Hong Kong’s exports to Japan recovering from set back

Hong Kong’s exports of electronics and related items to Japan gained by about 6% in June YOY. This comes after Japan’s supply chains improved towards the end of the April-June quarter.

On the whole, double-digit decline was still recorded for the first half of 2011.

Disruptions of Japan’s supply chains, in particular during April and May of 2011, had a severe impact on Hong Kong’s exports of electronics-related items to Japan, while dragging down the corresponding export growth.

Exports of electronics and related items to Japan, they were dealt a severe blow by the March-11 earthquake to tumble by around 20% YOY in May 2011, after trending down in both March and April.

Japan is Hong Kong’s third largest trading partner. Bilateral trade reached, respectively, US$56 billion and US$27.6 billion in 2010 and the first half of 2011, accounting for 6.3% of Hong Kong’s total trade for the same period.

Slightly more than half of Hong Kong’s exports to Japan are parts, components, raw materials and capital goods, with consumer goods accounting for the rest.

Telecommunication devices and related parts, along with semiconductors and other electronic items, represent more than one-fifth of Hong Kong’s exports to Japan.

The METI survey released in August 2011 also involved the retail and service industries, with 85% of the concerned industry respondents attributing the decrease in their sales to widespread “jishuku” or “voluntary self-restraint” of consumers. In other words, Japanese consumers tend to cut back discretionary spending, in particular non essential items. Some consumer goods exported from Hong Kong to Japan, such as toys, games and sporting goods, suffered, with the impact especially acute in April and May 2011. However, garment exporters noted that there had been a strong demand for basic items including underwear.

The same METI survey also revealed that 90% of the respondents believed that the impact of “voluntary self-restraint” was decreasing, thus boding well for a steady recovery of Hong Kong’s corresponding export items to Japan. As in the case of Hong Kong’s exports of toys, games and sporting goods, positive YOY growth was recorded in June 2011 after a precipitous fall from March-May 2011.


Japan is the second largest source of imports for Hong Kong’s re-exports, after the Chinese mainland. From January-June 2011, Japan-origin items represented 6.7% of total re-exports handled by Hong Kong. More than half of Hong Kong’s re exports of Japan-origin are electronics and electrical products.

Hong Kong re exported about US$13.6 billion of Japan-origin goods to the world in the first six months of 2011, expanding by only 2.6% YOY over the year-earlier period, and by far the slowest growth among re-exports of non-Hong Kong origin.

Compared to electronic items, the supply of watch movements was relatively less affected by the March-11 earthquake. Japanese manufacturing giants of watch movements such as Seiko and Citizen indicated that their supply of watch movements reached about 70%-80% of the pre disaster level in May, with full production seen in July 2011.I