Hong Export Slide Slows, Economists Optimistic

by Mary Swire, Tax-News.com, Hong Kong

28 March 2002

Responding to the announcement that the slide in Hong Kong exports has eased, some SAR analysts have suggested that this could mark the start of the road to recovery for the embattled jurisdiction.

Trade figures released this week revealed that despite the relative weakness of the January figures, exports for February fell only 9.1% from the previous year, a far less drastic fall than many economists had expected. It was also announced that imports in February dropped by 19.8% from the 2001 figures, again representing a less severe decrease than was initially predicted.

Speaking to the South China Morning Post following the release of the Census and Statistic Department results on Tuesday, Lehman Brothers' Senior Asian Economist, Rob Subbaraman suggested that the worst could be over for Hong Kong's export industry:

'I think the improving global economy and signs that China's trade performance is picking up strongly bodes well for Hong Kong's exports going forward,' he observed, adding by way of explanation that: 'Hong Kong's entrepot role to China, although diminishing, still exists, it has not suddenly disappeared as some have argued.'

HSBC Chief Regional Economist Geoffrey Barker supported this assertion, and referred to the easing in the decline of exports as 'modestly encouraging' for the jurisdiction's future economic prospects.

However, the Chairman and Chief Executive of the Bank of East Asia, David Li Kwok-po was less optimistic, and told the SCMP that despite the relatively strong trade results for February: 'There still aren't signs of economic recovery in Hong Kong.'

The Bank of East Asia has forecast 0% economic growth for the region in 2002, which is below the Lehman Brothers upgraded prediction of 2.5%, and the government's growth estimate of 1%.

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