ENG-2018 — Page 78

3

The Economy

Hong Kong is also the largest offshore RMB investment product market. As at end-2018, there were 47 Securities and Futures Commission (SFC)-authorised, RMB-denominated unlisted funds primarily investing onshore via the Renminbi Qualified Foreign Institutional Investor, Stock Connect, Bond Connect and China's Interbank Bond Market, with an aggregate net asset value (NAV) of RMB6.3 billion, and 33 SFC-authorised, RMB-denominated exchange traded funds primarily investing onshore via the same channels with an aggregate NAV of RMB51.4 billion.

In 2018, the Hong Kong-Zhuhai-Macao Bridge and the Hong Kong Section of the Guangzhou- Shenzhen-Hong Kong Express Rail Link began operation. Both projects greatly shorten travel between Hong Kong and cities in the Mainland, facilitating the flow of people and goods and further deepening the cross-boundary economic and trade links.

The Economy in 2018

External Trade

Total exports of goods, based on external merchandise trade statistics, grew solidly by 4.9 per cent in real terms in 2018 despite decelerating from the strong 6.2 per cent increase in 2017. Merchandise exports grew 6.6 per cent year on year in the first three quarters, but weakened visibly to a marginal growth of 0.2 per cent in the fourth quarter (chart 5) as global economic growth moderated and the Mainland-US trade conflict took its toll. Analysed by major market, exports to the US grew notably in 2018. However, the pace of growth moderated in the fourth quarter as re-exports affected by additional tariffs imposed by the US showed a sharp slowdown. Exports to the European Union recorded strong growth. Exports to the Mainland grew solidly for 2018 as a whole, with a year-on-year decline in the fourth quarter. Exports to other Asian markets were mixed, and many experienced decelerated growth or even declines in the fourth quarter.

Chart 5

Hong Kong's Goods Trade

(year-on-year rate of change in volume terms)

Per cent

10

5

-5

-10

Total exports of goods

Imports of goods

T

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

1

2014

2015

2016

2017

Merchandise exports grew solidly for 2018 as a whole.

40

2018

I