Caixin
Nov 22, 2018 05:39 PM
DAILY CHART

Chart of the Day: Trade War Hits Hong Kong’s Economic Growth

Hong Kong’s economic growth slowed to a two-year low in the third quarter amid rising Sino-U.S. trade tensions and an economic downturn on the Chinese mainland.

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Graphic: Gao Baiyu/Caixin

For the three months through September, the Hong Kong economy expanded by 2.9% from a year earlier, down from the previous quarter’s annual growth rate of 3.5%, according to a Hong Kong government report.

The government took a positive view of the expansion. “Domestic demand held firm. Labor market conditions remained favorable, while consumer price inflation went up slightly,” the report said.

Total exports of goods continued to expand in the third quarter with a year-on-year growth rate of 5% in real terms. “Yet the pace of export growth decelerated in September, as the impact of the US-Mainland trade conflicts began to surface,” the report said.

The fallout from the China-U.S. trade war will only grow more apparent in the near future, the report said. As a major port that serves Chinese exporters, Hong Kong has found itself in the crossfire of the billions of dollars in punitive tariffs that the U.S. and China have imposed on each other.

“Looking ahead, the economic outlook is subject to increasing downside risks,” the government said. Weakened momentum in the global economy, trade tensions, rising U.S. interest rates and tightening financing conditions across advanced economies are piling more pressure on Hong Kong’s economy.

The government forecast the Hong Kong economy will grow 3.2% this year, remaining within the range of 3% to 4% projected in August.

Contact reporter Charlotte Yang (yutingyang@caixin.com)

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