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 Malaysia

• Malaysia is a significant trading partner of Hong Kong. Bilateral trade between Hong Kong and Malaysia increased 7% from HK$82.3 billion in 2006 to HK$88.1 billion in 2007. In 2007, Malaysia was Hong Kong's 9^th largest trading partner; 14^th largest market for domestic exports and 16^th largest market for re-exports; and 7^th largest source of imports. 
  
  
• Hong Kong is also an important entrepot for trade between the Mainland of China and Malaysia. Re-export of goods of Mainland origin through Hong Kong to Malaysia decreased by 1% from HK$15.5 billion in 2006 to HK$15.4 billion in 2007.
  
  
• Hong Kong's domestic export of goods to Malaysia totalled about HK$1.3 billion in 2007. The top three domestic export categories to Malaysia in 2007 were:
  

• Electrical machinery, apparatus and appliances, and electrical parts 
  thereof
  
  
• Metalworking machinery
  
  
• Tobacco and tobacco manufactures
  

• Hong Kong's re-export of goods to Malaysia totalled about HK$24.0 billion in 2007. The top three re-export categories to Malaysia in 2007 were:

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

• Hong Kong's import of goods from Malaysia totalled about HK$62.8 billion in 2007. The top three import categories from Malaysia in 2007 were:

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

Bilateral Investment

• As at end 2006, Malaysia ranked outside the first 20 major sources of inward direct investment into Hong Kong.
  
  
• As at end 2006, Malaysia was the 12^th major destination of outward direct investment (ODI) from Hong Kong, with an ODI stock of HK$25.6 billion. 
  
  
• As at June 2007, eight regional headquarters, 24 regional offices and 29 local offices were set up by Malaysian companies in Hong Kong.
  

RC Division
Trade and Industry Department
August 2008