In the final month of 2024, Hong Kong witnessed a notable surge in its exports, marking an increase of 5.2% year-on-year to reach $406.7 billion. Conversely, imports experienced a slight decline of 1.1%, settling at $441.2 billion. This fluctuation resulted in a trade deficit of $34.5 billion, representing 7.8% of total imports. The year as a whole saw exports grow by 8.7%, reaching $4.94 trillion, while imports rose by 6%, totaling $5.32 trillion. The overall trade deficit for 2024 stood at $379.7 billion, or 7.7% of imports.

Exploring the Forces Shaping Hong Kong's Trade Landscape

Economic Trends and Regional Influence

Hong Kong's economic performance in 2024 was characterized by robust export growth, particularly within the Asian market. Exports to Asia surged by 9.6% in December, driven by substantial increases to Vietnam (+49.0%), the Philippines (+33.8%), and mainland China (+14.9%). These figures underscore the critical role that these economies play in sustaining Hong Kong's export momentum. However, not all regions performed equally well; exports to India (-33.2%) and Thailand (-16.3%) declined sharply, reflecting varying economic conditions across different markets.The impact of regional trade relationships on Hong Kong cannot be overstated. For instance, the strong growth in exports to Vietnam and the Philippines can be attributed to favorable trade policies and growing demand for Hong Kong's goods. In contrast, the decline in exports to India and Thailand highlights the importance of diversifying trade partners to mitigate risks associated with market volatility. Furthermore, the export performance to non-Asian markets such as the UK (-28.1%), the Netherlands (-23.6%), and the USA (-15.2%) underscores the challenges faced by Hong Kong in maintaining its competitive edge in more mature markets.

Sectoral Performance and Technological Shifts

One of the most striking trends in 2024 was the significant rise in exports of office machines and automatic data processing equipment, which increased by 52.1% or $19.4 billion in December. This surge reflects the growing demand for technology-driven products, particularly in the era of digital transformation. The rise in exports of electrical machinery and office machines throughout the year—by 10% and 32.7%, respectively—further illustrates the shift towards high-tech industries.Imports also saw notable changes, with telecommunications and sound recording equipment experiencing an 8.9% drop or $4.8 billion. This decline may indicate a shift in consumer preferences or technological advancements that have rendered certain products less relevant. On the other hand, the increase in imports from Malaysia (+53.7%) and Singapore (+12.1%) suggests that these countries are becoming key suppliers of essential goods and components for Hong Kong's industries.

Quarterly Insights and Future Prospects

On a quarterly basis, total exports fell by 1.1%, and imports decreased by 0.6% in Q4 2024. This modest decline in both exports and imports during the final quarter of the year could be attributed to seasonal factors or global economic uncertainties. However, the overall positive performance for the year indicates that Hong Kong's economy remains resilient despite external challenges.Looking ahead, the continued growth in exports, especially in high-tech sectors, bodes well for Hong Kong's future. The increasing reliance on technology and digital solutions is likely to drive further innovation and competitiveness in the global market. Moreover, the diversification of trade partners and the strengthening of regional ties will be crucial in ensuring sustained economic growth. As Hong Kong continues to adapt to changing global dynamics, its ability to leverage its strategic position as a hub for trade and technology will remain a key factor in its success.