Annual Economic Report: Hong Kong 2018

The Hong Kong economy grew by 3% for 2018 as a whole. Growth remained strong at 4.1% on a year-on-year basis in the first half of 2018 but decelerated to 2.8% in the third quarter and further to 1.3% in the fourth quarter of 2018 owing to the US-Mainland trade tensions and US interest rate hikes.

Hong Kong is the most important entrepôt of Mainland China. According to the HKSAR government statistics, 57% of re-exports were of China origin and 55% were destined for China in 2018. According to China's Customs statistics, Hong Kong is the fourth largest trading partner of China after the US, Japan and South Korea, accounting for 6.7% of its total trade in 2018. In 2017, Mainland China was the largest destination for Hong Kong's outward direct investment and the second largest investor country in Hong Kong.

Hong Kong is also a key offshore capital-raising centre for Chinese enterprises. As of December 2018, 1,146 mainland companies were listed in Hong Kong, comprising H-share, red-chip and privatecompanies, with total market capitalisation of around US$2.6 trillion, or 68% of the market total. Since 1993, mainland companies have raised more than US$800 billion via stock offerings in Hong Kong.

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