The Hong Kong Trade Development Council used its quarterly news conference Tuesday morning to warn that the rise of exclusive trade blocs such as the Trans Pacific Partnership (TPP) is threatening China’s export economy and could also hurt importers of Chinese made apparel and footwear.
A dozen countries, including the United States, Japan, Australia, Canada and Singapore, are now involved in TPP negotiations, which have emerged as a lynchpin in the Obama Administration’s strategy to counter China’s rising power in the Pacific. The TPP market represents nearly 800 million people and a combined GDP of more than 38 per cent of the world’s economy.
“If secured, the pact will certainly become one of the 21st century’s most important trade agreements,” said Daniel Poon, principal economist of global research for the Hong Kong Development Council (HKTDC). He added that, if the mainland is excluded from the agreement, its export competitiveness could slump.
“Countries like Vietnam, Malaysia and Japan could put more pressure on Chinese exports to the US. Industries that would likely suffer include footwear, clothing, vehicles and related components, as well as machinery equipment.”
Poon made his remarks in a press conference Tuesday morning, during which the HKTDC revealed that its Export Index had dropped to 42.1 in the third quarter. A reading below 50 indicates a pessimistic sentiment during the quarter and signals a contraction in Hong Kong exports over the short term.
