Financial News
Written by: Zhang Weilun
2020-06-16 17:08
Date of last update: 2020-06-16 17:08In view of the global economic downturn and the continued Sino-US trade war, Hong Kong’s exports have significant downside risks. The HKTDC lowered this year’s Hong Kong export forecast from minus 2% to minus 10%, the most pessimistic forecast since 2009. In the first four months of this year, Hong Kong’s final consumer exports fell 29.3%, with diamond and jewelry exports falling by 50% and 33% respectively.
Guan Jiaming, research director of the TDC, expects Hong Kong’s exports to decline by 8% to 10% in the first half of this year, mainly because many companies have tight cash flows and the market demand chain has also decreased, so orders have been cut. However, in response to the outbreak of the mainland and Southeast Asia, As the situation eases, the authorities encourage SMEs to switch to the Mainland and Southeast Asian markets. He continued that it is difficult to estimate whether there will be a second or third wave of outbreaks. He admitted that the recovery period of this outbreak is quite long, "hope that the worst period has passed."
U.S. cancellation of independent customs zone has slight impact on Hong Kong exports
The United States foretold that the treatment of the Hong Kong Independent Customs Zone will be cancelled. Guan Jiaming feels that the independent customs zone is not based on the definition of Hong Kong by a certain country, and that Hong Kong actually has independent borders and customs and is recognized by the WTO. Even if the United States cancels the Hong Kong Independent Customs Zone, 98.8% of Hong Kong’s exports to the United States are re-exports, and exports to the United States only account for 0.1% of total exports, mainly in the jewelry industry, so the relevant measures have little effect. If the United States revises export controls and regulations related to Hong Kong, it may reduce the US trade surplus with Hong Kong.
Guan Jiaming pointed out that whether the linked exchange system can be maintained depends on the financial situation of Hong Kong. (Photo by Kwong Yueting)
Regarding the linked exchange rate system, he said that since the implementation of the system in 1983, Hong Kong has not obtained the consent of countries outside Hong Kong. Whether the linked exchange rate system can be maintained depends on the financial situation of Hong Kong, and the current foreign exchange assets of the HKMA It is double the base currency of Hong Kong, but the public still has to pay attention to exchange rate risk.
In the second quarter of this year, the TDC’s export index was 18.2, a slight increase of 2.2 points from the historical low of the previous quarter. Under the scourge of the New Coronary Pneumonia epidemic, about 97.5% of exporters indicated that the epidemic had a negative impact on business, and the proportion increased by 3.6 percentage points quarter-to-quarter. Delayed product delivery (55.8%) and blocked logistics delivery (53.1%), etc. As China-US relations are tense, 69.8% of exporters are worried that trade frictions will damage export prospects, increasing by 20% quarter-to-quarter.
Trade Development Bureau