Exports from the city in March grew at the fastest pace since 1992, thanks to a low comparative base and strong demand from Asia. The value of total exports of goods increased by 32.1 percent over a year earlier to HK$231.8 billion in March, aft er a year-on-year rise of 28.5 percent in the previous month, the government said Tuesday. Within this total, the value of reexports increased by 32.1 percent to HK$226.0 billion while the value of domestic exports rose 29.4 percent to HK$5.7 billion. "Merchandise exports expanded strongly further in March amid the vibrant resurgence of intra-Asia trade and the continued normalization of global trade flows,"

a government spokesman said, when releasing the fi gures. In March, exports to Asia grew 44.4 percent from a year ago. The city's merchandise exports by now have largely returned to levels

seen prior to the outbreak of the global financial tsunami in 2008, the spokesman noted. Looking ahead, the spokesman said "the global economic recovery will continue to render support to Hong Kong's external trade in the near term. However, the fundamentals of the US and EU markets, while improving, are still rather fragile. Th is should remain a concern."

Economists also have similarly cautious tones about the outlook for the external trade. "The March growth rate beat expectations by far, mainly because of a low comparative base last year and stabilization in overseas demand," Irina Fan, a senior economist at Hang Seng Bank, told China Daily.

However, "We are unsure that exports can sustain a strong recovery," she said, noting that demand from the US and European markets, the traditionally key markets for Hong Kong exports,

remains weak. In March, the city's exports to the US market grew only 4.5 percent from a year ago, while exports to the German market and the UK market dropped 8.5 percent and 15.6 percent respectively.

Another economist, Paul Tang of Bank of East Asia also cited some "uncertainties" faced by the Hong Kong export sector. "The high unemployment rate in the US and the sluggish economic recovery and debt problems in Europe cloud the outlook for the export sector," he told China Daily.

Th is is particularly true after there-stocking process, which usually last two quarters, runs its course, Hang Seng Bank's Fan echoed, noting the re-stocking process

started in the last quarter of 2009. In March, the city's total imports increased 39.8 percent over a year earlier to HK$270.6 billion, after a year-on-year increase of 22.4

percent in February. A visible trade defi cit of HK$38.9 billion, equivalent to 14.4 percent of the value of imports of goods, was recorded in March. For the first quarter of 2010 as a whole, the value of total exports of goods rose by 26.0 percent over the same period in 2009. Within this total, the value of re-exports increased by 26.1 percent, while the value of domestic exports increased by 23.1 percent.

Concurrently, the value of imports of goods increased by 34.3 percent in the first quarter. A visible trade defi cit of HK$88.2 billion, equivalent to 12.2 percent of the value of imports of goods, was recorded in the first quarter.

CHINA DAILY

(HK Edition 04/28/2010 page2)