It’s been 20 years since Hong Kong returned to Chinese sovereignty under the “one country, two system” framework. As a part of the ongoing Chinese economic reforms that began in the late 1970s, Hong Kong’s return brought the former British crown colony closer to the Chinese mainland both politically and economically.
Here are some visualizations of important economic indicators that show the trajectory of Hong Kong’s economic growth before and after the 1997 handover.
IMPORTS, EXPORTS, RE-EXPORTS
Using data from the Hong Kong Census and Statistics Department the following chart shows the number of imports and exports in Hong Kong from 1992-2016.
Although Hong Kong’s imports and exports have grown steadily, Hong Kong is also a large hub for re-exports, as Hong Kong serves as a major transfer station for goods that imported and then delivered to other final destinations.
Trade to and from the Chinese mainland benefits a great deal from Hong Kong’s prime geographic location in the Pearl River Delta and its status as a Special Administrative Region of China.
According to the Hong Kong Government, approximately $407 billion in goods were re-exported through Hong Kong efrom or to the Chinese mainland in 2016, taking up 89.1 percent of Hong Kong’s total re-exports.
PURCHASING POWER PARITY
The “Mainland and Hong Kong Closer Economic Partnership Arrangement” (CEPA) was signed in 2003 to offer tariff-free treatment to all goods from Hong Kong that meet its rules of origin.
The value of Hong Kong’s total exports to the Chinese mainland is approximately HK$ 1,943 billion ($250 billion), making up about 41.6 percent of Hong Kong’s total exports in 2016, according to data from the Census and Statistics Department.
Purchasing Power Parity or PPP is an economic concept that relates the exchange rate of currencies to the purchasing power of its people, using the United States dollar as a standard to measure other currencies.
For example, if the same product costs $100 in the U.S. and $50 in another country, the purchasing power parity rate of the other country is 2. The greater the PPP rate, the more goods and services can be consumed in a particular country.
The chart below looks at the Hong Kong dollar’s PPP conversion factor – the rate of the number of goods and services that can be bought in Hong Kong compared to in the United States – based on GDP.
The Hong Kong dollar’s PPP reached a peak at 8.34 in 1998, before gradually dipping to 5.37 in 2010.
GROSS DOMESTIC PRODUCT
Hong Kong’s total Gross Domestic Product (GDP) and per capita GDP has also grown since the handover, according to data from the Census and Statistics Department. The data uses chained 2015 Hong Kong dollars, which means the data was adjusted for inflation based on 2015 Hong Kong dollars.
To see what that amounts to in U.S. dollars, we converted the GDP and real GDP to the U.S. dollar using the average exchange rate between Hong Kong dollars and U.S. dollars in 2015.
The data show that both total GDP and GDP per capita in Hong Kong grew steadily until 1997 when it reached $177 billion before resurging at a faster pace in 2004 to reach $321 billion in 2016.