Hong Kong: Economy#

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.

Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China through trade, tourism, and financial links helped it to make an initial recovery more quickly than many observers anticipated, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy.

The Hong Kong Government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 9.4% of total system deposits in Hong Kong by the end of 2015. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota.

The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 47.3 million in 2014, outnumbering visitors from all other countries combined. Mainland visitors to Hong Kong declined 3% in 2015 to approximately 45.7 million, reflecting an overall drop of 2.5% in total visitors to Hong Kong. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2015, mainland Chinese companies constituted about 51% of the firms listed on the Hong Kong Stock Exchange and accounted for about 62.1% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. In 2014, Hong Kong and China signed a new agreement on achieving basic liberalization of trade in services in Guangdong Province under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from March 2015, cover a negative list and a most-favored treatment provision, and will improve access to the mainland's service sector for Hong Kong-based companies.

Credit expansion and a tight housing supply have caused Hong Kong property prices to rise rapidly; consumer prices increased 4.4% in 2014, but slowed to 2.9% in 2015. Lower- and middle-income segments of the population are increasingly unable to afford adequate housing.

Hong Kong’s economic integration with the mainland continues to be most evident in the banking and finance sector. Initiatives like the Hong Kong-Shanghai Stock Connect, the Mutual Recognition of Funds, and The Hong Kong Shanghai Gold Connect are all important steps towards opening up the Mainland’s capital markets and has reinforced Hong Kong’s leading role as China’s offshore RMB market. Additional connect schemes from bonds to commodities and other investment products are also under exploration by Hong Kong authorities.

Economic Facts#

GDP (purchasing power parity)$427.4 billion (2016 est.)
$421.3 billion (2015 est.)
$411.3 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$316.1 billion (2015 est.)
GDP - real growth rate1.4% (2016 est.)
2.4% (2015 est.)
2.7% (2014 est.)
GDP - per capita (PPP)$58,100 (2016 est.)
$57,600 (2015 est.)
$56,600 (2014 est.)
note: data are in 2016 dollars
Gross national saving24.9% of GDP (2016 est.)
24.8% of GDP (2015 est.)
25.1% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 66.5%
government consumption: 9.9%
investment in fixed capital: 20.3%
investment in inventories: -0.2%
exports of goods and services: 192.6%
imports of goods and services: -189.1% (2016 est.)
GDP - composition, by sector of originagriculture: 0.1%
industry: 7.2%
services: 92.8% (2016 est.)
Agriculture - productsfresh vegetables and fruit; poultry, pork; fish
Industriestextiles, clothing, tourism, banking, shipping, electronics, plastics, toys, watches, clocks
Industrial production growth rate2% (2016 est.)
Labor force3.911 million (2016 est.)
Labor force - by occupationmanufacturing: 3.8%
construction: 2.8%
wholesale and retail trade, restaurants, and hotels: 53.3%
financing, insurance, and real estate: 12.5%
transport and communications: 10.1%
community and social services: 17.1%

note: above data exclude public sector (2013 est.)
Unemployment rate3.6% (2016 est.)
3.3% (2015 est.)
Population below poverty line19.6% (2012 est.)
Household income or consumption by percentage sharelowest 10%: NA%
highest 10%: NA%
Distribution of family income - Gini index53.7 (2011)
53.3 (2007)
Budgetrevenues: $59.09 billion
expenditures: $59.07 billion (2016 est.)
Taxes and other revenues18.7% of GDP (2016 est.)
Budget surplus (+) or deficit (-)0% of GDP (2016 est.)
Public debt38.4% of GDP (2016 est.)
37% of GDP (2015 est.)
Fiscal year1 April - 31 March
Inflation rate (consumer prices)2.6% (2016 est.)
3% (2015 est.)
Central bank discount rate0.5% (31 December 2013)
0.5% (31 December 2012)
Commercial bank prime lending rate5% (31 December 2016 est.)
5% (31 December 2015 est.)
Stock of narrow money$270.6 billion (31 December 2016 est.)
$254.3 billion (31 December 2015 est.)
Stock of broad money$1.576 trillion (31 December 2015 est.)
$1.42 trillion (31 December 2014 est.)
Stock of domestic credit$601 billion (31 December 2016 est.)
$655.7 billion (31 December 2015 est.)
Market value of publicly traded shares$3.185 trillion (31 December 2015 est.)
$3.233 trillion (31 December 2014 est.)
$3.101 trillion (31 December 2013 est.)
Current account balance$8.895 billion (2016 est.)
$9.631 billion (2015 est.)
Exports$487.7 billion (2016 est.)
$505.7 billion (2015 est.)
Exports - commoditieselectrical machinery and appliances, textiles, apparel, footwear, watches and clocks, toys, plastics, precious stones, printed material
Exports - partnersChina 53.7%, US 9.5% (2015)
Imports$509.5 billion (2016 est.)
$528.5 billion (2015 est.)
Imports - commoditiesraw materials and semi-manufactures, consumer goods, capital goods, foodstuffs, fuel (most is reexported)
Imports - partnersChina 49%, Japan 6.4%, Singapore 6.1%, US 5.2%, South Korea 4.3% (2015)
Reserves of foreign exchange and gold$342.7 billion (31 December 2016 est.)
$358.8 billion (31 December 2015 est.)
Debt - external$446 billion (31 December 2016 est.)
$491.9 billion (31 December 2015 est.)
Stock of direct foreign investment - at home$1.891 trillion (31 December 2016 est.)
$1.744 trillion (31 December 2015 est.)
Stock of direct foreign investment - abroad$1.766 trillion (31 December 2016 est.)
$1.657 trillion (31 December 2015 est.)
Exchange ratesHong Kong dollars (HKD) per US dollar -
7.779 (2016 est.)
7.752 (2015 est.)
7.752 (2014 est.)
7.754 (2013 est.)
7.756 (2012 est.)