However, Hong Kong is not
only interestng for FDIs from tax havens. Generally, different factors make
Hong Kong very attractive for FDI’s from all over the world as will be
Strategic Position – Hong Kong’s location can be considered advantageous due to its
function as a gateway to the chinese market.
Free port – Hong Kong has the status of a free port which enables duty-free import
of various goods, including raw materials (Santander trading portal).
Taxes – As mentioned before, taxes are very low and favorable for investors. In
addition to that, the tax system is overall rather easy compared to other
countries which makes Hong Kong attractive in relation to taxation issues.
Infrastructure – Hong Kong has a very well developed infrasturcture. This includes the
internal infrastructure, transportation to and from other countries and
especially the connection to mainland China. This makes transportation issues
easier and more cost efficient (Santander trading portal).
Security – Hong Kong provides high security for investors in regards to the
overall economic stability as well as the judicial system. This is especially
important when it comes to property rights which are protected and enforced
(Intellectual property department).
Hong kong is not only a
recepient of major FDIs but also provides FDI to other countries. It is the
largest provider of FDI to the chinese mainland and it is on rank seven of FDI
providers over the world with an amount of 62 billion USD (Santander Trade
portal). Overall, it can be concluded that incoming and outgoing FDI is of
major importance for the Hong Kong economy.
Hong Kong’s education system is modeled after the British system and is
compulsory and free from primary to secondary school. The primary education is 9 to 12 years, which
is followed by three to five years of secondary education. After that,
different options of further education can be chosen. Vocational education is
available in the form of professional training or non-degree programes. Furthermore,
tertiary education can be received at eigth universities accross Hong Kong,
which offer a variety of degrees in differrent fields. Generally, education can
be seen as highly competitive from a very young age. This can be attributed to
the high population density, resulting in a very high number of competitors,
every individual faces throughout their education (Classbase).
Even though education is
available to all citizens, the literacy rate is 93,5% which is slightly lower
than in many european countries (Indexmundi 1). However, compared to the rest
of the world, this percentage is to be seen positively.
10 Natural resources
Hong Kong’s Natural
resources are very limited and don’t play a significant role for the economy.
The only resources worth mentioning are minerals and rocks. However, currently
there is no commercial mining which shows that the mining sector can be
considered irrelevant in this context (Hong Kong Geology). The only active use
of natural resources in Hong Kong is within the agricultural sector, which only
makes up 0.07% of the GDP (Tradingeconomics 7, 2017). Hence, agriculture does
not play a significant role for the economy either. As mentioned above, the
economy relies much more on the service sector.
aforementioned aspects of Hong Kong, a rather positive image is drawn about the
region’s situation. Due to its political stability and its outstanding
international relations, Hong Kong is a very attractive market. The economic
situation also gives very positive image. Especially the continuing GDP growth
is a good indicator for the economic well-being of Hong Kong.
negative annotations must be made, which are mainly concerning the citizens of
Hong Kong. The huge income inequality is a major issue and results in
frustration among the peole. Furthermore, the development of the population
itself is critical, since the average age of the population is constantly
increasing because of the low birthrate.
In contrast to the lack of newborns, the overall number of people,
living in Hong Kong is very high compared to the size of the region. The high
population density causes a difficult housing situation, because housing space
is rare and expensive due to the enormous demand. Lastly, there is a certain
level of uncertainty concerning Hong Kong’s future development. The „one
country – two systems” agreement is only vaild until 2047 and it is not clear
how things will change once Hong Kong loses its status as a special
This paper has relied on
a literature review only, which gives it a limited character. The author
suggests further research of a possible future development and the collection
of qualitative or quantitative primary data to get more detailed insight on the
opinions of Hong Kong’s citizens.