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THE UNITED STATES AND HONG KONG SPECIAL ADMINISTRATIVE REGION SOME IMPORTANT FACTS
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OVERVIEW
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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 organizations and international trade agreements under the name of
Hong Kong, China. |
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In 1986, Hong
Kong became a separate contracting party to the General Agreement on Tariffs and
Trade (GATT). Upon the establishment of the World Trade Organization (WTO) on 1
January 1995, Hong Kong became one of its original members. 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 organizations remains unchanged except that our participation is
now under the name of Hong Kong, China.
HONG
KONG'S ECONOMY IN 2005
The economy of Hong Kong
is externally oriented and highly dependent on trade with the rest of the
world. In 2005, the value of Hong Kong's total merchandise trade amounted to
US$589 billion, or 331% of its Gross Domestic Product (GDP). The value of
imports was US$300 billion or 169% of GDP while exports valued at US$289
billion or 163% of GDP. Hong Kong also remained the world's 11th largest
trading entity in goods – the 11th largest exporter and the 11th largest
importer.
The services sector
continues to be very important to the Hong Kong economy. It accounted for 86%
of the total employment in 2005 and contributed to 90% of the GDP in 2004.
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 2005 – the 11th
largest services exporter and the 20th largest services importer. Total trade
in services amounted to US$94 billion, or 53% of GDP in 2005.
Fact 1 :
HONG KONG
IS AN IMPORTANT MARKET FOR US GOODS
- In 2005, the US was the
5th largest source for Hong Kong's imports of goods. Hong Kong imported
US$15 billion worth of goods from the US, accounting for 5% of its import.
- According to US'
exports figures, Hong Kong's imports per capita from the US in 2005 were
about US$2,366, substantially more than other places such as Mexico
(US$1,130), Taiwan (US$963), Australia (US$785), South Korea (US$569),
Malaysia (US$436), Japan (US$435) and the European Union (US$408).
- Hong Kong is a major
export market for US products, in particular :
- Jewelry and parts, of
precious metal other than silver (Hong Kong was US' No. 1 market in 2005, with
value of exports of US$394 million)
- Thyristors, diacs and
triacs, other than photosensitive devices (Hong Kong was US' No. 1 market in
2005, with value of exports of US$167 million)
- Diamonds, nonindustrial,
worked, including polished or drilled (Hong Kong was US' No. 3 market in 2005,
with value of exports of US$910 million)
- Electronic monolithic
integrated circuits, other than digital (Hong Kong was US' No. 5 market in 2005,
with value of exports of US$646 million)
- Parts (except antennas and
reflectors) for use with radio transmission, radar, radio navigational aid,
reception and television apparatus (Hong Kong was US' No. 5 market in 2005,
with value of exports of US$148 million)
- Other high value US products exported to Hong Kong in 2005 included electronic monolithic digital integrated circuits (US$2,116 million), parts and accessories for automated data processing machines (US$751 million), and parts of airplanes or helicopters (US$179 million).
Fact 2 :
HONG KONG IS AN IMPORTANT LOCATION FOR US INTERESTS
- Hong Kong is ideally
located in relation to the Pacific Rim and the Mainland of China (the
Mainland).
- The total number of US
citizens in Hong Kong is around 54,000 and they represent one of the most
significant foreign presences in Hong Kong.
- States including
Arizona, California, Illinois, Nevada, North Carolina, Ohio and Virginia
have set up representative offices in Hong Kong. In addition, port
authorities of Georgia, Long Beach, Los Angeles, New York and New Jersey,
Portland, Tacoma and Virginia maintain a presence in Hong Kong.
- There are over 1,260 US
companies in Hong Kong. Notable US companies represented in Hong Kong
include Apple Computer, AT&T, Baker & McKenzie, Caltex, Cisco,
Coca-Cola, Dell, Dow Chemical, EMC, ExxonMobil, Fedex, Hewlett-Packard,
IBM, Johnson & Johnson, Jones Day, Lucent Technologies, Marriott
International, McDonald's, Microsoft, Motorola, Newell Rubbermaid,
Procter & Gamble, Sprint, Sun Microsystems, Starbucks, Sybase, Time
Warner, Walt Disney and Yahoo!.
- As at June 2005, US
firms have set up 868 regional headquarters/offices in Hong Kong.
- The US has substantial
inward direct investment in Hong Kong. As at the end of 2004, the US'
total inward direct investment amounted to US$31.3 billion at market
price. The US was the largest source of inward direct investment in the
sectors of insurance (48% of the total inward direct investment) and
financial institutions other than banks and deposit-taking companies (34%
of the total inward direct investment). It was also the 3rd largest in the
sectors of transport and related services (15% of the total inward direct
investment) and wholesale, retail and import/export trade (12% of the
total inward direct investment). In addition to bringing in capital, these
investments also enhance technological upgrading of the industries
concerned.
- Hong Kong is one of the
world's major financial centres. Banking is the lynchpin of financial
activities and US financial institutions play an active part. This is
reflected by the number of US financial institutions operating in Hong
Kong. As at the end of 2005, 10 out of the 133 licensed banks were US
banks which constituted the 4th largest foreign bank group by number. Six
of the top 10 US banks maintained branch offices in Hong Kong. Apart from
licensed banks, there were six restricted licence banks and two
deposit-taking companies that were owned by US interests. The majority of
these institutions engage actively in money market operations, foreign
exchange and securities dealings. A number of them are also active in
domestic banking including mortgage lending and trade financing. In
addition, four US banks have established representative offices in Hong
Kong. The total assets of and customer deposits with US banks and
deposit-taking companies stood at US$87.8 billion and US$40.6
billion respectively, representing 9.4% and 7.7% of the total of Hong
Kong's banking sector.;
- US banks in Hong Kong
include American Express, Bank of America, Citibank and JPMorgan Chase.
- In the insurance
sector, US companies ranked 1st in number amongst foreign insurers
operating in Hong Kong. Of the 175 insurance companies authorized in Hong
Kong, 15 were US companies and 10 (non-US companies) were knowingly
controlled by US interests.
- US insurers in Hong
Kong include members of the American International Group, the MassMutual
Financial Group and the AEGON Group.
- US companies also
participate actively in securities and futures trading, in the field of
investment advice and in fund management. These companies include Bear
Stearns, Citigroup, Fidelity, Franklin Templeton, Goldman Sachs, J.P.
Morgan, Lehman Brothers, Merrill Lynch and Morgan Stanley Dean Witter.
- 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.
- Hong Kong has become
home to Walt Disney's 5th theme park in the world since 2005. The Hong
Kong Disneyland is operated by a joint venture company set up by the HKSAR
Government and the Walt Disney Company. The development cost is about
US$1.8 billion. The park is estimated to generate US$19 billion boost to
the Hong Kong economy in 40 years.
- The US also derives
considerable benefits from its air traffic rights in Hong Kong. The 11
US-based airlines which operate scheduled services to and from Hong Kong
are Atlas Air Inc., Continental Airlines, Continental Micronesia Inc.,
Evergreen International Airlines, Federal Express, Gemini Air Cargo,
Kalitta Air, Northwest Airlines, Polar Air Cargo, United Airlines and
United Parcel Service Ltd.
- 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.
Fact 3 :
THE US IS AN IMPORTANT MARKET FOR HONG KONG GOODS
- In 2005, the US was the
2nd largest market for Hong Kong's domestic exports, accounting for US$5
billion, or 28% of the total value.
- Hong Kong's major
domestic export items to the US in 2005 included wearing apparel, and to a
lesser extent, office machines and automatic data processing machines, and
electrical machinery, apparatus and appliances, etc..
- In 2005, textiles and
clothing products accounted for 68% of Hong Kong's domestic exports to
the US. The tariffs levied on US' imports of textiles and apparel from
Hong Kong averaged at 18.2%.
Fact 4 :
HONG KONG
IS AN IMPORTANT ENTREPÔT FOR SINO-US TRADE
- Hong Kong is an important
entrepôt for trade between the Mainland and the US. In 2005, around 24%
or US$38 billion of the Mainland's exports of goods to the US, and around
12% or US$6 billion of the Mainland's imports of goods from the US, were
routed through Hong Kong.
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 2006 Index of
Economic Freedom and in the Cato Institute's 2005 Annual Report on
Economic Freedom of the World.
- Hong Kong does not
subsidize its exports or any particular sector of the economy.
- Hong Kong does not levy
any tariffs. As an internal tax to raise revenue, excise duties are levied
on imported as well as domestically produced cigarettes and tobacco,
alcoholic products, methyl alcohol and some hydrocarbon oils. In 2005,
only 2% of all imports were subject to excise duties.
- Hong Kong treats
foreign and local companies on the same footing.
- Hong Kong does not
maintain any barriers to trade.
- Imports from the US can
compete freely with locally made products and imports from other
countries. Imports from the US were on a continued increase during the
past three years, expanding at an average annual growth of 9.9% in value
terms. In 2005, imports from the US rose further by 6.5% in value terms,
after a robust growth of 13.4% in 2004.
Fact 6 :
HONG KONG RESPECTS INTELLECTUAL PROPERTY RIGHTS
- 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) was set up in July 1990 to provide 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. The Customs and Excise Department
(C&ED) is responsible for the enforcement of criminal sanctions
against copyright and trade mark infringements.
- Hong Kong is determined
to have a robust intellectual property regime and maintain our status as a
responsible trading partner. Vigorous enforcement actions are taken
against piracy and trade mark counterfeiting activities. The C&ED has
a dedicated enforcement team of some 400 officers, one of the strongest in
the region. The piracy situation in Hong Kong has been brought under firm
control. The result is highly praised by our trading partners including
the US.
- A major legislative
exercise is underway to update the Copyright Ordinance to enhance
copyright protection; to improve our copyright exemption system; to relax
restriction on parallel importation; and to strengthen enforcement efforts
against copyright offences. The relevant amendment bill was introduced
into the Legislative Council in March 2006.
- The IPD operates
electronic registration services to provide a more efficient and
cost-effective means for registration and management of trade marks,
patents and registered designs. The system of IPD can now provide
web-based electronic search of the register, electronic filing of
applications for registration, electronic publication and payment for
applications for registration, as well as real-time renewal of trade marks
and patents and changes of a registrant's name. Interactive services for
assignment/assent of trade marks, extension of time for trade mark
applications and online search of description of goods and services are
also available since May 2006.
Fact 7 :
HONG KONG'S LABOUR FORCE IS PROTECTED BY LEGISLATION
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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 recognized standards on
various labour matters.
July 2006
Trade and Industry
Department
The Government of the Hong Kong
Special Administrative Region |
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