A former British colony until 1997 Hong Kong is now one of the two Special Administrative Regions (SAR) of the People's Republic of China, along with Macau. Hong Kong is located at the mouth of Pearl River Delta, with Shenzhen in the north and Macau on the west. It is divided into three districts: Hong Kong Island, the Kowloon Peninsula and the New Territories.A large majority of its population speaks Cantonese as their first language. Hong Kong is one of the largest financial center and trading economies in Asia.
Information presented on this page are introductory business intelligence on the respective region, and thus it cannot serve as a substitute for official information released by government agencies or similar institutions. For the most up-to-date information, please refer to the information sources or speak to a Dezan Shira & Associates representative.
Source: China 2013 Statistical Yearbook (uses 2012 statistics)
Source: China 2013 Statistical Yearbook (uses 2012 statistics)
Sources: Local Labor Bureau and Social Insurance Bureau (2013)
Hong Kong is a major services center for the mainland, providing infrastructural facilities such as ports and airports and institutional services like banking, insurance and business services.
The city is currently undergoing an ambitious transport infrastructure program, and has an annual budget of HK$15.5 billion to be spent on major road and railway projects.The entirety of this program is expected to be completed in 2020.
New major road projects will add around 50 kilometers of new roads, at least one bridge and four tunnels to Hong Kong's transport network. The investment should alleviate congestion in urban areas and provide new links to the New Territories. There is also the Hong Kong-Shenzhen Western Corridor, a 3 mile, dual three-lane carriageway which serves as the port of entry to Hong Kong from the mainland. The carriageway has a capacity of 80,000 vehicles per day.
The long-awaited Hong Kong-Zhuhai-Macau bridge project began in 2009 and is set to be completed in 2016. The proposed 50 kilometer bridge is expected to reduce traveling time between Hong Kong and Zhuhai or Macau from 4.5 hours to approximately 40 minutes.
The Hong Kong International Airport (HKIA) at Chek Lap Kok is the busiest airport in the world for international cargo with an annual capacity for three million tons and 45 million passengers. In 2011, the Hong Kong Airport Authority outlined a development project called the Airport Master Plan 2030. This major project aims to expand the services at HKIA’s terminals within the next 20 years, and includes a possibility of building a third runway to accommodate increased air traffic. Each week, around 77 international airlines operate an estimated 4,200 flights to 140 destinations. The marine cargo terminal located at the airport links with 18 ports in the Pearl River Delta.
Ports and waterways
The Port of Hong Kong is the force behind not only Hong Kong’s economy but south China’s as well. The port handles approximately 72 percent of Hong Kong's total cargo throughput and is the world’s third busiest container port in terms cargo throughput. The expansion of Kwai Chung container port can accommodate the passage of 80 international shipping lines with over 500 container line services weekly to more than 500 destinations. In 2010, the port handled approximately 23.7 million twenty-foot equivalent units (TEUs) of shipped goods.
There are nine container terminals in Kwai Chung-Tsing Yi basin under the operation of five different operators; namely the Modern Terminals, Hong Kong International Terminals Ltd, COSCO-HIT, DP World and Asia Container Terminals Ltd. The container terminals occupy 279 hectares of land while providing 24 berths and 8,530 meters of deep water frontage.
There are some 800 shipping-related companies in Hong Kong that provide comprehensive maritime services including ship registration, legal and dispute resolution services, ship finance and marine insurance, and ship-owning and ship management.
Hong Kong’s metro system, the Mass Transit Railway (MTR) network, is operated by the MTR Corporation. The system links Hong Kong Island, Kowloon and the New Territories by rail, and carries an average of 4 million passengers every weekday. The MTR system is made up of approximately 218 kilometers of rail, and is currently undertaking the construction of five new extension plans. These include the West Island Line, the Shatin to Central Link, the Kwun Tong Line Extension, the South Island Line and major extensions to the Guangzhou-Shenzhen Express Rail Line. The entirety of these projects is expected to be completed in 2015.
The government has spent more than US$6 million to improve infrastructure, including the construction of the Yuen Long southern bypass, the Ting Kau Bridge, and the massive West Kowloon reclamation project.
Hong Kong is the world’s 10th largest trading economy and the sixth biggest foreign exchange market. It is also the world's most service-oriented economy, with its service sector accounting for more than 90% of GDP.
The territory has experienced steady economic growth in the years since the financial crisis of 2008. In 2010, Hong Kong’s GDP grew by 7 percent to HK$1.74 trillion. Per capita GDP was HK$244,753, while the unemployment rate was at 4.3 percent.
The economic sectors of Hong Kong include trade and logistics, tourism, financial services, professional services and other producer services. Mainland China is Hong Kong's largest trading partner and its largest source of external direct investment.
In June 2003, Hong Kong and mainland China signed the Closer Economic Partnership Arrangement (CEPA), an agreement which liberalized general trade and investment between the two areas. Under CEPA, Hong Kong companies were allowed to establish businesses in mainland China with little restriction, and virtually all products of Hong Kong origin, except for a few prohibited articles, could be imported to the mainland tariff-free. Investment covers a wide range of activities ranging from traditional areas such as import/export, wholesale/retail, banking, transport and warehousing, to newer areas such as real estate, hotels, financial services, manufacturing and infrastructure developments.
In 2010, retail sales were worth HK$34.9 billion, while total exports were HK$303.1 billion. Imports during the same period came to HK$336.5 billion. The same year also saw the trade deficit increasing to about HK$33.4 billion.
Hong Kong’s savvy global business environment has paired well with the Pearl River Delta’s competitive manufacturing base. An estimated 15 percent of the mainland’s foreign trade is handled through Hong Kong. According to China's customs statistics, Hong Kong is the country’s third largest trading partner after Japan and the United States, contributing to 9 percent of all total trade.
Hong Kong Kwai Chung Port
Hong Kong’s port remains one of the world’s busiest and most efficient. The port is the force behind not only Hong Kong’s economy but south China’s as well; an estimated 80 percent of handled container traffic is connected to the latter.
The Hong Kong Shipping register offers the most competitive package for businesses with its simple and fast registration process. It inspects ships that should comply with international standards for the safety and protection of marine environment.
Hong Kong has double taxation relief arrangements with major trading partners.