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What’s Next for Hong Kong’s Export Sector in 2024?

What’s Next for Hong Kong’s Export Sector in 2024?

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. 
Ready to tap into this dynamic export market? InCorp Hong Kong is your trusted partner. 

We offer tailored solutions to help businesses of all sizes navigate the export process, from initial planning to market entry.

Free consultation: Get expert advice and explore your options with a no-obligation consultation.
Proven expertise: Our team deeply understands the Hong Kong business landscape and has a track record of success.

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