About HKTDC | Media Room | Contact HKTDC | Wish List Wish List () | My HKTDC |
繁體 简体
Save As PDF Email this page Print this page

Import and Export Trade Industry in Hong Kong


  • Hong Kong is the world's 8th largest trading economy. In 2013, Hong Kong’s total merchandise trade increased by 3.7% to US$977.0 billion. 
  • Hong Kong is handling an increasing amount of offshore trade. The Hong Kong government estimates that the value of offshore trade in 2012 (including both “merchanting” and “merchandising for offshore transactions”) amounted to HK$4,669 billion, up 4.5% over 2011. In comparison, the value of re-exports was HK$3,376 billion in 2012, up 3.2% over 2011. The amount of offshore trade has surpassed the value of Hong Kong's re-exports.
  • As at June 2014, 491,632 people were employed in the import and export trade sector, which had 102,249 establishments. In 2013, the sector accounted for about 20% of Hong Kong’s GDP.
  • Hong Kong has been handling a significant portion of the Chinese mainland's expanding external trade. In 2013, about 13% of the Chinese mainland's exports (US$277 billion) and 13% of imports (US$247 billion) were handled via Hong Kong and 62% of Hong Kong's total re-exports were originated from the Chinese mainland.

Industry Data

Table: Industry data
Table: Industry data
Table: Industry data
Table: Industry data

Range of Services

Hong Kong's import and export trading firms are active in sourcing various types of goods, including raw materials, machinery and parts, and a wide range of consumer goods. There are three main types of sourcing activities: (1) sourcing goods produced in Hong Kong; (2) sourcing goods from around the region for re-exports; and (3) sourcing goods from one country to be shipped directly to a third country without touching Hong Kong ground.

The import business of Hong Kong trading firms is mainly generated by the distributing capabilities under the identity of agents or dealers. These trading firms usually specialise in one area of products and represent one or more foreign brands. Their trading map usually encompasses Hong Kong, the Chinese mainland (or certain parts of it) or other Asian countries.

Due to the development of trade supporting services on the Chinese mainland, trading firms increasingly source goods offshore for sales in international markets. Some of these goods are transhipped via Hong Kong, or shipped directly without touching Hong Kong ground. Such trade, known as offshore trade, is not reflected in Hong Kong's trade statistics. According to the Census and Statistics Department, Hong Kong's sales value of offshore trade in 2012 (including both “merchanting” and “merchandising for offshore transactions”) amounted to HK$4,669 billion, up 4.5% over 2011. In comparison, the value of re-exports was HK$3,376 billion in 2012, up 3.2% over 2011. The amount of offshore trade has surpassed the value of Hong Kong's re-exports.

Service Providers

Hong Kong's import and export trading firms are typically small, employing less than 10 persons on average. There were 102,249 import and export trading firms in Hong Kong as of June 2014, with less than 300 of them having employed more than 100 employees. There are three broad categories of import and export trading firms:

  • Left hand-right hand traders: these refer to trading firms which match sellers and buyers without adding any significant value to the process. These firms are characterised by the conduct of a straight-forward sourcing operation, usually identifying goods produced on the mainland or Hong Kong and shipping them to overseas markets. These firms rely on their specialist knowledge of the sources of products in the region and the low costs of their supplies as their main competitive advantages.
  • Traders with some value-added services: Many firms now source raw materials for their suppliers and provide finance for these materials. They often use letters of credit from their customers as a guarantee for raising finance for their purchase orders. Other firms develop a sub-contractor relationship with a number of factories in which they exert significant control over the management of production, including quality control.
  • Traders with sophisticated value-added services: In certain cases exporting firms have added value to their traditional activity to such an extent that it may be difficult to retain the label of being exporters. For example, some firms have become designer and manufacturer of components for their supplier factories to produce finished goods, which the firms subsequently export. These firms add value mostly from their design team and their competitive edge comes from their ability to design products which sell well in the target markets.

The business environment for Hong Kong's trading firms is becoming more challenging amid the growing trend toward direct dealing between customers and manufacturers, known as “trade disintermediation”. In 2012, the rate of gross margin [1] of merchanting was 5.9%, down from 6.1% and 6.4% in 2010 and 2008 respectively, illustrating the squeeze in margin. In response to trade disintermediation, Hong Kong traders adaptively provide more value-added services in addition to finding more competitive sources of supplies. For example, Hong Kong traders help their overseas clients inspect the goods produced by the manufacturers to ensure they meet the procurement standard, and monitor production schedules to meet delivery. Hong Kong traders can also help overseas buyers coordinate production when the buyers have a sudden surge in orders and quick turnaround is needed.

In the same period, the commission rate of merchandising [2] for offshore transactions was 5.3% (2008: 4.7%; 2010: 5.5%), while the rate of re-export margin was 15.9% (2004: 17.3%; 2009: 16.9%).

The operations of small and big trading firms are quite different. Smaller firms are usually strong in introducing foreign products to the mainland market. In most cases, they specialise in one area, such as medical equipment, and represent some foreign brands as their agents or distributors. Bigger trading firms are usually strong in sourcing products from the region. They usually have regional or even global sourcing networks and do not specialise on a particular type of product.


Hong Kong's import and export trading sector exports its services mainly in the form of offshore buying and selling of goods. Given Hong Kong's proximity and the relocation of Hong Kong's manufacturing bases to the mainland, particularly the Pearl River Delta, the Chinese mainland is a major source of offshore trading activities. As Hong Kong manufacturers are diversifying their production activities to other low-cost countries, the offshore trading pattern is expected to reflect the move.

In 2013, Hong Kong earned US$37 billion from exporting merchanting and trade-related services, accounting for 28% of total services exports.

Industry Development and Market Outlook

  • Despite the global economic slowdown, Hong Kong’s total merchandise trade increased 3.7% to US$977 billion in 2013, followed by a year-on-year (YoY) expansion of 4% in the first ten months of 2014. Hong Kong’s merchandise exports saw an increase of 3.8% YoY in the first ten months of 2014, after expanding by 3.6% in 2013. For the same year, Hong Kong's major export markets were the Chinese mainland (54% of total), the EU (9%) and the US (9%).
  • Further, in recent years, Asia has become a more integrated market, thanks also to the various free trade agreements (FTAs) signed in the region. In particular, the product trade arrangements under the China-ASEAN Free Trade Area (CAFTA) pact, which commenced in 2005 with scheduled tariff elimination completed in 2010, have contributed to higher intra-Asian trade.
  • The continued growth in intra-Asia trade can be reflected by its faster growth than extra-Asia trade. During 2009-2013, the compound annual growth rate (CAGR) of Asia’s exports to within the region was 14%, compared to the respective CAGR of 7% and 13% for exports to Europe and North America.
  • In addition, over the past few years, there has been an increase in companies in developed economies treating Asia as a market instead of a pure production base. During 2009-2013, North America’s exports to Asia expanded by a CAGR of 12%, surpassing the CAGR of 6% in respect of its exports to Europe in the same period. Similarly, Europe’s exports to Asia expanded by a CAGR of 12% between 2009 and 2013, surpassing the CAGR of 9% in respect of its exports to North America in the same period.
  • In Jun 2010, the Chinese mainland and Taiwan signed a preferential agreement, called the Economic Cooperation Framework Agreement (ECFA), which bodes well for continued growth in trade within the Greater China region. Under ECFA, the tariffs on 539 Taiwan export items and 267 mainland export items to Taiwan are removed at the beginning of 2013.
  • ASEAN as a group is the fourth largest export market and second largest trading partner of Hong Kong, with Vietnam having surpassed Singapore to become Hong Kong’s largest export market in ASEAN since 2013. To further capitalise on expanding bilateral trade, Hong Kong and ASEAN began formal negotiations on a Hong Kong-ASEAN Free Trade Agreement (FTA) in July 2014. In addition to the reduction and/or elimination of import tariffs, other key elements covered by the FTA include, rules of origin, liberalisation of trade in services, promotion and protection of investment, as well as intellectual property co-operation. The HK-ASEAN FTA, expected to be completed in 2016, will foster stronger economic ties between Hong Kong and ASEAN and enhance Hong Kong’s role as a regional trading hub.

The Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA)

Under CEPA, Hong Kong service suppliers (HKSS) can provide, in the form of wholly-owned operations, commission agents' services and wholesale trade services and to set up wholly-owned external trading companies on the Chinese mainland.

Under CEPA Supplement VIII, for the same HKSS which opens more than 30 stores accumulatively on the mainland and sells different types and brands of commodities (including staple food) coming from multiple suppliers, the HKSS is allowed, on a pilot basis, to operate in Guangdong on a wholly-owned basis.

Under CEPA Supplement IX, HKSS are allowed to set up individually owned stores on the Chinese mainland to provide trade brokerage and commission agency services (excluding auction) for wholesale and retailing.

[1]  “Rate of gross margin” refers to the gross margin from merchanting expressed as a percentage of the sales value of goods involved, while “commission rate” is the commission from merchandising for offshore transactions expressed as a percentage of the sales value of goods involved. “Rate of re-export margin” is defined as the re-export margin expressed as a percentage of the value of re-exports.

[2]  The difference between “merchanting” and “merchandising” is that, an establishment engaged in “merchanting” takes ownership of the goods involved, whereas one engaged in merchandising transactions does not take ownership of the goods involved.

Content provided by Picture: Jacqueline Yuen
Comments (0)
Shows local time in Hong Kong (GMT+8 hours)

HKTDC welcomes your views. Please stay on topic and be respectful of other readers.
Review our Comment Policy

*Add a comment (up to 5,000 characters)