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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. Hong Kong’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. Hong Kong 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. The tourism industry is booming. mainly due to an exponential increase in the number of visitors from mainland China.
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MARKET RESEARCH COUNTRY REPORT
HONGKONG
CONTENTS
Main Industry SectorsEconomic OverviewForeign Direct Investment [FDI]FDI Government MeasuresCountry Strong PointsCountry Weak PointsForeign Trade Overview
MAIN INDUSTRY SECTORS 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.
Hong Kong’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.
Hong Kong 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.
The tourism industry is booming. mainly due to an exponential increase in the
number of visitors from mainland China.
ECONOMIC OVERVIEW
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.
FOREIGN DIRECT INVESTMENT [FDI]
Hong Kong has risen to the fourth position in the world for foreign direct investments (FDI)
in 2009 and maintained the second place in Asia after China.
The FDI fluxes, which have slowed down as an effect of the global recession, have again
began to grow in 2010.
This tendency will continue, due to the key role which the Asian region will play in global
growth.
Hong Kong's attraction is due to a number of its strengths: its strategic position which
makes the island the access gate to the Chinese market, its status as a free port, its simple
and very incentive tax regime, its efficient infrastructure and legal security.
FDI GOVERNMENT MEASURES
Hong Kong is a free territory for investments, which are in fact encouraged by the
government with a favorable taxation policy and light legislation.
Foreign companies can be set up freely, register their brands and the Director of the
company doesn't have to be a citizen nor resident of Hong Kong.
COUNTRY STRONG POINTS Hong Kong is an international leader in terms of export and as a services center.
Hong Kong is also the bridgehead to one of the largest production bases in the world,
China. Hong Kong has a sound economy and an efficient financial and banking system.
Favorable tax measures, the transparency of local institutions, political stability, freedom
of information, availability of qualified human resources as well as its advantageous
geographical location in Asia, all constitute to make Hong-Kong a preferred place for
company establishment, as witnessed by the millions of companies registered on the
territory.
In 2003, the Capital Investment Entrant Scheme (CIES) was launched by the Hong Kong
Special Administrative Region (SAR) Government.
Hong Kong scheme aims to facilitate the entry for residence for Foreign investors
through capital investment into permissible assets without the need to establish or join in
a business.
COUNTRY WEAK POINTS
Hong Kong has few, yet consequential, negative points against setting up:
High cost of real estate and work space (offices, shops,etc.);
High cost of salaries, compared to other Asian countries such as Mainland China and India;
The question of Hong Kong's future, especially when the town will be completely integrated
with the People's Republic of China;
The excessive importance of the financial sector.
The Hong Kong stock market was highly disturbed for year 2008-2009.
The stock market's main indicator fell by 45%, the lowest in 34 years.
FOREIGN TRADE OVERVIEW
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 belongs 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.
Hong Kong’s main trade partners are China, Southeast Asia and Japan.
RELATED HONGKONGREPORTS
Market Opportunities of products and Services in Hong Kong.
Export and investment sector opportunities in Hong Kong.
Overview of Trade Regulations, Customs and Standards in Hong Kong.
Hong Kong Investment guide for beginners.
Business and Project Financing in Hong Kong.
Business Travel Advisory in Hong Kong.
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