HONG KONG (Reuters) - Hong Kong’s total exports in June suffered their biggest annual fall in nearly three and a half years, hurt by a slowdown in China and the impact on the port city’s manufacturers from Sino-U.S. trade tensions.
In June, Hong Kong’s total exports dropped 9% from a year earlier to HK$309.6 billion ($39.62 billion), the largest decline since February 2016, government data showed on Thursday.
June was the eighth straight month of declining exports.
Total imports in June fell 7.5% to HK$364.8 billion, the seventh straight month of decline, and also biggest drop since February 2016.
In May, exports slipped 2.4% while imports dropped 4.3%.
“The near-term performance of Hong Kong’s merchandise exports will remain constrained by the softening global economy and uncertainties arising from US-Mainland trade tensions and other external developments,” the government said in a statement.
For the first half of 2019, export value dropped 3.6%, while imports fell 4.5%. The city recorded a visible trade deficit of HK$244.2 billion, equivalent to 11.4% of the value of imports.
“It is alarming,” said Paul Tang, chief economist of Bank of East Asia.
Tang said his bank may further cut its full-year GDP growth forecast if the sharp export decline continues. It earlier revised the forecast to 1.5% from 2%.
The U.S. and Chinese governments have levied billions of dollars of tariffs on each other’s imports, disrupted global supply chains and shaken financial markets in their dispute.
Trade issues aren’t the only factor denting Hong Kong’s economy at present. Violent incidents linked with protests against a controversial extradition bill have hurt tourism and retail industries.
The Hong Kong Retail Management Association recently revised its full-year retail sales forecast for the city to a double-digit fall instead of single-digit growth.
($1 = 7.8146 Hong Kong dollars)
Reporting by Donny Kwok and Twinnie Siu; Editing by James Pomfret and Richard Borsuk