THE ECONOMY
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Domestic exports to the various major markets showed a mixed performance in 1991. Compared with 1990, domestic exports to China rose significantly, by 14 per cent in real terms. Over 70 per cent of these domestic exports were related to outward processing arrangements commissioned by Hong Kong companies. While domestic exports to Germany showed some increase, by about four per cent in real terms, those to the United Kingdom showed little change. Domestic exports to Japan and the United States continued to decline, both by about seven per cent in real terms. There was, however, a moderate recovery in domestic exports to the United States in the fourth quarter, recording an increase of about three per cent in real terms over a year earlier. Although the United States was still the largest market for Hong Kong's domestic exports, its share fell to 27 per cent in 1991, from 32 per cent in 1989 and 29 per cent in 1990.
Analysed by major product categories, domestic exports of textiles grew by one per cent in real terms in 1991 while those of clothing fell by two per cent. Their shares in the total value of domestic exports in 1991 were eight per cent and 33 per cent respectively. In 1991, domestic exports of electronic components recorded the fastest growth (by 23 per cent in real terms), followed by metal manufactures (by eight per cent). On the other hand, domestic exports of radios, watches and clocks, and electrical appliances fell, by 18 per cent, 12 per cent and seven per cent respectively in real terms.
In 1991, re-exports showed a remarkable growth over 1990, by 29 per cent in value terms -or about 26 per cent in real terms. This compared with an increase of 20 per cent in value
terms, or 16 per cent in real terms, recorded in 1990.
China remained the largest source of, as well as the largest market for, Hong Kong's re-exports. Supported by the expansion of outward processing activities across the border, re-exports involving China in both directions continued to rise rapidly in 1991. Meanwhile, re-exports not related to China showed some increase. The other major re-export markets were the United States, Germany, Japan, Taiwan and the United Kingdom. The major suppliers of Hong Kong's re-exports, apart from China, were Japan, Taiwan, the United States and the Republic of Korea.
Analysed by end-use categories, Hong Kong's re-exports comprised mostly consumer goods, and raw materials and semi-manufactures, which represented 54 per cent and 30 per cent respectively of the total value of re-exports in 1991. Re-exports of footwear, clothing, telecommunications and sound recording and reproducing equipment, textile fabrics, and electrical machinery and appliances showed faster increases than re-exports of other commodity items.
Imports grew rapidly, by 21 per cent in value terms or by about 19 per cent in real terms in 1991, compared with corresponding increases of 14 per cent and 11 per cent in 1990. The major sources of Hong Kong's imports were China, Japan, Taiwan, the United States, the Republic of Korea and Singapore. Most of the growth in imports was attributable to the continued surge in re-export trade. To a lesser extent, this was also supported by imports retained for local use.
Retained imports increased by about 13 per cent in real terms in 1991. Among the various end-use categories, retained imports of capital goods recorded the fastest growth, by about 20 per cent in real terms. Within this category, retained imports of industrial machinery for manufacturing use registered an even sharper increase, by about 26 per cent in real terms. Retained imports of foodstuffs, fuels, and raw materials and semi- manufactures increased by about eight per cent, four per cent and two per cent respectively
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