ENG-2000 — Page 84

THE ECONOMY

investment can be expected to flow into the country. Hong Kong's role as a major funding centre for the Mainland will thus be sustained in the years to come.

The Economy in 2000

External Trade

Total exports of goods, having staged a strong upturn in the latter part of 1999, grew.. at a much accelerated rate in 2000. Sustained robust performance of the Mainland economy, continued revival in many of the other East Asian economies, and solid economic growth in the United States and Europe bolstered import demand in all these major markets. Also contributing was the improved competitiveness of Hong Kong's exports, upon the cost/price adjustments and productivity upgrading in the local economy over the past two years or so. Yet the growth pace in these exports moderated considerably towards the year-end, as the base of comparison was already much lifted, and as global demand weakened amidst the distinct slow-down in the US

economy.

Chart 8

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

Per cent

30

Imports of goods

Re-exports

20

10

0

Total exports of goods

52

-10

Domestic exports

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Growth in merchandise exports accelerated markedly further in 2000, underpinned by buoyant import demand in all the major markets and also improved competitiveness and productivity upgrading locally.

For 2000 as whole, total exports of goods (comprising re-exports and domestic exports) attained a marked growth of 17 per cent in real terms. This far outpaced the 4 per cent increase in 1999, and was the fastest growth recorded since 1992. Despite the moderation towards the year-end, double-digit year-on-year increases were still observed in all the four quarters of 2000, at 21 per cent, 18 per cent, 18 per cent and 13 per cent respectively in real terms. On a seasonally adjusted quarter-to-quarter