OVERVIEW 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 Sino-British Joint Declaration on Hong Kong and the Basic Law, the mini-constitution of the HKSAR, which ensure that the importance of Hong Kong as a regional centre will extend well beyond 1997. They guarantee continuation of Hong Kong's capitalist economic and trade systems, free movement of goods and capital, and its status as a free port and separate customs territory, with its own customs boundary. Tariff preferences and other similar arrangements obtained by the HKSAR will be enjoyed exclusively by the HKSAR. They also provide 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 an original member 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 (APEC) in 1991. After 1 July 1997, the status of the HKSAR 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 2007

The economy of Hong Kong is externally oriented and highly dependent on trade with the rest of the world. In 2007, the value of Hong Kong's total merchandise trade amounted to C$761 billion, or 344% of its Gross Domestic Product (GDP). The value of imports was C$393 billion or 177% of GDP while exports valued at C$368 billion or 166% of GDP. Hong Kong also remained the world's 12th largest trading entity in goods - the 13th largest exporter and the 12th largest importer.

The services sector continues to be very important to the Hong Kong economy. It accounted for 87% of the total employment in 2007 and contributed to 91% of the GDP in 2006. Hong Kong's trade in services, though still lagging behind merchandise trade in value terms, grew steadily in the past decade. Hong Kong ranked 16th in the world league of commercial services trading entities in 2007 - the 12th largest services exporter and the 19th largest services importer. Total trade in services amounted to C$133 billion, or 60% of GDP in 2007. 

Fact 1 :

HONG KONG IS AN IMPORTANT MARKET FOR CANADIAN GOODS

• In 2007, Canada ranked 22nd among suppliers of goods to Hong Kong. During the year, merchandise imports from Canada rose by 4.2% to C$1.6 billion. For Canada, Hong Kong was its 17th largest export market. 
  
  
• Major Canadian exports to Hong Kong include non-ferrous metals; electrical machinery, apparatus and appliances, and electrical parts thereof; as well as raw hides, skins and furskins.
  
  
• In addition, Canada was Hong Kong's 19th largest supplier of gold (including gold coins). A total of C$5 million of gold was imported from Canada in 2007. 
  

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 (the Mainland). 
  
  
• 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. 
  
  
• All foreign companies 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. 
  
  
• There are currently two Canadian provincial government offices in Hong Kong: the Government of Alberta Office (mainly handles trade and investment matters) and the Service d'Immigration du Quˆmbec. There is also a non-profit Canadian Education Centre which operates independently of government. 
  
  
• As at 1 June 2007, there were 14 regional headquarters, 32 regional offices and 38 local offices in Hong Kong representing their parent companies in Canada. 
  
  
• Hong Kong is one of the world's major financial centres in which banking and insurance play a vital role. There are six Canadian banking institutions in Hong Kong, including Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Royal Bank of Canada and Scotiabank (Hong Kong) Limited. 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 over 10 Canadian-controlled firms engaging in brokerage and/or investment advisory business in Hong Kong. 
  

Fact 3 :

CANADA IS AN IMPORTANT MARKET FOR HONG KONG GOODS

• In 2007, Canada ranked 20th among Hong Kong's domestic export markets of goods. Domestic exports of merchandise to Canada valued at C$136 million. Reciprocally, Hong Kong was Canada's 44th ranking import source.
  
  
• Major Canadian purchases from Hong Kong include telecommunications and sound recording and reproducing apparatus and equipment; articles of apparel and clothing accessories; as well as office machines and automatic data processing machines. 
  

Fact 4 :

CLOSE LINKS BETWEEN CANADA AND HONG KONG

• Canada continues to be a popular destination for Hong Kong emigrants. In 2006, there were approximately 1,500 successful applications from Hong Kong for permanent residency in Canada. 
  
  
• In 2006, over 800 study permits were issued to Hong Kong students. There are over 100,000 Canadian university alumni with 26 active alumni associations in Hong Kong. 
  
  
• In 2007, there were over 400,000 Canadian nationals visiting/residing in Hong Kong. They represent one of the most significant foreign presence in Hong Kong. 
  
  
• Hong Kong is an important source of investment for Canada. The latest figures show that Hong Kong's stock of foreign direct investment in Canada stands at C$6 billion. In 2006, Canadian direct investment in Hong Kong was C$4.6 billion. 
  
  
• In January 2008, Hong Kong and Canada signed a Memorandum of Understanding (MOU) on investment promotion co-operation. The MOU reinforces the well-established trade and economic relations between Hong Kong and Canada. 
  
  
• There are 45 direct scheduled passenger flights each week in each direction between Hong Kong and Canada, operated by Air Canada and Cathay Pacific Airways. Besides, Cathay Pacific Airways also operates all-cargo services to Vancouver and Toronto. 
  
  
• The Canada-based Hong Kong-Canada Business Association (HKCBA) has sections in major Canadian cities from coast to coast, including Ottawa, Montreal, Toronto, Vancouver, Calgary, Edmonton, Winnipeg and Halifax. At present, HKCBA has about 1,300 corporate and individual members in Canada, with connections to 31 similar business associations in 23 countries 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 its sister organisation -- the Canadian Chamber of Commerce in Hong Kong. Founded in 1984, HKCBA's mission is to promote commercial and economic activities between Canada and Hong Kong, and to assist Canadian businessmen in doing business in Hong Kong, and through Hong Kong, with the Mainland and South East Asia. 
  
  
• The Canadian Chamber of Commerce in Hong Kong is the largest Canadian business organisation outside Canada. It is also one of the largest international chambers in Hong Kong and one of the most influential business groupings in the Asia-Pacific. Currently, it represents more than 1,000 members with business interests in Canada, Hong Kong and the Mainland. 
  

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 was ranked the world's freest economy in the Heritage Foundation 2008 Index of Economic Freedom and in the Cato Institute's 2007 Annual Report on Economic Freedom of the World.
  
  
• Hong Kong does not subsidise its exports or any particular sector of the economy.
  
  
• Hong Kong does not maintain any barriers to trade.
  
  
• Hong Kong does not levy any tariffs. As an internal tax to raise revenue, excise duties are levied on cigarettes and tobacco, spirituous liquor, methyl alcohol and some hydrocarbon oils, whether imported or domestically produced. In 2007, less than two percent of all imports were subject to excise duties.
  
  
• Hong Kong treats foreign and local companies on the same footing.
  
  
• Imports from Canada compete freely with local made products and imports from other countries. They have been growing in the past five years (2003-2007), at an average annual rate of 8.3% in value terms. In 2007, imports from Canada grew moderately at 4.2%, following an increase of 16.3% in 2006. 
  

Fact 6 : 

HONG KONG RESPECTS INTELLECTUAL PROPERTY RIGHTS

• Hong Kong is determined to have a robust intellectual property regime and to maintain its status as a responsible trading partner.
  
  
• Hong Kong has an established legal framework for the protection of intellectual property rights in patents, trade marks, copyright, and registered designs. Our intellectual property legal framework is fully compatible with all our obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
  
  
• The Intellectual Property Department (IPD) provides a focal point for the development of intellectual property rights protection in Hong Kong. It administers the registration systems for trade marks, patents, designs and copyright licensing bodies. 
  
  
• In June 2007, the Copyright (Amendment) Ordinance 2007 was passed by the Legislative Council to enhance copyright protection; to improve our copyright exemption system; to further liberalise certain restrictions on parallel importation; and to strengthen enforcement efforts against copyright offences.
  
  
• The Customs and Excise Department (C&ED) is responsible for the enforcement of criminal sanctions against copyright and trade mark infringements. With a dedicated enforcement team of some 400 officers, one of the strongest in the region, its vigorous enforcement actions against piracy and trade mark counterfeiting activities have brought the piracy 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 adequately protected by a comprehensive set of labour legislation and an effective labour inspection system. Comprehensive labour laws, coupled with effective administrative measures, have enabled Hong Kong to apply 41 International Labour Conventions which prescribe internationally recognised standards on various labour matters.

July 2008

Prepared by:

Trade and Industry Department
The Government of the Hong Kong Special Administrative Region
Trade and Industry Department Tower, 700 Nathan Road, Kowloon, Hong Kong
Telephone: (852) 2398 5405 Website: www.tid.gov.hk

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.