Overview

Situated at the south-eastern tip of China, Hong Kong is ideally positioned at the centre of East Asia, one of the world's most dynamic regions. With a total area of just under 1 100 square kilometres, it covers Hong Kong Island, the Kowloon peninsula and the New Territories, including 235 outlying islands.

Hong Kong has no natural resources, except a deep-water harbour and an industrious population of 6.78 million. A hardworking, flexible and well-educated workforce of three million, coupled with entrepreneurial flair, is the bedrock of Hong Kong's productivity and creativity.

Described as a 'barren rock' 150 years ago, Hong Kong has since grown into a world-class financial, trading and business centre. It is the world's 10th largest trading economy and the 10th largest exporter of services.

Hong Kong advocates and practises free trade. Its economy is nurtured by a government policy of maximum support and minimum intervention. Its taxes are low and simple.

Hong Kong has a trusted legal system and an independent judiciary, which ensures that the rule of law is upheld and that no one is above the law.

Hong Kong became a Special Administrative Region of the People's Republic of China on 1 July, 1997, after a century and a half of British administration. Under Hong Kong's constitutional document the Basic Law, the existing economic, legal and social systems will be maintained for at least 50 years after 1997.

Economy of Hongkong, China

The Economy of Hongkong, China went through an eventful year in 1997. The Gross Domestic Product (GDP) registered accelerated growth, to 5.7 per cent in the first quarter and further to 6.9 per cent in the second quarter. The growth momentum was sustained into the third quarter, albeit at a somewhat slower rate of 6.1 per cent. An abrupt setback in economic growth to 2.8 per cent in the fourth quarter was recorded. Yet given the strong performance in the first three quarters, GDP for 1997 as a whole still grew by 5.3 per cent, higher than the 4.6 per cent growth in 1996.

In 1997 per capita GDP was over US$26,000. With the growth rate of 3 per cent for the population, per capital GDP grew by 2.2 per cent in real terms in 1997. The per capita GDP for 1997 is 9.6 per cent higher in money terms than the per capita GDP for 1996.

Trade

In 1997, Hongkong, China was the world¡¯s eighth-largest trading entity in terms of value of merchandise trade. External trade of Hongkong, China experienced a moderate growth in 1997, with total merchandise trade amounted to HK$3,071 billion, up 4.7 per cent from 1996.

Re-exports recorded a 5.0 per cent growth in 1997, reflecting the continued importance of Hongkong, China as an entrepot for the Mainland of China. The gross total value of re-exports was HK$1,244.5 billion. Domestic exports continued to be affected by the ongoing structural shift in the composition of exports of Hongkong, China from domestic exports to re-exports and registered a 0.4 per cent decrease, totaling HK$211.4 billion in value. Import rose by 5.2 per cent to HK$1,615.1 billion.

In 1997, total trade of Hongkong, China with APEC member economies increase by 5.0 per cent in value terms to HK$2,467.0 billion.

Financial and Monetary Affairs

Some 475 authorised institutions and local representative offices of banks from more than 40 countries conduct business in Hongkong, China. The presence of 79 of the world¡¯s top 100 banks and 156 foreign-owned banks in Hongkong, China has helped promote the territory as an international financial centre.

Employment

In 1997, total employment of Hongkong, China reached 3.1 million, of whom 61 per cent were males and 39 per cent were females.

Labour force of Hongkong, China showed a notable growth in 1997. In 1997, the labour force grew by 3.9 per cent over 1996. The unemployment rate for 1997 was 2.2 per cent while the underemployment rate was 1.2 per cent, compared with 2.8 per cent and 1.7 per cent respectively in 1996.

Of the employed in 1997, the majority (79.3 per cent) were engaged in the service sector - 33.5 per cent in wholesale, retail and import/export trades, restaurants and hotels, 11.3 per cent in transport, storage and communications; 12.9 per cent in financing, insurance, real estate and business services; and 21.6 per cent in community, social and personal services. About 9.8 per cent worked in the manufacturing sector.

Travel and Tourism

Travel and Tourism was among the largest foreign exchange earners of Hongkong, China in the service industries. Total visitor arrivals in Hongkong, China in Jan - Nov 1998 were 8.6 million, down by 9.7 per cent compared with the same period last year. The largest number of visitors were from China, Taiwan, Japan and Southeast Asia.

Visitor spending alone in Jan-Sep 1998 amounted to $37.8 billion, a fall of 29.7 per cent year-on-year.

Climate

Hong Kong¡¯s climate is sub-tropical, tending towards the temperate for nearly half the year. In spring, it can be very pleasant although there are occasional spells of high humidity. Fog and drizzle can be particularly troublesome on high ground which is exposed to the southeast, and air traffic and ferry services are occasionally disrupted because of reduced visibility. It is hot and humid in summer with occasional showers, thunderstorms and even typhoons. Afternoon temperatures often exceed 31 C whereas at night, temperatures generally remain around 26 C with high humidity. Many people regard November and December as the best months of the year in Hongkong, China when there are pleasant breezes, plenty of sunshine and comfortable temperatures. In winter, there are occasional cold fronts followed by dry northerly winds. It is not uncommon for temperatures to drop below 10 C in urban areas.

Population

The population of Hongkong, China passed the six million figures for the first time in 1994. There were 6,617,100 people in the territory at the end of 1997, comprising 3,327,000 males and 3,290,100 females. This represented an increase of 3 per cent, from the population estimate at the end of 1996.

Geography

Hongkong, China has a total land area of 1,096 square kilometres. The main urban areas are on Hong Kong Island and Kowloon Peninsula - on either side of the Victoria Harbour. Beyond the urban areas is the New Territories, consisting mainly of the land north of Kowloon up to the border with China, in which the new towns are developed.

The topography of Hongkong, China is characterised by steep granitic and volcanic mountains. The highest peak is Tai Mo Shan (957 metres), located in central New Territories. Four other peaks exceed 750 metres, all on Lantau Island. Victoria Peak, the highest on Hong Kong Island and best known as a major tourist attraction, is ranked 18th in the territory with an elevation of 554 metres.

Language

In addition to the Chinese language, English is also used as official language in Hongkong, China. Cantonese is the most commonly-spoken dialect in the territory among the local Chinese community, while Putonghua has gained popularity. English is used not only by the expatriate community, but also by a wide cross-section of the local community in commercial, financial and professional circles.

Currency

The Hong Kong dollar is freely convertible. It has been linked to the US dollar at the rate of HK$7.80 to US$1 under a linked exchange rate system since October 1983. It is a currency board system and the monetary base is fully backed by foreign reserves. There is no control of the movement of capital into and out of Hongkong, China for any purpose.