Hong Kong 2017 Economic Report

Throughout 2017, the global economic landscape continued to improve. Hong Kong’s economy grew by 3.8% in real terms, up from 2.1% growth in 2016. Hong Kong’s total exports of goods and exports of services registered a growth of 5.9% and 3.5% respectively in real terms in 2017. Domestic demand remained resilient. Full employment, coupled with the positive wealth effect, drove strong consumer confidence.

Hong Kong is the most important entrepôt of Mainland China. According to the HKSAR government statistics, 58% of re-exports were of China origin and 54% were destined for China in 2017. According to China's Customs statistics, Hong Kong is the third largest trading partner of China after the United States and Japan, accounting for 7% of its total trade in 2017. Mainland China was the largest des-tination 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 2017, 1,051 mainland companies were listed in Hong Kong, comprising H-share, red-chip and private companies, with total market capitalisation of around US$ 2.9 trillion, or 66% of the market total. In April 2018, the People’s Bank of China announced that China would quadruple the daily quota on the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connect schemes from 1st May 2018, a move that could increase integration of China’s onshore and offshore stock market trading. The daily southbound quota would be increased to RMB 42 billion whereas the daily northbound quota would be increased to RMB 52 billion.

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