Page 134 - 2021 Special Report
P. 134
Hong Kong
The Economy 2020, sharing about 75% of the world’s RMB
clearing activities2.
Situated at the southeastern tip
of China, Hong Kong Meanwhile, Hong Kong's stock market was
is at the center of East Asia. Since its return to ranked the 3rd largest in Asia and the 5th largest
China in 1997, the special administrative region in the world in terms of market capitalization as
has followed the “One Country, Two Systems” of September 20203. There were 2,560 companies
policy under the Basic Law, its mini-constitution. listed on HKEX4 and the total market capitalization
Hong Kong is considered one of the world’s freest of Hong Kong's stock market reached US$5.37
economies, and under its laissez-faire system trillion. In more recent years, the size of Hong
its financial sector has developed into a regional Kong’s asset management market has been rising,
center. In addition, Hong Kong continues to play particularly with the help of a growing number of
a significant role as a portal for Mainland China’s high-net worth individuals settling in Hong Kong. In
merchandise and capital flows. 2019, the total asset under management (AUM) of
funds registered for sales in Hong Kong expanded
According to the UNC TAD World Investment by 20.0%YoY to USD3.7t5, with comparable growth
Report 2020, global FDI inflows to Hong Kong among key categories such as equity, bond, and
amounted to US$68b in 2019, ranking 7th globally mixed-asset funds.
and behind only Mainland China (US$141b) and
Singapore (US$92b) in Asia. In terms of outflows, Hong Kong follows a free trade policy and hence
Hong Kong ranked 7th with US$59b, after Japan maintains basically no barriers to trade: there
(US$227b) and Mainland China (US$117b) in Asia. are no customs tariffs on goods imported into
Most of these investment flows, remarkably, are or exported from Hong Kong. Import and export
due to its position as a portal to investment flows licensing is kept to a minimum. Most products do
into and out of Mainland China. Thanks partly to not need licenses to enter or leave Hong Kong
this proxy position, Hong Kong also had one of the and where licenses or notifications are required,
world’s largest inward FDI stocks in 2019. they are only intended to fulfill obligations under
various international agreements, or to maintain
According to the Bank for International public health, safety or security. Therefore, while
Settlements, Hong Kong was the largest foreign much of Hong Kong’s indigenous manufacturing
exchange market in Asia and the 3rd largest in capacity has moved to the mainland since the
the world in April 2019, with the net daily average 1980s, it remains a trade hub with a significant
turnover of forex transactions reaching US$691b 1. This share of merchandizing, transshipment, and trade
is in part due to Hong Kong’s position as a hub facilitation in the region.
for offshore RMB. According to SWIFT, Hong Kong
is the largest RMB clearing center in September 2 https://www.swift.com/swift-resource/249626/down-
load
1 https://www.bis.org/statistics/rpfx19_fx_annex.pdf 3 https://focus.world-exchanges.org/issue/october-2020/
market-statistics
4 https://www.hkex.com.hk/eng/services/trading/securi-
ties/securitieslists/ListOfSecurities.xlsx
5 https://www.sfc.hk/edistributionWeb/gateway/EN/
news-and-announcements/news/doc?refNo=19PR73
134
The Economy 2020, sharing about 75% of the world’s RMB
clearing activities2.
Situated at the southeastern tip
of China, Hong Kong Meanwhile, Hong Kong's stock market was
is at the center of East Asia. Since its return to ranked the 3rd largest in Asia and the 5th largest
China in 1997, the special administrative region in the world in terms of market capitalization as
has followed the “One Country, Two Systems” of September 20203. There were 2,560 companies
policy under the Basic Law, its mini-constitution. listed on HKEX4 and the total market capitalization
Hong Kong is considered one of the world’s freest of Hong Kong's stock market reached US$5.37
economies, and under its laissez-faire system trillion. In more recent years, the size of Hong
its financial sector has developed into a regional Kong’s asset management market has been rising,
center. In addition, Hong Kong continues to play particularly with the help of a growing number of
a significant role as a portal for Mainland China’s high-net worth individuals settling in Hong Kong. In
merchandise and capital flows. 2019, the total asset under management (AUM) of
funds registered for sales in Hong Kong expanded
According to the UNC TAD World Investment by 20.0%YoY to USD3.7t5, with comparable growth
Report 2020, global FDI inflows to Hong Kong among key categories such as equity, bond, and
amounted to US$68b in 2019, ranking 7th globally mixed-asset funds.
and behind only Mainland China (US$141b) and
Singapore (US$92b) in Asia. In terms of outflows, Hong Kong follows a free trade policy and hence
Hong Kong ranked 7th with US$59b, after Japan maintains basically no barriers to trade: there
(US$227b) and Mainland China (US$117b) in Asia. are no customs tariffs on goods imported into
Most of these investment flows, remarkably, are or exported from Hong Kong. Import and export
due to its position as a portal to investment flows licensing is kept to a minimum. Most products do
into and out of Mainland China. Thanks partly to not need licenses to enter or leave Hong Kong
this proxy position, Hong Kong also had one of the and where licenses or notifications are required,
world’s largest inward FDI stocks in 2019. they are only intended to fulfill obligations under
various international agreements, or to maintain
According to the Bank for International public health, safety or security. Therefore, while
Settlements, Hong Kong was the largest foreign much of Hong Kong’s indigenous manufacturing
exchange market in Asia and the 3rd largest in capacity has moved to the mainland since the
the world in April 2019, with the net daily average 1980s, it remains a trade hub with a significant
turnover of forex transactions reaching US$691b 1. This share of merchandizing, transshipment, and trade
is in part due to Hong Kong’s position as a hub facilitation in the region.
for offshore RMB. According to SWIFT, Hong Kong
is the largest RMB clearing center in September 2 https://www.swift.com/swift-resource/249626/down-
load
1 https://www.bis.org/statistics/rpfx19_fx_annex.pdf 3 https://focus.world-exchanges.org/issue/october-2020/
market-statistics
4 https://www.hkex.com.hk/eng/services/trading/securi-
ties/securitieslists/ListOfSecurities.xlsx
5 https://www.sfc.hk/edistributionWeb/gateway/EN/
news-and-announcements/news/doc?refNo=19PR73
134
