Hong Kong
Hong Kong has a bustling economy highly dependent on international trade, which also reflects in the number of consulates: No other city in the world hosts more than the 107 consulates (June 2005) in Hong Kong, followed by Hamburg, Germany (98) and New York City (93). It is one of the world's freest economies, as well as the world's 10th largest trading entity and 11th largest banking center. Natural resources are limited, and food and raw materials must be imported. Indeed, imports and exports, including re-exports, each exceed GDP in dollar value. Hong Kong has extensive trade and investment ties with the People's Republic of China, even before its reunification with China on July 1, 1997. The service industry represented 86.5% of the GDP in 2001, and the territory, with a highly sophisticated banking sector, has housed the Asian headquarters of many multinational corporations in recent decades.
At a level of US$ 28,800 (2003 estimate) Hong Kong's per capita GDP compares with the level in the four big economies of Western Europe. It is ranked 15th in the world's top GDP - per capita category, outranking Japan (US $28,200), making Hong Kong the richest territorial region in entire Asia continent in terms of GDP - per capita. The GDP of Hong Kong is valued at $213 billion (2003 estimate), and is ranked 39th in top economies in terms of purchasing power parity. GDP growth averaged a strong 5% in 1989-1997. The widespread Asian economic difficulties in 1998 hit this trade-dependent economy quite hard, with GDP down 5%. The economy, with growth of 10% in 2000, recovered rapidly from the Asian financial crisis. The recent global downturn has badly hurt Hong Kong's exports and GDP growth was 2.3% in 2002.
In early 2003, the local economy was hit hard by the outbreak of Severe Acute Respiratory Syndrome (SARS). On June 29, 2003, the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) was signed. CEPA allows Hong Kong service providers in 18 areas to enter the mainland market at least one year ahead of their foreign competitors. The arrangement provides a platform for Hong Kong professionals to practice on the mainland and also allows Hong Kong permanent residents to set up individually owned retail stores in Guangdong Province. GDP growth in 2003 was 3.2%.
On July 28, 2003, the Individual Visit Scheme was started to allow travellers from some cities in mainland China to visit Hong Kong on an individual basis. As a result, the tourism industry in Hong Kong is booming once again.
In 2004, the revival in both external and domestic demand led to a strong upswing in Hong Kong's GDP growth, which surged 8.2% for the year. The domestic sector had completely shrugged off its earlier sluggishness, and, on the competitiveness front, the general weakness of the Hong Kong dollar, coupled with still modest cost and price pressures in Hong Kong, resulted in a strenthening in Hong Kong's external price competitiveness. In addition, Hong Kong's 68-month long deflationary spiral ended in mid-2004, with consumer price inflation hovering at near zero levels towards the end of 2004.
- This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy of Hong Kong".