On July 1, 1997, Hong Kong became part of China again, having previously been the last British colony in the region. Long before the takeover, Chinese leaders declared that the capitalist system would continue in Hong Kong. The trade union movement HKCTU is a strong force that defends the rights and democracy of employees. In recent years, protests in Hong Kong have increased, many people are demanding increased democracy and an end to policing. Several trade unionists have taken part in the protests.
Hong Kong developed into one of the world’s largest trading centers after World War II. The annual per capita income of US $ 38,420 (2013) is one of the highest in Asia. The rapid development of a labor-intensive export industry was facilitated by the influx of entrepreneurs and workers who fled from mainland China to Hong Kong in the 1950s. However, Hong Kong’s international competitiveness and dynamic economic development were called into question at the end of the 1970s by rising wage and property costs and the protectionism of Western trading partners. This crisis coincided with China’s opening up to foreign trade, which offered opportunities for economic integration with mainland China’s economy. From 1979 onwards, high levels of foreign investment flowed into southern China from and via Hong Kong; most of the manufacturing industry was relocated to the mainland. At the same time, China became the largest investor in Hong Kong. For example, China also invested in the construction of roads, tunnels and docks. See abbreviationfinder.org for acronyms about Hong Kong.
After an annual real GDP growth of 7.7% in the years 1980-88, there were considerable slumps as a result of the Asian financial crisis of 1997. After an average GDP growth of only 2% in the years 2001-03, the GDP- Growth can be increased to (2013) 3.0%.
Foreign trade: As a financial and trade center, Hong Kong is particularly dependent on foreign trade, in particular on its production base on the mainland. Raw materials and semi-finished products are transported to China for further processing with a contractual agreement on subsequent reimportation to Hong Kong. This makes China by far Hong Kong’s most important trading partner, with re-exports making up a large proportion of total exports (2012: 98.3%). The USA is the second most important buyer country for exports; Japan ranks third. The most important imports (2012) – apart from China (45.5%) – came from Japan (7.7%), Singapore (6.3%) and the USA (6.0%).
The agricultural sector is insignificant (2012) with a share of 0.1% of GDP. The major part of the food requirement (especially rice, the most important staple food) is imported from the mainland. However, 59.5% of the demand for live poultry is still obtained in Hong Kong itself and around 45.7% of the fish supply in Hong Kong’s marine environment.
In the course of the outsourcing of large parts of industrial production, the contribution of industry to GDP fell from 36% in 1979 to 7% in 2012. The textile and electronics industries are among the largest industries and foreign exchange providers in the manufacturing sector, as long as there are no re-exports of goods produced in China. About 75–80% of all manufacturing companies have production facilities in China (the New Territories are bordered by the Chinese province of Guangdong with the Shenzhen Special Economic Zone). Hong Kong is characterized by the low number of employees in the manufacturing sector, averaging 10 people.
By outsourcing most of its industrial production to southern China, Hong Kong is concentrating on its function as a trade, financial and service center for China and the East Asian region. In addition, air transport, computer services, banks, insurance, etc. are important branches of this area. The high share of (2012) 80% of employees in this sector and 93% of GDP makes the structural change clear. Hong Kong has developed into the most important exhibition and convention center in the Asia-Pacific region. It is also the location of numerous regional headquarters for foreign companies, primarily from the USA and Japan.
Tourism: With 48.6 million visitors in 2012, including 34.9 million tourists from the mainland, tourism is of outstanding importance for the economy with its high foreign exchange income.
Because of the limited space, there are many traffic problems in Hong Kong. The main load of passenger traffic is handled by buses, the state railroad and the underground (constant expansion). Hong Kong ranks third in the world in container shipping. The expansion of the infrastructure funded by Hong Kong (new construction of the airport and seaport, construction of the Ting Kau Bridge [1,177 m long; completion 1998] and the two-story Tsing Ma Bridge [road and rail bridge, span 1,377 m, Completion 1997]) should add to Hong Kong’s further attractiveness for foreign capital. Off the island of Lantau, around 25 km from Kowloon, the new Chek Lap Kok airport was built on a 1,248 hectare platform (commissioned in 1998 after seven years of construction), which replaced Kai Tak Airport (Kowloon), which had reached its capacity limits at the time and was also difficult to navigate. An approximately 50 km long bridge and tunnel connection between the two special economic zones Hong Kong (from the northwest of Lantau Island) and Macau and on to Zhuhai has been under construction since 2009; A connection is also planned between Chep Lap Kok Airport and Tuen Mun in the New Territories.