ENG-2016 — Page 119

Chapter 5

Commerce and Industry

Hong Kong's low tax rates, first-class infrastructure, effective legal system, and free flow of capital and information all contribute to an environment in which business can flourish. The city is an important gateway to the Mainland of China, one of the world's most dynamic

economies.

Hong Kong is a leading international trading and services centre as well as an important command and control centre for manufacturing activities in the region. It is recognised as one of the freest economies in the world, a model for international trade, and the most strategic gateway to the vast Mainland market. The government is firmly committed to free trade and sees its task as facilitating commerce and industry within the framework of a free market. As a separate customs territory of China, the Hong Kong Special Administrative Region (HKSAR) does not impose any tariffs. Regulatory measures on international trade are kept to the minimum. Hong Kong also adopts an open and liberal investment policy and proactively encourages inward investment.

Merchandise Trade Performance

Hong Kong's external trade decreased slightly in 2016. Total merchandise trade decreased 0.7 per cent to $7,596.6 billion compared with 2015. Domestic exports decreased 8.5 per cent to $42.9 billion, while re-exports decreased 0.4 per cent to $3,545.4 billion. Imports decreased 0.9 per cent to $4,008.4 billion. The territory's biggest trading partner was the Mainland of China, followed by the United States and Taiwan. A summary of external merchandise trade statistics is in table 13 of Appendix 6. In 2016, Hong Kong was the world's seventh largest trading entity in terms of value of merchandise trade.

Imports

In 2016, electrical machinery, apparatus and appliances, and electrical parts thereof constituted the largest share of total imports at $1,371.8 billion, followed by telecommunications and sound recording and reproducing apparatus and equipment ($726.8 billion) and office machines and automatic data processing machines ($321.4 billion). The Mainland, Taiwan and Singapore were Hong Kong's major suppliers, accounting for 47.8 per cent, 7.3 per cent and 6.5 per cent respectively of the total value of imports.

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