Bullish growth: Hong Kong's June merchandise exports grew 6.7% year-on-year as the Mainland market performed  well and the European market  grew steadily.

June saw total goods exports grow 6.7% over a year earlier, to $202.2 billion on the bullish economies of the Mainland China and Europe, says the Census & Statistics Department.

The department said merchandise exports rebounded last month as the Mainland market performed well and the European market grew steadily.

The US market seemed to be affected by weakening consumer sentiment there, and the Japanese market by the yen's notable depreciation over recent quarters.

External factors to have strong impact

Hong Kong's future trade performance will depend on the development of external environment, which includes the possible slowdown of the US and global economies amid rising interest rates, the Mainland's stepped-up macroeconomic tightening, high oil prices, and persistent global trade imbalances.

Last month, re-exports grew 6.2% year-on-year to $190.4 billion while domestic exports were up 16.5% to $11.8 billion. Imports grew 9.9% over a year earlier, to $216 billion, after a 2.5% year-on-year increase in May. 

Trade deficit widened

June's trade deficit widened to $13.8 billion from $7.05 billion over a year earlier.

The first half of 2006 saw total goods exports grow 8.5% over the same period in 2005. In the six-month period, the re-exports were up 7.5%, the domestic exports rose 28.6% and imports rose 10.8%.

The trade deficit in the first half of 2006 increased to $80.1 billion from $51.3 billion over a year earlier.

Comparing June 2006 with June 2005, some major destinations reported re-exports increases, in particular Korea (+13.5%) and the Mainland (+10.1%). 

However, re-exports fell in the Netherlands (-18.7%), France (-4.4%) and the United Kingdom (-4.2%).

Export to Europe increased

Last month significant year-on-year increases were recorded in domestic exports to Italy (+347.6%), the United Kingdom (+205.4%), Germany (+180.3%) and the Netherlands (+158.9%) while Taiwan experienced a fall (-28.8%).

June saw annualised increases in imports from most major suppliers, in particular Singapore (+18%), Taiwan (+13.3%), Korea (+11.8%), the Mainland (+11.4%) and Thailand (+7.6%).

Comparing June 2006 with June 2005, marked increases were registered in re-exports of electrical machinery, apparatus and appliances, and electrical parts ($6.8 billion or 18.4%), and telecoms and sound recording and reproducing apparatus and equipment ($1.6 billion or 5.8%). However, a decrease of 1.1 billion or 7.2% was registered in clothing re-exports.

June also saw an increase in domestic exports of clothing,  up $1.9 billion, and of office machines and automatic data-processing machines, up $564 million. 

However, in the same month, a $664 million decrease was recorded in domestic exports of electrical machinery, apparatus and appliances, and electrical parts.

Last month also saw an increase in imports of electrical machinery, apparatus and appliances, and electrical parts, up $7.7 billion, and of telecoms and sound recording and reproducing apparatus and equipment, up $1.6 billion.