Hong Kong:October trade growth weakened

Both exports and imports weakened in October compared with September. Afterseasonal adjustment, October exports contracted 4.6% (seasonally adjusted by GS,non-annualized) from the previous month, vs +3.6% mom sa in September. Octoberimports also fell by 3.8% mom sa, vs +2.4% mom sa in September. Among HK’smajor export destinations, exports to mainland China were roughly unchangedcompared with last October (i.e. around 0% yoy growth), vs +5.1% yoy inSeptember. This is directionally consistent with what China reported on imports fromHK earlier in the month. Export growth also slowed to other destinations such asIndia, Korea, Taiwan and Japan. As Hong Kong is an entrepot trade centre, importgrowth is thus closely linked to export growth. Imports by source country datashowed more diverged growth- imports from mainland China were down 8%yoy inOctober, vs +1.2% yoy in September, while growth in imports from other countriessuch as Korea and US improved from September. The trade deficit narrowed to 37bnHKD in October, from 40bn HKD in September.