By Guy Page
Hong Kong is Vermont’s second largest export market for goods, according to the Office of the U.S. Trade Representative. It is also troubled with political unrest and the U.S./China trade war.
Given the volatile situation in the streets and airport of Hong Kong, it’s impossible to say how— or if — the Vermont economy will be affected. But given Hong Kong’s important role as a major international customer for Vermont’s high-tech industry, it’s fair to ask: if Hong Kong gets a cold, will Vermont get the sniffles?
Vermont’s biggest export market is Canada. Vermont exported $1.3 billion in goods to Canada in 2018, representing 43 percent of the state’s total goods exports. Canada was followed by Hong Kong ($262 million), Taiwan ($195 million), South Korea ($186 million), and China ($168 million), the Office said.
Vermont’s largest manufacturing export category is computer & electronic products, which accounted for $1.9 billion of Vermont’s total goods exports in 2018. Of these exporters, Global Foundries in Essex Junction reportedly is the leading firm. Other top manufacturing exports are machinery, except electrical ($152 million), miscellaneous manufactured commodities ($132 million), food & kindred products ($118 million), and chemicals ($87 million).
The impact of pro-democracy protests, coupled with the trade war, has been mostly negative in the short-term for the Hong Kong economy. Fox Business reports two consecutive quarters of economic decline with the real possibility of a recession: “People in Hong Kong are trying to get their money out, and … they’re also trying to get themselves out,” Point Bridge Capital Founder and CEO Hal Lambert told FOX Business. “Think about it from an investor’s perspective, who’s going to invest right now in Hong Kong if you’re a corporation from outside Hong Kong?”
Not surprisingly, imports are suffering. This June, Hong Kong monthly imports fell 7.5% to $364 billion HKD (Hong Kong Dollars), the eighth consecutive month of declining imports, Reuters reported. It was the biggest monthly drop in over three years.
Furthermore, the city’s largest airline is reporting a large reduction in bookings, due no doubt to decline in tourism and unrest at the major airport, as well as cancellations from the skittish business community. What’s not known is the current and future impact on Vermont’s tiny slice of the city’s import pie.
According to Tripsavvy.com, Hong Kong is a Special Administrative Region of China. It has its own government, parliament, police, judiciary, but in terms of relations with other countries and defense depends on China. It enjoys a limited autonomy, at least for now – protesters fear China won’t keep promises of autonomy it made when authority for Hong Kong was transferred from the United Kingdom to China in 1997.
Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.