Hong Kong Economy
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Hong Kong maintains a highly capitalist economy built on a policy of free market, low taxation and government non-intervention. It is an important centre for international finance and trade, with the greatest concentration of corporate headquarters in the Asia-Pacific region. In terms of gross domestic product per capita and gross metropolitan product, Hong Kong is the wealthiest urban centre in the People's Republic of China. The GDP per capita (PPP) of Hong Kong even exceeded the four big economies in Western Europe (UK, France, Germany, Italy) and Japan in Asia.
Hong Kong has little arable land and few natural resources within its borders, and must therefore import most of its food and raw materials. Hong Kong is the world's eleventh largest trading entity, with the total value of imports and exports exceeding its gross domestic product. As of 2006, there are 114 countries that maintain consulates in Hong Kong, more than any other city in the world. Much of Hong Kong's exports consists of re-exports, which are products made outside of the territory, especially in mainland China, and distributed through Hong Kong. Even before the transfer of sovereignty to the People's Republic of China, Hong Kong has established extensive trade and investment ties with mainland China. The territory's autonomous status enables it to serve as a point of entry for investments and resources flowing into the mainland. It is also a connecting point for flights from the Republic of China on Taiwan destined for the mainland.
The currency used in Hong Kong is the Hong Kong dollar. Since 1983, it has been pegged at a fixed exchange rate to the United States dollar. The currency is allowed to trade within a range between 7.75 and 7.85 Hong Kong dollars to one United States dollar. The Hong Kong Stock Exchange is the fifth largest in the world, with a market capitalization of about US$1.69 trillion as of February 2007. In 2006, the value of initial public offerings conducted in Hong Kong was second highest in the world after London. The City of London Corporation's Global Financial Centers Index (GFCI) 2007, which evaluates the competitiveness of 46 financial centers worldwide, ranks Hong Kong as the third-best financial centre globally and the strongest centre in Asia.
In 2006, Hong Kong's per-capita GDP ranked as the 6th highest in the world at US$38,127, ahead of countries such as Switzerland, Denmark, and Japan. Its GDP ranked as the 40th highest at US$253.1 billion.
