The Hong Kong Trade Development Council (HKTDC) has revised down its 2019 export growth estimate for Hong Kong to 2 percent from an original projection of 5 percent, amid concerns over the Sino-US trade war and slower economic activity in some other major economies.
The HKTDC Export Index dropped 1.9 points to 37.3, marking the fourth consecutive quarterly contraction.
This reflected the pessimistic view of the exporters towards the prospects of the main export destinations.
In addition to trade disputes, a higher comparison base last year was also part of the consideration, according to Nicholas Kwan, director of research at HKTDC.
In the first four months of 2019, Hong Kong’s total exports dropped 2.5 percent from the same period last year.
Other than China, the US and Japan, Hong Kong’s exports to South Korea and Taiwan markets were also weak, suggesting that the impact of trade woes is being transmitted along the supply chain.
However, exports to the EU were up 8.2 percent, helping partially offset the negative growth to the US and Japan markets.
Meanwhile, exports to other emerging markets recorded solid growth, with exports to Latin America up 27.3 percent, shipments to Middle East up 13.1 percent and those to emerging Europe up 8.8 percent.
According to the latest research from HKTDC, about 41 percent of exporters surveyed said they were negatively impacted by the Sino-US trade war, facing issues such as order downsizing or tougher transaction terms.
To counter the headwind, the most widely adopted approach is market diversification, with 58.6 percent of respondents indicating that they were looking for alternatives to the US market. Some are considering changing the production base or sourcing base.