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 12% from HK$45.1 billion in 2006 to HK$50.7 billion in 2007. In 2007, 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 18^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 16% from HK$21.0 billion in 2006 to HK$24.3 billion in 2007.
  
  
• Hong Kong's domestic export of goods to Australia totalled about HK$1.8 billion in 2007. The top three domestic export categories to Australia in 2007 were:
  

• Telecommunications and sound recording and reproducing apparatus 
  and equipment
  
  
• 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$32.8 billion in 2007. The top three re-export categories to Australia in 2007 were:

• Telecommunications and sound recording and reproducing apparatus 
  and equipment
  
  
• Articles of apparel and clothing accessories
  
  
• Office machines and automatic data processing machines
  

• Hong Kong's import of goods from Australia totalled about HK$16.1 billion in 2007. The top three import categories from Australia in 2007 were:

• Non-ferrous metals
  
  
• Fish and other seafood
  
  
• Power generating machinery and equipment
  

Bilateral Investment

• As at end 2006, Australia was the 19^th major source of inward direct investment (IDI) into Hong Kong, with an IDI stock of HK$14.4 billion. 
  
  
• As at end 2006, Australia ranked outside the first 20 major destinations of outward direct investment from Hong Kong.
  
  
• As at June 2007, 21 regional headquarters, 69 regional offices and 69 local offices were set up by Australian companies in Hong Kong.
  
  
• The Australia-Hong Kong Investment Promotion and Protection Agreement (IPPA) 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
August 2008