Hong Kong is one of the world's most open and dynamic economies. Hong Kong per capita GDP is comparable to other developed countries. In 2008 Hong Kong’s real economic growth slipped to 2.5% as a result of the global financial turmoil. External trade, a significant part of Hong Kong’s economy, was severely hit as Hong Kong’s major trading partners fell into recession in the second half of the year. Domestic demand also slackened amidst declining asset prices and increasing unemployment. The unemployment rate surged to 4.6% in November 2008-January 2009, the highest level since the fourth quarter of 2006. The Hong Kong Government announced it would tap its significant fiscal reserves to fund an economic stimulus package to reinvigorate the economy. The surplus for fiscal year 2008-2009 was estimated at $620.3 million or 0.3% of GDP.
Hong Kong enjoys a number of economic strengths, including a sound banking system, virtually no public debt, a strong legal system, ample foreign exchange reserves and an able and rigorously enforced anti-corruption regime. Hong Kong’s liberal economic system enables it to respond quickly to changing circumstances. It continues to take measures designed to improve its attractiveness as a commercial and trading center, especially after China's entry into the World Trade Organization (WTO), and is continually refining its financial architecture. The government is deepening its economic interaction with the Pearl River Delta in an effort to maintain Hong Kong's position as a gateway to China. These efforts include the conclusion of a free trade agreement with China, known as “the Closer Economic Partnership Arrangement” (CEPA), which applies zero tariffs to all Hong Kong-origin goods and preferential treatment in 40 service sectors. Hong Kong, along with the Macau SAR, is also participating in a new pan-Pearl River Delta trade block with nine Chinese provinces, which aims to lower trade barriers among members, standardize regulations, and improve infrastructure. U.S. companies have a generally favorable view of Hong Kong's business environment, including its legal system and the free flow of information, low taxation, and infrastructure. However, the contracting world economy has affected business sentiment in Hong Kong and the region. The American Chamber of Commerce's annual business outlook survey, released in January 2009, showed only 39% of respondents had a "good" or "satisfactory" outlook for 2009. Survey results, however, suggested a positive economic outlook through 2011.
Information by U.S. Department of State
Hong Kong Gallery
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