Hong Kong

Economics, Political, and Trade Overview

Source: Feb 10, 2022 Economist Intelligence Unit

Hong Kong - In Short.

Overview of Hong Kong

Seized by the UK in 1841, Hong Kong was formally ceded by China the following year at the end of the First Opium War; the Kowloon Peninsula was added in 1860 at the end of the Second Opium War, and was further extended when Britain obtained a 99-year lease of the New Territories in 1898. Pursuant to an agreement signed by China and the UK on 19 December 1984, Hong Kong became the Hong Kong Special Administrative Region of the People’s Republic of China on 1 July 1997. In this agreement, China promised that, under its “one country, two systems” formula, China’s socialist economic and strict political system would not be imposed on Hong Kong and that Hong Kong would enjoy a “high degree of autonomy” in all matters except foreign and defense affairs for the subsequent 50 years. Since the turnover, Hong Kong has continued to enjoy success as an international financial center. However, dissatisfaction with the Hong Kong Government and growing Chinese political influence has been a central issue and led to considerable civil unrest. In June 2020, the Chinese Government passed a security law for Hong Kong that would criminalize acts such as those interpreted as secession, subversion, terrorism, and collusion with foreign or external forces. Critics said the law effectively curtailed protests and freedom of speech and was widely viewed as reducing Hong Kong’s autonomy, while Beijing said it would return stability. The law was met with widespread international condemnation and criticism that it effectively ended the “one country, two systems” guiding principle of Hong Kong’s Basic Law. Since its passing, authorities have used the law to detain pro-democracy activists and politicians, oust opposition lawmakers, and raid media offices. In March 2021, Beijing reduced the number of directly elected seats in Hong Kong’s legislature, furthering its efforts to curtail political opposition and protests.
Value
Country Full Name
Hong Kong
Country Code
HKG
Region
East Asia & Pacific
Income Group
High income
Currency Unit
GDP
3.47E+11
Population
7481800
Land Area
1050
Net National Income Per Capita
GDP per Capita (PPP)
59234.10859

2020 GDP Growth Rate (Current USD)

2020 GDP Per Capita (Current USD)

2020 Urbanization Rate (%)

2020 Total Fertility Rate (Birth Per Woman)

Doing Business Score (100= Most Friendly)

Hong Kong - Economic

Economy of Hong Kong

Hong Kong has a free market economy, highly dependent on international trade and finance – the value of goods and services trade, including the sizable share of reexports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.Excess liquidity, low interest rates and a tight housing supply have caused Hong Kong property prices to rise rapidly. The lower and middle-income segments of the population increasingly find housing unaffordable.Hong Kong’s open economy has left it exposed to the global economic situation. Its continued reliance on foreign trade and investment makes it vulnerable to renewed global financial market volatility or a slowdown in the global economy.Mainland China has long been Hong Kong’s largest trading partner, accounting for about half of Hong Kong’s total trade by value. Hong Kong’s natural resources are limited, and food and raw materials must be imported. As a result of China’s easing of travel restrictions, the number of mainland tourists to the territory surged from 4.5 million in 2001 to 47.3 million in 2014, outnumbering visitors from all other countries combined. After peaking in 2014, overall tourist arrivals dropped 2.5% in 2015 and 4.5% in 2016. The tourism sector rebounded in 2017, with visitor arrivals rising 3.2% to 58.47 million. Travelers from Mainland China totaled 44.45 million, accounting for 76% of the total.The Hong Kong Government is promoting the Special Administrative Region (SAR) as the preferred business hub for renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts, RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong, RMB trade settlement is allowed, and investment schemes such as the Renminbi Qualified Foreign Institutional Investor (RQFII) Program was first launched in Hong Kong. Offshore RMB activities experienced a setback, however, after the People’s Bank of China changed the way it set the central parity rate in August 2015. RMB deposits in Hong Kong fell from 1.0 trillion RMB at the end of 2014 to 559 billion RMB at the end of 2017, while RMB trade settlement handled by banks in Hong Kong also shrank from 6.8 trillion RMB in 2015 to 3.9 trillion RMB in 2017.Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2015, mainland Chinese companies constituted about 50% of the firms listed on the Hong Kong Stock Exchange and accounted for about 66% of the exchange’s market capitalization.During the past decade, as Hong Kong’s manufacturing industry moved to the mainland, its service industry has grown rapidly. In 2014, Hong Kong and China signed a new agreement on achieving basic liberalization of trade in services in Guangdong Province under the Closer Economic Partnership Agreement (CEPA), adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, which took effect in March 2015, cover a negative list and a most-favored treatment provision. On the basis of the Guangdong Agreement, the Agreement on Trade in Services signed in November 2015 further enhanced liberalization, including extending the implementation of the majority of Guangdong pilot liberalization measures to the whole Mainland, reducing the restrictive measures in the negative list, and adding measures in the positive lists for cross-border services as well as cultural and telecommunications services. In June 2017, the Investment Agreement and the Agreement on Economic and Technical Cooperation (Ecotech Agreement) were signed under the framework of CEPA.Hong Kong’s economic integration with the mainland continues to be most evident in the banking and finance sector. Initiatives like the Hong Kong-Shanghai Stock Connect, the Hong Kong- Shenzhen Stock Connect the Mutual Recognition of Funds, and the Bond Connect scheme are all important steps towards opening up the Mainland’s capital markets and have reinforced Hong Kong’s role as China’s leading offshore RMB market. Additional connect schemes such as ETF Connect (for exchange-traded fund products) are also under exploration by Hong Kong authorities. In 2017, Chief Executive Carrie LAM announced plans to increase government spending on research and development, education, and technological innovation with the aim of spurring continued economic growth through greater sector diversification.

Unemployment Rate

Inflation Rate

Hong Kong - GDP Composition

GDP Composiiton & Value Added of Hong Kong

Last Updated: Jan, 2021, Updated For 2020.

Hong Kong - GDP, Value Added

Demographics of Hong Kong

population fairly evenly distributed
Geographic Location

Eastern Asia, bordering the South China Sea and China

Races

Chinese 92%, Filipino 2.5%, Indonesian 2.1%, other 3.4% (2016 est.)

Languages

Cantonese (official) 88.9%, English (official) 4.3%, Mandarin (official) 1.9%, other Chinese dialects 3.1%, other 1.9% (2016 est.)major-language

Religion

Buddhist or Taoist 27.9%, Protestant 6.7%, Roman Catholic 5.3%, Muslim 4.2%, Hindu 1.4%, Sikh 0.2%, other or none 54.3% (2016 est.)note: many people practice Confucianism, regardless of their religion or not having a religious affiliation

Dependency & Expectancy of Hong Kong

Last Updated: Jan, 2021

Dependency Ratio

Expectancy

Politics & Policies of Hong Kong

2021 Policies Overview

Updated Coming in March 2021 after our team finish summarizing countries policy.

International Organizations

ADB, APEC, BIS, FATF, ICC (national committees), IHO, IMF, IMO (associate), Interpol (subbureau), IOC, ISO (correspondent), ITUC (NGOs), UNWTO (associate), UPU, WCO, WMO, WTO

Import of Hong Kong

Export of Hong Kong

Import Destination

Export Destination