HKTDC Export Index 3Q20: Exporter confidence rises for second consecutive quarter

Hong Kong reveals nice promise as worldwide enterprise hub for Better Bay Space

The HKTDC Export Index has risen for the second consecutive quarter, indicating that exporter sentiment continues to enhance. The Hong Kong Commerce Growth Council (HKTDC) introduced the index for the third quarter of 2020 in the present day with a studying of 25.1 – up 6.9 factors from the earlier quarter, and 9.1 factors from the report low within the first quarter of this 12 months. HKTDC Director of Analysis Nicholas Kwan famous that export indexes throughout all main industries stay in contractionary territory regardless of the latest rebound, stressing that instances will stay robust for Hong Kong’s exporters.

Because the preliminary shock of the Covid-19 pandemic begins to wane, the variety of exporters having orders cancelled, funds deferred or logistics and distribution disrupted confirmed a big drop in contrast with the earlier quarter. Mr Kwan famous that 60.5% of respondents indicated that diminished orders from patrons was the largest problem they confronted, up 3.5 share factors from the second quarter of 2020. Numerous exporters (23%, up 4.9 share factors) mentioned they needed to downsize their firms and in some circumstances lay off employees.

“Fewer respondents (51.5%, down 13.1 share factors) regarded the continuation of the pandemic as the largest menace to their export efficiency over the subsequent six months, with extra of them involved about softening international demand (21.5%, up 2.5 share factors) and commerce tensions between the US and China (15%, up 4.2 share factors),” Mr Kwan mentioned.

Commerce indexes choose up in third quarter

The HKTDC performed its newest enterprise confidence survey in August, interviewing 500 native merchants from six main trade sectors together with electronics, jewelry, timepieces, toys, clothes and equipment. The HKTDC Export Index displays the prospects of town’s near-term export efficiency. Readings above and beneath 50 point out an optimistic or pessimistic outlook respectively.

“Export indexes for all main sectors rose from their lowest readings within the first half of 2020, particularly the equipment sector (29.0), toys (27.5) and electronics (25.3), adopted by timepieces (21.6), clothes (21.0) and jewelry (20.1). Exporters’ notion on the efficiency of main markets remained largely unchanged, with Japan (46.1) and Mainland China (42.9) considered probably the most promising markets for Hong Kong exports, adopted by the US (41.2), the Affiliation of Southeast Asian Nations (ASEAN) bloc (41.0) and the European Union (36.0),” HKTDC Economist Samantha Yim mentioned.

Ms Yim added that the Procurement Index, Offshore Commerce Index and Commerce Worth Index all started to stabilise within the third quarter whereas the Employment Index dropped by 2.Three factors to a four-year low of 39.8. “In contrast with different industries, recruitment intentions in toys (38.0) and timepieces (35.6) had been notably downbeat, suggesting the chance of headcount losses inside these sectors.”

Capturing new alternatives within the Better Bay Space

As a extremely open and internationalised metropolis within the Guangdong-Hong Kong-Macao Better Bay Space, in addition to a hub for worldwide finance, logistics and transportation, skilled companies, commerce and aviation, Hong Kong performs an necessary position within the area underneath the “one nation, two programs” precept. A latest survey confirmed that senior enterprise executives usually recognise Hong Kong’s benefits as a world enterprise hub for the Better Bay Space, together with its sturdy authorized regime, open enterprise setting, free-market financial system, sturdy infrastructure and transportation programs in addition to its high quality pool of worldwide expertise.

The survey was commissioned by the HKTDC and performed by PricewaterhouseCoopers (PwC) to get detailed insights into Hong Kong’s position within the Better Bay Space. PwC performed in-depth interviews and questionnaire surveys of near 500 senior executives from the world to gauge their views on how six main industries, together with monetary companies, logistics and transportation, commerce companies, manufacturing, authorized and dispute decision and innovation know-how, can leverage Hong Kong’s benefits in enterprise operations. The consultancy agency additionally made solutions on the right way to reinforce town’s place as a world enterprise hub within the Better Bay Space, assessing the potential alternatives and sure challenges.

The survey confirmed respondents as believing that the 5 developments most necessary to Hong Kong within the subsequent 5 years are: growing software of rising know-how; integration of Hong Kong with the Better Bay Space, together with capital connectivity; growing cross-boundary transactions because of the Belt and Street Initiative; extending international worth chains out of the Better Bay Space; and industrial upgrading and transformation within the space.

Respondents believed that to additional improve Hong Kong’s place because the worldwide enterprise hub for the Better Bay Space, the 5 most necessary measures town has to take are: facilitate the free circulation of capital throughout the space; enhance knowledge privateness safety; enhance the analysis and improvement (R&D) functionality of Hong Kong by encouraging R&D actions and the adoption of rising applied sciences; promote tax simplification/harmonisation within the Better Bay Space; and promote regulatory transparency within the space.

New measures to reinforce Hong Kong’s key roles

HKTDC Assistant Principal Economist (Better China) Alice Tsang mentioned that, based on the findings of the PwC report, Hong Kong ought to implement a spread of measures to strengthen town’s key roles as a world monetary centre, authorized and dispute decision centre, logistics and transportation hub, buying and selling centre, innovation and know-how centre, and site for enterprise headquarters.

“For the sake of the monetary sector, Hong Kong ought to facilitate cross-border capital circulation, take the lead in reforming its monetary regulatory system and monetary services and products, and develop sustainable and inexperienced finance,” Ms Tsang mentioned, citing the report. “Within the space {of professional} companies, those that have accomplished skilled coaching programmes needs to be allowed to practise in particular areas throughout the Better Bay Space. Hong Kong must also improve its place as a world arbitration centre and set up itself as a safety base and buying and selling platform for mental property within the space.”

Ms Tsang added that to strengthen Hong Kong’s place as a logistics, transportation and buying and selling hub, town ought to facilitate the circulation of individuals and items to and from different cities within the Better Bay Space. “Hong Kong must also set up a unified product high quality certification mechanism with different cities within the space for modern companies and merchandise but to achieve worldwide certification. This might reinforce town’s place as a centre for testing and certification,” she mentioned.

Recommendations had been additionally made for capitalising on Hong Kong’s benefits as an innovation and know-how centre by supporting the trade’s improvement, creating an ecosystem through which Better Bay Space cities’ relative benefits can complement one another and develop in live performance, and attracting enterprise capital establishments to town. Hong Kong must also lengthen preferential insurance policies for establishing companies within the metropolis to additional appeal to Better Bay Space enterprises to develop their enterprise. This may assist to make Hong Kong extra enticing as a location for enterprise headquarters.

References
– HKTDC Analysis web site: http://analysis.hktdc.com/
– Hong Kong Export Index 3Q20: Exporter Confidence Rallies Reasonably Whereas Spectre of Covid-19 Nonetheless Looms Massive: https://bit.ly/2GKKiYx
– Hong Kong because the Worldwide Enterprise Hub for the Better Bay Space (Government Abstract): https://bit.ly/2Rm1ky9
– Photograph obtain: https://bit.ly/3htY1Q4

About HKTDC

The Hong Kong Commerce Growth Council (HKTDC) is a statutory physique established in 1966 to advertise, help and develop Hong Kong’s commerce. With 50 workplaces globally, together with 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way international funding and enterprise hub. The HKTDC organises worldwide exhibitions, conferences and enterprise missions to create enterprise alternatives for firms, significantly small and medium-sized enterprises (SMEs), within the mainland and worldwide markets. The HKTDC additionally supplies up-to-date market insights and product data through commerce publications, analysis studies and digital information channels. For extra data, please go to: www.hktdc.com/aboutus. Observe us on Twitter @hktdc and LinkedIn

Contact:

Leslie Ng, Tel: +852 2584 4239, E-mail: [email protected]
Beatrice Lam, Tel: +852 2584 4049, E-mail: [email protected]