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The Census and Statistics Department (C&SD) released today (February 15) statistics on Hong Kong's exports of services relating to offshore trade for 2005, 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 2005, on which a separate press release was issued today, exports of services relating to offshore trade took up 91.9% of the exports of "merchanting and other trade-related services", or 30.1% of total exports of services of Hong Kong, in 2005.
In 2005, Hong Kong earned $149.0 billion in terms of gross margin and commission from offshore trade, up by 12.7% over 2004. Within this total, the gross margin from "merchanting" was $128.5 billion (up by 13.3% over 2004), and the commission from "merchandising for offshore transactions" was $20.5 billion (up by 9.2%).
Offshore trade covers the services of "merchanting" and "merchandising for offshore transactions" provided by Hong Kong entities (i.e. establishments operating in Hong Kong, excluding their affiliates located outside Hong Kong). Earnings from offshore trade include 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 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 2005, the sales value of goods involved in "merchanting" grew by 16.1% over 2004 to $1,529.0 billion. Meanwhile, the sales value of goods involved in "merchandising for offshore transactions" was estimated at $558.1 billion in 2005, up by 7.6% over 2004.
It should be noted that there is a difference in the level of involvement of the service providers in "merchanting" and "merchandising for offshore transactions". This could be reflected in the difference in trade margin of "merchanting" (8.4%) and commission rate of "merchandising for offshore transactions" (3.7%) in 2005.
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 not providing exactly the same type of services, "merchanting" and "merchandising for offshore transactions", if taken together, involved a total of $2,087.2 billion in terms of the sales value of goods in 2005, up by 13.7% over 2004.
By comparison, the value of re-exports was $2,114.1 billion in 2005, up by 11.7% over 2004. The rate of re-export margin was 17.5%.
Analysed by destination of exports of services relating to offshore trade, the mainland of China (the Mainland) was the largest destination in terms of offshore trade earnings, accounting for 28.9% of the total margin/commission earned in 2005. It was followed by the United States (25.6%), Japan (6.1%), the United Kingdom (5.7%) and Germany (5.3%).
Analysed by destination of goods sold under "merchanting", the Mainland was the largest destination, accounting for 38.3% of the total value of goods sold under such arrangement in 2005. It was followed by the United States (17.4%), Japan (7.9%), the United Kingdom (5.1%) and Taiwan (4.1%).
Commentary
A Government spokesman noted that offshore trade continued to grow rapidly in 2005. This was attributable to the sustained expansion of the global economy, and also boosted by the Mainland's strong trade flows. The total sales value of goods involved in offshore trade expanded further in 2005, and was close to the value of re-exports in the same year. In terms of growth rate, the growth in total sales value of goods involved in offshore trade outpaced the growth in re-exports. This reflects that offshore trade has played an increasingly important role in Hong Kong's external trade, and also signifies the changing structure of Hong Kong's trading and logistics sector.
Further information
Table 1 presents analysis of activities of exports of services relating to offshore trade against re-exports of goods in 2004 and 2005.
Table 2 presents analysis of exports of services relating to offshore trade by main destination of exports of services in 2004 and 2005.
Table 3 presents analysis of merchanting by main destination of sales of goods involved in merchanting in 2004 and 2005.
More detailed statistics relating to offshore trade presented in the context of trade in services statistics will be given in the "Report on Hong Kong Trade in Services Statistics for 2005". Users can download this report (in PDF format) free of charge at the "Statistical Bookstore, Hong Kong" (www.statisticalbookstore.gov.hk) of the C&SD as from February 23, 2007. The print version of the report can be purchased as from mid-March 2007 in the following ways:
(i) Purchase in person at the Publications Unit of the C&SD (Address: 19/F Wanchai Tower, 12 Harbour Road, Wan Chai; Tel: 2582 3025). The price of the report is HK$74 per copy.
(ii) Complete a mail order form which is available for downloading from the website of the C&SD (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat/mail_ordering_of_publications/index.jsp) and return it to the C&SD. Price (excluding postage) is the same as above.
(iii) Purchase online at the Statistical Bookstore or the Government Bookstore of the Information Services Department (www.isd.gov.hk/eng/bookorder.htm). Print versions if purchased online are offered a discount and are sold at 85% of their original prices. After discount, the price (excluding postage) of the report is HK$62.9 per copy.
Enquiries about trade in services and offshore trade statistics 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/Thursday, February 15, 2007
Issued at HKT 16:15
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