HONG KONG'S TRADE IN 1990 TRENDS, PERSPECTIVES, FORECASTS
8
1990 OVERVIEW
Hong Kong's export growth continued to slow down in 1990, with total value up 12%, against a 16% increase in 1989. A weak US economy and the still soft China market both contributed significantly to the mod- est performance. Combined with a slack- ening in the growth of exports to some European and Asian countries, these factors have dampened Hong Kong's export ex- pansion. Domestic exports rose 1%, com- pared with a 3% rise for the previous year. But re-exports maintained much of their momentum with a 20% growth compared with the previous year's 26%. As re-exports continued to grow faster than domestic exports, their share in the total has risen to 65%. This trend serves to underline the undiminished importance of mainland China as a manufacturing base for Hong Kong and the territory's role as a mer- chandising, design and marketing centre, servicing Southern China.
UNITED STATES
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After eight consecutive years of expansion -the longest in the country's post-war history the US economy has begun to lose steam. Sluggish GNP growth and retail sales last year were reflected in slower imports. The financial troubles faced by some major retailers added to the eco- nomic woes. In 1990, Hong Kong's total combined domestic exports and re-exports to the US rose 7%, compared with an 18% increase in 1989. The gain was due entirely to the robust re-export growth (+22%) which more than offset the downturn in domestic exports (-8%).
Among the various product categories, total exports of clothing, toys, footwear, watches and clocks, travel goods, household appliances, and telecommunications equipment all rose, while parts for data-
processing machines and radios dropped.
In the meantime, protectionism re-surfaced in the form of the Textile, Apparel and Footwear Trade Bill of 1990. Among other things, the bill sought to limit the growth of textile and apparel imports and to freeze the level of footwear imports. After it was vetoed by President Bush and the House failed to overturn the veto, the bill came to an end. Nonetheless, the episode serves as areminder of the strong protectionist under- currents in the country. In another development, an average anti-dumping duty of 5.86% was imposed on certain Hong Kong man-made-fibre sweaters, after an investigation ruled that these were sold in the US at "less than fair value”.
WESTERN EUROPE
Hong Kong's export performance in Western Europe was
more encouraging, with total exports rising 25%. Although domestic exports rose only 2%, re-exports again maintained.
their upward trend, climbing 50%. The EEC economy remained fundamentally strong, with GDP growth holding at around the 3% level, well above the world average.
In
In the run-up to the Single European Market, corporate investments have been jostling to secure market shares. Germany, investment expenditure and consumer spending were particularly ro- bust, and national re-unification has opened new horizons for business. Other strong economies included the Netherlands, France, Italy, Spain and Portugal. The major exception was the UK, where a tight monetary policy and high interest rates - deployed to combat inflation—dampened
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