Hong Kong has a free market economy, highly dependent on international trade and finance. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.
The world’s 5th-largest exporter, Hong Kong shipped US$516.6 billion worth of products around the globe in 2016. It is currently the 7th largest exporter. Below is a list showcasing 15 of Hong Kong’s top trading partners in terms of exports sales. That is, countries that imported the most Hong Kong shipments by dollar value during 2016. Also shown is each import country’s percentage of total Hong Kong exports.
Almost nine-tenths (87.8%) of Hong Kong exports in 2016 were delivered to the above 15 trade partners.
Israel is Hong Kong’s second largest export market in the Middle East after the UAE – $4.44 billion (8%). Major export items included pearls, precious & semi-precious stones (65.3% share), telecom equipment & parts (11.4%), and electrical apparatus for electrical circuits (2.5%).
The top exports of Hong Kong are Integrated Circuits ($96.9B), Gold ($53.5B), Telephones
($50.9B), Broadcasting Equipment ($23.6B) and Office Machine Parts ($20.4B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Integrated Circuits ($81.4B), Telephones ($40.5B), Broadcasting Equipment ($34.5B), Gold ($29.4B) and Computers ($22.2B).
The world’s 5th-largest importer, Hong Kong imported US$547.1 billion worth of goods from around the globe in 2016, up by 55.3% since 2009 but down by -2.2% from 2015 to 2016.
Hong Kong’s top 10 imports accounted for over four-fifths (84.8%) of the overall value of its product purchases from other countries.
Hong Kong imports represent 3.3% of total global imports which totaled $16.473 trillion one year earlier in 2015.
From a continental perspective, 80.7% of Hong Kong’s total imports by value in 2016 were purchased from other Asian countries. European trade partners supplied 10.4% of import sales to Hong Kong while 5.6% worth originated from North America.
Import by country:
The following product groups represent the highest dollar value in Hong Kong’s import purchases during 2016. Also shown is the percentage share each product category represents in terms of overall imports into Hong Kong.
Benefiting from accelerating purchases of gold, diamonds and jewelry, gems and precious metals represent the fastest-growing import category for Hong Kong from 2009 to 2016, up 174.2. In second place was electrical machinery and equipment which appreciated by 88.9%, followed by imported clocks and watches (up 64.1%).
Leading the decliners was knit or crochet clothing and accessories via its -35.5% decrease in value, followed by imported mineral fuels including oil which depreciated by -16.5%.
Relevant sectors for Israel: financial technology, insurtech, healthtech, Artificial Intelligence, Cyber and Internet of Things (IoT).
Agreements & Regulations
Hong Kong follows a free trade policy and hence maintains basically no barriers on trade. There is no customs tariff on goods imported into or exported from Hong Kong. Import and export licensing are kept to a minimum. Most products do not need licenses to enter or leave Hong Kong, and where licenses or notifications are required, they are only intended to fulfill obligations under various international undertakings, or to apply for public health, safety or security reasons.
Hong Kong is a member of the following trade bodies:
Hong Kong has signed six Free Trade Agreements, respectively with the Mainland of China (June 2003), New Zealand (March 2010), the Member States of the European Free Trade Association (EFTA) (June 2011), Chile (September 2012), Macao (October 2017) and the Association of Southeast Asia Nations (ASEAN) (November 2017). Hong Kong is now negotiating FTAs respectively with Georgia, Maldives and Australia.
Hong Kong has been endeavoring to sign Investment Promotion and Protection Agreements (“IPPAs” or “Investment Agreements”) with foreign economies in order to enhance two-way investment flows and boost our economy. Hong Kong’s IPPAs give additional assurance to overseas investors that their investments in Hong Kong are protected, and enable Hong Kong investors to enjoy similar protection in respect of their investments overseas.
Hitherto, Hong Kong has signed 20 IPPAs with foreign economies.