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The Census and Statistics Department (C&SD) released today (March 10) statistics on Hong Kong's exports of services relating to offshore trade for 2004, with breakdowns by type of service and destination.
In Hong Kong's trade in services, exports of services relating to offshore trade are categorised under "merchanting and other trade-related services", which is the largest major service group of exports of services. According to the trade in services statistics for 2004, on which a separate press release was issued today, exports of services relating to offshore trade took up 90.2% of the exports of "merchanting and other trade-related services" or 30.8% of all exports of services of Hong Kong in 2004.
In 2004, Hong Kong earned $132.2 billion in terms of gross margin and commission from offshore trade, up by 13.5% over 2003. Within this total, the gross margin from "merchanting" was $113.5 billion (up by 13.3% over 2003), while the commission from "merchandising for offshore transactions" was $18.7 billion (up by 14.4%).
Offshore trade covers the services of both merchanting and merchandising for offshore transactions provided by Hong Kong entities (i.e. establishments ordinarily operating in Hong Kong's economic territory, but excluding their affiliates located outside Hong Kong). Earnings from offshore trade include the gross margin from merchanting and commission from merchandising for offshore transactions.
Merchanting is defined as services associated with the trading of goods purchased from and then sold to parties outside Hong Kong without the goods ever entering and leaving Hong Kong. The Hong Kong entity engaged in merchanting takes ownership of the goods involved. Also included are transactions of goods manufactured through sub-contract processing arrangement and directly sold to parties outside Hong Kong without the goods entering and leaving Hong Kong.
Merchandising for offshore transactions is defined as the services of arranging on behalf of buyers/sellers outside Hong Kong the purchases/sales of goods according to their specifications (including multiple sourcing, marketing, contract and price negotiation, volume and sample procurement, shipment, inspection and arrangement of follow-up order). The goods involved are sold by a party outside Hong Kong to another party outside Hong Kong under the arrangement of a Hong Kong entity without the goods ever entering and leaving Hong Kong. Unlike merchanting, the Hong Kong entity, in its capacity as an agent or broker, does not take ownership of the goods involved.
In terms of the sales value of goods involved in merchanting, it totalled $1,317.0 billion in 2004, up by 11.5% over 2003. The sales value of goods involved in merchandising for offshore transactions was estimated at $518.8 billion in 2004, up by 6.8% over 2003.
It should be noted, however, that there is a difference in the level of involvement of the service providers in the two types of services of merchanting and merchandising for offshore transactions. This could be reflected in the difference in the trade margin of merchanting (8.6%) and the commission rate of merchandising for offshore transactions (3.6%) in 2004.
For merchandising for offshore transactions, the service providers do not take up ownership of the goods involved and hence the value of goods involved is not required in their accounting systems.
Whilst noting the difference in the type of services they provide, merchanting and merchandising for offshore transactions, if taken together, involved a total of $1,835.8 billion in terms of the sales value of goods in 2004, up by 10.2% over 2003.
By comparison, the value of re-exports was $1,893.1 billion in 2004, up by 16.8% over 2003. The rate of re-export margin was 17.3%.
Analysed by destination of exports of services relating to offshore trade, the mainland of China was the largest destination in terms of offshore trade earnings, accounting for 30.3% of the total margin/commission earned in 2004. This was followed by the United States (25.7%), Japan (5.6%), Germany (5.1%) and the United Kingdom (4.4%).
Analysed by destination for goods sold under merchanting arrangement, the mainland of China was the largest destination, accounting for 36.8% of the total value of goods sold under such arrangement in 2004. This was followed by the United States (17.2%), Japan (10.3%), Taiwan (4.9%) and the United Kingdom (4.1%).
Commentary
A Government Secretariat spokesman pointed out that exports of services relating to offshore trade attained another year of double-digit growth in 2004. This was backed by the strong trade flows amidst the global economic upswing, and in particular the Mainland's buoyant external trade and robust domestic demand.
The spokesman further pointed out that the total sales value of goods involved in offshore trade in 2004 remained enormous, just slightly less than the value of re-exports. In terms of growth rate, the growth in total sales value of goods involved in offshore trade was also significant. These reflect that offshore trade continued to play a prominent role in Hong Kong's external trade and constitute one of the growth drivers of the Hong Kong economy.
Further information
Table 1 presents analysis of activities of exports of services relating to offshore trade against re-exports of goods in 2003 and 2004.
Table 2 presents analysis of exports of services relating to offshore trade by main destination of exports of services in 2003 and 2004.
Table 3 presents analysis of merchanting by main destination of sales of goods involved in merchanting in 2003 and 2004.
More detailed statistics relating to offshore trade presented in the context of trade in services statistics are available in the "Report on Hong Kong Trade in Services Statistics for 2004". This report is now on sale at HK$59 per issue. Both print version and download version of the publication can be purchased online at the "Statistical Bookstore, Hong Kong" (http://www.statisticalbookstore.gov.hk). Download version of the publication can be purchased at 75% of its original price exclusively at the online Statistical Bookstore. Print version if purchased online is also offered a discount, at 85% of its original price at the Statistical Bookstore as well as the Government Bookstore (http://www.isd.gov.hk/eng/bookorder.htm).
For purchase of print version, this can be done through mail order by returning a completed order form which can be downloaded from the C&SD's website (http://www.censtatd.gov.hk/eng/prod_serv/forms_index.html). Purchase can also be made in person at the Publications Unit of the C&SD (Address : 19/F Wanchai Tower, 12 Harbour Road, Wan Chai; Tel.: 2582 3025).
Enquiries about trade in services and offshore trade statistics published in the report can be directed to the Trade in Services Statistics Section of the C&SD (Tel. : 2802 1372 or E-mail : tis@censtatd.gov.hk).
Ends/Friday, March 10, 2006
Issued at HKT 16:16
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