3
The Economy
sector, its well-established linkages with the Mainland economy have underpinned the growth of Hong Kong's services sector, especially by driving the rapid development of trading and other supporting services.
Economic Links between Hong Kong and the Mainland
Since the Mainland launched its economic reform and open-door policy in 1978, the economic relationship between the Mainland and Hong Kong has grown steadily closer. Over the years, the massive flows of goods, services, people and capital between Hong Kong and the Mainland and between the Mainland and the world through Hong Kong have yielded enormous mutual benefits and contributed to the remarkable income and employment growth in the two places.
The Mainland plays an increasingly important role in the world arena and its total trade has surged 22-fold in the past two decades. Hong Kong has benefited substantially from the Mainland's phenomenal trade growth. Visible trade between Hong Kong and the Mainland in 2012 was about six times that in 1992, representing growth of 9 per cent per annum in value terms (Chart 7). In 2012, Hong Kong and the Mainland were ranked the world's ninth and second largest trading entities respectively.
Chart 7
Visible Trade between Hong Kong and the Mainland
HK$ Billion
4,000
Total trade value (left scale)
Year-on-year rate of change (right scale)
3,500
3,000
2,500
2,000
1,500
1,000
500
Per cent
سلسل
10
ú on ŏ 7 8 ~ 8 &
20
15
25
30
35
سلسل السلسلي
-5
-10
-15
-20
-25
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Merchandise trade between Hong Kong and the Mainland registered notable cumulative growth in the past two decades.
The Mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade value in 2012. Reciprocally, Hong Kong was the Mainland's third largest trading partner (after the European Union and the United States), accounting for about 9 per cent of the Mainland's total trade value in 2012. Nearly half of Hong Kong's exports to the Mainland (mainly re-exports) in 2012 involved raw materials, reflecting the latter's role as a production hinterland and the highly integrated production network within the Asia region. Meanwhile, Hong Kong's exports of consumer goods (mainly re-exports) to the Mainland more than doubled in the past 10 years. With a population of over 1.3 billion (over 100 million in
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