The coronavirus pandemic has wreaked havoc on Hong Kong trade, with exports plunging 12 per cent year on year in the first two months of 2020.
The Census and Statistics Department also revealed on Thursday that imports slumped 9.3 per cent, which resulted in a visible trade deficit of HK$69.1 billion (US$8.9 billion) in the two-month period.
Exports in February rose 4.3 per cent to HK$238.6 billion while imports edged down 0.1 per cent to HK$277.1 billion, but the department said the performance was distorted by the seasonal effects of the Lunar New Year in January.
By comparing export figures in the two-month period, it said the underlying trend reflected “serious disruptions to regional trading and production activities caused by the Covid-19 outbreak”.
The combined January and February performance was the worst since 2009, when it slumped 22 per cent.
A government spokesman said: “The external trading environment has turned even more austere lately, as demand in most major export markets plunged amid the pandemic.
“Hong Kong’s merchandise export performance is likely to remain weak in the near term.”
Exports had already recorded their sharpest drop in a decade last year, down 4.1 per cent under the shadow of the US-China trade war. The Hong Kong Trade Development Council forecast exports would drop another 2 per cent this year.
Hong Kong has been caught in the crossfire of the trade war between China and the United States since 2018, with tensions between the two countries escalating this month over the global pandemic.
The two economic powers are expected to put aside their arguments over who is to blame for the coronavirus outbreak and call a timeout to battle the crisis at a Group of 20 video conference on Thursday.
Hong Kong, a re-export hub for made-in-China products, now faces a fresh threat – the new coronavirus, which causes the disease called Covid-19.
The disease, which has infected at least 468,000 people and killed 21,400 worldwide, wreaked havoc on manufacturing and supply chains in production hubs such as China, South Korea and Japan.
Bank of East Asia chief economist Paul Tang Sai-on said the US and China had two very good reasons to pause their dispute and cooperate – their own economic health and the world’s.
“Europe’s economy is likely to fall into a recession this year,” he said. “There is room for the two economic powers to cooperate, which could avert a global recession.”
He added that global demand would polarise over the next few months, with consumers stocking up on necessities while avoiding spending on bigger ticket items.
“It would not be a surprise to see overseas’ orders for China’s factories drop sharply in the coming months, and Hong Kong will be inevitably affected as a result,” Tang said.
In January and February, Hong Kong exports were down 26.4 per cent to the US, 24.2 per cent to Japan, 22.3 per cent to Germany and 7.9 per cent to mainland China.
In terms of commodities, telecommunications and sound recording and reproduction equipment saw the sharpest drop, at 20 per cent for the two-month period, followed by miscellaneous manufactured articles – mainly jewellery, gold and silverware – at 20.1 per cent.
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This article Coronavirus: Hong Kong exports slump 12 per cent in first two months of year first appeared on South China Morning Post