How Hong Kong still remain one of the most competitive financial cities?
Hong Kong is the major financial center in China. It still holds its position as one of the world's leading finance centers. Hong Kong is one of the freest economies with perfect infrastructure support, efficient legal systems and low tax revenues for both individuals and business entities. For centuries it has been at the forefront in trade, banking and investment services. The stock exchange market in Hong Kong is around 15th largest in the world when compared to NYSE & NASDAQ exchanges in terms of market valuation. Being an international hub it serves Asian Countries mainly Mainland China including Taiwan & Japan.
Hong Kong has very few natural resources to support its economy. It depends mainly on the services sector which includes financial, banking and telecommunication industries. Real estate and tourism industry also contribute a lot to the revenue generation of the country. The economy is well diversified and employs different strategies to generate a large volume of income for supporting its population over there . The government is very careful in its spending and is not indulged in any type of debt. It restricts itself to generate incomes by taxation revenues or otherwise. This has proved to be beneficial for the country as now it has become one of the wealthiest countries in the world with GDP per capita around $43,000. Its centrally planned economy helps it to achieve success in different major industries.
Hong Kong has a very sophisticated market. It is one of the largest stock exchange markets in Asia, being at 15th position worldwide . It also provides several other economic services to its customers which include commercial banking, insurance and asset management etc. Hong Kong is a safe haven for foreigners as it does not tax overseas profits of global companies, capital gains on shares, dividends on foreign securities nor income from overseas bank deposits.
Hong Kong has become an important global trading center being 6th in the world. It is competing with Tokyo for this position . Hong Kong's Central Bank always works under the supervision of the International Monetary Fund (IMF). The currency unit adopted by Hong Kong is known as 'Hong Kong dollar'. It is pegged to the American dollar at a rate of HK 7.75 per 1 US$. Hong Kong has a very low budget deficit and this factor helps it to maintain a healthy economy.
The infrastructure in Hong Kong has been rated as world's best by the World Economic Forum for its excellent performance. Its ports, roads, telecommunication and public transport are found to be of the highest quality. The government has always concentrated on building infrastructural facilities which have proved very beneficial for the country.
The taxation system in Hong Kong is non-intrusive. It charges low tax rates for both individuals as well as business entities. It also allows its citizens to enjoy zero tax on profits made outside Hong Kong.
Hong Kong is a free economy with very few restrictions in terms of trade and economic activities. Anyone can establish his business under any field easily without worrying much about the government regulations. The laws are well defined and it leaves enough space for starting new businesses .
Hong Kong has an excellent business infrastructure with highly skilled professionals working for its various institutions. It has a very strong legal system which provides necessary support to the businesses over there. The judiciary is independent and free from any political intervention.
Hong Kong has been rated as one of the least corrupt countries in Asia and is found to be ranked in the top 10 most corruption-free countries in the world. This factor has increased its productivity and people are very happy with its policies.
Hong Kong's population is found to be highly skilled and literate. It provides excellent education opportunities to all its citizens who can study under different scholarship programs funded by both government as well as non-government institutions . As a result, today Hong Kong has a highly skilled workforce which has been attracting multinational as well as local businesses. The investors only need to pay for labor costs and practically nothing else.
The working conditions in Hong Kong are found to be better than many other countries . The laws governing labor relations are very strict and there is no room for any type of unethical practices from the employers' side. The employees in Hong Kong enjoy a lot of freedom and they can work under any conditions provided by their employer.
The employment policies of the government are more focused on attracting foreign investors to its territory . It has been successful in achieving this goal as today many multinational companies have set up their manufacturing plants in Hong Kong which in turn has resulted in large-scale employment generation.
Hong Kong's economy is considered to be very strong and vibrant, remaining unaffected by various global economic crises. The manufacturing industry plays an important role in the development of this country. Being a small place it can't provide all types of goods required for its population to survive, therefore it has to depend on foreign markets for importing its daily needs.
The manufacturing industry in Hong Kong serves many purposes especially for the China market where it satisfies the demands of locals residing there. The products manufactured are exported to various parts of Asia including Mainland China, Taiwan and Japan. Many multinational companies have set up their plants in Hong Kong for their production which has also increased its employment opportunities.
Hong Kong has proved to be one of the most competitive cities in Asia. It is said that its competitiveness depends on many factors like (i) its trade and investment environment; (ii) labor market; (iii) infrastructure for business, (iv) government policies regulating business, etc. Many of these factors are found to be directly related to its economic health. The policies of the government are exercised with an aim to improve the overall conditions of the country. It tries to achieve an optimum level of balance in all areas so that everything goes smoothly and according to plans.
Hong Kong has maintained a healthy balance between its economy, people's satisfaction and environmental concerns which have resulted in making it one of the best business destinations in Asia.