Hong Kong's exports rose for the 10th consecutive month in August, driven by robust demand from the Asian markets as well as the gradual recovery in demand from the United States and Europe. It was also the biggest increase seen in 18 years.

Total exports, including re-exports and domestic exports, increased by 36 percent year-on-year and 10.8 percent month-on-month to HK$290 billion. Comparing the three-month period ending August 2010 with the preceding three months on a seasonally adjusted basis, total exports rose by 4.4 percent, according to figures released by the Census and Statistics Department Monday.

Strong demand from Asian markets served as the major contributor to Hong Kong's export growth.

Exports to the mainland, the city's top export market, grew by 44 percent in August. Significant increases were also recorded in exports to other regional markets such as Thailand (58.8 percent), India (40.0 percent) and Malaysia (34.7 percent).

"The current robust growth momentum of the Asian markets should continue to render firm support to Hong Kong's exports in the coming months," said a government spokesman.

Meanwhile, exports to the US, Japan and Germany, all among the city's top-10 export destinations, registered strong growth. Exports to the US, the second largest market for Hong Kong's exports, rose 25 percent in August from a year earlier.

The strong figures have caught the market by surprise. "The August performance has turned out to be much stronger than we expected," said Irina Fan, senior economist at the Bank of East Asia. Her previous forecast for the month stood at 23 percent.

Fan noted that exports usually peak in August as overseas buyers rush about placing orders for the coming Christmas. However, she added that she doesn't expect to hear further good news from the export sector.

"The export sector will probably be facing a stagnant fourth quarter as the growth momentum is already falling sharply," said Fan, who projects 16 percent export growth for the whole of 2010.

Similarly, Paul Tang, chief economist at the Bank of East Asia, remains cautious towards Hong Kong's export outlook over the next few months. "Exports in August are not as bad as expected, but the months ahead will see a decline," said Tang.

A major factor conducive to this decline, he added, will be the economic slowdown of the US and Europe. Export growth in the coming months will fall below 20 percent, according to his prediction.

In August, Hong Kong's imports increased by 28.4 percent compared with a year earlier to HK$302.0 billion, after a year-on-year increase of 24.9 percent in July, 2010.

A visible trade deficit of HK$11.9 billion, equivalent to 3.9 percent of the value of imports of goods, was recorded in August.

China Daily

(HK Edition 09/28/2010 page2)