XN000022-1996-07-26 — Page 11

As the value of total exports in June 1996 was smaller than that of total imports, a visible trade deficit of $15 billion, equivalent to 12% of the value of imports, was recorded. This was slightly larger than the corresponding deficit of $14.4 billion, equivalent to 11% of the value of imports, in June 1995.

For the first half of 1996 as a whole, the value of total exports grew by 4.3% over the same period last year. The value of re-exports rose by 6.9%, while that of domestic exports decreased by 8.2%. The value of imports showed an increase of 3.2%.

In the first half of 1996, a visible trade deficit of $83.8 billion, equivalent to 11% of the value of imports, was recorded. This was smaller than the deficit of $88.1 billion, equivalent to 12% of the value of imports, recorded in the first half of 1995.

Commenting on the latest trade figures, a government spokesman said the trade situation was rather volatile in recent months.

"After notable increases in the first two months of 1996, export growth took an unexpected downturn in March, followed by a sharp pick-up in April, but was considerably weaker in both May and June.

"The deceleration in export growth in the first half of 1996 is to some extent anticipated, given the weaker demand in the United States, and the particularly robust export performance in the first half of last year thus resulting in a high base of comparison this year.

"But the slow-down in export growth in recent months was more abrupt than we have expected," the spokesman said.

"For the month of June in particular, the sluggish export performance could have been further compounded by a number of factors.

"These include the trade talk between China and the United States on protection of intellectual property rights under Special 301 in May, and possibly also the recurring issue over the renewal of China's MFN status in the United States, which might have contemplated US importers to hold up their orders from Hong Kong."

The trade situation would continue to be monitored closely, in particular to see if the situation would tend to stabilise in the coming months, the spokesman added.

A more detailed analysis of Hong Kong's external trade for June 1996, by commodity and country, will be released in mid-August.