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.
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.
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 26 consecutive years, most recently in September 2020.
The GDP per capita of Hong Kong amounted to HK$ 362,310 (US$ 46,718 - EUR 38,403) in 2020, and is among the highest in the world. The 2020 FM Global Resilience Index ranked Hong Kong Asia's most resilient economy. And according to IMD World Digital Competitiveness Ranking, Hong Kong is number two among Asian economies.
As the COVID-19 pandemic has dealt a heavy blow to economies around the world, reviving the economy and creating employment have become the most pressing issues. Over the past year, Hong Kong’s economy has also been severely hit by social unrest and international political situations and GDP contracted by 6.1% in 2020. The labour market is also under immense pressure, with the unemployment rate provisionally estimated at 7% in the first quarter of 2021. Hong Kong is a leading financial services hub and the sector continued to do very well throughout the crisis, with the stock exchange HKEx reporting record results for the third consecutive year in February 2021.
In his Budget speech on 24 February 2021, the Financial Secretary forecasted that Hong Kong's economy will grow by an average of 3.3% per annum in real terms from 2022 to 2025, while the underlying inflation rate will average 2%.
Hong Kong tops international rankings in finance efficiency, financial freedom and fund raising.
78 of the world's top 100 banks are operating in Hong Kong.
Hong Kong ranks fifth in the Global Financial Centres Index (September 2020), behind New York, London, Shanghai and Tokyo. It is part of a 24-hour global trading system with those cities.
There were 2 538 companies listed on the Hong Kong Stock Exchange (HKEx) in 2020 and it ranked fourth in the world for the number of new companies listing (154). The total market capitalisation of Hong Kong's stock market reached HK$47,392 billion and its turnover HK$ 32,023 billion in 2020.
The Stock Exchange of Hong Kong (HKEx) has been among the top five global Initial Public Offerings (IPO) listing markets for the past decade. In 2020, it ranked 2nd in the world, raising HK$ 400.2 billion.
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-2019 amounted to HK$29trillion (approx. US$3.7trillion).
Since launching the world's first offshore Renminbi (RMB) market in 2004, Hong Kong has become the world's largest offshore RMB business hub, with total deposits of RMB 756.6 billion (end November 2020). About 75% of the global offshore RMB payments are processed via Hong Kong (2019).
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 600 financial technologies (Fintech) companies in Hong Kong.
Hong Kong has the highest concentration of insurers in Asia with 164 authorised insurers (November 2020).
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 2020 the total number of companies with regional headquarters in Hong Kong was over 1 500, as the city is the pre-eminent gateway to and from the Mainland.
InvestHK's 2020 suyrvey found 3,360 startups in Hong Kong (an increase of 6% from 2019) employing 10 688 employees across 116 co-work spaces, incubators and accelerators.
The startup community is highly international, with 35% of founders coming from outside Hong Kong, including 7.9% from France and 3.5% from Itraly. Vibrant sectors include fintech, followed by e-commerce/supply chain management/logistics technology, professional or consultancy services, information, computers and technology.
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 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