Hong Kong Economic Data Suggests Solid Recovery Underway

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

02 February 2004

According to economic data released by Hong Kong’s Census and Statistic Department last Thursday, exports from the territory grew in December at their fastest rate in eleven months, providing further evidence that the economy is continuing to recover from last year’s SARS outbreak.

The government’s figures reveal that exports rose 16% year on year in December to HK$156.7 billion (US$20 billion) following a 9% rise in November. This represents the biggest monthly gain since January 2003, and came as a result of global consumers purchasing more Chinese goods shipped through Hong Kong’s ports.

Imports into the city also experienced substantial growth in December, rising 18% to HK$168.2 billion (US$21.5 billion) following 14% growth in November 2003. This has resulted in a monthly current account deficit of $US1.5 billion which analysts are interpreting as a sign that domestic demand is very much in recovery.

A substantial amount of Hong Kong’s exports originate from China, and it is thought that a 51% leap in China’s overseas sales helped push Hong Kong’s exports higher at the end of last year, as businesses on the mainland sought to take advantage of tax credits that were cut at the beginning of 2004.

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