HK Trade Hub Position Hinges on Re-exports

Hong Kong's re-exports will far outweigh the city's local goods exports, with a sharp year-on-year increase recorded in the former and an even sharper decline in the latter, according to figures released by the Census and Statistics Department (C&SD) of the SAR.

Hong Kong's re-exports increased year-on-year by 12.8 percent in June, while exports fell nearly 20 percent, making the total export volume rise by 10.9 percent.

International trade is a key driver for Hong Kong's economy, but the city's role as a global trading hub will hinge on re-exports as the volume of local goods exports will drop further, said analysts.

"The size of Hong Kong's local goods exports is becoming smaller and smaller. As many (trade-related) jobs shift to the mainland, Hong Kong will become a major re-export center," said Castor Pang, a strategist from Hong Kong-based Sun Hung Kai Financial Group.

"The volume of Hong Kong's domestic exports will decline further in the second half of this year, but it is difficult to estimate by how much," said Pang.

"Hong Kong's trade industry is experiencing a transformation. Previously it was just import and export, but now we call it trading and logistics," said Jeffrey Wong, Director of Specialty Planning for Walmart (China) Investment Co Ltd.

In June, goods sent to Hong Kong's major destinations - the mainland and Germany - recorded the fastest year-on-year growth by volume, 16.7 and 14.4 percent respectively.