Hong Kong exports drop most since 1950s as demand weakens

Hong Kong’s exports plunged in December by the most since the 1950s, extending a monthslong streak of declines fueled by China’s slowdown and a global demand dropoff that probably pushed the financial hub into economic contraction last year.

Overseas shipments plummeted 28.9% last month from a year earlier, the Census and Statistics Department said Thursday. That was worse than the 23.4% decline economists had expected and more severe than November’s 24.1% fall, already the worst since 1954.

Last month’s 23.5% slide in imports was deeper than November’s 20.3% drop, the worst since the global financial crisis. The trade deficit was HKD$51.6 billion ($6.6 billion).

The widening deterioration in exports last month reflected the “significant drags of the deteriorating external environment and disruptions to cross-boundary land transportation,” a government spokesman said in a statement accompanying the data release. 

Exports to mainland China, the US and the European Union “all continued to fall sharply,” the spokesman added.

Exports to China plummeted 30.4% in the month from a year prior, worse than November’s 29.7% decline. Shipments to the US dropped 26.7%, while exports to Japan and Taiwan recorded plunges of 39.3% and 34.4%, respectively.

Economy Struggled

Hong Kong’s economy struggled throughout 2022 under the weight of pandemic controls, a global demand slowdown and economic turmoil in China, where the government persisted with a tough Covid Zero strategy until the final weeks of the year. 

The city’s strict Covid curbs and other effects of the pandemic likely cost Hong Kong’s economy an estimated $27 billion in potential growth, Natixis SA estimated earlier this month.

Hong Kong is attempting a recovery given it has ended many of its pandemic curbs and the mainland has largely abandoned its toughest restrictions on movement and travel.

The territory’s economy has other concerns, though, including the ongoing global slowdown. South Korea’s trade data through the first 20 days of January — an early indicator for the global economy — showed a 2.7% fall in headline exports. Hong Kong officials have for months warned that the demand slowdown was also hurting the city’s trade.

The export performance “will continue to be adversely affected by the weak global growth in the near term,” the spokesman said in the statement, adding though that the recent relaxation of border restrictions “should offset some of the pressure.”