Hong Kong: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
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 | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 209.28 | 224.46 | 246.94 | 268.17 | 289.59 |
| GDP (Constant Prices, Annual % Change) | -2.7 | 7.0 | 6.0e | 4.3 | 4.6 |
| GDP per Capita (USD) | 29,621 | 31,514 | 34,393e | 37,051 | 39,691 |
| General Government Balance (in % of GDP) | -2.2 | -1.4e | -3.0e | -1.4 | -1.3 |
| General Government Gross Debt (in % of GDP) | 33.2 | 34.6 | 33.8e | 32.1 | 29.2 |
| Inflation Rate (%) | 0.6 | 2.3 | 5.5e | 4.5 | 3.5 |
| Unemployment Rate (% of the Labor Force) | 5.2 | 4.3 | 3.6 | 3.7 | 3.8 |
| Current Account (billions USD) | 17.96 | 13.93e | 13.39e | 14.72 | 16.85 |
| Current Account (in % of GDP) | 8.6 | 6.2 | 5.4e | 5.8 | - |
Source: IMF - World Economic Outlook Database ; World Bank , 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 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 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Hong Kong Dollar (HKD) - Average Annual Exchange Rate For 1 USD | 7.77 | 7.80 | 7.79 | 7.75 | 7.77 |
Source: World Bank - Last Available Data.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
See the Country Risk Analysis Provided By Ducroire.
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 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Imports of Goods (million USD) | 335,754 | 370,132 | 392,962 | 352,241 | 442,035 |
| Exports of Goods (million USD) | 322,669 | 349,386 | 370,242 | 329,422 | 401,022 |
| Imports of Services (million USD) | 36,905 | 42,450 | 46,918 | 44,379 | 51,225 |
| Exports of Services (million USD) | 72,674 | 84,643 | 92,048 | 86,306 | 108,000 |
| Imports of Goods and Services (Annual % Change) | 9.1 | 9.1 | 2.3 | -9.0 | 17.3 |
| Exports of Goods and Services (Annual % Change) | 9.4 | 8.3 | 2.5 | -10.3 | 16.8 |
| Imports of Goods and Services (in % of GDP) | 194.1 | 197.1 | 202.2 | 187.6 | 217.3 |
| Exports of Goods and Services (in % of GDP) | 205.5 | 208.0 | 212.4 | 195.1 | 223.0 |
| Trade Balance (million USD) | -14,033 | -19,701 | -23,117 | -26,862 | -42,965 |
| Trade Balance (Including Service) (million USD) | 21,642 | 22,430 | 22,113 | 15,610 | 12,598 |
| Foreign Trade (in % of GDP) | 399.7 | 405.1 | 414.6 | 382.7 | 440.3 |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| 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
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 disagrement 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 politicial rights of Hong Kong citizens are very limited and very elementary.
Source: Worldwide Press Freedom Index 2010, Reporters Without Borders
Map of freedom 2010
Source: Freedom House
Any Comments About This Content? Report It to Us.
© Export Entreprises SA, All Rights Reserved.
Last Updates: January 2012