In this July 18, 2020 photo, shipping containers are seen stacked on top of each other at a cargo terminal in Hong Kong. (ISAAC LAWRENCE / AFP)
Hong Kong’s exports are expected to grow by 8 percent in 2022, down from 25 percent in 2021, due to the lingering impact of the COVID-19 pandemic and disruptions in the global supply chain, the Hong Kong Trade Development Council said Thursday.
In the first 10 months of 2021, Hong Kong exports surged 26.7 percent year-on-year, thanks to a low base caused by the pandemic, said Nicholas Kwan Ka-ming, HKTDC’s director of research. During the same period last year, total exports in the city shrank 3.7 percent year-on-year.
The majority of respondents said soaring transportation costs presented various challenges to their business. Some 71.3 percent of respondents said they have recorded delays in deliveries, and 39.4 percent said they experienced production-schedule disruptions
“It’s not a slow growth considering the exterior environment,” said Kwan, referring to the forecast of 8 percent. “The figure is reasonable and achievable.”
The HKTDC Export Index for the fourth quarter of 2021 slid 1.8 points to 37.2 points, indicating that the economic uncertainties induced by the coronavirus pandemic continue to undermine exporters’ confidence in the near term, said Alice Tsang, HKTDC’s assistant principal economist for Greater China.
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Designed to gauge the prospects of the near-future export performance of Hong Kong traders, the HKTDC Export Index survey is conducted on a quarterly basis among 500 Hong Kong exporters from six major industry sectors. A reading above 50 indicates an optimistic outlook, while one below 50 represents a pessimistic outlook.
Kwan said the global epidemic remains the biggest threat for exports. The supply chain disruptions caused by delays in shipments due to global port closures and congestion as a result of the pandemic are leading to an increase in transportation costs, he added.
The majority of respondents said soaring transportation costs presented various challenges to their business. Some 71.3 percent of respondents said they have recorded delays in deliveries, and 39.4 percent said they experienced production-schedule disruptions. Amid the rising costs, 38.4 percent of exporters passed the extra shipping costs on to customers, according to the survey.
On the bright side, Kwan said he expects the export sector to benefit from a closer trade partnership within Asian economies with the Regional Comprehensive Economic Partnership, set to take effect in January. “This will provide a fresh impetus for Hong Kong to fortify its role as an international trading hub.”
READ MORE: HKTDC: Export confidence rises for the 4th straight quarter
A stronger connection with the Association of Southeast Asian Nations will further strengthen the city’s connection with its neighboring markets with the ASEAN free trade agreement entering a new stage in February, Kwan added.
Well-positioned as an international business and trade hub, Hong Kong has been an important entrepot for trade between the Chinese mainland and ASEAN countries. During the first 10 months of 2021, Hong Kong handled about HK$308 billion ($39.5 billion) of the re‑exports of ASEAN origin goods to mainland China, up 26.2 percent year-on-year, and HK$185 billion of the re‑exports of mainland origin goods to ASEAN, adding by 15.2 percent compared to last year.