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The Economy

largest in Asia by market capitalisation as at end-2019 and ranked first globally in terms of initial public offering (IPO) equity funds raised during the year.

As an international business hub, Hong Kong offers a business-friendly environment with a fine tradition of the rule of law and judicial independence, an unfettered flow of capital, people, goods and information, open and fair competition, a well-established and comprehensive financial network, superb transport and communications infrastructure, sophisticated support services, and a flexible labour market with a well-educated workforce and a pool of efficient and innovative entrepreneurs. The city has sizeable foreign exchange reserves, a fully convertible and stable currency, prudent fiscal management and a simple tax system with low tax rates. Thanks to these virtues, Hong Kong was ranked the world's second most competitive economy by the International Institute for Management Development and the third by the World Economic Forum in 2019, and was the third easiest place to do business globally according to the World Bank's Doing Business 2020 report published in October 2019. Hong Kong has also been ranked consistently by the Heritage Foundation and the Fraser Institute as one of the world's freest economies.

The Hong Kong economy has doubled in size over the past two decades, expanding at an average annual rate of 3.5 per cent, faster than most high-income economies. Over the same period, per capita GDP rose about 76 per cent in real terms, posting an average annual growth rate of 2.9 per cent. Per capita GDP at current market prices reached US$48,700 in 2019 (chart 2), comparable to many advanced economies.

Chart 2

Gross Domestic Product

Index (1999 = 100)

US$

250

50,000

Real GDP (left scale)

45,000

Per capita GDP at current market prices (right scale)

40,000

200

35,000

30,000

150

25,000

20,000

15,000

100

10,000

5,000

50

1999

2001

2003 2005 2007 2009 2011 2013 2015 2017 2019

Over the past two decades, the Hong Kong economy grew an average of 3.5 per cent annually, faster than most high-income economies.

Trade links with other parts of the world have grown extensively. Trade in goods and services has almost tripled in real terms over the past two decades. The total value of the goods trade compiled under the GDP accounting framework reached $8,711 billion in 2019, equivalent to 304 per cent of GDP, far higher than the ratio of 178 per cent in 1999, Including the value of

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