ENG-2009 — Page 98

50 The Economy

Although the US and EU economies resumed growth after the third quarter of 2009, their recovery was not yet solidly in place. Against this background, exports of Asian economies generally fell markedly during most of 2009, only improving more visibly in the latter part of the year. As unemployment in the US and EU remained severe, the rise of protectionist sentiments in these markets remained a threat to the global trading environment.

Chart 8

Hong Kong's Visible Trade (year-on-year rate of change in real terms)

Per cent

20

15

10

5-

0

-5-

-10-

-15-

-20-

-25

Imports of goods

Total exports of goods

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 |

2006

2007

|

2008 | 2009

Merchandise exports declined sharply in 2009 amidst the slump in global demand and world trade.

Hong Kong's merchandise exports to the EU and US markets, where recovery had been very weak by past standards, posted double-digit declines in all four quarters of 2009, reflecting the sluggishness in their domestic demand. The return of the Mainland to faster economic growth from the second quarter of 2009 provided an important stabilising force in Asia and helped to revive intra-regional trade. As a result, Hong Kong's exports to many Asian economies improved visibly in the latter part of the year. Exports to the Mainland, South Korea and Taiwan, rebounded to show year-on-year increases in the fourth quarter, and those to Japan saw a much tapered year-on-year decline in the same quarter. However, exports to Singapore still fell at double-digit rates.

Imports of goods recorded a decline of 9.4 per cent in real terms in 2009, after an increase of 2.6 per cent in 2008. Retained imports, referring to imports for domestic use, were also down, by 3.8 per cent in real terms in 2009, having fallen by 1.4 per cent in 2008. The fall-off was concentrated in the first half of 2009, as the severe global recession led to a world wide plunge in production and import demand, which in turn prompted local producers to pull back placing orders in view of the highly uncertain environment. But as the recessionary forces progressively