the Census and Statistics Department of the Hong Kong SAR Government, the value of total exports of goods in July 2018 increased by 10.0% over a year earlier to HK$359.1 billion, after a year-on-year increase of 3.3% in June 2018.

Comparing July 2018 with July 2017, total exports to Asia as a whole grew by 10.6%. In this region, increases were registered in the values of total exports to most major destinations, in particular Malaysia (+44.0%), Vietnam (+23.3%), Mainland China (+12.8%), India (+11.2%) and Korea (+6.8%). Decreases were recorded in the values of total exports to Taiwan (-15.6%) and Japan (-7.5%). Apart from destinations in Asia, increases were registered in the values of total exports to some major destinations in other regions, in particular the US (+10.1%) and Germany (+1.8%). Concurrently, a decrease was registered in the value of total exports to the UK (-3.6%).

A Government spokesman commented that, looking ahead, downside risks in the external trading environment have increased markedly in recent months. While the impacts of the trade conflicts between Mainland China and the US on Hong Kong's export performance appeared to be limited so far, they could become more apparent later this year. Global economic growth will also be affected if the trade conflicts are to persist or escalate further.

Corporate Failures in Major Export Markets

Market2018
Q2
Change in 2018 Q2 over
same period last year (%)
201720162015
US5,479-13.923,09824,02724,636
UK3,483+13.015,67214,81912,861
Japan2,058-5.88,3768,2148,517
*Germany3,345+0.220,09321,51823,101

*Figures of June 2018 are not included for Germany.

Corporate failure cases in the US and Japan recorded a decrease of 13.9% and 5.5% respectively in the second quarter of 2018 when compared to the same period in 2017. However, corporate failure cases of the UK increased by 13.0%. A year-on-year increase of 0.2% was recorded for Germany in April to May 2018.

HKECIC Introduced Additional Special Enhanced Measures

In view of the escalating trade conflicts between the US and Mainland China, the HKECIC announced additional special enhanced measures on 19 September 2018, aiming to provide Hong Kong exporters, especially SMEs, with more support and protection amid the unpredictable trade issues and rising credit risks. The additional special enhanced measures are as follows:

  • Increase the discount on premium for Small Business Policy holders from current 20% to 30% [1].
  • Increase the credit limit on each US buyer by 20% to a maximum of HK$5 million for Small Business Policy holders [1]. 
  • The validity of the special enhanced measures (including 6 free buyer credit assessments and the offer of additional pre-shipment cover for free to Small Business Policy holders who are affected by the US tariff measures) which announced on 25 June 2018 will be extended to 30 June 2019.

Details of the additional special enhanced measures are available on the HKECIC Website.


[1] The above additional special enhanced measures are valid until 30 June 2019.

Content provided by Picture: Hong Kong Export Credit Insurance Corporation
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