30 June 2016
Uncertainties in External Environment - Export Performance Awaits Impetus
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 April of 2016 decreased by 2.3% over a year earlier to $285.3 billion, after a year-on-year decrease of 7.0% in March. Within this total, the value of re-exports decreased by 2.0% to $281.9 billion, while the value of domestic exports decreased by 19.0% to $3.4 billion.
Total exports to Asia as a whole in April went down by 3.8% over the same period in 2015. Decreases were registered in the values of total exports to some major destinations, in particular Malaysia (-21.6%), Thailand (-7.0%), Japan (-6.4%), Mainland China (-4.8%) and the Philippines (-2.7%). Values of total exports to India, Singapore and Korea increased by 22.8%, 5.0% and 4.3% respectively. Apart from destinations in Asia, decreases were also registered in the values of total exports to some major destinations in other regions, in particular the United Kingdom (-2.0%) and the USA (-1.3%).
A Government spokesman noted that the value of merchandise exports recorded a narrower year-on-year rate of decline in April, with the EU and some Asian markets showing more discernible improvements. Looking ahead, Hong Kong's export performance will hinge on whether the advanced economies will continue to improve and provide impetus to trade flows in Asia. However, the uncertainties in the external environment are still notable.
Corporate Failures in Major Export Markets
|Market||2016 Q1||Change in 2016 Q1 over same period last year (%)||2015||2014||2013|
*Figures of March 2016 are not included for Germany.
While the external economic environment is struggling, corporate failure cases in the US recorded an increase of 1.1% in the first quarter when compared to the same period in 2015. However, corporate failure cases of UK and Japan fell by 2.6% and 2.7% respectively, and a year-on-year decrease of 2.3% was recorded for Germany in January to February.
Payment Difficulty Cases in Major Markets (March to May 2016)
|Market||Number of cases||Change over same period last year (%)||Estimated liability ($mn)||Change over same period last year (%)|
In the period from March to May 2016, the situation of payment difficulty for the ECIC varied between different markets. The number of payment difficulty cases for US buyers fell by 58.3% over a year earlier, with the related estimated liability decreased by 15.2% to $4.64 million. However, the number of payment difficulty for Australian buyers increased from two cases in 2015 to six cases in 2016, while the related estimated liability surged to $1.94 million; more than double that of 2015. The number of payment difficulty for Hong Kong buyers also increased by 150% to five cases, while the estimated liability dropped by 35.2%.
Owing to uncertainties in global trade ahead, with the US rate hike in end of 2015, setting off a cycle of rising interest rates. Exporters are advised to continue monitoring their risks prudently. Therefore, the ECIC continued providing supportive measures to lessen their burden. The policy fee waiver has been extended for a further year, until the end of December 2016. To demonstrate our continued support to SMEs, the Corporation permanently waived of HK $1,000 annual policy fee and premium discount of 20% for policyholders of “Small Business Policy” (SBP), with effect from 1 March 2016. For more information, please refer to the ECIC website www.hkecic.com.