Hong Kong exporters face challenges but remain optimistic about future

On March 27, 2025, findings from the 1Q25 HKTDC Export Confidence Index indicated that despite rising trade tensions and significant tariff hikes by the US on its trading partners, confidence among Hong Kong exporters has seen a moderate increase. The Current Performance Index rose by 1.8 points to 52.1, while the Expectation Index increased by 1.0 point to 51.0, both above the neutral watermark of 50. This indicates an overall optimistic outlook among exporters regarding future export prospects, although the HKTDC slightly adjusted its export growth forecast for Hong Kong from 4% to 3%, acknowledging potential risks related to ongoing global trade tensions and possible future tariff escalations. The survey revealed that 75.4% of respondents believe their net profit margins will either rise or remain stable, showcasing resilience in the local export sector. Despite the challenges posed by US tariffs, many exporters are implementing strategies to diversify sourcing, penetrate new markets, and relocate production lines, which they view as vital for mitigating adverse effects from protectionist policies. Overall, while the local export outlook faces hurdles, the ability of businesses to adapt appears to reinforce a positive sentiment, particularly in markets that are outside the US, such as Mainland China, the EU, and the ASEAN bloc. Notably, the Current Performance Index for Mainland China rose to 59.0, showing a robust recovery, indicating that localized trends are helping to offset any downturn caused by the trade tensions with the US.