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 Indonesia

• Indonesia maintains a good trading relationship with Hong Kong. Bilateral trade between Hong Kong and Indonesia increased 5.1% from HK$24.8 billion in 2005 to HK$26.1 billion in 2006. In 2006, Indonesia was Hong Kong's 21^st largest trading partner, 26^th largest market for domestic exports and 24^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 Indonesia. Re-export of goods of Mainland origin through Hong Kong to Indonesia increased by 14.9% from HK$7.7 billion in 2005 to HK$8.9 billion in 2006.
  
  
• Hong Kong's domestic export of goods to Indonesia totalled about HK$0.5billion in 2006. The top four domestic export categories to Indonesia in 2006 were:
  

• Textile yarn, fabrics, made-up articles, and related products
  
  
• Printed matter
  
  
• Tobacco and tobacco manufactures
  
  
• Medicinal and pharmaceutical products
  
  

• Hong Kong's re-export of goods to Indonesia totalled about HK$10.6 billion in 2006. The top four re-export categories to Indonesia in 2006 were:

• Telecommunications and sound recording and reproducing apparatus and equipment
  
  
• Textile yarn, fabrics, made-up articles, and related products
  
  
• Electrical machinery, apparatus and appliances and electrical parts thereof
  
  
• Office machines and automatic data processing machines
  

• Hong Kong's import of goods from Indonesia totalled about HK$15.0 billion in 2006. The top four import categories from Indonesia in 2006 were:

• Coal, coke and briquettes
  
  
• Miscellaneous edible products and preparations 
  
  
• Electrical machinery, apparatus and appliances and electrical parts thereof
  
  
• Telecommunications and sound recording and reproducing apparatus and equipment
  

Bilateral Investment

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

RC Division
Trade and Industry Department
August 2007