The Hong Kong Trade and Development Council lowered its yearly forecast for Hong Kong’s economy on Monday for a second time, from its June prediction of a 2 percent expansion to a contraction of 4 percent, due to the crippling impact of the drawn-out Sino-US trade dispute.
The council’s original prediction, in December, called for a 5 percent expansion.
The new study from the council showed that more than half of the surveyed Hong Kong businesspeople are feeling the pinch from the protracted trade skirmish between the world’s two largest economies
The new study from the council showed that more than half of the surveyed Hong Kong businesspeople are feeling the pinch from the protracted trade skirmish between the world’s two largest economies. Among them, about 73 percent are suffering from a reduction in orders, nearly 27 percent are grappling with a cancellation of orders, and 44 percent are facing price pressures and a squeeze on margins from buyers.
In their quest for a way to ride out the storm, most Hong Kong businesspeople are on the hunt for alternatives to the US market. Some are considering relocating their production or sourcing bases.
Nicholas Kwan Ka-ming, the council’s director of research, said the situation is worse than ever. Business traders in Asia’s financial hub are now scouring far beyond, to regions like Southeast Asia, Central America and the Middle East for greener pastures. In particular, the ASEAN area has what it takes to replace the US to be Hong Kong’s second-largest trading partner, Kwan said.
A Chinese trade delegation canceled a visit on Friday to US farms in the state of Montana, cutting short their US visit. The trip was to prepare for further negotiations between senior officials next month.
Earlier in the day, US President Donald Trump said the United States is “looking for a complete deal” with China and not “a partial one”, US media reported.
The US Trade Representative Office issued a brief statement characterizing the two days of trade talks last week as “productive” and that a principal-level trade meeting in Washington will take place in October as previously planned. The Xinhua News Agency also said Saturday the discussions were “constructive”. However, neither side elaborated further on the talks.
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