CANADA AND THE HONG KONG SPECIAL ADMINISTRATIVE REGION SOME IMPORTANT FACTS
The Hong Kong Special Administrative Region (HKSAR) of the People's Republic of China (PRC) is firmly committed to an open market policy which applies to all trade, as well as to all investments in the HKSAR.
Hong Kong has been a Special Administrative Region of the PRC 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 which ensures the continuation of Hong Kong's capitalist economic and trade systems, and the free movement of goods and capital. Hong Kong remains a free port and a separate customs territory with its own customs boundary. Tariff preferences and other similar arrangements obtained by the HKSAR continue to be enjoyed exclusively by the HKSAR. The Basic Law also provides that the HKSAR may participate in relevant international organisations and international trade agreements under the name of "Hong Kong, China".
In 1986, Hong Kong became a separate contracting party to the General Agreement on Tariffs and Trade (GATT). Accordingly, Hong Kong was one of the founding 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 the World Customs Organization) in 1987 and the Asia-Pacific Economic Cooperation in 1991. After 1 July 1997, Hong Kong's status in these and other international organisations remains unchanged except that our participation is now under the name of "Hong Kong, China".
HONG KONG'S ECONOMY IN 2015
The economy of Hong Kong is externally oriented and highly dependent on trade with the rest of the world. Hong Kong economy grew modestly, with real Gross Domestic Product (GDP) growing by 2.4% in 2015. The value of total merchandise trade amounted to C$1,260.6 billion (319% of GDP) with imports and exports at C$666.6 billion (169% of GDP) and C$594.0 billion (150% of GDP) respectively. In the same year, Hong Kong was the world's 8th largest trading economy in goods - the 7th largest exporter and the 7th largest importer.
The services sector continues to be very important to the Hong Kong economy. It contributed 93% to the GDP in 2014 and accounted for 88% of the total employment in 2015. Hong Kong's trade in services amounted to C$254 billion (64% of GDP) in 2015. In the same year, Hong Kong was the world's 16th largest commercial services trading economy - the 14th largest services exporter and the 17th largest services importer.
Fact 1 :
HONG KONG IS AN IMPORTANT MARKET FOR CANADIAN GOODS
- From 2010 to 2015, the value of imports from Canada grew at an average annual rate of 1.3%. In 2015, Hong Kong was Canada's 8th largest export market with merchandise imports from Canada amounting to C$2.1 billion.
- In 2015, Hong Kong was Canada's fifth largest export market in the world for beef and fourth largest market for fish and seafood.
- Other major Canadian exports to Hong Kong include crude animal and vegetable materials; meat and meat preparations; and raw hides, skins and furskin.
Fact 2 :
HONG KONG IS AN IMPORTANT LOCATION FOR CANADIAN INTERESTS
- Hong Kong is ideally located in relation to the Pacific Rim and the Mainland of China (Mainland China).
- Hong Kong is an important entrepôt for merchandise trade between Canada and Mainland China. In 2015, C$4.0 billion, representing around 6% of the total trade between Canada and Mainland China, was routed through Hong Kong. Hong Kong welcomes overseas investment and offers an environment in which there is a free flow of capital and return on investment without exchange controls.
- Three Canadian provinces have set up representative offices in Hong Kong. They are Alberta, British Columbia, and Québec.
- As of 1 June 2015, there were 18 regional headquarters, 31 regional offices and 61 local offices in Hong Kong representing their Canadian parent companies.
- Hong Kong is one of the world's major financial centres and Canadian financial institutions play an active part in the banking and insurance sectors. There are eight Canadian or Canadian-controlled banks operating as licensed banks or restricted licence banks in Hong Kong. The five licensed banks include Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, The Bank of Nova Scotia, Bank of Montreal, and Royal Bank of Canada while RBC Capital Markets (Hong Kong) Limited, RBC Investor Services Bank S.A., and Scotiabank (Hong Kong) Limited are the three restricted licence banks. National Bank of Canada and Manulife Bank of Canada each has a representative office in Hong Kong. There are also seven Canadian or Canadian-controlled insurance companies authorised to operate in Hong Kong, including Manulife (International) Limited and Sun Life Hong Kong Limited.
- Canadian-controlled companies also participate actively in securities and futures trading and in the field of investment advice. There are around 18 Canadian-controlled firms engaging in brokerage, investment advisory and asset management business in Hong Kong.
Fact 3 :
CANADA IS AN IMPORTANT MARKET FOR HONG KONG GOODS
- Canada ranked 19th among Hong Kong's domestic export markets of goods in 2015. Domestic exports to Canada valued at C$82 million. Reciprocally, Hong Kong was Canada's 66th ranking import source.
- Major Canadian purchases from Hong Kong include miscellaneous edible products and preparations; cereals and cereal preparations; and jewellery, goldsmiths' and silversmiths' wares, and other articles of precious or semi-precious materials.
Fact 4 :
CLOSE LINKS BETWEEN CANADA AND HONG KONG
- The Canadian community is among the largest foreign communities in Hong Kong. In 2015, around 390,115 Canadian nationals visited/resided in Hong Kong.
- There are over 175,000 Canadian-educated alumni and over 20 active Canadian alumni associations in Hong Kong.
- Over 1,000 study permits were issued to Hong Kong residents in 2015 to pursue studies at Canadian educational institutions. In 2015, there were close to 4,000 Hong Kong students aged 25 and below studying in Canada.
- Canada continues to be a popular destination for Hong Kong emigrants. 630 people emigrated from Hong Kong to Canada in 2015.
- Hong Kong is an important source of investment for Canada. Last available figures show that, at end 2014, the position of Hong Kong's outward direct investment in Canada was C$11.1 billion, whereas that of Hong Kong's inward direct investment from Canada was C$5.8 billion.
- Hong Kong and Canada signed an Investment Promotion and Protection Agreement (IPPA) on 10 February 2016 and the IPPA entered into force on 6 September 2016. The Agreement gives additional assurance to Canadian investors that their investments in Hong Kong are adequately protected. At the same time, it enables Hong Kong investors to enjoy similar protection for their investments in Canada. It will stimulate bilateral investment flows and benefit both sides' economies.
- Since 2010, the Working Holiday Scheme arrangement between Hong Kong and Canada has provided excellent opportunities for youths of both places to enrich their global exposure and broaden their horizons through living and working temporarily overseas while holidaymaking. Apart from facilitating cultural exchanges, the Scheme also helps enhance bilateral cooperation and promote tourism and development between Hong Kong and Canada.
- On 29 October 2013, The Canada - Hong Kong Avoidance of Double Taxation Agreement entered into force. It further strengthens the bilateral economic and trade ties and provides added incentives for companies in Canada to do business or invest in Hong Kong. Under the agreement, tax paid in Hong Kong shall be deducted from the tax payable in Canada. Reciprocally, tax paid in Canada shall be allowed as a credit against the tax payable in Hong Kong, subject to the provisions of the tax laws of Hong Kong.
- In February 2013, Hong Kong and Canada renewed for another 5 years a Memorandum of Understanding (MOU) on investment promotion co-operation that was originally signed in 2008. The MOU reinforces the well-established trade and economic relations between Hong Kong and Canada.
- There are on average 12 (6 round trips) direct scheduled passenger flights daily between Hong Kong and Canada. They are operated by Air Canada and Cathay Pacific Airways. In addition, Cathay Pacific Airways operates all-cargo services to Vancouver, Toronto and Calgary.
- The Canada-based Hong Kong-Canada Business Association (HKCBA) has active Chapters in major Canadian cities including Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montreal and Halifax. Founded in 1984, HKCBA now has about 1,000 corporate and individual members in Canada, with connections to 40 similar business associations in 29 countries, and approximately 12,000 individual associates around the world through the Federation of Hong Kong Business Associations Worldwide. Being one of the largest bilateral trade associations in Canada, HKCBA works closely with The Canadian Chamber of Commerce in Hong Kong - its Hong Kong partner organisation. HKCBA's mission is to promote and encourage increased commercial and economic activities between Canada and Hong Kong, as well as to assist Canadians in doing business in Hong Kong, and, through Hong Kong, with Mainland China and South East Asia.
- The Canadian Chamber of Commerce in Hong Kong is the largest Canadian business organisation outside Canada providing an extensive networking platform for its members. It is also one of the largest and most active international chambers in Hong Kong and one of the most influential business groups in the Asia-Pacific. Currently, it represents approximately 1,100 members with business interests in Canada, Hong Kong, the Mainland China and the broader Asia-Pacific region.
FACT 5 :
HONG KONG PRACTISES FREE TRADE
- Hong Kong is a staunch supporter of the multilateral trading system and adheres to the WTO/GATT principles of non-discrimination and most-favoured-nation treatment. Hong Kong takes seriously its rights and obligations as a member of the WTO. Our free trade policy applies to both merchandise trade as well as trade in services.
- Hong Kong has been consistently ranked as the world's freest economy by the Heritage Foundation and the Cato Institute of the United States, and the Fraser Institute of Canada.
- Hong Kong does not maintain any barriers to trade.
- Hong Kong does not levy any tariffs. Excise duties are levied on four types of commodities, namely tobacco, liquor, methyl alcohol and hydrocarbon oil. In 2015, around 1.2% of our total imports were subject to excise duties.
- Hong Kong does not subsidise its exports.
- Imports from Canada compete freely with locally-made products and imports from Hong Kong's other trading partners.
- Hong Kong treats foreign and local companies on the same footing. All companies, foreign or local, benefit from the government's policy of providing an efficient business environment and supporting infrastructure, including good communications; efficient port and airport facilities; a stable currency free from exchange controls; a simple tax structure and low tax rates; and an established legal and judicial system.
FACT 6 :
HONG KONG RESPECTS INTELLECTUAL PROPERTY RIGHTS
- Hong Kong has an established legal framework for the protection of intellectual property (IP) rights including patents, trademarks, copyright and registered designs. We update our IP laws from time to time to meet our prevailing economic needs. In June 2016, the Legislative Council passed the Patents (Amendment) Bill 2015 which is a major step to reform our local patent system.
- The Hong Kong Customs has a strong and dedicated team comprising 250 officers to enforce criminal sanctions against IP rights infringements. Another 3,700 officers are responsible for intelligence analysis and interception of contraband, including pirated and counterfeit goods at entry and exit points. The vigorous and sustained enforcement efforts have brought infringement situation in Hong Kong under firm control.
FACT 7 :
HONG KONG'S LABOUR FORCE IS PROTECTED BY LEGISLATION
- Hong Kong's labour force enjoys rights and benefits that are protected by a comprehensive set of labour legislation and an effective labour inspection system. This has enabled Hong Kong to apply 41 International Labour Conventions which prescribe internationally recognised standards on various labour matters.
ECONOMIC AND TRADE OFFICE
Hong Kong has an Economic and Trade Office in Canada. It represents Hong Kong on matters related to economy and trade in Canada, and helps foster trade and commercial ties between Hong Kong and Canada. Its webpage is: http://www.hketotoronto.gov.hk.
Trade and Industry Department
The Government of the Hong Kong
Special Administrative Region
Trade and Industry Tower
3 Concorde Road, Kowloon City
Telephone: (852) 2398 5405
Note: While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same.