ENG-2008 — Page 81

The Economy | 41

economy in the world for the 14th year in a row. Likewise, the Fraser Institute of Canada has also consistently ranked Hong Kong as the world's freest economy.

The Hong Kong economy more than doubled in the past two decades, with its GDP expanding at an average annual rate of 4.1 per cent in real terms, surpassing the world economy's growth of 3.4 per cent. Over the same period, Hong Kong's per capita GDP nearly doubled, posting an average annual growth rate of 3 per cent in real terms. At US$30,900, Hong Kong's per capita GDP was one of the highest in Asia in 2008 (Chart 1).

Chart 1

Gross Domestic Product

(year-on-year rate of change in real terms)

Per cent

10

8

6

4

Per capita GDP

2

0

-2

-4

GDP

N

-6

-8

1988 1990

1992 1994 1996 1998

2000 2002 2004 2006 2008

Over the past two decades, the Hong Kong economy grew by an average of 4.1 per cent in real terms, outpacing the 3.4 per cent growth for the world economy. The local economy remained vibrant in 2008, with real GDP growing by 2.5 per cent.

In line with the Hong Kong economy's increased openness in the midst of the growing influence of globalisation, Hong Kong's trade in goods expanded almost six times and in services, four times in real terms over the past two decades. In 2008, the total value of visible trade (comprising re-exports, domestic exports and imports of goods) reached $5,868 billion, equivalent to 350 per cent of GDP. This was considerably larger than the ratios of 211 per cent in 1988 and 213 per cent in 1998. If the value of exports and imports of services is also taken into account, the ratio would be even greater, at 414 per cent in 2008, compared to 251 per cent in 1988 and 248 per cent in 1998.

The stock of inward direct investment in Hong Kong was significant, at $9,187 billion in market value at the end of 2007, equivalent to 569 per cent of GDP. It served as another strong indicator of Hong Kong's increasingly international focus. Hong Kong is the second most preferred destination for inward direct investment in Asia, next only to the Mainland.