The Economy 1 53
Despite the continuing drag from the structural shift to re-exports and offshore trade, domestic exports bounced up to a modest 2.4 per cent increase in 2004, the first growth since 2000. The growth was most remarkable in the fourth quarter due to a significant rebound in exports to the Mainland, possibly as the boost from CEPA progressively showed up.
In 2004, the Mainland and the United States were the two largest markets for Hong Kong's total exports (including domestic exports and re-exports), accounting for 44 per cent and 17 per cent respectively of the total. Other major markets included Japan (5 per cent), the United Kingdom (3 per cent), Germany (3 per cent), Taiwan (2 per cent), the Republic of Korea (2 per cent), and Singapore (2 per cent).
Mirroring closely the expansion in re-export trade, and also with a notable growth in import intake for local use, imports of goods likewise flourished, surging by 14.1 per cent in real terms in 2004. Imports of goods sourced from East Asian markets performed particularly well, with imports from the Mainland the largest source of Hong Kong's imports attained an even more marked growth in 2004. Within total imports of goods, retained imports of capital goods, particularly industrial machinery for manufacturing use, and telecommunications equipment, picked up visibly in 2004, as investment sentiment turned more sanguine and as the more established economic recovery necessitated further expansion in productive capacity to meet increased demand (Chart 7).
Chart 7
Hong Kong's visible trade (year-on-year rate of change in real terms)
Per cent
20
15
10
5
Total exports
of goods
0
-5
-10
Domestic exports
-15
Re-exports
Imports of goods
1994 1995 1996 1997 1998 1999 2000 2001 2002
2003 2004
Total exports of goods sustained double-digit growth throughout 2004. Re- exports continued to outperform overall export growth, while domestic exports bounced up to a modest increase in 2004. Imports of goods likewise flourished in 2004.