Solid growth: Hong Kong's merchandise exports grew solidly in July, with the value of total exports up 8.6%.

The values of Hong Kong's total exports and imports of goods recorded year-on-year rises of 8.6% and 9.8% in July, the Census & Statistics Department says.

Merchandise exports grew solidly. The Mainland's vibrant trade flows on the back of a buoyant economy, together with the fairly strong performance of the European Union as well as the emerging markets, more than offset the softness of the US market.

The external trading environment is still largely positive and should be conducive to Hong Kong's exports going forward, yet it is subject to uncertainties arising from the recent financial market turmoil originating from the US sub-prime mortgage market and the weak US property market. The effects of the Mainland's cut in export tax rebate and tightening measures on processing trade, as well as exchange rate movements, are also areas to watch.

The value of total exports of goods rose 8.6% to $238.5 billion, with the value of re-exports surging 10.9% to $228.1 billion and the value of domestic exports falling 25.1% to $10.5 billion. The value of goods imports rose 9.8% over a year earlier to $246.7 billion. A visible trade deficit of $8.2 billion, equivalent to 3.3% of the value of imports of goods, was recorded.

For this year's first seven months, the value of total exports of goods rose 10.1% over a year earlier, with the value of re-exports up 12.4% and the value of domestic exports down 25.7%. The value of goods imports grew 10.7%. A visible trade deficit of $102.7 billion, equivalent to 6.5% of the value of goods imports, was recorded.

Analysed by commodities, significant rises were registered in the values of total exports of many principal commodity divisions, in particular electrical machinery, apparatus and appliances, and electrical parts (up $9.5 billion or 20.8%); telecommunications and sound recording and reproducing apparatus and equipment ($4.7 billion or 15.7%); and miscellaneous manufactured articles consisting mainly of baby carriages, toys, games and sporting goods ($4.6 billion or 26%). However, the value of total exports of office machines and automatic data processing machines fell $3.7 billion or 13.5%.

The values of total exports to many major destinations also grew in July, with notable increases registered for Germany (up 20.1%), France (18.6%), the Mainland (13.3%) and the Netherlands (12.7%).