Hong Kong Imports Grow As Recovery Takes Hold

by Mary Swire, Tax-News.com, HongKong

29 October 2003

Economists have been further encouraged by economic data from Hong Kong this week which shows that imports into the territory last month grew over 7%, higher than expected. This has been cited as further evidence that a more tangible recovery is taking hold.

"This is what usually happens when an economy starts to recover, so I hope this pattern will continue," Paul Tang, an economist with Bank of East Asia, told the Wall Street Journal, adding: "This shows businesspeople are beginning to buy inventory again."

The government has revealed that imports in September grew 7.3% year on year to reach a level of HK$162.2 billion ($20.92 billion), outstripping exports, which grew by 6.4% to HK$157.5 billion. As a result, the city now has a balance of trade deficit of $HK4.6 million for the month.

Finance Secretary Henry Tang revealed that whilst exports to the United States were slowing, sales of goods to China, Japan and other Asian countries were actually growing. However, Tang noted that the recent decision by China to cut back its export credits, making its exports more expensive, could hurt Hong Kong, especially as the city re-exports a great deal of Chinese goods.

Economists have also observed that one of the most crucial factors in Hong Kong’s recovery has been the resurgence of the tourism sector since the end of the SARS crisis, most notably from mainland China.

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