Hong Kong’s economy took a battering with the recession in 2019 and the outbreak of the COVID-19 pandemic in 2020. However, it has since rebounded and showed growth in 2021. According to Macrotrends, Hong Kong’s trade-to-GDP ratio was reported at 403.1% in 2021, a 52.4% increase from 2020. As the economy slowly recovers, businesses are presented with more opportunities to expand their business internationally and generate more revenue.
Hong Kong’s economy is primarily driven by international trade. They have established trade relations with markets across Asia, Europe, North America, and the Pacific. Countries in these regions import and export goods and services from and to Hong Kong throughout the year. Some of Hong Kong’s biggest exports as of 2022 include electronics (72%), articles of precious jewellery (1.5%), clothing (1.3%) and watches and clocks (1.2%), based on a study by HKTDC Research.
In this article, we summarise Hong Kong’s top trading partners and the popular exports to these regions.
Hong Kong operates as a special administrative region (SAR) in the Republic of China with its own government and economic policies. In 2003, Mainland China and Hong Kong signed the Closer Economic Partnership Arrangement (CEPA). This allows both parties to trade goods with zero tariff benefits as long as they meet the CEPA rules of origin.
CEPA has helped countless Hong Kong exporters ship to China with ease. China accounts for 45.8% of Hong Kong’s total imports. According to the Trade and Industry Department (TID), major domestic exports were plastics, metalliferous ores and metal scrap, medicinal and pharmaceutical products, and cereals.
Taiwan is Hong Kong’s second-largest trading partner. According to the Trade and Industry Department (TID) of the Hong Kong Special Administrative Region, the region exported HK$6.6 billion worth of goods to Taiwan in 2022 and imported goods valued at HK$587.4 billion in the same year. Taiwan’s market mostly depends on imports since its major economic output comes from the services sector. This sector contributes 60% of its GDP, according to NDTV Profit.
According to TID, major export products include non-ferrous metals, jewellery, precious or semi-precious materials, and metalliferous ores and metal scrap.
Hong Kong acts as a port for trade between the US and Mainland China. In Hong Kong acts as a port for trade between the US and Mainland China. In 2021, an estimated US$28.1 billion worth of exports from China to the US and US$13.7 billion worth of imports from the US to China were routed to Hong Kong, according to the TID. Major exports include electrical machinery, apparatus and appliances, electrical parts, telecommunications equipment and office machines and automatic data processing machines.
Bilateral relations between Hong Kong and Singapore have advanced since they were established in the 1900s. Several agreements and regulations have been established to improve trade, alleviate barriers at customs offices, and simplify shipping procedures. In 2019, Singapore formalised trade relations with Hong Kong by signing the ASEAN-Hong Kong, China Free Trade Agreement (AHKFTA).
Hong Kong is one of Singapore’s major trading partners, with 2022 data by government statistics recording S$83.8 billion worth of export to the region. Electrical equipment and machinery are among the top exports.
Korea is Hong Kong’s 5th largest trading partner. The largest trading bloc in place – the Regional Comprehensive Economic Partnership (RCEP) – facilitates bilateral trade between the two countries. In 2022, Hong Kong’s exports to Korea totalled HK$2.1 million, according to TID. Top exports include metalliferous ores and metal scrap; jewellery, goldsmiths' and silversmiths' wares, and other articles of precious or semi-precious materials; and miscellaneous edible products and preparations.
Japan and Hong Kong enjoy a dynamic trade relationship, with Japan being Hong Kong’s 6th largest trading partner. According to TID, in 2022, Hong Kong’s exports to Japan amounted to HK$700 million. Some key exports include jewellery, goldsmiths' and silversmiths' wares, precious or semi-precious materials and metal ores
The UK is among the top business allies of Hong Kong outside the ASEAN area. The success in trade relations is due in part to the Comprehensive avoidance of Double Taxation Agreement (CDTA) consensus implemented in 2010 that facilitates the open flow of trade. According to TID, goods exported from Hong Kong to the UK account for 6.6% of Hong Kong’s total exports in 2021. Top exports include silver and platinum, jewellery, precious metal ores and concentrates.
The above seven countries are Hong Kong’s top export partners. The majority of exports and imports in Hong Kong’s trade industry are handled by entrepreneurs who have learned what it takes to succeed in international trade. One of the important elements of growing your export business is marketing. These entrepreneurs create a compelling go-to-market strategy, which outlines the target market, a marketing plan, and a sales conversion strategy.
You first need to deeply understand your market. Research the economy, its culture, people, and financial regulations in your target market. Building a knowledge base of your market will facilitate a smooth entry into the market.
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