Hong Kong encourages free enterprises and a free trade economy. The government makes no distinction between local and foreign companies and welcomes investment from both.
The Basic Law (which is the highest constitutional law of Hong Kong) provides that Hong Kong can enjoy a high degree of autonomy as a Special Administrative Region (SAR) of the People’s Republic of China. Hong Kong’s social and economic systems, as well as its lifestyles, would remain unchanged for 50 years after the handling over in 1997, and China’s socialist system and policies are NOT to be practiced in the SAR.
Ownership Restrictions
- Land
There is no discrimination between local residents and overseas investors in the area of holding title to land. Overseas investors wishing to buy leases of industrial land for the establishment of their plants may therefore do so. In accordance with the Sino-British Joint Declaration signed on 19th December 1984, normal land grants throughout the territory are now made for terms expiring not later than will be charged by government.
Labour legislation and labour standards
The momentum in improving working conditions, Occupational Safety and health and employees’ rights and benefits has been kept up through an extensive programme of labour legislation. Some 42 pieces of legislation were enacted between 1997 and 2001. More are in the pipeline. Hong Kong aims at applying relevant International labour standards as the local circumstances allow. As of April 28, 2000, Hong Kong is following 40 Conventions, exceeding most countries in the region.
Economy of Hong Kong
Hong Kong has a free market, entrepot economy, highly dependent on international trade. Natural resources are limited, and food and raw materials must be imported. Gross imports and exports (i.e., including re-exports to and from third countries) each exceed GDP in dollar value. Even before Hong Kong reverted to Chinese administration on 1 July 1997, it had extensive trade and investment ties with China. Hong Kong has been further integrating its economy with China because China’s growing openness to the world economy has made manufacturing in China much more cost effective. Hong Kong’s re-export business to and from China is a major driver of growth. Per capita GDP is comparable to that of the four big economies of Western Europe. GDP growth averaged a strong 5% from 1989 to 2005, but Hong Kong suffered two recessions in the past eight years because of the Asian financial crisis in 1997-1998 and the global downturn in 2001-2002. Although the Severe Acute Respiratory Syndrome (SARS) outbreak also battered Hong Kong’s economy, a solid rise in exports, a boom in tourism from the mainland because of China’s easing of travel restrictions, and a return of consumer confidence resulted in the resumption of strong growth from late 2003 through 2005 .
In August 1998, the government intervened in the stock, futures, and currency markets to fend off “manipulators.” The banking sector remains solid, and the government is committed to the U.S.-Hong Kong dollar link.
Hong Kong’s Victoria harbour has facilitated rapid development of foreign trade. Hong Kong’s principal trading partners include Mainland China, the United States, Japan, Taiwan, Germany, Singapore, and South Korea.
Hong Kong enjoyed economic growth in the past because of its strong manufacturing sector, but in recent years the service sector has surpassed it in importance and now accounts for 85% of GDP. The major components of Hong Kong’s service trade are shipping, civil aviation, tourism, and various financial services. Hong Kong has one of the world’s most sophisticated telecommunications and information technology infrastructures and functions as a major regional and international financial and commercial center.
Labor force – by occupation
Manufacturing 7.5%, construction 2.9%, wholesale and retail trade, restaurants, and hotels 43.7%, financing, insurance, and real estate 19.2%, transport and communications 7.9%, community and social services 18.5%.
note: above data exclude public sector.
Industries
Hong Kong’s industry depends on textiles, clothing, tourism, banking, shipping, electronics, plastics, toys, watches, clocks.
Transnational Issues
Hong Kong makes strenuous law enforcement efforts, but faces difficult challenges in controlling transit of heroin and methamphetamine to regional and world markets; modern banking system provides conduit for money laundering; rising indigenous use of synthetic drugs, especially among young people.
Trade and investment
Exports: 1 billion f.o.b., including reexports
Exports – commodities: clothing, textiles, footwear, electrical appliances, watches and clocks, toys, plastics, precious stones
Exports – partners: Mainland China 43%, Japan 12%, Taiwan 8%, US 7%, South Korea 5%, Singapore 3% (2000)
Imports: .8 billion (2001 est.)
Imports – commodities: foodstuffs, transport equipment, raw materials, semimanufactures, petroleum; a large share is reexported
Imports – partners: Mainland China 41%, Japan 13%, US 8%, Taiwan 7%, South Korea 5%, Singapore 4% (1998)
Debt – external: .1 billion (1999)
Economic aid – recipient: none (Source: Wikipedia)
Why Invest in Hong Kong?
Hong Kong which reverted to Chinese rule in 1997 remains a vibrant economy with a relatively high standard of living. Although the population is small, businessmen and women are used to western business practices and competition is intense. New products can and do gain market share very quickly in Hong Kong.
Hong Kong is a gateway to Chinese Market. Many businesses in Hong Kong have their manufacturing in Guandong province. Hong Kong’s strengths are in high-tech sectors and well capitalized banking sector.
Credit:ivythesis.typepad.com
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