Hong Kong - Mainland China Trade Relations

Hong Kong And The Mainland Of China (The Mainland) Are Each Other's Major Trading Partner

  • Since the reform and opening-up of the Mainland, its share of Hong Kong's merchandise trade had increased significantly from 9.3% in 1978 to 51.0% (HK$4,826.3 billion or US$618.5 billion) in 2024. It has been Hong Kong's largest merchandise trading partner (Note 1) since 1985.
  • Hong Kong and the Mainland signed the "Mainland and Hong Kong Closer Economic Partnership Arrangement" (CEPA) in June 2003, providing tariff free treatment to all Hong Kong-origin goods meeting the CEPA rules of origin, thus furthering the development potential of the trade between the two places.
  • Hong Kong was the Mainland's third largest merchandise trading partner (after the US and the Republic of Korea) in 2024, and their total trade value accounted for 5.0% of the Mainland's total trade.
  • Hong Kong was the Mainland's second largest export market, taking up 8.1% (HK$2,243.4 billion or US$287.5 billion) of its total exports in 2024.
  • The Mainland has been Hong Kong's largest supplier in goods since 1982. The value of Hong Kong's total imports from the Mainland was HK$2,144.7 billion (US$274.9 billion), accounting for 43.6% of Hong Kong's total imports in 2024. Major imports were electrical machinery, apparatus and appliances, telecommunications and sound recording and reproducing apparatus and equipment, office machines and automatic data processing machines, miscellaneous manufactured articles, and professional, scientific and controlling instruments and apparatus, etc. Besides, the Mainland is also a key region for outward processing activities of Hong Kong.
  • In 2024, the Mainland was Hong Kong's largest domestic export market, absorbing HK$20.4 billion (US$2.6billion) worth of goods, or 35.3% of our total domestic exports. Major domestic exports were medicinal and pharmaceutical products, miscellaneous manufactured articles, cereals and cereal preparations, miscellaneous edible products and preparations, and plastics in primary forms, etc.
  • Given its strategic geographical location, well-developed infrastructure and international communication network, Hong Kong plays an important entrepot role for the trade between the Mainland and the rest of the world. In 2024, the value of goods re-exported through Hong Kong from and to the Mainland was HK$3,780.4 billion (US$484.5 billion), accounting for 84.3% of Hong Kong's total re-export trade value.

Hong Kong Is An Important Location For The Mainland Interests

  • The Mainland was Hong Kong's largest source of inward direct investment. At end-2023, investment from the Mainland accounted for about 31.1% or HK$5,167.6 billion (US$660.1 billion) of the total stock of Hong Kong's inward direct investment.
  • As at June 2024, there were 310 companies from the Mainland with regional headquarters in Hong Kong. They were mainly engaged in financing and banking, import/export trade, wholesale and retail, information technology services, and professional, business and education services, etc. Another 420 companies had set up regional offices in Hong Kong to oversee business activities in the region.
  • As at 31 December 2024, 34 of the 150 licensed banks in Hong Kong were of Mainland interests. In the deposit-taking business, two of the 15 restricted licence banks and two of the 11 deposit-taking companies were of Mainland interests.

Hong Kong As The Largest Foreign Investor In The Mainland

  • Hong Kong was the Mainland's largest source of realised foreign direct investment, accounting for about 59.2% of the national total as at end-2023, with the cumulative value reaching HK$13,164.5 billion (US$1,681.5 billion).
  • Hong Kong's investments in the Mainland concentrate largely in the Guangdong Province. In 2023, Guangdong Province's realised direct investment from Hong Kong reached RMB$114.2 billion.
  • Hong Kong's investments in the Mainland covers a wide range of economic activities, such as information and communications, real estate, professional and business services, manufacturing, financial services, import/ export, wholesale and retail trades.

Hong Kong Practises Free Trade

  • Under “one country, two systems”, the Basic Law confers on Hong Kong a unique status. Article 116 of the Basic Law stipulates that the Hong Kong Special Administrative Region is a separate customs territory and Article 151 provides that Hong Kong may, using the name “Hong Kong, China”, participate in international organisations such as the World Trade Organization (WTO) and the Asia-Pacific Economic Cooperation (APEC) as a separate member.
  • Hong Kong is a free port. We pursue a free trade policy and do not maintain barriers on trade. No tariff is charged on import or export of goods (Note 2).
  • Hong Kong was ranked the freest economy in the world in the Fraser Institute's Economic Freedom of the World 2024 Annual Report.
  • Hong Kong does not subsidise its exports.
  • Hong Kong maintains a level playing field for foreign and local companies.

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Notes:
  1. Unless otherwise specified, all rankings mentioned in this factsheet are worked out with the trade values of the individual economies being considered separately.
  2. There is no tariff on goods entering Hong Kong but excise duties are charged on four groups of commodities, whether they are imported or manufactured locally, for domestic consumption. These commodities are certain hydrocarbon oil (motor spirit, aircraft spirit and light diesel oil), liquor with alcoholic strength more than 30 per cent by volume, methyl alcohol and tobacco (other than smokeless tobacco).

Exchange rate: US$1 = HK$7.803 (2024 approximate average rate)

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Trade and Industry Department
The Government of the Hong Kong Special Administrative Region

Telephone: (852) 2398 5676
Website: www.tid.gov.hk

February 2025

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.

2025-02-24
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