The Hong Kong Special Administrative Region of the People's Republic of China (HKSAR) is firmly committed to an open market policy. This policy applies to all trade, as well as to all investments in the HKSAR.

Hong Kong has become a Special Administrative Region of the People's Republic of China since 1 July 1997. The "One Country, Two Systems" principle provides the HKSAR with a high degree of autonomy in economic, trade, financial and monetary matters. This is guaranteed by the Basic Law, the mini-constitution of the HKSAR, which ensures that the important elements making Hong Kong a regional business and financial centre will extend well beyond 1997, including continuation of capitalist economic and trade systems, free movement of goods and capital, and status as a free port and separate customs territory. Tariff preferences and other similar arrangements obtained by the HKSAR will be enjoyed exclusively by the HKSAR. The Basic Law also provides that the HKSAR may participate in relevant international organizations and international trade agreements under the name " Hong Kong, China".

In 1986, Hong Kong became a separate contracting party to the General Agreement on Tariffs and Trade (GATT). Hong Kong was one of the original members of the World Trade Organization (WTO) when it was established on 1 January 1995. Hong Kong also became a member of the Customs Cooperation Council (subsequently renamed as the World Customs Organization) in 1987 and the Asia Pacific Economic Cooperation (APEC) in 1991. The status of the HKSAR in these and other international organizations remains unchanged except that our participation is now under the name "Hong Kong, China".

Trade Relations with Australia

• Hong Kong maintains a good trading relationship with Australia. Bilateral trade between Hong Kong and Australia increased 11.6% from HK$40.4 billion in 2005 to HK$45.1 billion in 2006. In 2006, Australia was Hong Kong's 16^th largest trading partner, 9^th largest market for domestic exports and 12^th largest market for re-exports, and 17^th largest source of imports.
  
  
• Hong Kong is also an important entrepot for trade between the Mainland of China and Australia. Re-export of goods of Mainland origin through Hong Kong to Australia increased by 1.7% from HK$20.7 billion in 2005 to HK$21.0 billion in 2006.
  
  
• Hong Kong's domestic export of goods to Australia totalled about HK$2.5 billion in 2006. The top four domestic export categories to Australia in 2006 were:

• Office machines and automatic data processing machines
  
  
• Electrical machinery, apparatus and appliances, and electrical parts thereof
  
  
• Jewellery, goldsmiths' and silversmiths' wares, and other articles of precious or semi-precious materials
  
  
• Printed matter

• Hong Kong's re-export of goods to Australia totalled about HK$26.3 billion in 2006. The top four re-export categories to Australia in 2006 were:
  
  
  • Articles of apparel and clothing accessories
    
    
  • Telecommunications and sound recording and reproducing apparatus and equipment
    
    
  • Office machines and automatic data processing machines
    
    
  • Electrical machinery, apparatus and appliances, and electrical parts thereof 
    
    
• Hong Kong's import of goods from Australia totalled about HK$16.3 billion in 2006. The top four import categories from Australia in 2006 were:
  
  
  • Non-ferrous metals
    
    
  • Fish, crustaceans, molluscs and aquatic invertebrates and preparations thereof
    
    
  • Office machines and automatic data processing machines
    
    
  • Telecommunications and sound recording and reproducing apparatus and equipment

Bilateral Investment

• As at end 2005, Australia was the 18^th largest source of inward direct investment into Hong Kong, accounting for HK$17.9 billion. 
  
  
• As at end 2005, Australia ranked outside the first 20 major destinations of Hong Kong's outward direct investment.
  
  
• As at 1 June 2006, 21 Australian companies had regional headquarters and 65 Australian companies had regional offices in Hong Kong
  
  
• The Australia-Hong Kong Investment Promotion and Protection Agreement (IPPA) has entered into force since October 1993. The Agreement further strengthens the excellent trade and economic relations between Australia and Hong Kong.

RC Division
Trade and Industry Department
July 2007