Anemic trade triggers economic worries in 2012

Hong Kong's rising trade deficit and stubbornly weak exports in November raise the prospects of tough times in 2012.

The city's Census and Statistics Department reported a trade deficit of HK$44.1 billion for November on merchandise exports of HK$278.6 billion and imports of HK$322.7 billion.

The disppointing November trade figures pushed Hong Kong's total trade deficit in the first eleven months of 2011 to HK$378.5 billion. In this period, the total value of merchandise imports increased by 12.2 percent while merchandise exports rose by 10.4 percent over the same period in 2010.

A Hong Kong government spokesman noted that merchandise exports weakened again in November, showing only a modest year-on-year increase in value terms. With Europe being on the brink of recession, Asian economies, including Hong Kong, saw a weakening demand for their exports and a fall in intra-regional trade flows that were associated with the global supply chains.

Looking ahead, the spokesman said Hong Kong's exports will continue to face strong headwinds due to the deepening eurozone sovereign debt crisis and the unsteady economic situations in the advanced markets.

Hong Kong's merchandise exports in November posted a moderate year-on-year increase of two percent to HK$278.6 billion, down from a year-on-year increase of 11.5 percent in October 2011. Exports dropped to some major destinations, in particular the U.K. and the U.S., but total exports to Asia as a whole grew by 4.4 percent.

Merchandise import value increased by 8.8 percent over a year earlier to HK$322.7 billion in November 2011 after a year-on-year increase of 10.9 percent in October 2011.