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| Wednesday, 14 December 2016, 17:40 HKT/SGT | |
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Source: HKTDC | |
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| Services Industries to Benefit from Belt and Road Initiative; Bangladesh Provides Long-term Relocation Opportunities |
HONG KONG, Dec 14, 2016 - (ACN Newswire) - Despite challenges facing the global economy, Hong Kong's exports are expected to stabilise in 2017, with improvements in export value and volume compared to this year. The Hong Kong Trade Development Council (HKTDC) today released its Export Index for the fourth quarter of 2016 (4Q16), forecasting export volume to increase 0.5 per cent and export value to remain flat in 2017, compared to estimates of zero per cent and minus two per cent respectively for 2016.
"Suggestive of the difficulties with foreign buyers, the 4Q16 Export Index shows a deterioration in the overall confidence of Hong Kong exporters in the near term, although they maintain a neutral outlook towards 2017 as a whole," said Nicholas Kwan, Director of Research, HKTDC. "Barring rising trade tension triggered by US president-elect Donald Trump's protectionist policies, any deflationary shocks in the EU and Japan, untamed volatility of capital markets, a marked slowdown of the Chinese economy or escalated geopolitical tensions, our forecast is for Hong Kong exports to become stable in the year ahead."
The overall HKTDC Export Index for 4Q16 was 33.7, down 5.1 compared to the previous quarter. "Although many remain pessimistic with regard to their likely export performance over the short-term, exporters maintain a neutral outlook towards next year. Indeed, 59 per cent of respondents expect their sales to increase or remain unchanged in 2017," said Mr Kwan. The Export Index gauges exporter confidence, with a reading below 50 indicating a pessimistic sentiment during the quarter and signaling a contraction in Hong Kong exports over the short term.
- A slightly better global environment in 2017
Continued challenges notwithstanding, the world economy is expected to see some improvement in 2017, but any growth is likely to remain sluggish and patchy. "While the US economy looks set to gain traction in 2017, the EU and Japan will remain in a slower lane. Growth prospects for the emerging economies will also be mixed," said Daniel Poon, Principal Economist (Global Research), HKTDC. "As the economies reliant on natural resources should bottom out in sync with steadier oil and commodity prices, China will see slower growth in the midst of its restructuring process, although developing Asia should continue to be a stand-out performer."
- Bright spots emerge in various sectors
With marginally improving prospects for overall exports, Mr Poon identified some bright spots in different industries:
Electronics: Augmented reality (AR) and virtual reality (VR) applications expected to fuel growth; market optimistic about wearable electronics, notably for health and sports related wearables, as well as smart home products, including smart lighting
Clothing: World clothing consumption should strengthen slightly in line with the bumpy revival of the global economy. Yet most consumers are expected to stick to down-to-earth items that offer comfort, function and value-for-money
Toys: Toy sales should steadily pick up on the back of improving economic conditions, led by licensed toys, STEAM (science, technology, engineering, arts and maths) toys and those that incorporate VR and AR applications
Timepieces: Hong Kong exporters are cautiously optimistic about the overall sales outlook for 2017; smart watches, classic designs and less expensive watches to lead sales
Jewellery: Recovery of the global economy should be a positive development for jewellery exports; good design, quality and craftsmanship are key factors.
- Bangladesh offers opportunities for production relocation
With land, labour and other production costs rising on the Chinese mainland, companies are seeking alternative manufacturing bases in the region. The HKTDC's Research Department conducted a recent survey to learn more about the opportunities and challenges of Bangladesh as an alternative production base.
"Bangladesh is relatively less exploited as a production base by Hong Kong manufacturers compared with Southeast Asian countries such as Vietnam and Cambodia, despite the country's comparatively lower labour costs," said Dickson Ho, Principal Economist (Asian and Emerging Markets), HKTDC. Mr Ho noted that Hong Kong manufacturers with operations in either Dhaka or Chittagong unanimously pointed out that the labour cost advantage and abundant labour supply will likely be sustainable over a much longer time than in Southeast Asia. Mr Ho said Bangladesh should be regarded as a long-term commitment, as costs related to staff training and management as well as overcoming challenges related to infrastructure would likely affect returns in the short-term.
- Belt and Road service demand from southern China
Amid growing awareness of the opportunities arising from the Belt and Road Initiative, HKTDC Research conducted a questionnaire survey in the South China region to gauge the enthusiasm of mainland enterprises for 'going out' to explore Belt and Road opportunities and to assess their need for professional services.
The survey results indicate that many mainland enterprises interviewed (50%) regard Hong Kong as the preferred location for seeking professional services outside of the mainland to capitalise on the Belt and Road opportunities. Their required services are largely related to sales and marketing strategies (as indicated by 55% of the respondents), marketing activities tailored for Belt and Road markets (38%), product development and design (32%) and brand design (28%). "These represent good opportunities for Hong Kong's services providers," said Wing Chu, Senior Economist (Greater China Research Team), HKTDC.
Among enterprises that would consider tapping Belt and Road opportunities, a great majority (83%) would focus on Southeast Asian countries, including those in ASEAN, followed by South Asia (27%) and Central and Eastern Europe (24%). Regarding the nature of business, most of them intend to sell more consumer and industrial products to these markets (88%). Some also expressed an interest in setting up manufacturing facilities in Belt and Road countries (36%) or sourcing various types of consumer goods, foodstuff or raw materials (35%).
Reference
HKTDC Research webpage: www.hktdc.com/research
Hong Kong Export Prospects 2017: http://bit.ly/2gZb3XI
HKTDC Fourth Quarter 2016 Export Indices: http://bit.ly/2hDHaQr
HKTDC Business-Stat Online: http://bit.ly/1ITG8bs
Podcast
Hong Kong Export Outlook 2017: http://bit.ly/2gzt4KZ
Photos Download: http://bit.ly/2hMhXj1
To view press releases in Chinese, please visit http://mediaroom.hktdc.com/tc
Contact:
HKTDC
Communication and Public Affairs Department
Joe Kainz
Tel: +852 2584 4216
Email: joe.kainz@hktdc.org
Topic: Research / Industry Report
Source: HKTDC
Sectors: Exchanges & Software, Retail & eCommerce, Daily Finance, Crypto, Exchange, Funds & Equities, Banking & Insurance
http://www.acnnewswire.com
From the Asia Corporate News Network
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