3
The Economy
Imports of goods expanded notably by 5.9 per cent in real terms on the back of rapid growth in retained imports and solid expansion in re-exports. Thanks to the robust domestic demand in the first three quarters, retained imports, which refer to imports for domestic use and accounted for about one-quarter of total imports, grew strongly by 8.7 per cent in real terms. However, imports of goods experienced a marginal fall of 0.4 per cent in the fourth quarter as both retained imports and imports for subsequent re-export weakened.
Exports of services grew solidly by 4.9 per cent in real terms. However, after the robust expansion in the first half of the year, growth moderated in the second half amid mounting external headwinds (chart 6). Underpinned by the surge in visitor arrivals, exports of travel services registered the strongest annual growth since 2013 despite visible deceleration in the second half due to softer per capita visitor spending. Exports of financial services grew notably, thanks to the particularly strong first-half growth amid buoyant cross-border financial activities. Exports of transport services and business and other services saw only modest growth.
Chart 6
Hong Kong's Services Trade (year-on-year rate of change in real terms)
Per cent
10
5
-5
-10
Imports of services
Exports of services
T
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014
2018
2015
I
2016
2017
Exports of services grew solidly for 2018 as a whole.
Note:
Exports and imports of services are compiled based on the change of ownership principle.
Imports of services grew modestly by 2.3 per cent in real terms in 2018, similar to the 2.1 per cent growth in 2017. Of the various services, imports of travel services, while fluctuating over the course of the year, grew modestly for the year as a whole. Imports of transport services and business and other services also saw modest growth amid expansion in regional trading activities. Imports of manufacturing services fell modestly, as an expansion in outward processing activities in the region in the first three quarters was more than offset by a decline in the fourth quarter.
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