See all the events to celebrate the establishment of the Hong Kong Special Administrative Region
25th Anniversary celebration

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 over 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 Canada-based Fraser Institute once again ranked Hong Kong as the world´s freest economy in the Economic Freedom of the World 2021 Annual Report in September 2021. Hong Kong has been at the top of the annual rankings issued by the Fraser Institute since its first economic freedom report in 1996.  And according to the IMD World Digital Competitiveness Ranking 2021, Hong Kong is number two in the world after the USA.

The GDP per capita of Hong Kong amounted to HK$ 362,310 (US$ 46,718 - EUR 38,403) in 2020, among the highest in the world.  

The Hong Kong economy recovered further and grew by 4.8% year-on-year in the fourth quarter of 2021, thanks to robust export performance and improved private consumption.   In 2021 as a whole, real GDP expanded notably by 6.4%, reversing the declines in the previous two years. Looking ahead, the Hong Kong economy is expected to expand further in 2022, but the growth pace is subject to various uncertainties, especially those relating to the local epidemic development.

The seasonally adjusted unemployment rate was 3.9% in October – December 2021, while inflation was 2.4%.

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.

Hong Kong ranked 6th among leading world traders in 2020, in value of US$ 1,119 billion, accounting for a 3.2% share in world trade.

Manufacturing enterprises which employ fewer than 100 persons and non-manufacturing enterprises which employ fewer than 50 persons are regarded as Small and Medium-Size Enterprises (SMEs) in Hong Kong.

As at March 2021, there were over 340 000 SMEs in Hong Kong. They accounted for more than 98% of the total number of enterprises and provided job opportunities to more than 1.2 million persons, about 45% of total employment (excluding the civil service).  Among 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 over 90% of all enterprises.  

Most of the SMEs were in the import/export trade and wholesale industries, followed by the professional and business services industry. They accounted for about 46% of the SMEs in Hong Kong and represented about 44% of the SME employment.

INTERNATIONAL FINANCIAL CENTRE

Hong Kong ranks third in the Global Financial Centres Index (September 2021), behind New York and London, and first in Asia.

Hong Kong is a global banking hub with external transactions of US$ 3 trillion, ranking number 3 in Asia and number 7 globally (end November 2021).

78 of the world's top 100 banks are operating in Hong Kong (end 2021).

The banking system is well-capitalised with average liquidity coverage ratio and capital adequacy ratio at around 150% and 20% (September 2021).

Total bank deposits amounted to HK$ 15.1 trillion (end November 2021).

Foreign reserves were over HK$ 3.8 trillion, 1.8 times Hong Kong’s monetary base (end 2021).

There are currently over 600 financial technologies (Fintech) companies in Hong Kong.

The Hong Kong Stock Exchange (HKEX) is one of the largest bourses in the world by stock market capitalisation (HK$42,381 billion/US$5,496 billion in 2021) with a daily turnover of HK$166.7 billion in 2021, up 28.8% over 2020.

There are 2,572 listed companies (January 2022). 

HKEX is a leading Initial Public Offering (IPO) market, ranking the world’s number 1 in seven of the past 13 years.  In 2021 it ranked number 2 in Asia and 4th in the world in 2021, with funds raised amounting to US$ 42,303 billion.

In 2021 there were 92 IPOs raising a total of HK$318.9 billion.  HKEX welcomed 54 new economy companies in 2021, including 32 healthcare and biotech firms, accounting for 86.6% of IPO funds raised in Hong Kong during the period. 

Hong Kong is one of the leading international wealth and asset management centres in Asia.  As the premier fund management hub in Asia, Hong Kong’s asset and wealth management business at end-2020 amounted to HK$34.9 trillion (approx. US$4.47 trillion).

Hong Kong is Asia’s number 1 hedge fund base (end 2020) and number 2 in private equity CUM (end 2021) behind the Mainland.

Hong Kong has the highest concentration of insurers in Asia with 165 authorised insurers (September 2021).  

13 of the world’s top 20 insurers operate in Hong Kong (end 2021).

High insurance density: insurance premium per capital at US$9,746, number 1 in Asia and number 2 globally (end 2020).

The Insurance Authority has also issued four virtual insurer authorisations. 

US$119 billion poured into the Hong Kong economy in 2020, making it the second highest recipient of FDI in Asia only after mainland China (US$1149 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.  
      
In 2021 the total number of business operations in Hong Kong with parent companies overseas or in the Mainland was 9,049, comprising 1 457 operating as regional headquarters, 2,483 as regional offices and 5 109 as local offices.  

In 2021 there were 3,775 start-ups in Hong Kong (an increase of 68% from 2017) employing 13 804 staff (+118%) across 124 locations (+100%) of co-work spaces, incubators and accelerators.

The start-up community is highly international, with 28% of founders coming from outside Hong Kong, including 7.1% from France and 2.8% from Italy.  Vibrant sectors include fintech, followed by e-commerce/supply chain management/logistics technology, professional or consultancy services, information, computers and technology.        

Since launching the world's first offshore Renminbi (RMB) market in 2004, Hong Kong has become the world's number one offshore RMB business pool, with total deposits of RMB 887 billion (end November 2021) processing around 75% of all global offshore RMB payments.

Mutual access of capital market is ever-closer. HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.  

Stock Connects: daily trade value of RMB 121.1 billion for Northbound and HK$41.7 billion for Southbound in 2021, up 32% and 71% over 2020 respectively.

As mentioned in the Proposal for Formulating China's National 14th Five-Year Plan, China supports Hong Kong in consolidating and bolstering its competitive edges, building the city as an international I&T hub, fostering the development of the city as a Belt and Road Initiative functional platform, and achieving diversified and sustainable development of the economy. 

Hong Kong will continue to benefit from the ongoing development of Mainland China. The signing of the Regional Comprehensive Economic Partnership (RCEP) on 15 November 2020 by 15 member states – the ten ASEAN countries, China, Japan, South Korea, Australia and New Zealand - will further promote economic integration in the region.  Hong Kong will leverage on the advantages under "One Country, Two Systems", playing its unique role as a gateway and an intermediary and seizing the opportunities brought by the development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the Belt and Road (B&R) Initiative.

 
For more information about Hong Kong, see Fact Sheets
here

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