HONG KONG: Hong Kong’s May trade data has arrived, meaning that for one blissful moment today you can harken back to a time when Brexit was merely a looming threat rather than reality.
Exports from Hong Kong fell 1 per cent year-on-year in May, much improved from the previous month’s reading of -2.3 per cent but marking a thirteenth consecutive month of contraction, according to Hong Kong’s Census and Statistics Department. The drop was also less severe than a consensus forecast of -1.3 per cent from economists surveyed.
Yet imports fell 4.3 per cent for the period, up from April’s reading of -4.5 per cent, but worse than a forecast of -4 per cent and marking a sixteenth month of contraction.
Those trade flows combined for a trade deficit of HK$26.2bn, far less than the deficit of HK$31bn the month prior and besting a consensus forecast calling for the deficit to hold steady from April.
The latest figures from the department on exports to China continued to contrast dramatically with those from the mainland’s General Administration of Customs on imports from Hong Kong.
Whereas China customs data showed imports from Hong Kong grew more than 242 per cent year-on-year in May – accelerating from growth of close to 204 per cent in April – figures from Hong Kong’s statistics department showed exports to China grew 0.9 per cent during the period. That was the first instance of growth since December.
That remarkable growth on the China side likely represents continued under-invoicing of exports and over-invoicing of exports, facilitating transfer of funds outside of China as trade with Hong Kong continues to serve as cover for capital outflows.
Also worth noting, however, is that the value of imports from Hong Kong remains only a small contributor to the headline growth rate of import value published by China’s customs administration – though they had nonetheless more than doubled their share since October 2015 to nearly 2 per cent as of May.
