Hong Kong exports drop most in almost 7 decades on global slump

Hong Kong’s exports plummeted in November by the most in nearly seven decades as a slump in China’s economy and global demand worsened, making the road to recovery even tougher for the financial hub. 

Overseas shipments plunged 24.1% last month from a year earlier, the Census and Statistics Department said Thursday. That was the worst decline since 1954, and far more severe than the median estimate of a 16.2% decline in a Bloomberg survey of economists. Exports fell 10.4% in October.

Imports declined 20.3% in November from a year earlier — the biggest drop since 2009 and worse than economists’ projection of a 13.8% decline. The trade deficit was HKD$27.1 billion ($3.5 billion).

A government spokesman attributed the falls to a “deteriorating external environment and disruptions to cross-boundary land transportation,” according to a statement accompanying the release. China had strict Covid restrictions in place at the time to curb infections, but has since dropped them.  

Exports to mainland China, the US and other economies including Japan, Taiwan and Vietnam all dropped by double-digit percentages. The decline in shipments to China was 29.7%, far worse than October’s drop of 12.9%. Exports to the US plunged 26.8%. 

Hong Kong’s economy has struggled throughout 2022 under the weight of pandemic controls, a global demand slowdown and economic turmoil in China, which spent much of the year in Covid Zero isolation. Gross domestic product in Hong Kong is expected to contract for the third time in four years. 

The city this week announced it was ending some of its last major Covid rules, including tests for inbound travelers and caps on public gatherings, bolstering prospects for an economic turnaround in 2023. 

Still, Hong Kong’s export performance “will continue to face huge challenges in the near term, as monetary policy tightening in advanced economies further dampens demand,” the government spokesman said. He said the relaxation of border restrictions though “may offset some of the pressures.”