Economy of Hong Kong

Mother Earth Travel > Country Index > Hong Kong > Map Economy History

Hong Kong, as the world's tenth-largest trading entity and ninth-largest banking center, is one of the world's most open and dynamic economies. Per capita GDP approximates Great Britain's. Hong Kong's banking system is sound, and the government has massive reserves. The economy suffered its worst recession in 30 years during the Asian financial crisis. GDP recovered strongly in 2000, growing at 10.5%, but the collapse of consumer demand in the United States and Europe interrupted that recovery, dragging the economy into recession in 2001. Strong economic growth in China will buffer Hong Kong to some extent from the global economic slowdown, especially as compared to its rivals Singapore and Taiwan. However, increasing unemployment (now 5.3%) and uncertainty about the future have created a growing popular unease. In response to these economic difficulties, the government unveiled a series of modest stimulus measures in October 2001, including infrastructure expenditures, small tax cuts, and development funds for small and medium enterprises. Authorities generally resisted pressure for largescale government expenditures to stimulate the economy. The deficit for fiscal year 2001-02 will be considerably larger, primarily because of declining revenues caused by the economic downturn.

Over the long term Hong Kong enjoys a number of positive economic factors, including accumulated public and private wealth from decades of unprecedented growth, virtually no public debt, a strong legal system, and an able and rigorously enforced anti-corruption regime. The need for restructuring and redefinition--possibly as a high-tech, information center--as Hong Kong's advanced, high-cost, service-based economy continues to evolve, poses difficult challenges and choices for the government. Hong Kong is endeavoring to improve it competitiveness, especially in preparation for China's entry into the WTO, and continues to refine its financial architecture. U.S. companies have a generally favorable view of Hong Kong's business environment, including its legal system and the free flow of information, low taxation, and infrastructure. The American Chamber of Commerce's annual business confidence survey, released in December 2000, reflects what was then an emerging economic recovery, with 95% indicating the outlook for 2001 was "good" or "satisfactory"--compared to 85% last year. Survey results showed a positive outlook through 2005.

On the international front, Hong Kong is an active member of the World Trade Organization (WTO) and the Asia Pacific Economic Cooperation (APEC) forum, where it is an articulate and effective champion of free markets and reduction of trade barriers. Despite growing competition from the Mainland, Hong Kong residents across the political spectrum have supported China's accession to the WTO, believing this will open new opportunities on the Mainland for local firms and will stabilize relations between Hong Kong's two most important trade and investment partners, the United States and China.

GDP: purchasing power parity - purchasing power parity - $181 billion (2000 est.)
GDP - real growth rate: 10.5% (2000 est.)
GDP - per capita: purchasing power parity - $25,400 (2000 est.)
GDP - composition by sector:
agriculture:  0.1%
industry:  14.3%
services:  85.6% (1999 est.)
Inflation rate (consumer prices): 3.7% (2000 est.)
Labor force: 3.39 million (2000 est.)
Labor force - by occupation: wholesale and retail trade, restaurants, and hotels 31.5%, community and social services 24%, financing, insurance, and real estate 14.5%, transport and communications 11.6%, manufacturing 7.7%, construction 2.6% (October 1999)
Unemployment rate: 5.3% (2001 est.)
Budget:
revenues:  $20.8 billion
expenditures:  $24.5 billion, including capital expenditures of $NA (FY99/00)
Industries: textiles, clothing, tourism, electronics, plastics, toys, watches, clocks
Industrial production growth rate: 2.1% (2000)
Electricity - production: 27.726 billion kWh (1999)
Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1999)
Agriculture - products: fresh vegetables; poultry
Exports: $204 billion (including reexports; f.o.b., 2000 est.)
Exports - commodities: clothing, textiles, footwear, electrical appliances, watches and clocks, toys
Exports - partners: China 33%, United States 24%, Japan 5%, UK 4%, Germany, Singapore (1999)
Imports: $215 billion (f.o.b., 2000)
Imports - commodities: foodstuffs, transport equipment, raw materials, semimanufactures, petroleum; a large share is reexported
Imports - partners: China 44%, Japan 12%, United States 7%, Taiwan 7%, South Korea, Singapore (1999)
Debt - external: $48.1 billion (1999)
Currency: Hong Kong dollar (HKD)

SOURCES: The World Factbook, U.S. Department of State

Mother Earth Travel > Country Index > Hong Kong > Map Economy History