Official Name: Hong Kong Special Administrative Region
Internet Domain: .cn (same as China)
International Dialing Code: +852
|Location and Size||Credit and Collections|
|Legal Systems||Business Climate|
|Interesting Facts||Business Protocol|
|Economy||Other Sources of Information|
|Comparative Economic Indicators|
Hong Kong is located in Eastern Asia, bordering the South China Sea and China. Its total area equals 1,104 sq. km. -- six times the size of Washington, DC.
Hong Kong’s government is a limited democracy.
- Chief of State: President of China HU Jintao
- Head of Government: Chief Executive Donald TSANG Yam-kuen
- Cabinet: 15 official members and 14 non-official members
Legislative Branch: unicameral Legislative Council (60 seats; 30 members indirectly elected by functional constituencies, 30 elected by popular vote; members serve four-year terms)
Judicial Branch: Court of Final Appeal in the Hong Kong Special Administrative Region
Hong Kong’s legal system is based on English common law. Its constitution strongly supports private property and freedom of exchange.
- The meaning of “Hong Kong” is “Fragrant Harbor”.
- Hong Kong is among the most densely populated areas of the world.
- The new airport of Hong Kong is on Lantau Island. It is linked to the mainland by the Tsing Ma Bridge, one of the longest suspension bridges in the world.
- Hong Kong has more Rolls Royce’s per person than any other city in the world.
- Hong Kong has the most skyscrapers in the world. Classified as buildings with more than 14 floors, Hong Kong has around 8000, almost double that of New York, its nearest rival.
The Special Administrative Region of Hong Kong, which comprises Hong Kong Island, Kowloon, the New Territories and numerous small islands, is part of the People’s Republic of China. However, it governs its own affairs on a day-to-day basis and enjoys a wide range of freedoms under the territory’s mini-constitution, the Basic Law. Pursuant to an agreement by China and the United Kingdom in 1984, China promised that, under its "one country, two systems" formula, China's socialist economic system would not be imposed on Hong Kong and that Hong Kong would enjoy a high degree of autonomy in all matters except foreign and defense affairs for the next 50 years.
Hong Kong has one of the world’s most prosperous economies, thanks to small government, low taxes, and light regulation. Due to its economic openness with exports and imports representing 350% of GDP, Hong Kong was particularly affected by the global economic and financial crisis. Sound fiscal management has helped Hong Kong manage the global downturn. Hong Kong’s recovery was prompt and in 2010 the economy resumed strong growth, especially thanks to exports stimulated by the growth of China.
Hong Kong has a free market economy highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP.
Leading Markets (2009): China 51.2%, US 11.6%, Japan 4.4%
Leading Exports-commodities: electrical machinery and appliances, textiles, apparel, footwear, watches and clocks, toys, plastics, precious stones, printed material
Leading Suppliers (2009): China 46.4%, Japan 8.8%, Taiwan 6.5%, Singapore 6.5%, US 5.3%
Leading Imports-commodities: raw materials and semi-manufactures, consumer goods, capital goods, foodstuffs, fuel (most is re-exported)
Top Industries: textiles, clothing, tourism, banking, shipping, electronics, plastics, toys, watches, clocks
Top Agricultural Products: fresh vegetables; poultry, pork; fish
|Hong Kong||China||Indonesia||Malaysia||Japan||United States|
|Population growth rate (%)||0.5||0.5||1.1||1.6||-0.2||1.0|
|Age Structure (%)
(15 to 64 years old)
Age Structure (%)
|Unemployment rate (%)||4.6||4.3||7.1||3.5||5.2||9.6|
|Population below poverty line (%)||n/a||2.8||13.3||5.1||15.7||12.0***|
|GDP** (USD billions)||323.3||9,872||1,033.0||416.4||4,338.0||14,720.0|
|GDP real growth rate (%)||5.7||10.3||6.0||7.1||3.0||2.8|
|GDP per capita** (USD)||45,600.0||7,400.0||4,300.0||14,700.0||34,200.0||47,400.0|
|Public debt (% of GDP)||18.2||17.5||26.4||52.6||196.4||58.9|
|Exports (USD billions)||382.6||1,506.0||146.3||192.8||735.8||1,270.0|
|Imports (USD billions)||413.0||1,307.0||111.1||149.2||636.8||1,903.0|
|Reserves of foreign exchange and gold (USD billions)||262.7||2,622.0||83.6||104.1||1,024.0*||130.8*|
|Exchange rate per USD) mm/dd/yyyy||7.8||6.6||8,771.9||3.0||83.1||n/a|
|Exchange rate (per EUR) mm/dd/yyyy||10.6||9.0||11,957.7||4.1||113.2||1.4|
Data from CIA World Factbook
* 2009 estimates
** PPP – Purchasing Power Parity
*** 2004 estimate
ABC-Amega’s collection experience in China
- Be wary of whom you select in Hong Kong to collect debts. There are still Hong Kong companies in the collection industry that utilize gangster-type tactics for which the creditor can be held responsible.
- Law suits are very expensive and legal fees assessed by the Court can be challenged by the loser in the suit.
- In theory, a Winding Up Petition should be able to be prosecuted within months. However, in reality, I have seen some such petitions take as much as 4-5 years to be adjudicated.
Coface Country Rating: A1 -- The political and economic situation is very good. A quality business environment has a positive influence on corporate payment behavior. Corporate default probability is very low on average.
Coface Business Climate Rating: A2 -- The political and economic situation is good. A basically stable and efficient business environment nonetheless leaves room for improvement. Corporate default probability is low on average.
Ducroire Delcredere Political Risk: 1 (lowest risk)
Ducroire Delcredere Commercial Risk: 2 (some risk)
Hong Kong is a free port with virtually no duties or tariffs. Its strong rule of law and respect for property rights make it a strategic platform for companies, especially small- and medium-sized firms, seeking to do business in Asia and particularly in mainland China.
Hong Kong enjoys a high degree of autonomy as a separate customs territory, with no changes to borders, staffing, or technology export controls since the 1997 handover by the United Kingdom to China.
Economic Freedom: Hong Kong’s economic freedom score is 89.7, making it #1 among all the 179 countries ranked in the 2011 Index of Economic Freedom. (The United States is ranked 9th. China is ranked 135th.) Business freedom in Hong Kong is well protected.
Ease of Doing Business: According to the 2011 Doing Business report of The World Bank, Hong Kong is ranked #2 in the ease of doing business. Singapore is ranked #1; the United States is ranked #5; China is ranked 79th. 183 countries were ranked from #1 (very easy to do business) to #183 (very hard to do business).
Market Access: Hong Kong’s weighted average tariff rate was 0 percent in 2009. However, restrictive pharmaceuticals regulation, market access restrictions for some services, and food and energy labeling regulations do add to the cost of trade.
There are no limits on foreign ownership and no screening or special approval procedures to set up a foreign firm except for certain legal services and in broadcasting.
Regulatory System: Business freedom in Hong Kong is well protected within an efficient regulatory framework. The bureaucracy is efficient. Bureaucratic and regulatory transparency, along with the overall environment, is conducive to doing business.
Intellectual Property Rights: Despite government public awareness campaigns, pirated and counterfeit products such as CDs, DVDs, software, and designer apparel are sold openly. Pressure has been building for changes in the Copyright Ordinance.
Exchange Control: Since the Hong Kong dollar maintains a fixed exchange rate with the U.S. dollar, interest rates and currency movements follow trends in the United States. Foreign capital receives domestic treatment, and foreign investment is strongly encouraged. There are no controls or requirements on current transfers, access to foreign exchange, or repatriation of profits.
Corruption: Corruption is perceived as minimal. Giving or accepting a bribe is a criminal act. Business malpractice and corruption are serious crimes. Hong Kong scored 8.4 in Transparency International’s Corruption Perceptions Index for 2010 (1 is completely corrupt; 10 is very clean). This makes them the 13th “cleanest” country out of the 178 countries rated. (China was rated 3.5 – 75th ranking. The U.S. rated 7.1 – 22nd ranking.
Hong Kong City is a highly developed business city with a well-established code of business conduct.
Hong Kong business people prefer a no-nonsense approach in business negotiations. It is therefore not necessary to “beat around the bush.” People will come to you when they have a real business need. Business discussions should therefore be straightforward, clear and to-the-point. While relationships (guanxi) can play a role in some situations, it is increasingly the company that offers a better deal (in terms of price, quality, time-to-market, etc.) that is able to win the deal.
More information on Business Protocol: Executive Planet
Doing Business in Hong Kong and Macau: 2010
Country Commercial Guide of U.S. Commercial Service
Hong Kong Economic and Trade Offices:
This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including Hong Kong. For further information, contact [email protected].
This report represents a compilation of information from a wide variety of reputable sources.
Comparative Economic Indicators: CIA World Factbook
Exchange Rates: OANDA.com The Currency Site.
Other information is provided by sites including FITA.