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COUNTRY PROFILES


PROFILE

Country Profile

Area: 1,104 square kilometres (about 40 square miles)
Population: 7,01million(2009)
People: Chinese 99%, 1% other
Languages: Chinese (mainly Cantonese), English
Religion: Buddhism and Taoism (majority), Christianity, Islam, Hinduism, Sikhism, Judaism
Currency: The Hong Kong Dollar, which is pegged to the US Dollar
Major Political Parties: Democratic Alliance for the Betterment of Hong Kong, Liberal Party, Democratic Party and Civic Party
Government: The head of the Hong Kong SAR Government is the Chief Executive
Head of State (President of China): Hu Jintao
Chief Executive: Donald Tsang
Chief Secretary for Administration: Henry Tang
Financial Secretary: John Tsang

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ECONOMY

Basic Economic Facts

GDP: HK$ 1,632billion (2009- current market prices)
GDP Growth: -2.6% (2009)
GDP per capita: HK$229,329 (2009)
Unemployment: 4.6% (March-May 2010)
Currency: The Hong Kong Dollar is pegged to the US Dollar. HK$7.8 = $1.
British exports to Hong Kong: 3.51bn (2009)
British imports from Hong Kong: £7.1bn (2009)
UK Trade & Investment Country Profile: Hong Kong (http://www.uktradeinvest.gov.uk/ukti/hong_kong)

Hong Kong is one of the world's leading trading and financial centres. It is the twelfth largest trader in the world and, according to the United Nations Conference on Trade and Development (UNCTAD), it is the second largest source of foreign direct investment amongst Asian economies and the 6th largest in the world (2007).

The economy grew at an average of nearly 6% between 2005-2008. Following the financial crisis, the economy went into recession in 2009, from which it has now emerged. The IMF estimates that growth will recover to 5% in 2010.

Financial services, trade and professional services are the key drivers of growth. Services account for over 90% of GDP. A major destination for tourism, 29.5 million visitors, or more than four times the size of local population, came to Hong Kong in 2008. Retail sales have also recorded strong growth in 2008 of 10.5%.

At the same time, China has benefited from Hong Kong's massive investment of capital and expertise in the mainland. Hong Kong is the largest source of overseas direct investment to the mainland.

The Hong Kong and Chinese economies have become increasingly interdependent. Hong Kong is the most important gateway for the Chinese mainland, handling around 22% of China's foreign trade, and is its third largest trading partner. The Closer Economic Partnership Agreement (CEPA) between China and Hong Kong gives Hong Kong preferential access to China’s markets.

Hong Kong is an important business hub for the Asia Pacific Region. As at 2008, there were 3,882 regional headquarters and regional offices representing parent companies located outside Hong Kong.

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HISTORY

The Hong Kong Special Administrative Region of China (SAR) covers an area of 1,098 square kilometres (424 square miles) on the southern coast of China. It comprises Hong Kong Island, Kowloon and the New Territories, and about 235 outlying islands. Hong Kong's harbour, strategically located on the primary Far Eastern trade routes, facilitated Hong Kong's development as one of the greatest trading ports in the Asia-Pacific Region.

Hong Kong was occupied by the British in 1841. A year later Hong Kong Island was ceded by China to Britain under the Treaty of Nanking (Nanjing). In 1860, other territories such as Kowloon and Stonecutters Island were ceded under the Treaty of Peking. In 1898, China leased the New Territories to Britain for 99 years.

The period following the Second World War saw an influx of immigrants from Mainland China which helped swell the population, and by the 1970s Hong Kong had become an Asian economic powerhouse.

China came to view the Treaties under which Hong Kong had been ceded to Britain as unequal and unfair. In 1982 Britain and China entered negotiations over Hong Kong's future, which eventually led two years later to the signing of the Sino-British Joint Declaration on the Question of Hong Kong (the Joint Declaration).

The Joint Declaration outlined the 'One Country, Two Systems' model for the Hong Kong SAR under which Hong Kong would return to Chinese sovereignty. It provided that Hong Kong's capitalist system and way of life would remain unchanged for 50 years; and that Hong Kong would have a high degree of autonomy, except in foreign affairs and defence, which would be the responsibility of the Chinese Government.

A 'mini-constitution', known as the Basic Law, was established and promulgated in 1990. It sets out, among other things, the relationship between the Chinese Government and the Hong Kong SAR Government, the fundamental rights and duties of the Hong Kong people and the SAR's political structure. It also contains provisions on the interpretation and amendment of its Articles.

On 1 July 1997, in accordance with the Joint Declaration Hong Kong was handed over to Chinese sovereignty. Hong Kong then became the Hong Kong Special Administrative Region of the People's Republic of China.

Generally the British government has assessed that the 'One Country, Two Systems' model enshrined in the Joint Declaration has worked well in practice. There is a lot to be satisfied with in respect of Hong Kong's economic and social development since the handover, although we believe there is still a need to make progress towards full universal suffrage, as envisaged in the Basic Law. We have called for the introduction of full universal suffrage as soon as possible.

Hong Kong historical timeline

-- 1841: Hong Kong occupied by the British
-- 1842: Hong Kong Island ceded by China to Britain under the Treaty of Nanking (Nanjing)
-- 1860: Kowloon and Stonecutters Island ceded to Britain under the First Convention of Peking (Beijing)
-- 1898: New Territories leased from China for 99 years under the Second Convention of Peking (Beijing)
-- 1941: Japanese occupy Hong Kong
-- 1945: Hong Kong liberated from Japanese occupation
-- 1982: Negotiations open between Britain and China on the future of Hong Kong
-- 1983: Hong Kong Dollar pegged to US Dollar
-- 1984: Sino-British Joint Declaration on Hong Kong
-- 1985: Joint Declaration enters into force and registered with the UN. First meeting of Sino-British Joint Liaison Group
-- 1986: Visit by Her Majesty the Queen and His Royal Highness Prince Philip
-- 1990: Basic Law promulgated
-- 1997: Handover of Hong Kong from Britain to China. Hong Kong becomes a Special Administrative Region of China (midnight 30 June). C H Tung appointed Chief Executive for a five-year term
-- 1998: Chek Lap Kok airport opened
-- 2002: Chief Executive, C H Tung, re-appointed for a second 5-year term
-- 2003: SARS crisis. Mass demonstration on 1 July, primarily against national security bill under Article 23 of the Basic Law. Bill later withdrawn
-- 2004: On 26 April the Standing Committee of the National Peoples Congress "interpreted" two aspects of the Basic Law which effectively set limits on constitutional reform
-- 2004: 12 September: Legislative Council elections held
-- 2005: 10 March: C H Tung resigns, citing reasons of ill health
-- 2005: 21 June: Donald Tsang formally appointed as Chief Executive
-- 2007: Donald Tsang re-appointed as Chief Executive.
-- 2007: Standing Committee of the National People’s Congress announces a “decision” that the Chief Executive could not be elected by universal suffrage until 2017; and that the Legislative Council (LegCo) could be elected by universal suffrage thereafter (effectively 2020).
-- 2008: 7 September Legislative Council Elections.
-- 2009: 25th anniversary of the Sino-British Joint Declaration on the Question of Hong Kong.
-- 2009: Launch of the Hong Kong Government's public consultation on arrangements for the 2012 elections.
-- 2010: 25 June: Legislative Council passes the Hong Kong Government's proposals for changes to the methods of electing the Chief Executive and Legislative Council in 2012.

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INTERNATIONAL RELATIONS

The UK's relations with Hong Kong

Nearly ten years on from the formal return of Hong Kong to Chinese sovereignty, the UK enjoys a positive, forward looking relationship with The Hong Kong SAR Government, and mutually beneficial co-operation in a wide range of areas.

A lot of our historic ties and affinities still endure. There are around 3.5million British passport-holders in Hong KongThe majority are British Nationals (Overseas) - BN(O)s. This form of British nationality accords visa-free access to the UK for visits, but not the right of abode in the UK. BN(O)s enjoy the same level of consular service in third countries as other British Nationals.

Our Consulate-General in Hong Kong is the largest British consulate in the world - bigger than most British embassies - and it includes the largest British passport-issuing operation outside the UK. Our Consul-General is MrAndrew Seaton.

Hong Kong continues to be a major business partner for the UK. It is important as a very significant market in its own right and also as the principal gateway into, and increasingly, out of mainland China, particularly the Pearl River Delta (PRD).

Hong Kong and the UK have benefited hugely from globalisation. But we are also working together to tackle many of the serious challenges that it presents. We have developed close co-operation on law enforcement issues, including customs, drugs and illegal immigration.

The Foreign Secretary reports to Parliament every six months (#) on developments in Hong Kong, and gives our assessment of how well the 'one country, two systems' model outlined in the Sino-British Joint Declaration on the Question of Hong Kong is working in practice.

Visits

The frequency of senior visitors representing both HMG and British business demonstrates the importance we attach to Hong Kong. The last year has seen visits by:

-- then-Minister of State for Foreign and Commonwealth Affairs Bill Rammell MP

-- then-Minister of State for Schools and Learners, the Rt. Hon. Jim Knight MP

-- then Secretary of State for Scotland Mr Jim Murphy

-- then-Minister for Communications, Technology and Broadcasting, Lord Carter

-- UK Government Chief Scientific Adviser, Professor John Beddington

-- then-First Minister for Scotland, the Rt. Hon. Alex Salmond MSP

-- then-Minister for Trade, Investment and Business, Lord Davies

-- then- Secretary of State for Energy and Climate Change, the Rt. Hon. Ed Miliband MP

-- Lord Mayor of the City of London Alderman, Ian Luder

-- then-Secretary of State for Transport The Rt. Hon. Lord Adonis

-- Professor K. C. Chan Hong Kong Secretary for Financial Services and the Treasury visited London on 6 May

-- John Tsang Financial Secretary met the UK’s Financial Secretary to the Treasury,the Rt. Hon. Stephen Timms MP in London to discuss the global economic outlook and the G20 on 10 June

-- Rita Lau, Secretary for Commerce and Economic Development visited the UK from
25-28 June

-- Gregory So, Under Secretary for Commerce and Economic Development visited the UK from 29 June to 1 July

-- Hong Kong Chief Secretary for the Administration, Henry Tang, visited London from 3-5 November.

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GEOGRAPHY

Climate

Hong Kong has a subtropical climate with hot, wet summers and cool, dry winters.

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TRADE AND INVESTMENT

UK/Hong Kong Trade

Britain has a clear stake in Hong Kong's continuing prosperity and Hong Kong remains a key market for UK Trade and Investment.

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Hong Kong is the UK's 14thlargest export market worldwide (2009) and the 2nd largest in the Asia Pacific region behind China, but ahead of Japan,India, Singapore and Australia (2009).

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In 2009 UK exports to Hong Kong were valued at 3.51bn, a 1% increase on 2008.

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The largest categories of UK exports to Hong Kong were power generating equipment and machinery and miscellaneous manufactured items (2009).

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Hong Kong is also a major gateway for our exports into China: Around 15% of British exports to Mainland China pass through Hong Kong and many British companies use Hong Kong as a base for their operations in China and the rest of the Asia Pacific region.

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Hong Kong is the UK’s 11th largest import market (2009). Imports from Hong Kong represent 2.3% of total imports. UK import of goods amounted to £7.2 bn in 2009, down 6% on 2008.

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Jan-April 2010 imports were worth £2 bn, down 3.5% on the same period in 2008.

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The UK is the second largest European foreign investor in Hong Kong.

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Further information can be found on the UK Trade & Investment website.

UK Trade & Investment (http://www.uktradeinvest.gov.uk)

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POLITICS

The Chief Executive

The Chief Executive is the head of the Hong Kong SAR Government (HKSARG) The current Chief Executive was elected by an Election Committee of 800 members, who represent different sectors of Hong Kong society, and appointed by the Central People's Government in Beijing. The Chief Executive is accountable to the Central People's Government and to the HKSARG itself. Donald Tsang was re-appointed Chief Executive for a five-year term in 2007.

The Executive Council (ExCo)

The Executive Council (ExCo), which currently comprises the Chief Secretary, Secretary for Finance and the Secretary for Justice and 15 non-official members (community, business, academia and party representatives), assists the Chief Executive in making major policy decisions and developing subsidiary legislation.

The Legislature (LegCo)

The Legislative Council (LegCo) is Hong Kong’s parliament. It currently has 60 members, with 30 members returned by geographical constituencies through direct elections and 30 members returned by functional constituencies representing different sectors of the community. The most recent LegCo elections took place on 7 September 2008. The elections were seen as orderly and well managed. Pan-democrats performed at the upper end of expectations winning 59% of the vote in the geographical constituencies, which gave them 19 out of 30 seats. They won four out of 30 functional seats. With a total of 23 seats, the pan-democrats retained their veto on constitutional reform.

LegCo's main functions are to:

enact laws

-- examine and approve Government budgets, taxation and public expenditure

monitor the performance of the Government

-- endorse the appointment (and removal) of judges of the Court of Final Appeal and the Chief Judge of the High Court; and

debate issues of public interest.

The Judiciary

Hong Kong's legal system is based on English Common Law and has remained largely unchanged since the handover. The most significant change then was the establishment of the Court of Final Appeal (which replaced the Judicial Committee of the Privy Council in London as the highest appellate court in Hong Kong). The Joint Declaration and Basic Law provide that the courts will exercise judicial power independently and free from interference. Serving members of the House of Lords continue to sit as non-permanent members of the Court of Final Appeal.

Constitutional Development

The Basic Law states as an “ultimate aim” the election of the Chief Executive and all members of the Legislative Council by universal suffrage. The Legislative Council comprises 30 directly elected geographical seats; and 30 “functional constituency” seats representing different sectors in society, the economy and business, and with franchises of very different sizes (e.g. Finance has 140 voters, whereas Education has over 90,000 voters). Much of the debate about future democratic development in Hong Kong revolves around the continued existence of the functional constituencies.

On 29 December 2007, the Chinese National People’s Congress Standing Committee (NPCSC) issued a ‘decision’ that Hong Kong’s Chief Executive could be elected by universal suffrage in 2017; and that the Legislative Council (LegCo) could be elected by universal suffrage thereafter (effectively 2020). The ‘decision’ also allowed that the methods to elect both the Chief Executive and LegCo at the next scheduled elections (in 2012) may be reformed.

The Hong Kong Government has referred to the 2012 elections as a "mid-way point" to attaining universal suffrage for the Chief Executive and Legislative Council. It carried out a public consultation on changes to electoral arrangements for the 2012 elections between November 2009 and February 2010. On 7 June, the Government announced proposals for the 2012 elections. These were closely based on the outline proposals that it had included in its earlier consultation document, which were criticised widely by pan-democrats for being too conservative. The Government later amended its proposals to incorporate a suggestion from the Democratic Party and the Legislative Council passed the proposals on 24 and 25 June. Under the final proposals, the Legislative Council will be enlarged in 2012, from 60 seats to 70. There will be five new members directly elected from each of Hong Kong’s geographical constituencies. The other five will be drawn from Hong Kong’s District Councils, and will sit as ‘functional members’, elected by the public following nomination by elected District Council members. The Chief Executive will be elected by an enlarged Election Committee of 1200 members.

Immediately following the passage of these proposals, Minister of State at the Foreign and Commonwealth Office Mr Jeremy Browne MP issued a statement in which he said, “"I warmly welcome the Legislative Council’s passage of the Government's proposals for Hong Kong's electoral arrangements in 2012. Hong Kong's Government and legislators have displayed the pragmatism for which Hong Kong is renowned, and progress has been secured. I hope that Hong Kong can now move forward with a renewed spirit of co-operation towards full universal suffrage as promised for 2017 and 2020. The Legislative Council elections in 2016 will present an important opportunity to roll democracy further forward in preparation for 2020. The British Government and the international community will continue to take a close interest."

Education

Demand for UK education has increased, with student visa applications up 4% to 6,213 for the academic year starting in 2009. Over 17,000 Hong Kong students are studying in UK schools, colleges and universities.

Hong Kong remains an important centre of activity for the British Council. The Teaching Centre in Hong Kong is the largest in the British Council’s worldwide network with over 48,000 registrations a year, complemented by an extensive community-based programme of English language teaching, which involves many thousands more. The British Government's Chevening Scholarship Scheme has operated in Hong Kong since 1996, giving young people with leadership potential the opportunity to develop their academic and management skills in the UK. In total, 509 people have received awards from the British Consulate-General.

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Last Updated: June 2010

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