Hong Kong

Danielle Kassab

Overall Score: 89.6 World Rank: 1

Hong Kong Quick Facts/United States

Population: $7.2 million/$316.4 million

GDP: $381.9 billion/$16.8 trillion

GDP Growth: 2.9% / 1.9%

GDP Per Capita: $52,722 / $53,101

Unemployment: 3.3% / 7.5%

Inflation: 4.3% / 1.5%

Foreign Direct Investment: $76.1 billion/$187.5 billion

Big image

7 Major Sources of Economic Progress

Legal System

In Hong Kong private property is guaranteed by the government. The court system enforces contracts efficiently and the justice system punishes those unlawfully confiscate private property. Hong Kong has relatively low rates of corruption. Hong Kong's property rights are well protected.

Competitive Markets

Hong Kong's economy has long been one of the freest and most competitive. In Hong Kong there are attempts and behavior that reduce competition. Hong Kong must work continuously maintain competition in the market. Competition in a market ensures effective distribution of economic resources, facilitates continuous innovation of products and services, and enhances efficiency in supply.

Limits on Government Regulation

Business freedom is an overall indicator of the efficiency of government regulation of business. Hong Kong has the freest business environment. The competitive and transparent regulatory framework supports dynamic business formation and operation.

An Efficient Capital Market

Hong Kong is the third largest exchange in the Pacific Basin of Asia. Different imports entering a country can face different tariffs. The large and growing financial exposure to the mainland continues to deepen.

Monetary Stability

Hong Kong, a global free port and financial hub, continues to thrive on the free flow of goods, services, and capital. The monetary policy objective of Hong Kong is currency stability, defined as a stable external exchange value of the currency of Hong Kong, in terms of its exchange rate in the foreign exchange market against the US dollar, at around HK$7.80 to US$1.

Low Tax Rates

Hong Kong's standard income tax rate is 15 percent, the top corporate tax rate is 16.5 percent, and the overall tax burden equals 13.7 percent of domestic income. The public debt is low and a budget surplus has been maintained. Hong Kong keeps it very simple. There's no capital gains tax, there's no dividend tax, there's no tax on interest, and you are only taxed on income earned in Hong Kong - not overseas.

Free Trade

Hong Kong has a 0 percent average tariff rate and remains one of the world's most open economies for international trade and investment. Hong Kong doe snot charge tariff on importation or exportation of goods. Import and export licensing is also kept to a minimum.