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Slowing Economic Growth while Hong Kong’s Export Continues to be Under Pressure

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 January 2019 decreased by 0.4% over a year earlier to $348.7 billion, after a year-on-year decrease of 5.8% in December 2018.

Comparing January 2019 with January 2018, total exports to Asia as a whole dropped by 3.6%. In this region, decreases were registered in the values of total exports to some major destinations, in particular India (-35.2%), Taiwan (-18.6%), Vietnam (-7.9%) and Mainland China (-3.9%). On the other hand, increases were recorded in the values of total exports to Malaysia (+25.6%), the Philippines (+24.4%), Singapore (+17.9%) and Thailand (+14.5%). Apart from destinations in Asia, decreases were registered in the values of total exports to some major destinations in other regions, in particular the US (-5.8%) and Germany (-1.1%). Concurrently, an increase was registered in the value of total exports to the UK (+10.7%).

A Government spokesman said that the value of merchandise exports recorded a marginal year-on-year decline in January 2019. It should be noted that the trade figures for January might have been distorted by the difference in timing of the Lunar New Year, which fell in early February this year but mid-February last year. It is thus more meaningful to analyse the trade figures for January and February combined, when available, for a clearer picture of the underlying situation. Looking ahead, the external environment is still challenging. Moderating economic growth in many of our key trading partners will likely weigh on Hong Kong's merchandise exports in the near term.

Corporate failure cases in the US and the UK recorded an increase of 2.2% and 2.9% respectively in the fourth quarter of 2018 when compared to the same period of 2017. However, a year-on-year decrease of 1.7% and 5.5% was recorded for Japan (fourth quarter of 2018) and Germany (October and November 2018) respectively.

Corporate Failures in Major Export Markets

Market
2018 Q4
Change in 2018 Q4 over same period last year (%)201720162015
US
5,855+2.2
23,09824,02724,636
UK4,292+2.912,86814,81912,861
Japan2,080-1.78,3768,2148,517
Germany*3,222-5.520,09321,51823,101

*Figures of December 2018 are not included for Germany.

HKECIC Introduced New Initiatives to Support SMEs

The HKECIC introduced special enhanced measures in June and September 2018 to help Hong Kong exporters, especially SMEs, with issues on tariffs and shipments arising from the trade conflicts between the US and Mainland China, with an aim to provide more support and protection amid the unpredictable trade issues and rising credit risks. The above measures are valid until 30 June 2019.

In September 2018, the HKECIC launched the new one-stop online credit insurance platform EC-Reach to provide timely support to back up the growth of SMEs which lack resources. Online Micro-Business Policy is available on the platform. Start-up enterprises and small- and micro-business exporters are able to purchase credit insurance online in a fast and convenient way, to insure their self-selected buyers for suitable protection, as well as to learn effective ways of risk management, enabling them to explore overseas markets safely. For more information about the EC-Reach, please visit: www.ec-reach.com.hk.

Content provided by Picture: Hong Kong Export Credit Insurance Corporation
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