CANADA AND THE HONG KONG SPECIAL ADMINISTRATIVE REGION SOME IMPORTANT FACTS
The Hong Kong Special Administrative Region (HKSAR) of the People's Republic of China (PRC) is firmly committed to an open market policy which applies to all trade, as well as to all investments in the HKSAR.
Hong Kong has been a Special Administrative Region of the PRC 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 which ensures the continuation of Hong Kong's capitalist economic and trade systems, and the free movement of goods and capital. Hong Kong remains a free port and a separate customs territory with its own customs boundary. Tariff preferences and other similar arrangements obtained by the HKSAR continue to be enjoyed exclusively by the HKSAR. The Basic Law also provides that the HKSAR may participate in relevant international organisations and international trade agreements under the name of "Hong Kong, China".
In 1986, Hong Kong became a separate contracting party to the General Agreement on Tariffs and Trade (GATT). Accordingly, Hong Kong was one of the founding 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 the World Customs Organization) in 1987 and the Asia-Pacific Economic Cooperation in 1991. After 1 July 1997, Hong Kong's status in these and other international organisations remains unchanged except that our participation is now under the name of "Hong Kong, China".
HONG KONG'S ECONOMY IN 2018
The economy of Hong Kong is externally oriented and highly dependent on trade with the rest of the world. Hong Kong economy as measured by Gross Domestic Product (GDP) in real terms recorded a growth of 3.0% in 2018. The value of total merchandise trade amounted to C$1,468 billion (312% of GDP) with imports and exports at C$780 billion (166% of GDP) and C$687 billion (146% of GDP) respectively. In the same year, Hong Kong was the world's 7th largest trading economy in goods - the 8th largest exporter and the 8th largest importer.
The services sector continues to be very important to the Hong Kong economy. It contributed 92% to the GDP in 2017 and accounted for 88% of the total employment in 2018. Hong Kong's trade in services amounted to C$252 billion (54% of GDP) in 2018. In the same year, Hong Kong was the world's 18th largest commercial services trading economy - the 15th largest services exporter and the 19th largest services importer.
Fact 1 :
HONG KONG IS AN IMPORTANT MARKET FOR CANADIAN GOODS
- In 2018, Hong Kong was Canada's 10th largest export market with merchandise imports from Canada amounting to C$1.9 billion.
- In 2018, Hong Kong was Canada's largest export market in the world for frozen beef and fourth largest market for fish and seafood.
- Other major Canadian exports to Hong Kong include meat and meat preparations; and crude animal and vegetable materials.
Fact 2 :
HONG KONG IS AN IMPORTANT LOCATION FOR CANADIAN INTERESTS
- Hong Kong is ideally located in relation to the Pacific Rim and the Mainland of China (Mainland China).
- Hong Kong is an important entrepôt for merchandise trade between Canada and Mainland China. In 2018, more than C$3.4 billion, representing around 4% of the total trade between Canada and Mainland China, was routed through Hong Kong. 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.
- Currently, three Canadian provinces have representative offices in Hong Kong. They are Alberta, British Columbia and Quebec.
- As at 1 June 2018, there were 21 regional headquarters, 33 regional offices and 59 local offices in Hong Kong with parent companies located in Canada.
- Hong Kong is one of the world's major financial centres and Canadian financial institutions play an active part in the banking and insurance sectors. There are seven Canadian or Canadian-controlled banks operating as licensed banks or restricted licence banks in Hong Kong. The five licensed banks include Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, The Bank of Nova Scotia, Bank of Montreal, and Royal Bank of Canada while RBC Investor Services Bank S.A. and Scotiabank (Hong Kong) Limited are the two restricted licence banks. National Bank of Canada and Manulife Bank of Canada each has a representative office in Hong Kong. There are also eight Canadian or Canadian-controlled insurance companies authorised to operate in Hong Kong, including Manulife (International) Limited and Sun Life Hong Kong Limited.
- Canadian-controlled companies also participate actively in securities and futures trading and in the field of investment advice. As at March 2019, there were around 21 Canadian-controlled firms engaging in brokerage, investment advisory and asset management business in Hong Kong.
- Canada also has a growing presence in Hong Kong's cultural scene. Canadians are regularly showcased at major cultural festivals and events in the city, such as the Hong Kong Arts Festival, the Hong Kong International Film Festival and the Hong Kong International Literary Festival. The cultural collaboration between Canada and Hong Kong is further strengthened by the opening of the Xiqu Centre, which was jointly designed and built by Canadian architectural firm Revery Architecture (formerly Bing Thom Architects).
Fact 3 :
CANADA IS AN IMPORTANT EXPORT MARKET FOR HONG KONG
- Canada ranked 25th among Hong Kong's total export markets of goods in 2018. Total exports to Canada were valued at C$3.1 billion. Reciprocally, Hong Kong was ranked as Canada's 62nd in terms of goods imports.
- Major Canadian imports from Hong Kong include telecommunications equipment; wearing apparel; and electrical machinery.
Fact 4 :
CLOSE LINKS BETWEEN CANADA AND HONG KONG
- The Canadian community is among the largest foreign communities in Hong Kong. In 2018, around 411,418 Canadian nationals visited/resided in Hong Kong.
- There is an estimate of over 175,000 Canadian-educated alumni and 29 active Canadian alumni associations in Hong Kong.
- Thousands of students from Hong Kong choose to attend Canadian schools, colleges and universities each year. As of the end of December 2018, there were 4,045 Hong Kong passport holders with a study permit in Canada.
- Canada continues to be a popular destination for Hong Kong emigrants. 1,525 people from Hong Kong were admitted as permanent residents of Canada in 2018, a 12% increase over 2017.
- Hong Kong is an important source of investment for Canada. Last available figures show that, at end 2017, the position of Hong Kong's outward direct investment in Canada was C$13.0 billion, whereas that of Hong Kong's inward direct investment from Canada was C$9.5 billion.
- Hong Kong and Canada signed an Investment Promotion and Protection Agreement (IPPA) on 10 February 2016 and the IPPA entered into force on 6 September 2016. The Agreement gives additional assurance to Canadian investors that their investments in Hong Kong are adequately protected. At the same time, it enables Hong Kong investors to enjoy similar protection for their investments in Canada. It also expands investment flows between Hong Kong and Canada, and further strengthens our existing strong economic and trade ties.
- Since 2010, the Working Holiday Scheme arrangement between Hong Kong and Canada has provided excellent opportunities for youths of both places to enrich their global exposure and broaden their horizons through living and working temporarily overseas while holidaymaking. Apart from facilitating cultural exchanges, the Scheme also helps enhance bilateral cooperation and promote tourism and development between Hong Kong and Canada.
- On 29 October 2013, The Hong Kong - Canada Comprehensive Avoidance of Double Taxation Agreement ("CDTA") entered into force. The CDTA has become effective in Hong Kong since 1 April 2014. It further strengthens the bilateral economic and trade ties and provides added incentives for companies in Canada to do business or invest in Hong Kong. Under the agreement, tax paid in Hong Kong shall be deducted from the tax payable in Canada. Reciprocally, tax paid in Canada shall be allowed as a credit against the tax payable in Hong Kong, subject to the provisions of the tax laws of Hong Kong.
- There are on average around 14-16 (7-8 round trips) direct scheduled passenger flights daily between Hong Kong and Canada. They are operated by Air Canada, Cathay Pacific Airways and Hong Kong Airlines. In addition, Cathay Pacific Airways operates all-cargo services to Toronto.
- The Canada-based Hong Kong-Canada Business Association (HKCBA) has active Chapters in major Canadian cities including Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montreal and Halifax. Founded in 1984, HKCBA now has about 1,000 corporate and individual members in Canada, with connections to 43 similar business associations in 32 countries, and approximately 13,000 individual associates around the world through the Federation of Hong Kong Business Associations Worldwide. Being one of the largest bilateral trade associations in Canada, HKCBA collaborates with The Canadian Chamber of Commerce in Hong Kong to benefit the business community on both sides of the Pacific. HKCBA's mission is to promote and encourage increased commercial and economic activities between Canada and Hong Kong, as well as to assist Canadians in doing business in Hong Kong, and, through Hong Kong, with Mainland China and South East Asia.
- Founded in 1977, the Canadian Chamber of Commerce in Hong Kong is a proactive, non-government body that provides an extensive networking platform for members with business interests in Canada, Hong Kong, Mainland China, and the broader Asia-Pacific region. Being one of the largest Canadian business organizations outside of Canada, its mission is to connect members with one another and with other members of the business network in Hong Kong in order to expand their opportunities so that their businesses and careers thrive.
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 has been consistently ranked as the world's freest economy by the Heritage Foundation of the United States and the Fraser Institute of Canada.
- Hong Kong does not maintain any barriers to trade.
- Hong Kong does not levy any tariffs. Excise duties are levied on four types of commodities, namely tobacco, liquor, methyl alcohol and hydrocarbon oil. In 2018, around 1.4% of our total imports were subject to excise duties.
- Hong Kong does not subsidise its exports.
- Imports from Canada compete freely with locally-made products and imports from Hong Kong's other trading partners.
- Hong Kong treats foreign and local companies on the same footing.
FACT 6 :
HONG KONG RESPECTS INTELLECTUAL PROPERTY RIGHTS
- Hong Kong is fully committed to upholding a robust and effective system of intellectual property (IP) protection, which covers patents, trademarks, copyright and registered designs. In this regard, the World Economic Forum has ranked Hong Kong the 9th among 140 economies worldwide in terms of IP protection.
- We update our IP laws from time to time to meet our prevailing social and economic needs. We are, for example, pressing ahead with the establishment of an "original grant patent" system which is scheduled for launch in 2019. We are also preparing for implementation of the Madrid Protocol concerning international registration of marks.
- The Hong Kong Customs has all along been taking rigorous enforcement actions against infringement activities, so as to protect the legitimate interests of IP right owners. C&ED is also committed to enhancing co-operation with IP enforcement authorities in other jurisdictions, including Canada, in combating the transnational flow of infringing goods.
FACT 7 :
HONG KONG'S LABOUR FORCE IS PROTECTED BY LEGISLATION
- Hong Kong's labour force enjoys rights and benefits that are protected by a comprehensive set of labour legislation and an effective labour inspection system. This has enabled Hong Kong to apply International Labour Conventions (ILCs) which prescribe internationally recognised standards on various labour matters. As at the end of 2018, Hong Kong has applied 31 ILCs.
ECONOMIC AND TRADE OFFICE
Hong Kong has an Economic and Trade Office in Toronto, Canada. It represents Hong Kong on matters related to the economy and trade in Canada, and helps foster trade and commercial ties between Hong Kong and Canada. Its webpage is: http://www.hketotoronto.gov.hk.
Trade and Industry Department
The Government of the Hong Kong
Special Administrative Region
Trade and Industry Tower
3 Concorde Road, Kowloon City
Telephone: (852) 2398 5405
Note: 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.