The Hong Kong Trade Development Council (HKTDC) forecast that Hong Kong's exports in 2021 will grow by 5 percent year on year as global trade is expected to gradually recover and mainland markets will also provide a major boost.

While local businesses still contend with weakened global demand, disrupted supply chains and elevated protectionism, business operations are expected to begin to revert to a more normal level when the COVID-19 vaccine becomes available, allowing the world economy to stabilize and rebound, HKTDC Director of Research Nicholas Kwan said on Wednesday.

"Hong Kong exports have more room to grow with the new opportunities arising from mainland's 'dual circulation' policy and the development of the Guangdong-Hong Kong-Macao Greater Bay Area," he said.

Kwan also cited favorable factors, including the implementation of a free trade agreement between Hong Kong and the Association of Southeast Asian Nations and the signing of the Regional Comprehensive Economic Partnership free trade deal.

The HKTDC Export Index increased for three consecutive quarters – rebounding from a record low of 16 to 36.2 – in the fourth quarter of 2020.

About 60 percent of the businesses surveyed for the index anticipate sales will increase or remain unchanged in the coming year, the HKTDC said, which also made an upward revision to its estimates for this year's total exports, from a 10-percent slump to a 3-percent mild drop.

The HKTDC conducts a survey every quarter, interviewing 500 local exporters from six major industries, including machinery, electronics, jewelry, watches and clocks, toys and clothing, to gauge their business confidence on near-term export prospects.

The readings of the HKTDC Export Index indicate an optimistic or pessimistic outlook, with 50 as the dividing line.

(Cover image: Container terminals at Kwai Chung district in Hong Kong, China. /Reuters)