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Active Regional Trade Flows Continue to Support Export Growth

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 increased by 7.3% over a year earlier to HK$326.6 billion, after a year-on-year increase of 11.1% in June 2017. Within this total, the value of re-exports increased by 7.4% to HK$322.9 billion in July 2017, whereas the value of domestic exports decreased by 5.3% to HK$3.7 billion. For the first seven months of 2017 as a whole, the value of total exports of goods rose by 8.5% over the same period in 2016.

Comparing July 2017 with July 2016, total exports to Asia grew by 8.8%. In this region, increases were registered in the values of total exports to most major destinations, particularly the Philippines (+26.7%), Taiwan (+23.5%), Thailand (+12.7%), Japan (+9.0%), Mainland China (+8.8%) and Singapore (+7.8%). Decreases were recorded in the values of total exports to Malaysia (-1.0%) and India (-0.4%). Yet, apart from destinations in Asia, decreases were registered in the values of total exports to some major destinations in other regions, specifically the UK (-4.9%) and the US (-0.6%). An increase was registered in the value of total exports to Germany (+6.7%).

A Government spokesman noted that merchandise exports continued to grow notably in July over a year earlier, thanks to active regional trade flows amid an improving global economic environment. Looking ahead, the moderate expansion of the global economy will likely continue to render support to exports from Asia and Hong Kong in the near term.

Corporate Failures in Major Export Markets

Market2017
Q2
Change in 2017 Q2 over same period last year (%)201620152014
US6,366-2.624,02724,63626,849
UK4,12632.914,81912,86114,155
Japan2,1857.08,2148,5179,180
*Germany3,337-7.921,51823,12324,085

*Figures of June 2017 are not included for Germany.

Corporate failure cases in the US recorded a decrease of 2.6% in the first quarter when compared to the same period in 2016. However, corporate failure cases of the UK rose sharply by 32.9% while Japan increased by 7.0%. A year-on-year decrease of 7.9% was recorded for Germany in April to May.

Payment Difficulty Cases in Major Markets (June 2017 to August 2017)

MarketNumber of casesChange over same period last year (%)Estimated liability ($mn)Change over same period last year (%)
US11+83.317.60+1,529.6
UK2+100%3.57+730.2%
Mainland China2-33.30.34-95.4

For the HKECIC, the situation of payment difficulty varied among different markets in the period from June to August 2017. The number of payment difficulty cases on US buyers surged by 83.3% over a year earlier to 11 cases, with an estimated liability rose to HK$17.60 million, which is over 15 times more than that of 2016. Two payment difficulty cases were reported on both UK and Chinese buyers, with estimated liability surging by over seven times and dropping by over 90% respectively.

The trading environment is still subject to various uncertainties, including those arising from possible increase in protectionist sentiment, the US monetary policy normalisation, Brexit-related negotiations and elevated geopolitical tensions in various regions. Exporters are advised to continue monitoring their risks prudently. To support SMEs, the HKECIC offers a new “Fixed Amount Cover Endorsement” under the Small Business Policy for a 1-year period, which provides more flexible options to SMEs. For further information, please refer to the HKECIC website www.hkecic.com.

Content provided by Picture: Hong Kong Export Credit Insurance Corporation
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