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flag Hong Kong Hong Kong: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

After four years of maintained growth, the global financial crisis led the Hong Kong economy into recession during the third quarter of 2008. The recovery was nevertheless prompt and vigorous and in 2010 the economy resumed a trajectory of strong growth, especially thanks to the dynamism of exports, stimulated by the growth of China. In 2010, the growth is estimated at 6 %.

The government’s priority is now to deal with the vertiginous rise in the real estate prices, which creates problems of social cohesion and access to housing. The announced measures seek to reduce the lever effect on bank lending, reduce speculation, increase the transparency of the market and expand the land available to developers.

The economic crisis has lead to the deterioration of the labor market, particularly in the financial services. However, the unemployment rate decreased to 4.4% in 2010 and should further decrease in 2011.

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 209.28224.46246.94268.17289.59
GDP (Constant Prices, Annual % Change) -2.77.06.0e4.34.6
GDP per Capita (USD) 29,62131,51434,393e37,05139,691
General Government Balance (in % of GDP) -2.2-1.4e-3.0e-1.4-1.3
General Government Gross Debt (in % of GDP) 33.234.633.8e32.129.2
Inflation Rate (%) 0.62.35.5e4.53.5
Unemployment Rate (% of the Labor Force) 5.24.33.63.73.8
Current Account (billions USD) 17.9613.93e13.39e14.7216.85
Current Account (in % of GDP) 8.66.25.4e5.8-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

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 also very low. The country's main industrial sectors are textiles, electronic components and household appliances, computer technology and communications.

The tertiary sector, particularly financial services, is the heart of economic activity. It contributes around 90% of the GDP and employs about 80% of the active population. Hong Kong is a services center for Asian companies, especially those that trade with China. According to recent 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 12.4 87.4
Value Added (in % of GDP) 0.1 7.4 92.6
Value Added (Annual % Change) 0.8 -5.2 7.0

Source: World Bank - Last Available Data.

 
 
Monetary Indicators 20062007200820092010
Hong Kong Dollar (HKD) - Average Annual Exchange Rate For 1 USD 7.777.807.797.757.77

Source: World Bank - Last Available Data.

 
 
Learn more about Market Analysis about Hong Kong on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
89.7/100
Position:
Free
World Rank:
1/179
Regional Rank:
1/38

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

Hong Kong's economy is considered a model of capitalism because of its dedication to free trade.Trade represents more than 400% of the GDP. Hong Kong belonge among the fifteen top exporters of trade services and the first fifteen trade-based economies in the world.

Foreign trade was pursued intensively during these past years. Structurally in a deficit, the trade balance of Hong Kong has worsened due to the quicker rise in imports.

The island's main trade partners are China, Southeast Asia and Japan. 

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 335,754370,132392,962352,241442,035
Exports of Goods (million USD) 322,669349,386370,242329,422401,022
Imports of Services (million USD) 36,90542,45046,91844,37951,225
Exports of Services (million USD) 72,67484,64392,04886,306108,000
Imports of Goods and Services (Annual % Change) 9.19.12.3-9.017.3
Exports of Goods and Services (Annual % Change) 9.48.32.5-10.316.8
Imports of Goods and Services (in % of GDP) 194.1197.1202.2187.6217.3
Exports of Goods and Services (in % of GDP) 205.5208.0212.4195.1223.0
Trade Balance (million USD) -14,033-19,701-23,117-26,862-42,965
Trade Balance (Including Service) (million USD) 21,64222,43022,11315,61012,598
Foreign Trade (in % of GDP) 399.7405.1414.6382.7440.3

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
China 52.5%
United States 10.7%
Japan 4.1%
Germany 2.6%
India 2.5%
See More Countries 27.6%
Main Suppliers
(% of Imports)
2010
China 44.7%
Japan 9.3%
Singapore 7.0%
United States 5.3%
South Korea 4.1%
See More Countries 29.7%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 13.8%
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 7.6%
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. 5.3%
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. 3.4%
Parts suitable for use solely or principally with...Parts suitable for use solely or principally with transmission and reception apparatus for radio-telephony, radio-telegraphy, radio-broadcasting, television, television cameras, still image video cameras and other video camera recorders, radar apparatus, radio navigational aid apparatus or radio remote control apparatus, n.e.s. 3.1%
See More Products 66.8%
Main Imports
(% of Imports)
2010
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 15.9%
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 5.1%
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. 4.6%
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 3.5%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 3.3%
See More Products 67.5%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

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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

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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), (in Chinese only) 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 March 2012
 

Indicator of Freedom of the Press

World Rank:
34/178
Evolution:
14 places up compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Partly Free
Political Freedom:
5/7
Civil Liberties:
2/7

Map of freedom 2010
Source: Freedom House

 

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Last Updates: January 2012