Background information about Hong Kong

HISTORY

Hong Kong was established as a Special Administrative Region of the People's Republic of China on 1 July 1997.   Under Hong Kong's constitutional document the Basic Law, the existing economic, legal and social systems will be maintained for at least 50 years after 1997.  Since 1997, Hong Kong has continued to prosper, full of dynamism and opportunities, and has grown in importance in the international arena under the auspices of the 'one country, two systems'; and "Hong Kong people ruling Hong Kong" principles.

LOCATION

Situated at the south-eastern tip of China, Hong Kong is ideally positioned at the centre of East Asia, one of the world's most dynamic regions. Hong Kong includes Hong Kong Island, the Kowloon Peninsula and the New Territories, including 262 outlying islands. Hong Kong Island lies just south of Kowloon, separated by Victoria Harbour; the New Territories lie north of Kowloon and run up to the border with Mainland China.  A map of Hong Kong can be found here.

POPULATION, GEOGRAPHY, LANGUAGES AND VIBRANT CITY LIFE

Hong Kong has a population of almost 7.5 million living on 1 105.7 square kilometres of land. More than 75% of the total area is undeveloped land with great natural beauty and biodiversity.  Both English and Chinese are the official languages and many people are fluent in Cantonese and Putonghua.  English is widely used in the Government and by the legal, professional and business sectors.  Almost all information in signs, announcements and government and business websites is also provided in English.  Hong Kong has many clubs, chambers of commerce, business and other associations, special interest groups and networking clubs, making it easy for expatriates to build business and social networks.

ECONOMY

Hong Kong's economic strength is premised on free and open trade, the rule of law and a level playing field, as well as a simple, low tax system.  The US-based Heritage Foundation has rated Hong Kong the world's freest economy for 25 consecutive years.  The GDP per capita of Hong Kong amounted to US$46,000 in 2018, and is among the highest in the world.  The real GDP growth in 2018 was +3%.  Inflation for 2018 was 2.4%.  The unemployment rate is 2.8% (January 2019). 

FINANCE

Hong Kong tops international rankings in finance efficiency, financial freedom and fund raising.  Hong Kong ranks third in the Global Financial Centres Index (March 2019), behind New York and London.  It is part of a 24-hour global trading system with those cities. There were 2,315 companies listed on the Hong Kong Stock Exchange (HKEx) at the end of 2018 and the total mark capitalisation of Hong Kong's stock market reached US$3.82 trillion.

The Stock Exchange of Hong Kong (HKEx) has been among the top five global Initial Public Offerings (IPO) listing markets for the past decadeIn 2018, it ranked 1st in the world, raising US$36,628 billion.

Hong Kong is one of the leading international wealth and  asset management centres in Asia.  The asset and wealth management business of Hong Kong amounted to around US$3.1 trillion as at end-2017, with 66% of the fund sourced from non-Hong Kong investors.  Over 2200 public funds were approved for distribution in Hong Kong in 2018. Hong Kong's turnover of Exchange Traded Funds in 2018 amounted to US$ 139,989 million. 

As at January 2019, 77 of the world's top 100 banks were operating in Hong Kong.

Since launching the world's first offshore Renminbi (RMB) market in 2004, Hong Kong has become the hub of the global offshore RMB business.  It is the largest offshore RMB clearing centre handling about 79% of global offshore RMB payment transactions in 2018.  The Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and mutual recognition of funds arrangements have reinforced Hong Kong's leading position as the global offshore RMB business hub.

There are currently over 550 financial technologies (Fintech) companies in Hong Kong.

INSURANCE

Hong Kong has the highest concentration of insurers in Asia with 161 authorised insurers (end 2018).

BUSINESS

Hong Kong is a leading international trade and business services centre.  Services account for over 92% of GDP.  The economy has prospered on the back of the four pillar industries of financial services, trading and logistics, professional and business services, and tourism. Considerable efforts are also being made to broaden and diversify the economic base with as a focus on areas such as innovation and technology and creative industries.

The city was the world's seventh-largest economy in merchandise trade in 2017 with a total volume of US$1.140 billion. 

The Hong Kong business sector is predominated by small and medium-sized enterprises (SMEs), which generally refer to enterprises engaging less than 50 persons.   In 2017, there were around 331 000 SMEs, accounting for 98% of the total of 337 000 enterprises in Hong Kong. Among the SMEs, the number of the so-called micro enterprises, which are defined as those that engage less than 10 persons, amounted to some 302 000, representing 90% of all enterprises.

Foreign direct investment (FDI) of about US$85 billion poured into the Hong Kong economy in 2017, making it the second highest recipient in Asia only after mainland China (US$144 billion), according to the United Nations Conference on Trade and Development (UNCTAD). Overall, mainland China ranked second around the world for FDI, and Hong Kong third, outranked only by the US.   Hong Kong was the biggest investor in mainland China.
      
In 2018 the total number of companies with regional headquarters in Hong Kong increased to over 1 500, representing a year-on-year growth of over eight per cent, as the city is the pre-eminent gateway to and from the Mainland. 

As at November 2018, the number of startups grew by 18% year on year, and jobs created surged by 51%. The startup community is highly international, with 35% of founders coming from outside Hong Kong. Vibrant sectors include fintech, followed by e-commerce/supply chain management/logistics technology, professional or consultancy services, information, computers and technology.        

China's 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 China's economic development and opening up to the world.  Seeing the potential of the visionary Belt and Road Initiative which covers 4.4 billion people in 60-plus countries in Africa, Asia and Europe with over 30% of global economic value, Hong Kong will strive to grasp the vast opportunities arising from this Initiative together with business partners from all over the world.


For more information about Hong Kong, see Fact Sheets here

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