Hong Kong is the world's tenth largest trading power and the third largest financial center in the world. Hong Kong's economy is often cited as the model of capitalism. Its ultra-liberal operating system was heavily exposed to the global financial crisis but ultimately proved to be resilient. In 2012, its growth rate was weak due to the slowdown of the Chinese economy and the recession in Europe. According to estimations, the country's growth must have slightly increased in 2013 (about 3%) and inflation was 4.6%.
Household consumption has increased and the country retains huge fiscal reserves. The government rarely intervenes in the economic sphere, but due to political pressure, it has been asked to adopt a number of measures. In the current ambiguous international environment, the budget proposal for 2013-2014 focuses on growth and employment. It includes an increase of more than 30% in welfare spending, as well as tax cuts and energy subsidies. In order to encourage long-term growth, the government seeks to strengthen Hong Kong's role as a global warehouse and to support the development of the industries of logistics and funds management. The fight against environmental pollution and senior citizens welfare support are also among the priorities. In 2014, the government will continue to center its control in a budgetary discipline. Tourism is an important sector, in 2013 about 54 million visitors, mainly from continental China, visited Hong Kong. This year, the government has applied new measures in order to reduce the price of real estate which could eventually weaken the growth perspectives of Hong Kong. Lastly, the country's attractive fiscal policy, which is one of its major advantages, could be threatened by the competitiveness of the emerging regional countries. In 2014 a constitutional reform should be passed, but at the moment there is not a consensus regarding this subject.
The economic crisis had led to a demotion on the labor market, particularly in the financial services. However, the unemployment rate has decreased again and remains at a historical minimum (slightly above 3%). Nevertheless, Hong Kong must deal with high levels of social inequality.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||248.51||262.63||274.03||292.68||312.39|
|GDP (Constant Prices, Annual % Change)||4.8||1.6||2.9||3.0e||3.3|
|GDP per Capita (USD)||34,941||36,589||37e||40,304e||42,770|
|General Government Balance (in % of GDP)||1.2||0.7||-1.0||0.3||-1.0|
|General Government Gross Debt (in % of GDP)||6.1||6.8||6.7||6.5||6.3|
|Inflation Rate (%)||5.3||4.1||4.3||3.9e||3.8|
|Unemployment Rate (% of the Labor Force)||3.4||3.3||3.1||3.1||3.1|
|Current Account (billions USD)||13.81||4.14||5.10e||6.22||6.81|
|Current Account (in % of GDP)||5.6||1.6||1.9e||2.1||2.2|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
Since the agricultural sector is almost non-existent, Hong Kong has to import 80% of its food supplies. Hong Kong does not have any natural resources and depends entirely on its imports of raw materials and energy. Agriculture, practically does not contribute at all to the country's economy.
The manufacturing industry's contribution to the GDP is also very low. The country's main industrial sectors are textiles, electronic components and household appliances, computer technology and telecommunications.
The tertiary sector, particularly financial services, is the heart of the country's economic activity. It contributes to around 90% of the GDP and employs more than 85% of the active population. Hong Kong acts as a service center for Asian companies, especially those that trade with China. According to the figures published by the Commercial Register, there are over 900,000 companies registered in Hong Kong. The tourism industry is booming, mainly due to an exponential increase in the number of visitors from mainland China.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||0.2||11.6||87.7|
|Value Added (in % of GDP)||0.1||7.2||92.7|
|Value Added (Annual % Change)||1.2||0.5||3.5|
Source: World Bank - Last Available Data.
|Hong Kong Dollar (HKD) - Average Annual Exchange Rate For 1 USD||7.75||7.77||7.78||7.76||7.76|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Hong Kong's economy is considered a model of capitalism because of its dedication to free trade. Trade represents nearly 430% of the GDP (2009-2011 average). Hong Kong is one of the top fifteen exporters of trade services and it is also among the top fifteen largest trade-based economies in the world.
Foreign trade was pursued intensively during these past years, supported by the growth of the Chinese economy. Structurally in deficit, the trade balance of Hong Kong has a tendency to deteriorate due to the unfavorable international context, which is harming imports. In 2013, this deficit became larger, imports progressed a little faster than exports.
The island's main trade partners are China, Southeast Asia and Japan.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||352,241||441,369||510,855||553,486||622,277|
|Exports of Goods (million USD)||329,422||400,692||455,573||492,907||535,546|
|Imports of Services (million USD)||44,379||51,019||56,125||58,479||59,337|
|Exports of Services (million USD)||86,306||103,977||118,840||126,130||135,024|
|Imports of Goods and Services (Annual % Change)||-9.0||17.4||4.6||2.9||6.8|
|Exports of Goods and Services (Annual % Change)||-10.0||16.8||3.9||1.9||6.4|
|Imports of Goods and Services (in % of GDP)||183.4||213.5||221.6||224.4||228.7|
|Exports of Goods and Services (in % of GDP)||191.2||219.4||225.5||225.6||229.6|
|Trade Balance (million USD)||13,288||3,292||-7,482||-18,913||-26,207|
|Trade Balance (Including Service) (million USD)||16,850||13,435||9,563||2,973||2,333|
|Foreign Trade (in % of GDP)||374.6||432.9||447.1||450.0||458.3|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||26.7%|
(% of Imports)
|See More Countries||33.2%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2014|
|Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies||14.8%|
|Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form||9.5%|
|Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof||9.1%|
|Parts and accessories (other than covers, carrying...Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading 8469 to 8472, n.e.s.||5.1%|
|Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras||4.6%|
|See More Products||56.8%|
|- bn USD of products imported in 2014|
|Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies||16.4%|
|Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form||9.2%|
|Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof||6.3%|
|Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras||5.8%|
|Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.||4.0%|
|See More Products||58.3%|
Source: Comtrade, Last Available Data
|- bn USD of services exported in 2010|
|- bn USD of services imported in 2010|
Source: Comtrade, Last Available Data
The government is responsible only to the Chief Executive and is composed of 12 ministers (Secretaries) who are assisted by 17 senior functionaries who hold the title of "Permanent Secretaries". In hierarchical order, the three main government posts are the Chief Secretary- number 2 in the government, the Financial Secretary, and the Secretary for Justice. If the Chief Executive is unable to conduct his functions temporarily, they will be conducted in this order of precedence by the title holders of the main posts.
In addition, the Chief Executive is assisted by an Executive Council or Exco which includes the government ministers and 15 non-official members who are parliamentarians nominated by the Chief Executive; personalities from the business world or from civil companies. The Exco serves as the Council of Ministers by being the venue for formulation of government's policies. This council is consulted for all important political decisions. It meets once a week, under the chairmanship of the Chief Executive who should specially justify his decisions in case of disagreement with the majority of its members.
The council votes for and amends laws and can also introduce any new proposal. It examines and approves the budget, taxes and public expenditure, appoints the judges for the Court of Final Appeal and the President of the High Court. It can even question the responsibility of the Chief Executive and raise questions to the government about the conduct of its policy, the absence of political responsibility of the ministers can make the legislative council limit the control exercised by this assembly on the executive power.
Their mandate is for four years. The government is directly or indirectly dependent on parliament's support, which is often given through a vote of confidence. The Chief Executive does not have the power to dissolve the Parliament. He cannot refuse to sign a bill which has been voted in by 2/3 majority in the parliament. The political rights of Hong Kong citizens are very limited and very elementary.
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: October 2014