THE ECONOMY
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items, re-exports of footwear, electrical machinery and appliances, telecommunications and sound recording and reproducing equipment, clothing, and textile fabrics, showed faster increases than other commodity items.
The value of domestic exports was one per cent higher in 1992 than in 1991. After discounting for an estimated one per cent increase in prices, there was virtually zero growth in real terms. This compared with an increase of two per cent in value terms or virtually no growth in real terms in 1991. On a year-on-year comparison, domestic exports grew by one per cent in real terms in the first half of 1992, but fell by one per cent in the second half.
Domestic exports to the various major markets showed a mixed performance in 1992. Compared with 1991, domestic exports to China surged further, by 13 per cent in real terms. A large proportion of these domestic exports were related to outward processing arrangements commissioned by Hong Kong companies. Domestic exports to the United States eased back in the second half of 1992, after a pick-up in the first half. For the year as a whole, there was no growth in real terms. On the other hand, domestic exports to Germany and the United Kingdom showed marked declines amid a slack demand, but the rates of decline had moderated somewhat in the latter part of the year. For 1992 as a whole, domestic exports to these two markets declined by 20 per cent and eight per cent respectively in real terms. For domestic exports to Japan, a moderate decrease of five per cent in real terms was recorded in 1992.
Analysed by major product categories, domestic exports of textiles fell by three per cent - in real terms in 1992, while those of clothing fell by two per cent. Their shares in the total value of domestic exports in 1992 were seven per cent and 33 per cent respectively. In 1992, domestic exports of electronic components recorded a sharp growth of 31 per cent in real terms. On the other hand, domestic exports of watches and clocks, and electrical appliances fell, by nine per cent, and 38 per cent respectively in real terms. Domestic exports of metal manufactures recorded virtually no growth.
Imports grew rapidly, by 23 per cent in value terms or by about 22 per cent in real terms in 1992. This compared with an increase of 21 per cent in value terms or 19 per cent in real terms in 1991. 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, it was also supported by imports retained in Hong Kong for local use.
Retained imports increased by 14 per cent in value terms in 1992. The increase in real terms was also 14 per cent. Among the various end-use categories, retained imports of consumer goods recorded the fastest growth, by about 23 per cent in real terms. Retained imports of capital goods also grew sharply, by 19 per cent in real terms. Within this category, retained imports of industrial machinery for manufacturing use registered an increase of about 11 per cent in real terms. Retained imports of food, fuels and raw materials and semi-manufactures increased by about nine per cent, 18 per cent, and seven per cent respectively in real terms.
As the value of total exports (domestic exports plus re-exports) was smaller than that of imports, a visible trade deficit of $30,342 million, equivalent to 3.2 per cent of the total value of imports, was recorded in 1992. This compared with a deficit of $13,096 million, equivalent to 1.7 per cent of the total value of imports, recorded in 1991. As the prices of total exports increased at a faster rate than those of imports in 1992, the terms of trade showed a small improvement.