ENG-2009 — Page 99

The Economy | 51

receded later in the year, the inventory cycle began to turn along with some normalisation of global trade and the strengthening of domestic demand, leading to distinct increases in retained imports in the latter part of the year.

Analysed by end-use, retained imports of raw materials and semi-manufactures reverted to a marked increase in the second half of 2009, having plunged in the first half. Retained imports of consumer goods and capital goods both fell in 2009 as a whole, yet reverted to year-on-year increases in the latter part of the year. The growth in intake of consumer goods towards the year-end was particularly sharp, consistent with the upturn in local consumer spending. Retained imports of foodstuffs likewise showed faster growth in the second half of 2009, while those of fuels increased notably throughout the year.

Exports of services fared persistently better over the course of 2009, particularly during the second half of the year where there was a marked rebound. For the year as a whole, exports of services fell by only 0.7 per cent in real terms, following an increase of 5 per cent in 2008. As IPO and other financial market activities started to bottom out in the second quarter after the dismal first quarter, followed by a distinct upturn in the second half, exports of finance, business and other services registered a moderate increase in 2009 as a whole. Thanks to the rebound in the number of visitor arrivals in the second half of the year, exports of travel services held up well. However, exports of transportation services and trade-related services (mainly offshore trade) were down during most of 2009 due to the large shrinkage in global trade flows, before reverting to year-on-year increases by the fourth quarter.

Imports of services contracted by 4 per cent in real terms in 2009, in contrast to the 6.3 per cent growth in 2008. Imports of finance, business and other services decreased in 2009, but held up rather well in the second half of the year as financial and commercial activities revived. Imports of travel services, after contracting in the first quarter, resumed growth in the remaining three quarters, along with a strengthening of local consumer sentiment, resulting in a modest increase in 2009 as a whole. Meanwhile, imports of trade-related services recovered to positive growth in the fourth quarter amidst a revival in intra-regional trade, while imports of transportation services fell throughout the year (Chart 9).

With the surplus in the invisible trade account more than offsetting the deficit in the merchandise trade account, a sizable surplus of $117.7 billion was recorded in the combined visible and invisible trade balance in 2009, equivalent to 3.9 per cent of the total value of imports of goods and services. This compared with the corresponding figures of $170.7 billion and 5 per cent in 2008. The still sizable trade surplus was one of the strong economic fundamentals that Hong Kong possessed in meeting the challenges posed by the global financial crisis.