KNOWLEDGE|
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Economic Development Plans Apart from providing the infrastructure, either through direct services or by cooperation with public utility companies and autonomous bodies, the government's role in the economy remains one of providing a stable framework within which commerce and industry can function efficiently and effectively with a minimum of interference. In keeping with its role of providing a modern and economic infrastructure for Hong Kong, the government in 1989 approved a major infrastructural project. It included the expansion of port facilities; the construction of a new airport on the island of Chek Lap Kok, near Lantau Island; and the building of a road/rail suspension bridge to connect Lantau with the mainland. Private and public sector investment spending on the airport and related infrastructure projects will play an increasingly important role in supporting the economy. The government has no direct powers through which it can control prices, rates of inflation, money supply, or other components of the economy. It intervenes only in response to the pressure of overriding economic or social needs; it does not protect or subsidize manufactured products. The aim of the government's fiscal policy is to maintain a balanced budget, and in all but a few years the government has recorded a budget surplus. Its objective in relation to monetary policy is to provide a favourable environment in the financial sector, with sufficient regulation to ensure confidence and sound business practice but with minimal intervention and impediments. |
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Trend Toward Privatization State ownership in Hong Kong is minimal. The majority of public utilities in Hong Kong such as gas, electricity, and broadcast and transport facilities are privately owned. An increasing trend of privatization has recently occurred in such areas as health care and the water supply. |
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Regional/Special Industry Development There is no government policy to encourage regional or special industry development. |
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Free-Trade Zones Hong Kong is a free port. |
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Financial Services Hong Kong has a sophisticated banking system that provides a full range of financial services. As of August 2005, Hong Kong's banking sector comprised over 180 licensed banks and over 60 deposit-taking banks. In addition, over 160 foreign banks had representative offices in Hong Kong. Because of time differences, business can be conducted in Hong Kong outside of business hours in London and New York. Hong Kong also has an active and soundly regulated stock exchange for raising capital for investment projects. |
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Membership in Trade Blocs Hong Kong is a separate contracting party to the World Trade Organization (WTO) (formerly the General Agreement on Tariffs and Trade-GATT) and is one of the best examples of WTO principles in action. The Multi-Fiber Arrangement (MFA), aimed at the orderly development and expansion of international trade in textiles, formerly provided the framework within which Hong Kong negotiated bilateral restraint agreements with textile importing countries (currently Canada, the European Union, Norway, and the United States). However, when the WTO succeeded GATT, the MFA quotas began to be phased out. This will have a profound effect on Hong Kong's textiles and apparel industry, which produces a significant portion of its exports. On the more positive side, Hong Kong stands to benefit from the WTO. This will strengthen and boost confidence in the multilateral trading system, which is based on most-favored-nation status. |
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Imports Hong Kong is a free port and imposes no general tariff on imported goods. However, some goods are subject to duty if they are imported into Hong Kong. These goods include alcoholic beverages, tobacco, certain hydrocarbons, and methyl alcohol. |
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Exports There are no special incentives for exports. As a free port, Hong Kong keeps its import and export licensing requirements to a minimum. No production or sales taxes are levied in Hong Kong. |
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Trade Barriers As a free port, Hong Kong has never erected import barriers, despite periodic trade imbalances and economic setbacks. However, the territory is required to accept increasing restrictions imposed by countries to which it exports, particularly the United States. |
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Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |
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