Hong Kong exports were expected to have shrunk 3 percent last year and to grow 5 percent this year as supply and demand returned to near pre-pandemic levels in the second half of last year and companies expanded online sales, the Trade and Development Council said.
Nicholas Kwan Ka-ming said in an online conference that the growth forecast for this year is driven by the small-base effect and does not reflect a strong rebound in exports after the turmoil.
He said the current export value has not yet returned to the peak before the Sino-US trade war began in 2018. Many companies said that they would use a "price cut" to win orders in the last quarter.
He believes that a price cut is the last resort before businesses shrink.
Even if exports increase next year, it does not mean that corporate profits will increase, Kwan said.
Hong Kong exports to major markets such as Europe, the United States and ASEAN countries in the first 11 months of last year fell 9.5 to 16.3 percent year on year, while China's rose 3.9 percent. It is believed the mainland market will continue to improve.
Government economist Andrew Au Sik-hung said as an international trade center, Hong Kong's exports will benefit from the strong economic growth in the mainland.
Au said the mainland's 14th five-year development plan will focus on innovation and technological progress, as well as an internal circular development model.
In addition, the Regional Comprehensive Economic Partnership is the world's largest free trade agreement and Hong Kong will benefit from it.
Meanwhile, Hong Kong's foreign reserves rose US$5.9 billion (HK$46.02 billion) month on month in December to US$491.6 billion, the Hong Kong Monetary Authority said.