CONFIDENCE among Hong Kong’s exporters has fallen to its lowest level, in the context of coronavirus, softening global demand and ongoing trade tension between the US and Mainland China.
The Hong Kong Trade Development Council announced the latest HKTDC Export Index today with a reading of 16 – down a further 2.8 points from the previous quarter’s low.
Close to 94% of the 500 Hong Kong exporters surveyed said the COVID-19 outbreak had adversely affected their companies in areas such as arranging product deliveries (80.4%), supply of labour following the Chinese New Year holiday (76.2%), business contacts with overseas buyers or suppliers (60.5%) and supply of raw materials (56.1%).
HKTDC director of research Nicholas Kwan said the coronavirus pandemic had disrupted the global supply chain.
“Since the Sino-US trade dispute surfaced, many manufacturers have set up production lines outside the mainland to avoid additional tariffs,” Mr Kwan said.
“Following the COVID-19 outbreak, operations in some factories in the mainland – and even in Japan and Korea – have been suspended or have yet to fully resume, putting a strain on the global supply chain,” he said.
“For example, the shortage of electronics components has affected the supply of consumer electronics in the market. Multinational corporations may begin to further diversify their investments and no longer rely on a single country for production.”
Mr Kwan said the pandemic had resulted in the global economy losing its growth momentum, leading to a decline in the demand for new orders.
HKTDC assistant principal economist (Asian and Emerging Markets) Wenda Ma said manufacturers would continue shifting or extending their supply chains from the mainland to other countries, including Vietnam.
“While it has developed quickly as a manufacturing hub, Vietnam has become a victim of its own success, with growing issues such as congested ports and roads and the rising cost of land and labour,” Ms Ma said.