Hong-Kong

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Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of general economic information | Political outline

Economic indicators

GDP growth reached an average level of 5% during the period of 1989 to 2006. In 2008, the country was extremely affected by the financial crisis owing to its strong dependence on foreign capital and the strong financialization of its economy. After four years of maintained growth, the global financial crisis led the Hong Kong economy into recession during the third quarter of 2008. The deterioration of the foreign environment, which led to the decrease in Hong Kong's commercial trade, caused a significant drop in domestic demand. From 2008, private consumption dropped, a trend which should continue during the next three years. The price indicator is expected to follow this downward trend. Economic growth had enabled the noticeable improvement of the employment market. This market deteriorated considerably, especially financial services, and recovery is not expected before 2011. Due to the strong decrease in global and domestic demand, the inflationary pressure (4.3% in 2008) let up in 2009.

Main indicators	2006	2007	2008	2009	2010
GDP (billions USD)	189.93	207.02	215.56e	206.11	210.87
GDP (constant prices, annual % change)	7.0	6.4	2.5	-4.5	0.5
GDP per capita (USD)	27,489	29,775	30,755e	29,172e	29,606e
General government balance (in % of GDP)	4.1	7.7	-0.1	-2.3	-1.5e
Inflation rate (%)	2.0	2.0	4.3	1.0e	1.0e
Unemployment rate (% of the labor force)	4.8	4.0	3.5	6.3	7.5
Current Account (billions USD)	22.94	25.53	30.62	14.85	10.89
Current Account (in % of GDP)	12.1	12.3	14.2	7.2e	5.2e

Source: IMF - World Economic Outlook Database

Note: (e) Estimated data

Main sectors of industry

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 imports of raw materials and power. Agriculture contributes practically nothing to the economy.
The manufacturing Industry's contribution to the GDP is very low. The country's main industrial sectors are textiles, clothing and electronic components.
The tertiary sector, particularly financial services, is the heart of economic activity and contributes around 90% of the GDP. Hong Kong is a services center for Asian companies, especially those that trade with China. Additionally, 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)	0.3	15.2	84.6
Value added (in % of GDP)	0.1	7.7	92.3
Value added (annual % change)	-9.2	-0.8	5.1

- last available data.

Monetary indicators	2004	2005	2006	2007	2008
Hong Kong Dollar (HKD) - Average annual exchange rate for 1 USD	7.79	7.78	7.77	7.80	7.79

Source: World Bank - World Development Indicators

Indicator of economic freedom

Score:: 90/100
Position:: free
World Rank:: 1 out of 179
Regional Rank:: 1 out of 42

Distribution of Economic freedom in the world
Source: 2008 Index of Economic freedom, Heritage Foundation

Country risk

See the country risk analysis provided by Ducroire.

Foreign trade in figures

Hong Kong is amongst the world's first fifteen commercial services exporters and the world's fifteen primary trade economies. Hong Kong's economy is considered as a model of capitalism because of its dedication to free trade. Foreign trade was pursued intensively during these past years. Maintained by the strength of trade with China and the weakness of the dollar, export and import of goods grew by 10%. However, a decrease in trade was noted in 2009 and Hong Kong's trade deficit worsened. This trend should continue in 2010.
The island's main trade partners are China, Southeast Asia and Japan.

Foreign trade indicators	2003	2004	2005	2006	2007
Imports of goods (millions USD)	230,435	269,575	297,206	331,634	365,679
Exports of goods (millions USD)	224,656	260,263	289,579	317,600	345,979
Imports of services (millions USD)	26,126	31,138	33,979	37,060	41,234
Exports of services (millions USD)	46,555	55,160	63,709	72,735	83,563
Imports of goods and services (annual % change)	11.3	13.8	8.0	9.1	8.8
Exports of goods and services (annual % change)	12.8	15.4	10.6	9.4	8.0
Imports of goods and services (in % of GDP)	161.8	181.3	186.3	194.1	196.4
Exports of goods and services (in % of GDP)	171.0	190.2	198.7	205.5	207.3
Trade Balance (millions USD)	-5,779	-9,312	-7,627	-14,033	-19,701
Trade Balance (including service) (millions USD)	14,651	14,710	22,104	21,642	22,629
Foreign trade (in % of GDP)	332.8	371.4	385.0	399.5	403.7

Source: World Bank

Main partner countries

Main customers (% of exports)	2008
China	48.2%
United States	12.5%
Japan	4.2%
Germany	3.3%
United Kingdom	2.9%
Singapore	2.0%
South Korea	1.9%
India	1.9%
Netherlands	1.6%
Australia	1.4%
France	1.3%
Thailand	1.3%
Italy	1.2%
Canada	1.0%
Switzerland	0.9%
Malaysia	0.9%
Vietnam	0.9%
United Arab Emirates	0.8%
Philippines	0.7%
Macau	0.7%
See more countries	28.9%

Main suppliers (% of imports)	2008
China	46.1%
Japan	10.0%
Singapore	6.4%
United States	5.0%
South Korea	4.0%
Thailand	2.3%
Malaysia	2.2%
India	1.9%
Germany	1.8%
Philippines	1.7%
Switzerland	1.6%
United Kingdom	1.4%
Italy	1.1%
France	0.8%
Belgium	0.7%
Indonesia	0.6%
Australia	0.5%
Israel	0.5%
Netherlands	0.5%
Brazil	0.5%
See more countries	28.5%

Source: Comtrade

Main products

Main exports (% of exports)	2008
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	41.4%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	13.5%
Natural or cultured pearls, precious or...Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	7.1%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	4.1%
Articles of apparel and clothing accessories,...Articles of apparel and clothing accessories, knitted or crocheted	3.8%
Plastics and articles thereofPlastics and articles thereof	3.7%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	3.3%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	3.3%
Clocks and watches and parts thereofClocks and watches and parts thereof	1.9%
Articles of leather; saddlery and harness; travel...Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut)	1.8%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	1.6%
CottonCotton	1.2%
Knitted or crocheted fabricsKnitted or crocheted fabrics	0.8%
Iron and steelIron and steel	0.8%
Copper and articles thereofCopper and articles thereof	0.6%
Raw hides and skins (other than furskins) and...Raw hides and skins (other than furskins) and leather	0.6%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.6%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	0.5%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	0.5%
Meat and edible meat offalMeat and edible meat offal	0.4%
Furskins and artificial fur; manufactures thereofFurskins and artificial fur; manufactures thereof	0.4%
Miscellaneous chemical productsMiscellaneous chemical products	0.4%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.4%
Miscellaneous manufactured articlesMiscellaneous manufactured articles	0.4%
Articles of iron or steelArticles of iron or steel	0.4%
Pharmaceutical productsPharmaceutical products	0.4%
Man-made filamentsMan-made filaments	0.3%
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	0.3%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	0.3%
Organic chemicalsOrganic chemicals	0.3%
Aluminium and articles thereofAluminium and articles thereof	0.3%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	0.3%
Man-made staple fibresMan-made staple fibres	0.2%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.2%
Special woven fabrics; tufted textile fabrics;...Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery	0.2%
Essential oils and resinoids; perfumery, cosmetic...Essential oils and resinoids; perfumery, cosmetic or toilet preparations	0.2%
Tobacco and manufactured tobacco substitutesTobacco and manufactured tobacco substitutes	0.2%
Glass and glasswareGlass and glassware	0.2%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	0.2%
Prepared feathers and down and articles made of...Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair	0.2%
Rubber and articles thereofRubber and articles thereof	0.2%
Wool, fine or coarse animal hair; horsehair yarn...Wool, fine or coarse animal hair; horsehair yarn and woven fabric	0.2%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.2%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.2%
Beverages, spirits and vinegarBeverages, spirits and vinegar	0.1%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	0.1%
Works of art, collectors' pieces and antiquesWorks of art, collectors' pieces and antiques	0.1%
Zinc and articles thereofZinc and articles thereof	0.1%
See more products	30.0%

Main imports (% of imports)	2008
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	39.5%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	12.9%
Natural or cultured pearls, precious or...Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	6.7%
Plastics and articles thereofPlastics and articles thereof	3.7%
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	3.7%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	3.5%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	3.2%
Articles of apparel and clothing accessories,...Articles of apparel and clothing accessories, knitted or crocheted	2.5%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	2.0%
Clocks and watches and parts thereofClocks and watches and parts thereof	1.6%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	1.3%
Articles of leather; saddlery and harness; travel...Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut)	1.3%
CottonCotton	1.1%
Iron and steelIron and steel	1.0%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	0.9%
Meat and edible meat offalMeat and edible meat offal	0.9%
Copper and articles thereofCopper and articles thereof	0.8%
Raw hides and skins (other than furskins) and...Raw hides and skins (other than furskins) and leather	0.8%
Knitted or crocheted fabricsKnitted or crocheted fabrics	0.6%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	0.6%
Fish and crustaceans, molluscs and other aquatic...Fish and crustaceans, molluscs and other aquatic invertebrates	0.6%
Organic chemicalsOrganic chemicals	0.5%
Furskins and artificial fur; manufactures thereofFurskins and artificial fur; manufactures thereof	0.5%
Essential oils and resinoids; perfumery, cosmetic...Essential oils and resinoids; perfumery, cosmetic or toilet preparations	0.4%
Articles of iron or steelArticles of iron or steel	0.4%
Pharmaceutical productsPharmaceutical products	0.4%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.4%
Miscellaneous chemical productsMiscellaneous chemical products	0.4%
Man-made filamentsMan-made filaments	0.4%
Glass and glasswareGlass and glassware	0.3%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.3%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	0.3%
Beverages, spirits and vinegarBeverages, spirits and vinegar	0.3%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	0.3%
Aluminium and articles thereofAluminium and articles thereof	0.3%
Rubber and articles thereofRubber and articles thereof	0.3%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.3%
Miscellaneous manufactured articlesMiscellaneous manufactured articles	0.3%
Man-made staple fibresMan-made staple fibres	0.3%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	0.3%
Wool, fine or coarse animal hair; horsehair yarn...Wool, fine or coarse animal hair; horsehair yarn and woven fabric	0.2%
Dairy produce; birds' eggs; natural honey; edible...Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included	0.2%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.2%
Works of art, collectors' pieces and antiquesWorks of art, collectors' pieces and antiques	0.2%
Aircraft, spacecraft, and parts thereofAircraft, spacecraft, and parts thereof	0.2%
Preparations of meat, of fish or of crustaceans,...Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates	0.2%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.2%
Special woven fabrics; tufted textile fabrics;...Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery	0.2%
Tobacco and manufactured tobacco substitutesTobacco and manufactured tobacco substitutes	0.2%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	0.1%
Miscellaneous edible preparationsMiscellaneous edible preparations	0.1%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	0.1%
Nickel and articles thereofNickel and articles thereof	0.1%
Preparations of cereals, flour, starch or milk;...Preparations of cereals, flour, starch or milk; pastrycooks' products	0.1%
Photographic or cinematographic goodsPhotographic or cinematographic goods	0.1%
Live animalsLive animals	0.1%
See more products	33.5%

Source: Comtrade

See more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of general economic information

Ministries: Business and Trade(information of the HK governement)
HK Trade Development Council
Commerce and Economic Development Bureau
Financial Services and the Treasury Bureau
Agriculture, Fisheries and Conservation Department
Trade and Industry Department
Statistical Office: Census and Statistics Department
Central Bank: HK Monetary Authority(HKMA)
Stock Exchange: Hong Kong Stock Exchange(SEHK)
Search Engines
Economic portals: Far Eastern Economic Review

Political outline

Executive Power: The territory is governed by a Chief Executive, elected for 5 years by a college of 800 large voters including parliamentarians, eminent personalities and representatives of the professional sectors. Mr.Donald Tsang was re-elected as Chief Executive on 25 March 2007 with 81% votes of large electors and a strong popular support (nearly 70% favorable opinions). For the first time, this election was challenged by a candidate of the democtratic camp Mr. Alan Leong, member of the Civil Party, a favorable sign of the effect of democratic debate.

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 disagrement with the majority of its members.
Legislative Power: The Monocameral legislative power is conferred to a legislative council of 60 members whose appointment is confirmed through a complex poll procedure which has three distinct colleges :
- 30 members are elected by univeral voting (proportional voting by geographical district);
- 30 members are elected as part of the districts called "functional", which are professional colleges (teachers, banks, real-estate sector...) of very unequal importance (from several thousands to a few tens).

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 politicial rights of Hong Kong citizens are very limited and very elementary.
Main political parties: Since there is no legislation on political parties in Hong Kong, there is no legal definition of what is a political party. Most of the political parties or groups are registered either companies or as Business Corporations. Hong Kong has a multiparty system. There are several parties and one single party generally does not have any chance to win power by controlling the Legislative Council. The main political parties of the country are :
- The ADPL (Association for Democracy and People's livelihood), popular pro-democracy party
- The Citizens Party, it supports matters regarding minorities and environmental protection;
- DAB (Democratic Alliance for Betterment and Progress of Hong Kong), conservative and pro-Beijing party;
- The Democratic Party, pro-democracy and liberal party ;
- The Frontier Party, radical, pro-democracy, demands that Hong Kong should have the right to draw-up its own constitution.
Current political leaders: Head of State : President of China - HU Jintao (since March 2003) - Chinese Communist Party
Chief Executive : Donald TSANG (since June 2005) non-supporter
Next election dates: Legislative Council : in 2012

Indicator of freedom of the press

World Rank:: 51/173
Evolution:: 10 places up compared to 2007

Source: Worldwide Press Freedom Index 2007, Reporters Without Borders

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