Political overview

Hong Kong, officially known as the Hong Kong Special Administrative Region of the People's Republic of China (PRC), 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). The Basic Law serves as Hong Kong's 'mini-constitution'.

The Basic Law states that Hong Kong is part of the PRC but also defines separate executive, legislative and judicial powers, and states that the territory will be provided with a high degree of autonomy under the principle of 'One Country, Two Systems' in all areas except defence and foreign affairs (for which the PRC is responsible).

Hong Kong can conclude and implement agreements with states, regions and international organisations 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.

National Security Law

The National Security Law (NSL) for Hong Kong came into effect on 1 July 2020.

The NSL established new security institutions in Hong Kong and created four new criminal offences: secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national security. The NSL allows some cases to be remanded to the courts of the PRC, and includes extra-territorial provisions.  

Safeguarding National Security Ordinance (Article 23) legislation

In March 2024, the Government of the Hong Kong Special Administrative Region enacted the Safeguarding National Security Ordinance under Article 23 of the Basic Law. This legislation expands on the NSL to include: theft of state secrets and espionage, sabotage endangering national security, external interference, insurrection and treason. Some of the new offences include extra-territorial provisions.

Chief Executive

The Basic Law designates a system of governance led by a Chief Executive and an Executive Council, with a two-tiered system of representative government and an independent judiciary. The Chief Executive makes policy decisions and has the power to initiate legislation. According to the Basic Law, the Chief Executive is 'accountable to the Central People's Government and the Hong Kong Special Administrative Region'.

The Chief Executive is elected by a 1500 member Election Committee, and appointed by the Central People’s Government for a period of five years. Chief Executive John Lee Ka-chiu commenced his term on 1 July 2022.

Legislative Council

The major functions of the Legislative Council (LegCo) are 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. Its meetings are open to the public.

District councils

Hong Kong has 18 district councils responsible for advising government on local matters and managing public facilities and services.

Judiciary

Hong Kong's Basic Law designates an independent judiciary. The Court of Final Appeal is the highest appellate court. The PRC's National People's Congress Standing Committee (NPCSC) has the power of final interpretation of the Basic Law.

Senior retired Australian jurists have regularly served, and continue to serve, on the Court of Final Appeal as non-permanent judges in their private capacity. As of October 2024, four retired Australian judges serve on Hong Kong’s Court of Final Appeal.

Economic overview

Hong Kong occupies an area smaller than the Australian Capital Territory and has a population of 7.5 million. Over several decades, Hong Kong's economic growth and prosperity has been underpinned by an open trade and investment regime complemented by a highly educated and flexible workforce.

Hong Kong is a major international financial hub. It is a free port, a WTO member, and has no capital and data controls across international borders. It has independent regulators and a common law legal system.

Since 2004, the China-Hong Kong Closer Economic Partnership Arrangement (CEPA) has accelerated integration between Hong Kong and the PRC, giving favourable treatment to Hong Kong manufacturing and services. Hong Kong is part of the Greater Bay Area, which is a PRC initiative to link nine cities of Guangdong's Pearl River Delta (Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing) with the Special Administrative Regions of Hong Kong and Macau into an integrated economic and business hub.

Bilateral relations

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

The Australian Government regularly raises concerns with China and Hong Kong regarding the erosion of Hong Kong’s autonomy, rights and freedoms.

Due to concerns about the NSL, Australia suspended the bilateral extradition agreement with Hong Kong (October 2020). The Australian Government has introduced new visa measures for graduates and skilled workers from Hong Kong who want to work and live in Australia (see the Department of Home Affairs website for the latest information).

The Australian Consulate-General represents the Australian Government in Hong Kong.

People-to-people links

Hong Kong is home to one of the largest Australian communities abroad. Around 100,000 Australians reside in Hong Kong and approximately 86,000 people born in Hong Kong live in Australia.

In 2019, the Foreign Minister announced the establishment of the National Foundation for Australia China Relations. The Foundation works to build links between Australia and the PRC, by bringing together government, business and communities to find and support ways to engage constructively including through a competitive grants program. For more information, visit the Foundation website.

Bilateral trade and investment

Australia and Hong Kong have a longstanding trade and investment relationship. Hong Kong has Australia's largest commercial presence in Asia. 

The Australia-Hong Kong Free Trade Agreement and associated Investment Agreement entered into force on 17 January 2020. The FTA locks in zero tariffs for Australian exporters and provides Australian service suppliers with guaranteed access into key sectors of Hong Kong's growing services market. The Investment Agreement protects investors on both sides, including providing for a minimum standard of treatment, a requirement to pay compensation in certain circumstances where an investment is expropriated, and protection against discrimination. 

Bilateral trade in goods and services between Hong Kong and Australia amounted to $17 billion in 2023. Australia's goods exports to Hong Kong in 2023 were valued at approximately $9.8 billion, and services exports were valued at $2.9 billion.

Hong Kong is Australia's fifth-largest source of total foreign investment (direct, portfolio and other) with stock of $146.6 billion in 2023. Investment sectors include utilities, infrastructure, transport, telecommunications, resources, clean energy and hotels, and increasingly agri-food, major infrastructure and health services.

Hong Kong is also an attractive investment destination for Australia. Hong Kong is Australia's tenth-largest destination for total investment with stock of $74.7 billion in 2023. 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.

For more information see Austrade’s Doing business in Hong Kong webpage.