Hong Kong’s position as one of the world’s most important economic centers is based on several factors. It is located midway between Japan and Singapore, and it lies astride the main shipping and air routes of the western Pacific. It also has long served as a major port of entry and trade for China, which uses Hong Kong as a primary link to the world economy. Furthermore, Hong Kong has a favorable atmosphere for business and trade. Despite the uncertainty associated with its return to China, which has a Communist government, Hong Kong continues to thrive economically and attract new migrants. Hong Kong’s economy has always been based upon commerce, trade, and shipping, and today it vies with Singapore as the world’s largest container port. Industry and tourism are also important, and agriculture continues to provide a significant share of the territory’s food and flower supplies, although Hong Kong must import the majority of its food.
Hong Kong has 422 square miles (1,092 square kilometres) of land area, including land reclaimed from the sea, and the area continues to grow as more land is reclaimed. Hong Kong Island and its adjacent islets have an area of only about 35 square miles, while urban Kowloon, which includes the Kowloon Peninsula south of Boundary Street, and Stonecutters Island measure only about six square miles. The New Territories account for the rest of the area, amounting to more than 90 percent of the total. The Victoria urban district located on the barren rocks of the northwestern coast of Hong Kong Island is the place where the British first landed in 1841, and it has since been the centre of administrative and economic activities.
Hong Kong has a bustling free market economy highly dependent on international trade. Natural resources are limited, and food and raw materials must be imported. Indeed, imports and exports, including reexports, each exceed GDP in dollar value. Even before Hong Kong reverted to Chinese administration on 1 July 1997 it had extensive trade and investment ties with China. Per capita GDP compares with the level in the four big countries of Western Europe. GDP growth averaged a strong 5% in 1989-97. The widespread Asian economic difficulties in 1998 hit this trade-dependent economy quite hard, with GDP down 5%. The economy is undergoing a rapid recovery, with growth of 10% in 2000 to be followed by projected growth of 5% in 2001.
