Hong Kong


Hong Kong Country profile

December 2016

Hong Kong has a more favourable business climate, income per capita and a stronger growth record than most other advanced economies. Creditworthiness is on par with most of its developed peers.


Economic outlook

Hong Kong’s strategically located service-based economy is a leading financial hub. As the international gateway to China, it has reaped benefits from strong Chinese growth. But the economy is heavily reliant on exports, leaving it vulnerable to swings in global demand and volatility in financial markets.

Softer Chinese demand and ongoing weakness across the rest of the globe has weighed on growth. The outlook is expected to improve, mirroring improvements in the world economy. But China’s economic slowdown and rebalancing will continue to weigh on exports in the medium term. The currency is pegged to the USD—which is expected to appreciate with tighter US monetary policy—adding further risk to exporter incomes. Growth is expected to average 2.6% p.a., stronger than the 2.1% average across most other advanced economies.

The overvalued real estate market poses risks to financial stability and growth. To keep a lid on property prices, the government has raised down-payment ratios on residences, pledged to increase land supply, and placed a 30% tax on overseas buyers.


Per capita income has risen steadily over the last decade and is projected to reach Holland’s current level by 2018.


Business climate

Hong Kong enjoys an investment grade credit rating and an OECD country credit grade of 1. This suggests a relatively low likelihood that it will be unable or unwilling to meet its external debt obligations in a systemic sense (though, needless to say, individual debtors can and do default).


The business climate generally outperforms most other advanced economies. Hong Kong ranks 4 out of 190 economies on the World Bank’s ease of doing business gauge—which measures regulation and red tape relevant to a domestic small to mid-sized firm. An efficient and transparent regulatory framework, low and simple taxation, and sophisticated capital markets are features of the economy.


Hong Kong scores well on most areas of governance. It was transferred from the UK to China in 1997 to become China’s first special administered region. As such, governance is largely based on the British colonial system—with the chief executive (equivalent to the governor general under the colonial system) responsible for Hong Kong. The Chief Executive is appointed by Beijing.  


Bilateral relations

Hong Kong is Australia’s 13th largest trading partner. Australian exports of goods and services were valued at US$11.3b in 2015-2016 made up of gold, telecommunications equipment, and fruits and nuts.  Australia is an important source of wine for Hong Kong's hotel and restaurant sector, fresh and chilled seafood, vegetables and dairy. Imports of goods and services from Hong Kong were worth US$4b comprised mainly of transport services and professional, technical and other business services.


Major Australian companies in Hong Kong include Leighton Asia (construction), Telstra International Group (telecommunications) and AME Group (mining). There are also several Australian SMEs that export to Hong Kong including NGIS (software) and ANCA(manufacturing).

Service exports to Hong Kong reached A$2.4b in 2015-2016 (3.3% of total service exports) of which A$600m was from transport and A$550m from tourism. Tourist arrivals exceeded 230,000 in 2016 and tourism Australia expects inbound tourism from Hong Kong will be worth A$1b by 2020.


Student enrolments are starting to recover as the weaker AUD is enticing students back to Australia following a lull over much of the last decade. Although a growing preference for British education have weighed on student enrolments.


Hong Kong’s investment in Australia has risen steadily following the retrenchment in the wake of the global financial crisis. Hong Kong is Australia’s 6th largest source of foreign investment with Investments spread across electricity, food processing, light industry, insurance, engineering, hotels, telecommunications, electronic devices and biotechnology industries.


Australian investment in Hong Kong was worth A$50b at the end of 2015, equivalent to 2.4% of Australia’s international investment portfolio. Investment is concentrated in banking and finance; construction and engineering; health and medical services; telecommunications; insurance; legal services; education; information technology; consulting; logistics; and transport.

Useful links

Department of Foreign Affairs

Country brief


Market Profile

Asialink Business

Market profile