Hong Kong –World's Freest Economy
Hong Kong – key economic data
Population 6.9 mn (mid-2005) Per capita GDP US$24,100 (2004)Nominal GDP US$166 billion (2004)Total trade in goods US$530 billion (2004)Total trade in services US$84 billion (2004)
Economic growth 7.3% (2005Q1-Q3)Consumer price inflation 1.0% (Jan-Oct 2005)Unemployment rate 5.3% (Aug-Oct 2005)
Hong Kong - a global trading hub
• Economic freedom and free trade are what make it possible for 6.9mn people to have a high standard of living in a small city with very little natural resources
• For decades, Hong Kong is at the forefront of globalization
“ Big market, small government”
• Excellent infrastructure & flexible markets
• Good governance and regulatory framework
• Freedom of entry; open competition; level playing field
• Business leads, government facilitates
• Continuous economic restructuring
FDI Inflows of 10 Neighbouring Economies in Asia (US$billion)
2002 2003 2004
1 Mainland China (52.7)
Mainland China (53.5) Mainland China (60.6)
2 Hong Kong (9.7) Hong Kong (13.6) Hong Kong (34.0)
3 Japan (9.2) Singapore (9.3) Singapore (16.1)
4 Singapore (5.8) Japan (6.3) Japan (7.8)
5 India (3.4) India (4.3) S.Korea (7.7)
6 Malaysia (3.2) S.Korea (3.8) India (5.3)
7 S.Korea (2.9) Malaysia (2.5) Malaysia (4.6)
8 Philippines (1.8) Brunei (2.0) Taiwan (1.9)
9 Taiwan (1.4) Thailand (1.9) Vietnam (1.6)
10 Vietnam (1.2) Vietnam (1.5) Thailand (1.1)
Sources: UN Conference on Trade and Development 2005
Latest Inward Investment Data
• World Investment Report 2005: Hong Kong - 2nd largest recipient of FDI in Asia, 7th
in world
*preliminary figures Sources: UN Conference on Trade and Development 2005 Census and Statistics Department
•Inflow of FDI in Hong Kong
Year 2002 2003 2004 2005(Q1-Q2)Amounts (US$billion) 9.7 13.6 34.0 19.8*
Regional Operations in Hong Kong
2002 2003 2004 2005 % Change
(2004 – 2005)
RHQs 948 966 1 098 1 167 +6.3
ROs 2 171 2 241 2 511 2 631 +4.8
LOs 1 748 2 207 2 334 2 474 +6.0
RHQs+ROs 3 119 3 207 3 609 3 798 +5.2
RHQs+ROs+LOs 4 867 5 414 5 943 6 272 +5.5
Source: Report on 2005 Annual Survey of Regional Offices Representing Overseas Companies in HK
3,798 Regional Operation Centres
Source: Report on 2005 Annual Survey of Regional Offices Representing Overseas Companies in HK
262
204
115
107
75
33
49
45
38
54
168
606
537
215
160
139
133
110
103
73
68
50
437
17
0 100
200
300
400
500
600
700
800
900
1000
The United StatesJapan
The United KingdomThe mainland of China
GermanyTaiwanFrance
SingaporeSwitzerland
Republic of KoreaThe Netherlands
Others
Number of companies that are regional headquarters Number of companies that are regional offices
Hong Kong - 10 Key Advantages
• Rule of law• Unrivalled location• Low and simple taxes• World’s freest economy• Clean government• Free flow of information• World class infrastructure• Skilled workforce• International lifestyle• Gateway to the Mainland
•Inward investment projects completed by Invest Hong Kong
2002 2003 2004 2005 (Q1-Q3)
No of projects: 117 142 205 204
•About 16% of the completed projects in first 9 months of 2005 involved Mainland investments.
Investment projects completed by Invest
Hong Kong
Mainland and Hong Kong Closer Economic Partnership Arrangement
(CEPA)
• With the implementation of CEPA, Hong Kong's attractiveness to foreign investors was further strengthened.
• Out of the 204 investment projects completed by Invest Hong Kong in first 9 months of 2005, - 30 companies said they invested because of CEPA- 56 companies said it was a contributing factor
www.info.gov.hkwww.info.gov.hk/hkecon/press/index.htm
www.investhk.gov.hk