HONG KONG: The city's exports fell for a 10th month in August as the global recession continued to cut demand.

Overseas sales shrank 13.9 percent from a year earlier to HK$213.3 billion ($27.5 billion), the government said yesterday on its website, after sliding 19.9 percent in July. That compared with the median forecast in a Bloomberg News survey of nine economists of a 12.6 percent decline.

The slump is not limited to Hong Kong. Neighboring Japan's exports slid in August from both a year earlier and the previous month, a report showed yesterday, adding to signs that the recovery from the worst global slump since the Great Depression may be subdued.

Hong Kong Financial Secretary John Tsang said on September 16 that while the worst is over for the city, sustainable growth depends on "the external environment."

Several analysts queried suggest a quick recovery is unlikely: "The recovery in the global economy and in demand for Asian exports will be a very long and drawn-out process," said Kelvin Lau, a Hong Kong-based economist at Standard Chartered Bank. Exports may grow 10 percent or more in the first quarter of 2010, partly because the performance was "so poor" in the same period this year, Lau said.

Imports fell 9.8 percent in August from a year earlier, leaving a trade deficit of HK$21.8 billion.

The pace of the recovery in global trade will be "a major concern for Hong Kong over the next few years," according to a report this month by Lombard Street Research Ltd, a London-based economic forecasting company.

International Monetary Fund Managing Director Dominique Strauss-Kahn called yesterday for leaders from the Group of 20 nations to maintain efforts to pull the world economy out of a recession, warning that the crisis isn't over.

"This recovery will be rather sluggish, at an average lower than growth we had before the crisis," Strauss-Kahn said in an interview in Washington. "It's too early to say the crisis is behind us."

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.

On the positive side, the city's economy rebounded to 3.3 percent growth in the second quarter from the previous three months as declines in exports and household spending moderated.

Moreover, the World Bank forecasts that world trade may climb 3.8 percent in 2010 after declining 9.7 percent this year. Among local hopeful signs, Hong Kong-listed Li & Fung Ltd, the biggest supplier of clothes and toys to Wal-Mart Stores Inc and Target Corp, is seeing increased orders, President Bruce Rockowitz said in an interview on September 21.

Bloomberg News

(HK Edition 09/25/2009 page3)