HKTDC Research projects a 4% to 6% growth in Hong Kong’s exports for 2024, following a challenging period marked by a significant downturn in global and local economic conditions.
This optimism is largely based on the anticipated recovery in the electronics market, a critical component of Hong Kong’s export portfolio. Despite facing an 11% reduction in exports from January to October 2023, on top of an 8.6% decline in 2022, and grappling with issues like high inflation, rising interest rates, geopolitical tensions, and semiconductor sector downturns, there are signs of potential recovery.
These challenges, compounded by capacity constraints in cross-border land transportation with mainland China, led to an estimated 7% to 9% decline in Hong Kong’s total exports for 2023, closely mirroring the global trade performance.
Moving into 2024, despite enduring economic challenges and the expectation of continued strict regulatory oversight by central banks, the electronics sector’s recovery is anticipated to significantly contribute to a rebound in Hong Kong’s export growth, especially in the latter half of the year.
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Recovery In The Horizon
Hong Kong’s trade with key Asian markets, primarily involving intermediate goods and industrial commodities, has faced challenges due to a prolonged downturn in the semiconductor sector, affecting about 87% of its exports to regions like mainland China, the ASEAN countries, India, South Korea, and Taiwan.
From January to October 2023, a significant decline was observed in exports to these areas, with the most considerable drops in trade with mainland China (13.7%), the ASEAN bloc (10.9%), Vietnam (3.9%), and Singapore (23.9%), alongside decreases to India, Taiwan, and Japan.
Despite these challenges, recent months have shown signs of recovery, with Hong Kong’s exports marking a 1.4% year-on-year growth in October. Additionally, while exports to the US and EU have been affected by weak consumer spending, exports to the Middle East have increased by 10.6%, indicating a diversifying and potentially rebounding trade landscape.
| Region | 2022 HK$ Million | 2022 Growth % | Jan – Oct 2023 HK$ Million | Jan – Oct 2023 Growth % | 2024 Outlook Growth |
|---|---|---|---|---|---|
| US | 292,705 | -5.5 | 222,855 | -10.5 | Mild growth |
| EU | 312,617 | -7.9 | 228,690 | -13 | Moderate decline |
| Japan | 102,488 | -13.8 | 69,895 | -20.1 | Sharp decline |
| Developing Asia | 3,422,168 | -8.3 | 2,541,068 | -12.2 | Moderate decline |
| Mainland China | 2,570,757 | -12.9 | 1,874,970 | -13.7 | Moderate decline |
| ASEAN | 360,017 | 6.5 | 271,427 | -10.9 | Moderate decline |
| Latin America | 84,667 | -8.4 | 61,580 | -15.3 | Moderate decline |
| Middle East | 125,538 | 23.4 | 110,530 | 10.6 | Strong growth |
| Emerging Europe | 82,057 | -26 | 64,846 | -4.1 | Mild growth |
| Africa | 28,261 | -39.4 | 21,004 | -15.2 | Strong growth |
| World | 4,531,650 | -8.6 | 3,404,931 | -11 | Overall 4% to 6% growth |
Electronics To Spearhead Recovery
The 2024 outlook for Hong Kong’s export sector, especially in electronics aimed at consumer markets, anticipates overcoming short-term obstacles despite global economic signals of stagnation and contraction.
Manufacturing PMIs across the US, mainland China, and the ASEAN region are hovering around the stagnation mark of 50, with the Eurozone showing figures well below, indicating economic contraction.
The IMF predicts subdued growth for advanced economies in 2024, with a decline in growth rates reflecting the impact of strict policy measures. Similarly, the OECD anticipates a slight global economic downturn.
Additionally, a significant portion of respondents in the Q4 2023 HKTDC Export Index survey expressed concerns over potential economic downturns and the effects of geopolitical tensions, pointing towards a cautious but hopeful recovery led by the electronics sector.
| Industry Sector | 2022 HK$ Million | 2022 Growth % | Jan-Oct 2023 HK$ Million | Jan-Oct 2023 Growth % | 2024 Outlook Growth | |
|---|---|---|---|---|---|---|
| Electronics | 3,285,001 | -8.8 | 2,389,201 | -13.6 | Moderate growth | |
| Precious Jewellery | 71,348 | -3.6 | 71,935 | 20.8 | Mild growth | |
| Watches & Clocks | 54,781 | -8.4 | 45,365 | -2.8 | Mild growth | |
| Clothing | 53,520 | -19.7 | 41,450 | -7.6 | Moderate decline | |
| Toys | 21,380 | -36.7 | 14,941 | -17.4 | Sharp decline | |
| Household Electrical Appliances | 8,693 | -47.5 | 6,538 | -10.6 | Moderate decline | |
Capitalise on Hong Kong’s revitalisation with InCorp
HKTDC Research projects a positive growth outlook for Hong Kong’s exports in 2024, with an anticipated growth rate of 4-6%, especially highlighting a resurgence in the electronics sector’s intra-regional trade.
This recovery is expected to be more pronounced in the latter half of the year, supported by Hong Kong’s robust electronics export base and predicted improvements in the global economic environment.
This forecast aligns with the WTO’s expectation of a 3.3% increase in global merchandise trade volume for 2024, following an estimated growth of 0.8% in 2023.
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