News and Finance

Hong Kong’s exports fell for a 12th straight month in October, dragging on the city’s recovery from a yearlong recession.

Overseas shipments declined 13.1 percent from a year earlier to HK$240.8 billion ($31 billion), the government said today on its Web site, after sliding 8.6 percent in September. That compared with the median forecast of nine economists in a Bloomberg News survey for a 13 percent decline.

Japan, Taiwan and Singapore reported improvements in their latest export figures and Australia posted the biggest month-on- month increase in almost a year as worldwide government spending boosted demand. Hong Kong’s exports rose to a record value in October last year, before the financial crisis savaged demand, making a high base for comparison.

“Recent economic reports indicate a stabilization in global demand,” said Joanne Yim, Hong Kong-based chief economist at Hang Seng Bank Ltd. “Hong Kong’s exports are likely to resume growth in November,” she said, blaming the “high base effect” for the latest decline.

Imports fell 10.7 percent in October from a year earlier, leaving a trade deficit of HK$19.2 billion, the smallest in four months.

Hong Kong’s economy expanded 0.4 percent in the third quarter from the previous three months, as consumption and investment improved. The city exited a yearlong recession in the second quarter.

‘Highly Vulnerable’

The global economy is “stable, and getting better, but still highly vulnerable,” International Monetary Fund Managing Director Dominique Strauss-Kahn said this week.

Hong Kong’s exports have tumbled since November last year, including a 23 percent plunge in February that was the biggest drop in half a century. In October, shipments to China fell 8.9 percent and those to the U.S. declined 23.4 percent.

The government said the worse overall performance was due to “the high base in the same month last year when many traders reportedly advanced their shipments for fear of subsequent cancellation of orders at the onset of the financial tsunami.”

Seasonally adjusted, exports have “improved modestly in recent months,” it said. The value of October’s exports was the highest in a year.

The city’s exports will “show an obvious improvement in coming months and may return to positive growth as soon as November,” said Cheng Cheng-mount, a Taipei-based economist at Citigroup Inc.’s Taiwan unit, citing demand from China and the economic recovery in the U.S.

Hong Kong-listed Li & Fung Ltd., a supplier to Wal-Mart Stores Inc., expects U.S. consumer demand to take until the middle of 2010 to “regenerate,” Chairman Victor Fung said Nov. 14.

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