3
The Economy
international air cargo handled, as well as one of the busiest container ports by container throughput.
Hong Kong was also the world's sixth largest banking centre in terms of external positions as at end-2020, and the fourth largest foreign exchange trading centre according to a triennial survey conducted by the Bank for International Settlements in 2019. Its stock market was the third largest in Asia by market capitalisation as at end-2020 and ranked second 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 has been ranked consistently by the Fraser Institute as the world's freest economy.
The Hong Kong economy expanded at an average annual rate of 2.8 per cent over the past two decades, faster than many other advanced economies. Over the same period, per capita GDP rose about 55 per cent in real terms, posting an average annual growth rate of 2.2 per cent. Like many other economies, the growth figures would have been more impressive if the especially weak performance in 2020 were excluded. Per capita GDP at current market prices was US$46,300 in 2020 (chart 2), exceeding many advanced economies.
Chart 2
Gross Domestic Product
Index (2000 = 100)
US$
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
2000
2002 2004 2006 2008 2010
2012 2014 2016 2018 2020
Over the past two decades, the Hong Kong economy grew an average of 2.8 per cent annually, faster than most high-income economies.
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