Victoria Harbour remains a key factor in Hong Kong’s economic development and is one of the world’s busiest ports.

Despite a number of upheavals over the past 20 years – from the Asian financial crisis to the bursting of the high-tech bubble, and Severe Acute Respiratory Syndrome (SARS) to the global financial crisis – Hong Kong has not only weathered the challenges but emerged as a stronger and more vibrant global hub of commerce and financial services.

Strategically located and with world-class infrastructure, Hong Kong is a highly flexible and efficient free economy that enjoys the unique advantage of “one country, two systems”, a low and simple tax regime and a highly open market enabling the free flows of people, capital and goods. Hong Kong is a pluralistic and inclusive society that upholds the rule of law. The public sector is small yet efficient; the financial system is well-established and service industries are well-developed – all of which combine to provide a major competitive advantage in the region.

The US-based Heritage Foundation has rated Hong Kong the world’s freest economy for 23 consecutive years, while the Fraser Institute of Canada has consistently ranked Hong Kong number one globally for economic freedom.

Hong Kong has experienced solid economic development since its return to the Motherland. In 2016, gross domestic product (GDP) and per capita GDP reached $2.5 trillion (US$320 billion) and $339,000 respectively, an increase of 81 and 60 per cent in nominal terms since 1997.

Fiscal reserves are healthy and expected to reach $935.7 billion by 31 March 2017 – more than double the $370.7 billion at end-March 1997. Official foreign currency reserve assets managed by the Hong Kong Monetary Authority have grown from US$92.8 billion at end-December 1997 to US$390.5 billion by end-February 2017.

Hong Kong’s labour market has remained broadly stable in a state of full employment over the past six years. In 2016, the total number of employed persons reached a record high of 3.78 million, an increase of around 620,000 compared to 1997.

During the Asian financial crisis in 1997 and 1998, the government took the unprecedented step of operating in the stock and futures market to ensure the stability and integrity of the financial markets. Following the global financial crisis that started in 2008, the government adopted counter-cyclical spending measures to boost infrastructure development, which in turn created jobs and helped support many enterprises.

The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) was signed in 2003 to promote closer economic co-operation

and development between the two economies. The Individual Visit Scheme, under which Mainland tourists can travel to Hong Kong as individuals rather than in group tours, provided a welcome and long-term boost to the tourism sector. The Agreement on Trade in Services signed in 2015 under the CEPA framework marked the important milestone of basically achieving liberalisation of trade in services.

Links between Hong Kong and the Mainland have grown much stronger and deeper over the past two decades. The Mainland is Hong Kong’s second-largest source of inward direct investment and largest export market, while Hong Kong is the Mainland’s largest source of realised foreign direct investment, second-largest trading partner and premier offshore Renminbi hub and international financing centre for Mainland enterprises.

Hong Kong has made the most of its dual advantages under “one country” and “two systems” and actively participates in global and regional economic fora; negotiates its own free trade agreements, investment promotion and protection agreements and civil aviation agreements; explores new opportunities in emerging markets and, remains one of the most externally oriented and international cities in the world.

Hong Kong is enhancing its strengths in the pillar industries of financial services, tourism, trading and logistics, and business and professional services, while diversifying the economic base by fostering innovation and technology, creative industries, education and training, as well as arbitration and dispute resolution services.

Hong Kong’s cultural and creative industries, covering such areas as design, architecture, film, music, advertising, computer games, interactive media, culture and the arts, account for 4.7 per cent of GDP. The government’s CreateSmart Initiative and Film Development Fund support the development of creative industries.

The National 13th Five-Year Plan supports Hong Kong to strengthen its status as an international financial, transportation, trade and legal and dispute resolution centre and enhance its role in the country’s economic development and opening up to the world.

Under the Belt and Road Initiative, Hong Kong can provide supports in trading, logistics, financial, professional and legal services as well as arbitration services. This will provide more business opportunities for the local economy and help contribute to the nation’s overall economic development.

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Left: The Belt and Road Initiative is a modern-day Silk Road to create economic co-operation through vast regions of Asia, Africa and Europe. The scheme will open up a wealth of opportunities for many countries and regions.

Above: Hong Kong International Airport is one of the world’s busiest airports for international passengers and air cargo and a regional aviation hub.

Right: Kwai Chung and Tsing Yi Container Terminals help maintain Hong Kong’s status as a major port of southern China.

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Offices outside Hong Kong play an important role in promoting the city globally. Recent events include (clockwise from top left) Hong Kong Economic and Trade Office (ETO), London, in the 2016 City of London Lord Mayor's Show; Singapore ETO hosts “Hong Kong's Evolving Harbour” Exhibition in Malaysia in 2014; Liaoning Liaison Unit and the Dalian Municipal People’s Government jointly present “Savouring Hong Kong‧Liaoning 2016” in Dalian; Beijing Office launches a roving “Belt and Road” exhibition in Tianjin in 2016.

Hong Kong’s cultural and creative industries have grown rapidly in various areas, such as (clockwise from top left) design – using paper-carving techniques to produce gift and greeting cards; computer games and interactive media; and film production.

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