HONG KONG’S exports will decline by four per cent in 2019 as a result of the trade dispute between the United States and mainland China, the Hong Kong Trade Development Council (HKTDC) forecasts.
Nicholas Kwan, director of research at HKTDC, reveals the United States has imposed tariffs on almost all goods imported from the mainland.
“Inevitably, this will have an impact on Hong Kong’s exports to the USA,” he observes. “Local traders should look to capture opportunities among the challenges and hasten their pace of expansion into [other] emerging economies such as the Association of Southeast Asian Nations (ASEAN) countries, Latin America and the Middle East,” he contends.
Hong Kong’s exports to these markets are growing steadily, with ASEAN recently surpassing the USA as the entrepot city’s second-largest export market, figures show.
In the first seven months of 2019, Hong Kong’s exports to ASEAN markets climbed by 4.6 per cent year-on-year, whilst those to the USA fell by 10.9 per cent.
Regarding the global supply chain, Kwan suggests Hong Kong manufacturers should consider establishing new production bases in countries along the Belt and Road Initiative — an ambitious programme to connect Asia with Africa and Europe via land and maritime networks aimed at increasing trade and stimulating economic growth.
Kwan’s comments support data collected by the International Air Transport Association (IATA) showing monthly declines in airfreight for Asia-Pacific airlines in 2019.
They saw demand for air cargo contract by 4.9 per cent in July this year, in comparison with the same period in 2018.
“The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market,” warned a statement from IATA earlier this year.
“With the region accounting for more than 35 per cent of total freight tonne kilometres, this performance is the major contributor to the weak industry-wide outcome.”
Originally published at https://aircargoeye.com on September 24, 2019.