Hong Kong's exports rose 14 percent year on year last month, easily beating analysts'forecasts as Chinese mainland's trade with the rest of the world continued to surge and fallout from the SARS outbreak was not as severe as feared.

The June expansion exceeded the 13.6 percent growth rate in May.

"The very strong trade performance from the mainland certainly benefited Hong Kong,"said Standard Chartered economist Tai Hui.

Total exports, which include re-exports, rose 1.4 percent in value terms for the three months to the end of June compared with the preceding three months on a seasonally-adjusted basis, the government said Friday.

About 90 percent of Hong Kong's exports comprise re-exports to or from mainland.

Hui said some watchers had expected the outbreak of severe acute respiratory syndrome, or SARS, to take a bigger bite out of Hong Kong's June exports.

"It's still a risk in the next few months, not only in July,"he said."But some of the anecdotal evidence suggests that if there is any impact, it's going to be pretty mild."

Exports have been one of the few bright spots in Hong Kong's weak economy, which has been plagued by record unemployment, nearly five years of deflation and a record budget deficit.

But because the bulk of Hong Kong's manufacturing has moved to mainland, the territory's domestic economy feels only a limited amount of the benefits of strong export growth.

"This is good news for Hong Kong, because it shows that at least Hong Kong can depend on its external sector as its main source of growth,"said Citigroup economist Joe Lo.

The government hopes that a recently-signed free trade agreement with mainland, which scraps import tariffs on 273 products made in Hong Kong, could reverse some of that outflow by encouraging companies to set up factories in Hong Kong.

Mainland's exports grew by 32.6 percent in June year on year, slower than the 37.3 percent expansion in May, as orders at some factories in southern China slowed down.

Many buyers of items such as textiles and yarn shifted their orders temporarily to other countries such as India, fearing that a severe outbreak of the deadly SARS virus, which originated in southern China, would disrupt production in Chinese plants.

Editor: Liao Ming