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The Economy
people bonds; taking forward the Guangdong-Hong Kong-Macao Bay Area development; and enhancing collaboration in project interfacing and dispute resolution services.
During the year, the construction of major cross-boundary infrastructure projects continued, including the Hong Kong Boundary Crossing Facilities and Hong Kong Link Road under the Hong Kong-Zhuhai-Macao Bridge project, the Hong Kong section of the Guangzhou-Shenzhen- Hong Kong Express Rail Link, and the Liantang/Heung Yuen Wai Boundary Control Point. Upon completion, these infrastructures will further facilitate the flow of people and goods, thereby deepening the economic and trade relations between Hong Kong and the Mainland.
The Economy in 2017
External Trade
The global trading environment was sanguine in 2017. Total exports of goods, on the external merchandise trade statistics basis, grew markedly by 6.2 per cent in real terms, accelerating notably from the 1.4 per cent increase in 2016 and representing the fastest growth in seven years. Merchandise exports sustained solid growth on a year-on-year basis throughout 2017, being subject to a higher base of comparison over the course of the year notwithstanding (chart 6). Analysed by major market, exports to Asian markets remained the key growth propeller, attaining high single-digit growth for the region as a whole, reflecting the vibrant intra-regional trade flows. In particular, exports to the Mainland sustained solid growth throughout the four quarters, and those to Japan staged a double-digit rebound after four years of decline. Exports to India and Taiwan saw another year of double-digit growth, while those to Singapore and South Korea saw modest to moderate growth. Exports to the US and Europe also improved, providing more visible growth impetus to the overall export performance in the latter part of the year.
Imports of goods grew 6.8 per cent in real terms in 2017, as re-export trade blossomed amid the notable improvement in global trading. The robust local consumption demand also supported visible growth in retained imports, meaning imports for domestic use, which accounted for about one-quarter of total imports. In particular, retained imports grew 8.3 per cent in real terms for 2017 as a whole, a strong rebound from an annual decline of 0.6 per cent in 2016. Retained imports sustained solid expansion throughout 2017, mirroring the brisk growth in domestic demand and progressive improvement in the local retail market over the course of the year.
Benefiting from the more favourable external developments, exports of services reverted to a moderate growth of 3.5 per cent in real terms in 2017, from a 3.4 per cent decline in 2016. The improvement was broad-based. Among the key components, exports of transport services continued to outperform, registering the fastest growth since 2010. Reflecting the buoyant global financial markets and active cross-border financing activities, exports of financial services gathered pace over the course of the year, attaining high single-digit year-on-year growth in the fourth quarter, in stark contrast to the relapse seen in 2016. Exports of travel services recovered from more than three years of decline and resumed modest growth in 2017, with the growth pace picking up somewhat towards the year end. Exports of business and other services also saw modest growth.
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