Economy of Hong Kong

Economy of Hong Kong
CurrencyHong Kong dollar (HKD)
1 April – 31 March
Trade organisations
APEC, WTO, Group of Twenty (Chinese delegation), One Belt One Road, AIIB and ICC etc.
Country group
Statistics
PopulationIncrease 7,498,100 (2023)[3]
GDP
  • Increase $410.36 billion (nominal, 2024 est.)[4]
  • Increase $577.87 billion (PPP, 2024)
GDP rank
GDP growth
  • +6.4% (2021) −3.5% (2022)[5]
GDP per capita
  • Increase $54,080 (nominal, 2024 est.)[4]
  • Increase $76,150 (PPP, 2024 est.)[6]
GDP per capita rank
GDP by sector
1.9% (2022)[5]
Population below poverty line
19.9% (2016 est.)[7]
53.9 high (2016)[7]
Labour force
  • Decrease 3,946,772 (2019)[10]
  • Decrease 59.0% employment rate (2016)[11]
Labour force by occupation
  • manufacturing: 6.5%
  • construction: 2.1%
  • wholesale and retail trade, restaurants, and hotels: 43.3%
  • financing, insurance, and real estate, professional and business service: 20.7%
  • transport and communications: 7.8%
  • community, social, and personal services: 19.5%
Unemployment4.3% (2022)[5]
Average gross salary
HK$ 19,100
US$ 2,439
per month (2022 May)[12]
HK$ 17,883
US$ 2,284
per month (2022 May)[13]
Main industries
financing and insurance, import and export trade, professional and business services
External
Exports$533.6 billion (2023)[5]
Main export partners
Imports$593.3 billion (2023)[5]
Main import partners
FDI stock
  • Increase$2.2 trillion (31 December 2017 est.)[7]
  • Increase Abroad: $2.036 trillion (31 December 2017 est.)[7]
Increase $14.75 billion (2017 est.)[7]
Positive decrease $633.6 billion (31 December 2017 est.)[7]
Public finances
0.1% of GDP (2017 est.)[7]
+5.2% (of GDP) (2017 est.)[7]
Revenues79.34 billion (2017 est.)[7]
Expenses61.64 billion (2017 est.)[7]
Standard & Poor's:[14]
AAA (Domestic)
AAA (Foreign)
AAA (T&C Assessment)
Outlook: Stable[15]
Moody's:[15]
Aa3
Outlook: Negative
Fitch:[15]
AA+
Outlook: Stable
$430.7 billion (April 2023)[16]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of Hong Kong is a highly developed free-market economy. It is characterised by low taxation, almost free port trade and a well-established international financial market.[17][18] Its currency, called the Hong Kong dollar, is legally issued by three major international commercial banks,[19] and is pegged to the US dollar.[20][21] Interest rates are determined by the individual banks in Hong Kong to ensure that they are market driven.[22] There is no officially recognised central banking system, although the Hong Kong Monetary Authority functions as a financial regulatory authority.[23][24]

Its economy is governed under positive non-interventionism, and is highly dependent on international trade and finance. For this reason it is regarded as among the most favorable places to start a company. In fact, a recent study shows that Hong Kong has come from 998 registered start-ups in 2014 to over 2800 in 2018, with eCommerce (22%), Fintech (12%), Software (12%) and Advertising (11%) companies comprising the majority.[25] The Economic Freedom of the World Index lists Hong Kong as the second freest territory, with a score of 8.55 based on data from 2021.[26]

Hong Kong's economic strengths include a sound banking system, virtually no public debt, a strong legal system, ample foreign exchange reserves with assets of US$481.6 billion represent over six times the currency in circulation or about 46 per cent of Hong Kong dollar M3 as at the end of March 2022,[27] rigorous anti-corruption measures and close ties with mainland China.[28] The Hong Kong Stock Exchange is a favourable destination for international firms and firms from mainland China to be listed, due to Hong Kong's highly internationalised and modernised financial industry. Additional advantages include the city's capital market in Asia, its size, regulations and available financial tools, which are comparable to London and New York City.[29][30]

Hong Kong's gross domestic product had grown 180 times between 1961 and 1997. Also, the GDP per capita rose by 87 times within the same time frame.[31] Its economy is slightly larger than Chile's or Romania's[32][33][34] and its GDP per capita at purchasing power parity was the twelfth highest globally in 2023. By the latter measure, its GDP per capita was higher than those of the Netherlands, and slightly lower than Brunei. In 2009, Hong Kong's real economic growth fell by 2.8% as a result of the Great Recession.[35]

By the late 20th century, Hong Kong was the seventh largest port in the world and second only to New York City and Rotterdam in terms of container throughput. Hong Kong is a full Member of the World Trade Organization.[36] The Kwai Chung container complex was[when?] the largest in Asia, while Hong Kong shipping owners were[when?] second only to those of Greece in terms of total tonnage holdings in the world. The Hong Kong Stock Exchange is the sixth largest in the world, with a market capitalisation of about US$3.732 trillion.[37]

Hong Kong has also had an abundant supply of labour from the regions nearby. A skilled labour force coupled with the adoption of modern British/Western business methods and technology ensured that opportunities for external trade, investment, and recruitment were maximised. Prices and wages in Hong Kong are relatively flexible, depending on the performance and stability of the economy of Hong Kong.[38]

Hong Kong raises revenues from the sale and taxation of land and through attracting international businesses to provide capital for its public finance, due to its low tax policy. According to Healy Consultants, Hong Kong has the most attractive business environment within East Asia, in terms of attracting foreign direct investment (FDI).[39] In 2013, Hong Kong was the third largest recipient of FDI in the world.[40]

Hong Kong ranked fourth on the Tax Justice Network's 2011 Financial Secrecy Index.[41] The Hong Kong Government was the fourth highest ranked Asian government[42] in the World Economic Forum's Network Readiness Index (NRI), a measure of a government's information and communication technologies in 2016, and ranked 13th globally.[43]

  1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Archived from the original on 21 December 2019. Retrieved 29 September 2019.
  2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Archived from the original on 28 October 2019. Retrieved 29 September 2019.
  3. ^ "Press Releases Detail". www.censtatd.gov.hk.
  4. ^ a b https://www.imf.org/external/datamapper/profile/HKG
  5. ^ a b c d e f g h Cite error: The named reference C&SD was invoked but never defined (see the help page).
  6. ^ "World Economic Outlook Database October 2023". www.imf.org. Retrieved 4 November 2023.
  7. ^ a b c d e f g h i j "The World Factbook". Central Intelligence Agency. Retrieved 25 January 2019.
  8. ^ "Human Development Index (HDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Archived from the original on 14 August 2019. Retrieved 18 November 2022.
  9. ^ Nations, United. "Inequality-adjusted Human Development Index (IHDI)". Human Development Reports. HDRO (Human Development Report Office) United Nations Development Programme. Archived from the original on 11 December 2019. Retrieved 18 November 2022.
  10. ^ "Labor force, total – Hong Kong SAR, China". data.worldbank.org. World Bank. Archived from the original on 14 August 2019. Retrieved 11 December 2019.
  11. ^ "Employment to population ratio, 15+, total (%) (national estimate)". data.worldbank.org. World Bank. Archived from the original on 24 August 2019. Retrieved 24 August 2019.
  12. ^ "Wages and Labor Income", www.censtatd.gov.hk
  13. ^ "Income tax calculator Hong Kong", hk.talent.com
  14. ^ "Sovereigns rating list". Standard & Poor's. Archived from the original on 28 September 2011. Retrieved 26 May 2011.
  15. ^ a b c Rogers, Simon; Sedghi, Ami (15 April 2011). "How Fitch, Moody's and S&P rate each country's credit rating". The Guardian. London. Archived from the original on 1 August 2013. Retrieved 31 May 2011.
  16. ^ "Hong Kong's Latest Foreign Currency Reserve Assets Figures Released". Hong Kong Monetary Authority. 11 April 2023. Archived from the original on 25 July 2023. Retrieved 25 July 2023.
  17. ^ Mizuoka, Fujio (2018). Contrived Laissez-Faireism: The Politico-Economic Structure of British Colonialism in Hong Kong. Springer Publishing. p. 26. ISBN 978-3319697932. Archived from the original on 1 August 2020. Retrieved 1 June 2020.
  18. ^ "The Profitability of the Banking Sector in Hong Kong" (PDF). Hkma.gov.hk. Archived (PDF) from the original on 14 June 2018. Retrieved 27 July 2018.
  19. ^ Legal Tender Notes Issue Ordinance Archived 3 May 2015 at the Wayback Machine. Legislation.gov.hk (30 June 1997)
  20. ^ "Monetary Stability" (PDF). Hkma.gov.hk. Archived from the original (PDF) on 5 June 2013. Retrieved 27 July 2018.
  21. ^ "Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity in April 2007" (PDF). Triennial Central Bank Survey 2007. Bank for International Settlements: 7. September 2007. Archived (PDF) from the original on 6 December 2017. Retrieved 5 September 2010.
  22. ^ Gough, Neil; Sang-Hun, Choe (19 July 2012). "Asian Financial Regulators Examine Local Lending Rates". The New York Times. Archived from the original on 20 September 2017. Retrieved 5 March 2017.
  23. ^ "The Hong Kong Association of Banks". Hkab.org.hk. Archived from the original on 17 September 2018. Retrieved 5 November 2012.
  24. ^ Chiu, Peter (2003). "Hong Kong's Banking Industry Facing Keen Competition". China Perspectives. 2003 (2). doi:10.4000/chinaperspectives.260. Archived from the original on 14 May 2013. Retrieved 16 November 2012.
  25. ^ WHub (2018). "Hong Kong Start Up Ecosystem Whitepaper". Archived from the original on 17 September 2018.
  26. ^ "Economic Freedom of the World". Fraser Institute. 22 December 2016. Retrieved 28 December 2023.
  27. ^ "Hong Kong's latest foreign currency reserve assets figures released". www.info.gov.hk.
  28. ^ "Hong Kong". U.S. Department of State. Archived from the original on 4 June 2019. Retrieved 23 May 2019.
  29. ^ "London retains financial services crown". Financial Times. Archived from the original on 10 December 2019. Retrieved 27 September 2013.
  30. ^ "The Global Financial Centres Index 13" (PDF). Zyen.com. March 2013. Archived (PDF) from the original on 18 November 2017. Retrieved 27 July 2018.
  31. ^ Rikkie Yeung (2008). Moving Millions: The Commercial Success and Political Controversies of Hong Kong's Railways. Hong Kong University Press. ISBN 978-962-209-963-0.
  32. ^ "Nominal GDP list of countries. Data for the year 2010". World Economic Outlook Database, October 2022. International Monetary Fund. Retrieved 5 November 2022.
  33. ^ "Gross domestic product (2009)" (PDF). The World Bank: World Development Indicators database. World Bank. 27 September 2010. Archived (PDF) from the original on 12 September 2009. Retrieved 5 October 2010.
  34. ^ Field listing – GDP (official exchange rate) Archived 4 October 2008 at the Wayback Machine, The World Factbook
  35. ^ "GDP growth (annual %)". World Bank. Archived from the original on 10 December 2019. Retrieved 11 June 2019.
  36. ^ Hong Kong, China – Member information Archived 21 September 2012 at the Wayback Machine. WTO. Retrieved 1 November 2012.
  37. ^ "World's Largest Stock Exchanges December 2017". Retrieved 20 April 2020.
  38. ^ Hong Kong Monetary Authority (30 December 2009). "A Structural Investigation into the Price and Wage Dynamics in Hong Kong" (PDF). Archived (PDF) from the original on 19 June 2013. Retrieved 5 November 2012.
  39. ^ "Hong Kong Company Formation". Archived from the original on 25 August 2013. Retrieved 27 August 2013.
  40. ^ "UNCTAD World Investment Report". UNCTAD. Archived from the original on 17 August 2013. Retrieved 27 August 2013.
  41. ^ "2011 Results – Financial Secrecy Index". Archived from the original on 28 August 2013. Retrieved 12 August 2013.
  42. ^ After Singapore, S. Korea and Taiwan
  43. ^ "Global Information Technology Report 2016". World Economic Forum. Archived from the original on 17 September 2018. Retrieved 16 September 2018.

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