HONG KONG, June 23, 2021 - (ACN Newswire) - The Hong Kong Trade Development Council (HKTDC) announced today that its Export Index has risen for the fifth consecutive quarter, soaring from a record low of 16.0 at the beginning of the COVID-19 pandemic last year to 48.7 in the second quarter of 2021, which is close to expansionary territory. The sustained upturn indicates that local exporters have gradually regained confidence in the city's export outlook.Presenting the HKTDC Export Index for the second quarter of 2021 and an analysis on opportunities in the "new normal" are researchers at the Hong Kong Trade Development Council: (from left) Assistant Principal Economist (Greater China) Alice Tsang, Director of Research Nicholas Kwan, Assistant Principal Economist (Global Research) Louis Chan
HKTDC Director of Research Nicholas Kwan said Hong Kong's exports have grown significantly in recent months, buoyed by the global revival in trade and the resumption of production activities. Total exports in the first quarter of 2021 increased by 33.2% year-on-year to HK$1,107.8 billion, with growth of 24.4% registered in April. "Led by Mainland China and the United States, the global economy has rebounded steadily, which will continue to bolster Hong Kong's export performance," Mr Kwan said.
Meanwhile, the HKTDC's Export Index survey showed that local exporters continue to have concerns. These include the persistence of the COVID-19 pandemic (41.5%), softening global demand (16.7%), prolonged trade tensions between the mainland and the United States (13.0%) and continuing pandemic-mandated border closures (11.6%).
"The global economic recovery is likely to be highly uneven. After taking into account a basket of factors, we decided to revise Hong Kong's export forecast in 2021 upward from 5% to 15%, albeit from a low base. This represents the biggest rebound since the city's recovery from the global financial crisis in 2010," Mr Kwan added.
Smaller orders, higher costs
Mr Kwan pointed out that while concerns remain, the impact of the pandemic has been gradually easing over the past few months. The percentage of respondents reporting that they had been negatively affected by pandemic-related issues fell from 78.2% in the first quarter of 2021 to 56.9% in the second quarter.
A reduction in order size (66.4%), increased transportation costs (46.4%) and logistics or distribution disruptions (42.6%) were cited as the three most common problems, Mr Kwan said. In addition to getting accustomed to a new normal of smaller orders and higher transportation costs, Hong Kong businesses have adopted new strategies to weather these challenges such as developing other product categories (53.8%), developing the mainland domestic market (49.5%), developing online sales channels (45.5%) and targeting new overseas markets (28.4%), with the Association of Southeast Asian Nations (ASEAN) bloc and Europe the most popular choices for diversification.
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