Hong Kong

Economy

:Main articles: Economy of Hong Kong and Employment in Hong Kong

Related Topics:
Economy of Hong Kong - Employment in Hong Kong

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Hong Kong has one of the least restricted economies in world and is basically duty-free. It is the world's 10th largest {{ref|10th}} trading entity and 11th largest {{ref|11th}} banking centre. The dominant presence of international trade is reflected in the number of consulates located in the territory: As of June 2005, Hong Kong had 107 consulates and consulates-general, more than any other city in the world. Even New York City, host of the United Nations, only has 93 consulates.

Related Topics:
Banking centre - Consulate - As of June 2005 - New York City - United Nations

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The objective of Hong Kong's monetary policy is to maintain currency stability. Given the highly externally oriented nature of the economy, this objective was further defined as a stable external value for the Hong Kong dollar in terms of a linked exchange rate against the US dollar at the rate of HK$7.80 to one United States dollar until 2005, when it was allowed to trade within a band of HK$7.75-$7.85.

Related Topics:
Hong Kong dollar - Exchange rate - United States dollar

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Hong Kong has limited natural resources, and most food and raw materials must be imported. In fact, imports and exports (including re-exports) exceed the GDP of Hong Kong. Hong Kong has extensive trade and investment ties with the People's Republic of China which existed even before the handover on 1 July 1997. These ties and its autonomous status enable it to be the middleman between the Republic of China on Taiwan and the mainland. Flights, investment, and trade from Taiwan go through Hong Kong to get to the mainland. The service sector represented 86.5 % {{ref|86.5}} of the GDP in 2001. The territory, with a highly sophisticated banking sector and good communication links, hosts the Asian headquarters of many multinational corporations.

Related Topics:
Natural resources - Food - Raw material - Import - Export - GDP - People's Republic of China - Handover - 1 July - 1997 - Republic of China - Taiwan - Service sector - Asia - Multinational corporation

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At USD 24,626 {{ref|24,626}} in 2005, the nominal per capita GDP of Hong Kong is somewhat lower than that of the four big economies of western Europe. However, it would be ranked 11th in terms of per capita GDP (PPP) in the world (USD 32,292), which is even higher than Japan (USD 31,384), making Hong Kong one of the richest territorial regions in Asia. Growth averaged a strong 5 % between 1989 and 1997, although the Asian financial crisis in 1998 damaged the trade-dependent economy badly, prompting the economy to shrink by 5 % in a year. The economy rebounded rapidly, growing by 10 % in 2000. A world-wide global downturn and the Severe Acute Respiratory Syndrome (SARS) outbreak reduced economic growth to 2.3 % in 2002. Thereafter, a boom in tourism from the mainland because of China's easing of travel restrictions, a return of consumer confidence, and a solid rise in exports resulted in the resumption of strong growth in late 2003 and 2004, with growth rates reaching 6% in 2005.

Related Topics:
USD - Per capita - Western Europe - Ranked 11th - PPP - Japan - Asian financial crisis

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To further increase economic co-operation between Hong Kong and the mainland, the Individual Visit Scheme was started on 28 July 2003, which allows travellers from some cities in mainland China to visit Hong Kong without an accompanying tour group. As a result, the tourism industry in Hong Kong is booming due to an exponential increase in the number of visitors from mainland China. The upsurge is also boosted by the recent opening of Hong Kong Disneyland Resort.

Related Topics:
Individual Visit Scheme - 28 July - 2003 - Tourism industry in Hong Kong - Hong Kong Disneyland Resort

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A revival in both external and domestic demand led to a strong upswing in growth in 2004, surging to 8.2 % for the year. The domestic sector completely shrugged off its earlier sluggishness, and the general weakness of the Hong Kong dollar, when included with the still modest cost and price pressures in Hong Kong, has resulted in a strengthening in Hong Kong's external price competitiveness. In addition, Hong Kong's 68-month-long deflationary spiral, the longest and highest deflation {{ref|deflation}} according to Guinness World Records, ended in mid-2004, with consumer price inflation hovering at near zero levels.

Related Topics:
Deflationary - Guinness World Records - Inflation

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Along with Singapore, South Korea and Taiwan, ROC, Hong Kong's fast-paced industrialisation earned it a place as one of the four original East Asian Tigers.

Related Topics:
Singapore - South Korea - Taiwan, ROC - East Asian Tigers

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