Hong Kong is a vibrant city of 7 million people and is known as an international business, trade, tourist and financial centre.

Economy

Hong Kong’s economy is characterised by limited import restrictions, free trade, a low and simple taxation system, and a robust legal system similar to Australia’s.

Trade

Hong Kong is heavily reliant on imports, with over 90% of food and beverages sourced from other countries.

Major food import opportunities include:

  • seafood
  • meat and meat products
  • fresh/chilled beef
  • lamb and offal
  • fresh fruit and vegetables
  • dairy products
  • beverages.

Hong Kong is also a significant entry port for re-exporting to mainland China.

Investment

Hong Kong is a top 5 source market for foreign direct investment (FDI) into Queensland. Hong Kong is also a hub for outbound FDI from mainland China. Increasingly, investors based in Hong Kong are partnering or forming consortiums/alliances with mainland China entities for offshore investment projects. Investors are increasingly sophisticated, and competition is fierce from other international markets seeking investment from Hong Kong.

Hong Kong has long played a role in facilitating mainland Chinese Government and private-sector offshore investments and is a key financial centre. Recent restrictions on capital flows out of mainland China imposed by China’s Central Government have had some impact on funds flowing through Hong Kong. However, the market maintains its position as a key hub for RMB (Chinese currency) exchange and connecting with Chinese capital.

Hong Kong Skyline

Hong Kong opportunities

Current

Current

  • Healthy, functional, fresh and organic food
  • Premium organic meat and seafood
  • Student recruitment into higher education
  • Consumer products in health and wellbeing such as essential oils, natural skincare products
  • Infant care – baby food, skincare products
  • Investment into agriculture and infrastructure into Queensland

Sector opportunities in Hong Kong

90% of produce and protein food imported.

Food and agribusiness

Hong Kong imports 90% of its produce and protein food, including processed meat, horticulture produce, premium seafood, and organic food, making it an ideal market for promoting Queensland fresh food and value-added products.

Hong Kong is also a target market for agri-investment in Queensland’s food and hospitality industry.

There is a trend towards organic food and healthy snacks as awareness about health and wellbeing increases.

A$32.9 billion has been allocated for hospital and medical facilities

Infrastructure

Hong Kong’s 2018 budget (the first budget of the current government) was released by Chief Executive Lam in February 2018. Key announceables included further investment in cross-border infrastructure, rail/road and aviation, smart liveable cities, technology, health care, education, tourism attraction, social welfare (caring and sharing) and the aging population. The Hong Kong Government will continue to support the broader initiatives of One Belt One Road and the Greater Bay Area (GBA) with mainland China.1

1Government of the Hong Kong Special Administrative Region. 2018–19 Budget.

Technology and Innovation

The 2018–19 budget has allocated an additional HK$50 billion to advancing Hong Kong’s innovation and technology industries. (in addition to the HK$100 billion allocated in the 2017-18 budget).2

This year’s budget allocation includes $20 billion for the first phase of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop for site formation, infrastructure, superstructure and initial operation. Given the scale of the development, it is estimated that the whole project will eventually cost far more than HK$20 billion.

2Government of the Hong Kong Special Administrative Region. 2018–19 Budget.

Health care

Sharing and caring is a key theme of the 2018–19 Hong Kong budget, with health care and aged care being a priority focus area. A 10-year hospital development plan amounting to HK$200 billion has also commenced. The expenditure on public healthcare services will increase by 13.3% to HK$71.2 billion in 2018–19, accounting for 17.5% of total recurrent expenditure. Additional recurrent funding of nearly HK$6 billion will be allocated to the Hospital Authority in 2018–19 to increase the number of hospital beds, operating theatre sessions, the quota for general out-patient and specialist out-patient services and the staff required.
 

Land resources

  • Public housing: estimated production for the next five years is about 100,000 units
  • Private housing: projected supply of first-hand private residential property in the next 3 to 4 years is about 97,000 units
  • Annual production of private residential units in the next 5 years is estimated to be about 20,800 units on average, up by 50% over the past 5 years
  • Potential land supply for private housing in 2018–2019 is expected to have a capacity to produce about 25,500 units
  • 2018–2019 Land Sale Programme included 4 commercial/hotel sites, capable of providing about 530,000 square metres of floor area
  • Set aside $1 billion to subsidise eligible projects to optimise the use of vacant government sites or school premises

Environment

Following the allocation of HK$200 million last year, this year’s budget sets aside another HK$800 million this year to further promote the installation of renewable energy facilities at government buildings, venues and community facilities. The government will also enhance tax concessions for capital expenditure incurred by enterprises in procuring eligible energy-efficient building installations and renewable energy devices by allowing tax deductions to be claimed in full in 1 year instead of the current timeframe of 5 years. Waste management is also an area of priority for innovation and development in Hong Kong.
 

Art and culture

  • Set aside $20 billion for the improvement and development of culture facilities, including the construction of the new Territories East Culture Centre and the expansion of the Hong Kong Science Museum and Hong Kong Museum of History, and allocate $500 million for acquisition of museum collections and holding exhibitions

Greater Bay Area (GBA) initiative

  • The Guangdong–Hong Kong–Macau GBA Initiative is an advanced version of the Pearl River Delta Initiative, aimed mainly at the mainland Chinese part of the region. The GBA was first brought up in China’s 13th five-year plan (2016–2020) and now has the support of China’s National Development and Reform Commission (NDRC) and the governments of Guangdong, Hong Kong and Macau. GBA’s 11 cities have a total population of nearly 67 million, which is greater than the Tokyo Metropolitan Area – making it the world’s largest city cluster with a population of 44 million. The GBA also has a combined GDP of US$1.34 trillion (compared to the US$1.61 trillion of Greater New York and US$1.78 trillion of Greater Tokyo). Hong Kong remains the single biggest economy of the 11 cities, with a GDP of US$319 billion in 2016. It is likely to be overtaken by Guangzhou (US$285 billion) and Shenzhen (US$283 billion) in the foreseeable future.
  • Hong Kong is exploring opportunities to leverage its unique ‘system’ of rule by law, intellectual property protection and the open market (including capital market), to develop joint projects with mainland China across innovation, technology, research and development, education, health and aged care, advanced manufacturing, infrastructure financing and aviation financing. Hong Kong’s GBA may also create opportunities for greater supply chain access and efficiency in mainland China for imported products and services that are already using the country as an entry market/base market.