Hong Kong
The Economy of Hong Kong
Hong Kong has a free market economy highly dependent on international trade. The territory has become more closely linked to mainland China over the past few years. Even before Hong Kong reverted to Chinese administration on 1 July 1997, it had extensive trade and investment ties with China.
Hong Kong's service industry over the past decade has grown rapidly as its manufacturing industry has moved to the mainland. Hong Kong also has stepped up its efforts to gain approval to offer more mainland financial services in a bid to remain competitive with China's growing financial centers. Hong Kong's natural resources are limited, and food and raw materials must be imported.
Although the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 also battered Hong Kong's economy, a solid rise in exports, a boom in tourism from the mainland because of China's easing of travel restrictions, and a return of consumer confidence resulted in the resumption of strong growth from late 2003 through 2006. Moreover, several large initial public offerings of Chinese companies on the Hong Kong stock exchange since late 2005 have helped to boost Hong Kong's status as a financial hub and have contributed to the improved performance of the market in late 2006.
