Hong Kong country brief

Political Overview

Hong Kong, officially known as the Hong Kong Special Administrative Region of the People’s Republic of China, is a former British territory that reverted to Chinese sovereignty on 1 July 1997. Hong Kong is governed by the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China (the Basic Law), passed by China's National People's Congress (NPC) in 1990. The Basic Law serves as Hong Kong's 'mini-constitution'. It provides for independent executive, legislative and judicial powers, and gives the territory a high degree of autonomy under the principle of ‘one country, two systems’ in all areas except defence and foreign affairs (for which China is responsible).

Hong Kong can conclude and implement agreements with states, regions and international organisations. It does so in areas such as the economy, trade, shipping, fishing regulation, communications, tourism, culture and sport. Hong Kong is a member of the World Trade Organization (as a separate customs territory) and the Asia-Pacific Economic Cooperation (APEC) forum.

Chief Executive

Under Hong Kong's 'executive-led' system, a form of government substantially inherited from the British colonial administration, the Chief Executive (CE) heads the government and is responsible for implementing the Basic Law and other laws of Hong Kong. The CE makes policy decisions and has the power to initiate legislation. According to the Basic Law, the CE is 'accountable to the Central People's Government and the Hong Kong Special Administrative Region'.

The CE is appointed by Beijing after election by an Election Committee, whose 1,200 members are themselves elected through a limited franchise from a number of professional, business and community bodies, Hong Kong deputies to the NPC, and Hong Kong members of the Chinese People's Political Consultative Conference. Chief Executives are appointed for a period of five years. Mr Leung Chun-ying (C Y Leung) was sworn in as Hong Kong's third CE on 1 July 2012, having won the election on 25 March 2012. The next CE election will be held on 26 March 2017.

Legislative Council

The major function of the Legislative Council (LegCo) is to enact laws; examine and approve budgetary matters; monitor the government's performance; and debate issues of public interest. The LegCo also endorses the appointment and removal of judges of the Court of Final Appeal. It cannot initiate bills involving government expenditure, limiting its role in policy development. Its meetings are open to the public.

Elections for the sixth LegCo took place on 4 September 2016, with all 70 members elected for a term of four years. Of the LegCo 70 seats, 40 are directly elected by voters (35 from geographical constituencies and 5 from ‘super-seat’ functional constituencies) with the remaining 30 elected indirectly by the members of traditional functional constituencies representing occupational and other special interest groups.

Currently no institutions of government in Hong Kong are elected through universal suffrage, although universal suffrage in Chief Executive and LegCo elections is the “ultimate aim” of constitutional development under Basic Law.


Hong Kong's legal system is based on English Common Law. Under the Basic Law, the judiciary is independent of the executive and legislative branches of government. The Court of Final Appeal replaced the British Privy Council as the highest appellate court in Hong Kong on 1 July 1997.

China's National People's Congress Standing Committee (NPCSC) has the power of final interpretation of the Basic Law. The NPCSC has exercised this power on five occasions concerning the right of abode (1999), universal suffrage (2004), the term of office of the Chief Executive (2005), and state immunity (2011). Most recently, on 7 November 2016, the NPCSC issued an interpretation on Article 104 of the Basic Law, which states that lawmakers must swear allegiance to Hong Kong as part of China in the form of an oath when they take office.

As Hong Kong is Australia’s leading regional business base, we have a substantial stake in the integrity of Hong Kong’s legal system. Distinguished Australian jurists have been appointed to the Court of Final Appeal as non-permanent judges, including former Chief Justice of the NSW Supreme Court, James Spigelman, and former justices of the High Court, Sir Francis Gerard Brennan, Sir Daryl Dawson, Anthony Murray Gleeson, William Gummow, Sir Anthony Mason, and Michael McHugh. Messrs Gleeson, Gummow, and Spigelman are currently appointed to the Court of Final Appeal.

Economic Overview

The city occupies an area smaller than the Australian Capital Territory and has a population of 7.3 million, about one-third of Australia’s. In GDP (nominal terms) it stands as the 34th-largest economy in the world at nearly US$310 billion.

Hong Kong’s economic growth and prosperity have been underpinned by an open trade and investment regime complemented by a highly educated and flexible workforce and a transparent legal and regulatory environment. The city has evolved into an efficient global and regional transport and trade hub.

The free movement of capital in and out of Hong Kong has accelerated the city’s development as an international commercial and financial centre. A strong institutional framework including the rule of law has attracted a number of important corporate headquarters to Hong Kong. It has emerged as a major provider of services to China and is the mainland's designated centre for the internationalisation of the Renminbi (China’s currency).

Hong Kong’s economic integration with mainland China developed through the 1980s with the establishment of China’s first Special Economic Zone in Shenzhen, across the border, transforming a fishing village into a city of over 10 million people. Investment by Hong Kong industrialists across the Pearl River Delta (PRD), arching from Hong Kong in the East through Shenzhen, Dongguan, Guangzhou, Foshan, Zhongshan and Zhuhai to Macau in the West, has been one of the main drivers of China’s rapid economic modernisation.

Since 2004, the China-Hong Kong Closer Economic Partnership Arrangement (CEPA) has accelerated integration between Hong Kong and the PRD, giving favourable treatment to Hong Kong manufactures and services. The lack of discrimination against foreign-owned companies has allowed Australian companies to benefit from CEPA and gain greater access to mainland China. Infrastructure projects such as a bridge linking Hong Kong, Macau and Zhuhai (commenced in November 2011, expected to be completed in late 2017) and a high-speed rail link to Guangzhou via Shenzhen (commenced in January 2010, due to be completed in late 2018) are expected to improve transport links with the region.

In 2015, GDP growth was 2.4 per cent, and the unemployment rate was steady at 3.3 per cent. The underlying inflation rate, at 3 per cent in 2015, was a drop of 1.4 percentage points from 2014. Forecast GDP growth for 2016 is 1.4 per cent, with consumer and tourist spending expected to remain subdued.

Bilateral Relations

Australia has extensive and enduring interests in Hong Kong built on strong trade and investment connections and close people to people links.

The Australian Consulate-General represents the Australian Government in Hong Kong. In Australia, the Hong Kong Government is represented through the Hong Kong Economic and Trade Office based in Sydney.

People to people links

Nearly 90,000 Australians reside in Hong Kong and around 75,000 people born in Hong Kong now live in Australia.

In October 2013,Hong Kong agreed to participate in the pilot phase of the New Colombo Plan. The New Colombo Plan — an initiative to encourage young Australians to work and study in the region. In the first four years of the New Colombo Plan (2014-2016) over 600 Australian undergraduate students have been funded to study and undertake internships in Hong Kong. In 2017, 246 students across 26 projects will study and undertake work-based experiences in Hong Kong through mobility grants under the New Colombo Plan. 13 prestigious NCP Scholarships have also been awarded for longer term study and internships in Hong Kong.

The Australia-China Council (ACC) was established by the Australian Government in 1978 to promote people-to-people links and to enhance mutual cooperation with China. The ACC has supported several projects in and with Hong Kong.

Bilateral trade and investment

Hong Kong is an important source of foreign investment for Australia, our sixth-largest, with a stock of $85.4 billion at the end of 2015. Investment sectors include electricity supply, natural gas, mining, transport, vineyards, food processing, port infrastructure, light industry, insurance, engineering, telecommunications and biotechnology. Hong Kong businesses see Australia as a safe, reliable and open investment destination with a well-performing and well-managed economy.

Hong Kong is also an attractive investment destination for Australia, our eighth-largest, with a stock of $50.7 billion at the end of 2015. Sectors of interest include banking and finance; construction and engineering; health and medical services; telecommunications; insurance; legal services; education; information technology; consulting; logistics; and transport.

Hong Kong is Australia’s leading business base in East Asia. More than 600 Australian companies, including the four major banks, have a major presence in Hong Kong. The Australian Chamber of Commerce in Hong Kong is Australia’s largest offshore Chamber of Commerce. Australian business is drawn to Hong Kong because of the transparency and efficiency of its regulatory environment, the integrity of Hong Kong’s financial markets and the rule of law, backed by an independent judiciary and the freedoms of an open civil society. Hong Kong’s location gives Australian companies an important base for commercial engagement with China and neighbouring countries in Southeast Asia.

Australia and Hong Kong have a longstanding trade relationship. In 2015-16, total two-way trade in goods and services was $15.3 billion. Hong Kong was Australia's sixth most important destination for merchandise exports ($8.9 billion) in 2015-16 and seventh-largest services market ($2.4 billion) in 2015-16. Australia's major merchandise exports were gold, edible products and preparations, telecommunications equipment and parts, and fruit and nuts.

Australia is an important source of high-quality food and beverages for Hong Kong’s hotel and restaurant sector — featured exports include wines, fresh and chilled seafood, premium fruit, nuts, vegetables and dairy products. Hong Kong's strategy to become a wine trading and distribution centre for the Asian region presents opportunities for Australian wine producers and for providers of wine-related services, such as storage and auctioning. Other major merchandise exports in 2015-16 were gold and telecommunications equipment and parts.

Australia’s major imports from Hong Kong in 2015-16 were telecommunications equipment and parts, printed matter, optical goods and monitors, projectors and TVs. The bilateral services trade is centred on transport, travel (including education exports) and business services.

Information on doing business and opportunities in Hong Kong

High level visits

November 2016: Finance Minister, the Hon Mathias Cormann visited Hong Kong to attend the Asia-Pacific Conference of German Business. He also met with Hong Kong Financial Secretary, Mr John Tsang, and Secretary for Finance Services and Treasury, Professor KC Chan.

November 2016: Hong Kong Secretary for Transport and Housing, Professor Anthony Cheung visited Australia to meet Minister for Trade, Tourism and Investment, the Hon Stephen Ciobo, and Minister for Infrastructure and Transport, the Hon Darren Chester.

November 2016: Hong Kong Secretary for Financial Services and the Treasury, Professor KC Chan visited Australia to meet Treasurer, the Hon Scott Morrison, and Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer.

September 2016: Minister for Trade, Tourism and Investment, the Hon Stephen Ciobo visited Hong Kong where he met Secretary for Commerce and Economic Development, Mr Gregory So, as well as a number of regional investors.

April 2016: Minister for Trade, Tourism and Investment, the Hon Stephen Ciobo visited Hong Kong leading the Australian business delegation for the biennial Australia Week in China (AWIC).

October 2015: Then Minister for Trade and Investment, the Hon Andrew Robb visited Hong Kong to promote tourism investment in Australia. He met Hong Kong Secretary for Commerce and Economic Development, Mr Gregory So.

September 2015: Hong Kong Chief Secretary for Administration, Mrs Carrie Lam visited Australia as a Guest of Government.

April 2015: Then Minister for Trade and Investment, the Hon Andrew Robb visited Hong Kong to meet with his counterpart, Secretary for Commerce and Economic Development, Mr Gregory So, as well as current and potential foreign investors.

Last Updated: 8 October 2014