Hong Kong trade balance contracts moderately, stays less than expected

Hong Kong’s trade balance contracted moderately during the month of June, although it stayed lower than what markets had expected, worsening from the previous month’s reading.

Exports from Hong Kong fell 1 percent year-on-year in June, contracting for the 14th consecutive month in a row, data released by Hong Kong’s Census and Statistics Department showed Tuesday. However, the decline remained lower than the market forecast of -1.6 percent.

Further, imports fell only 0.9 per cent for the period, much improved from May’s reading of -4.3 percent. Though incoming shipments remained on a downward trend for the 17th consecutive month, it fared better than the -5 percent contraction forecast by analysts.

The figures add up to a trade deficit of HKD45 billion, a far greater sum than both the deficit of HKD31 billion seen in the prior month and a forecast calling for an increase to only HKD34.7 billion. Hong Kong's imports from China in June rose 0.2 percent, while the value of total exports to China climbed 1.8 percent.

Meanwhile, there are growing concerns that massive fake trade invoicing from China to Hong Kong is taking place, following a big discrepancy in Chinese exports to Hong Kong in December last year, reports said.