Hong Kong's exports will continue to expand in 2004, fuelled by a faster global economic recovery, according to the Hong Kong Trade Development Council's (TDC) chief economist Edward Leung.

"A resurgent US economy will in turn prop up progressive recovery in the EU and Japan. Global trade growth is also poised to accelerate. This is undoubtedly good news for export-oriented economies like Hong Kong," said Mr Leung.

In a research report on Hong Kong's Trade Outlook for 2004, Mr Leung said total merchandise exports are expected to rise by seven per cent in value, or 7.5 per cent in volume.

Hong Kong's export performance will also depend on the outlook for the mainland market, which takes approximately 40 per cent of Hong Kong domestic exports.

These exports are also expected to benefit from Cepa, with some 273 products being granted zero tariff access from January 2004.

Re-exports are projected to increase by eight per cent in value and 8.5 per cent in volume. In the first 2003, Hong Kong's total exports grew by 11.5 per cent.

Cepa impact on services "profound and long-lasting"

The report also highlighted Hong Kong's increasing role as an exporter of services. Under Cepa, Hong Kong-based companies from 18 service sectors will benefit from faster and easier access to the Chinese mainland.

"Cepa will have a profound and long-lasting impact on Hong Kong services companies' expansion in the mainland market," Mr Leung said.

Services currently account for 86 per cent of Hong Kong's GDP.

More details at Outlook strong for Hong Kong 2004