| Consensus | Actual | Previous | |
|---|---|---|---|
| Balance | HK$-30.1B | HK$-27.9B | HK$-25.8B |
| Imports - Y/Y | 7.1% | 2.6% | |
| Exports - Y/Y | 7.4% | 1.4% |
Highlights
Hong Kong's merchandise trade deficit widened from HK$25.8 billion in October to HK$27.9 billion in November. Exports rose 7.4 percent on the year in November after advancing 1.4 percent in October, while imports rose 7.1 percent after a previous increase of 2.6 percent.
The year-over-year increase in headline exports was largely driven by strong growth in exports to mainland China, up 15.5 percent. Exports to the United States also rose modestly, up 2.2 percent, but this was offset by declines in exports to Japan and the European Union. Officials continue to expect external factors will weigh on export performance in coming months.
The year-over-year increase in headline exports was largely driven by strong growth in exports to mainland China, up 15.5 percent. Exports to the United States also rose modestly, up 2.2 percent, but this was offset by declines in exports to Japan and the European Union. Officials continue to expect external factors will weigh on export performance in coming months.
Market Consensus Before Announcement
Hong Kong's trade deficit is seen widening to HK$30.1 billion in November from a smaller-than-expected HK$25.8 billion on October, when exports rose at a faster pace than imports.
Definition
Hong Kong's external merchandise trade statistics are compiled based on information contained in import/export declarations. The Hong Kong Special Administrative Region is a separate customs territory, as stated in"The Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China". Import/export declaration is also required of Hong Kong's merchandise trade with the mainland of China, and statistics relating to this are included in Hong Kong's external merchandise trade statistics.
Total merchandise trade refers to all the movements of merchandise between Hong Kong and her trading partners, by land, air, water and by post. It comprises imports, domestic exports and re-exports of goods. Imports of goods refer to goods which have been produced or manufactured in places outside the jurisdiction of Hong Kong and brought into Hong Kong for domestic use or for subsequent re-export as well as products of Hong Kong which are re-imported. Domestic exports of goods refer to the natural produce of Hong Kong or the products of a manufacturing process in Hong Kong which has changed permanently the shape, nature, form or utility of the basic materials used in manufacture. Re-exports of goods refer to products which have previously been imported into Hong Kong and which are re-exported without having undergone in Hong Kong a manufacturing process which has changed permanently the shape, nature, form or utility of the product.
Total merchandise trade refers to all the movements of merchandise between Hong Kong and her trading partners, by land, air, water and by post. It comprises imports, domestic exports and re-exports of goods. Imports of goods refer to goods which have been produced or manufactured in places outside the jurisdiction of Hong Kong and brought into Hong Kong for domestic use or for subsequent re-export as well as products of Hong Kong which are re-imported. Domestic exports of goods refer to the natural produce of Hong Kong or the products of a manufacturing process in Hong Kong which has changed permanently the shape, nature, form or utility of the basic materials used in manufacture. Re-exports of goods refer to products which have previously been imported into Hong Kong and which are re-exported without having undergone in Hong Kong a manufacturing process which has changed permanently the shape, nature, form or utility of the product.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they also affect currency values in foreign exchange markets. However, the foreign exchange impact is muted here given that Hong Kong’s currency is pegged to the United States dollar.
Imports indicate demand for foreign goods and services in the local economy. Exports show the demand for local goods in countries overseas. Movements in the trade balance directly affect GDP growth because of the Hong Kong's dependence on trade. Stronger exports are bullish for corporate earnings and the stock market. The bond market is also sensitive to the risk of importing inflation.
This report also gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods and services in the local economy. Exports show the demand for local goods in countries overseas. Movements in the trade balance directly affect GDP growth because of the Hong Kong's dependence on trade. Stronger exports are bullish for corporate earnings and the stock market. The bond market is also sensitive to the risk of importing inflation.
This report also gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
