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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 and 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, the Hong Kong Special Administrative Region (HKSAR) does not impose any tariffs and works at enhancing customs clearance efficiency while maintaining effective control. Hong Kong also adopts an open and liberal investment policy and proactively encourages inward investment.

Merchandise Trade Performance

Hong Kong's external trade decreased moderately in 2020. Total merchandise trade decreased 2.5 per cent to $8,197.3 billion compared with 2019. Total exports decreased 1.5 per cent to $3,927.5 billion, while imports decreased 3.3 per cent to $4,269.8 billion. The territory's biggest trading partner was the Mainland, followed by Taiwan and the United States. Hong Kong was the world's sixth largest trading entity in terms of value of merchandise trade.

Total Exports

In 2020, electrical machinery, apparatus and appliances and electrical parts thereof worth $1,703.2 billion were the principal commodities exported, followed by telecommunications and sound recording and reproducing apparatus and equipment ($666.6 billion) and office. machines and automatic data processing machines ($429.8 billion). The Mainland, the US and Japan were the main destinations, accounting for 59.2 per cent, 6.6 per cent and 2.8 per cent respectively of the total value of total exports.

Imports

In 2020, electrical machinery, apparatus and appliances and electrical parts thereof constituted the largest share of total imports at $1,796.5 billion, followed by telecommunications and sound

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