ENG-1999 — Page 78

THE ECONOMY

in the fourth quarter. On a seasonally adjusted quarter-to-quarter comparison, total exports edged up by 1 per cent and 3 per cent respectively in real terms in the first and second quarters of 1999, and then rose further by 4 per cent in the third quarter and 3 per cent in the fourth quarter.

Within total exports, re-exports rose by 5 per cent in real terms in 1999, reversing the 4 per cent fall in 1998. The performance of domestic exports was however still modest, affected by the ongoing structural shift towards re-exports and offshore trade. Notwithstanding some improvement towards the year-end, domestic exports still fell by 7 per cent in real terms for 1999 as a whole, only marginally improved from the 8 per cent decrease in 1998.

Mirroring closely the pick-up in re-exports during the year and also incorporating the rebound in retained imports towards the year-end, imports of goods staged a strong upturn after mid-1999. For 1999 as a whole, imports showed virtually no change in real terms, which was already a notable improvement from the 7 per cent decrease in 1998. Analysed by source of Hong Kong's imports, the Mainland remained the largest supplier, accounting for 44 per cent of the total value in 1999. Other major suppliers included Japan (with a share of 12 per cent), Taiwan (7 per cent), and the United States (7 per cent).

Chart 7:

Hong Kong's visible trade (year-on-year rate of change in real terms)

Per cent

30

Re-exports

Imports

20

10

0

-10

1989

1990

Domestic exports

1991

1992

1993

Total exports

1994

1995

1996

1997

1998

1999

52

Export performance staged a strong recovery over the course of 1999, reversing the downtrend in 1998. This was largely attributable to the resurgence in exports to East Asia during the year, amidst a broad-based revival in import demand in line with economic recovery in the region. With the value of total exports showing little change but the value of imports still shrinking for the year as a whole, the visible trade deficit narrowed further, to $43.7 billion or 3.1 per cent of the value of imports in 1999. These were substantially smaller than the corresponding figures of $81.4 billion and 5.7 per cent in 1998.