Economic trends
After the prompt and vigorous economic recovery of 2010 and sustained growth in the first quarter of 2011, the economy nearly reentered recession, Hong Kong suffering the effects of the European crisis. Due to the slowdown of the Chinese economy and the likely new recession in Europe, forecasts for 2012 are not optimistic.
The government rarely intervenes in the economic sphere, but due to political pressure, it has been asked to adopt measures protecting the poor and to fight against inflation. The latter has reached 7% in the summer of 2011, but it should decrease again in 2012, with inflation declining in China and property prices having again stabilized. A minimum wage has been introduced. The government seeks to strengthen Hong Kong's role as a global warehouse, focusing on financial services, logistics, tourism and professional services, and to develop six other sub-sectors as pillars of the economy. The cooperation agreement signed with China gives Hong Kong companies easier access to services in China. Reducing pollution is another key concern.
The economic crisis has lead to the deterioration of the labor market, particularly in the financial services. However, the unemployment rate has again decreased and remains at a historical minimum (slightly above 3%). Hong Kong must nevertheless deal with high levels of social inequality.
Main branches of industry
Since the agricultural sector is almost non-existent, Hong Kong has to import 80% of its food supplies. Hong Kong does not have any natural resources and depends entirely on imports of raw materials and power. Agriculture contributes practically nothing to the economy.
The manufacturing Industry's contribution to the GDP is also very low. The country's main industrial sectors are textiles, electronic components and household appliances, computer technology and communications.
The tertiary sector, particularly financial services, is the heart of economic activity. It contributes around 90% of the GDP and employs over 85% of the active population. Hong Kong is a services center for Asian companies, especially those that trade with China. According to recent figures published by the Commercial Register, there are over 900,000 companies registered in Hong Kong. The tourism industry is booming. mainly due to an exponential increase in the number of visitors from mainland China.
International trade
Hong Kong's economy is considered a model of capitalism because of its dedication to free trade.Trade represents more than 413% of the GDP (2008-2010 average) . Hong Kong is one of the fifteen top exporters of trade services and the first fifteen trade-based economies in the world.
Foreign trade was pursued intensively during these past years. Structurally in a deficit, the trade balance of Hong Kong has worsened due to the quicker rise in imports. Exports fell in 2011, especially to the United States, further deepening the trade deficit. The situation is not likely to improve in 2012 due to the unfavorable international context.
The island's main trade partners are China, Southeast Asia and Japan.
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Last updates: May 2012
