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China |
Hong Kong SAR (China) |
Economy - overview |
Since the late 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role. China has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. Reforms began with the phaseout of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China continues to pursue an industrial policy, state support of key sectors, and a restrictive investment regime. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2016 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. Still, China's per capita income is below the world average. After keeping its currency tightly linked to the US dollar for years, China in July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, the renminbi appreciated more than 20% against the US dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing announced it would allow a resumption of gradual liberalization. From 2013 until early 2015, the renminbi (RMB) appreciated roughly 2% against the dollar, but the exchange rate fell 13% from mid-2015 until end-2016 amid strong capital outflows in part stemming from the August 2015 official devaluation; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi, after the currency was accepted as part of the IMF’s special drawing rights basket. However, since late 2015 the Chinese Government has strengthened capital controls and oversight of overseas investments to better manage the exchange rate and maintain financial stability. The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) managing its high corporate debt burden to maintain financial stability; (c) controlling off-balance sheet local government debt used to finance infrastructure stimulus; (d) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and college graduates, while maintaining competitiveness; (e) dampening speculative investment in the real estate sector without sharply slowing the economy; (f) reducing industrial overcapacity; and (g) raising productivity growth rates through the more efficient allocation of capital and state-support for innovation. Economic development has progressed further in coastal provinces than in the interior, and by 2016 more than 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the “one-child policy” - which was relaxed in 2016 to permit all families to have two children - is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and urbanization. The Chinese Government is seeking to add energy production capacity from sources other than coal and oil, focusing on natural gas, nuclear, and clean energy development. In 2016, China ratified the Paris Agreement, a multilateral agreement to combat climate change, and committed to peak its carbon dioxide emissions between 2025 and 2030. The government's 13th Five-Year Plan, unveiled in March 2016, emphasizes the need to increase innovation and boost domestic consumption to make the economy less dependent on government investment, exports, and heavy industry. However, China has made more progress on subsidizing innovation than rebalancing the economy. Beijing has committed to giving the market a more decisive role in allocating resources, but the Chinese Government’s policies continue to favor state-owned enterprises and emphasize stability. Chinese leaders in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. Chinese leaders also have undermined some market-oriented reforms by reaffirming the “dominant” role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time. The slight acceleration in economic growth in 2017—the first such uptick since 2010—gives Beijing more latitude to pursue its economic reforms, focusing on financial sector deleveraging and its Supply-Side Structural Reform agenda, first announced in late 2015. |
Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of reexports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983. Excess liquidity, low interest rates and a tight housing supply have caused Hong Kong property prices to rise rapidly. The lower and middle-income segments of the population increasingly find housing unaffordable. Hong Kong's open economy has left it exposed to the global economic situation. Its continued reliance on foreign trade and investment makes it vulnerable to renewed global financial market volatility or a slowdown in the global economy. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory surged from 4.5 million in 2001 to 47.3 million in 2014, outnumbering visitors from all other countries combined. After peaking in 2014, overall tourist arrivals dropped 2.5% in 2015 and 4.5% in 2016. The tourism sector rebounded in 2017, with visitor arrivals rising 3.2% to 58.47 million. Travelers from Mainland China totaled 44.45 million, accounting for 76% of the total. The Hong Kong Government is promoting the Special Administrative Region (SAR) as the preferred business hub for renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts, RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong, RMB trade settlement is allowed, and investment schemes such as the Renminbi Qualified Foreign Institutional Investor (RQFII) Program was first launched in Hong Kong. Offshore RMB activities experienced a setback, however, after the People’s Bank of China changed the way it set the central parity rate in August 2015. RMB deposits in Hong Kong fell from 1.0 trillion RMB at the end of 2014 to 559 billion RMB at the end of 2017, while RMB trade settlement handled by banks in Hong Kong also shrank from 6.8 trillion RMB in 2015 to 3.9 trillion RMB in 2017. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2015, mainland Chinese companies constituted about 50% of the firms listed on the Hong Kong Stock Exchange and accounted for about 66% of the exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. In 2014, Hong Kong and China signed a new agreement on achieving basic liberalization of trade in services in Guangdong Province under the Closer Economic Partnership Agreement (CEPA), adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, which took effect in March 2015, cover a negative list and a most-favored treatment provision. On the basis of the Guangdong Agreement, the Agreement on Trade in Services signed in November 2015 further enhanced liberalization, including extending the implementation of the majority of Guangdong pilot liberalization measures to the whole Mainland, reducing the restrictive measures in the negative list, and adding measures in the positive lists for cross-border services as well as cultural and telecommunications services. In June 2017, the Investment Agreement and the Agreement on Economic and Technical Cooperation (Ecotech Agreement) were signed under the framework of CEPA. Hong Kong’s economic integration with the mainland continues to be most evident in the banking and finance sector. Initiatives like the Hong Kong-Shanghai Stock Connect, the Hong Kong- Shenzhen Stock Connect the Mutual Recognition of Funds, and the Bond Connect scheme are all important steps towards opening up the Mainland’s capital markets and have reinforced Hong Kong’s role as China’s leading offshore RMB market. Additional connect schemes such as ETF Connect (for exchange-traded fund products) are also under exploration by Hong Kong authorities. In 2017, Chief Executive Carrie LAM announced plans to increase government spending on research and development, education, and technological innovation with the aim of spurring continued economic growth through greater sector diversification. |
GDP (purchasing power parity) |
$23.12 trillion (2017 est.) $21.66 trillion (2016 est.) $20.3 trillion (2015 est.) note: data are in 2017 dollars country comparison to the world: 1 |
$453 billion (2017 est.) $437.5 billion (2016 est.) $428.8 billion (2015 est.) note: data are in 2017 dollars country comparison to the world: 44 |
GDP (official exchange rate) |
$11.94 trillion (2017 est.) note: because China's exchange rate is determined by fiat rather than by market forces, the official exchange rate measure of GDP is not an accurate measure of China's output; GDP at the official exchange rate substantially understates the actual level of China's output vis-a-vis the rest of the world; in China's situation, GDP at purchasing power parity provides the best measure for comparing output across countries |
$334.1 billion (2017 est.) |
GDP - real growth rate |
6.8% (2017 est.) 6.7% (2016 est.) 6.9% (2015 est.) country comparison to the world: 13 |
3.5% (2017 est.) 2% (2016 est.) 2.4% (2015 est.) country comparison to the world: 89 |
GDP - per capita (PPP) |
$16,600 (2017 est.) $15,700 (2016 est.) $14,800 (2015 est.) note: data are in 2017 dollars country comparison to the world: 106 |
$61,000 (2017 est.) $59,400 (2016 est.) $58,700 (2015 est.) note: data are in 2017 dollars country comparison to the world: 18 |
Gross national saving |
45.4% of GDP (2017 est.) 45.9% of GDP (2016 est.) 47.5% of GDP (2015 est.) country comparison to the world: 4 |
24.9% of GDP (2017 est.) 26.4% of GDP (2016 est.) 24.9% of GDP (2015 est.) country comparison to the world: 52 |
GDP - composition, by end use |
household consumption: 39.1% government consumption: 14.6% investment in fixed capital: 43.3% investment in inventories: 1.1% exports of goods and services: 19.6% imports of goods and services: -17.7% (2017 est.) |
household consumption: 66.6% government consumption: 10% investment in fixed capital: 22.3% investment in inventories: 0.7% exports of goods and services: 191.9% imports of goods and services: -191.3% (2017 est.) |
GDP - composition, by sector of origin |
agriculture: 8.2% industry: 39.5% services: 52.2% (2017 est.) |
agriculture: 0.1% industry: 7.2% services: 92.7% (2017 est.) |
Agriculture - products |
world leader in gross value of agricultural output; rice, wheat, potatoes, corn, tobacco, peanuts, tea, apples, cotton, pork, mutton, eggs; fish, shrimp |
fresh vegetables and fruit; poultry, pork; fish |
Industries |
world leader in gross value of industrial output; mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizer; consumer products (including footwear, toys, and electronics); food processing; transportation equipment, including automobiles, railcars and locomotives, ships, aircraft; telecommunications equipment, commercial space launch vehicles, satellites |
trading and logistics, financial services, professional services, tourism, cultural and creative, clothing and textiles, shipping, electronics, toys, clocks and watches |
Industrial production growth rate |
6.2% (2017 est.) country comparison to the world: 32 |
3% (2017 est.) country comparison to the world: 103 |
Labor force |
806.7 million note: by the end of 2012, China's population at working age (15-64 years) was 1.004 billion (2017 est.) country comparison to the world: 1 |
3.965 million (2017 est.) country comparison to the world: 95 |
Labor force - by occupation |
agriculture: 28.3% industry: 29.3% services: 42.4% (2016 est.) |
manufacturing: 3.8% construction: 2.8% wholesale and retail trade, restaurants, and hotels: 53.3% financing, insurance, and real estate: 12.5% transport and communications: 10.1% community and social services: 17.1% note: above data exclude public sector (2013 est.) |
Unemployment rate |
4% (2017 est.) 4% (2016 est.) note: data are for registered urban unemployment, which excludes private enterprises and migrants country comparison to the world: 48 |
2.6% (2017 est.) 2.7% (2016 est.) country comparison to the world: 24 |
Population below poverty line |
3.3% note: in 2011, China set a new poverty line at RMB 2300 (approximately US $400) (2016 est.) |
19.6% (2012 est.) |
Household income or consumption by percentage share |
lowest 10%: 2.1% highest 10%: 31.4% note: data are for urban households only (2012 est.) |
lowest 10%: NA% highest 10%: NA% |
Distribution of family income - Gini index |
46.5 (2016 est.) 46.2 (2015 est.) country comparison to the world: 31 |
53.7 (2011 est.) 53.3 (2007 est.) country comparison to the world: 9 |
Budget |
revenues: $2.672 trillion expenditures: $3.146 trillion (2017 est.) |
revenues: $66.19 billion expenditures: $62.86 billion (2017 est.) |
Taxes and other revenues |
22.4% of GDP (2017 est.) country comparison to the world: 134 |
19.8% of GDP (2017 est.) country comparison to the world: 155 |
Budget surplus (+) or deficit (-) |
-4% of GDP (2017 est.) country comparison to the world: 143 |
1% of GDP (2017 est.) country comparison to the world: 15 |
Public debt |
18.6% of GDP (2017 est.) 16.1% of GDP (2016 est.) note: official data; data cover both central government debt and local government debt, including debt officially recognized by China's National Audit Office report in 2011; data exclude policy bank bonds, Ministry of Railway debt, and China Asset Management Company debt country comparison to the world: 190 |
43.6% of GDP (2017 est.) 44.8% of GDP (2016 est.) country comparison to the world: 122 |
Fiscal year |
calendar year |
1 April - 31 March |
Inflation rate (consumer prices) |
1.8% (2017 est.) 2% (2016 est.) country comparison to the world: 82 |
2% (2017 est.) 2.6% (2016 est.) country comparison to the world: 93 |
Central bank discount rate |
2.25% (5 December 2017 est.) 2.25% (31 December 2016 est.) country comparison to the world: 115 |
0.5% (31 December 2013 est.) 0.5% (31 December 2012 est.) country comparison to the world: 133 |
Commercial bank prime lending rate |
4.4% (5 December 2017 est.) 4.35% (30 December 2016 est.) country comparison to the world: 154 |
5.1% (31 December 2017 est.) 5% (31 December 2016 est.) country comparison to the world: 144 |
Stock of narrow money |
$8.16 trillion (31 October 2017 est.) $7.001 trillion (31 December 2016 est.) country comparison to the world: 1 |
$310.3 billion (31 December 2017 est.) $285.5 billion (31 December 2016 est.) country comparison to the world: 17 |
Stock of broad money |
$25.24 trillion (October 2017 est.) $22.3 trillion (December 2016 est.) country comparison to the world: 1 |
$1.736 trillion (31 December 2017 est.) $1.613 trillion (31 December 2016 est.) country comparison to the world: 10 |
Stock of domestic credit |
$26.87 trillion (31 December 2017 est.) $23.02 trillion (31 December 2016 est.) country comparison to the world: 1 |
$719.2 billion (31 December 2017 est.) $676.5 billion (31 December 2016 est.) country comparison to the world: 22 |
Market value of publicly traded shares |
$7.321 trillion (31 November 2017 est.) $8.188 trillion (December 2016 est.) $6.005 trillion (December 2015 est.) country comparison to the world: 2 |
$3.185 trillion (31 December 2015 est.) $3.233 trillion (31 December 2014 est.) $3.101 trillion (31 December 2013 est.) country comparison to the world: 5 |
Current account balance |
$162.5 billion (2017 est.) $196.4 billion (2016 est.) country comparison to the world: 4 |
$10.06 billion (2017 est.) $14.88 billion (2016 est.) country comparison to the world: 21 |
Exports |
$2.157 trillion (2017 est.) $1.99 trillion (2016 est.) country comparison to the world: 1 |
$540 billion (2017 est.) $502.5 billion (2016 est.) country comparison to the world: 8 |
Exports - commodities |
electrical and other machinery, including computers and telecommunications equipment, apparel, furniture, textiles |
electrical machinery and appliances, textiles, apparel, watches and clocks, toys, "jewelry, goldsmiths' and silversmiths' wares, and other articles of precious or semi-precious materials"; Hong Kong plays an important role as entrep?t to the Chinese mainland; in 2017, 58% of Hong Kong’s re-exports originated in mainland China, and 54% were destined for the Chinese mainland |
Exports - partners |
US 18.2%, Hong Kong 13.8%, Japan 6.1%, South Korea 4.5% (2016) |
China 54.3%, US 8.5%, India 4.1% (2016) |
Imports |
$1.731 trillion (2017 est.) $1.495 trillion (2016 est.) country comparison to the world: 2 |
$561.4 billion (2017 est.) $520.1 billion (2016 est.) country comparison to the world: 8 |
Imports - commodities |
electrical and other machinery, including integrated circuits and other computer components, oil and mineral fuels; optical and medical equipment, metal ores, motor vehicles; soybeans |
raw materials and semi-manufactures, consumer goods, capital goods, foodstuffs, fuel (most is reexported) |
Imports - partners |
South Korea 10%, Japan 9.2%, US 8.5%, Germany 5.4%, Australia 4.4% (2016) |
China 45.5%, Taiwan 9.8%, South Korea 6.7%, Japan 6.3%, US 4.4% (2016) |
Reserves of foreign exchange and gold |
$3.194 trillion (31 December 2017 est.) $3.098 trillion (31 December 2016 est.) country comparison to the world: 1 |
$398.3 billion (31 December 2017 est.) $386.3 billion (31 December 2016 est.) country comparison to the world: 9 |
Debt - external |
$1.649 trillion (31 December 2017 est.) $1.467 trillion (31 December 2016 est.) country comparison to the world: 14 |
$494.5 billion (31 December 2017 est.) $505.9 billion (31 December 2016 est.) country comparison to the world: 23 |
Stock of direct foreign investment - at home |
$1.514 trillion (31 December 2017 est.) $1.391 trillion (31 December 2016 est.) country comparison to the world: 6 |
$1.901 trillion (31 December 2017 est.) $1.786 trillion (31 December 2016 est.) country comparison to the world: 5 |
Stock of direct foreign investment - abroad |
$1.342 trillion (31 December 2017 est.) $1.227 trillion (31 December 2016 est.) country comparison to the world: 12 |
$1.806 trillion (31 December 2017 est.) $1.723 trillion (31 December 2016 est.) country comparison to the world: 5 |
Exchange rates |
Renminbi yuan (RMB) per US dollar - 7.76 (2017 est.) 6.64 (2016 est.) 6.23 (2015 est.) 6.14 (2014 est.) 6.2 (2013 est.) |
Hong Kong dollars (HKD) per US dollar - 7.8 (2017 est.) 7.76 (2016 est.) 7.76 (2015 est.) 7.75 (2014 est.) 7.75 (2013 est.) |