Hong Kong

1
Hong Kong World's Freest Economy

2
Hong Kong key economic data

• Population 6.9 mn (mid-2005)
• Per capita GDP US24,100 (2004)
• Nominal GDP US166 billion (2004)
• Total trade in goods US530 billion (2004)
• Total trade in services US84 billion (2004)
• Economic growth 7.3 (2005Q1-Q3)
• Consumer price inflation 1.0 (Jan-Oct
  2005)
• Unemployment rate 5.3 (Aug-Oct
  2005)

3
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

4
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

5
FDI Inflows of 10 Neighbouring Economies in Asia
(USbillion)
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
6
Latest Inward Investment Data

• World Investment Report 2005
• Hong Kong - 2nd largest recipient of FDI in
  Asia, 7th in world

• Inflow of FDI in Hong Kong
• Year 2002 2003 2004 2005(Q1-Q2)
• Amounts (USbillion) 9.7 13.6 34.0 19.8

preliminary figures Sources UN Conference on
Trade and Development 2005 Census
and Statistics Department
7
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

RHQsROs 3 119 3 207 3 609 3 798 5.2
RHQsROsLOs 4 867 5 414 5 943 6 272 5.5
Source Report on 2005 Annual Survey of Regional
Offices Representing Overseas Companies in HK
8
3,798 Regional Operation Centres
Source Report on 2005 Annual Survey of Regional
Offices Representing Overseas Companies in HK
9
Hong Kong - 10 Key Advantages

• Rule of law
• Unrivalled location
• Low and simple taxes
• Worlds freest economy
• Clean government
• Free flow of information
• World class infrastructure
• Skilled workforce
• International lifestyle
• Gateway to the Mainland

10
Investment projects completed by Invest Hong Kong

• 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.

11
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

12

• www.info.gov.hk
• www.info.gov.hk/hkecon/press/index.htm
• www.investhk.gov.hk