THE UNITED STATES AND 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, the mini-constitution of the HKSAR, 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 (APEC) 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 2010
The economy of Hong Kong is externally oriented and highly dependent on trade with the rest of the world. Recovering from the global recession of 2009, Hong Kong's Gross Domestic Product (GDP) sprang back sharply by 7.0% in real terms in 2010. The value of total merchandise trade increased to US$823 billion (367% of GDP) with imports and exports at US$433 billion (193% of GDP) and US$390 billion (174% of GDP) respectively. In 2010, Hong Kong was the world's 10th largest trading entity in goods -- the 11th largest exporter and the 9th largest importer.
The services sector continues to be very important to the Hong Kong economy. It accounted for 88% of the total employment in 2010 and contributed 93% to the GDP in 2009. Hong Kong's trade in services has been growing steadily in the past decade, reaching US$157 billion (70% of GDP) in 2010. In the same year, Hong Kong was the world's 14th largest commercial services trading entity -- the 11th largest services exporter and the 18th largest services importer.
FACT 1 :
HONG KONG IS AN IMPORTANT MARKET FOR US GOODS
- In 2010, the United States (US) was Hong Kong's 2nd largest trading partner in the world. Despite a setback in 2009 due to the global economic downturn, merchandise trade between the two economies rebounded in 2010 with an impressive 20% growth.
- In 2010, the US was Hong Kong's 5th largest source for imports of goods. US$23 billion worth of goods were imported from the US, accounting for 5% of total imports.
- According to US' export figures, Hong Kong's imports per capita from the US in 2010 stood at US$3,748. The figure was substantially higher than those of the European Union (US$478), Japan (US$477), Mexico (US$1,452), Australia (US$1,013), South Korea (US$799) and Brazil (US$176).
Hong Kong continues to be an important market for US exports. In particular, Hong Kong was the US' No. 1 market for the following products in 2010:
- - Jewellery and parts thereof, of precious metal other than silver (value of US exports at US$1,366 million)
- - Chicken cuts and edible offal (including livers) frozen (US$625 million)
- - Rubies, sapphires and emeralds, otherwise worked (US$221 million)
- - Drawn glass and blown glass, in sheets, whether or not having an absorbent or reflecting layer, but not otherwise worked, not elsewhere specified or included (US$213 million)
- - Pistachios, fresh or dried, whether or not shelled (US$156 million)
Other significant US exports to Hong Kong in 2010 included diamonds, nonindustrial, worked, including polished or drilled (US$2,261 million); aircraft, spacecraft, and parts thereof (US$1,400 million); processors or controllers (US$785 million); and gold, nonmonetary, unwrought, not elsewhere specified or included (other than powder) (US$749 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 (Mainland China).
- US nationals represent one of the most significant foreign presence in Hong Kong, with around 60,000 US citizens residing in or visiting Hong Kong in 2010. In the same year, there were 1.2 million US visitor arrivals to Hong Kong, an increase of 9.5% over 2009.
- 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.
- All companies, foreign or local, 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.
- As at 1 June 2010, there were 288 regional headquarters, 529 regional offices and 446 local offices in Hong Kong representing their parent companies in the US.
- Notable US companies represented in Hong Kong include Apple, AT&T, Baker & McKenzie, Caterpillar, Chevron, Cisco, Dell, Dow Chemical, EMC, ExxonMobil, Facebook, Fedex, General Electric, Hewlett-Packard, IBM, Johnson & Johnson, Jones Day, Marriott International, Mayer Brown, McDonald's, Microsoft, Motorola, Oracle, Procter & Gamble, Starbucks, Time Warner, UPS, Wal-Mart, Walt Disney and Yahoo!.
- States including Illinois, Nevada, North Carolina, New York, Ohio and Virginia have set up representative offices in Hong Kong. In addition, port authorities including ports of Savannah Georgia, Long Beach, Los Angeles, New York and New Jersey, Tacoma and Virginia maintain a presence in Hong Kong.
- The US has made substantial inward direct investment in Hong Kong. As at end-2009, the stock of total inward direct investment from the US amounted to US$40.7 billion at market price. The US was the largest source of inward direct investment in both the insurance and other financial institutions sectors (55% and 18% respectively of the total inward direct investment). It was also the 4th largest in the wholesale, retail and import/export trade sector (8%). In addition to bringing in capital, these investments also enhanced technological upgrading of the industries concerned.
- As one of the world's major financial centres, banking is the lynchpin of Hong Kong's financial activities in which US financial institutions play an active part. This is reflected by the number of US financial institutions operating in Hong Kong. As at end-2010, 9 out of the 146 licensed banks in Hong Kong were US banks. They constituted the 6th largest foreign bank presence in Hong Kong. There were also three restricted licence banks and one deposit-taking company owned by US interests. The total assets of and customer deposits with US banks and deposit-taking companies stood at US$106.9 billion and US$46.3 billion respectively, representing 6.8% and 5.3% of the total of Hong Kong's banking sector.
- Major US banks in Hong Kong include Bank of America, Citibank and JPMorgan Chase.
- In the insurance sector, US companies rank 2nd in number among foreign insurers operating in Hong Kong. Of the 167 insurance companies authorised in Hong Kong, 13 are US companies. Another 15 are known to be controlled by US interests.
- US insurers in Hong Kong include members of the American International Group, the MassMutual Financial Group and the MetLife Group.
- US companies also participate actively in securities and futures trading, investment advice and fund management. These companies include Citigroup, Fidelity, Franklin Templeton, Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch and Morgan Stanley.
- Hong Kong is home to Walt Disney's 5th theme park. The Hong Kong Disneyland is operated by a joint venture company set up by the HKSAR Government and The Walt Disney Company. Since its opening in September 2005, Hong Kong Disneyland has received over 25 million visitors.
- An expansion project is underway to add three new themed areas to the Hong Kong Disneyland. Upon their target completion in mid-2014, the park area will be 23% larger. With 30 new entertainment and interactive experiences added, there will be over 100 attractions in the park.
- The US also derives considerable benefits from its air traffic rights in Hong Kong. The 10 US-based airlines which operate scheduled services to and from Hong Kong are Atlas Air Inc., Continental Airlines, Delta Air Lines, Evergreen International Airlines, Federal Express, Kalitta Air, Polar Air Cargo Worldwide, Southern Air Inc., United Airlines and United Parcel Service Ltd.
FACT 3 :
THE US IS AN IMPORTANT MARKET FOR HONG KONG GOODS
- In 2010, the US was the 2nd largest market for Hong Kong's domestic exports, accounting for US$1,076 million or 12% of the total value.
- Hong Kong's major domestic export items to the US in 2010 included telecommunications equipment, jewellery, wearing apparel and electrical machinery.
FACT 4 :
HONG KONG IS AN IMPORTANT ENTREPÔT FOR SINO-US TRADE
- Hong Kong is an important entrepôt for trade between Mainland China and the US. In 2010, around 13% or US$38 billion of Mainland China's exports of goods to the US, and around 8% or US$9 billion of Mainland China's imports of goods from the US, 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, 17 years in a row, the world's freest economy by the Heritage Foundation in its 2011 Index of Economic Freedom. The Cato Institute's 2010 Annual Report on Economic Freedom of the World also awarded Hong Kong the same accolade.
- Hong Kong does not subsidise its exports or any particular sector of its economy.
- Hong Kong does not maintain any barriers to trade.
- Hong Kong does not levy any tariffs. As an internal tax to raise revenue, excise duties are levied on cigarettes and tobacco, spirituous liquor with alcoholic strength over 30%, methyl alcohol and some hydrocarbon oils, whether imported or domestically produced. In 2010, around 1.7% of our total imports were subject to excise duties.
- Hong Kong treats foreign and local companies on the same footing.
- Imports from the US compete freely with locally-made products and imports from other trading partners. The value of imports from the US had been rising steadily at an average annual rate of 9.7% from 2006 to 2010. Despite a 5.7% dip in 2009 due to the global recession, the value of imports from the US rebounded sharply by 26% in 2010.
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 our obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The Copyright Ordinance is being amended to further enhance protection of copyright works in the digital environment.
- Hong Kong is committed to maintaining a robust intellectual property regime and its status as a responsible trading partner. Hong Kong Customs has a strong and dedicated team comprising some 400 officers to enforce criminal sanctions against intellectual property right infringements. Another 3,400 officers are responsible for interception of contraband, including pirated and counterfeit goods at boundary control points and for intelligence analysis. With the rigorous enforcement actions taken, the infringement situation in Hong Kong has been brought under firm control.
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 41 International Labour Conventions which prescribe internationally recognised standards on various labour matters.
ECONOMIC AND TRADE OFFICES
Hong Kong has three Economic and Trade Offices in Washington DC, New York and San Francisco. They represent Hong Kong on matters related to economy and trade in the US, and help foster trade and commercial ties between Hong Kong and the US. Webpages of the three Offices are:
|Washington DC : http://www.hketowashington.gov.hk|
|New York : http://www.hketony.gov.hk|
|San Francisco : http://www.hketosf.gov.hk|
Trade and Industry Department
The Government of the Hong Kong
Special Administrative Region
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.