Trade War Continues To Stymie HK's Economy

Latest data showed the Hong Kong economy remained subdued in the second quarter of this year – expanding by just 0.6 per cent – as the bitter trade war between China and the United States continued to bite into city's fortunes.

The growth rate was the same in the first quarter, which was the lowest since 2009.

The headline GDP figure came in lower than market expectations of 1.6 percent as a further drop in exports and investment as well as weak local consumption have dragged growth.

On a quarterly basis, the economy contracted by 0.3 percent after a 1.3 percent growth in the first quarter. Two consecutive negative readings could define a technical recession.

The government is forecasting annual GDP growth of 2 to 3 percent this year.

Exports dropped further in the three-month quarter ended in June, falling 5.4 percent after a decrease of 3.7-percent in the previous quarter.

The contraction in imports also widened to 7 percent in the latest reading.

Overall investment took a plunge, diving 12 percent – after a 7-percent drop in the first quarter.

Domestic consumption remained sluggish, rising just 1.2 percent. But that's already slightly higher than the 0.4-percent growth in the previous three months.

The government said the further slowdown in exports came in tandem with further setback in manufacturing and trading activities in Asia, amid softening global economic growth and US-China trade and technology tensions.