The Economy 1 47
Economic Links between Hong Kong and the Mainland
Since the open door policy of the Mainland in 1978, the ongoing economic integration between the Mainland and Hong Kong has brought enormous mutual benefits to both places over the past 30 years. The huge flows of goods, services, people and capital between Hong Kong and the Mainland and between the Mainland and the world through Hong Kong have created remarkable growth in incomes and employment in both Hong Kong and on the Mainland over the years.
Visible trade between Hong Kong and the Mainland has soared by 243 times since 1978, at an average annual rate of 21 per cent in value terms. The vibrant growth momentum continued into 2007, with a growth rate of 12 per cent (Chart 6). In 2007, Hong Kong and the Mainland were ranked the 12th and the third largest trading entities respectively in the world.
Chart 6
Visible trade between Hong Kong and the Mainland
HK$ Billion
3,500
Total trade value (left scale)
Year-on-year rate of change (right scale)
3,000
2,500
2,000-
1,500
1,000
500
Per cent
25
20
20
15
10
5
0
-5
-10
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Since the Mainland adopted economic reform and an open door policy in 1978, there has been a rapid expansion in merchandise trade, especially re-export trade, between Hong Kong and the Mainland.
The Mainland has long been Hong Kong's largest trading partner, accounting for 47 per cent of Hong Kong's total trade value in 2007. Ninety-one per cent of Hong Kong's re-export trade was related to the Mainland, making it the largest market for, and the largest source of, Hong Kong's re-exports. Reciprocally, Hong Kong was the Mainland's fourth largest trading partner (after the European Union, United States and Japan), accounting for more than 9 per cent of the Mainland's total trade value in 2007.