Hong Kong exports or the worst recovery in 55 years depends on the mainland

Shu Shi The financial crisis affected Hong Kong's economy to reproduce the weak signal.　　The Hong Kong Trade Development Council ("HKTDC") yesterday announced in its report on the medium-term outlook for exports in Hong Kong, which was just completed in the context of the global economic downturn, in view of the lower than expected global trade performance, the forecast for this year's export growth in Hong Kong was reduced from an earlier estimate of 6% per cent to 10%~12%. Lianghai, chief economist of Hktdc, said this would be the worst year for Hong Kong exports since 1954.　　Although there are indications that overseas buyers have resumed their purchases and have supplemented their inventories with small orders, the TDC expects to postpone the external trading environment until the second half of this year. Hong Kong's exports fell 21% in the first 4 months of this year, the TDC said.　　Since the advent of the global financial crisis, consumer demand has fallen, and overseas buyers have thus reduced warehousing, and consumers tend to buy cheap products, all of which have put downward pressure on the price. Lianghai said: "Despite the relief measures taken by local governments, the reduction of liquidity, the contraction of trade credit, the decline in asset prices and the fragile business and consumer confidence have hindered the investment, production, consumption and import of Hong Kong's traditional export markets." "The unemployment rate has not been improved on the same day that the TDC announced its economic forecasts, the Census and Statistics Department of the Hong Kong Special Administrative Region (HKSAR) published the latest Labour-force statistics and the situation remains worrisome."　　The seasonally adjusted unemployment rate for March to May this year was 5.3%, the same as the figure for February-April this year, but the underemployment rate rose from 2.2% to 2.3% in the same period. The Hong Kong Special Administrative Region Government has disclosed that the number of unemployed persons (without seasonal adjustment) has risen from February to April from 196900 this year to 199700 people from March to May, with an increase of about 2800 people.　　Over the same period, the number of underemployed persons increased from 79900 to 85200, and about 5300. Compared with February to April this year, the decline in unemployment rates (without seasonal adjustments) during the period from March to May was mainly seen in the construction, transport, accommodation and arts, entertainment and leisure services sectors, while the rise in the rate of unemployment in catering services, social work activities and the wholesale sector was more pronounced.　　In the underemployment rate, the increase is mainly seen in construction and warehousing and transport support services. However, the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, believes that the unemployment rate has remained unchanged for the first time in eight months, and is already an encouraging sign. Moreover, after four months of continuous contraction, the number of workers has risen for the first time, an increase of 12800 people is also a good performance. But he expects the situation to be grim. "As the overall economy is still to be revived and fresh graduates and school leavers will be involved in the labour market in the next month or two, the unemployment rate is expected to remain under pressure."　　"he said.　　To demonstrate the determination to tide over the difficulties with the public, Hong Kong chief executive Donald Tsang announced at noon yesterday that the Government's accountable officials in the HKSAR, led by him, generally paid a 5.38% pay cut, while the junior civil servants implemented a policy of wage freeze. Hong Kong's recovery relies on the mainland's decline in exports,While the unemployment rate has risen, Hong Kong's economy is becoming increasingly reliant on mainland recoveries.　　Lianghai, chief economist of Hktdc, said the mainland may be the first major economy to recover and Hong Kong will rely more heavily on mainland economic growth. "Although emerging economies have been hit quite a lot in this crisis, it is generally expected that the mainland will benefit from fiscal stimulus measures and easy bank credit policies to become the first major economies to recover," he said. "Hong Kong's exports to the mainland have fallen sharply, mainly because of the goods destined for the mainland to be exported to the mainland for processing and re-export," he said. "It is expected that Hong Kong's exports will return to normal growth trajectory when the global economy recovers markedly," he said. But he said the global economic recovery still depended on the normal functioning of the banking and credit systems, a bottoming out of the housing market, and renewed confidence among businesses and consumers, while the biggest threat to the global trading environment was the potentially far-reaching and growing protectionist and human influenza outbreaks in the world economy, Will also pose a threat to the prospects of global trade.　　These will also cast a variable in Hong Kong's economic recovery. Lianghai suggested that Hong Kong companies should focus on inland provinces and some two or three-line cities as soon as possible, expanding local markets. He said that, compared with coastal provinces and cities, these inland provinces and two or three of the city are less dependent on exports, the impact of the global financial crisis is also relatively minor. According to a survey conducted by the HKTDC in March this year, 33.4% Hong Kong companies operating in the mainland have embarked on the development of domestic sales. As for other companies that have not yet expanded their domestic sales, over 30% per cent said they would enter or consider entering the domestic market within the next 6 months