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 India

• India is a significant trading partner of Hong Kong. Bilateral trade between Hong Kong and India increased 4.2% from HK$57.4 billion in 2005 to HK$59.8 billion in 2006. In 2006, India was Hong Kong's 12^th largest trading partner, 18^th largest market for domestic exports and 15^th largest market for re-exports, and 11^th largest source of imports.
  
  
• Hong Kong is also an important entrepot for trade between the Mainland of China and India. Re-export of goods of Mainland origin through Hong Kong to India increased by 29.0% from HK$7.1 billion in 2005 to HK$9.1 billion in 2006.
  
  
• Hong Kong's domestic export of goods to India totalled about HK$1.2 billion in 2006. The top four export categories to India 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 India totalled about HK$21.8 billion in 2006. The top four re-export categories to India in 2006 were:

• Non-metallic mineral manufactures
  
  
• Telecommunications and sound recording and reproducing apparatus and equipment
  
  
• Electrical machinery, apparatus and appliances and electrical parts thereof 
  
  
• Office machines and automatic data processing machines
  

• Hong Kong's import of goods from India totalled about HK$36.8 billion in 2006. The top four import categories from India in 2006 were:

• Non-metallic mineral manufactures
  
  
• Leather, leather manufactures and dressed furskins
  
  
• Jewellery, goldsmiths' and silversmiths' wares, and other articles of precious or semi-precious materials
  
  
• Textile yarn, fabrics and made-up articles and related products
  

Bilateral Investment

• As at end 2005, India ranked outside the first 20 major sources of inward direct investment into Hong Kong.
  
  
• As at end 2005, India ranked outside the first 20 major destination of outward direct investment from Hong Kong.
  

RC Division
Trade and Industry Department
July 2007