Hong Kong:Domestic clothing exports decline sharply by 43.1% at $2.6bn in June

In June, 2005, the values of Hong Kong''s total exports and imports of goods both showed distinct year-on-year increases. The Census and Statistics Department (C&SD) released today (July 26) the external merchandise trade statistics for June 2005.

In June, 2005, the value of total exports of goods (comprising re-exports and domestic exports) increased by 12.6% over a year earlier to $189.5 billion, after a year-on-year increase of 16.9% in May. Within this total, the value of re-exports increased by 14.1% to $179.4 billion in June, while the value of domestic exports decreased by 8.6% to $10.1 billion. Concurrently, the value of imports of goods increased by 10.5% over a year earlier to $196.5 billion in June, 2005, after a year-on-year increase of 16% in May. A visible trade deficit of $7.1 billion, equivalent to 3.6% of the value of imports of goods, was recorded in June, 2005.

For the first half of 2005 as a whole, the value of total exports of goods rose by 11.6% over the same period in 2004. Within this total, the value of re-exports increased by 12.8%, while the value of domestic exports decreased by 6.6%. Concurrently, the value of imports of goods increased by 9.1%. A visible trade deficit of $51.4 billion, equivalent to 4.7% of the value of imports of goods, was recorded in the first half of 2005.

Comparing the second quarter of 2005 with the preceding quarter on a seasonally adjusted basis, the value of total exports of goods roseby 7.0%. Within this total, the value of re-exports increased by 7.2%, while the value of domestic exports went up by 3.5%. Meanwhile, the value of imports of goods increased by 5.2%.

Comparing June, 2005, with June, 2004, increases were registered in the values of re-exports of most principal commodity divisions, in particular "clothing" (by $3.9 billion or 34.0%). Concurrently, decreases were registered in the values of domestic exports of some principal commodity divisions, in particular "clothing" (by $2.6 billion or 43.1%).

For the first half of 2005 as a whole, year-on-year increases were registered in the values of re-exports of most principal commodity divisions, in particular "clothing" (by $19.4 billion or 34.0%). Concurrently, year-on-year decreases were registered in the values of domestic exports of some principal commodity divisions, in particular "clothing" (by $10.0 billion or 38.7%).

A government spokesman noted that merchandise exports continued to rise distinctly in June, after a strong growth in May. There were across-the-board increases in exports to nearly all markets, with double-digit growth recorded in exports to such major markets as the Mainland, Japan, Taiwan and some EU economies. On a seasonally adjusted basis, the value of total exports of goods also increased markedly in the second quarter compared with the first quarter.

The government spokesman further pointed out that the recent strong export performance was supported by the continued expansion of the global economy, particularly the robust growth in the United States and the Mainland. The outlook for the external environment remains fairly favourable. However, there are a number of uncertainties, including those stemming from the still high and volatile oil prices, the terrorist attacks in London, the recent strengthening of the US dollar, and the protectionist threats from the US and EU against imports of goods from the Mainland. The latest reform to the Renminbi exchange rate regime is likely to have minimal immediate impact on Hong Kong''s external trade, given the small appreciation of the Renminbi. Nevertheless, the move may help reduce trade frictions between the Mainland and its trading partners and hence would benefit Hong Kong''s re-export trade.