RESTRICTED  
  
WT/TPR/S/ 450 
11 October 2023  
(23-6814) Page: 1/121 
Trade Policy Review Body   
 
  
TRADE POLICY REVIEW  
REPORT BY THE SECRETARIAT  
HONG KONG, CHINA 
This report, prepared for the ninth Trade Policy Review of Hong  Kong,  China , has been drawn up by 
the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establishing the Trade Policy Review Mechanism (Annex  3 of the Marrakesh Agreement Establishing 
the World Trade Organization), sought clarification from Hong  Kong,  China  on its trade policies and 
practices.  
 
Any technical question s arising from this report may be addressed to Masahiro  Hayafuji 
(tel. 022 739 5873), Denby  Probst (tel.  022 739 5847), and Fatima  Chaudhri (tel.  022 739 6384).  
 
Document WT/TPR/G/ 450 contains the policy statement submitted by Hong Kong,  China.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Hong  Kong,  China . This report was 
drafted in English.  
  WT/TPR/S/ 450 • Hong Kong, China  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  11 
1.1   Main features of the economy  ................................ ................................ ....................  11 
1.2   Recent economic developments  ................................ ................................ ..................  13 
1.2.1   Growth and employment  ................................ ................................ .........................  13 
1.2.2   Fiscal policy  ................................ ................................ ................................ ..........  15 
1.2.3   Monetary policy, prices, and exchange rates  ................................ ..............................  15 
1.2.4   Balance of payments  ................................ ................................ ..............................  16 
1.2.5   Outlook  ................................ ................................ ................................ ................  17 
1.3   Developments in trade and investment  ................................ ................................ ........  18 
1.3.1   Trends and pa tterns in merchandise and services trade  ................................ ...............  18 
1.3.1.1    Merchandise trade  ................................ ................................ ...............................  18 
1.3.1.2    Services trade  ................................ ................................ ................................ .... 20 
1.3.2   Trends and patterns in direct investment  ................................ ................................ ... 22 
2   TRADE AND INVESTMENT REGIMES  ................................ ................................ ...........  25 
2.1   General framework  ................................ ................................ ................................ ... 25 
2.2   Trade policy formulation and object ives ................................ ................................ ....... 25 
2.2.1   COVID -19-related trade policy measures  ................................ ................................ ... 27 
2.2.2   Consultation and dialogue with stakeholders on trade policy  ................................ .........  28 
2.3   Trade agreements and arrangements  ................................ ................................ ..........  28 
2.3.1   WTO ................................ ................................ ................................ ....................  28 
2.3.2   Regional and preferential agreements  ................................ ................................ ....... 29 
2.3.2.1    Reciprocal trade agreements  ................................ ................................ .................  29 
2.3.2.2    Unilateral preferences  ................................ ................................ ..........................  31 
2.3.3   Other agreements and arrangements  ................................ ................................ ........  31 
2.4   Investment regime  ................................ ................................ ................................ ... 32 
2.4.1   Framework  ................................ ................................ ................................ ...........  32 
2.4.2   Investment promotion activities  ................................ ................................ ...............  33 
2.4.3   Investment restrictions  ................................ ................................ ...........................  34 
3   TRADE POLICIES AND PRACTICES BY MEASURE  ................................ ........................  35 
3.1   Measures directly affecting imports  ................................ ................................ .............  35 
3.1.1   Customs procedures, valuation, and requirements  ................................ ......................  35 
3.1.1.1    Recent developments  ................................ ................................ ..........................  36 
3.1.1.2    Customs appeals and enforcement  ................................ ................................ ........  36 
3.1.1.3    Trade facil itation  ................................ ................................ ................................ . 37 
3.1.1.3.1    Authorized Economic Operators (AEO)  ................................ ................................ . 39 
3.1.1.3.2    Single window ................................ ................................ ................................ .. 39 
3.1.1.4    Customs valuation  ................................ ................................ ...............................  40 
3.1.2   Rules of origin  ................................ ................................ ................................ ....... 40 WT/TPR/S/ 450 • Hong Kong, China  
 
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  3.1.3   Tariffs  ................................ ................................ ................................ ..................  41 
3.1.4   Other charges affecting imports  ................................ ................................ ...............  43 
3.1.5   Import prohibitions, restrictions, and licensing  ................................ ...........................  45 
3.1.6   Anti-dumping, countervailing, and safeguard measures  ................................ ...............  49 
3.1.7   Other measures affecting imports  ................................ ................................ ............  50 
3.2   Measures directly affecting exports  ................................ ................................ .............  50 
3.2.1   Customs procedures and requirements  ................................ ................................ ..... 50 
3.2.2   Taxes, charges, and levies  ................................ ................................ ......................  50 
3.2.3   Export prohibitions, restrictions, and licensing  ................................ ............................  51 
3.2.4   Export support and promotion  ................................ ................................ .................  53 
3.2.5   Export finance, insurance, and guarantees  ................................ ................................  54 
3.3   Measures affecting production and trade  ................................ ................................ ...... 56 
3.3.1   Incentives  ................................ ................................ ................................ ............  56 
3.3.1.1    Measures notified under the SCM  Agreement  ................................ ..........................  56 
3.3.1.2    Budget and COVID -19 pandemic support measures  ................................ ..................  57 
3.3.1.3    Taxation, tax rebates, and other non -tax schemes  ................................ ...................  59 
3.3.1.4    Focus on Hong  Kong,  China enterprises and SMEs  ................................ ....................  62 
3.3.2   Standards and other technical requirements  ................................ ..............................  63 
3.3.2.1    Accreditation and conformity assessment  ................................ ...............................  65 
3.3.2.2    International and other cooperation  ................................ ................................ ....... 65 
3.3.3   Sanitary and phytosanitary requirements  ................................ ................................ .. 66 
3.3.4   Competition policy and price controls  ................................ ................................ ........  69 
3.3.5   State trading, state -owned enterprises, and privatization  ................................ .............  71 
3.3.6   Government procurement  ................................ ................................ .......................  73 
3.3.7   Intellectual property rights  ................................ ................................ ......................  78 
3.3.7.1    Framework  ................................ ................................ ................................ .........  79 
3.3.7.2    Recent developments  ................................ ................................ ..........................  81 
3.3.7.3    Enforcement  ................................ ................................ ................................ ....... 83 
4   TRADE POLICIES BY SECTOR  ................................ ................................ .....................  85 
4.1   Agriculture, forestry, and fisheries  ................................ ................................ ..............  85 
4.1.1   Overview  ................................ ................................ ................................ ..............  85 
4.1.2   Policy and regulatory developments  ................................ ................................ ..........  85 
4.1.2.1    Production and trade  ................................ ................................ ...........................  85 
4.1.2.2    Farm support measures  ................................ ................................ .......................  86 
4.1.3   Rice ................................ ................................ ................................ .....................  87 
4.1.4   Fisheries  ................................ ................................ ................................ ...............  88 
4.2   Mining and energy  ................................ ................................ ................................ .... 88 
4.2.1   Policy and regulatory development s ................................ ................................ ..........  89 
4.3   Manufacturing  ................................ ................................ ................................ ..........  90 
4.4   Services  ................................ ................................ ................................ ..................  91 WT/TPR/S/ 450 • Hong Kong, China  
 
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  4.4.1   Financial services  ................................ ................................ ................................ ... 91 
4.4.1.1    Overview  ................................ ................................ ................................ ...........  91 
4.4.1.2    Banking services  ................................ ................................ ................................ . 92 
4.4.1.3    Insurance services  ................................ ................................ ..............................  94 
4.4.1.4    Securities  ................................ ................................ ................................ ..........  96 
4.4.1.5    Mutual funds and asset management  ................................ ................................ ..... 98 
4.4.1.6    Financial technology (Fintech)  ................................ ................................ ...............  98 
4.4.2   Telecommunications services  ................................ ................................ ...................  99 
4.4.2.1    Overview  ................................ ................................ ................................ ...........  99 
4.4.2.2    Policy and regulatory developments  ................................ ................................ ..... 100 
4.4.3   Transport  ................................ ................................ ................................ ...........  102 
4.4.3.1    Maritime transport  ................................ ................................ ............................  102 
4.4.4   Tourism  ................................ ................................ ................................ ..............  103 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 105  
 
CHARTS  
Chart  1.1 Product composition of merchandise trade by main HS section, 2018 and 2022  ...........  19 
Chart  1.2 Direction of merchandise trade, 2018 and 2022  ................................ ......................  20 
 
TABLES  
Table  1.1 GDP and employment by economic activity, 2018 -22 ................................ ..............  11 
Table  1.2 Selected macroeconomic indicators, 2018 -22 ................................ .........................  13 
Table  1.3 Balance of payments, 2018 -22 ................................ ................................ .............  16 
Table  1.4 Composition of trade in services, 2018 -22 ................................ .............................  21 
Table  1.5 Stock of direct investment by major economic activity, 2018 -22 ...............................  22 
Table  1.6 Stock of direct investment by selected major economy, 2018 -22 ..............................  23 
Table 2.1 Overview of Hong  Kong,  China's FTAs and merchandise trade, 2022  ..........................  29 
Table 2.2 New or amended FTAs, 2018 -23 ................................ ................................ ...........  31 
Table 2.3 FTAs and IPPAs, 2023  ................................ ................................ .........................  32 
Table 3.1 Overview of Customs revenues and operations, FY2017/22  ................................ ...... 35 
Table 3.2 Customs enforcement, 2018 -22 ................................ ................................ ...........  37 
Table 3.3 Single window overview  ................................ ................................ ......................  39 
Table 3.4 Bound and applied tariffs, by WTO definition, 2023  ................................ .................  42 
Table 3.5 Dutiable commodity rates, 2018 and 2023  ................................ .............................  43 
Table 3.6 Internal tax collection, FY2017/18 FY2021/22  ................................ ........................  44 
Table 3.7 FRT rates for motor vehicles, FY2017/18 and 2023  ................................ .................  44 
Table 3.8 Prohibitions or restrictions on imports, 2023  ................................ ..........................  46 
Table 3.9 Products subject to import licensing, 2023  ................................ .............................  47 
Table 3.10 Prohibitions, restrictions, or licensing on exports, 2023  ................................ ..........  51 
Table 3.11 Overview of HKECIC activities, 2018 -22 ................................ ...............................  55 WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.12 WTO notifications on subsidies, 2023  ................................ ................................ .. 57 
Table 3.13 Anti -epidemic Fund  ................................ ................................ ...........................  58 
Table 3.14 Selected COVID -19 support measures related to businesses and trade in the 
Budgets, 2020 -23 ................................ ................................ ................................ ............  59 
Table 3.15 Tax incentives and tax holidays introduced, 2018 -23 ................................ .............  60 
Table 3.16 Main funds or schemes available to enterprises, including SMEs  ..............................  63 
Table 3.17 Changes to the laws on technical regulations  ................................ ........................  64 
Table 3.18 Main legislation on SPS measures  ................................ ................................ ....... 67 
Table 3.19 SPS statistics, 2018 -22 ................................ ................................ .....................  68 
Table 3.20 Key legislation on competition policy, 2023  ................................ ..........................  70 
Table 3.21 Competition enforcement statistics, 2018 -22 ................................ ........................  70 
Table 3.22 Government Business Enterprises, excluding Trading Funds, 2018 and 2022  .............  72 
Table 3.23 Government Business Enterprises, Trading Funds, 2018 and 2022  ...........................  73 
Table 3.24 Government procurement in Hong Kong, China, 2018 -21 ................................ ....... 76 
Table 3.25 IPR overview, 2018 -22 ................................ ................................ ......................  79 
Table 3.26 Framework protecting IPRs, 2022  ................................ ................................ ....... 80 
Table 3.27 Patent applications and grants related to COVID -19 vaccines, and therapeutic 
and diagnostic products, 2020 -22 ................................ ................................ ......................  82 
Table 3.28 Overall IP enforcement statistics, 2018 -22 ................................ ...........................  83 
Table 3.29 Enforcement of IP at the border, 2018 -22 ................................ ............................  84 
Table 4.1 Agricultural exports and imports, 2018 -22 ................................ .............................  85 
Table 4.2 AFCD loan programmes for fisheries, 2018 -22 ................................ ........................  88 
Table 4.3 Insurance penetration and density, 2018 and 21  ................................ ....................  94 
Table 4.4 Insurance companies operating in Hong  Kong,  China, by type of activity,  
2018 and 2022  ................................ ................................ ................................ ................  94 
Table 4.5 Insurance industry assets, 2018 and 2022  ................................ .............................  95 
Table 4.6 Main economic indicators of the telecommunications sector, 2018 -22 ........................  99 
Table 4.7 Average telecom prices, 2022  ................................ ................................ ............  100  
 
BOXES  
Box 2.1 Chief Executive's 2022 Policy Address initiatives related to trade and investment  ...........  26 
Box 3.1 Overview of procurement, 2023  ................................ ................................ .............  74 
Box 4.1 Banking subsector  ................................ ................................ ................................  92 
Box 4.2 Stock exchange and securities subsector, 2018, 2021, and 2022  ................................ . 96 
Box 4.3 Bound trade regimes of the telecommunications sector  ................................ ............  101 
 
APPENDIX TABLES  
Table  A1.1 Merchandise imports by HS section and major HS chapter/heading, 2018 -22 ..........  105 
Table  A1.2 Merchandise imports by origin, 2018 -22 ................................ ............................  106 
Table  A1.3 Merchandise exports by HS section and major HS chapter/heading, 2018 -22 ..........  107 
Table  A1.4 Merchandise exports by destination, 2018 -22 ................................ .....................  108 WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table A2.1 Selected notifications to the WTO, January 2018 -June 2023  ................................ . 109 
Table A3.1 Incentives  ................................ ................................ ................................ ..... 111 
Table A3.2 Main changes to the Stores and Procurement Regulations  resulting from the 
new pro -innovation government procurement policy in 2019  ................................ ................  118 
Table A3.3 Intellectual property laws and regulations, 2023  ................................ .................  119 
 
  WT/TPR/S/ 450 • Hong Kong, China  
 
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  SUMMARY  
1. The economy of Hong  Kong,  China continues to be externally oriented and dependent on trade 
with the rest of the world. In 2023, Hong  Kong,  China ranks 10th among world traders in terms of 
value of trade in goods and services (2.5% of total world trade). The services sector is the main 
contributor to GDP (accounting for more than 90%) and employment (88.4%). The contribution of 
manufacturing to GDP and to employment is modest (1% and 2.1%, respectively).  
2. Impacted by domestic and external shocks such as the COVID -19 pandemic, most 
GDP components posted negative growth rates in 2019 and 2020; the decrease in exports  of goods 
and services was particularly noticeable. While the economy expanded in 2021 in response to the 
adoption of various policy responses and thanks to pre -crises buffers, such as a sufficient level of 
fiscal reserves, it contracted in 2022, due to th e effect of the fifth wave of the COVID -19 pandemic, 
a deteriorated external environment, and tightened financial conditions. Private consumption, 
investment, and exports and imports of goods and services were all negatively impacted.  
3. During the review per iod, government accounts retained strong fiscal and financial 
fundamentals; the fiscal reserve balance recorded surpluses during the whole period despite a shift 
to an expansionary fiscal stance in 2019 -20, when there was an increase in public expenditure in 
response to the COVID -19 pandemic. The Government continued to adopt an expansionary fiscal 
policy in 2022.  
4. Between 2018 and 2022, the value of the Hong  Kong dollar against the US dollar was kept 
within the Convertible Zone (HKD  7.75 and HKD  7.85 agains t the USD) established by the 
Hong Kong Monetary Authority. Interest rates remained low between 2018 and 2021, but 
subsequently increased gradually as a consequence of the tightening of monetary policy in 
the United  States.  
5. Hong Kong,  China recorded a curr ent account surplus between 2018 and 2021 supported by 
an increase in primary income and a surplus in the services balance; the current account surplus 
narrowed in  2022 as merchandise trade reverted to a deficit and more than offset the increase in 
the ser vices trade surplus.  
6. Hong Kong,  China is characterized by having a small production base and a highly specialized 
services industry; it depends on merchandise imports to meet its domestic consumption demands. 
Imports (mainly machinery and electrical equipm ent) for subsequent re -export are the main 
component of overall merchandise exports, accounting for 97.1% of total exports of goods in  2022. 
In terms of trade in services, Hong  Kong,  China maintained a substantial surplus over the review 
period, although i t decreased from 8.7% of GDP in  2018 to 5.5% of GDP in  2022.  
7. Hong Kong,  China is ranked as the third -largest recipient of foreign direct investment (FDI) 
inflows. Hong  Kong,  China also serves as a significant conduit for China's investment flows. The 
British Virgin  Islands continued to be the major source of inward FDI, followed by China, the 
Cayman  Islands, and the United  Kingdom.  
8. The economy is expected to grow in 2023 amid the backdrop of China's economic recovery, a 
rebound in tourism stemming from the removal of COVID -19-related quarantine restrictions, and 
the resumption of normal travel with the rest of the world. Private consumption and private 
investment growth rates are expected to pick up, and the labour market is expected to improve. 
Challenges f acing the economy include high inflationary pressure and monetary tightening in 
advanced economies, which may weaken growth momentum and have an impact on export of goods.  
9. There have been no significant changes in the general overall government framework, and 
the same institutions maintain their roles with respect to Hong  Kong,  China's trade policy. Its trade, 
investment, and related policies leverage the 14th Five -Year Plan of China, which supports 
Hong Kong,  China by reinforcing its competitive advantages  in its four traditional areas (financial 
services, international transportation, trade, and legal and dispute resolution) and in four emerging 
sectors (innovation and technology, international aviation, regional intellectual property trading, and 
internat ional cultural exchange). The authorities consider that the elements under the Belt and Road 
Initiative and the development of the Guangdong -Hong Kong-Macao Greater Bay Area are, inter alia, 
key to greater integration and economic development.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  10. Hong Kong,  China continues to pursue a free and open trade policy and looks to the WTO for 
trade liberalization and safeguarding its rights. Participating in all aspects of the WTO's work has 
been important for Hong  Kong,  China to demonstrate its support for the multi lateral trading system. 
It has also joined various new plurilateral initiatives and the Multi -Party Interim Appeal Arbitration 
Arrangement, and, more recently, accepted the Agreement on Fisheries Subsidies in August  2023.  
11. Free trade agreements continue to be an important part of Hong  Kong,  China's trade policy 
with 8 agreements in place with 20 partners. During the review period, new agreements entered 
into force with the Association of Southeast Asian Nations (ASEAN), Australia, and Georgia. The 
existing a greement with Chile was amended to improve services commitments and the China and 
Hong Kong, China  Closer Economic Partnership Arrangement added two new subsidiary agreements 
on goods and services. There is continued interest by Hong  Kong,  China to pursue FTAs through 
forging new agreements, and it has initiated negotiations with Peru and submitted its accession 
request to the Regional Comprehensive Economic Partnership.  Hong Kong,  China's  FTA partners 
accounted for  61% of total merchandise imports and 69% of merchandise exports in 2022.  
12. There are no specific laws on investment per se in Hong  Kong,  China, but FTAs and 
Investment Promotion and Protection Agreements (IPPAs) continue to be developed or improved 
and thereby contributed to the improvement of its investment framework. Three new IPPAs and 
two new FTAs with investment chapters entered into force during the review period. 
Hong Kong,  China's investment promotion activities have been stepped up in recent years to include 
new institutional setups and ini tiatives targeting enterprises, investment, and talent. A number of 
new organizations or schemes were put in place over the review period for investment promotion 
purposes, including the Hong Kong Investment Corporation Ltd, the Office for Attracting Strat egic 
Enterprises, and several funding schemes.  
13. Regarding customs matters, Hong  Kong,  China had no significant changes to customs import 
procedures during the review period, although it continues to move towards electronic trade 
documents through a gradual implementation of the Trade Single Window (TSW). Currently in 
phase  2 of the implementation process, the TSW is expected to have 28  types of trade documents 
incorporated before reaching the final phase  3 implementation starting in 2026. The Agreement on 
Trade Facilitation was accepted in 2014 and trade -facilitating measures continue to be implemented; 
there are no procedures in place for advance rulings or expedited shipments. Hong  Kong,  China's 
Authorized Economic Operators (AEO) Programme continues to und ergo expansion with new 
accredited AEOs and a growing number of Mutual Recognition Arrangements. A new registration 
regime for dealers in precious metals and stones came into force in April  2023 through the Anti -
Money Laundering and Counter -Terrorist Finan cing Ordinance.  
14. No laws, regulations, or administrative procedures exist specifically for valuing goods for 
customs purposes in Hong  Kong,  China. However, for goods subject to excise duties, a methodology 
for ad valorem  duty assessment is contained in the Dutiable Commodities Ordinance, and for motor 
vehicles subject to the First Registration Tax System, a published retail price system is used for 
valuation. Hong  Kong,  China does not have any specific laws or regulations on non -preferential 
origin but maint ains preferential rules of origin for most of its FTAs. An importer of goods is required 
to submit origin information in the import declaration. Preferential origin criteria vary according to 
each FTA but generally involve several determining criteria such  as change in tariff classification and 
regional value content.  
15. Hong Kong,  China does not apply tariffs on imports, nor does it maintain any tariff rate quotas. 
Thus, its 7,805 tariff lines all have applied rates of zero; its WTO schedule has about half (4 7.6%) 
of these lines bound. All agricultural lines are bound, while 39.4% of non -agricultural goods are 
bound. Excise duties are charged on four categories of goods, (alcoholic liquor, tobacco, hydrocarbon 
oil, and methyl alcohol). The rates of these excis e duties remained unchanged during the review 
period except for the excise duties on tobacco products, which increased in 2023 as a policy measure 
to curb tobacco use.  
16. A number of import and export prohibitions and restrictions continue to be applied on ce rtain 
goods generally due to health, safety, or environmental protection reasons, and to comply with 
obligations under international treaties and agreements. There were no significant changes to the 
lists of products subject to these measures during the re view period, although new legislation was 
put in place to protect toothfish and to prohibit alternative smoking products and mercury or mercury 
mixtures. Licensing requirements are imposed on certain goods, most notably on imports and WT/TPR/S/ 450 • Hong Kong, China  
 
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  exports of strategic commodities. New licensing requirements were enacted for firearms and 
ammunition.  
17. For trade remedies, there have been no developments since the last Review; 
Hong Kong,  China does not have any laws, regulations, or authorities for the application of 
anti-dumping, countervailing, or safeguard measures. However, Hong  Kong,  China's FTAs generally 
contain some provisions on trade remedies, often reaffirming rights and obligations under the 
WTO Agreements.  
18. Customs procedures on exports did not change during the r eview period. Similar to imports, 
export processes are increasingly facilitated through electronic means, including the TSW. Customs 
duties are not charged on exports; however, the Clothing Industry Training Levy on exports is 
charged for most apparel item s manufactured in Hong  Kong,  China. The rate of duty remains at 
HKD 0.30 per HKD  1,000 f.o.b. value. Certain goods are subject to export controls, such as export 
licences/permits, to, inter alia, comply with international obligations or protect public heal th or the 
environment.  
19. Hong Kong,  China has a number of export support and promotion activities aimed to help 
exporters including a government -supported body for export promotion, funds specific to  SMEs and 
branding promotion, and a temporary COVID -19 pand emic−driven subsidy fund for conferences and 
conventions. The long -standing Hong  Kong Export Credit Insurance Corporation continued to provide 
export insurance during the review period, and also commenced offering export guarantees through 
the Export Credi t Guarantee Programme in 2022. A Commercial Data Interchange mechanism was 
launched in 2022 to facilitate access to finance for enterprises, in particular for SMEs.  
20. Tax and non -tax incentives programmes in the form of financial/funding support, tax reducti on 
for certain business activities, and loans and grants are some of the measures maintained by 
Hong Kong,  China to support industry. Most are long -standing programmes, although in some cases, 
the scope has been expanded, or additional programmes/measures have been introduced, such as 
temporary measures during the COVID -19 pandemic. For example, the Anti -epidemic Fund provided 
HKD 228.5  billion over six rounds of funding to support various sectors of the economy, e.g.  the 
tourism industry, wholesale traders , and the convention and exhibition industry.  
21. There has not been any significant change in the organization or structure of 
Hong Kong,  China's standards, testing, and conformity assessment entities since the last Review. 
The Innovation and Technology Commi ssion continues to promote internationally accepted 
standards and conformity assessment measures. Professional associations or institutions lead the 
development of voluntary standards, which are based on the needs or concerns identified by the 
industry. Re gulatory authorities continue to issue standards as necessary and incorporate technical 
regulations into laws when needed. Further, the laws on technical regulations or products subject to 
technical regulations have similarly not changed much except for or dinances on vehicle construction 
and maintenance, construction of buildings and associated works, dangerous goods, and certain 
telecommunications.  
22. Regarding sanitary and phytosanitary requirements, several developments occurred during 
the review period, in cluding legislative changes, new structures, and the introduction of a new 
electronic portal. The Environment and Ecology Bureau was established in July  2022 with expanded 
policy functions on environmental hygiene, food safety, agriculture and fisheries, a nd veterinary 
public health, beyond those of the previous Food and Health Bureau. Amendments were made to 
the Food Adulteration (Metallic Contamination) Regulations, the Harmful Substances in Food 
Regulations, and the Food and Drugs (Composition and Labell ing) Regulations.  
23. Hong Kong,  China has notified that it does not have any state trading enterprises within the 
meaning of the Understanding on Article  XVII of the GATT 1994. However, a long -standing Fish 
Marketing Organization remains in place. Hong Kong,  China has 15 enterprises owned or controlled 
by the Government that are referred to as government business enterprises (GBEs), which take 
different legal forms and operate across a number of sectors. The number of GBEs and their level of 
governm ent ownership remained stable over the review period.  
24. Hong Kong,  China remains a party to the Agreement on Government Procurement with market 
access schedules contained therein and a stated government policy objective of achieving best value WT/TPR/S/ 450 • Hong Kong, China  
 
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  for money and maintaining open and fair competition in procurement. A new pro -innovation 
government procurement policy was launched and implemented during the review period that has 
wide-ranging changes including promoting innovation in procurement, amending the "value for 
money" concept, and assigning dedicated weighting to environmental protection, social 
responsibility, and governance in assessing tenders, among others. Other developments include 
flexibility of payment provisions in response to the pandemic, a revampe d contractor management 
system, a Green Procurement policy, and the launch of the pilot electronic tendering system.  
25. The overall structure and framework of Hong  Kong,  China's intellectual property (IP) 
protection entities have not changed; however, there w ere amendments to various IP laws or 
regulations related to, inter alia, a new and direct filing route, steps towards implementing the 
international registration system for trademarks pursuant to the Madrid Protocol, enhanced 
copyright exceptions, and proh ibitions on the registration of certain designs. Other developments 
include Hong  Kong,  China's continued efforts to further establish itself as a regional IP trading 
centre, the adoption of flexibilities and stepping up efforts to promote IP in response to  the 
pandemic, and carrying out various IP promotion activities.  
26. The economic significance of the agricultural sector in Hong  Kong,  China is modest, and it 
continues to rely mainly on imports for its food supply. In terms of mining and energy, 
Hong Kong,  China produces a limited amount of primary energy, and is a net energy importer. 
During the review period, it revised its renewable energy policies to encourage private -sector 
investment in renewable energy. Most enterprises in the manufacturing sector (98. 6%) are small or 
medium -sized, employing less than 100 persons each.  
27. The services sector is the backbone of Hong  Kong,  China's economy. During the review period, 
its trade balance in financial and insurance services was positive and growing. Over the same period, 
Hong Kong,  China revised its anti -money laundering and counter -financing of terrorism frameworks, 
continued to implement international supervisory standards, and created a framework for fintech.  
28. The telecommunications sector is highly developed and  benefits from the latest technologies 
(e.g. 5G and fibre -based networks). Between 2018 and 2021, the gross output of the telecom 
industry expanded, and exports and imports in the sector also increased. In the same period, the 
authorities adopted policies to simplify the licensing framework to facilitate adoption of innovative 
services by the industry, strengthen the protection of underground telecommunications 
infrastructure, and introduced subsidy schemes for the early deployment of 5G to improve efficien cy 
of operations.  
29. Several pieces of legislation related to maritime transport were enacted during the review 
period to meet the requirements of international organizations or conventions in which 
Hong Kong,  China participates.  
30. In September  2022, the Travel  Industry Authority took over the licensing and trade regulatory 
functions from the Travel Agents Registry and the Travel Industry Council of Hong  Kong, 
respectively. Facing the decline in visitor arrivals between 2020 and 2021 due to the COVID -19 
pandemic , the Hong Kong Tourism Board gave substantial resources to promoting local tourism and 
boosting consumption.  
 WT/TPR/S/ 450 • Hong Kong, China  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main features of the economy  
1.1.  The economy of Hong  Kong,  China  continues to be externally oriented and dependent on trade 
with the rest of the world.  In 2022, its trade to GDP ratio was 383.8% (compared with  376.9% 
in 2018). During the review period, Hong  Kong,  China  retained its position as one of the main global 
trade and financial centres; in 2022, it was ranked 10th among world traders in terms of value of 
trade, accounting for 2.5% of world total trade.1 In March  2023, it was ranked 4th place globally in 
the Global Financial Centres Index.2 
1.2.  The services sector constitutes the backbone of the economy, contributing more than 90% 
of GDP, with financial and insurance ; import/export ; wholesale and retail trades ; and real estate, 
professional , and business services accounting for about 50% of GDP (Table  1.1). The shares in GDP 
of the manufacturing (1% of GDP) and the agriculture, fishing, and mining and quarrying 
sectors  (0.1% of GDP) remain small.  
Table  1.1 GDP and employment by economic activity, 2018 -22 
 2018  2019  2020  2021  2022  
GDP by economic activity in real terms (annual percentage change)  
Agriculture, fishing, mining and quarrying  -1.8 -0.8 3.8 -2.5 -6.0 
Manufacturing  1.3 0.4 -5.8 5.5 0.2 
Electricity, gas and water supply and waste management  0.1 -0.5 -14.2 3.7 -2.5 
Construction  3.3 -9.7 -11.7 -0.6 5.8 
Services  3.1 -0.6 -6.7 5.9 -3.1 
Import/export, wholesale and retail trades  4.2 -7.5 -15.0 13.3 -12.1 
 Import and export trade  3.8 -5.6 -8.1 13.6 -12.9 
 Wholesale and retail trades  6.0 -15.3 -47.3 11.2 -6.8 
Accommodation and food services  5.9 -11.7 -44.8 22.6 -10.8 
Transportation, storage, postal and courier services  2.5 -1.7 -36.9 7.7 -4.6 
 Transportation and storage  2.6 -1.5 -39.8 6.4 -4.5 
 Postal and courier services  1.0 -3.9 10.5 20.6 -6.2 
Information and communication  4.1 4.7 1.7 2.6 0.8 
Finance and insurance  4.0 3.4 4.0 4.7 -0.1 
Real estate, professional and business services  -0.4 -0.2 -4.6 2.1 -2.7 
 Real estate  -3.1 -1.6 -3.6 2.3 -4.6 
 Professional and business services  2.0 1.0 -5.4 1.9 -1.3 
Public administration, social and personal services  3.6 3.2 -2.3 4.4 0.7 
Ownership of premises  1.0 0.6 -0.3 1.2 0.6 
Share of GDP at current basic prices (%)  
Agriculture, fishing, mining and quarrying  0.1 0.1 0.1 0.1 .. 
Manufacturing  1.0 1.1 1.0 1.0 .. 
Electricity, gas and water supply and waste management  1.3 1.2 1.4 1.3 .. 
Construction  4.5 4.2 4.1 4.0 .. 
Services  93.1 93.4 93.4 93.7 .. 
Import/export, wholesale and retail trades  21.3 19.5 18.4 19.4 .. 
 Import and export trade  17.2 16.1 15.9 16.8 .. 
 Wholesale and retail trades  4.1 3.4 2.5 2.6 .. 
Accommodation and food services  3.4 2.8 1.4 1.7 .. 
Transportation, storage, postal and courier services  5.9 5.5 4.5 7.3 .. 
 Transportation and storage  5.5 5.2 4.0 6.9 .. 
 Postal and courier services  0.3 0.3 0.4 0.4 .. 
Information and communication  3.4 3.5 3.7 3.6 .. 
 
1 WTO (2023), Global Trade Outlook and Statistics . Viewed  at: 
https://www.wto.org/english/res_e/booksp_e/trade_outlook23_e.pdf . 
2 Government of Hong  Kong,  China  (2023). Viewed  at: 
https://www.info.gov.hk/gia/general/202303/23/P2023032300621.htm . WT/TPR/S/ 450 • Hong Kong, China  
 
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   2018  2019  2020  2021  2022  
Finance and insurance  19.8 21.2 23.4 21.3 .. 
Real estate, professional and business services  10.4 10.1 9.5 9.1 .. 
 Real estate  4.6 4.5 4.2 3.9 .. 
 Professional and business services  5.8 5.6 5.3 5.3 .. 
Public administration, social and personal services  18.5 19.6 20.7 20.5 .. 
Ownership of premises  10.5 11.3 11.8 10.8 .. 
Share of sector in total employment (%)  
Manufacturing  2.3 2.3 2.3 2.2 2.1 
Construction  8.9 8.6 8.4 8.8 9.0 
Services  88.3 88.6 88.8 88.5 88.4 
Import/export, wholesale and retail trades  22.5 21.1 19.7 19.0 18.9 
 Import and export trade  12.5 11.5 10.7 10.2 10.1 
 Wholesale and retail trades  10.0 9.6 9.0 8.8 8.8 
Accommodation and food services  7.2 7.1 6.4 6.5 6.6 
Transportation, storage, postal and courier services  7.9 8.0 7.9 7.9 7.7 
Information and communications  2.9 2.9 3.0 3.0 3.0 
Financing and insurance  6.8 7.1 7.5 7.6 7.4 
Real estate  3.6 3.7 4.0 4.1 4.1 
Professional and business services  10.4 10.6 11.1 11.1 11.1 
Public administration  3.0 3.1 3.3 3.5 3.6 
Education  5.6 5.8 6.0 5.9 6.0 
Human health and social work services; and arts, entertainment 
and recreation  6.7 7.0 7.3 7.4 7.7 
Other social and personal services  11.8 12.1 12.6 12.5 12.3 
Othersa 0.5 0.5 0.5 0.5 0.5 
.. Not available.  
a Including the industries of agriculture, forestry , and fishing; mining and quarrying; and electricity, 
gas and water supply, and waste management.  
Source:  Census and Statistics Department. Viewed  at: http://www.censtatd.gov.hk ; and data provided by 
the authorities.  
1.3.  Since  2018, various measures aiming to maintain Hong  Kong,  China 's competitive advantages 
and increase growth have been introduced, especially after the outbreak of the COVID -19 pandemic. 
According  to the authorities, measures included those that would consolidate and enhance 
Hong Kong,  China's status as an international financial, innovation and technology, trade and 
shipping centre, and aviation hub, as well as a regional intellectual property tra ding centre . 
Hong Kong,  China has also adopted measures to attract enterprises, investment , and talent to 
enhance its competitiveness so as to create strong impetus for long -term growth. Measures include 
the establishment of the Office for Attracting Strategic Enterprise and the Talents Service Unit.3 
Temporary support measures, such as taxation relief, have also been implemented to support 
enterprises, especially small and medium -sized enterprises (SMEs) in response to the 
COVID -19 pandemi c. 
1.4.  The authorities have also continued to implement policies with the aim of further strengthening 
economic and trade relations with trading partners, including through entering into new trade and 
investment agreements, and pursuing further liberalization under existing agreements (Section  2.3). 
During the review period, Hong  Kong,  China  signed three new free trade agreements (FTAs), which 
have all entered into force. In 2018, Hong  Kong,  China  and China signed the Agreement on Trade 
in Goods, consolidating and updating the commitments on liberalization and facilitation of trade in 
goods under the China and Hong Kong Closer Economic Partnership Arrangement (CEPA), which was 
signed in 2003. In 2019, they signed the Agreement concerning Amendment to the CEPA  Agreement 
on Trade in Services, which updated the commitments on liberalization and facilitation of trade in 
services under the Agreement on Trade in Services implemented since  June 2016.  
 
3 Government of Hong  Kong,  China  (2022), Policy Address . Viewed  at: 
https://www.policyaddress.gov.hk/2022/en/p25.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  1.2  Recent economic developments  
1.2.1   Growth and employment  
1.5.  According to the au thorities, economic growth during the review period was impacted by 
various domestic and external shocks including the COVID -19 pandemic; as a consequence, 
most GDP components, except for government consumption and imports of services, were marked 
by negat ive growth rates both in 2019 and 2020 (Table  1.2). The decrease in exports of goods and 
services was particularly noted with a drop of 6.1% in 2019 and a further decrease in 2020. Imports 
of goods and services also decreased during the same period. Privat e consumption featured negative 
growth in 2020, and the unemployment rate sharply increased in 2020 (5.8%) after declining to its 
lowest rate since 1997 in 2018 (2.8%).4 Unemployment in all major sectors deteriorated, with the 
construction sector and thos e consumption - and tourism -related sectors hardest hit.5 Analy zed by 
skill segment, the lower -skilled segment was more adversely affected.  
Table  1.2 Selected macroeconomic indicators, 2018 -22 
  2018  2019  2020  2021  2022  
Real GDP (HKD  billion, 2021 prices)  2,931.8  2,882.7  2,694.1  2,867.6  2,767.9  
Current GDP (HKD  billion)  2,835.4  2,845.0  2,675.8  2,867.6  2,818.0  
Current GDP (USD  billion)  361.7  363.1  345.0  368.9  359.8  
GDP per capita at current market price (HKD)  380,462.0  378,937.0  357,679.0  386,832.0  383,611.0  
GDP per capita at current market price (USD)  48,535.0  48,358.0  46,110.0  49,760.0  48,980.0  
National accounts  (% change, unless otherwise indicated)  
Real GDP  2.8 -1.7 -6.5 6.4 -3.5 
 Consumption  5.2 -0.1 -8.1 5.6 0.3 
 Private consumption  5.3 -0.8 -10.6 5.6 -1.2 
 Government consumption  4.2 5.1 7.9 5.9 8.2 
 Gross domestic fixed capital formation  1.7 -14.9 -11.1 8.3 -7.7 
 Exports of goods and non -factor servicesa 3.7 -6.1 -6.7 17.0 -12.6 
 Goodsa 3.5 -5.5 -1.4 18.7 -13.9 
 Servicesa 4.6 -9.6 -34.8 3.4 -1.4 
 Imports of goods and non -factor servicesa 4.5 -7.2 -6.9 15.8 -12.2 
 Goodsa 4.7 -8.2 -3.2 17.2 -13.2 
 Servicesa 2.8 0.1 -32.2 2.5 -1.7 
 XGS/GDP (%) (at current market price)a 188.3  177.7  176.3  204.0  193.9  
 MGS/GDP (%) (at current market price)a 188.6  176.1  174.4  198.5  189.9  
Unemployment rate (%)  2.8 2.9 5.8 5.2 4.3 
Labour force participation rate (%)  61.3 60.7 59.7 59.4 58.2 
Prices and interest rates  
Inflation (CPI, % change)  2.4 2.9 0.3 1.6 1.9 
Lending rate (period average)  5.04 5.10 5.00 5.00 5.10 
Deposit rate (period average)  0.04 0.14 0.06 0.02 0.05 
Three -month HIBORb 1.8 2.1 1.1 0.2 2.1 
Exchange rate  
HKD/USD (period average)  7.839  7.836  7.757  7.774  7.832  
Nominal effective exchange rate index 
(2020=100)  96.2 99.4 100.0  95.5 100.1  
Real effective exchange rate (2010=100)  113.2  117.7  117.2  111.8  115.4  
 (% of GDP, unless otherwise indicated)  
Fiscal balancec 
Government opening reserve balance  38.7 41.9 42.6 32.6 .. 
 
4 Government of Hong  Kong,  China  (2021), 2020 Economic Background and 2021 Prospects . Viewed  at: 
https://www.hkeconomy.gov.hk/en/pdf/er_20q4.pdf . 
5 Government of Hong  Kong,  China  (2021), 2020 Economic Background and 2021 Prospects . Viewed  at: 
https://www.hkeconomy.gov.hk/en/pdf/er_20q4.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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    2018  2019  2020  2021  2022  
Total revenue  21.0 21.4 21.4 25.4 .. 
 Current revenue  15.9 15.5 16.9 18.5 .. 
 Tax revenue  13.7 12.6 13.8 15.0 .. 
Total expenditure  18.6 21.8 30.0 24.3 .. 
 Current expenditure  15.2 18.7 26.4 20.7 .. 
Government consolidated balance  2.4 -0.4 -8.5 1.0 .. 
Fiscal reserve balance  41.0 41.5 34.1 33.6 .. 
Government debtd (end-fiscal year)  0.87 0.28 1.00 1.99 .. 
Saving and investment  
Gross national savings  25.7 24.0 26.0 28.6 25.5 
Gross domestic investment  22.0 18.2 19.0 16.8 15.0 
Savings -investment gap  3.7 5.8 7.0 11.8 10.5 
External sector  
Current account balance  3.7 5.9 7.0 11.8 10.5 
Goods balance  -8.9 -4.2 -1.5 0.9 -1.6 
 Exports  157.1  149.6  156.9  182.6  170.8  
 Imports  166.0  153.8  158.4  181.7  172.4  
Services balance  8.7 5.8 3.5 4.7 5.5 
 Exports  31.3 28.1 19.4 21.4 23.0 
 Imports  22.6 22.3 15.9 16.7 17.5 
Capital account  -0.1 -0.0 -0.0 -0.4 0.0 
Financial account  -6.1 -8.3 -9.1 -12.7 -10.3 
 Direct investment  6.1 5.6 9.9 11.9 3.9 
Balance of payments  0.3 -0.3 9.8 -0.3 -13.0 
Terms of trade (2021=100)  100.1  100.0  100.0  100.0  99.7 
Goods exports (% change)e 5.7 -4.5 -1.3 24.7 -8.1 
Goods imports (% change)e 7.2 -7.0 -3.1 22.9 -6.8 
Service exports (% change)e 8.7 -9.9 -34.4 18.2 5.6 
Service imports (% change)e 5.0 -0.9 -32.1 12.4 2.9 
Foreign exchange reserves (USD  billion, 
end-period)  424.7  441.4  491.8  496.9  424.0  
 in months of imports of goodsf 33.0 41.3 51.5 44.3 .. 
Total external debt (HKD  billion)  13,277.2  13,046.1  13,872.4  14,591.9  14,196.4  
 % of GDP  468.3  458.6  518.4  508.9  503.8  
.. Not available.  
a Figures are based on fiscal year beginning 1  April.  
b The Hong Kong Interbank Offered Rate  (HIBOR) is a Hong Kong dollar -based interest rate 
benchmark for lending between banks in the Hong Kong market.  
c Excluding bonds issued under the Government Bond Programme.  
d Growth rates based on trade figures taken fr om the Balance of Payment in US  dollars Figures are 
calculated based on past 12 -month average of retained imports of goods.  
e Figures are calculated based on past 12 -month average of retained imports of goods.  
f Figures are compiled based on the change of ownership principle in recording goods sent abroad for  
processing and merchanting under the standards stipulated in the System of National  
Accounts  2008.  
Source:  Census and Statistics Department. Viewed  at: http://w ww.censtatd.gov.hk ; and IMF  (2023) , Staff 
Report for the 2023 Article  IV Consultation , Country Report No.  23/186, May  2023. Viewed  at: 
https://www.imf.org/en/Publications/CR/Issues/2023/05/30/Peoples -Republic -of-China -Hong-Kong-
Speci al-Administrative -Region -2023-Article -IV-533975 . 
1.6.  The economy recovered strongly in 2021 with the adoption of various policy responses and 
pre-crises buffers such as ample fiscal reserves.6 Private consumption expenditur e increased and 
the seasonally adjusted unemployment rate fell to 4% in the fourth quarter of 2021.7 However, 
 
6 IMF (2022), Staff Report for the Article  IV Consultation , IMF Country Report No.  22/69. Viewed  at: 
https://www.imf.org/en/Publications/CR/Issues/2022/03/07/Peoples -Republic -of-China -Hong-Kong-Special -
Administrative -Region -2022-Article -IV-513945 . 
7 Government of Hong  Kong,  China  (2022), 2021 Economic Background and 2022 Prospects . Viewed  at: 
https://www.hkeconomy.gov.hk/en/pdf/er_21q4.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  in 2022, the economy contracted considerably; according to the authorities, economic activities were 
first dampened by the fifth wave of the loca l COVID -19 epidemic, and subsequently by the 
deteriorated external environment and tightened financial conditions.8 These domestic and external 
issues had an impact on private consumption, investment, and exports and imports of goods and 
services. The lab our market was again under pressure in the early months of 2022 amid the 
fifth wave of the local COVID -19 epidemic; however, it improved subsequently in the rest of the year 
as domestic economic activities gradually revived alongside the generally stable l ocal 
epidemic  situation.9 
1.2.2   Fiscal policy  
1.7.  According to the IMF, Hong  Kong,  China 's economy continued to retain strong fiscal and 
financial fundamentals supported by significant policy measures and strong institutional 
frameworks.10 The fiscal reserves balan ce recorded surpluses during the review period, despite a 
decline in 2019-20 (40.8% of  GDP from 41.3% of GDP in 2018-19) mainly due to an increase in 
public expenditure in response to challenges posed by the COVID -19 pandemic.  
1.8.  Hong Kong,  China  adopted a fo rward -looking fiscal policy based on strategic financial 
management principles. Ample fiscal reserves have allowed the authorities to allocate additional 
resources for the future (such as infrastructure and improving services), for various countercyclical 
and anti -epidemic measures, in a prompt manner to support the economy during the review period.11 
In the 2022 -23 Budget, the authorities continued to adopt an expansionary fiscal policy with 
initiatives mainly focusing on four areas: containing the COVID -19 pandemic; reinvigorating social 
and economic activities; rendering support to the struggling economy and fostering post -epidemic 
economic revival; and investing for the future by planning ahead for the medium - and long -term 
development of the economy. In the 2022 -23 Budget, the total financial commitment of 
countercyclical measures was around HKD  170 billion.  
1.2.3   Monetary policy, prices , and exchange rates  
1.9.  Currency stability, implemented through the Linked Exchange Rate System (LERS), continues 
to be the main monetary policy objective. Under the LERS , the external exchange value of the 
Hong Kong dollar (HKD) is pegged to the US dollar (USD) at around HKD  7.80 to USD  1.00.12 The 
Hong Kong Monetary Authority (HKMA) provides Convertibility Undertakings (CUs), under which 
the HKMA commits to purchase HKD  upon request from licensed banks at HKD  7.85 to USD  1.00 
and sell HKD  to them upon request at HKD  7.75 to USD  1.00. According to the authorities, the 
stability of the HKD  excha nge rate is maintained through an automatic interest rate adjustment 
mechanism and the firm commitment by the HKMA to honour the C Us under the LERS.  
1.10.  Between 2018 and 2022, under the LERS, the authorities consider that the HKD  exchange 
rate continued to tra de in a smooth and orderly manner within the Convertibility Zone of 
HKD 7.75 and HKD  7.85 against the USD as driven by market supply and demand.13 Against other 
currencies, the HKD  real effective exchange rate appreciated between  2018 and 2019 and then 
started to depreciate from 2020 onwards , following the weakening of the USD vis-à-vis other major 
currencies.  
1.11.  Under the LERS, the HKMA does not have any target on the level of interest rates. The 
HKMA's  Base Rate closely reflects the changes to the US policy rate made by the US  Federal  Reserve. 
The interest rate in Hong  Kong,  China remained at low levels during the review period until  2022, 
when it gradually increased as the monetary policy in the United  States began to tighten. As the 
 
8 Government of Hong  Kong,  China  (2023), 2022 Economic Background and 2023 Prospects . Viewed  at: 
https://www.hkeconomy.gov.hk/en/pdf/er_22q4.pdf . 
9 Government of Hong  Kong,  China  (2023), 2022 Economic Background and 2023 Prospects . Viewed  at: 
https://www.hkeconomy.gov.hk/en/pdf/er_22q4.pdf . 
10 IMF Country Report No.  22/69.  
11 WTO, COVID -19: Support Measures . Viewed  at: 
https://www.wto.org/english/tratop_e/covid19_e/trade_related_support_measures_e.htm . 
12 HKMA, Linked Exchange Rate System . Viewed  at: https://www.hkma.gov.hk/eng/key -
functions/money/linked -exchange -rate-system/ . 
13 HKMA (2022), "The HKMA's Response to the US Fed's Rate Hike", 17  March. Viewed  at: 
https://www.hkma.gov.hk/eng/news -and-media/press -releases/2022/03/20220317 -4/. WT/TPR/S/ 450 • Hong Kong, China  
 
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  US Federal  Reserve incre ased its key interest rates, the HKMA subsequently raised its Base Rate14 
seven times to sustain the HKD  peg to the USD  from 0.50% at end -2021 to  4.75% at end -2022.15 
1.12.  Between 2018 and 2022, the increase in the headline composite Consumer Price Index  (CPI) 
was moderate. In particular , inflation receded visibly in 2020 reflecting the easing of price pressures 
on most goods and services amid global and domestic economic conditions caused by the pandemic 
and relief measures implemented by the authorities.16 The increase in CPI accelerated in 2021, but 
at a slower rate than in 2018. 
1.2.4   Balance of payments  
1.13.  Reflecting its savings and investment balance, Hong  Kong,  China's balance of payments 
featured a current account surplus between 2018 and 2021 against the backgrou nd of a surge in 
primary income and surplus in the services balances (Table  1.3). The current account surplus 
narrowed in 2022 as merchandise trade reverted to a deficit and more than offset the increase in 
services trade surplus from 2021 to 2022.17 Expressed as the share of GDP, the current account 
surplus increased from 3.7% in 2018 to 11.8% in 2021 and decreased to 10.5% in 2022. The strong 
surplus in Hong  Kong,  China's primary income balance, which increased during the review period, 
was the main  contributor to the current account surplus. In addition, the services trade surplus was 
also a key contributor to the current account surplus.  
1.14.  The merchandise trade balance was in deficit, but on a declining trend, in the first three  years 
of the review p eriod. In 2021, the balance recorded a surplus , reflecting the increase of export 
demand from trading partners, such as China, the United  States, and the European  Union.18 In 2022, 
it recorded a deficit as the value of exports of goods saw a larger decline  than that of imports.19 
Similarly, the surplus in the services trade balance was on a declining trend in the first three  years 
of the review period; it rebounded in 2021 as exports of transport services rose as regional trading 
activities and cargo flows increased.20 In addition, exports of business and other services as well as 
financial services expanded alongside the global economic recovery. The services trade surplus 
widened in 2022 amid a surge in exports of travel services.  
1.15.  Between 2018 and 2022, th e capital and financial accounts recorded net outflows, except for 
the capital account in 2022 when it recorded a net inflow. The change in the capital account in 2022 
was due to an inflow of fixed capital donations, consisting mainly of the total value of  anti-epidemic 
facilities provided by the Government of China to Hong  Kong,  China , such as the Emergency Hospital 
and Mobile Cabin Facility.  
Table  1.3 Balance of payments, 2018 -22 
(HKD  million)  
 2018  2019  2020  2021  2022  
Current account  105,942  166,482  187,012  339,429  296,871  
Goods and services balance  -6,061  44,357  51,623  159,713  110,786  
 Goods balance  -252,997  -120,521  -41,325  24,671  -44,829  
 Exports  4,453,350  4,255,098  4,198,338  5,236,005  4,813,750  
 Imports  4,706,347  4,375,619  4,239,663  5,211,334  4,858,579  
 Services balance  246,936  164,878  92,948  135,042  155,615  
 Credit  886,883  799,121  519,205  615,069  649,345  
 Debit  639,947  634,243  426,257  480,027  493,730  
 
14 Base rate is the interest rate forming the foundation upon which the discount rates for the HKMA's 
discount window are computed.  
15 Government of Hong  Kong,  China  (2023), 2022 Economic Background and 2023 Prospects . 
Viewed at: https://www.hkeconomy.gov.hk/en/pdf/er_22q4.pdf . 
16 Government of Hong  Kong,  China  (2021), 2020 Economic Background and 2021 Prospects . 
Viewed  at: https://www.hkeconomy.gov.hk/en/pdf/er_20q4.pdf . 
17 IMF Country Report No.  22/69.  
18 Government of Hong  Kong,  China  (2022), 2021 Economic Background and 2022 Prospects . 
Viewed  at: https://www.hkeconomy.gov.hk/en/pdf/er_21q4.pdf . 
19 Government of Hong  Kong,  China  (2023), 2022 Economic Background and 2023 Prospects . 
Viewed  at: https://www.hkeconomy.gov.hk/en/pdf/er_22q4.pdf . 
20 Government of Hong  Kong,  China  (2022), 2021 Economic Background and 2022 Prospects . 
Viewed  at: https://www.hkeconomy.gov.hk/en/pdf/er_21q4.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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   2018  2019  2020  2021  2022  
Primary income  134,815  143,717  156,083  198,732  199,526  
 Credit  1,630,576  1,673,829  1,544,587  1,674,890  1,757,345  
 Investment income  1,627,247  1,670,293  1,541,278  1,671,368  1,754,100  
 Compensation of employees  3,329  3,536  3,308  3,521  3,245  
 Debit  1,495,761  1,530,112  1,388,504  1,476,157  1,557,819  
 Investment income  1,488,439  1,522,299  1,381,455  1,469,122  1,550,763  
 Compensation of employees  7,322  7,814  7,049  7,035  7,056  
Secondary income  -22,813  -21,592  -20,694  -19,017  -13,441  
 Credit  12,791  13,328  14,889  15,044  18,953  
 Debit  35,603  34,921  35,583  34,061  32,394  
Capital account  -1,574  -682 -90 -10,363  1,287  
Financial account  -173,507  -236,756  -243,839  -363,230  -291,113  
 Financial non -reserve assets  -165,948  -245,612  19,211  -372,371  -658,325  
 Direct investment  172,795  160,730  263,703  340,141  110,712  
 Assets  -587,673  -295,944  -647,387  -726,013  -836,201  
 Liabilities  760,467  456,674  911,090  1,066,154  946,913  
Portfolio investment  -616,428  -215,764  -528,049  -620,493  -415,531  
 Assets  -760,277  -220,626  -397,140  -662,227  -446,367  
 Equity and investment fund shares  -256,391  -87,692  -340,122  -642,237  -336,509  
 Debt securities  -503,886  -132,933  -57,018  -19,990  -109,858  
 Liabilities  143,849  4,861  -130,909  41,734  30,836  
 Equity and investment fund shares  -18,700  15,102  -32,351  11,076  42,768  
 Debt securities  162,549  -10,241  -98,558  30,658  -11,932  
Financial derivatives  33,202  1,239  18,790  45,126  138,760  
 Assets  615,605  487,239  572,669  551,235  880,557  
 Liabilities  -582,403  -486,000  -553,879  -506,109  -741,797  
Other investment  244,483  -191,817  264,766  -137,145  -492,266  
 Assets  -568,893  85,752  -470,177  -699,233  -3,032  
 Currency and deposits  -442,645  323,931  -403,733  -395,648  -292,916  
 Loans  -120,594  -253,498  -56,180  -215,243  190,640  
 Trade credit and advances  1,154  1,042  -13,888  -47,159  55,979  
 Other assets  -6,808  14,276  3,624  -41,182  43,266  
 Liabilities  813,376  -277,569  734,943  562,088  -489,234  
 Currency and deposits  590,647  -309,876  459,687  364,291  -576,188  
 Loans  216,674  12,880  238,093  149,538  166,568  
 Trade credit and advances  -1,012  -11,297  21,136  39,813  -39,091  
 Other liabilities  7,068  30,724  16,028  8,446  -40,523  
 Reserve assets  -7,559  8,855  -263,050  9,142  367,212  
Net errors and omission  69,139  70,957  56,918  34,164  -7,045  
Balance of payments  7,559  -8,855  263,050  -9,142  -367,212  
Source:  Census and Statistics Department.  
1.2.5   Outlook  
1.16.  The IMF projects GDP growth in 2023 at 3.5%21 amid the backdrop of China's recovery in 
economic growth, rebound in tourism from the removal of COVID -19-related quarantine restrictions , 
and the resumption of normal travel with China and the rest of the world.22 In addition, the 
authorities also expect  improvement of the labour market, private consumption , and private 
investment. Infrastructure development and increasing housing supply are also intended to support 
fixed asset investment.23 However, the authorities consider that in 2023, Hong  Kong,  China  is facing 
 
21 IMF. Viewed  at: https://www.imf.org/en/Count ries/HKG . 
22 Reuters  (2023), "Hong  Kong GDP Shrinks for 4th Straight Quarter, but Poised for Recovery", 
1 February. Viewed  at: https://www.reuters.com/world/asia -pacific/hong -kongs -economy -shrinks -4th-quarter -
recovery -seen-2023-2023-02-01/. 
23 Government of Hong  Kong,  China  (2023), 2022 Economic Background and 2023 Prospects . 
Viewed  at: https://www.hkeconomy.gov.hk/en/pdf/er_22q4.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  risks from high inflationary pressure and monetary tightening in advanced economies; these are 
likely to weaken growth momentum in advanced economies and have an impact on export 
of goods.24 
1.3  Developments in trade and investment  
1.3.1   Trends and patter ns in merchandise and services trade  
1.3.1.1   Merchandise trade  
1.17.  Hong Kong,  China's exports and imports of goods and services continued to represent a large 
portion of GDP during the review period. In 2022, Hong  Kong,  China ranked as the 
world's  10th largest exporter and the 11th largest importer of goods, and the 24th largest exporter 
and the 27th largest importer of services.25 
1.18.  Both merchandise exports and imports fluctuated considerably during the review period , 
decreasing in 2019 and 2020, increas ing robustly in 2021 (exceeding pre -pandemic levels due to 
recovery policies implemented) , and decreasing again in 2022 (Tables A1.1 and  A1.3).  
1.19.  As the economy is characterized by a small production base and highly specialized services 
industry , it depends on merchandise imports to meet its domestic consumption demands. This 
dependency on merchandise imports was reflected in a deficit in the goods trade balance in 2018 
and 2019; however, the deficit narrowed in 2020, and finally increased in 2021 and 2022. In 2022, 
Hong Kong,  China's total merchandise imports amounted to USD  668.5  billion (USD  627.3  billion 
in 2018), while total exports were USD  610 billion (USD  569 billion in 2018) (Chart  1.1 and 
Table  A1.1).  
1.20.  Imports for subsequent re -exports26 also declined  along with the worsening of export 
performance.  Re-exports are the driving force of overall merchandise exports, accounting for 97.1% 
of total exports of goods in 2022. China is the origin of about 45.2% of Hong  Kong,  China's  
re-exports. Imports related t o re-exports represented 79% of total merchandise imports in 2022, 
whereas "retained imports" (i.e.  for domestic use) made up the rest.27 Domestic exports accounted 
for 2.9% of total exports of goods in 2022 (2.3% in 2018). The category of p recious stones,  metals , 
and pearls was the largest domestic export item, and its share in domestic exports increased 
to 73.5% in 2022 (from 63.5% in 2018). 
1.21.  The overall broad structure of Hong  Kong,  China's merchandise trade remained unchanged 
during the review period. Machinery and electrical equipment remained the largest import item and 
its share in total imports increased to 67.4% in 2022 (from 64% in 2018), with electronic integrated 
systems accounting for 33.2% of the total. Other major import items are precious stones, metals , 
and pearls, and precision instruments.  
1.22.  The product composition of re -exports continues to be dominated by machinery and electrica l 
equipment (in particular, telecommunications equipment, semiconductors, and computer items). 
According to the authorities, this product category increased its share in total re -exports to 76.4% 
in 2022 (69% in 2018), with electronic integrated systems ac counting for 36.1% of the total . Other 
re-exported products are precious stones, metals , and pearls; precision instruments; textiles and 
textile articles; and chemicals and products thereof.  
 
24 Government of Hong  Kong,  China, The 2023 -24 Budget, Speech by the Financial Secretary, the 
Hon Paul MP Chan Moving the Second Reading of the Appropriation Bill 2023 . Viewed  at: 
https://www.budget.gov.hk/2023/eng/pdf/e_budget_speech_2023 -24.pdf . 
25 WTO (2023), Global Trade Outlook and Statistics . Viewed  at: 
https://www.wto.org/english/res_e/booksp_e/trade_outlook23_e.pdf . 
26 According to the Government, "[r]e -exports are those goods which have previously been 
imported  … and are subsequently exported without having undergone  … any manufacturing processes which 
change permanently the shape, nature, form or utili ty of the goods". Government of Hong  Kong, China (2023), 
2022 Economic Background and 2023 Prospects , p. 52. Viewed  at: 
https://www.hkeconomy.gov.hk/en/pdf/er_22q4.pdf . 
27 The value of retained imports is derived by subtracting the estimated import value of re -exports from 
the value of imports. The estimated import value of re -exports is obtained by removing the re -export margin 
from the value of re -exports.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Chart  1.1 Product composition of merchandise trade by main HS section, 2018 and 2022  
 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
1.23.  Given the close ties between the two economies, China is Hong  Kong,  China's largest 
merchandise trading partner (Chart  1.2). Over the period 2018 -21, merchandise trade with  China 
broadly trended upward amid rising demand in advanced economies and the increasing role of China 
in global supply chains. Total merchandise trade between the two amounted to USD  618.4  billion 
in 2022, accounting for 57.4% of Hong  Kong,  China's merchandise exports and  40% of merchandise 
imports (Table s A1.2 and A1.4). In addition, according to the authorities, in 2022, an estimated 85% 
of Hong  Kong,  China's re -exports involved China either as an or igin or a destination.  
1.24.  Other markets, such as other Asian economies (excluding China), were also important for 
Hong Kong,  China's exports during the review period. According to the authorities, in 2022, 21.3%  
of re-exports and 34.9% of domestic exports wer e destined for other Asian/Oceania economies 
(including Japan), compared to 20.3%  and 43.2%,  respectively, in 2018. The European  Union 
(EU-27) and the United  States are also important export markets for Hong  Kong,  China, but their 
respective shares in exports decreased over the review period.  
2018 2022
Total:  USD 569.1 billion Total:  USD 610.1 billion  
Total:  USD 627.3 billion Total:  USD 668.5 billion Other
7.6%
Other 
13.4%Precision equipment
4.7%
Other
10.3%Other
10.6%
Chemicals 2.5%Machinery; electrical equipment
67.5% (out of which 23.2% 
electronic integrated circuits)
Machinery;  electrical equipment
64.0% (out of which 24.9% 
electronic integrated circuits)Machinery; electrical equipment
67.4% (out of which 33.2% 
electronic integrated circuits)Precious stones
& metals
12.7%Precious stones
& metals
10.4%Mineral products
2.6%Mineral products 
2.3%
Textiles & textile 
articles 3.0%Textiles & textile
articles 1.6%Exports (f.o.b.)
Imports (c.i.f.)Precious stones
& metals
12.0%Precious stones
& metals
11.2%Chemicals
1.6%
Textiles & textile 
articles 1.5%Textiles & textile 
articles 3.6%Chemicals
1.6%
Chemicals 2.3%Precision 
equipment
3.7%
Machinery; electrical equipment 
74.3% (out of which 35.0% 
electronic integrated circuits)
Precision equip.
4.3%Precision equip.
3.4%WT/TPR/S/ 450 • Hong Kong, China  
 
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  1.25.  In terms of imports, besides China, other major suppliers of goods to Hong  Kong,  China were 
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese  Taipei), Singapore, 
the Republic  of Korea , and Japan, which together accounted for 29.9% of imports in 2022 (up from 
24.6% in 2018). While the United  States and the EU -27 are also significant suppliers, their shares 
have decreased (Chart  1.2). 
Chart  1.2 Direction of merchandise trade, 2018 and 2022  
 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
1.3.1.2   Services trade  
1.26.  Against the backdrop of the COVID -19 pandemic, services exports decreased between  2019 
and 2020, and the share of service s exports as a percentage of GDP decreased from 31.3% in 2018 
to 19.4% in 2020. However, as the external economic environment improved in 2021, exports of 
services reverted to growth across most major subsectors (Table  1.4): exports of transport services 
rebou nded owing to regional trading activities and cargo flows; business and other services exports 
2018 2022
Exports (f.o.b.)
Total:  USD 569.1 billion Total:  USD 610.1 billion
EU-27
5.1%Other
5.2%United 
States
5.1%Imports (c.i.f.)
EU-27
4.0%United
States
4.2%
Total:  USD 627.3 billion Total:  USD 668.5 billionKorea, Rep. of
5.6%Korea, Rep. of
5.7%United States
8.1%
Other Asia/Oceania
10.8%United States
6.2%
Source :  WTO Secretariat calculations, based on UN Comtrade database.Japan
5.3%China
44.8%China
57.4%EU-27
6.5%
China
55.2%Middle East
2.1%
Japan
5.6%Other Asia/Oceania
7.2%Japan 2.1%EU-27
7.4%
Viet Nam 1.9%
Japan
2.9%Middle East
2.8%
Malaysia 3.4%Other Asia/Oceania
10.1%
Other Asia /Oceania
8.9%Viet Nam 2.4%
United Kingdom
2.5%
Malaysia
3.8%Other
5.9%
Singapore
7.7%
China
40.1%Singapore
6.4%Chinese Taipei
2.1%
Chinese 
Taipei
6.9%Viet Nam 2.7%Chinese Taipei 3.3 %India 3.7%Other 
6.4%Other 
5.4%
India 3.1%
Chinese Taipei
11.3%Switzerland
2.5%WT/TPR/S/ 450 • Hong Kong, China  
 
- 21 - 
 
  increased alongside the global economic recovery; and the increase in financial services were 
supported by cross -border financial activities.28 Tourism service e xports remained low, as inbound 
tourism was still frozen throughout 2021 due to COVID -19 restrictions.  
1.27.  Hong Kong,  China continued to maintain a substantial surplus in trade in services over the 
review period, although the surplus decreased from 8.7% of GDP  in 2018 to 5.5% of GDP in 2022. 
In terms of contribution to exports, in 2021, the main services subsectors were transport, financial 
services and other business services (such as business and management consulting, and public 
relations services). On the i mport side, the main categories were transport, manufacturing services , 
and other business services (Table  1.4). 
Table  1.4 Composition of trade in services, 2018 -22 
  2018  2019  2020  2021  2022  
Total credit (HKD  billion)  886.9  799.1  519.2  615.1  649.3  
 (% of total credit)  
 Manufacturing services  0.0a 0.0a 0.0a 0.0a .. 
 Maintenance and repair services  0.3 0.3 0.4 0.3 .. 
 Transport  29.2 30.9 35.8 41.6 39.9 
 Travel  32.6 28.4 4.3 2.3 3.8 
 Construction  0.1 0.1 0.1 0.0a .. 
 Insurance and pension services  1.3 1.4 1.7 1.5 1.6 
 Financial services  19.6 21.2 32.5 30.2 32.0 
 Charges for the use of intellectual property  0.7 0.7 1.0 0.9 .. 
 Telecommunications, computer and information services  2.6 3.0 5.0 4.8 .. 
 Other business services  13.2 13.6 18.7 18.0 .. 
 Personal, cultural and recreational services  0.3 0.3 0.4 0.3 .. 
 Government goods and services  0.1 0.1 0.1 0.1 .. 
Total debit (HKD  billion)  639.9  634.2  426.3  480.0  493.7  
 (% of total debit)  
 Manufacturing services  14.6 13.9 18.5 19.7 18.0 
 Maintenance and repair services  0.2 0.3 0.4 0.3 .. 
 Transport  22.7 22.7 27.0 32.6 31.9 
 Travel  32.4 33.2 10.0 5.4 8.7 
 Construction  0.1 0.1 0.1 0.0a .. 
 Insurance and pension services  1.8 1.9 3.0 3.2 2.5 
 Financial services  7.6 8.0 13.1 11.8 12.2 
 Charges for the use of intellectual property  2.4 2.4 3.2 3.3 .. 
 Telecommunications, computer and information services  2.4 2.5 4.2 4.1 .. 
 Other business services  15.3 14.7 19.8 18.9 .. 
 Personal, cultural and recreational services  0.2 0.2 0.4 0.4 .. 
 Government goods and services  0.2 0.2 0.2 0.2 .. 
.. Not available.  
a Less than 0.05%.  
Source:  Census and Statistics Department.  
1.28.   China is also one of the largest services trade partners of Hong  Kong,  China, accounting 
for 17.1% of services exports and 41 .4% of services imports in 2021. According to the authorities, 
in conjunction with China's continuing economic transformation and trade liberalization, the value of 
Hong Kong,  China's exports of services to China has generally been rising, registering growth 
of 3.5% in 2021, after fal ling visibly in 2019 and 2020. Meanwhile, imports of services from  China 
followed a similar trend, growing by 21.6% in 2021, after declining in 2019 and 2020.  
1.29.  In terms of exports of services, other major destinations , besides China, were 
the United  States (24.4%), the United  Kingdom (12.1%) , and Germany (6.2%) in terms of the value 
of total exports of services in 2021. In terms of imports of services, besides  China, the  United  States 
(16.2%), the United  Kingdom (7.0%) , and Singapore (6.1%) were the main sou rces in terms of the 
value of total imports of services in 2021. Analy zed by region, Asia is the most important destination 
for the exports and imports of services, reflecting Hong  Kong,  China's role as a key trading hub.  
 
28 Government of  Hong Kong,  China  (2022), 2021 Economic Background and 2022 Prospects . 
Viewed  at: https://www.hkeconomy.gov.hk/en/pdf/er_21q4.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  1.3.2   Trends and patterns in direct inve stment  
1.30.  Hong Kong,  China is one of the world's top destinations for foreign direct investment (FDI); 
in 2021 it ranked as the third -largest recipient of FDI inflows.29 It also serves as an important 
business hub for connecting China with global markets . In addition, it is an attractive investment 
destination with the absence of foreign exchange controls and restrictions on overseas investment. 
According to the authorities, between 2018 and 2022, Hong  Kong,  China  strengthened its policies 
to attract  FDI, as w ell as enterprises and investors from around the globe to establish their 
businesses  (Section  2.4). 
1.31.  Hong Kong,  China remains one of the major global sources of foreign investment. The stock 
of direct investment liabilities fluctuated during the review peri od, decreasing in 2019 and 2020 and 
finally increasing in 2021 (Tables  1.5 and 1.6).30 At the end of 2021, it stood at HKD  16,826.2  billion, 
equivalent to 586.8% of GDP. The British  Virgin  Islands continued to be the major source of 
Hong Kong,  China's inward direct investment, accounting for 30.9% of the total stock at end -2021, 
followed by China, the Cayman  Islands, and the United  Kingdom.  
Table  1.5 Stock of direct investment by major ec onomic activity, 2018 -22 
  2018  2019  2020  2021  2022  
Direct investment liabilitiesa (HKD  billion)  17,120.7  16,186.9  15,883.5  16,826.2  17,301.7b 
 % of GDP  603.8  569.0  593.6  586.8  614.0b 
Total of inward direct investment of all 
economic activitiesa (HKD  billion)  15,380.6  14,543.8  14,354.4  15,263.5  .. 
 (% of total)  
Investment and holding, real estate, professional 
and business services  69.4 65.7 65.2 63.9 .. 
Banking  11.8 12.9 13.2 13.2 .. 
Import/export, wholesale and retail trades  9.0 10.7 11.0 11.5 .. 
Financing (except banking, investment and 
holding companies)  2.8 3.0 3.3 2.7 .. 
Insurance  1.1 1.6 2.2 2.6 .. 
Construction  2.0 2.3 1.7 1.8 .. 
Transportation, storage, postal and courier 
services  1.3 1.1 1.1 1.5 .. 
Information and communications  0.6 0.6 0.5 1.2 .. 
Manufacturing  0.4 0.5 0.4 0.4 .. 
Accommodation and food services  0.3 0.3 0.3 0.2 .. 
Other activities  1.3 1.2 1.1 1.0 .. 
Direct investment assetsa (HKD  billion)  16,071.3  15,694.4  16,420.3  17,154.3  17,020.9b 
 % of GDP  566.8  551.6  613.7  598.2  604.0b 
Total of outward direct investment of all 
economic activitiesa (HKD  billion)  14,331.2  14,051.3  14,891.2  15,591.7  .. 
 (% of total)  
Investment and holding, real estate, professional 
and business services  80.4 77.6 77.7 77.3 .. 
Import/export, wholesale and retail trades  7.4 8.6 8.5 8.8 .. 
Banking  2.8 3.1 3.1 3.1 .. 
Insurance  1.8 2.9 3.0 2.9 .. 
Manufacturing  2.3 2.4 2.6 2.5 .. 
Financing (except banking, investment and 
holding companies)  0.5 0.6 0.7 1.1 .. 
Information and communications  0.7 0.7 0.6 0.7 .. 
Accommodation and food services  0.6 0.6 0.7 0.7 .. 
Transportation, storage, postal and courier 
services  1.1 1.1 0.9 0.7 .. 
 
29 UNCTAD  (2022) , World Inve stment Report 2022 . Viewed  at: https://unctad.org/system/files/official -
document/wir2022_en.pdf . 
30 The stock of direct investment liabilities is compiled based on the "asset/liability principle", in 
accordance with international statistical standards.  WT/TPR/S/ 450 • Hong Kong, China  
 
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    2018  2019  2020  2021  2022  
Construction  0.5 0.5 0.4 0.6 .. 
Other activities  1.8 1.8 1.7 1.6 .. 
.. Not available.  
a The total of inward (outward) direct investment of all economic activities is different from the 
aggregate direct investment liabilities (assets) due to the adoption of different presentation 
principles, with the former compiled based on the "directional principle" and the latter based on the 
"asset/liability principle" in accordance with the international statistical standards. The total of 
inward (outward) d irect investment of all economic activities should be referred to in calculating the 
shares of individual economic activities, while the direct investment liabilities (assets) should be 
referred to in the analyses on aggregate statistics.  
b Figures are subject to revision.  
Source:  Census and Statistics Department. Viewed  at: https://www.censtatd.gov.hk/en/ . 
1.32.  The stock of Hong  Kong,  China's direct investment assets31 also flu ctuated over the review 
period, decreasing in 2019 and then increasing in 2020 and 2021. At the end of 2021, the  stock 
reached HKD  17,154.3  billion, or 598.2% of GDP. China is the largest recipient, with a share of 
49.3% of the total stock of outward direc t investment in 2021, followed by the British  Virgin  Islands, 
with 30.3%. The Cayman  Islands, Bermuda, and Singapore are other major recipients (Table  1.6). 
1.33.  In 2021, total direct investment inflow amounted to HKD  1,066.2  billion , while total direct 
investm ent outflow amounted to HKD  726.0  billion , resulting in a net direct investment inflow of 
HKD 340.1  billion, compared with a net inflow of HKD  263.7  billion in 2020.32 
1.34.  Analy zed by major economic activity of Hong  Kong enterprise groups (HKEGs)33, the 
composition of Hong  Kong,  China's direct investment liabilities and assets are mostly directed to the 
services sector. The categories of investment and holding, real estate and professional and business 
services accounted f or 63.9% and 77.3%  of the t otal stocks of inward and outward direct 
investment , respectively , at end -2021. Other major economic sectors receiving both direct 
investment liabilities and assets include import/export, wholesale and retail trades, and banking.  
Table  1.6 Stock of direct investment by selected major economy, 2018 -22 
  2018  2019  2020  2021  2022  
Direct investment liabilitiesa 
(HKD  billion)  17,120.7  16,186.9  15,883.5  16,826.2  17,301.7b 
 % of GDP  603.8  569.0  593.6  586.8  614.0b 
Total of inward direct investment of all 
investment partnersa (HKD  billion)  15,380.6  14,543.8  14,354.4  15,263.5  .. 
 (% of total)  
British  Virgin  Islands  31.9 33.9 31.6 30.9 .. 
China  26.8 28.1 27.1 27.7 .. 
Cayman  Islands  8.1 9.5 10.0 10.7 .. 
United  Kingdom  7.8 8.2 9.5 9.8 .. 
Bermuda  5.3 5.9 5.7 5.8 .. 
United  States  1.9 2.4 2.5 2.3 .. 
Singapore  2.1 2.2 3.2 2.3 .. 
Canada  1.1 1.3 1.8 1.9 .. 
Japan  1.6 1.5 1.3 1.4 .. 
Cook Islands  0.8 1.0 1.3 1.3 .. 
Other  12.6 6.0 5.9 5.8 .. 
Direct investment assetsa (HKD  billion)  16,071.3  15,694.4  16,420.3  17,154.3  17,020.9b 
 % of GDP  566.8  551.6  613.7  598.2  604.0b 
Total of outward direct investment of 
all investment partnersa (HKD  billion)  14,331.2  14,051.3  14,891.2  15,591.7  .. 
 
31 The stock of direct investment assets is compiled based on the "asset/liability principle", in 
accordance with international statistical standar ds. 
32 Census and Statistics Department (2022), Balance of Payments: International Investment Position 
and External Debt Statistics of Hong Kong . Viewed  at: 
https://www.censtatd.gov.hk/en/data/stat_report/product/B1040001/att/B10400012022QQ04B0100.pdf . 
33 An HKEG mainly consists of a Hong  Kong,  China  parent company  and its Hong  Kong, China  
subsidiaries, associates , and branches.  WT/TPR/S/ 450 • Hong Kong, China  
 
- 24 - 
 
    2018  2019  2020  2021  2022  
 (% of total)  
China  40.6 44.7 47.3 49.3 .. 
British  Virgin  Islands  33.8 34.8 31.6 30.3 .. 
Cayman  Islands  3.6 4.1 3.8 3.7 .. 
Bermuda  2.4 3.1 3.5 3.4 .. 
Singapore  1.8 2.1 2.1 2.2 .. 
United  Kingdom  1.3 2.0 1.8 1.8 .. 
Australia  0.8 0.9 1.0 1.0 .. 
Netherlands  1.1 1.1 1.0 1.0 .. 
United  States  0.8 0.8 1.0 0.9 .. 
Japan  0.5 0.6 1.0 0.7 .. 
Other  13.2 5.8 5.8 5.8 .. 
.. Not available.  
a The total of inward (outward) direct investment of all investment partners  is different from the 
aggregate direct investment liabilities (assets) due to the adoption of different presentation 
principles, with the former compiled based on the "directional principle" and the latter based on 
the "asset/liability principle" in accord ance with the international statistical standards. The total of 
inward (outward) direct investment of all investment partners  should be referred to in calculating 
the shares of individual investor (recipient) countries/territories, while the direct investm ent 
liabilities (assets) should be referred to in the analyses on aggregate statistics.  
b Figures are subject to revision.  
Source:  Census and Statistics Department. Viewed  at: https://www.censtatd.gov.hk/en/ . 
 WT/TPR/S/ 450 • Hong Kong, China  
 
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  2  TRADE AND INVESTMENT REGIMES  
2.1  General framework  
2.1.  The main structure of the Government and the legal framework of Hong  Kong,  China remain 
largely unchanged since the previous Review.1 The two main instruments are the Constitution 
of China and the Basic Law, which together form the constitutional framework. Under the Basic Law, 
Hong Kong,  China is guaranteed a high degree of autonomy, with e xecutive, legislative, and 
independent judicial power, including that of final adjudication; it maintains an independent taxation 
system and retains its status as a free port and a separate customs territory.  
2.2.  Hong Kong,  China has an executive -led Governmen t headed by the Chief Executive. The Chief 
Executive implements the Basic Law, signs bills and budgets, promulgates laws, makes government 
policy decisions, and issues executive orders. The Chief Executive is assisted by the Executive 
Council, which compri ses 21  Principal Officials and 16  non-official  members appointed by the Chief 
Executive. The Legislative Council of 90  members is the law -making entity. Hong  Kong,  China's 
judiciary is independent of the legislative and executive branches and based on comm on law. The 
highest level of the judiciary is the Court of Final Appeal.2 
2.2  Trade policy formulation and objectives  
2.3.  Hong Kong,  China continues to pursue a free trade policy with the aim of promoting open 
market access and removing barriers to trade. Through  multilateral, regional, plurilateral, and 
bilateral trade agreements, the main objective is to improve access for exports of its goods and 
services. According to the authorities, there were no major changes to trade and investment policy 
formulations duri ng the review period and they  remain as reported in the previous Review.3 
2.4.  Trade, investment, and related policies leverage the 14th Five-Year Plan for National Economic 
and Social Development of the People's Republic of China and the Long -Range Objectives Through 
the Year 2035 (the 14th Five-Year Plan). Hong  Kong,  China's Chief Executive's vision and policy 
initiatives as set out in a nnual Policy Addresses also reflect some directions of its trade and related 
policies.  
2.5.  The 14th Five-Year Plan supports Hong  Kong,  China by reinforcing its competitive advantages 
for the continuous development of its four traditional centres4 and four eme rging sectors5, 
capitalizing on its well -established international business environment. It also encourages 
Hong Kong,  China to foster outreach, exchanges, and cooperation with partners around the world.6 
The Policy Addresses have highlighted how Hong  Kong, China can leverage the support and take 
forward initiatives for its development. In the most recent 2022 Policy Address, the Chief Executive 
set out, inter alia, a number of trade and investment related initiatives, an overview of which is 
outlined in Box 2.1.7 
 
1 The general framework is detailed in WTO document WT/TPR/S/380/Rev.1, 30  January  2019.  
2 An Ordinance was passed in late 2022 with respect to judgements in civil and commercial matters but 
it has not yet entered i nto force as of August  2023.  
3 WTO document WT/TPR/S/380/Rev.1, 30 January  2019.  
4 Namely as an international financial centre, international transportation centre, international trade 
centre, and a centre for international legal and dispute resolution ser vices in the Asia -Pacific region.  
5 International innovation and technology hub, international aviation hub, regional intellectual property 
trading hub, and East -meets -West centre for international cultural exchange.  
6 Government of Hong  Kong,  China, Factsheets on "Outline of the 14th Five-Year Plan ". Viewed  at: 
https://www.policyaddress.gov.hk/2021/eng/pdf/publications/14 -5/14-5-full.pdf . 
7 This report focuses on the latest policy address, and previous ones may be consulted at: 
https://www.policyaddress.gov.hk/2019/eng/ ; https://www.policyaddress.gov.hk/2020/eng/ ; and 
https://www.policyaddress.gov.hk/2021/en g/. WT/TPR/S/ 450 • Hong Kong, China  
 
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  Box 2.1 Chief Executive's 2022 Policy Address initiatives related to trade and investment  
Proactively promote high ‑quality development and cooperation between Hong  Kong,  China and the Belt and Road 
Initiative economies in trade and commerce, professional services, and cultural exchanges  
Capitalize on shipping and aviation developments to enhance connectivity in regional supply chains  
Set up the Office for Attracting Strategic Enterprises (OASES) and dedicated teams in Economic and Trade Offices 
(ETOs) to attract target enterprises and talent to pursue investment in Hong  Kong,  China  
Encourage the Hong  Kong Trade Development Council (HKTDC) to enhance its Asia IP Exchange portal to create 
favourable conditions for arts and cultural industries  
Pursue early accession to the Regional Comprehensive Economic Partnership (RCEP)  
Support the convention and exhibition (C&E) industry, in particular for SMEs. Extension of the Convention and 
Exhibitio n Industry Subsidy Scheme to 30  June 2023; launch of a new HKD  1.4 billion scheme thereafter 
on 1 July 2023 to incentivize more than 200  exhibitions to be staged over three  years.  
Promote the C&E industry, and pursue infrastructure development to substant ially increase large ‑scale C&E  spaces  
Raise the level of funding support for SMEs  
Extend the pre -approved Principal Payment Holiday Scheme until 31  July 2023 
Formulate an action plan to promote high value ‑added modern logistics development  
Establish the Hong Kong Investment Corporation Ltd  
Promote commercialization of R&D outcomes by earmarking HKD  10 billion to launch the "Research, Academic and 
Industry Sectors One -plus Scheme"  
Increase the cumulative number of smart production lines fun ded under the Re ‑industrialization Funding Scheme  
Establish the Co ‑Investment Fund with HKD  30 billion to attract enterprises to set up operations in  Hong Kong,  China  
Further develop Hong  Kong,  China into a regional IP trading centre through strengthening protection of IP  rights, 
building human resources capacity, and organizing promotion and public education events  
Promote and capitalize on opportunities in China, including the Greater Bay Area, through setting up a dedicated 
promotion centr e in Guangdong ETO and more HKTDC "GoGBA Business Support Centres"  
Source:  Government of Hong  Kong,  China. The Chief Executive's 2022 Policy Address . Viewed  at: 
https://www.policyaddress.gov.hk/2022/public/pdf/policy/policy -full_en.pdf . 
2.6.  In addition, China's Belt and Road Initiative and the development of the 
Guangdong -Hong Kong-Macao Greater Bay Area (Greater Bay Area), which was bas ed on 
cooperative agreements signed in  20178, were identified by the authorities as, inter alia, key 
elements towards greater integration and economic development. The Greater Bay 
Area – comprising Hong  Kong,  China; Macao,  China; and nine municipalities i n Guangdong 
Province,  China  – is established with the main objectives of deepening cooperation and promoting 
coordinated regional economic development in accordance with the principle of "One Country, Two 
Systems". The Outline Development Plan (ODP) of the  Greater Bay Area, published in  2019, included 
Hong Kong,  China as one of the four core cities to serve as core engines for regional development 
in the Greater Bay Area. The ODP lists seven key areas, including, developing an international 
innovation and t echnology hub and building a globally competitive modern industrial system.9 More 
specifically, the parties will seek to improve the efficiency of customs clearance, promote mutual 
recognition of professional qualifications, deepen mutual access between t he financial markets, and 
facilitate cross -boundary exchange of innovative elements.  
2.7.  The Commerce and Economic Development Bureau (CEDB) is in charge of, inter alia, 
Hong Kong,  China's external commercial relations with different parts of the world and for mulates 
trade and investment policies, as well as oversees participation in international and regional 
organizations, including the WTO. The 14  overseas Economic and Trade Offices (ETOs), which have 
 
8 Government of Hong  Kong,  China. Viewed  at: 
https://gia.info.gov.hk/general/201712/14/P2017121400551_274123_1_15132419 87560.pdf ; and 
https://www.bayarea.gov.hk/filemanager/en/share/pdf/Framework_Agreement.pdf . 
9 The other five key areas are (i)  expediting infrastructural connectivity; (ii)  taking forward ecological 
conservation; (iii)  developing a qua lity living circle for living, working, and travelling; (iv)  strengthening 
cooperation and jointly participating in the Belt and Road Initiative; and (v)  jointly developing 
Guangdong -Hong Kong-Macao cooperation platforms. Greater Bay Area, "Outline Develop ment Plan ". 
Viewed  at: https://www.bayarea.gov.hk/en/outline/plan.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  a role in promoting and strengthening Hong  Kong,  China's trade and economic connections 
overseas, are also under the purview of the CEDB. Policy areas such as trade facilitation, investment 
promotion, business support, intellectual property, competition, consumer protection broadcasting, 
and telecommunications a re coordinated by the CEDB.  
2.8.  Hong Kong,  China's Trade and Industry Department (TID), under the CEDB, facilitates the 
development of trade and industry. On a more functional level, it coordinates Hong  Kong,  China's 
participation in the WTO and Asia Pacific E conomic Cooperation (APEC); implements trade policies 
and agreements; and is responsible for (i)  negotiating FTAs and Investment Promotion and 
Protection Agreements (IPPAs); (ii)  administering the system of certificates of origin, and certain 
import/ expor t licences; and (iii)  supporting small and medium -sized enterprises (SMEs). In addition 
to the ETOs, Invest Hong Kong (Invest  HK) and other government bodies such as the Hong  Kong 
Trade Development Council  (HKTDC) and the Hong  Kong Export Credit Insurance 
Corporation  (HKECIC) are involved in promoting Hong  Kong,  China's trade and investment.  
2.9.  Hong Kong,  China recognizes women's contribution to the community and attaches importance 
to the work of supporting women. Gender and family implications are to be asse ssed in policy 
formulation. Moreover, a gender benchmark target of 35% has been set to enhance the participation 
of women in the government's advisory and statutory bodies, including those related to trade.10 The 
Chief Executive's 2022 Policy Address inclu des annual funding for the Women's Commission to 
organize activities promoting women's development and this was increased from HKD  4 million to 
HKD 10 million over the period 2023 -25.11 Furthermore, a Women Empowerment Fund (WEF) would 
be set up.12 The WEF  aims to empower women, regardless of their age, occupation, or background, 
to realize their full potential in their respective areas, ultimately achieving the goal of promoting 
women's development in Hong  Kong,  China. Subsequently, in the 2023 -24 Budget, HKD 100 million 
was set aside to strengthen support for women's development and related  projects.13 
2.2.1   COVID -19-related trade policy measures  
2.10.  Hong Kong,  China continued to maintain an open and free trade regime amid the 
COVID -19 pandemic. No significant restrictive measures were imposed on the import or export of 
goods, including essential medical supplies. Nevertheless, two temporary measures were 
implemented for the protection of human or animal life and health:  
• A Local Mask Production Subsi dy Scheme was launched in March  2020 to subsidize and 
encourage local production of face masks. The face masks produced using government 
subsidies during the 12 -month subsidized period of the Scheme starting from 
second  quarter 2020 were not allowed to be exported. The measure was notified to 
the WTO as a temporary measure14 and has lapsed as of mid -2021.15 
• A temporary suspension of commercial imports of live rodents and lagomorphs from all 
sources was implemented in early 2022 for precautionary reasons. It  was later adjusted 
to cover only commercial imports of live hamsters in April  2022, and subsequently lifted 
in January  2023. The imposition and removal of the temporary measure were notified to 
the SPS  Committee.16 
2.11.  The various travel restrictions on the m ovement of persons during the pandemic has had a 
negative impact on Hong  Kong,  China's tourism sector, which has traditionally been one of the main 
 
10 Home and Youth Affairs Bureau, Advisory and Statutory Bodies . Viewed  at: 
https://www.hyab.gov.hk/en/policy_responsibilities/District_Community_and_Public_Relations/advisory.htm . 
11 The Chi ef Executive's 2022 Policy Address . Viewed  at: 
https://www.policyaddress.gov.hk/2022/public/pdf/policy/policy -full_en.pdf . 
12 The Chi ef Executive's 2022 Policy Address: Policy Measures 2022.10.19 . Viewed  at: 
https://www.policyaddress.gov.hk/2022/public/pdf/measure/Policy -Measures -full-en.pdf. 
13 Government of Hong  Kong,  China, The 2023 -24 Budget, Speech by the Financial Secretary, the 
Hon Paul MP Chan Moving the Second Reading of the Appropriation Bill 2023 Wednesday . Viewed  at: 
https://www.budget.gov.hk/2023/eng/pdf/e_budget_speech_2023 -24.pdf . 
14 WTO document G/MA/QR/N/HKG/5, 28  October  2020, Section  1, item  28, and justified under 
Article  XI:2(a) of the GATT  1994.  
15 Information provided by the authorities.  
16 WTO documents G/SPS/N/HKG/47, 11  April 2022; and G/SPS/N/HKG/47/Add.1, 16  January  2023.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  pillars of its economy. On 1  April 2023, all pre -departure and post -arrival quarantine and testing 
requireme nts were removed and normal travel has resumed . 
2.2.2   Consultation and dialogue with stakeholders on trade policy  
2.12.  Hong Kong,  China maintains close liaisons with local industries and trade and industrial bodies 
for the formulation of its trade policy. There are t wo formal advisory bodies – the Trade and Industry 
Advisory Board (TIAB) and the Small and Medium Enterprises Committee (SMEC)  – that advise the 
Government on matters impacting trade and industry, and on issues affecting the development of 
SMEs, respective ly. The membership of these bodies comprises a broad mix of business 
professionals, bankers, academics, representatives from trade organizations, and government 
officials so that different views from relevant sectors are taken into account when formulating  
policies.  
2.13.  On top of the advisory bodies, there is also direct outreach to stakeholders to seek views on 
trade policy matters. For example, members of the public, including business chambers and 
professional bodies, would normally be consulted when annual policy addresses and budgets are 
prepared. A public consultation exercise would also be launched when formulating major trade policy 
measures.  
2.3  Trade agreements and arrangements  
2.3.1   WTO  
2.14.  Hong Kong,  China remains a strong supporter of the multilateral trading sys tem as 
demonstrated by its active participation in all areas of the WTO's work. According to the authorities, 
the WTO has been, and continues to be, important to safeguard rights and improve access for 
its exports. Hong  Kong,  China looks to the WTO for tra de liberalization, especially in areas of 
interest, such as tariffs and services. Strengthening and updating the rules -based multilateral 
trading system as a framework to promote trade expansion and liberalization, as well as to protect 
against any arbitra ry or discriminatory practices, are other important objectives.  
2.15.  In terms of the regular work of the WTO, Hong  Kong,  China's participation includes monitoring 
implementation of WTO agreements and responding to trade -restrictive measures. 
Hong Kong,  China al so actively participates in the discussion of various proposals concerning reform 
of the WTO and the dispute settlement system. Ongoing support to the WTO has been demonstrated 
through actively participating in Ministerial Conferences, collaborating on adv ancing negotiations, 
providing a representative to serve as committee chairperson, and joining various plurilateral Joint 
Statement Initiatives (JSIs), namely on Services Domestic Regulation, E -commerce, Investment 
Facilitation for Development, and Micro, Small, and Medium -Sized Enterprises. Hong  Kong,  China 
has also joined the plurilateral initiatives focusing on trade and environment, i.e.  the Dialogue on 
Plastics Pollution and Environmentally Sustainable Plastics Trade and the Trade and Environmental 
Sustainability Structured Discussions. In addition, Hong  Kong,  China joined the Multi -Party Interim 
Appeal Arbitration Arrangement. Demonstrating some of the key areas of interest, there have been 
submissions or joint proposals to the Work Programme on Electr onic Commerce and the Structured 
Discussions on Investment Facilitation for Development. Hong  Kong,  China has initiated certification 
procedures to give legal effect to the negotiated outcome of the JSI on Services Domestic Regulation. 
Regarding the Agreem ent on Fisheries Subsidies, Hong  Kong,  China accepted the Agreement 
on 21 August  2023.  
2.16.  Hong Kong,  China's notification record demonstrates its commitment to the  WTO with regular 
notifications in many areas including agriculture, services, and import licensing, (Table  A2.1). No 
outstanding regular notifications were identified; however, some ad hoc notifications of amended 
legislation, may be outstanding. In terms of dispute settlement, Hong  Kong,  China was involved in 
one dispute during the review period and has been a third party to the disputes involving the 
United  States on steel and alumi nium in  2018. Hong  Kong,  China was the complainant against the WT/TPR/S/ 450 • Hong Kong, China  
 
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  United  States on an origin marking requirement.17 The panel report was issued in December  202218, 
and in January  2023, it was appealed by the United  States.19 
2.3.2   Regional and preferential agreemen ts 
2.17.   Hong Kong,  China has pursued new free trade agreements (FTAs) and expanded existing 
agreements as part of its trade policy in order to further open markets and secure more favourable 
market access conditions for its goods and services' exports. There h as been a growing interest in 
pursuing and completing FTAs  during the review period.  
2.3.2.1   Reciprocal trade agreements  
2.18.  As of June  2023, Hong  Kong,  China had 8  FTAs with 20  partners (Table  2.1). Three  of these 
agreements and two subsidiary agreements under the fr amework of the Hong  Kong, China  Closer 
Economic Partnership Arrangement (CEPA) entered into force during the review period. 
Hong Kong,  China has significant trade surpluses with its main neighbouring FTA partners, China 
and Macao,  China, but large deficits  with Association of Southeast Asian Nations (ASEAN) and 
European Free Trade Association (EFTA) partners. Taken together, the 20  FTA partners accounted 
for 61% of Hong  Kong,  China's total merchandise imports in  2022, and 69% of its exports, 
demonstrating t hat those FTA partners are important and account for a majority of 
Hong Kong,  China's trade.20 In addition to these new  agreements and subsidiary agreements, there 
were also amendments to the existing FTA with Chile, whereby the parties improved their resp ective 
services commitments  (Table  2.2). 
2.19.  Looking ahead, Hong  Kong,  China continues to pursue FTAs through forging new agreements 
and requesting to join other FTA networks with its trading partners. In this regard, Hong  Kong,  China 
has initiated FTA negotiations with  Peru in  January  2023 with a view to achieving a high -quality and 
comprehensive FTA.21 The negotiations are expected to cover a wide range of trade and related 
matters including trade in goods, services, investment, electronic commerce, go vernment 
procurement, intellectual property, and competition. Hong  Kong,  China is actively seeking early 
accession to the Regional Comprehensive Economic Partnership (RCEP) with the goal of opening 
further markets and pursuing the potential for greater int egration and trade with the 15  RCEP 
economies that account for a large portion of Hong  Kong,  China's trade.22 Upon RCEP's entry into 
force, Hong  Kong,  China submitted its accession request in January  2022.  
Table 2.1 Overview of Hong  Kong,  China's FTAs and merchandise trade, 2022  
(USD million)  
Agreement  Partner(s)  Entry into force  Imports  Exports  Trade 
balance  
Agreements 2018 -23 
Subsidiary agreements 
under CEPA  
- Agreement on Trade in 
Goods  
- Agreement concerning 
Amendment to the 
Agreement on Trade in 
Services of CEPA  China  14 December  2018 
 
21 November  2019 268,033.7  350,384.9  82,351.2  
 
17 DS597: United  States  – Origin Marking Requirement . 
18 WTO document WT/DS 597/R, 21  December  2022.  
19 WTO document WT/DS597/9, 30  January  2023.  
20 Only total trade was taken into account as it was not possible to examine trade benefiting from 
preferential rates under the FTA.  
21 Trade and Industry Department (2022), "Joint Statemen t by Mr Algernon Yau, Secretary for 
Commerce and Economic Development of the  Hong Kong Special Administrative Region and Mr Miguel 
Palomino, Vice Minister of Foreign Trade of the Republic of Peru", 16  November. Viewed  at: 
https://www.tid.gov.hk/english/ita/fta/hkpefta/files/joint_statement.pdf . 
22 The Chief Executive's 2022 Policy Address, 2022.10.19 . Viewed  at: 
https://www.policyaddress.gov.hk/2022/public/pdf/policy/policy -full_en.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Agreement  Partner(s)  Entry into force  Imports  Exports  Trade 
balance  
Hong Kong,  China – 
Georgia  
Free Trade Agreement  Georgia  13 February  2019 6.0 46.5 40.5 
Free Trade Agreement 
between 
Hong Kong,  China  and 
Australia  Australia  17 January  2020 5,717.5  4,304.3  -1,413.2  
Free Trade Agreement 
between 
Hong Kong,  China and the 
Association of Southeast 
Asian Nations  Brunei  Darus
salam, 
Cambodia, 
Indonesia, 
Laos, 
Malaysia, 
Myanmar, 
Philippines, 
Singapore, 
Thailand, and 
Viet Nam 11 June 2019 
(Laos, Myanmar,  
Singapore, Thailand,  
and Viet  Nam),  
13 October  2019  
(Malaysia),  
12 May 2020 
(Philippines),  
4 July 2020 
(Indonesia),  
20 October  2020 
(Brunei  Darussalam)
, 
12 February  2021 
(Cambodia)  122,306.6  51,390.8  -70,915.8  
Agreements prior to 2018  
New Zealand Closer 
Economic Partnership 
Agreement  New Zealand  1 January  2011 563.9  422.8  -141.1  
Free Trade Agreement 
between the EFTA States 
and Hong  Kong,  China  Iceland, 
Liechtenstein, 
Norway, 
Switzerland  1 October  2012 
(Iceland, 
Liechtenstein, 
Switzerland), 
1 November  2012 
(Norway)  9,852.5  4,672.7  -5,179.8  
Free Trade Agreement 
between 
Hong Kong,  China  and 
Chile Chile 9 October  2014 1,610.0  634.6  -975.4  
Hong Kong Special 
Administrative Region and 
Macao Special 
Administrative Region 
Closer Economic 
Partnership Arrangement  Macao,  China  27 October  2017 1,168.3  7,741.0  6'572.7  
Source:  TID, Trade and Investment Agreements . Viewed  at: 
https://www.tid.gov.hk/english/ita/fta/index.html ; UN Comtrade database; and information 
provided by the authorities.  
2.20.  During the review period, new agreements entered into force with Georgia, Australia, and 
ASEAN. Two subsidiary agreements under the framework of CEPA were implemented with China, 
and amendments were made to the FTA with Chile.23 The main elements and features are 
summarized in  Table  2.2. 
 
23 The amendments to the FTA with Chile were agreed through an exchange of notes 
on 18 January  2022 and entered into force on 6  April 2023.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 2.2 New or amended FTAs, 2018 -23 
Agreement  Main features  WTO notification  
CEPA CEPA is designed with a building -block approach for progressive trade 
and investment liberalization between the parties.  The following two 
subsidiary agreements were signed under the framework of CEPA:  
The Agreement on Trade in Goods was signed and entered into force 
on 14  December  2018 and implemented since 1  January  2019. It 
consolidates and updates the previous commitments on liberalizatio n 
and facilitation of trade in goods in CEPA and its relevant Supplements. 
On top of the existing CEPA commitments on trade in goods, it 
enhances the provisions on rules of origin, and adds new chapters on 
customs procedures and trade facilitation, SPS mea sures, and technical 
barriers to trade (TBT). It also introduces trade facilitation measures in 
the Greater Bay Area.  
The Agreement concerning Amendment to the Agreement in Trade in 
Services of CEPA (the Amendment Agreement) was signed and entered 
into for ce on 21  November  2019 and implemented since 1  June 2020. 
The Amendment Agreement updates the commitments on liberalization 
and facilitation of trade in services under the Agreement on Trade in 
Services implemented since 1 June  2016 so as to enhance the le vel of 
liberalization on trade in services under the framework of CEPA and 
introduces new liberalization measures in various services sectors.  
The two sides will continue to enrich the content of CEPA to achieve 
further liberalization and facilitation of t rade and investment between 
them.  WT/REG162/N/1/Add.11,  
5 March  2019;  
S/C/N/264/Add.11, 
20 March  2020; and 
S/C/N/264/Add.11/Corr.1, 
27 March  2020 
Georgia  The Agreement liberalizes trade in goods and services and has 
provisions to facilitate investment. It  also covers other trade -related 
issues including rules of origin, TBT, SPS, safeguards, protection of 
intellectual property and the environment, as well as promotion 
of competition.  WT/REG397/N/1, 
12 February  2019;  
S/C/N/923, 
12 February  2019 
Australia  The Agreement covers trade in goods, trade in services, investment, 
government procurement, intellectual property, competition, dispute 
settlement mechanism and other related areas, e.g.  rules of origin, 
e-commerce, TBT, and SPS.  WT/REG400/N/1, 
17 January  2020;  
S/C/N/986, 
17 January  2020 
ASEAN  The Agreement covers trade in goods, trade in services, investment, 
economic and technical cooperation, dispute settlement and other 
related areas such as rules of origin, safeguard measures, standards, 
customs, and trade facilitation measures.  WT/REG448/N/1, 
11 February  2021;  
S/C/N/1043, 
11 February  2021 
Chile Commitments on trade in services under the Agreement have been 
updated. Both parties have undertaken more favourable commitments 
on market access and national treatment in over 50  services sectors.  S/C/N/773/Add.1, 
6 April 2023 
Source:  Compiled by the WTO Secretariat based on notification documents and information provided by the 
authorities.  
2.3.2.2   Unilateral preferences  
2.21.  Hong Kong,  China does not offer unilateral preferences to other Members; this is essentially 
not relevant as Hong  Kong,  China does not have applied customs tariffs on imports.  
2.3.3   Other agreements and arrangements  
2.22.  Since  1991, Hong  Kong,  China has been a member of APEC and continues to participate 
actively in APEC's work. During the review period, Hong  Kong,  China contributed by promoting 
structural reforms including through strengthening economic and legal infrastructure in the 
Asia-Pacific region under the APEC Economic Committee. In a ddition, with the aim of improving the 
business environment, Hong  Kong,  China participates in the APEC Committee on Trade and 
Investment that addresses trade and investment matters. Hong  Kong,  China has been engaged in WT/TPR/S/ 450 • Hong Kong, China  
 
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  advancing regional undertakings, redu cing barriers to trade, enhancing resilient supply chains, and 
promoting sustainable trade.  
2.4  Investment regime  
2.23.  According to UNCTAD's World Investment Report 2022, Hong  Kong,  China remains one of the 
world's largest destinations for foreign direct investment  (FDI)  (Section 1.3.2) . For 2021, 
Hong Kong,  China ranked  3rd in terms of inflows and demonstrated an increase over 2020, with most 
of it accounted for by reinvested earnings. At the same time, FDI outflows remained strong, but less 
than inflows, with Hong  Kong,  China ranking 7th in 2021.24 Hong Kong,  China remains an attractive 
destination for FDI  due to its central location in Asia, its rule of law, and developed infrastructure; 
its position on investment mirrors its trade situation as it serves as a significant conduit for China's 
investment flows.25 In 2021, a reported 55.6% of China's outward F DI26 was channelled through 
Hong Kong,  China.27 To enhance its investment competitiveness, Hong  Kong,  China has put in place 
new institutional setups and implemented a number of new initiatives for attracting enterprises and 
investments.  
2.4.1   Framework  
2.24.  Although Hong  Kong,  China has no specific laws regulating foreign investment, it maintains a 
framework of IPPAs and FTAs with investment provisions to give protections or assurances to 
investors as well as promote two -way investment flows. As of June  2023,  Hong Kong,  China had 
4 FTAs with investment chapters and 22  IPPAs (Table  2.3). During the review period, 
IPPA negotiations were concluded, and entered into force, with Australia, Mexico, and 
the United  Arab Emirates, and negotiations were ongoing with the  Kingdom  of Bahrain, Maldives, 
Myanmar, the Russian  Federation, the Kingdom  of Saudi  Arabia, and Türkiye.  
2.25.  The IPPAs vary in their coverage and content but generally contain provisions on 
non-discrimination, fair and equitable treatment, full protection and  security, free transfer, 
expropriation, and settlement of disputes. Some agreements go further to incorporate investment 
facilitation, taxation measures, and corporate responsibility provisions. Hong  Kong,  China negotiates 
IPPAs based on a model text, whi ch is for internal purposes and not publicly available.  
Table 2.3 FTAs and IPPAs, 2023  
 Agreements currently in force  Date of signing  
FTAs with investment 
chapters (see note)  European Free Trade Association ( EFTA)  
Chile 
Georgia  
Australia  June 2011 
September  2012 
June 2018 
March  2019 
IPPAs  Netherlands  
Denmark  
Sweden  
Switzerland  
New Zealand  
Italy 
France  
Germany  
Belgo -Luxembourg Economic Union  
Austria  
Japan  
Republic  of Korea  
United  Kingdom  
Thailand  
Finland  
Kuwait, State of  
Canada  November  1992 
February  1994 
May 1994 
September  1994 
July 1995 
November  1995 
November  1995 
January  1996  
October  1996  
October  1996 
May 1997 
June 1997 
July 1998 
November  2005 
July 2009 
May 2010 
February  2016 
 
24 UNCTAD, World Investment Report  2022. Viewed  at: https://unctad.org/publication/world -
investment -report -2022. 
25 InvestHK (2022), "Hong Kong: Where Opportunities Connect". Viewed  at: 
https://www.investhk.gov.hk/sites/default/files/2022.11 -corporate -brochure -en.pdf . 
26 In terms of cumulative outward FDI stock.  
27 Ministry of Commerce  of the People's Republic of China, National Bureau of Statisti cs, and State 
Administration of Foreign Exchange, 2021 Statistical Bulletin of China's Outward Foreign Direct Investment . 
Viewed  at: http://images.mofcom.gov.cn/fec/202211/202211180 91910924.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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   Agreements currently in force  Date of signing  
Chile 
ASEAN  
Australia  
United  Arab Emirates  
Mexico  November  2016 
November  2017 
March  2019 
June 2019 
January  2020 
Note:  Under the framework of the CEPA, China and Hong  Kong,  China signed the Investment Agreement 
on 28  June 2017. It brings enhancement to the overall CEPA framework through expansion of 
commitments of admission of investment to non -services sectors and introduction of obligations on 
investment protection. It also contains provisions on investment promotion and facilitation. It  has 
been fully implemented since  1 January  2018.  
Source:  TID, Hong Kong's Investment Promotion and Protection Agreements . Viewed  at: 
https://www.tid.gov.hk/english/ita/ippa/index.html ; and information provided by the authorities.  
2.4.2   Investment promotion activities  
2.26.  In order to enhance its competitiveness in attracting investment and promoting itself as an 
investment destination, Hong  Kong,  China has in recent y ears put in place new institutional setups 
and introduced new initiatives targeted at attracting enterprises, investment, and talent. In addition 
to the long -standing investment promotion agency InvestHK, Hong  Kong,  China recently established 
more organiza tions and investment funding schemes for this purpose: the Hong Kong Investment 
Corporation Ltd (HKIC), the Office for Attracting Strategic Enterprises (OASES), and several funding 
schemes. These developments demonstrate the new policy directions in this a rea. 
2.27.  InvestHK is the long -standing government agency responsible for attracting and retaining 
FDI in Hong  Kong,  China. It offers client -centric and one -stop customized services to support 
companies from the planning stage through to the launch and expansio n of their businesses and it 
adopts a sector -focused and market -oriented approach to identify and reach out to overseas 
and Chinese companies to set up or expand their businesses in Hong  Kong,  China. For example, 
InvestHK is attracting potential companies in carbon neutrality to Hong  Kong,  China to complement 
the policy of achieving carbon neutrality before 2050 and is planning more initiatives related to the 
Belt and Road Initiative and the development of the Greater Bay Area. Dedicated teams for attractin g 
businesses and talent have been set up in certain global trade offices under this initiative, as has a 
Pan-Greater Bay Area Inward Investment Liaison Group with a view to strengthening collaboration 
and synergies among the Greater Bay Area cities by deve loping joint inward investment propositions.  
2.28.  The HKIC was established and incorporated in  2022 as a government -owned corporation to 
consolidate the management of the investment activities of the Hong Kong Growth Portfolio, the 
Greater Bay Area Investment F und, the Strategic Tech Fund, and the newly established 
Co-Investment Fund. It aims to use these government financial reserves to identify investment 
opportunities and promote and attract industries globally to Hong  Kong,  China.28 The Co -Investment 
Fund wa s established in  2022 (by setting aside HKD  30 billion from the Future Fund) to attract 
enterprises from all over the world to set up operations and invest in Hong  Kong,  China so as to 
enhance the long -term competitiveness, economic vitality, and liveabili ty, while generating an 
investment return.  
2.29.  More recently, as part of its policy initiatives, Hong  Kong,  China established the Office for 
Attracting Strategic Enterprises (OASES) in December  2022 with the overall goal of attracting high 
potential and repres entative strategic enterprises. OASES offers facilitative measures such as 
one-stop services, connections, and identification of schemes and support to enterprises in industries 
of strategic importance, e.g. life and health technology, artificial intellige nce and data science, 
financial technology (Fintech), and advanced manufacturing and new energy technology. While 
focused on these sectors, OASES offers facilitation services to all qualified strategic enterprises 
across all sectors, which are assessed on a case -by-case basis.  
2.30.  In addition, Hong  Kong,  China has set up an Advisory Committee on Attracting Strategic 
Enterprises  in 2022 , comprising representatives from relevant business sectors and social leaders, 
 
28 Hong Kong Investment Corporation Ltd. Viewed  at: https://www.hkic.org.hk/ . WT/TPR/S/ 450 • Hong Kong, China  
 
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  to advise on how to attract strategic enterprises. The Advisory Committee has held two meetings 
since its establishment.  
2.4.3   Investment restrictions  
2.31.  Hong Kong,  China's investment r egime has typically been and remains open with few formal 
barriers to foreigner investors. The business registration, tax regime, and absence of controls on 
foreign exchange are also favourable to attracting investment. Thus, there are few formal barriers 
to foreign investment. The exceptions are with respect to broadcasting in which, according to the 
Broadcasting Ordinance (Cap.  562) and the Telecommunications Ordinance (Cap.  106), the voting 
control for domestic free TV and sound broadcasting licensees as  held by unqualified persons, 
i.e. non-residents, must not exceed 49%. Regarding legal services, persons desiring to practice law 
in Hong  Kong,  China are required to meet certain qualifications and a residency requirement; the 
same provisions are applied t o those from Hong  Kong,  China and to lawyers qualified in other 
jurisdictions.  
 WT/TPR/S/ 450 • Hong Kong, China  
 
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  3  TRADE POLICIES AND PRACTICES BY MEASURE  
3.1  Measures directly affecting imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  Hong Kong,  China remains a free port, implementing its own customs procedures that did not 
change significantly during the review period. The Customs and Excise Department (C&ED) is 
responsible for the implementation of border/boundary measures, including protection and 
facilitation of legitimate trade, revenue collection on dutiable goods, countering smuggling, 
interdiction of narcotics, and protection of intellectual property rights and consumer interests.1 
C&ED  oversees 16  border posts. In addition to f acilitating imports and exports of goods into and out 
of Hong  Kong,  China, C&ED also oversees the cargo clearance of transit trade.  
3.2.  There were no significant changes to the customs import procedures during the review period. 
Hong Kong,  China continues to m ove towards electronic trade documents, in particular the 
implementation of its Trade Single Window (TSW) (Section  3.1.1.3). The main legislation governing 
imports (and exports) remains the Import and Export Ordinance (Cap.  60) and its subsidiary 
regulatio ns. Importers are required to file an import declaration within 14  days of importation of the 
goods. Import manifests, licensing/permit applications (if required) (Cap.  60A), and bill of lading or 
invoices are also to be filed (Cap.  60E). The payment of ce rtain fees or costs (Cap.  60B) or taxes 
(if applicable), as well as possible inspection or control is part of the import process.  
3.3.  Customs collects excise duties (Section  3.1.4), associated fees, trade declaration charges, and 
late charges/penalties (Table  3.1). The majority of revenues are contributed by the dutiable 
commodities, which generally accounted for over 90% of total customs revenues during the review 
period. About 20  million import declarations are filed per year, with a slight decline during 202 0-21 
on account of the COVID -19 pandemic and an increase thereafter to  22.6 million in  2022. The 
number of cargo manifests gradually declined over the review period.  
3.4.  In 2023, Hong  Kong,  China's declaration charges, on imports and exports, were HKD  0.2 in 
respect of the first HKD  46,000 of the value of the goods and HKD  0.125 for each additional 
HKD 1,000 thereafter.2 A cap of HKD  200 per declaration has been in place since 1  August  2018 for 
the benefit of the local trading and logistics industry through lo wering the operating costs to 
encourage the sector to move up the value chain.3 For certain food items as enumerated in 
Appendix  I of the Hong Kong Harmonized System4, only HKD  0.2 declaration charge is applied to 
each import declaration irrespective of its value.  
Table 3.1 Overview of Customs revenues and operations, FY2017 /22 
 FY2017/18  FY2018/19  FY2019/20  FY2020/21  FY2021/22  
Import and export processes (No., million)  
Import and export declarations 
(No., million)  20.2 20.58  19.62  18.67  22.61  
Cargo manifests (No.,  million)  8.1 8 7.4 6.1 6.2 
Excise duties/fees/charges/penalties (HKD  million)  
Excise duties collected  10,701  10,636  11,391  11,852  12,467  
Fees charged for dutiable commodities  6.0 6.6 6.6 5.9 6.8 
Trade declaration charges  970 671 430 430  477 
Late/administrative penalties  14.7 14.9 13.7 9.7 13.1 
Source:  C&ED, Statistics, Annual Revenue Collection . Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/common/pdf/statistics/revenue_en.pdf ; C&ED, 
Departmental Reviews , various editions 2018 -21. Viewed  at: 
https://www.customs.gov.hk/en/publications -useful -information/publications/departmental -
reviews/ index.html ; and information provided by the authorities.  
 
1 C&ED, Vision, Mission and Values . Viewed  at: https://www.customs.gov.hk/en/about -us/vision -
mission -values/index.html . 
2 C&ED, Import and Export Declaration . Viewed  at: https://www.customs.gov.hk/en/service -
enforcement -information/cargo -clearance/import -export -declaration/index.html . 
3 Information provided by the authorities.  
4 Census and Statistics Department, Commodity Classification Publications, Appendix  I. Viewed  at: 
https://ww w.censtatd.gov.hk/FileManager/EN/Content_93/Food_2022.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  3.5.  Hong Kong,  China cooperates with other customs authorities on customs matters through 
Customs Co -operative Arrangements (CCAs). As of June  2023, there were 29  such agreements in 
place.5 During the review period, C&ED concluded new CCAs with Cambodia, Fiji, Georgia, 
Singapore, and the Republic  of the Congo, and they have all entered into force. The CCAs are 
instruments for strengthening information and intelligence e xchange to combat cross -border crimes 
and promote trade facilitation between the parties.6 
3.1.1.1   Recent developments  
3.6.  The growth of e -commerce in recent years has resulted in a significant increase in the number 
of shipments transported by express couriers, in particular packets, and C&ED has continued to 
strike a balance between trade facilitation on the one hand and law  enforcement on the other through 
adopting a multi -pronged approach including (i)  flexible deployment of labour 
resources;  (ii) customs -business partnerships; (iii)  intelligence analysis; and (iv)  the use of 
specialized  equipment.  
3.7.  C&ED formulated the Smart  Customs Blueprint in  2019, aiming to employ innovation and 
technology to enhance customs clearance efficiency, law enforcement effectiveness, and trade 
facilitation, as well as to foster economic development. A number of smart initiatives have already 
been introduced, such as computed tomography (CT) scanners, auto -detection devices for X -ray 
checkers, and Cargo Big Data System. C&ED has put forward the Smart Customs Blueprint to align 
it with its Smart Customs, Smart Borders and Smart Connectivity (3S) In itiative. C&ED has continued 
to promote cross -border collaboration between the customs authorities of China and 
Hong Kong,  China so as to facilitate the efficient flow of goods, and contribute to Hong  Kong,  China's 
continued development as a logistics hub in the Greater Bay Area.  
3.8.  Hong Kong,  China has introduced a new registration regime for dealers in precious metals and 
stones, which came into effect on 1  April 2023 through amending the Anti -Money Laundering and 
Counter -Terrorist Financing Ordinance (Cap.  615). The regime aims to further Hong  Kong,  China's 
efforts in enhancing its anti -money laundering and counter -terrorist financing  (AML/CTF) measures 
in accordance with international practice. Although the regime does not impose any additional import 
and e xport controls on precious metals, precious stones, or precious products, any importer or 
exporter7 of these items that engages in a transaction with a total value at or above HKD  120,000 
in Hong  Kong,  China is required to register with C&ED. C&ED  enforce s the legislation and monitor 
the AML/CTF conduct of registrants.  
3.1.1.2   Customs appeals and enforcement  
3.9.  For customs control and related matters, if there is a disagreement about customs decisions, 
traders may lodge an objection through various channels, includin g the Administrative Appeals Board 
and the Chief Secretary for Administration, within 14  days from the date the decision was known. 
They may also appeal to a court. No administrative reviews or appeals were registered during the 
review period.  
3.10.  During the p eriod 2018 -22, there was a decline in the number of overall customs enforcement 
cases, yet a significant increase the value of seizures over the period (Table  3.2). These trends can 
be explained by different approaches taken by smugglers during the pandemi c and the changing 
tactics used by C&ED in response. Thus, there was a drop in land cargo smuggling due to restrictions 
on movement of persons across the border but a corresponding move to larger scale smuggling via 
air and sea cargo, resulting in much hig her value of goods seized. Most of the customs infringements 
involved dutiable commodities, in particular illicit cigarettes; dangerous drugs, i.e.  cocaine and 
methamphetamines; and intellectual property (IP) violations (Section  3.3.7).  
 
5 Argentina, Australia, Belgium, Cambodia, Canada, China, the Republic  of the Congo, the 
European  Union , Fiji, France, Georgia, India, Indonesia, Israel, Italy, Japan, the Republic  of Korea, 
Madagascar, Mexico, Mongolia, the Netherlands, New  Zealand, the Russian  Federation, Singapore, Thailand, 
Ukraine, the United  Kingdom, the United  States, and Viet  Nam.  
6 All CCAs are legally non -binding except there is a legally binding agreement with the  European  Union.  
7 Also applies to manufacturing, trading, or acting as an intermediary.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.2 Customs enforcement, 2018 -22 
 2018  2019  2020  2021  2022  
Overall  
No. of cases  29,828  32,946  8,076  8,327  8,809  
Persons arrested  20,025  24,809  4,076  5,153  4,432  
Value of seizures (HKD  million)  1,221  2,040  3,629  6,384  7,147  
Major cases  
Import and export  
 No. of cases  5,643  5,205  1,942  1,367  1,043  
 Persons arrested  4,220  4,233  586 366 246 
 Value of seizures (HKD  million)  513 582 908 2,577  1,496  
Dangerous drugs  
 No. of cases  919 827 1,111  906 931 
 Persons arrested  393 383 200 218 178 
 Value of seizures (HKD  million)  450 1,123  2,108  2,588  3,576  
Copyright  
 No. of cases  119 101 62 52 53 
 Persons arrested  143 118 70 70 72 
 Value of seizures (HKD  million)  6 4 1 3 3 
Trade descriptions  
 No. of cases  1,044  1,002  725 807 616 
 Persons arrested  774 698 343 466 385 
 Value of seizures (HKD  million)  107 119 146 167 188 
Illicit cigarettes  
 No. of cases  18,849  22,352  3,881  4,312  4,710  
 Persons arrested  13,040  17,343  2,500  3,560  2,816  
 Value of seizures (HKD  million)  148 163 564 1,178  2,019  
Illicit fuel  
 No. of cases  31 31 42 67 47 
 Persons arrested  45 63 160 109 85 
 Value of seizures (HKD  '000) 476 882 1,103  1,177  1,027  
Weight and measures  
 No. of cases  56 56 32 26 26 
 Persons arrested  0 2 0 0 0 
 Value of seizures (HKD  '000) 21 31 127 3 0 
Toys and children's products safety  
 No. of cases  76 65 55 42 25 
 Persons arrested  0 0 0 0 0 
 Value of seizures (HKD  '000) 85 406 132 131 5 
Consumer goods safety  
 No. of cases  36 48 56 74 27 
 Persons arrested  0 0 20 6 0 
 Value of seizures (HKD  '000) 6 86 81 1,265  80 
Source:  C&ED, Enforcement Results, Cases , Seizures, Arrests . Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/common/pdf/statistics/enforcement_cases_en.pdf ; 
and information provided by the authorities.  
3.1.1.3   Trade facilitation  
3.11.  Hong Kong,  China has been a strong supporter of the Agreement on Trade Facilitation  (TFA) 
and was the first  Member to accept the TFA on 8  December  2014. When the TFA entered into force 
in February  2017, Hong  Kong,  China had designated all of its provisions under Category A, meaning 
that all provisions were to be fully implemented without delay upon the Agreement's entry into force. 
A number of trade -facilitating measures continue to be implemented and continual improve ments 
are being made to Hong  Kong,  China's paperless trading environment.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  3.12.  Since the late  1990s, different electronic platforms have been established to facilitate the 
electronic submission of trade -related documents to the Government for customs control, t rade 
declaration, trade control, and statistics compilation purposes. The Government Electronic Trading 
Services (GETS), introduced in 1997, enables the trading community to submit trade documents 
electronically including the Import and Export Declarations , Certificate of Origin, Dutiable 
Commodities Permit, and Cargo Manifest for air and sea modes. Several electronic cargo clearance 
platforms have also been developed to facilitate cargo clearance and speed up border processes, 
including the Air Cargo Clear ance System  (ACCS), the Road Cargo System (ROCARS), and the E -Sea 
Customs Clearance Scheme (e -SCC Scheme). In  2022, about 21  million, 39  million, and 34  million 
submissions were made through GETS, ACCS, and ROCARS, respectively.  
3.13.  A number of measures have b een put in place to further improve Hong  Kong,  China's position 
as a logistics hub and to promote transhipment trade. The Intermodal Transhipment Facilitation 
Scheme (ITFS) has been in place for many years to facilitate air –land and sea -land transhipment 
cargoes through simplified clearance processes. It was expanded in  2016 upon the launch of the 
Single E -lock Scheme (SELS) to reduce repeated inspections and expedite the flow of transhipment 
road cargoes to and from China.8 With the seamless cargo flow be tween Hong  Kong,  China and 
China, the transhipment scheme reduces time -related costs and accelerates the flow of goods 
throughout the chain of logistics.  
3.14.  The Free Trade Agreement Transhipment Facilitation Scheme (FTA Scheme) to facilitate 
qualified cargo t ranshipped through Hong  Kong,  China for preferential tariff treatment under the 
trade agreements of China with other economies continues to operate without major changes. 
C&ED  provides customs supervision services and issues non -manipulation certificates t o aid the 
transhipment of these goods through Hong  Kong,  China. The Scheme facilitates incoming shipments 
to China from 66  economies, as well as outgoing transhipped cargo to Australia, the 
Republic  of Korea, and the Separate  Customs  Territory of Taiwan,  Penghu,  Kinmen  and Matsu 
(Chinese  Taipei). As of 31  March  2023, a total of 34,708  applications under the Scheme have been 
received with a trade value of USD  2.6 billion and tariff saving of USD  175.9  million. In the first 
quarter of 2023, the outgoing trans hipped merchandise was mainly directed to Chinese  Taipei, 
followed by the Republic  of Korea; incoming transhipped merchandise was mainly from Japan, 
Chinese  Taipei, and Thailand.9 During the review period, the programme was extended to new 
partners, e.g.  Georgia, Mauritius, and Japan; and the service fees have been continually waived 
since 1  October  2020 in response to the COVID -19 pandemic and to aid businesses until 
30 September  2023.  
3.15.  A voluntary customs facilitation arrangement for exporting wine from Hong  Kong,  China to 
China has been in place since  2010. Instantaneous customs clearance by China for the import of 
wine is available to wine exporters registered in Hong  Kong,  China . The requirements include having 
a business registered in Hong  Kong,  China and having engaged in substantive wine operations 
during the previous six months.  
3.16.  According to the authorities, no time release studies have been undertaken, although 
Hong Kong,  China has certain performance standards or targets that it sets to meet or exceed. These 
include customs clearance times, delivery of licences, standards, registration; and consignment 
inspection times. For example, the clearance of detained sea cargo is exp ected within 5  working 
days and for detained air cargo it is 80  minutes. For 2022, these targets were achieved at 100%.10 
Furthermore, there are no special customs provisions for expedited shipments or perishable goods.  
3.17.  In terms of advance rulings of class ification, origin, etc., Hong  Kong,  China does not offer any 
such advance rulings.  
3.18.  C&ED applies risk management in identifying high -risk cargoes, passengers, and conveyances 
for interception and customs actions. Through risk assessment, C&ED promotes sound  customs 
control while minimizing undue disruption to the legitimate flow of trade. To make 
Hong Kong,  China's risk profiling work more efficient, C&ED launched the Customs and Excise 
 
8 The scheme applies only to road cargo.  
9 C&ED, FTA Scheme Statistics. Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/en/share/pdf/fta/ftat_en.pdf . 
10 C&ED, Performance Standards, Targets and Achievement Re sults. Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/en/content_36/perf_standard_target_e.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Information and Risk Management System (CEIRMS) in  June 2018, which is a  centralized repository 
of investigation findings, intelligence, and trader records with analytical tools to facilitate Customs 
investigation of crimes and risk profiling of traders.  
3.1.1.3.1   Authorized Economic Operators (AEO)  
3.19.  Hong Kong,  China's AEO Programme is i ts Customs -to-Business partnership to facilitate the 
movement of legitimate goods.11 Accredited stakeholders12 receive incentives including reduced 
customs inspections and prioritized customs clearance. Participation in the AEO programme is 
voluntary, free of charge, and open to companies established in Hong  Kong,  China. As of May  2023, 
79 companies were accredite d as AEOs.13 
3.20.  In recent years, Hong  Kong,  China has been actively pursuing AEO Mutual Recognition 
Arrangements (MRAs) with its trading partners to provide greater benefits. New  MRAs were agreed 
with New  Zealand (2018), Israel (2019), Canada (2019), Mexico ( 2020), and Indonesia  (2022). As 
of June  2023, MRA discussions were ongoing with the Kingdom  of Bahrain; Macao,  China; the 
Philippines; and  Türkiye; and there were 13  MRAs in place with trading partners.14 
3.21.  In December  2021, C&ED launched the Authorized Econ omic Operator Platform for Data 
Exchange (APEX), to enable automated exchange of AEO information between Hong  Kong,  China 
and MRA signatories in a secure and more accurate way. Hong  Kong,  China has exchanged AEO data 
automatically with China through APEX s ince April  2022. C&ED has been promoting the use of APEX 
with other MRA signatories as well.  
3.1.1.3.2   Single window  
3.22.  Hong Kong,  China continues to make progress on its implementation of its TSW to provide a 
one-stop electronic platform for various types of import an d export trade documents for trade 
declaration and customs clearance purposes. It is being implemented in three  phases in which 
Phase  2 was recently launched. It currently covers 14  types of trade documents; coverage will be 
extended progressively to cover  28 types at the end of Phase  2, followed by another 5  types in 
Phase  3 (Table 3.3).  
3.23.  Since its inception in  2018, usage of the TSW has grown exceptionally. In  2019 there were 
889 applications for licences/permits and 745 issued, whereas in  2022, the figure s were  9,296 
and 11,654, respectively.15 
Table 3.3 Single window overview  
Phase 1  Phase 2  Phase 3  
First launched 
in December  2018 First launched in May  2023 Scheduled to launch in  2026 
14 types of trade 
documents  28 types of trade documents  Five types of trade documents  
Over 90% usage rate 
in April 2023 n.a. n.a. 
Seven government 
agencies  Five g overnment agencies  Three g overnment agencies  
 
11 C&ED, Hong Kong Authorized Economic Operator (AEO) Programme . Viewed  at: 
https://www.customs.gov.hk/en/service -enforcement -information/trade -facilitation/aeo/ind ex.html . 
12 Accredited stakeholders include, for example, manufacturers, importers, exporters, freight 
forwarders, warehouse operators, and carriers.  
13 C&ED, List of Hong Kong AEOs . Viewed  at: https://www.customs.gov.hk/en/service -enforcement -
information/trade -facilitation/aeo/list/index.html . 
14 C&ED, AEO MRA . Viewed  at: https://www.customs.gov.hk/en/service -enforcement -information/trade -
facilitation/aeo/mra/index.html . 
15 C&ED, Trade Single Window Statistics . Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/common/pdf/tsw/tsw_stat_en.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Phase 1  Phase 2  Phase 3  
Mainly import and 
export licences/permits 
required for specific 
controlled goods  Mainly import and export licences/permits 
required for specific controlled goods  Import and Export Declaration, Advance 
Cargo Information, Cargo Manifest and 
Cargo Report, and Certificate of Origin 
and Permit for Dutiable Commodit ies 
n.a. Not applicable.  
Source:  C&ED, Departmental Reviews , various editions 2018 -21. Viewed  at: 
https://www.customs.gov.hk/en/publications -useful -information/publications/departmental -
reviews/index.html ; and Trade Single Window, Frequently Asked Questions . Viewed  at: 
https://www4.tradesinglewindow.hk/portal/en/faq/index.html . 
3.1.1.4   Customs valuation  
3.24.  Customs valuation is used essentially for the purpose of calculating internal taxes (e.g.  excise 
duties) collected at the border/boundary, and there were no changes to Hong  Kong,  China's custom 
valuation rules during the review period. The notification to the Customs Valuation Committee 
in 1996 remains relevant, and no laws, regulations, or administrative procedures exist specifically 
for valuing  goods for customs purposes.16 However, goods subject to excise duties, per the Dutiable 
Commodities Ordinance (Cap.  109), have a specific valuation basis contained therein for determining 
the ad valorem  duty assessment. Also, all vehicles first launched o n roads in Hong  Kong,  China, 
including those imported, have another specific valuation methodology as prescribed in the Motor 
Vehicles (First Registration Tax) Ordinance (Cap.  330) (Section  3.1.4).  
3.25.  Valuation by customs is only relevant for alcoholic liquor s per the Dutiable Commodities 
Ordinance (Cap.  109) as the others (tobacco, hydrocarbon oil, and methyl alcohol) currently have 
specific duties. Section  26A of the Dutiable Commodities Ordinance stipulates that "the value shall 
be the normal price which th e goods would fetch, at the relevant time, on their sale in the open 
market between a buyer and seller independent of each other". The normal price does not include 
the duties but includes patent, design, or trademark fees. Also, per the normal price deter mination, 
the buyer is responsible for transport, insurance, and all other costs incidental to the delivery but 
the seller is responsible for commissions and other costs incidental to the sale.  
3.26.  For motor vehicles, C&ED is also responsible for tax assessmen t. All vehicle taxes are 
ad valorem  and vary depending on the class and type of vehicle. For new imported vehicles, 
Section  4E of the Ordinance provides that the taxable value is essentially the published retail price 
with certain adjustments. The Motor Ve hicles First Registration Tax System of C&ED is dedicated to 
provide an Internet -based web application for tax assessment of motor vehicles. The system 
publishes an approved published retail price with search tools for public access for the valuation of 
the vehicles.17 Vehicles previously owned and registered by the importer in another jurisdiction may 
be subject to depreciation on the value of the vehicle upon importation.  
3.1.2   Rules of origin  
3.27.  Hong Kong,  China does not have any specific laws or regulations for non-preferential origin 
determination on imports. As required under Regulation  4 of the Import and Export (Registration) 
Regulations (Cap.  60E), an importer of goods, other than the exempted articles, shall lodge an 
accurate and complete declaration for th e goods imported, including their origin. Hong  Kong,  China 
also administers an origin certification system to facilitate exports to foreign markets. Origin rules 
are established in conformity with internationally accepted practice and standards for the cer tificates 
of origin and are further detailed in the Certificate of Origin Circular.18 
3.28.  Certificates of origin are not mandatory for the export of goods originating from 
Hong Kong,  China; an origin certification system is administered to help exporters meet the 
 
16 WTO documen t G/VAL/N/1/HKG/1, 31  January  1996.  
17 C&ED, Motor Vehicles First Registration Tax System . Viewed  at: 
https://eservices.customs.gov.hk/FRT/common/wcm00104 . 
18 Trade and Industry Department (TID), Hong Kong Origin Rules: Basic Principles and Specific 
Requirements . Viewed  at: https://www.tid.gov.hk/english/import_export/cert/cert_ru les.html ; and TID, 
Certificate of Origin Circular No.  1/2022 , 12 January  2022. Viewed  at: 
https://www.tid.gov.hk/english/aboutus/t radecircular/coc/2022/coc012022.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  requirements of the importing economies.19 However, Hong  Kong,  China provides guidance and has 
published origin -determining rules under its "Administrative Origin Criteria for Specified Products for 
Issue of Certificates of Hong Kong Origin".20 The Adm inistrative Origin Criteria detail the origin 
criteria as well as the principal processes that confer origin for non -preferential certificates for 
exports. Hong  Kong,  China has notified these origin criteria to the WTO Committee on Rules of 
Origin.21 
3.29.  Durin g the review period, following the entry into force of the FTAs with ASEAN and Georgia, 
Certificate of Hong Kong Origin  – Form AHK (CO(Form  AHK)) and Certificate of Hong  Kong 
Origin  – Georgia (CO(Georgia)) were introduced to facilitate goods claiming prefe rential tariff 
treatment under these FTAs.22 
3.30.  In terms of preferential rules of origin, all of Hong  Kong,  China's FTAs contain provisions on 
origin determination. Generally speaking, they all involve a number of origin determining rules such 
as change in tariff classification, regional value content, and other criteria, with the exception of the  
FTA with Macao,  China in which there are no specific preferential rules of origin.23 Hong Kong,  China 
has notified the preferential rules of origin of its recent FTAs  with Macao,  China; Georgia; Australia; 
and ASEAN to the WTO Committee on Rules of Origin  during the review period.24 
3.1.3   Tariffs  
3.31.  As a free port, Hong  Kong,  China does not apply tariffs on imports nor maintain any tariff rate 
quotas. Appendix  I and II of Hong  Kong,  China's tariff provides for reduced additional charges on 
imports and an export lev y (Sections  3.1.1 and 3.2.2).  
3.32.  The tariff nomenclature (Hong Kong Harmonized System  (HKHS)) is published annually on 
the Census and Statistics Department website.25 The HKHS contains 8 -digit tariff nomenclature and 
units of quantity. On 1  January  2022, Hong  Kong,  China implemented the latest Harmonized 
System  changes (HS22) to its tariff schedule, the HKHS that applies to both imports and exports.26 
There are usually annual amendments, but they are relatively minor compared to the WCO  HS 
changes that occurre d in 2022 where the changes were numerous.27 
3.33.  The structure of bound and applied rates is outlined in Table  3.4. Agricultural tariff lines 
are 100% bound pursuant to the Agreement on Agriculture. A smaller percentage (i.e.  39.4%) of 
non-agricultural lines a re bound. For non -agricultural goods, bindings are mainly in the  fish, wood, 
and paper sectors, which have the highest percentage of bound lines. All items that are bound have 
a zero rate of duty in the schedule.  
 
19 Hong Kong,  China also issues a Certificate of Origin  – Processing that certifies goods have undergone 
certain manufacturing processes in Hong  Kong,  China.  
20 TID, Appendix  I, Adminis trative Origin Criteria for Specified Products for Issue of Certificates of 
Hong Kong Origin. Viewed  at: 
https://www.tid.gov.hk/english/aboutus/tradecircular/c oc/2022/files/coc012022a.pdf ; and Certificate of Origin 
Circular No.  1/2022. Viewed  at: 
https://www.tid.gov.hk/english/ aboutus/tradecircular/coc/2022/coc012022.html#Note1 . 
21 The last such notification was WTO document G/RO/N/86, 1  October  2012.  
22 TID, Certificate of Hong Kong Origin  – Georgia. Viewed  at: 
https://www.tid.gov.hk/english/import_export/cert/cert_georgia.html ; and Certificate of Hong Kong 
Origin  – Form AHK, viewed at: https://www.tid.gov.hk/english/import_export/cert/co_form_AHK.html . 
23 See the respective RTA Factual Presentations on these FTAs for the deta ils on the rules of origin under 
each Agreement.  WTO documents WT/REG448/1 , 24 March 2023; WT/REG400/1/Rev.1 , 16 December  2020; 
WT/REG397/1 , 27 January 2020; WT/REG390/1/Rev.1 , 2 April 2019; WT/REG356/1 , 8 July  2015; 
WT/REG322/1 , 9 July 2013; and WT/REG291 /1/Rev.1 , 26 March 2012.  
24 WTO documents G/RO/N/170, 24  May 2018; G/RO/N/185, 15  April 2019; G/RO/N/193, 
18 February  2020; and G/RO/N/221, 29  April 2021.  
25 Census and Statistics Department, Commodity Classification Publications . Viewed  at: 
https://www.censtatd.gov.hk/en/page_1364.html . 
26 Census and Statistics Department (2022), Monthly Digest of Statistics , February.  Viewed  at: 
https://www.censtatd.gov.hk/en/data/stat_report/product/FA100286/att/B72202FA2022XXXXB0100.pdf . 
27 Census and Statistics Department, Commodity Class ification Publications . Viewed  at: 
https://www.censtatd.gov.hk/en/page_1364.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.4 Bound and applied tariffs, by WTO definition, 2023  
 No. of 
lines  No. of 
bound 
linesa % bound, 
of totala Bound 
average  MFN 
applied 
average  
Total lines  7,805  3,717 (152)  47.6 0.0 0.0 
WTO agriculture  1,062  1,062  100.0  0.0 0.0 
Animals and products thereof  175 175 100.0  0.0 0.0 
Dairy products  27 27 100.0  0.0 0.0 
Fruit, vegetables and plants  328 328 100.0  0.0 0.0 
Coffee and tea  28 28 100.0  0.0 0.0 
Cereals and preparations  125 125 100.0  0.0 0.0 
Oil seeds, fats and oils and their 
products  95 95 100.0  0.0 0.0 
Sugars and confectionery  26 26 100.0  0.0 0.0 
Beverages, spirits and tobacco  80 80 100.0  0.0 0.0 
Cotton  5 5 100.0  0.0 0.0 
Other agricultural products 
n.e.s.  173 173 100.0  0.0 0.0 
WTO non-agriculture  6,743  2,655 (152)  39.4 0.0 0.0 
Fish and fishery products  386 386 100.0  0.0 0.0 
Minerals and metals  1,042  679 (6)  65.2 0.0 0.0 
Chemicals and photographic 
supplies  1,536  178 (21)  11.6 0.0 0.0 
Wood, pulp, paper and furniture  353 338 95.8 0.0 0.0 
Textiles  712 104 14.6 0.0 0.0 
Clothing  512 8 (2) 1.6 0.0 0.0 
Leather, rubber, footwear and 
travel goods  214 90 42.1 0.0 0.0 
Non-electric machinery  702 243 (41)  34.6 0.0 0.0 
Electric machinery  389 220 (40)  56.6 0.0 0.0 
Transport equipment  265 36 (13)  13.6 0.0 0.0 
Non-agriculture articles n.e.s.  583 373 (29)  64.0 0.0 0.0 
Petroleum  49 0 0.0 n.a. 0.0 
By HS section  
01 Live animals and products  558 558 100.0  0.0 0.0 
02 Vegetable products  417 417 100.0  0.0 0.0 
03 Fats and oils  61 61 100.0  0.0 0.0 
04 Prepared food, beverages 
and tobacco  337 337 100.0  0.0 0.0 
05 Mineral products  205 120 58.5 0.0 0.0 
06 Chemicals and products 
thereof  1,413  187 (11)  13.2 0.0 0.0 
07 Plastics, rubber, and articles 
thereof  291 64 (10)  22.0 0.0 0.0 
08 Raw hides and skins, leather, 
and its products  131 47 35.9 0.0 0.0 
09 Wood and articles of wood  150 141 94.0 0.0 0.0 
10 Pulp of wood, paper and 
paperboard  151 151 100.0  0.0 0.0 
11 Textiles and textile articles  1,173  91 (2)  7.8 0.0 0.0 
12 Footwear, headgear, etc.  68 56 82.4 0.0 0.0 
13 Articles of stone, plaster, 
cement  170 109 (5)  64.1 0.0 0.0 
14 Precious stones and metals, 
pearls  86 8 9.3 0.0 0.0 
15 Base metals and articles 
thereof  628 462 (1)  73.6 0.0 0.0 
16 Machinery, electrical 
equipment, etc.  1,134  511 (81)  45.1 0.0 0.0 
17 Transport equipment  279 41 (13)  14.7 0.0 0.0 
18 Precision equipment  281 186 (19)  66.2 0.0 0.0 
19 Arms and ammunition  18 0 0.0 n.a. 0.0 
20 Miscellaneous manufactured 
articles  234 166 (10)  70.9 0.0 0.0 WT/TPR/S/ 450 • Hong Kong, China  
 
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   No. of 
lines  No. of 
bound 
linesa % bound, 
of totala Bound 
average  MFN 
applied 
average  
21 Works of art, etc.  20 4 20.0 0.0 0.0 
n.a. Not applicable.  
a Including 152  tariff lines that are only partially bound. Number of partially bound lines are shown 
in parentheses.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.1.4   Other charges affecting imports  
3.34.  Hong Kong,  China charges excise duties on four categories of goods (alcoholic liquor, tobacco, 
hydrocarbon oil, and methyl alcohol), pursuant to the Dutiable Commodities Ordinance (Cap.  109), 
regardless of whether they are locally manufactured or imported. During the review period, the 
dutiable rates increased for tobacco products on 22  February  2023 as a means to reduce tobacco 
use but remained unchanged for the remaining products (Table  3.5). The products must be stored 
in a bonded warehouse until the duty is paid28, at which time C&ED issues a removal permit.  
Table 3.5 Dutiable commodity rates, 2018 and 2023  
Commodity  2018  2023  
 (%) 
Liquora 
Liquor with an alcohol strength of more than 30% by volume, measured at a 
temperature of 20°C  100 100 
Liquor, other than wine, with an alcohol strength of not more than 30% by volume, 
measured at a temperature of 20°C  0 0 
Wine 0 0 
 (HKD)  
Tobacco  
Cigarettes (per 1,000  cigarettes)  1,906  2,506  
Cigars (per kg)  2,455  3,228  
Chinese -prepared tobacco (per kg)  468 615 
All other manufactured tobacco except tobacco intended for the manufacture of 
cigarettes (per kg)  2,309  3,036  
Hydrocarbon oil (per  litre)  
Aircraft spirit  6.51 6.51 
Light diesel oil  2.89 2.89 
Motor spirit (unleaded petrol)  6.06 6.06 
Motor spirit (leaded petrol)  6.82 6.82 
Ultra-low sulphur diesel  2.89 2.89 
Euro V diesel 0.00 0.00 
Methyl alcohol  
Methyl alcohol and any mixture thereof with an alcohol strength of up to 30% by 
volume, measured at a temperature of 20°C (per hectolitre)  840.00  840.00  
For every 1% of alcohol strength exceeding 30% by volume  28.10  28.10  
a Where there is no or insufficient information available to determine the value of imported liquor of 
less than 12  litres, the Commissioner of Customs and Excise (or an authorized officer) may assess 
the duty payable at a rate of HKD  160 per  litre. 
Source:  C&ED, Types and Duty Rates . Viewed  at: https://www.customs.gov.hk/en/service -enforcement -
information/trade -facilitation/dutiable -commodities/types -and-duty-rates/index.html . 
3.35.  There was a steady increa se in the duties collected over the period, a 16.5% rise 
from FY2017/18 to FY2021/22 (Table  3.6). Over half of the revenues collected were with respect to 
tobacco products. Duties are collected on both imported and locally manufactured products. 
Imported g oods accounted for the vast majority of duties (98% of the total collected in  FY2021/22), 
as most goods are imported rather than locally produced.  
 
28 An import licence is also required for dutiable products in order to protect the collection of the duty 
(Section  3.1.5).  WT/TPR/S/ 450 • Hong Kong, China  
 
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  3.36.  Other taxes include a First Registration Tax (FRT) applied on motor vehicles pursuant to the 
Motor Vehicles ( First Registration Tax)(FRT) Ordinance (Cap.  330).29 An import return must be 
lodged within 30  days of importation through the Motor Vehicles First Registration Tax System 
website and thereafter C&ED will proceed with a notification of provisional value for the tax 
assessment. The registration, control comp liance, and calculation and collection of the tax follow 
thereafter by the Transport Department. As there are no locally manufactured vehicles, the FRT is 
currently applied de facto exclusively on imported vehicles only.  
3.37.  The FRT will be derived from the ta xable value assessed by C&ED times the appropriate tax 
rate, which depends on class of motor vehicle and is generally progressive (Table  3.7). FRT rates on 
private cars have been increased by  15% since February  2021 and now range from 46% to 132%. 
This is the first rate increase since  2011 and is a policy measure to reduce the number of private 
vehicles. To promote green transport, electric vehicles, and environmentally friendly commercial 
vehicles (goods vehicles, buses, light buses, taxis, and special pur pose vehicles) have been granted 
concessions on the FRT. FRT for a private electric car will be waived up to a value of HKD  97,500 
from 1  April 2017 to 31  March  2024. A "One -for-One Replacement" Scheme is also effective from 
28 February  2018 to 31  March  2024 to allow a higher FRT concession. The latest concession cap is 
HKD 287,500. Collections under the FRT have fluctuated over the period FY2017/18 to FY2021/22 
but have generally declined in the last two years, reflecting lower number of vehicles subject t o the 
payment and lower average taxes collected per vehicle (Table  3.6). 
Table 3.6 Internal tax collection, FY2017/18  FY2021/22  
(HKD  million)  
Fiscal year  FY2017/18  FY2018/19  FY2019/20  FY2020/21  FY2021/22  
Excise duties  10,701  10,636  11,391  11,852  12,467  
Liquor  Local 0.1 0.1 0.1 0.4 0.4 
Imported  523 567 564 553 714 
Tobacco  Local 201 184 207 241 218 
Imported  6,225  6,127  6,842  7,383  7,684  
Hydrocarbon oil  Local n.a. n.a. n.a. n.a. n.a. 
Imported  3,747  3,753  3,769  3,669  3,843  
Methyl alcohol  Local n.a. n.a. n.a. n.a. n.a. 
Imported  5 5 9 6 8 
First registration tax  8,594  9,432  7,219  6,594  6,167  
n.a. Not applicable.  
Source:  C&ED, Statistics, Annual Revenue Collection . Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/common/pdf/statistics/revenue_en.pdf . Information 
provided by the aut horities.  
Table 3.7 FRT rates for motor vehicles, FY2017/18 and 2023  
(Rate of tax, %)  
Class of motor vehicle  FY2017/18  2023  
I. Private cars  
- on the first HKD  150,000  40 46 
- on the next HKD 150,000  75 86 
- on the next HKD  200,000  100 115 
- on the remainder  115 132 
II. Motor cycles and motor tricycles  35 35 
III.a. Goods vehicles, other than van -type light goods vehicles  15 15 
 b. Van-type light goods vehicles not exceeding 1.9 tonnes permitted gross vehicle weight:  
- on the first HKD  150,000  35 35 
- on the next HKD  150,000  65 65 
- on the remainder  85 85 
 c. Van-type LGV exceeding 1.9  tonnes permitted gross weight  17 17 
 
29 The tax is technically also applicable to locally manufactured vehicles, which are not currently 
produced in  Hong Kong,  China.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Class of motor vehicle  FY2017/18  2023  
IV. Taxis, light buses, buses, and special purpose vehicles  3.7 3.7 
Source:  Transport Department, Guidelines for Importation and Registration of Motor Vehicle . Viewed  at: 
https://www.td.gov.hk/en/public_services/licences_and_permits/vehicle_first_registration/guid elines
_for_importation_and_registration_of_mot/index.html . 
3.1.5   Import prohibitions, restrictions, and licensing  
3.38.  Hong Kong,  China continues to prohibit or restrict the importation of certain products for 
reasons of public hea lth, animal health, safety, security, and environmental protection, or to comply 
with obligations under international treaties and agreements, e.g.  CITES, the Montreal Protocol, the 
Rotterdam Convention, and the Kimberley Process Certification Scheme. As o f June  2023, there were 
prohibitions/restrictions on 9  categories of products (Table  3.8) and import licensing requirements 
on 22  categories of products (Table  3.9). Most of these have not changed significantly since the last 
Review, except in a few instan ces, as outlined below.  
3.39.  The Import and Export Ordinance (Cap.  60) regulates the import of certain controlled articles 
into Hong  Kong,  China and contains some of the restrictions, otherwise the import measures are 
contained in specific ordinances as noted i n the respective tables. Depending on the product or 
sector, various departments or offices are responsible for the controls or the issuance of licences. 
There continue to be various application or authorization forms to obtain licences or complete import 
processes. These are gradually being incorporated into the TSW environment, through which the 
traders can submit their applications through one portal electronically (Section  3.1.1.3.2). The 
relevant details on forms, contact points, and hotlines are avail able from the Trade and Industry 
Department (TID) Database of Articles subject to Import or Export Control.30 
3.40.  During the review period, there were a number of new items subject to licensing or 
amendments to existing measures. In July  2020, the Conservation  of Antarctic Marine Living 
Resources Ordinance (Cap.  635) was enacted to give effect to the Convention on the Conservation 
of Antarctic Marine Living Resources in Hong  Kong,  China. The Conservation of Antarctic Marine 
Living Resources (Toothfish Catch Doc umentation Scheme) Regulation (Cap.  635A) was made to 
implement the Toothfish Catch Documentation Scheme. As a result, Hong  Kong,  China requires 
licences for the import, export, and re -export of toothfish items.  
3.41.  In 2021, the Smoking (Public Health) Ordinan ce (Cap.  371) was amended to prohibit the 
import, manufacture or sale, or use in certain places of alternative smoking products, including 
electronic smoking products, heated tobacco products, and combustible herbal cigarettes. The 
amendment became effecti ve on 30  April 2022 and covers not only cargo imports but parcel imports 
and through incoming travellers.  
3.42.  Hong Kong,  China imposes licensing requirements on imports and exports of strategic 
commodities. These are contained in the Import and Export Ordinanc e (Cap.  60) and its subsidiary 
legislation, the Import and Export (Strategic Commodities) Regulations (Cap.  60G). Together the 
scope of the control is listed in four  schedules that mirror the underlying international convention 
and regimes of non -prolifera tion of weapons of mass destruction, i.e.  the Chemical Weapons 
Convention, Australia Group, Missile Technology Control Regime, Nuclear Suppliers Group, Nuclear 
Non-proliferation Treaty, the Wassenaar Arrangement, and Arms Trade Treaty. As a result of 
amend ments to the control lists adopted by these conventions and regimes, Hong  Kong,  China has 
made amendments to the schedule lists; the last one took effect in September  2021.31 Another 
amendment exercise was conducted and the legislative process was recently  completed 
in June 2023, with the amended schedule lists to take effect from 1  November  2023.32 Amendments 
were also made in a similar way to incorporate changes in the product coverage of the Rotterdam 
 
30 TID, Database of Articles Subject to Import or Export Control . Viewed  at: 
https://www.tid.gov.hk/service/utf/EnqIE.do?lang=en&cl=Y . 
31 TID (2021), Strateg ic Trade Controls Circular No.  8/2021 . Viewed  at: 
https://www.stc.tid.gov.hk/english/circular_pub/2021_stc08.html . 
32 TID (2023), Strategic Tra de Controls Circular No.  3/2023 . Viewed  at: 
https://www.stc.tid.gov.hk/english/circular_pub/2023_stc03.html ; and Import and Export (Strategic 
Commodities) Regulations (Amendment of Schedules  1 and 2) Order 2023 (Commencement) Notice. 
Viewed  at: https://www.legco.gov.hk/yr2023/english/subleg/negative/2023ln111 -e.pdf. WT/TPR/S/ 450 • Hong Kong, China  
 
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  Convention on the Prior Informed Consent Procedure fo r Certain Hazardous Chemicals and Pesticides 
in International Trade to the Pesticides Ordinance (Cap.  133) and Hazardous Chemicals Control 
Ordinance (Cap.  595) to incorporate new pesticides and hazardous chemicals.  
3.43.  New or amended import (and export) measur es were also enacted during the review period 
on firearms and ammunition, and mercury or mercury mixtures, both in  2021. Based on the 
international Minamata Convention, the Mercury Control Ordinance (MCO) (Cap.  640) was effective 
from 1 December  2021 to pr ohibit the importation and exportation of certain mercury -added 
products and to require licensing for imports and exports of mercury or mercury mixtures.33 The 
Firearms and Ammunition (Declaration of Arms) (Amendment) Regulation 2021 was implemented 
on 1 November  2021 to require licensing for possession of or dealing in (including import and 
export), by way of trade or business, specified firearm component parts34 pursuant to the Firearms 
and Ammunition Ordinance (Cap.  238).  
3.44.  Since  2008, China has implemente d export administration measures for wheat flour, rice 
flour, and rice to Hong  Kong,  China. To complement the measures, Hong  Kong,  China has 
implemented a registration scheme for local importers of China's wheat flour, rice flour, and rice. 
Thus, local com panies that would like to import these products35 are required to be registered 
importers and report import quantities monthly; be subject to disclosure of information, inspection, 
and verification; and ensure that the products are for consumption in Hong  Kong,  China and not for 
re-export. As at end -May 2023, there were 80  registered importers of wheat  flour, rice flour, 
and rice.36 
Table 3.8 Prohibitions or restrictions on imports, 2023  
Product  Measure  Rationa le Legislation  
Elephant ivory and 
elephant hunting trophy  Prohibition/restriction  Article  XX(a), (b), and (g) of the 
GATT  1994 
CITES  Protection of Endangered 
Species of Animals and 
Plants (Amendment) 
Ordinance 2018  
Mercury -added products  Prohibition  Article  XX(b) of the GATT  1994 
Part I of Annex  A of the 
Minamata Convention on Mercury  Mercury Control Ordinance 
(Cap.  640) 
Asbestos and asbestos -
containing materials  Prohibition/restriction  Article  XX(b) of the GATT  1994 Air Pollution Control 
Ordinance (Cap.  311) 
Controlled products 
containing ozone -
depleting substances  Prohibition/restriction  Article  XX(b) of the GATT  1994 
Montreal Protocol  Ozone Layer Protection 
Ordinance (Cap.  403) and 
its subsidiary regulations  
Smokeless tobacco 
products  Prohibition  Article  XX(b) of the GATT  1994 Smokeless Tobacco 
Products (Prohibition) 
Regulations (Cap.  132BW)  
Alternative smoking 
products, including 
electronic smoking 
products, heated 
tobacco products and 
herbal cigarettes  Prohibition  Article  XX(b) of the GATT  1994 Smoking (Public Health) 
(Amendment) 
Ordinance  2021 
(Cap.  371) 
 
33 Environmental Protection Department (EPD), Mercury Control . Viewed  at: 
https://www.epd.gov.hk/epd/english/resources_pub/res ources_subject/mco.html . 
34 These include barrel, chamber, cylinder, frame, body, receiver, breech block, bolt, or other 
mechanism for containing the pressure of discharge at the rear of a chamber. See Section  2(1) of the  Firearms 
and Ammunition Ordinance (Cap.  238). Viewed  at: https://www.elegislation.gov.hk/hk/cap238 . 
35 It applies to the following HS codes: 11010000, 11031100, 11032010, 11029021, 11029029, 
11031931, 11031939, 10061021, 10061029, 10061081, 10061089, 10062020, 10062080, 10063020, 
10063080, 10064020, and 10064080. TID, Mainland Cereals and Grain  Flour Regis tration Circular No.  3/2022 , 
Annex  I. Viewed  at: https://www.tid.gov.hk/english/import_export/nontextiles/nt_flour/flour032022.html . 
36 TID, Register of Registered Importers . Viewed  at: 
https://www.tid.gov.hk/english/import_export/nontextiles/nt_flour/files/importer_list.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Product  Measure  Rationa le Legislation  
Volatile Organic 
Compounds (VOC) 
containing products  Prohibition/restriction  Article  XX(b) of the GATT  1994 Air Pollution Control 
(Volatile  Organic 
Compounds) Regulation 
(Cap.  311W)  
Rough diamonds  Prohibition/restriction  Kimberley Process Certification 
Scheme  Import and Export 
Ordinance, Cap.  60 and its 
subsidiary regulations  
Certain prohibited 
weapons  
(e.g. Chinese -style 
throwing darts, 
knuckle -duster, gravity 
knife and 
gravity -operated 
steel baton)  Prohibition  Article  XX(d) of the GATT  1994 Weapon Ordinance, 
Cap. 217 
Source:  WTO document G/MA/QR/N/HKG/6, 28  October  2022; TID, Database of Articles Subject to Import or 
Export Control . Viewed  at: https://www.tid.gov.hk/service/utf/EnqIE.do ; and information provided 
by the authorities.  
3.45.  In terms of licensing procedures, in August  2022, Ho ng Kong,  China notified changes in the 
process for obtaining an import licence for sand whereby there was a cessation of the in -person 
application service.37 Also, there was a notification on the full implementation of e -services for import 
licences for ri ce with effect from 30  June 2022.38 
Table 3.9 Products subject to import licensing, 2023  
Product  Regime/rationale  Automatic/non -automatic  Legislation  
Strategic commodities 
that are munitions and 
10 categories of dual -use 
items (i.e.  items capable 
of being used for both 
industrial and military 
purposes), e.g.  firearms, 
ammunitions, nuclear 
materials, high precision 
machine tools, and 
chemical weapon 
precursors)  To monitor and 
control the flow of 
strategic commodities 
so as to prevent 
Hong Kong,  China 
from being used as a 
conduit for the 
proliferation of 
weapons of mass 
destruction  Non-automatic  Import and Export 
Ordinance, Cap.  60 
and the Import and 
Export (Strategic 
Commodities) 
Regulations, Cap.  60G 
Radio transmitting 
equipment  To control imports 
unless the importer is 
a holder of a Radio 
Dealers Licence 
(Unrestricted)  Non-automatic  Telecommunications 
Ordinance, Cap.  106 
Arms, ammunition, and 
explosives  To monitor and 
control the flow of 
these commodities  Non-automatic  Arms and ammunition 
are controlled under 
Firearms and 
Ammunition Ordinance 
(Cap.  238) and 
explosives are 
controlled under 
Dangerous Goods 
Ordinance (Cap.  295) 
Rice To maintain a stable 
supply and a reserve 
stock for emergencies  Non-automatic  Reserved Commodities 
Ordinance, Cap.  296 
Reserved Commodities 
(Control of Imports, 
Exports and Reserve 
Stocks) Regulations, 
Cap. 296A 
Rough diamonds  To fulfil international 
obligations  Non-automatic  Import and Export 
Ordinance, C ap. 60 
and its subsidiary 
regulations  
 
37 WTO document G/LIC/N/2/HKG/21, 17  August  2022.  
38 WTO document G/LIC/N/2/HKG/20, 1  August  2022.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Product  Regime/rationale  Automatic/non -automatic  Legislation  
Pesticides  To protect public 
health  Non-automatic  Import and Export 
Ordinance, Cap.  60 
and its subsidiary 
regulations  
Pesticides Ordinance, 
Cap. 133 
Ozone -depleting 
substances  To fulfil international 
obligations under the 
Montreal Protocol  Non-automatic  Ozone Layer Protection 
Ordinance, Cap.  403  
Pharmaceutical products 
and medicines  To protect public 
health  Non-automatic  Import and Export 
Ordinance, Cap.  60 
and its subsidiary 
regulations  
Proprietary  Chinese 
medicines and 36  Chinese 
herbal medicines  To protect public 
health  Non-automatic  Chinese Medicine 
Ordinance, Cap.  549 
Import and Export 
(General) Regulations, 
Cap. 60 
Radioactive substances 
and irradiating apparatus  To fulfil international 
obligations and to 
ensure public safety, 
security, and health  Non-automatic  Import (Radiation) 
(Prohibition) 
Regulations, Cap.  60 
Dutiable commodities  To protect and collect 
the excise duty 
imposed on the 
dutiable commodities  Non-automatic  Dutiable Commodities 
Ordinance, Cap.  109 
Controlled chemicals  To prevent diversion 
of controlled 
chemicals into illicit 
manufacture of 
narcotic drugs and 
psychotropic 
substances  Non-automatic  Control of Chemicals 
Ordinance, Cap.  145 
Optical disc mastering 
and replication equipment  To enforce a robust 
intellectual property 
rights regime and to 
prevent the use of 
optical disc mastering 
and replication 
equipment for 
copyright infringing 
activities  Non-automatic  Import and Export 
Ordinance, Cap.  60 
and its subsidiary 
regulations  
Sand (in excess of 
100 kg) To provide a 
mechanism to enable 
the protection of 
beaches and seabed  Non-automatic  Sand Ordinance 
(Cap.  147) 
Plants, plant pests, and 
soil To establish an 
effective means for 
plant quarantine to 
prevent the spread of 
plant pests in 
compliance with the 
recommendations of 
the Plant Protection 
Agreement for the 
Asia and Pacific 
Region and the 
International Plant 
Protection Convention 
(IPPC)  Non-automatic  Plant (Importation and 
Pest Cont rol) 
Ordinance, Cap.  207 
Endangered species of 
animals and plants  To protect 
endangered species 
and to prevent them 
from over exploitation 
in accordance with 
CITES  Non-automatic  Protection of 
Endangered Species of 
Animals and Plants 
Ordinance, Cap.  586 WT/TPR/S/ 450 • Hong Kong, China  
 
- 49 - 
 
  Product  Regime/rationale  Automatic/non -automatic  Legislation  
Live animals  To protect public and 
animal health, 
provide for public 
safety and animal 
welfare, and prevent 
cruelty to animals  Non-automatic  Public Health (Animals 
and Birds) Ordinance, 
Cap. 139 
Rabies Ordinance 
(Cap.  421) Prevention 
of Cruelty to Animals 
Ordinance (Cap.  169) 
Toothfish  To implement the 
requirements of 
relevant conservation 
measures under the 
Convention on the 
Conservation of 
Antarctic Marine 
Living Resources  Non-automatic  Conservation of 
Antarctic Marine Living 
Resources (Toothfis h 
Catch Documentation 
Scheme) Regulation, 
Cap. 635A 
Waste  Per the requirements 
of the Basel 
Convention on the 
Control of 
Transboundary 
Movements of 
Hazardous Wastes 
and their Disposal  Non-automatic  Waste Disposal 
Ordinance, Cap.  354 
and its subsidiary 
regulations  
Non-pesticide hazardous 
chemicals  To implement 
effective controls on 
non-pesticide 
hazardous chemicals 
to protect human 
health and the 
environment in 
accordance with the 
Stockholm 
Convention and the 
Rotterdam 
Convention  Non-automati c Hazardous Chemicals 
Control Ordinance, 
Cap. 595 
Import/Export 
Ordinance (Cap.  60) 
and its subsidiary 
regulations  
Mercury and mercury 
mixtures  To implement 
effective control to 
protect human health 
and the environment 
from anthropogenic 
emissions and 
releases of mercury 
and mercury 
compounds in 
accordance with the 
Minamata Convention  Non-automatic  Mercury Control 
Ordinance, Cap.  640 
Frozen or chilled meat 
and poultry  To protect public 
health and for food 
safety reasons  Non-automatic  Import and Export 
Ordinance, Cap.  60 
and its subsidiary 
regulations  
Imported Game, Meat, 
Poultry and Eggs 
Regulations, 
Cap. 132AK  
Source:  WTO documents G/LIC/N/3/HKG/26, 4  October  2022; and G/MA/QR/N/HKG/6, 28  October  2022; 
TID, Database of Articles Subject to Impor t or Export Control . Viewed  at: 
https://www.tid.gov.hk/service/utf/EnqIE.do ; and information provided by the authorities.  
3.1.6   Anti-dumping, countervailing, and safegu ard measures  
3.46.  At the multilateral level, there have been no developments since the last Review and 
Hong Kong,  China does not have any laws, regulations, or authorities for the application of any 
anti-dumping, countervailing, or safeguard measures.39 
 
39 WTO documents G/SG/N/1/HKG/1, 20  March  1995; G/ADP/N/1/HKG/1, 24  March  1995; 
G/ADP/N/193/HKG, 14  July 2010; G/SCM/N/1/HKG/ 1, 10 March  1995; and G/SCM/N/202/HKG, 14  July 2010.  WT/TPR/S/ 450 • Hong Kong, China  
 
- 50 - 
 
  3.47.  Hong Kong,  China's FTAs generally contain a section on trade remedies that generally 
reaffirms the rights and obligations under the relevant WTO agreements for anti -dumping, subsidies, 
and safeguards. According to the provisions of the Hong  Kong, China  Closer Economic Partnership 
Arrangement (CEPA), the parties undertake not to apply anti -dumping measures or countervailing 
measures to goods imported or originated from each other. On safeguards, CEPA provides that 
temporary safeguards may be applied under ce rtain conditions. For the Agreements with ASEAN, 
Australia, and Georgia, the FTAs essentially reaffirm the rights and obligations under Article  XIX of 
GATT  1994 and the WTO  Agreement on Safeguards.40 
3.1.7   Other measures affecting imports  
3.48.  In line with internatio nal norms, Hong  Kong,  China implements sanctions decided by the 
Security Council of the United Nations (UNSC). The United  Nations Sanctions Ordinance (Cap.  537) 
provides for Hong  Kong,  China's imposition of economic and trade embargoes, arms embargoes, 
and other mandatory measures decided by the UNSC. In addition, there are separate pieces of 
subsidiary legislation under Cap.  537 that are dedicated to trading partners subject to 
UN sanctions.41 According to information provided by the authorities, 13  countr ies 
and 2 organizations are subject to UNSC  sanctions related to trade.42 Hong Kong,  China does not 
impose any unilateral or other sanctions on trade other than UN sanctions.  
3.2  Measures directly affecting exports  
3.2.1   Customs procedures and requirements  
3.49.  The customs procedures for exports did not change during the review period and remain as 
reported in the previous Review. The Import and Export Ordinance (Cap.  60) and its subsidiary 
regulations, in particular Cap.  60E, govern the export process. The export pr ocess is nearly identical 
to the import process in that the exporter must file an export declaration for exports or re -exports 
within 14  days of exportation. Other procedures such as filing an export manifest, applying for an 
export licence (if applicable) , and payment of applicable fees are also part of the export procedures. 
Like the import process, the export process is increasingly facilitated through electronic means. The 
TSW has provided a one -stop electronic platform for the trading community to lodg e export and 
import trade documents with the Government.  
3.2.2   Taxes, charges, and levies  
3.50.  Similar to the situation on imports, as a free port, Hong  Kong,  China does not apply 
customs  duties on exports.  
3.51.  Nevertheless, pursuant to the Industrial Training (Clothing Industry) Ordinance (Cap.  318), a 
Clothing Industry Training Levy on exports is charged for most apparel items manufactured in 
Hong Kong,  China.43 The levy of HKD  0.30 per HKD  1,000 f.o.b. value funds the Clothing Industry 
Training Authority for the purpos e of providing facilities and training for clothing industry employees. 
Certain exceptions to the levy apply, e.g.  for clothing items exported by the Government for postal 
packets of a value not exceeding HKD  4,000, and samples.44 
3.52.  In 2021, the training lev y gross collection was HKD  232,595, of which HKD  54,330 was 
retained by C&ED as a collection fee.45 Compared to earlier years during the review period, there 
 
40 The FTA with Georgia goes slightly further in requiring notification in the case of the initiation of a 
global safeguard case.  
41 See separate pieces of subsidiary legislation under Cap.  537 at Hong Kon g e-Legislation. Viewed  at: 
https://www.elegislation.gov.hk/hk/cap537?tab=s . 
42 Commerce and Economic Development Bureau (CEDB), United Nations Security Counci l Sanctions . 
Viewed  at: https://www.cedb.gov.hk/en/policies/united -nations -security -council -sanctions.html . 
43 Includes HS  392620, 401590, 4203, 4303, 4304, 61, 62, 64 (certain exceptions), 6504, 6505, 6506 
(certain exceptions), 6507, and 91139020. HKHS, Appendix  IIf. Viewed  at: 
https://www.ce nstatd.gov.hk/FileManager/EN/Content_93/clothing_2022.pdf . 
44 Laws of the Industrial Training (Clothing Industry) Ordinance (Cap.  318), Part  I, para.  3.  
45 Clothing Industry Training Authority, Annual Report 2021 . Viewed  at: https://www.cita.org.hk/wp -
content/uploads/2022/06/Annual_Report_2021.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
- 51 - 
 
  has been a more than doubling of the amount of levy collected, as in  2018 the gross collection was  
HKD 99,551.46 
3.2.3   Export prohibitions, restrictions, and licensing  
3.53.  Hong Kong,  China has certain goods that are subject to export controls, such as export 
licences/permits, in order to, inter alia, comply with international obligations or protect public health  
or the environment. As of June  2023, there were 18  categories of products that required export 
permits or licences, and 7  categories where certain prohibitions or restrictions were applied on 
exports (Table  3.10). Similar to the situation with imports, Ho ng Kong,  China is moving to the 
TSW environment to facilitate the filing and approval of export licences and related forms.  
3.54.  Most of the categories of export restraints have been in place for many years and have not 
changed significantly. However, there wer e new or amended requirements for mercury or mercury 
mixtures, firearms and ammunition, strategic control items, toothfish items, and pesticides. These 
changes are discussed in depth in Section  3.1.5 on the import side and will not be repeated here, 
althou gh they are equally applicable to exports.  
Table 3.10 Prohibitions, restrictions, or licensing on exports, 2023  
Product  Measure  Rationale  Legislation  Administration  
Chinese herbal 
medicines and 
proprietary 
Chinese medicines  Non-automatic 
licensing  Article  XX(b) of 
GATT  1994 Import/Export Ordinance 
(Cap.  60) and its 
subsidiary regulations  Chinese Medicine 
Regulatory Office, 
Department of Health  
Certain prohibited 
weapons 
(e.g. Chinese -style 
throwing darts, 
knuckle -duster, 
gravity knife and 
gravity -operated 
steel baton)  Prohibition  Article  XX(d) of 
GATT  1994 Weapons Ordinance, 
Cap. 217 Customs and Excise 
Department (C&ED)  
Dangerous drugs  Non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 
UN Single Convention 
on Narcotic Drugs 1961  
UN Single Convention 
on Psychotropic 
Substances  1971 Dangerous Drugs 
Ordinance (Cap.  134) Department of Health  
Dutiable 
commodities 
(alcoholic liquors, 
tobacco, hydro -
carbon oil and 
methyl alcohol)  Non-automatic 
licensing  Article  XX(d) of the 
GATT  1994 Dutiable Commodities 
Ordinance (Cap.  109) Office of Dutiable 
Commodities 
Administration, C&ED  
Local protected 
wild animals  Special permit  Article  XX(b) of the 
GATT  1994 Wild Animals Pr otection 
Ordinance, Cap.  170 Wetland and Fauna 
Conservation Division, 
Agriculture, Fisheries and 
Conservation Department 
(AFCD)  
Optical disc 
mastering and 
replication 
equipment  Non-automatic 
licensing  Article  XX(d) of the 
GATT  1994 Import and Export 
Ordinance, Cap.  60 and 
its subsidiary regulations  Intellectual Property 
Investigation Bureau, 
C&ED  
Controlled 
chemicals  Non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 
United Nations 
Convention Against 
Illicit Traffic in Narcotic 
Drugs and Psychotropic 
Substances 1988  Control of Chemicals 
Ordinance, Cap.  145 Controlled Chemicals and 
Support Division, C&ED  
Elephant ivory and 
elephant hunting 
trophy  Prohibition of 
re-export  Article  XX(a), (b), and 
(g) of the GATT  1994 
CITES  Protection of Endangered 
Species of Animals and 
Plants (Amendment) 
Ordinance 2018  AFCD  
 
46 Clothing Industry Training Authority, Annual Report 2018 . Viewed  at: https://www.cita.org.hk/wp -
content/uploads/2022/06/Annual_Report_2018.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Product  Measure  Rationale  Legislation  Administration  
Toothfish items  Non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 
Convention on the 
Conservation of 
Antarctic Marine Living 
Resources  Conservation of Antarctic 
Marine Living Resources 
Ordinance (Cap.  635) and 
Conservation of Antarctic 
Marine Living Resources 
(Toothfish Catch 
Documentation Scheme) 
Regulation (Cap.  635A)  AFCD  
Controlled 
products 
containing 
ozone -depleting 
substances  Prohibition/  
Restriction/non -
automatic  
licensing  Montreal Protocol  Ozone Layer Protection 
Ordinance, Cap.  403 and 
its subsidiary regulations  Air Science and Modelling 
Group, Environmental 
Protection Department 
(EPD)  
 
Rough Diamonds and 
Ozone Depleting 
Substances Licens ing 
Unit, Trade and Industry 
Department (TID)  
Non-pesticide 
hazardous 
chemicals  Prohibition/  
Restriction/  
non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 
 
Rotterdam Convention 
on the Prior Informed 
Consent Procedure for 
Certain Hazardous 
Chemicals and 
Pesticides in 
International Trade  
 
Stockholm Convention 
on Persistent Organic 
Pollutants  Hazardous Chemicals 
Control Ordinance, 
Cap. 595 and its 
subsidiary regulations  
 
Import/Export Ordinance 
(Cap.  60) and its 
subsidiary regulations  Territorial Control Office, 
EPD 
Endangered 
animal and plant 
species  Prohibition/  
restriction/  
non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 
 
CITES Protection of Endangered 
Species of Animals and 
Plants Ordinance 
(Cap.  586) Endangered Species 
Protection Division, AFCD  
Mercury, mercury 
mixtures and 
mercury -added 
products  Non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 
 
Minamata Convention 
on Mercury  Mercury Control 
Ordinance (Cap.  640) Territorial Control Office, 
EPD 
Wastes  Prohibition/  
restriction  Article  XX(b) of the 
GATT  1994 
 
Basel Convention for 
the Control of 
Transboundary 
Movements of 
Hazardous Waste and 
their Disposal  Waste Disposal 
Ordinance, Cap.  354 and 
its subsidiary regulations  Territorial Control Office, 
EPD 
Rough diamonds  Prohibition/non -
automatic  
licensing  Kimberley Process 
certification scheme for 
rough diamonds  Import and Export 
Ordinance, Cap.  60 and 
its subsidiary regulations  Rough Diamonds and 
Ozone Depleting 
Substances Licensing 
Unit, TID  
Strategic 
commodities  Non-automatic 
licensing  Article  XXI(b)(ii)  of the 
GATT  1994 Import and Export 
Ordinance, Cap.  60 
 
Import and Export 
(Strategic Commodities) 
Regulations (Cap.  60G) Strategic Trade Controls 
Branch, TID  
Pesticides  Non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 
 
The Rotterdam 
Convention on the Prior 
Informed Consent 
Procedure for Certain 
Hazardous Chemicals 
and Pesticides in 
International Trade  
 
The Stockholm 
Convention on 
Persistent Organic 
Pollutants  Import  and Export 
Ordinance, Cap.  60 and 
its subsidiary regulations  
Pesticides Ordinance, 
Cap. 133 Plant and Pesticides 
Regulatory Division, 
AFCD  
 
Rough Diamonds and 
Ozone Depleting 
Substances Licensing 
Unit, TID  WT/TPR/S/ 450 • Hong Kong, China  
 
- 53 - 
 
  Product  Measure  Rationale  Legislation  Administration  
Pharmaceutical 
Products, 
Medicines and 
Dangerous  Drugs  Non-automatic 
licensing  Article  XX(b) of the 
GATT  1994 Dangerous Drugs 
Ordinance, Cap.  134 
Import and Export 
Ordinance, Cap.  60 and 
its subsidiary regulations  Drug Import/Export 
Control Unit, Drug Office, 
Department of Health  
Powdered Formula  Non-automatic 
licensing  Article  XX(j) of the 
GATT  1994 Import and Export 
Ordinance, Cap.  60 and 
its subsidiary regulations  Powdered Formula 
Licensing Unit, TID  
Radio Transmitting 
Equipment  Non-automatic 
licensing  Article  XX(d) of the 
GATT  1994 Telecommunications 
Ordinance, Cap.  106 Licensing Unit, Office of 
the Communications 
Authority  
Rice Non-automatic 
licensing  Article  XX(j) of the 
GATT  1994 Reserved Commodities 
Ordinance, Cap.  296 
 
Reserved Commodities 
(Control of Imports, 
Exports  and Reserve 
Stocks) Regulations, 
Cap. 296A Rice Control Unit, TID  
Source:  WTO document G/MA/QR/N/HKG/6, 28  October  2022; TID, Database of Articles Subject to Import or 
Export Control . Viewed  at: https://www.tid.gov.hk/service/utf/EnqIE.do?lang=en&cl=Y ; and 
information provided by the authorities.  
3.2.4   Export support and promotion  
3.55.  Hong Kong,  China ha s a number of organizational supports or funds that are aimed to help 
exporters. These include the government -supported body for export promotion, funds specific 
to SMEs and branding promotion, and a temporary COVID -19 pandemic −driven subsidy fund for 
conferences and conventions.  
3.56.  The Hong Kong Trade Development Council (HKTDC), created by the Hong Kong Trade 
Development Council Ordinance (Cap.  1114), is a statutory body to promote, assist, and develop 
trade with a particular emphasis on exports. It may also  make recommendations with respect to 
measures that may increase Hong  Kong,  China's trade. It maintains a network of 50  offices around 
the world to promote business and investment. The HKTDC has three  main areas of operation: 
(i) creating platforms for int ernational business; (ii)  facilitating business partnerships and 
opportunities worldwide; and (iii)  empowering SMEs and entrepreneurs for global business. Some 
of the specific work undertaken includes promotion activities, networking events, exhibitions, 
research, business matching, and brand promotion. In recent years, the HKTDC has particularly 
focused on healthcare, sustainability, technology and innovation, and digital transformation.47 
In 2021, in response to the COVID -19 pandemic and to continue to su pport SMEs, the HKTDC 
launched the GoGBA one -stop platform for business updates, advice, and practical tools geared 
to SMEs.  
3.57.  Hong Kong,  China has a Dedicated Fund on Branding, Upgrading and Domestic Sales 
(BUD  Fund) established in June  2012. It originally comprised the Enterprise Support Programme and 
the Organisation Support Programme (OSP). In  2018, the OSP was merged with the former SME 
Development Fund (SDF) to form the Trade and Industrial Organisation Support Fund (TSF). The  TSF 
provides financial sup port to non -profit -distributing organizations to implement projects for 
enhancing the competitiveness of non -listed enterprises in general or in specific sectors. Activities 
covered under the funding include seminars, workshops, conferences, exhibitions, r esearch studies, 
and award schemes. As of end -May 2023, 1,642  applications had been received, of which  473 were 
approved with total funding of HKD  823 million under the TSF as well as the former OSP and SDF.48 
3.58.  The BUD Fund currently provides funding support, in the form of cash grants, to non -listed 
enterprises for developing brands, upgrading and restructuring operations, and promoting sales. 
 
47 Hong Kong Trade and Development Council, Annual Report 2021/22 . Viewed  at: 
https://info.hktdc.com/a nnualreport2022/lib/uploads/165700213462c3d8965ad3e/TDCAR2022%20AW_Spread
Pg_Final%202.pdf . 
48 TID, Statistics, Trade and Industrial Organisation Support Fund . Viewed  at: 
https://www.smefund.tid.gov.hk/english/tsf/tsf_statistics.html ; Statistics,  SME Development Fund . Viewed  at: 
https://w ww.smefund.tid.gov.hk/english/tsf/sdf_statistics.html ; and Statistics , BUD Fund (Organisation 
Support Programme). Viewed  at: https://www.smefun d.tid.gov.hk/english/tsf/bud_statistics.html . WT/TPR/S/ 450 • Hong Kong, China  
 
- 54 - 
 
  Initially established for Hong  Kong,  China enterprises interested in developing markets in China, it 
has since been expanded geographically to cover ASEAN in August  2018, FTA partners 
in January  2020, and Investment Promotion and Protection Agreement (IPPA) partners in phases 
since July 2021, thus 37  economies in total as o f May  2023. Funding support is provided on a 
matching basis, with a maximum of 50% of the total approved project costs covered. The funding 
ceiling for each approved project is HKD  1 million, and a cumulative funding ceiling of HKD  7 million 
per enterprise .49 As at end May  2023, about 6,085  projects have been approved, involving a total 
funding of about HKD  3.7 billion.50 
3.59.  The SME Export Marketing Fund (EMF) was established in  2001 to encourage SMEs to expand 
their markets outside Hong  Kong,  China through pa rticipation in export marketing activities such as 
trade exhibitions, trade missions, advertising on trade publications, and online promotion activities. 
SMEs may receive funding support, in the form of cash grants, up to 50% of the total approved 
expendit ure, subject to a ceiling of HKD  100,000 per application.51 The cumulative funding ceiling 
per enterprise is HKD  1 million.52 As of end -May 2023, 345,680  applications were received, of 
which  284,045 were approved for a total amount of HKD  4.8 billion.53 
3.60.  To help enterprises explore local business opportunities and maintain Hong  Kong,  China's 
leading position in large -scale merchandise exhibitions after the COVID -19 pandemic, enhanced 
measures were put in place from 30  April 2021 to 30  June 2026 for the  EMF. The funding scope has 
been expanded to cover large -scale exhibitions targeting the local market as well as online 
exhibitions, and the eligibility criteria have been relaxed to cover non -SMEs, i.e.  all non -listed 
enterprises registered in, and with substan tive business operations in, Hong  Kong,  China. During 
May 2021 to May  2023, around 97% of the enterprise beneficiaries were SMEs.  
3.61.  In 2020, the Convention & Exhibition Industry Subsidy Scheme under the Anti -epidemic Fund 
was launched with a total commitment  of HKD  1.07 billion to support this sector. Funding is provided 
at 50%  of the fees to participants at HKTDC exhibitions and conventions and 100% of the venue 
rental for exhibitions held at the Hong  Kong Convention and Exhibition Centre and AsiaWorld -Expo.54 
As of  31 December  2022, the Scheme had subsidized 215 exhibitions, for a total of about 
HKD 611 million.55 The rental subsidy under the Scheme ended on 30  June 2023, and the whole 
scheme will expire by 31  March  2024. However, a new Incentive Scheme for Recurrent Exhibitions 
was launched on 1  July 2023, providing incentives to attract exhibitions to be staged recurrently in 
Hong Kong,  China. This new scheme has provisions for three  years, i.e.  until 30  June 2026.  
3.2.5   Export finance, insurance, and guarantees  
3.62.  The Hong  Kong Export Credit Insurance Corporation (HKECIC) was established in  1966 
pursuant to the Hong  Kong Export Credit Insurance Corporation Ordinance (Cap.  1115) in order to 
support export trade. The HKECIC continues to be the corporation f or export insurance and more 
recently for export guarantees. It provides protection to Hong  Kong,  China's exporters of both goods 
and services against non -payment risks arising from commercial and political events. The contingent 
liability of the HKECIC fo r insurance contracts is currently limited to HKD  55 billion and has not been 
changed since  2017. A number of insurance products are available covering Hong  Kong,  China 
exporters as well as exporters' business, re -exports, and goods shipped from overseas t hat do not 
pass through Hong  Kong,  China.  
3.63.  The number of policies of the HKECIC has remained relatively steady at about  2,600 during 
the period 2018 -22 (Table  3.11). Due to trade conflicts and the COVID -19 pandemic, the amount 
 
49 The HKD  7 million cap was effective from 7  November  2022, whereas prior to that it 
was HKD 6 million. The maximum number of approved projects per enterprise was also increased on the 
same  date, from 60 to 70.  
50 Information provided by the authorities.  
51 Each enterprise is subject to a cumulative funding ceiling of HKD  1,000,000.  
52 The HKD  1 million ceiling was effective from 7  November  2022, whereas prior to that it 
was HKD 0.8 million.  
53 TID, Statistics,  SME Export Market Fund . Viewed  at: 
https://www.smefund.tid.gov.hk/english/emf/emf_statistics.html . 
54 There is a cap of HKD  10,000 for each booth and HKD  100,000 for each fair. CEDB, Convention &  
Exhibition . Viewed  at: https://www.cedb.gov.hk/en/sectors/convention -and-exhibition.html ; and  HKTDC. 
Viewed  at: https://info.hktdc.com/dm/hkils/2021/itr167105/index_en.html . 
55 Information provided by the authorities.  WT/TPR/S/ 450 • Hong Kong, China  
 
- 55 - 
 
  insured declined over the peri od from a high of HKD  160.2  billion in  2018 to HKD  120.2  billion 
in 2020, which later increased slightly to  HKD 134.1  billion in  2022. The majority of the business is 
highly concentrated in five key markets  – the United  States, China, the United  Kingdom, G ermany, 
and Canada  – which together accounted for approximately 70% of the total each year. While 
China  was traditionally the major market during 2018 -21, the United  States took this top position 
in 2022 as the value of the insured business with China decl ined over the period. Among the major 
product sectors, the electronics and textiles & clothing sectors accounted for the largest shares over 
the period. There were some shifts with the furniture sector overtaking the toy sector in terms of 
rank, although t hey both accounted for much smaller shares.  
Table 3.11 Overview of HKECIC activities, 2018 -22 
(HKD  million, except as noted otherwise)  
 2018  2019  2020  2021  2022  
Policies (number)  2,599  2,547  2,602  2,764  2,631  
Max. liability of policies  42,296  39,671  38,991  40,083  42,988  
Insured business  160,253  150,914  120,244  130,688  134,102  
 By major market (top 5)  
 United  States  36,331  28,845  24,203  34,931  41,195  
 China  67,574  58,893  50,247  56,182  39,146  
 United  Kingdom  8,421  7,585  6,444  5,138  5,271  
 Germany  4,829  3,781  3,299  2,952  3,728  
 Canada  2,369  .. 1,738  2,375  2,829  
 By major product sector (top 5)  
 Electronics  60,502  53,643  38,554  47,959  49,619  
 Textiles and clothing  22,370  18,429  14,852  18,049  23,337  
 Electrical appliances  22,153  10,680  7,951  10,658  8,151  
 Furniture  .. 4,459  3,658  6,386  6,939  
 Toys 6,917  5,860  6,088  5,680  5,959  
Gross claims  198.14  630.48  584.46  98.44  13.14  
Profit/(loss)  124.37  (14.12)  (104.58)  212.63  233.77  
Net assets  2,414.76  2,382.14  2,265.69  2,614.88  2,672.30  
.. Not available.  
Source:  HKECIC, Annual Report, 2021 -22. Viewed  at: 
https://www.hkecic.com/cms/sites/default/files/annual -reports/2022 -08/annualreport_en2022.pdf ; 
and various edition s 2017 -21. Viewed  at: https://www.hkecic.com/en/annual -reports . 
3.64.  Since  2018, the HKECIC has launched 10  new supportive measures to help exporters mitigate 
the impact of trade conflicts and the COVID -19 pandemic; they include, inter alia, free pre -shipment 
cover, waiver of annual policy fee, expedited claims settlement process.56 Further to this effort, 
in June 2020 the 100% Credit Limit Top -Up Scheme was initiated to p rovide greater support to 
exporters and increase their resilience by uplifting existing policyholders' credit limits.57 These 
measures have been extended until  end-June 2023. After the Scheme lapses, the HKECIC will absorb 
the uplifted credit limits where the degree of risk allows. In  2021, the HKECIC introduced 
the EC-Reach 2.0, an improved electronic platform for simplifying and expediting application 
approvals, and the Flexible Indemnity Ratio arrangement, which  automatically increases credit limits 
up to HKD 5 million for applications not previously fully approved.  
3.65.  In March  2022, the HKECIC launched the Export Credit Guarantee Programme on a pilot basis 
for a period of 12  months. The Programme provides guarantees up to 70% of the export financing 
of the policyholder up to a maximum guarantee limit of HKD  50 million. The Programme has been 
extended for another 12  months until March  2024. Most recently, in April  2023, the HKECIC 
 
56 For a full list of the measures, see Press Release LCQ9: "Export C redit Insurance Support for Small 
and Medium Enterprises". Viewed  at: https://www.info.gov.hk/gia/general/202206/22/P2022062200367.htm . 
57 As of end -October  2022, the Scheme had provided around HKD  23.4 billion of additional coverage to 
over 1,900  policyholders, involving a cumulative total of HKD  28.9 billion of shipments made. Information 
provided by the authorities.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  launched the First Innovative Green Export Credit Insurance to promote the gree n export trade.58 
Through cooperation with a leading bank, a premium discount is offered when companies contribute 
to achieving carbon reduction by having a relevant green certification.  
3.66.  The HKECIC also has a number of measures specific to SMEs, i.e.  with an annual turnove r of 
less than HKD  50 million. The SME programmes include the Small Business Policy, Self -Underwritten 
Policy, and Online Micro -Business Policy (with lower threshold of HKD  30 million). Some of the added 
benefits for small exporters include annual policy f ee waivers, premium discounts, free credit checks, 
simplified declaration procedures, and favourable indemnity ratios.  
3.67.  To enhance data sharing, the Hong Kong Monetary Authority announced the official launch of 
Commercial Data Interchange (CDI) in October  2022, with the participation of 23  banks with 
material SME business and 10  data providers. As of May  2023, seven key data providers with 
substantial SME  data have started to provide access for banks in the CDI production environment. 
In this phase, the comm ercial data involved include e -trade declaration, e -commerce, supply chain, 
payment, and credit reference data. As an innovative, consent -based data infrastructure, CDI 
effectively facilitates enterprises, in particular SMEs, to share their commercial data  at different data 
sources with banks, thereby enhancing their access to financial services. Since its production launch, 
CDI has facilitated more than 3,100  loan applications and reviews, with an estimated credit approval 
amount exceeding HKD  2.8 billion as of 30  April 2023.  
3.3  Measures affecting production and trade  
3.3.1   Incentives  
3.68.  Hong Kong,  China maintains a number of tax and non -tax incentives programmes to meet 
different policy objectives. The incentives can be in the form of financial/funding support, tax 
reduction for certain business activities, and loans and grants. Most of these programmes were 
already in place at the time of the last Review, although, in some cases, their scope has been 
expanded, and a few additional prog rammes or support measures have been introduced. These 
measures were put in place to support and complement policy objectives for fostering growth, or 
temporary measures to relieve hardship faced by residents and businesses during the COVID -19 
pandemic. Wh ere applicable, subsidy notifications have been submitted to the Committee on 
Subsidies and Countervailing Measures.  
3.3.1.1   Measures notified under the SCM  Agreement  
3.69.  Hong Kong,  China submitted two notifications to the Committee on Subsidies and 
Countervailing Mea sures pursuant to Article  XVI:1 of GATT  1994 and Article  25 of the Agreement on 
Subsidies and Countervailing Measures (SCM  Agreement) during the review period.59 The majority 
of subsidies notified relate to the fisheries sector (Table  3.12). There was an i ncrease in the number 
of subsidies notified during the period, which can be attributed to the COVID -19 pandemic, whereby 
three additional subsidies notified in  2021 were for local mask production, certain local primary 
production, and fishing vessels with deckhands from China provided for under the Anti -epidemic 
Fund (AEF). A new subsidy scheme on Chinese  medicines was also added in the 2021 notification. 
These continued to be relevant and were again notified in the 2023 notification. The Recycling Fund, 
notified in  2019, was not included in the 2021 notification because the authorities considered it no 
longer a specific subsidy covered by the SCM  Agreement. The largest subsidy scheme notified, 
HKD 137 million, was to support owners of fishing vessels with d eckhands from China, as 
noted  above.  
 
58 HKECIC (2022), "HKECIC E xtends Supportive Measures to End -June 2023", 29  December. Viewed  at: 
https://www.hkeci c.com/cms/sites/default/files/announcements/2022 -
12/Press%20release_HKECIC%20Extends%20Supportive%20Measures%20to%20end%20June%202023.pdf . 
59 WTO documents G/SCM/N/401/HKG, 30  June 2023; G/SCM/N/372/HKG, 29  June 2021; and 
G/SCM/N/343/HKG, 1  July 2019.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.12 WTO notifications on subsidies, 2023  
Programme  Policy objective  Who receives assistance  Amount  
Fisheries 
Development Loan 
Fund To promote more sustainable 
fisheries, develop aquaculture, 
and support those impacted by 
trawl ban  Hong Kong,  China residents and 
owners of local fishing vessels or 
fish collectors with valid licences 
for operations, or registered 
cooperative societies/companies  HKD 10,370,000  
Fish Marketing 
Organization Loan 
Fund To meet the operational and 
sustainable development needs of 
fishers  Members of a registered 
cooperative society, a registered 
fishing company, or local fishers 
with valid fishing vessel licences  HKD 85,504,000  
(one-year loans)  
Kadoorie 
Agricultural Aid 
Loan Fund  To meet development and 
working capital needs of fish 
farmers and farmers  Fish farmers and farmers  HKD 3,250,000  
Sustainable 
Fisheries 
Development Fund  To foster sustainable development 
of the fisheries industry  Companies or bodies corporate 
incorporated in 
Hong Kong,  China with a close 
connection to the fisheries 
industry; local academic and 
research institutions  HKD 12,971,000  
Subsidies for 
Fishing Vessels 
with Mainland 
Deckhands (under 
the A EF) To provide immediate relief to the 
owners of fishing vessels and fish 
collectors with deckhands from 
China, whose operations were 
seriously affected by the 
COVID -19 pandemic  Owners of the fishing vessels 
and fish collectors meeting 
certain criteria  HKD 137,260,000  
Subsidies for Local 
Primary Producers 
(under the AEF)  To provide immediate financial 
relief to local primary producers 
impacted by the COVID -19 
pandemic  Local primary producers  HKD 51,930,000  
Local Mask 
Production Subsidy 
Scheme (under 
the AEF) To facilitate the establishment of 
mask production facilities in 
Hong Kong,  China to address the 
severe shortage situation during 
the COVID -19 pandemic  Companies registered in 
Hong Kong,  China with a 
Certificate of Incorporation and 
a Business Registration 
Certificate  HKD 11,396,000  
Chinese Medicine 
Development Fund  To improve the standards of the 
Chinese medicine industry  Those engaged in the Chinese 
medicine drug industry or 
non-profit organizations and 
related as sociations involved in 
Chinese medicine  HKD 132,330,000  
Source:  WTO document G/SCM/N/401/HKG, 30  June 2023.  
3.3.1.2   Budget and COVID -19 pandemic support measures  
3.70.  Support measures provided by Hong  Kong,  China to combat the impact of the COVID -19 
pandemic were substantial. The total amount provided under the COVID AEF over six  rounds of 
approved funding measures amounted to HKD  228.5  billion.60 The AEF provided a wide range of 
support measures to various sectors of the economy, particularly to those hard hit by the pandemic, 
e.g. tourism industry, wholesale traders, and the convention and exhibition industry. Some of those 
measures are trade -related (Table  3.13); many were extended due to the prolonged epidemic. 
Hong Kong,  China has regularly provided the WTO wit h information on trade -related measures taken 
in response to the COVID -19 crisis.61 As of June 2023, many of these measures still remained 
in place.  
3.71.  In addition to the main funding mechanism for the pandemic, the AEF, Hong  Kong, China has 
also set aside re sources through its regular budgetary process  on COVID -19-related support 
measures. A number of measures specific to trade or supporting businesses were identified 
during  2020-23 through the budget (Table 3.14). The specific budgetary items vary but some a re 
direct funding of certain sectors while others concern waiving of fees or reducing taxes.  
 
60 In relation to 2022 real GDP figure (2020 prices).  
61 WTO, COVID -19 and Trade . Viewed  at: 
https://www.wto.org/english/tratop_e/covid19_e/covid_details_by_country_e.htm?country=HKG . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.13 Anti-epidemic Fund  
Round  Selected trade -related measures  Date  Amount  
1 Local mask production support; convention and exhibition 
industry subsidy scheme; support to the property 
management sector; support to the construction sector; 
retail sector subsidy scheme; subsidy for the transport 
sector; subsidies for live marine fish wholesale traders, 
fishing vessels with deckhands from China and fresh marine 
fish/vegetable/freshwater fish/hen egg/fresh fruit 
wholesalers; travel agents subsidy scheme; licensed 
guesthouse subsidy scheme; licensed hawkers subsidy 
scheme; and arts and culture sector subsidy s cheme.  21 February  2020 HKD 30 billion  
2 Employment support scheme; LAWTECH  Fund; support for 
IT solutions adoption; subsidy for encouraging early 
deployment of 5G; tourism industry support schemes; 
catering business subsidy scheme; subsides for local 
primary producers; special subside to exchange 
participants; cash subsides for licensees in the estate 
agency sector; passenger transport subsidy; subsidy for the 
aviation sector; and sports and recreational sites subsidy 
scheme.  8 April 2020 HKD 137.5  billion  
3 Subsidy scheme for the promotion of contactless payment in 
public marke ts; catering business subsidy scheme; tourism 
industry support scheme; subsidy scheme for the transport 
and aviation sector; cinemas subsidy scheme; and arts and 
culture sector subsidy scheme.  15 September  2020 HKD 24 billion  
4 Catering business subsidy scheme; arts and culture sector 
subsidy scheme; cinemas subsidy scheme; and sports and 
recreational sites subsidy scheme.  21 December  2020 HKD 6.4 billion  
5 Catering business subsidy scheme; arts and culture sector 
subsidy scheme; subsidy to companies in the performing 
industry; support for the cross -boundary passenger 
transport trade; and Green Lifestyle Local Tour Incentive 
Scheme; payment for pet shops selling hamsters; cinemas 
subsidy scheme; sports and recreational sites subsidy 
scheme; a rts and culture sector subsidy scheme; subsidy 
for aviation support services; and tourism industry 
additional support scheme.  14 January  2022 HKD 3.57 billion  
6 Catering business subsidy scheme; subsidy to companies in 
the performing industry; tourism industry additional support 
scheme; support for the creative industries; cross -boundary 
passenger transport trade support; fuel subsidy to local 
passenger transport sector; subsidies for fresh food 
wholesalers; subsidies for local primary producers ; arts and 
culture sector subsidy scheme; support for cross -boundary 
goods vehicle drivers; cinemas subsidy scheme; sports and 
recreational sites subsidy scheme; arts and culture sector 
subsidy scheme; support to shipyards providing repair 
services to cros s-boundary ferries; support for airport staff 
in targeted groups; dishware washing trade subsidy 
scheme; and support for creative industries.  15 February  2022 HKD 27 billion  
Source:  Government of Hong  Kong, China , Anti-epidemic Fund . Viewed  at: 
https://www.coronavirus.gov.hk/eng/anti -epidemic -fund.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.14 Selected COVID -19 support measures rela ted to businesses and trade in the 
Budgets, 2020 -23 
2020 -21 Budget  2021 -22 Budget  2022 -23 Budget  
• add HKD  1 billion to the 
Dedicated Fund on Branding, 
Upgrading and Domestic 
Sales (BUD  Fund)  
• add funding of 
HKD 150 million to the Hong 
Kong Trade Development 
Council (HKTDC)  
• add a concessionary 
low-interest loan under the 
SME Financing Guarantee 
Scheme (SFGS) of up to 
commitment of 
HKD 20 billion  
• introduce 90% loan 
guarantee under the SFGS  
• reduce profits tax by 100% 
up to ceiling of HKD  20,000  
• waive  the business 
registration fees for 2020 -21 
• waive the registration fees 
for all annual returns (except 
for late delivery) charged by 
the Companies Registry for 
two years  
• provide rate concession for 
non-domestic properties for 
four quarters of 2020 -21, 
subject to a ceiling of 
HKD 5,000 per  quarter in the 
first two quarters and a 
ceiling of HKD  1,500 
per quarter in the remaining 
two quarters for each 
rateable non -domestic 
property (ceiling for 
remaining two  quarters 
subsequently enhanced to 
HKD 5,000 per  quarter as 
well) 
• extend 50% rental 
concession for eligible 
tenants of government 
premises, short -term 
tenancies, and waivers for 
6 months (subsequently 
enhanced to 75% rental 
concession or 100% rental 
waiver for 12  months)  • add HKD  1.5 billion to the 
BUD Fund, and extend its 
provisions  
• implement three -year Green 
and Sustainable Finance 
Grant Scheme  
• add three -year grant scheme 
to subsidi ze the setting up of 
Real Estate Investment 
Trusts (REITs)  
• implement Subsidy Scheme 
for Encouraging Early 
Deployment of 5G reducing 
profits tax by 100% up to 
ceiling of HKD  10,000  
• waive the business 
registration fees for 2021 -22 
• provide rate concession for 
non-domestic properties for 
four quarters of 2021 -22, 
subject to a ceiling of 
HKD 5,000 per  quarter in th e 
first two  quarters and a 
ceiling of HKD  2,000 
per quarter in the remaining 
two quarters for each 
rateable property  
• extend 75% rental 
concession or 100% rental 
waiver for eligible tenants of 
government premises, 
short-term tenancies. and 
waivers for 6  months 
(subsequently extended to 
12 months)  
• extend the reduction of 75% 
water and sewage charges 
payable by non -domestic 
household subject to a 
monthly cap of HKD  20,000 
(water charges) and 
HKD 12,500 (sewage 
charges) per household for 
8 months (subsequently  
extended to 12  months)  • inject funds to the 
Sustainable Agricultural 
Development Fund  (SADF) 
and the Sustainable Fisheries 
Development Fund (SFDF) of 
HKD 500 million each  
• add HKD  135 million for the 
Support Scheme for Pursuing 
Development in  China  
• reduce p rofits tax by 100% 
up to ceiling of HKD  10,000  
• waive the business 
registration fees for 2022 -23 
• provide rate concession for 
non-domestic properties for 
four quarters of 2022 -23, 
subject to a ceiling of 
HKD 5,000 per  quarter in the 
first two  quarters and a 
ceiling of HKD  2,000 
per quarter in the remaining 
two quarters for each 
rateable property  
• extend the 
waivers/concessions of 
government fees and 
charges to certain business 
sectors for 12  months  
• extend the Special 100% 
Loan Guarantee under 
the SFGS  
• extend t he Pre -approved 
Principal Payment Holiday 
Scheme for corporate 
customers  
• launch the Export Credit 
Guarantee Programme on a 
pilot basis  
• extend 75% rental 
concession or 100% rental 
waiver for eligible tenants of 
government premises, 
short-term tenancies and 
waivers for 6  months 
(subsequently extended to 
15 months until 
end-June 2023)  
• extending the reduction of 
75% water and sewage 
charges payable by 
non-domestic household 
subject to a monthly cap of 
HKD 20,000 (water charges) 
and HKD  12,500 (sewage 
charges) per household for 
4 months (subsequently 
extended to 12  months)   • extend the reduction of 75% 
water and sewage charges 
payable by non -domestic 
household subject to a 
monthly cap of HKD  20,000 
(water charges) and 
HKD 12,500 (sewage 
charges) per hous ehold for 
8 months (subsequently 
extended to 16  months until 
end-July 2023)  
• allocate HKD  800 million to 
the New Energy Transport 
Fund   
Source:  Budget Speeches, 2020 -21 to 2022 -23. Viewed  at: 
https://www.budget.gov.hk/2020/eng/speech.html , 
https://www.budget.gov.hk/2021/eng/speech.html , and 
https://www.budget.gov.hk/2022/eng/speech.html . 
3.3.1.3   Taxation, tax rebates, and other non -tax schemes  
3.72.  Hong Kong,  China is known for its ease of setting up businesses and its attractive tax regime. 
The taxation regime is generally territorial based, with low corporate taxes, no VAT or sales tax, and 
no tax on capital gains or dividends. Income derived abroa d has also traditionally not been taxed WT/TPR/S/ 450 • Hong Kong, China  
 
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  (subject to provisions outlined below). The majority of internal tax revenues collected by Inland 
Revenue Department in  2021-22 are from the profits tax  (44.2%)62 on corporations and 
unincorporated businesses, salari es tax (20%), and the stamp duty63 (26.3%). Other internal taxes 
comprise the property tax, tax under personal assessment, betting duty, and business registration 
fees, which together accounted for less than 10% of revenues collected by the Inland Revenue 
Department in  2021-22. Other indirect taxes collected by Hong  Kong,  China include general rates, 
excise duties, motor vehicle FRT, tax -loaded fees, air passenger departure tax and royalties. 
Hong Kong,  China maintains double taxation treaties with 46  jurisdictions.64 
3.73.  Internal tax collections by the Inland Revenue Department were HKD  378.5  billion 
in 2021-22, the highest on record, after some declines during 2019 -21 on account of the pandemic 
and global economic downturn.65 The majority of the profits tax of  corporations was derived from 
the banking  (21.4%), wholesale distribution (import & export) (19.9%), and property (18.3%) 
sectors in  2021-22.66 
3.74.  One of the recent changes implemented by Hong  Kong,  China is with respect to amending its 
Foreign -sourced Incom e Exemption (FSIE) regime to align itself with international efforts to combat 
cross-border tax evasion and prevent double non -taxation.67 The Inland Revenue (Amendment) 
(Taxation on Specified Foreign -sourced Income) Ordinance 2022 was implemented 
on 1 January 2023 to include certain foreign -sourced income as taxable under the profits tax. In 
general, this covers four types of offshore income: foreign -sourced interest, dividends, disposal gains 
in relation to equity interests, and intellectual property inco me, which are deemed to be sourced 
from Hong  Kong,  China if received by a multinational enterprise entity conducting business 
in Hong Kong, China with no economic presence.68 
3.75.  Hong Kong,  China also instituted a number of tax incentives or concessions from t axation for 
businesses and industries during the review period (Table  3.15).69 
Table 3.15 Tax incentives and tax holidays introduced, 2018 -23 
Type  Information  Eligibility  
For businesses  
Two-tiered profits tax rates regime  Profits tax rate for the first 
HKD 2 million of assessable profits 
of corporations is lowered 
from 16.5% to 8.25%, while the 
assessable profits above that 
amount continue to be taxed 
at 16.5%. The corresponding 
two-tiered profits t ax rates for 
unincorporated businesses are  7.5% 
and 15%.  All businesses  
 
62 Percentage of revenues collected by the Inland Revenue Department, 2021 -22. Inland Revenue 
Department, Annual Report  2021-22, pp. 5-6. Viewed  at: https://www.ird.gov.hk/dar/2021 -
22/table/en/revenue.pdf . 
63 The stamp duty is asses sed on property transactions, stock transactions, and the leasing of property.  
64 See link for the list of 46  jurisdictions. Inland Revenue Department, Comprehensive Double Taxation 
Agreements Concluded . Viewed  at: https://www.ird.gov.hk/eng/tax/dta_inc.htm . 
65 Internal taxes collected by the Inland Revenue Department account for the majority of 
Hong Kong,  China's government rev enues. During 2018 -22, this ranged from 62% -72% of total government 
general revenues. The increase in revenues in  2021-22 was on account of larger collections of the profits tax 
and the stamp duty collections.  
66 Percentage of profits tax contributions by s ector, 2021 -22. Inland Revenue Department, Annual 
Report  2021-22. Viewed  at: https://www.ird.gov.hk/dar/2021 -22/table/en/schedules.pdf . 
67 Inland Reve nue Department, Foreign -sourced Income Exemption . Viewed  at: 
https://www.ird.gov.hk/eng/tax/bus_fsie.htm#a01 . 
68 Certain exemptions may apply, such as meeting the economic substance requirement, participation 
requirement, or nexus requirement. Furthermore, certain foreign -sourced income received by regulated 
financial entities or taxpayers benefiting from the prefer ential tax regimes fall outside the scope of specified 
foreign -sourced income of the FSIE regime, as example.  
69 Deloitte (2021), Hong Kong Tax and Investment Guide 2021 . Viewed  at: 
https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/tax/deloitte -cn-tax-hk-tax-guide -en-
210928.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Type  Information  Eligibility  
Ship leasing activities  Profits tax concessionary rate on the 
qualifying profits of ship lessors 
carrying out operating lease and 
finance lease activities is 0%, while 
profits tax concessionary rate on the 
qualifying profits of ship leasing 
managers is 0% or 8.25%.  Qualifying ship lessors and ship 
leasing managers  
Shipping -related activities (i.e.  ship 
agency, ship management, or ship 
brokering activities)  Profits tax concessionary  rate 
at 8.25%  
(Profits derived by a qualifying 
shipping commercial principal from 
carrying out a qualifying activity for 
an associated shipping enterprise, 
which is entitled to a concessionary 
tax rate or income exemption under 
the Inland Revenue Ordinanc e, will 
also be subject to the same 
concessionary tax rate or income 
exemption as those applicable to the 
associated shipping enterprise).  Qualifying shipping commercial 
principals (i.e.  ship agents, ship 
managers, and ship brokers)  
Research and developme nt (R&D) 
activities   Deduction on R&D 
expenditures is the sum of 
"Type  A expenditure", which 
qualifies for 100% deduction, 
and "Type  B expenditure", 
which qualifies for 300% for 
the first HKD  2 million of the 
aggregate amount of 
payments and 200% for the 
remaining amount.  
 For the enhanced tax 
deduction (i.e.  Type B 
expenditure), there is no cap 
on the amount of enhanced 
tax deduction.  Type B expenditure is an R&D 
expenditure falling within any of the 
following descriptions:  
 
(a) a payment to a designated 
local research institution 
(DLRI) for a qualifying 
R&D activity related to the 
enterprise's trade, 
profession, or business;  
(b) a payment to a DLRI that 
has, as an object, the 
undertaking of a qualifying 
R&D activity related to the 
class of trade, p rofession, 
or business to which the 
enterprise's trade, 
profession, or business 
belongs, where the 
payment is used for 
pursuing that object; and  
(c) a qualifying expenditure 
related to the enterprise's 
trade, profession, or 
business.  
Type A expenditure is an R &D 
expenditure other than a Type  B 
expenditure.  
Funds  Profits tax exemption of qualifying 
transactions was extended to all 
funds, irrespective of their structure 
and location of central management 
and control.  All funds including onshore and 
offshore open -ended fund 
companies and private funds  
Intellectual property rights  Expanded scope of profits tax 
deduction for capital expenditure 
incurred for specified intellectual 
property rights from five  types to 
eight types. Deduction of the capital 
expenditure being allowed by 
five equal amounts over 
five consecutive years starting from 
the year of purchase.  All businesses  
Environmental protection 
installations  100% profits tax deduction for 
capital expenditure incurred in 
relation to e nvironmental protection 
installations.  All businesses  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Type  Information  Eligibility  
Qualifying debt instrument (QDI)  Profits tax exemption for interests 
income and trading profits derived 
from a QDI  issued on or after 
1 April 2018, regardless of its tenor.  All businesses  
Carried interest issued by private 
equity funds  Tax exemption for eligible carried 
interest derived by qualifying 
persons from the provision of 
investment management services 
for sp ecified investment funds or 
entities.  Qualifying carried interest recipients  
Insurance -related businesses  Profits tax concessionary rate at 
8.25%.  All general reinsurance businesses 
and selected general insurance 
businesses of direct insurers and 
selected insurance brokerage 
businesses of licensed insurance 
broker companies  
Family -owned investment holding 
vehicles (FIHVs)  Profits tax exemption for FIHVs' 
assessable profits earned from 
qualifying transactions and 
incidental transactions.  Eligible F IHVs managed by single 
family offices in Hong  Kong,  China 
that fulfil the minimum asset 
threshold of HKD  240 million and 
substantial activities requirement  
Stamp duty exemption  Waiver of the stamp duty payable 
on certain transactions relating to 
dual-counter stock made by dual -
counter market makers (DCMM)  Transactions made by DCMMs under 
the dual-counter market maker 
regime for conducting market 
making activities and liquidity 
providing activities mainly for 
arbitrage purpose  
Others  
Stamp duty amendment for 
non-residential properties  Ad valorem  stamp duty rates 
chargeable on non -residential 
property transactions reverted to 
lower rates (i.e.  Scale  2 rates)  Non-residential property purchasers  
Source:  Inland Revenue Department. Viewed  at: 
https://www.ird.gov.hk/eng/tax/budget.htm#:~:text=The%20Financial%20Secretary%20proposed
%20a,gazetted%20on%2028%20Apr il%202023 ; and information provided by the authorities.  
3.76.  There were 28  trade-related incentives or subsidy programmes for the period 2018 -22 
(Table  A3.1) provided by the authorities. This list is considered non -exhaustive , as it covers only the 
main schemes. They cover a range of areas, and broadly can be categorized as pertaining to all 
enterprises (including SMEs), innovation and technology, and services. Additional schemes or funds 
are compiled by the TID70, although consulting the various government bureaux and departments is 
the only way to have a comprehensive overview of such programmes.  
3.3.1.4   Focus on Hong  Kong,  China enterprises and SMEs  
3.77.  According to the TID, there are over 360,000  small and medium enterprises  (SMEs)71 in 
Hong Kong,  China and they account for about 98% of total business establishments.72 The majority 
of SMEs are in the services' sector and predominantly involved in the import/export trade and 
wholesale business. During the review period, additi onal efforts to support SMEs included enhancing 
the cooperation of the existing four SMEs centres, namely Support and Consultation Centre for Small 
and Medium Enterprises (SUCCESS) under the TID, the SME Centre under the Hong  Kong Trade 
Development Council , the SME One under the Hong Kong Productivity Council (HKPC), and the 
TecONE under the Hong Kong Science and Technology Parks Corporation, since  October  2019. The 
SME Link, a one -stop web portal, commenced operation in June  2022 to help SMEs search for 
information and support services, including on government funding schemes, from a single online 
platform. In addition, a service team called SME  ReachOut, operated by the HKPC under the support 
of the Government, began operations in January  2020 to help SMEs  identify suitable funding 
schemes and provide guidance to those that wish to apply for funding schemes through face -to-face 
or online meetings. During the review period, Hong  Kong,  China established an increasing number 
 
70 TID, Government Funding Schemes at a Glance . Viewed  at: 
https://www.success.tid.gov.hk/success_enews/govfundscheme/eng.pdf . 
71 SMEs in Hong  Kong,  China are defined as manufacturing enterprises employing les s than 100  persons 
and non -manufacturing enterprises employing less than 50  persons.  
72 TID, Support to Small and Medium Enterprises . Viewed  at: 
https://www.tid.gov.hk/english /smes_industry/smes/smes_content.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  of funds or support measures for en terprises (including SMEs), or enhanced existing ones. As of 
June 2023, there were over 40  funds or support measures with different objectives available to 
enterprises, including SMEs; the main ones are outlined below (Table 3.16).73 
Table 3.16 Main funds or schemes available to enterprises, including SMEs  
Fund/Scheme  Description  
Dedicated Fund on Branding, Upgrading and Domestic 
Sales (BUD Fund)  Develop brands, restructure business operations, and 
promote sales for business development in China and 
other economies with which Hong  Kong,  China has 
signed FTAs and/or IPPAs  
SME Export Marketing Fund (EMF)  Encourage expansion of markets outside 
Hong Kong, China  
Technology Voucher Programme (TVP)  Support technological services and solutions to improve 
productivity  
Enterprise Support Scheme (ESS)  Support in -house R&D  
SME Financing Guarantee Scheme (SFGS)  Help SMEs obtain financing  
100% Credit Limit Top -Up Scheme  Extend credit parameters for exporters  
Source:  HKPC, Funding Schemes and Support . Viewed  at: https://www.hkpc.org/en/support -resource/sme -
one/funding -scheme/smeone -start-up; and TID, SUCCESS . Viewed  at: https://www.success.tid  
.gov.hk/en_landing.html . 
3.3.2   Standards and other technical requirements  
3.78.  There has not been any significant change in the organization or structure of 
Hong Kong,  China's standards, testing, and conformity assessment entities since the last Review. 
Hong Kong,  China has no central body for the development of standards or comprehensive legal 
framework regulating this area. Regulatory authorities issue standards as necessary and incorporate 
technical regulations into laws, or prescribe technical  regulations pursuant to laws, when certain 
protections are needed. Hong  Kong,  China uses international or overseas standards as a reference, 
or also aligns standards with international standards where appropriate. The Innovation and 
Technology Commission (ITC) is responsible for promoting internationally accepted standards and 
conformity assessment and, under it, the Hong  Kong Accreditation Service (HKAS) accredits 
conformity assessment bodies, i.e.  laboratories, inspection bodies, and certification bodies  based on 
international standards.74 The Hong Kong Council for Testing and Certification (HKCTC) is the 
advisory body that advises the Government on the overall development strategies for the testing 
and certification sector.  
3.79.  Since  2018, there has been no significant change to the list of laws on technical regulations 
in place or products subject to technical regulations except for four sets of changes (Table  3.17). 
Technical regulations continue to be applied to 38  different sets of legislation; these main ly concern 
animals and plants, boilers and pressure vessels, building materials, chemicals, consumer goods, 
dangerous goods, electrical goods, energy efficiency, environment, food, gas safety, ICT, lifts and 
escalators, pesticides, pharmaceutical products,  radioactive substances, road transport, toys and 
children's products, and water pipes.75 A comprehensive list is provided on the ITC website.76 Certain 
Hong Kong,  China professional associations or institutions lead the development of voluntary 
standards,  which are based on the needs or concerns identified by the industry and consumers. One 
example is the "Standard Methods for Testing Fei Cui (Jadeite Jade/Omphacite Jade/Kosmochlor 
Jade) for Hong  Kong" formulated by the Gemmological Association of Hong Kon g Ltd.  
3.80.  The Fire Services Department (FSD) is the regulatory authority of dangerous goods on land. 
Under the previous local dangerous goods regulatory system, there was no single, globally 
harmonized system to govern the classification, packing, marking, an d labelling of dangerous goods; 
changes were introduced on 31  March  2022 to harmonize these with the International Maritime 
Dangerous Goods (IMDG) Code. Further, the Code of Practice for Control of Dangerous Goods on 
Land (CoP) was published to facilitate compliance with the new technical standards and technical 
regulations by traders and the general public. The CoP has adopted standards and technical 
 
73 HKPC, Funding Schemes and Support . Viewed  at: https://www.hkpc.org/en/support -resourc e/sme -
one/funding -scheme/smeone -start-up. 
74 ITC, Standard -related Services . Viewed  at: www.itc.gov.hk/en/quality/qsdiv/index.html . 
75 ITC, Standards, Technical Regulations and Conformity Assessment . Viewed  at: 
https://www.itc.gov.hk/en/quality/qsdiv/conformity_assess.html . 
76 ITC, Standards, Technical Regulations and Conformity Assessment . Viewed  at: 
https://www.itc.gov.hk/en/quality/qsdiv/conformity_assess.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  regulations following the United Nations Economic Commission for Europe (UNECE), the UN Manual 
of Tests and  Criteria, and the IMDG Code publications.  
3.81.  In the telecommunications sector, 10  new technical regulations have been adopted 
since 2018 by the Communications Authority.77 All of them are identical or aligned with international 
standards. These concern ultra  wideband devices, 6  GHz wireless LAN devices, and various types of 
5G new radio base station/repeater equipment and user equipment.  
3.82.  In addition, the Code of Practice on the Design and Construction of Builders' Lifts 
(2021  Edition), the Code of Practice on  the Design and Construction of Tower Working Platforms 
(2021  Edition), the Code of Practice on the Design and Construction of Lifts and Escalators 
(June  2020), and the Code of Practice for Escalators (October  2022) have been revised since  2018.  
3.83.  Hong Kong,  China's labelling requirements concern mainly food products, certain household 
electrical appliances, Chinese herbal medicines, proprietary Chinese medicines, and pharmaceutical 
products. Pharmaceutical products are, for example, required to have indicati ons of the name of the 
pharmaceutical product, the name and quantity of each active ingredient, the name and address of 
the manufacturer, the product registration number, the batch number, the expiry date, the dosage, 
and the route and frequency of adminis tration on the label. Since the previous Review, 
Hong Kong,  China has made two notifications on labelling requirements under the TBT  Agreement 
concerning the mandatory energy efficiency labelling scheme.78 
Table 3.17 Changes to the laws on technical regulations  
Ordinance/regulation  Summary of the 
legislation  Changes since  2018  
Road Traffic (Construction 
and Maintenance of Vehicles) 
Regulations  
(Cap.  374A)  Set out the control of vehicle 
construction and 
maintenance.  First Schedule and Second Schedule were 
amended, and came into effect on 5  July 2020 to 
increase the maximum overall length of a light bus 
to 7.5  meters and the maximum gross vehicle 
weight of a light bus to 8.5  tonnes, with a view to 
introduc ing light bus models with more 
environmental benefits  and/or barrier -free 
facilities into Hong  Kong,  China.  
 
New regulations 67A, 67B, and 67C were 
introduced and came into effect on 
15 October  2021 to allow flexibility in the design 
of emergency exits of light buses. Specifically, 
light buses can use the driver's doors, emergency 
windows, and escape hatches as alternative 
means of emergency exit in addition to the 
emergency  door. 
Buildings Ordinance  
(Cap.  123) and its  
subsidiary legislation  Provide for the planning, 
design, and construction of 
buildings and associated 
works; provide for the 
rendering safe of dangerous 
buildings and land; and 
provide for regular 
inspections of buildings and 
the associated repairs to 
prevent the buildings from 
becoming uns afe. The Buildings Ordinance (Cap.  123) was amended 
in September  2021 and the Building (Minor 
Works) Regulation (Cap.  123N) was amended in 
September  2020 and September  2021 to extend 
the coverage of the Minor Works Control System 
so as to facilitate the ca rrying out of minor works 
and bring greater convenience to the public.  
The Building (Construction) Regulation 
(Cap.  123Q) was amended in February  2021 for 
implementation of a performance -based building 
control system to ensure meeting modern -day 
requiremen ts and international standards on 
construction quality and safety.  
 
77 These have been adopted the Communications Authority but not necessarily written into the laws. 
HKCA  2001 concerns amendments made to Section  32D of the Tele communications Ordinance.  
78 WTO documents G/TBT/N/HKG/51, 23  August  2019; and G/TBT/N/HKG/52, 5  July 2022.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Ordinance/regulation  Summary of the 
legislation  Changes since  2018  
Dangerous Goods Ordinance 
(Cap.  295) and its subsidiary 
legislation  Prescribe rules on 
classification, packing, 
marking, and labelling of 
dangerous goods and to 
regulate the manufacture, 
storage, conveyance, and 
use of dangerous goods.  To update the dangerous goods regulatory 
system, including dangerous goods classification, 
as well as packing, marking, and labelling 
requirements for dangerous goods, with a view to 
aligning it with international standards. The 
Dangerous Goods Ordinance (Cap.  295) and its 
subsidiary legislation were amended and came 
into effect on 31  March  2022.  
Telecommunications 
Ordinance  (Cap.  106) (TO)  Provide for the licensing and 
control of 
telecommunications, 
telecommunications services, 
and telecommunications 
apparatus and equipment. 
Section  32D of the TO sets 
out the authority of the 
Communications Authority 
(CA) to prescribe technical 
regulations (i.e.  in the form 
of performance 
specifications) and the 
objec tives of these 
regulations.  With effect from 24  June 2022, Section  32D of the 
TO was amended to clearly stipulate that the 
powers and duties of the CA would focus on 
regulating the telecommunications functions of 
telecommunications apparatus. 
Non-telecommu nications functions of such 
equipment and devices (e.g.  electrical safety 
specifications and standards) are regulated by 
other dedicated legislation as appropriate. 
Technical regulation HKCA  2001 and its scope of 
safety requirements have been updated 
accor dingly.  
Source:  Information provided by the authorities.  
3.3.2.1   Accreditation and conformity assessment  
3.84.  The regulatory regime on accreditation and conformity assessment procedures has not 
changed since the previous Review. The HKAS continues to provide accreditation services to 
laboratories, certification bodies, and inspection bodies. The HKAS oversees thre e voluntary 
accreditation schemes, i .e. the Hong Kong Laboratory Accreditation Scheme (HOKLAS), the 
Hong Kong Certification Body Accreditation Scheme (HKCAS), and the Hong Kong Inspection Body 
Accreditation Scheme (HKIAS). As of November  2022, there were 2 89 organizations accredited 
under these schemes: 240  laboratories, 26  certification bodies, and 23  inspection bodies. Mandatory 
conformity assessment is required on fire service installation and equipment, dangerous  goods, 
builders'  lifts, tower working pl atforms, lifts, escalators, and telecommunications equipment.  
3.3.2.2   International and other cooperation  
3.85.  HKAS is a member of the International Accreditation Forum (IAF), the International 
Laboratory Accreditation Cooperation (ILAC), and the Asia Pacific Accredita tion Cooperation (APAC). 
It is also a signatory to the multilateral/mutual recognition arrangements (MLAs/MRAs) administered 
by these organizations. Since January  2018, the HKAS has expanded the scope of its IAF MLAs to 
cover energy management system certi fication, occupational health and safety management system 
certification, and greenhouse gas validation and verification. Its scope under the ILAC MRAs was 
also extended to cover proficiency testing providers. As of June  2023, the HKAS had concluded MRAs 
with over 110  economies worldwide. The ITC represents Hong  Kong,  China in the Asia Pacific 
Economic Cooperation (APEC) Sub -Committee on Standards and Conformance  (SCSC), International 
Organization for Standardization (ISO), and the Pacific Area Standards Co ngress (PASC). It also 
serves as Hong  Kong,  China 's enquiry and notification point for the purposes of the TBT  Agreement.  
3.86.  In terms of the work of the TBT  Committee, Hong  Kong,  China raised a specific trade concern 
with the United  States on Origin Marking R equirements in October  2020. This subsequently was 
adjudicated in the DSB (Section  2.3.1). Also in  2020, in coordination with a group of Members79, 
Hong Kong,  China raised the issue of amended regulations on toy imports against India. In terms of 
notificat ions, five  new notifications were made during the review period, including two technical 
regulations concerning portable air compressors and air compressors and handheld percussive 
 
79 Canada, China, the European  Union, Mexico, and the United  States.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  breakers, and three conformity assessment procedures on labelling schemes o n water closets, air 
conditioners, lamps, dehumidifiers, cookers, and heaters.80 
3.87.  Pursuant to the CEPA, there was greater integration achieved in the testing and certification 
sector with China during the review period. A Hong  Kong,  China certification body  became one of 
seven National Certification Bodies (NCB) of China under the International Electrotechnical 
Commission System of Conformity Assessment Schemes for Electrotechnical Equipment and 
Components in March  2020, which has a total of 93  NCBs listed.81 China's  Compulsory Certification 
(CCC) market has been gradually opened up to Hong  Kong,  China's testing and certification 
organizations during 2018 -20.The geographical coverage of CCC factory inspection that can be 
undertaken by qualified Hong  Kong,  China testing and certification organizations in collaboration 
with designated Chinese organizations has been expanded. Additional tasks, such as CCC product 
testing and selection of post -certification test samples, can now be carried out by 
Hong Kong,  China' s testing and certification industry, which could contribute to the further 
development of Hong  Kong,  China as a regional testing and certification centre.  
3.3.3   Sanitary and phytosanitary requirements  
3.88.  The Food and Environmental Hygiene Department (FEHD) is one of the responsible 
departments for the enforcement of sanitary and phytosanitary (SPS) measures in 
Hong Kong,  China. Together with its policy bureau – the Environment and Ecology Bureau  (EEB), 
the FEHD, through its Centre for Food Safety (CFS), is responsi ble for food safety and related 
issues.82 The EEB was established on 1  July 2022, following the reorganization of government 
structure. It has expanded the policy functions of the former Environment Bureau by taking over the 
policies on environmental hygie ne, food safety, agriculture and fisheries, and veterinary public 
health, from the previous Food and Health Bureau (FHB).83 The Agriculture, Fisheries and 
Conservation Department (AFCD) remains the main body responsible for animal health and plant 
protecti ons. The TID remains the overall coordinator and serves as the WTO enquiry point for 
SPS matters.  
3.89.  There were several SPS -related developments during the review period. In terms of legislative 
changes, amendments were made to the Food Adulteration (Metallic  Contamination) 
Regulations  (Cap.  132V), the Harmful Substances in Food Regulations (Cap.  132AF), and the Food 
and Drugs (Composition and Labelling) Regulations (Cap.  132W). Other initiatives include a new 
electronic portal and arrangements on meat imports  from the United  Kingdom following its 
withdrawal from the European  Union (Brexit). In 2020, the Government made amendments to the 
Public Health (Animals and Birds) (Licensing of Livestock Keeping) Regulation (Cap.  139L) to remove 
restrictions under the Re gulation, allowing chicken farms to be moved to more suitable locations and 
implement more comprehensive biosecurity measures, thereby reducing the risk of disease 
outbreaks, human infection by avian influenza, and environmental contamination, as well as 
minimizing antimicrobial usage.  
3.90.  The main legislation governing food safety remains the Public Health and Municipal Services 
Ordinance (Cap.  132) and its subsidiary legislation, and the Food Safety Ordinance (Cap.  612). The 
Public Health and Municipal Servic es Ordinance provides the overall framework for food protection, 
labelling, and hygiene, while many related SPS rules are contained in its subsidiary legislation 
(Table  3.18). The Food Safety Ordinance requires food importers/distributors to be registered;  this 
involves identifying the food categories and classification of food to be imported to enhance food 
traceability.84 
 
80 WTO documents G/TBT/N/HKG/54, 17  October  2022; G/TBT/N/HKG/53, 17  October  2022;  
G/TBT/N/HKG/52, 5 July  2022; G/TBT/N/HKG/51, 23  August  2019; and G/TBT/N/HKG/50, 8  February  2018.  
81 HKCTC, Legislative Council Panel on Commerce and Industry : Latest Development of the Testing and 
Certification Industry , 19 February  2021. Viewed  at: 
https://www.hkctc.gov.hk/en/doc/CIPanel_20210219_Paper_Eng.pdf . 
82 The FEHD is responsible for, inter alia, issuing Food Safety Orders to control, pro hibit, or recall 
imports or the supply of any food on public health grounds.  
83 Also including food markets, animal management welfare, burial, and reduction of salt and sugar.  
84 CFS, A Guide to the Registration Scheme for Food Importers and Food Distributo rs. Viewed  at: 
https://www.cfs.gov.hk/english/whatsnew/whatsnew_fstr/files/Guide_to_Application_e.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.18 Main legislation on SPS measures  
Instrument  Date  Latest amendment  Overview  
Food Safety Ordinance 
(Chapter  612) 1 February  2012 n.a. Registration of food 
importers/distributors, 
record -keeping 
requirements and making of 
food safety order to protect 
public health  
Public Health and Municipal 
Services Ordinance (Cap.  132, 
Part V) and its subsidiary 
legislation  11 November  1960 8 May 2023 Main overarching public 
health and municipal 
service ordinance  
Imported Game, Meat, Poultry 
and Eggs Regulations 
(Cap.  132AK)  1 July 1976 5 December  2015 Requiring a health 
certificate for importation  
Food and Drugs (Composition and 
Labelling) Regulations 
(Cap.  132W)  11 November  1960 14 July 2021 Labelling of prepackaged 
food 
Pesticide Residues in Food 
Regulation (Cap.  132CM)  1 August  2014 n.a. Regulation on pesticide 
residues in food to 
international standards  
Plant (Importation and Pest 
Control) Ordinance (Cap.  207) 1 May 1976 9 July 2020 Governing importation of 
plants and soil  
Harmful Substances in Food 
Regulations (Cap.132AF)  11 November  1960 14 July 2021 Prohibits import and sale of 
food containing certain 
substances in excessive 
concentration  
Food Adulteration (Metallic 
Contamination) Regulations 
(Cap.  132V)  27 May 1983 10 October  2018 Regulates the concentration 
of metals i n food  
Frozen Confections Regulation 
(Cap.  132AC)  11 November  1960 10 April 2014 Restriction on sale, etc. of 
imported frozen confections  
Preservatives in Food Regulation 
(Cap.  132BD)  2 February  1973 1 July 2008 Regulates preservatives and 
antioxidants in food  
Milk Regulation (Cap.  132AQ)  11 November  1960 1 July 2022 Restriction on sale, etc. of 
imported milk or milk 
beverages  
Sweeteners in Food Regulations 
(Cap.  132U)  1 January  1970 1 August  2010 Regulates sweeteners in 
food 
Public Health (Animals and Birds) 
Ordinance (Cap.  139) 1 January  1936 4 November  2021 To control the 
import/transit of live 
animals and birds  
Rabies Ordinance (Cap.  421) 1 July 1994 1 July 2022 Various powers to control 
rabies including control of 
import/transit of mammals  
Genetically Modified Organisms 
(Control of Release) Ordinance 
(Cap.  607) 1 March  2011 1 July 2022 Controls the import and 
export of GMOs  
n.a. Not applicable.  
Source:  Compiled by the Secretariat and information provided by the authorities.  
3.91.  The Food Adulteration (Metallic Contamination) Regulation (Cap.  132V) was amended in  2018 
to update the maximum levels for metallic contamination in food; this entered into force 
on 1 November  2019, and took full effect from 1  November  2020 on  all kinds of foods. The amended 
Regulation increased the total number of metallic contaminants to be regulated from 7 to 14, while 
the number of maximum levels (MLs) for metallic contaminants in respect of different foods and 
food groups increased from 19  to 144.  
3.92.  In 2021, the Harmful Substances in Food (Amendment) Regulation (the Amendment 
Regulation) was passed to update and strengthen the regulatory control of three  types of 
mycotoxins, as well as setting or updating the MLs for five other harmful substa nces in edible fats 
and oils, condiments, or formula products intended for infants. Partially hydrogenated oils  (PHO), 
the main source of industrially produced trans fatty acids (IP -TFAs), were specified as a prohibited 
substance in food in line with recom mendations of the World Health Organization  (WHO). To align 
with the Codex standards, the Food and Drugs (Composition and Labelling) (Amendment) 
Regulation  2021 was passed at the same time. It stipulates that any prepackaged food containing 
hydrogenated oi ls, e.g.  fully hydrogenated oil, must be indicated accordingly in the list of 
ingredients. These measures came into force on 1  June 2023 (for provisions stipulating the MLs of WT/TPR/S/ 450 • Hong Kong, China  
 
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  harmful substances in food other than PHO) or are expected in December  2023 (for  provisions on 
banning PHO).  
3.93.  The Food Trader Portal (FTP), a website serving as a one -stop electronic communication 
platform between food traders and the CFS, has been launched in stages since  2019. It facilitates 
registration of food importers (also distr ibutors) and serves as the interface to apply for import 
licences and import permissions. Starting with the launch of the trader registration module in  2019, 
the functions of the FTP were subsequently expanded to cover online applications for all import 
licences and import permissions issued by the CFS, as well as handling of the arrival reporting and 
release of consignments. All import -related functions were fully implemented in May  2021.  
3.94.  Regarding the import of meat products from the United  Kingdom follow ing Brexit and the end 
of the transition period, Hong  Kong,  China has made provisions for the continued trade of these 
products. At the request of the United  Kingdom, the CFS has accepted a dual purpose export 
document arrangement between the United  Kingdo m and the Republic of Ireland regarding meat 
derived from animals born, raised, or slaughtered in either area. However, the products must be 
exported through the United  Kingdom to benefit from the arrangement.85 
3.95.  Food importers are responsible for ensuring that food products comply with all applicable laws 
and requirements. A prior import licence and/or a written permission from the FEHD is required for 
the importation of food products that are designated by Hong  Kong,  China as high -risk, such as 
game, meat,  poultry, eggs, milk, and frozen confections. As part of the import process, these items 
are subject to certain controls, which include a pre -entry assurance system, verification of health 
documents, and surveillance at import control points, and CFS adopt s a risk -based approach to 
conduct physical inspection on the consignments to ensure their compliance with various safety and 
quality indicators. Under the Imported Game, Meat, Poultry and Eggs Regulations (Cap.  132AK), 
imports of these products require an  export health certificate issued by a competent body in the 
exporting country/region. During the period 2018 -21, there was a reduction in the number of 
approved applications for import permissions in  2020 and onwards as some importers were no longer 
required to apply for permissions for chilled meat/poultry, transhipped meat/poultry, and some 
permissions were issued with a longer validity period, i.e.  from 6 to 12 months, following a business 
process review in March  2020 for streamlining import permission requirements. (Table  3.16).86 The 
number of registered food importers and number of export health certificates for animal products 
issued remained relatively constant.  
3.96.  The import of live animals is by special permit from the AFCD and all plant imports are required 
to have a Plant Import Licence from the AFCD, as well as a Phytosanitary Certificate from the 
exporting country/region. Certain plants may also be subject to fumigation or disinfection, 
quarantine, or post -entry quarantine observation. The number of plant import licences issued more 
than doubled from FY2017/18 to FY2020/21 (Table  3.19).  
Table 3.19 SPS statistics, 2018 -22 
(Number)  
 2018  2019  2020  2021  2022  
Food safety  
Registered food importers  10,311  10,696  10,462  10,775  11,142  
Registered food distributors  9,033  9,286  8,660  8,853  9,183  
Export health certificates for food 
products of animal origin issued  1,199  1,397  1,310  1,521  1,419  
Trade alert incidents issued  103 91 100 93 72 
Imported food  
Applications approved for import licence 
for frozen/ chilled meat and poultry  111,838  103,521  92,864  76,993  50,909  
Applications approved for import 
permission for game, meat, poultry and 
eggs 3,285  3,351  2,057  1,394  1,178  
 
85 CFS, Imported Food Control . Viewed  at: 
https://www.cfs.gov.hk/english/import/Guide_to_import_of_beef_pork&mutton_derived_from_anima ls_born&r
aised_in_RoI_or_UK.html . 
86 CFS, Rollout of Online Application for Import Licence and Import Permission and New Measures on 
Food Import  Control . Viewed  at: https://www.ftp.cfs.gov.hk/web/files/pdf/Rollout%20of%20Online%20Applica
tion%20for%20Import%20Licence%20and%20I mport%20Permission%20and%20New%20Measures%20on%2
0Food%20Import%20Control.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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   2018  2019  2020  2021  2022  
Applications approved for import 
permission for milk and milk products  494 459 464 420 398 
Applications approved for import 
permission for frozen confections  423 463 547 496 510 
Plant and animal healtha 
Plant import licences  861 1,016  1,080  1,988  2,573  
Plant import authorizations  1,764  1,656  1,494  1,254  1,095  
Phytosanitary certificates  5,943  5,096  3,530  3,038  3,466  
Phytosanitary certificates for re -export  1,824  1,530  1,448  1,337  1,142  
Plant confiscations  892 473 1,349  2,268  421 
Official Animal Health Certificates of 
livestock  4,584  5,853  7,580  8,358  14,748  
Sanitary Certificates for export of 
animal products  756 592 528 538 421 
Import/transit permits for livestock 
issued  8,014  8,072  7,851  7,289  4,224  
a Data refer to FY2017/18, FY2018/19, FY2019/20, FY2020/21, respectively.  
Note:  Plant import licences for the import of plants are issued under a statutory standard format, while 
plant import authorizations for the import of growing medium and plant pests are processed an d 
issued on a case -by-case basis under specific terms and conditions determined by the Director of 
Agriculture, Fisheries and Conservation.  
Source:  FEHD, Annual Report , various editions 2018 -21. Viewed  at: 
https://www.fehd.gov.hk/english/publications/index.html ; AFCD, Department Annual Report , various 
editions  2017-18 to 2020-21. Viewed  at: https://www.afcd.gov.hk/english/publications/publications
_dep/publications_dep.html ; and information provided by the authorities.  
3.97.  During t he review period, Hong  Kong,  China submitted 11  notifications (including addenda 
and corrigenda) to the SPS Committee.87 These concerned proposed amendments to preservations 
in Food Regulations, temporary import measures regarding live hamsters (Section  2.2.1), 
amendments of legislation on harmful substances in food, imports of equine animals, amendments 
to Food Adulteration (Metallic Contamination) Regulations (Cap.  132V), hairy crab permits, and the 
lifting of prohibition on imports of edible fats and oil s of animal origin produced in Chinese  Taipei. 
There were no specific trade concerns raised in the SPS Committee by or against Hong  Kong,  China 
during the review period.  
3.98.  Hong Kong,  China's participation in the Codex Alimentarius Commission, the World 
Organ isation for Animal Health (WOAH), or the Commission on Phytosanitary Measures of the 
International Plant Protection Convention (IPPC) is through the delegation of China.  
3.3.4   Competition policy and price controls  
3.99.  The competition laws and framework of Hong  Kong,  China have not undergone significant 
change since the previous Review. The Competition Ordinance (Cap.  619) of  2015 continues as the 
main legislation with no amendments during the review period. It is supplemented by certain 
guidelines (Table  3.20). The C ompetition Commission continues to be an independent statutory 
competition authority responsible for enforcing the Ordinance, as well as creating and safeguarding 
a competitive environment. The Competition Commission has concurrent jurisdiction with the 
sectoral regulator for the telecommunications and broadcasting industries, i.e.  the Communications 
Authority. A number of policy documents also are available that give guidance on certain matters, 
including those related to enforcement, leniency, cooperation , recommended pecuniary penalties, 
and Section  60 commitments.  
 
87 WTO documents G/SPS/N/HKG/40/Add.1, 28  March  2019; G/SPS/N/HKG/42/Add.1, 30  October  2018; 
G/SPS/N/HKG/43, 19  July 2018; G/SPS/N/HKG/44, 25  September  2020; G/SPS/N/HKG/45, 
11 December  2020; G/SPS/N/HKG/45/Add.1, 30  July 2021; G/SPS/N/HKG/45/Add.1/Corr.1, 2  August  2021; 
G/SPS/N/HKG/46, 9  March  2021; G/SPS/N/HKG/47, 11  April 2022; G/SPS/N/HKG/47/Add.1, 16  January  2023; 
and G/SPS/N/HKG/48, 26  May 2023. WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.20 Key legislation on competition policy, 2023  
Instrument  Overview  Date  
Legislation  
Competition Ordinance (Cap.  619), 
including its subsidiary legislation  Main overarching framework  14 December  2015 
Guidelines  
Guideline on the First Conduct Rule  Prohibits anti -competitive agreements  27 July 2015 
Guideline on the Second Conduct Rule  Prohibits abuse of market power  27 July 2015 
Guideline on the Merger Rule  Prohibits anti -competitive mergers and 
acquisitions  27 July 2015 
Source:  Competition Commission, The Competition Ordinance (Cap  619). Viewed  at: 
https://www.compcomm.hk/en/legislation_guidance/legislation/legislation/comp_ordinance_cap619.
html. 
3.100.   The Competition Ordinance prohibits anti -competitive agreements and concert ed practices 
(First  Conduct  Rule), abuse of substantial market power (Second Conduct Rule), and certain mergers 
(Merger Rule). It provides a "safe harbour" for smaller undertakings, i.e.  the First Conduct Rule will 
not apply if the combined annual turnover  of the relevant undertakings does not exceed 
HKD 200 million, except where serious anti -competitive conduct is involved. Another "safe harbour" 
is also established under the Second Conduct Rule for smaller undertakings with an annual turnover 
not exceedin g HKD  40 million. Apart from the "safe harbours", the Competition Ordinance allows for 
a number of exclusions and exemptions from the Conduct Rules. These are agreements, 
undertakings or conduct relating to enhancing overall economic efficiency; complying with a legal 
requirement; servicing a general economic interest by the Government; and/or resulting in a 
merger.88 Exemptions may also be granted on public policy grounds, or to avoid conflicts with 
international obligations. Further, most statutory bodies  are exempted from the application of the 
substantive competition rules.89 The Merger Rule of the Ordinance has limited application as it is 
applicable only to mergers involved in undertakings that hold a telecommunication carrier licence.  
3.101.   The number of competition investigation cases initiated over the period remained relativel y 
steady with the majority being cases concerning anti -competitive agreements (Table  3.21). There 
was, nonetheless, a decline in  2020 that coincided with the start of  the pandemic. Separately, there 
was an increase in the number of investigation cases init iated concerning abuse of dominance 
in 2021.  
3.102.   The Competition Commission is an active participant in multilateral competition fora 
including the International Competition Network (ICN), the Competition Committee of the OECD, 
and the APEC  Competition Policy and Law Group.  Such participation has included submitting papers, 
hosting webinars, speaking at events, and co -chairing an ICN working group. In August  2023, the 
Competition Commission was due to convene a regional conference bringing together academics an d 
enforcers in the Asia -Pacific region to discuss ways of collaborating to address the most significant 
issues facing the competition community in the region. In addition to multilateral engagement, the 
Competition Commission also liaises on a bilateral ba sis with competition authorities in other 
jurisdictions. This may be in the context of an issue arising in a case, but does not involve the sharing 
of confidential, case -specific information. The Competition Commission has Memoranda of 
Understanding in pla ce with the Canadian Competition Bureau and the Philippine Competition 
Commission. These include an agreement to share competition law knowledge and enforcement 
experience, and engage in other forms of technical cooperation including staff exchanges.  
Table  3.21 Competition enforcement statistics, 2018 -22 
 2018  2019  2020  2021  2022  
1. Initiation of case investigations (number)  
a) Cases concerning anti -
competitive agreements  24 20 8 17 5 
 
88 Schedule 1 of the Competition Ordinance. Viewed  at: https://www.elegislation.gov.hk/hk/cap619 . 
89 Six statutory bodies (Ocean Park, Matilda and War Memorial Ho spital, the Federation of Hong  Kong 
Industries, the General Committee of the Federation of Hong Kong Industries, Helena May, and Kadoorie Farm) 
are subject to provisions of the Competition Ordinance by virtue of the Competition (Application of Provisions) 
Regulation (Cap.  619A). On the other hand, seven entities (the Stock Exchange and other financial entities) 
are excluded from the application of the First and Second Conduct Rules by virtue of the Competition 
(Disapplication of Provisions) Regulation (Cap.  619B).  WT/TPR/S/ 450 • Hong Kong, China  
 
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   2018  2019  2020  2021  2022  
b) Cases concerning abuse 
of dominance  2 4 2 7 0 
c) Leniency applicationsa      
d) Notifications of mergers 
and acquisitionsb 2 1 0 3 1 
2. Completed cases (number)  
a) Anti -competitive 
agreements  22 14 18 14 17 
b) Abuse of dominance  2 1 4 1 2 
c) Settlementsc 1 1 5 2 2 
d) Mergers and 
acquisitions (total number 
of decisions and number 
of mergers and 
acquisitions that were not 
approved)d 1 2 0 1 3 
3. Infringement penalties  
(number and HKD) 0 3 
Case 1: 
HKD 4,961,000e 
Case 2:  
HKD 37,702.26   
Case 3:  
HKD 7,169,686  0 1 
Case 4  
HKD 3,861,000f 1 
Case 5  
HKD 5,777,000  
4. Appeals (number of 
completed judicial review 
decisions)  0 0 0 0 0 
a Figure not to be published to the public for operational reasons.  
b The figures are for cases handled by the Communications Authority (CA). Notification of mergers to 
the CA is not mandatory under the Competition Ordinance (Cap.  619).  
c Cases on anti -competitive agreements or abuse of dominance that were resolved through a 
settlement between the competition authority and the investigated party/parties rather than through 
findings of violation(s).  
d The figures are for cases handled by the CA. There were no mergers and acquisitions that were not 
approved from 2018 to 2022.  
e The penalty was fir st imposed by the Competition Tribunal in April  2020, and the appeal judgement 
with the cited revised amount was issued in June  2022.  
f The penalty was first imposed by the Competition Tribunal in January  2021, and the appeal 
judgement with the cited revis ed amount was issued in June  2022.  
Source:  Information provided by the authorities.  
3.103.   As concerns price controls, there have been no changes since the previous Review and 
Hong Kong,  China does not apply price controls in goods or services. Nevertheless, 
Hong Kong,  China maintains fees for pilotage services in ports that are set by the Director of the 
Marine Department after consultation with relevant stakeholders. An initiative was taken to revise 
the pilotage fees and after completion of the legislative exer cise in November  2022, they have been  
adjusted upwards to an average of 9.7%. The authorities monitor the prices of certain public 
transport and energy products (Section  4.2). 
3.3.5   State trading, state -owned enterprises, and privatization  
3.104.   Regarding state tradin g enterprises, Hong  Kong,  China has notified the WTO that it does not 
have any such enterprises within the meaning of Article  XVII:4(a) of GATT  1994 and Paragraph  1 of 
the Understanding on the Interpretation of Article  XVII. During the period 2018 -June 2023, 
three  notifications were made to the Working Party on State Trading Enterprises to this effect.90 
However, the Fish Marketing Organization (FMO) per the Marine Fish  (Marketing) 
Ordinance  (Cap.  291) has been granted certain exclusive rights with respect to the importation, 
exportation, distribution, landing, and transport of marine fish. The FMO operates seven wholesale 
fish markets in Hong  Kong,  China, which provide fish trading facilities and certain related services 
such as accounting. According to the  authorities, they do not consider the FMO as a state trading 
 
90 WTO documents G/STR/N/19/HKG, 1  June 2022; G/STR/N/18/HKG, 3  June 2020; and 
G/STR/N/17/HKG, 19  January  2018.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  entity as it is involved in the fish trade entering by vessel only, and not other transport modes, 
e.g. air. While acknowledging that Cap.  291 empowers the Chief Executive in Council to control the 
imports and exports of marine fish, no such measures have reportedly been established.  
3.105.   Hong Kong,  China has 15  enterprises owned or controlled by the Government that are 
referred to as government business enterprises (GBEs) (Tables  3.22 and 3.23). Acco rding to the 
reporting requirements of the Treasury, GBEs are defined as those enterprises where the 
Government has an investment holding of not less than 20% and where the Government shares the 
net earnings.91 GBEs are normally established to meet certain  policy objectives or support delivery 
of public services.  
3.106.   However, GBEs take different legal forms: some are public statutory corporations with/or 
without a shareholding structure, others are private companies with shareholding structure formed 
under the Companies Ordinance (Cap.  622), and the remaining are independent legal entities with 
their own board of directors and are either statutory corporations or private companies formed under 
Companies Ordinance (Cap.  622) (Table  3.22). Some have their own ordi nances that stipulate their 
operations and financial reporting requirements, e.g.  Airport Authority. Five of the GBEs remain as 
part of the Government albeit not having a separate legal existence. They are separate accounting 
entities established under the  Trading Funds Ordinance (TFO) (Cap.  430) for the provision of specific 
government services and are expected to provide a targeted rate of return and are referred to as 
trading funds (Table  3.23).  
3.107.   The number of GBEs  and their level of Government ownership remained stable over the 
review period with minimal change. In March  2022, IEC Holdings Ltd was acquired by the Airport 
Authority Hong  Kong from the Government and became its wholly owned subsidiary. The Hong  Kong 
Investment Corporation Ltd (HKIC) is a recently established 100% government -owned entity created 
to identify investment opportunities and strategically promote development of target industries 
(Section  2.4). Thus, the overall number of GBEs remained the sam e although one was added and 
one removed.  
3.108.   GBEs operate in a variety of sectors including transport infrastructure, new technologies, 
real estate, and communications. As of March  2022, the Government held assets of HKD  395 billion 
in GBEs, an increase from HKD 369 billion in  2018.92 Overall, the majority of GBEs have been 
profitable and contributed positively to the Treasury during the review period.  
3.109.   According to the authorities, there were no plans to privatize any existing state enterprise, 
nor acquire any  new enterprise.  
Table 3.22 Government Business Enterprises, excluding Trading Funds, 2018 and 2022  
Enterprise  Government ownership  
Area(s) of activity  
2018  2022  
Airport Authority Hong  Kong (AAHK)  100%  100%  Airport operation  
Hong Kong Cyberport Development Holdings 
Ltd 100%  100%  Development of digital 
technology  
Hong Kong Science and Technology Parks 
Corporation  100%  100%  Development of 
innovation and 
technology  
Kowloon -Canton Railway Corporation  (KCRC)  100%  100%  Railway assets holder  
MTR Corporation Limited (MTRCL)  75.2%  74.8%  Railway development 
and operation  
Hong Kong International Theme Parks Ltd  52.9%  52.3%  Tourism promotion  
 
91 The Treasury, Accrual -based Consolidated Financial Statements of the Government for the Year Ended 
31 March  2022. Viewed  at: https://www.try.gov.hk/internet/pde_abac2122_fullset.pdf . 
92 The Treasury, Accrual -based Consolidated Financial Statements of the Government for the Year 
Ended  31 March  2022. Viewed  at: https://www.try.gov.hk/internet/pde_abac2122_fullset.pdf ; and 
Accrual -based Consolidated Financial Statements of the Govern ment for the Year Ended 31  March  2018. 
Viewed  at: https://www.try.gov.hk/internet/pde_abac1718_fullset.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Enterprise  Government ownership  
Area(s) of activity  
2018  2022  
West Rail Property Development Ltd (WRPDL)  49.0%  49.0%  Property development  
Urban Renewal Authority  100%  100%  Urban redevelopment  
IEC Holding Ltd  88.2%  Became a 
subsidiary 
of AAHK  n.a. 
Hong Kong Investment Corporation  (HKIC) Ltd  - 100%  Investment company 
set up to further 
optimize the use of 
fiscal reserves for the 
strategic development 
of target industries  
n.a.  Not applicable.  
Source:  Information provided by the authorities; and the Treasury, Accrual -based Consolidated Financial 
Statements of the Government for the Year Ended 31  March  2022. Viewed  at: 
https://www.try.gov.hk/internet/pde_abac2122_fullset.pdf ; and Accrual -based Consolidated 
Financial Statements of the Government for the Year Ended 31  March  2018. Viewed  at: 
https://www.try.gov.hk/internet/pde_abac1718_fullset.pdf . 
Table 3.23 Government Business Enterprises, Trading Funds, 2018 and 2022  
Enterprise  Government ownership  
Area(s) of activity  
2018  2022  
Companies Registry Trading Fund  100%  100%  Incorporation or 
registration of companies 
and company search  
Electrical and Mechanical Services Trading Fund  100%  100%  Electrical, mechanical, and 
electronic services to 
government departments 
and public bodies  
Land Registry Trading Fund  100%  100%  Land search, registration of 
deeds, and related services  
Office of the Communications Authority 
Trading  Fund 100%  100%  Regulation of 
telecommunication and 
broadcasting services  
Post Office Trading Fund  100%  100%  Postal services  
Source:  Information provided by the authorities; and the Treasury, Accrual -based Consolidated Financial 
Statements of the Government for the Year Ended 31 March  2022. Viewed  at: 
https://www.try.gov.hk/internet/pde_abac2122_fullset.pdf ; and Accrual -based Consolidated 
Financial Statements of the Government for the Year Ended 31  March 2018. Viewed  at: 
https://www.try.gov.hk/internet/pde_abac1718_fullset.pdf . 
3.3.6   Government procurement  
3.110.   The policies of Hong Kong,  China's procurement sector continue to be driven by the 
objectives of achieving best value for money and maintaining open and fair competition.93 Public 
accountability, transparency, pro -innovation, and providing equal opportunities for tenderin g that is 
non-discriminatory in nature are the stated principles of its procurement regime.94 The Financial 
Services and the Treasury Bureau (FSTB) continues to be the overarching government entity 
responsible for procurement policy. The Stores and Procure ment Regulations (SPRs) apply to all 
procurement of goods (except land and buildings) and services (including construction and 
engineering) by most government agencies.95 For commonly used goods, Hong  Kong,  China uses a 
centralized procurement approach, wi th the Government Logistics Department (GLD) being the 
Government's central procurement agent; construction services are procured by individual work 
 
93 WTO document WT/TPR/S/380/Rev.1, 30  January  2019, Section  3.3.6. Value for money does not 
necessarily mean purchasing at the lowest price; Hong  Kong,  China defines the term as "economy, 
effectiveness and efficiency, taking into account the total costs involved, measured on a whole -life costing 
basis" , SPRs. This was recently modified per its pro -innovation policy, see below.  
94 FSTB, Guide to Procurement . Viewed  at: 
https://www.fstb.gov.hk/tb/en/business/gov_procurement/guide -to-procurement.htm . 
95 A few government agencies (i.e.  the Hong  Kong Monetary Authority, the Independent Pol ice Complaints 
Council, and the Ombudsman's Office) in Annex  1 and all five entities in Annex  3 to Appendix  I concerning 
Hong Kong,  China under the GPA 2012 have their own procurement rules.  WT/TPR/S/ 450 • Hong Kong, China  
 
- 74 - 
 
  departments that operate under the supervision of the Development Bureau. Other entities having 
a role in p rocurement are outlined in Box  3.1. The laws or regulations on procurement continue to 
be the SPRs, supplemented by Financial Circulars and Financial Services and the Treasury Bureau 
Circular Memoranda.96 In line with the Agreement on Government Procuremen t (GPA) on tendering, 
the main procurement methods according to the SPRs are open tendering, selective tendering and 
prequalified tendering, and single or restricted tendering.97 
Box 3.1 Overview of procurement,  2023  
GPA thresholds  All government bureaux and departments 
and other central government entities  Non-government public bodies including the 
Airport Authority, the Hospital Authority, the 
Housing Authority and Housing Department, 
the Kowloon -Canton Railway  Corporation and 
the MTR Corporation Ltd  
 SDR 130,000 for 
procurement of 
goods and specified 
servicesa (other than 
construction  services)  SDR 5,000,000 for 
construction 
services  SDR 400,000 for 
procurement of goods 
and specified servicesa 
(other than 
construction services)  SDR 5,000,000 for 
construction 
services  
Types of 
tendering  Open Selective  Single or restricted  
Requirements:  Normally adopted  Selective tendering is normally adopted for 
works projects. Works Departments may use 
prequalified tendering for projects requiring 
high level of skills.  Allowed under a 
variety of 
circumstances  
Tender boards/  
committees  Central Tender Board  GLD Tender Board  Public Works Tender 
Board  Departmental 
Tender Committees  
Procurement types 
and key financial 
limits:  (i) Tenders for goods, 
general services 
(non-works) and 
revenue of a value 
exceeding 
HKD 60 million; and 
(ii) tenders for works 
and related services 
of a value exceedi ng 
HKD 200 million  Tenders for goods, 
general services 
(non-works) and 
revenue of a value 
higher than 
HKD 10 million and 
not exceeding 
HKD 60 million  Tenders for works and 
related services of a 
value not exceeding 
HKD 200 million  Tenders for goods, 
general  services 
(non-works) and 
revenue of a value 
not exceeding 
HKD 10 million  
a Specified services mean those services identified in Annex  5 to Appendix  I in Hong  Kong,  China's 
GPA schedule.  
Source:  Compiled by the Secretariat from FSTB sources.  
3.111.   There were a number of developments in Hong  Kong,  China's procurement regime during 
the review period. In  2019 the new pro -innovation government procurement policy was launched; 
it was subsequently enhanced in  2020 and 2023.98 This new policy, with effect from 1  April 2019, 
incorporates innovation as one of the guiding principles in the award of procurement contracts 
thereby facilitating the participation of start -ups and SMEs in government procurement. It appl ies 
to the procurement of stores, services, and revenue contracts, but excludes works and consultancy 
contracts. The policy clarified the concept of "value for money" and, with a view to facilitating the 
assessment of innovative solutions in the tender eva luation process, it makes wider use of marking 
schemes to evaluate tenders for quality and price aspects. Thus, the weighting percentages for the 
technical aspects versus the price weighting has been modified, placing more emphasis on the 
former.99 As part  of these modifications, for the benefit of SMEs and start -ups, the removal of 
tenderers' experience as an essential requirement, and the weighting of tenderers' experience should 
 
96 However, the five entities covered in Annex  3 to Appendix  I of the GPA have their own 
procurement  rules.  
97 FSTB, Guide to Procurement . 
Viewed  at:https://www.fstb.gov.hk/en/treasury/gov_procurement/guide -to-procurement.htm . The SPRs 
provide also for direct engagement under certain circumstances (SPR 331 -333).  
98 FTSB, F inancial Circular No.  2/2019. Viewed  at: 
https://accessinfo.hk/en/request/533/response/1514/attach/6/FC02%202019.pdf?cookie_passthrough=1 . 
99 Thus, as of 1 April 2019 the change was introduced resulting in the technical weighting of 50 -70% 
(from 30 -40%) and price weighting of 30 -50% (from 60 -70%) (SPR 350(i)).  WT/TPR/S/ 450 • Hong Kong, China  
 
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  not exceed 15% of the total technical marks.100 In 2023, to promote and encou rage environmental 
protection, social responsibility and governance (ESG)101 in government procurement, the 
Government assigned dedicated weighting to ESG in the quality assessment of government tenders. 
Overall, these changes have been numerous, as outline d in Table A3.2, and have been incorporated 
in the SPRs and Financial Circulars.  
3.112.   In response to the COVID -19 pandemic, to relieve the pressure on contractors due to cash 
flow issues, the Government handled payment terms of goods and services contracts flex ibly and 
settled payments to contractors under a phased approach within a reasonable timeframe where 
possible.  The Government also provided advance payments to contractors and consultants to 
facilitate their cash flow for ongoing and new public works contr acts and expedited processing of 
payment applications, orders, and claims in public works' contracts. The Government also flexibly 
handled requests from contractors for extension of time, for up to six months, in public works 
contracts.  
3.113.   In 2021, the Govern ment introduced a new policy on the Security of Payment provisions in 
public works contracts to facilitate timely processing of contract payments to contractors, 
sub-contractors, and suppliers, and provided an interim mechanism for payment resolutions.  
3.114.   Also in 2021, the Government revamped the contractor management system including the 
admission and retention criteria for the approved lists of contractors and increased the tender limits 
for lower groups contractors (Groups  A and B)102 with a view to enhancin g tender opportunities and 
upward mobility of SME contractors. The new tender limits for Groups  A and B contractors have been 
raised to HKD  150 million and HKD  400 million, respectively.103 
3.115.   Since  2000, Hong  Kong,  China has promoted a Green Procurement polic y to take into 
account environmental considerations when conducting procurement. This entails, inter alia, 
improved recyclability, greater energy efficiency, and utilizing clean technologies.104 
Hong Kong,  China has designated "green specifications" and now has a Green Procurement list of 
183 items in 24  categories that aids in the selection of products and services that are better for the 
environment.105 An updated Memorandum106 sets out additiona l measures to expand 
environmentally friendly procurement processes; green specifications in the tender process may be 
"mandatory" or "desirable", depending on market availability.107 
3.116.   The pilot electronic tendering system (e -TS) was launched in mid -June 2022 to provide an 
electronic platform for the tendering process including dissemination of documents, submissions, 
evaluations, and reports. It is designed to assist bureaux/departments in handling works and 
non-works tenders under the Central Tender Board a nd the Public Works Tender Board 
(see thresholds Box  3.1). As of June  2023, 15  works departments were participating, involving some 
30 works tenders, and all relevant non -works departments joined and identified more than 
 
100 Legislative Council Panel on Financial Affairs, meeti ng of October  2018. Viewed  at: 
https://www.legco.gov.hk/yr18 -19/english/panels/fa/papers/fa20181030cb1 -12-1-e.pdf. 
101 Under the pro -innovation procurement policy, ESG proposals refer to measures that improve 
environmental protection, sustainability, governance, or social responsibility. These measures may, but do not 
need to be direc tly relevant to the services being procured, but can bring about positive values/benefits to the 
Government, and/or the public at large.  Examples of such positive values or benefits may include measures 
that could contribute to environmental protection suc h as using green materials/products, reducing energy 
consumption, or promoting waste reduction in the execution of the contract; or improving social responsibility 
through employment of people with disabilities, and/or rehabilitated persons for the contrac t. 
102 Hong Kong, China divides contractors into groups, i.e.  A, B, and C, according to the value of 
contracts that they are normally eligible to tender. See Development Bureau, Contractor Management 
Handbook . Viewed  at: https://www.devb.gov.hk/filemanager/en/content_187/CMH_Rev24%20(Aug23).pdf . 
103 Development Bureau, Contractor Management Handbook . Viewed  at: 
https://www.devb.gov.hk/filemanager/en/content_187/CMH_Rev24%20(Aug23).pdf . 
104 EPD, Green Procurement . Viewed  at: 
https://www.epd.gov.hk/epd/english/how_help/green_procure/whatisgreenprocurement.html . 
105 EPD, 183 Green Procurement Items . Viewed  at: 
https://www.epd.gov.hk/epd/english/how_help/green_procure/pdf/Green%20Specifications%20of%20183%20
Items_ENG.pdf . 
106 Environment Bureau Circular Memorandum No.  1/2021, Green Procurement in the Government. 
Viewed  at: https://www.epd.gov.hk/epd/english/how_help/green_procure/scr/ ENB_CM_1 -2021.pdf . 
107 EPD, Environment Bureau Circular Memorandum No.  1/2021. Viewed  at: 
https://www.epd.gov.hk/epd/english/how _help/green_procure/scr/ENB_CM_1 -2021.pdf . Environment Bureau 
Circular Memorandum No.  1/2021 superseded Environment Bureau Circular Memorandum No.  6/2015.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  50 non-works tenders for e -TS. The system has been implemented for approximately one  year. In 
view of the benefits brought about by electronic tendering, the service will be expanded to include 
the procurement of works -related consultancy services, and would be launched in  2024.  
3.117.   In addition  to e-TS, the long -standing e -Procurement Programme continues to operate as 
an electronic portal for low -value goods.108 It covers departmental purchases of goods and 
non-construction services not exceeding HKD  1.4 million and consultancy services not excee ding 
HKD 3 million.  
3.118.   In 2020, the GLD launched a new initiative to publish and update monthly government 
departments' procurement plans in the coming two years on the GLD's website. This is to facilitate 
prospective tenderers' early planning and enhance eff ectiveness of government procurement.  
3.119.   Data provided by the authorities indicate that during 2018 -21, 5,166  GPA-covered 
procurement contracts (above the thresholds specified in the SDRs) were awarded for a total value 
of HKD  552,046.02  million, of which HKD  505,477.28  million was awarded under competitive (open 
and selective) tendering procedures, and HKD  46,568.74  million under limited tendering procedures 
(Table  3.24). For example, in  2021, more than 91% of GPA -covered procurement contracts were 
awarded un der open and selective tendering procedures, and around 9% under limited tendering . 
GPA-covered procurement generally rose over the period 2018 -21, peaking in  2020 to 
174.46  billion, and declined in  2021 to HKD  135.46  billion. In  2020 and 2021 there were i ncreases 
in procurement by other entities, which more than doubled in  2020 compared to 2018 figures. This 
was attributed to an increase in general and construction services by the Airport Authority in  2020 
and the procurement of goods and general and const ruction services by the Hospital Authority 
in 2021.This significant increase propelled procurement to 6.5% of GDP in  2020. According to the 
authorities, the Government does not maintain figures on non -GPA procurement.  
Table 3.24 Government procurement in Hong Kong, China, 2018 -21 
(HKD  million)  
Year Level  GPA-covered procurementc 
Total value  Share 
(%) of 
GDPd Awarded under open 
and selective tendering  Awarded under limited 
tendering  
Total 
value  Ratio  Total value  Ratio  
2018 Central government 
entitiesa 55,963.98  1.97 55,572.74  99.30  391.24  0.70 
Other entitiesb 49,142.05  1.73 41,866.13  85.19  7,275.92  14.81  
Total 105,106.03  3.71 97,438.87  92.71  7,667.16  7.29 
2019 Central government 
entitiesa 81,704.70  2.87 81,244.74  99.44  459.96  0.56 
Other entitiesb 55,355.89  1.95 45,850.96  82.83  9,504.93  17.17  
Total 137,060.59  4.82 127,095.70  92.73  9,964.89  7.27 
2020 Central government 
entitiesa 74,660.02  2.79 66,634.96  89.25  8,025.06  10.75  
Other entitiesb 99,755.09  3.73 90,859.93  91.08  8,895.16  8.92 
Total 174,415.11  6.52 157,494.89  90.30  16,920.22  9.70 
 
108 Government of Hong  Kong, China , The e -Procurement Programme . Viewed  at: 
https://www.gov.hk/en/theme/eprocurement/eppp/ . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Year Level  GPA-covered procurementc 
Total value  Share 
(%) of 
GDPd Awarded under open 
and selective tendering  Awarded under limited 
tendering  
Total 
value  Ratio  Total value  Ratio  
2021 Central government 
entitiesa 51,255.14  1.79 50,364.65  98.26  890.49  1.74 
Other entitiesb 84,209.15  2.94 73,083.17  86.79  11,125.98  13.21  
Total 135,464.29  4.72 123,447.82  91.13  12,016.47  8.87 
a Central government entities refer to the government entities listed in Annex  1 to Appendix  I of the 
GPA 2012.  
b There are five other entities covered by GPA, as listed in Annex  3 to Appendix  I of GPA  2012: the 
Airport Authority, the Hospital Authority, the Housing Authority and Housing Department, the 
Kowloon -Canton Railway Corporation, and the MTR Corporation Ltd.  
c For central government entit ies, statistics include only procurement of goods and services of a value 
exceeding HKD  1.4 million, and construction services of a value exceeding HKD  7 million. For other 
entities, statistics include only procurement of goods and services of a value exce eding 
SDR 0.4 million (approximately HKD  4.31 million in  2018-19, and HKD  4.394  million in  2020-21), 
and construction services of a value exceeding SDR 5  million (approximately HKD  53.872  million 
in 2018-19, and HKD  54.92  million in  2020-21). 
d Calculated based on GDP at current market prices of the year.  
Note:  No information was available on non -GPA procurement.  
Source:  Information provided by the authorities.  
3.120.   During  the period 2018 -21, a significant majority of contracts were awarded to suppliers 
established in Hong  Kong,  China; the percentage of contracts awarded to suppliers outside 
Hong Kong,  China was smaller but no detailed statistics on such procurement were av ailable. Data 
on procurement outside Hong  Kong,  China are further complicated by the fact that these entities 
can establish physical presence in Hong  Kong,  China, as well as use subsidiaries or joint ventures 
when tendering. A small subset of data on procu rement from outside Hong  Kong,  China by the 
GLD indicates that suppliers outside Hong  Kong,  China accounted for less than 10% of contracts but 
accounted for a much higher percentage of tender value, generally above 20%. It should be 
emphasized that this is  not necessarily indicative of all procurement in Hong  Kong,  China, as no data 
were available and these were estimates made from available information. While there are no formal 
barriers to non -local tendering in the procurement rules, Hong  Kong,  China use s a contractor 
management system to facilitate selection of reliable and capable contractors, familiar with local 
regulations and practices for certain types of procurement. The so -called "approved contractor lists" 
for public works contracts are open to b oth local and non -local contractors but contractors lacking 
local experience are on a probationary list until local experience is obtained and therefore may be 
limited in the number and value of public works contracts.109 
3.121.   Hong Kong,  China was a party to the  GPA 1994 from June  1997 and has participated in the 
GPA 2012 since its entry into force in April  2014. As set out in its market access schedules (Annexes 
to Appendix  I to the GPA  2012), Hong Kong,  China is committed to providing non -discriminatory 
treatme nt to suppliers, including those of other GPA Parties, with respect of covered goods, services, 
and construction services.110 Hong Kong, China's GPA schedule covers all goods; services in certain 
areas, e.g.  computer, rental/leasing, other business, courier, telecommunications, environmental, 
transport, and some financial services; and all construction services.111 Hong Kong,  China's Annex  I 
commitments cover 62  central government entities, and Annex  3 covers 5  other entities.112 
 
109 Development Bureau, Contractor Management Handbook . Viewed  at: 
https://www.devb.gov.hk//en/content_187/CMH_Rev24%20(Aug23).pdf . 
110 WTO, e -GPA Gateway. Viewed  at: https://e -gpa.wto.org/en/A greement/Latest . 
111 Services categories are defined by the United Nations Provisional Central Product Classification  (CPC) 
and construction services are per Division  51 of the CPC. WTO, Coverage Schedules . Viewed  at: 
https://www.wto.org/english/tratop_e/gproc_e/gp_app_agree_e.htm . 
112 WTO, Integrated Government Procurement Market Access Information (e -GPA) Portal. 
Viewed  at: https://e -
gpa.wto.org/en/Annex/Details?Agreement=GPA113&Party=HongKongChina&AnnexNo=1&ContentCulture=en . 
Annex  3 entities include the Airport Au thority, Hospital Authority, Housing Authority and Housing Department, 
Kowloon -Canton Railway Corporation, and MTR Corporation Ltd.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  3.122.   During the review period, Hong  Kong,  China submitted a number of notifications under 
the GPA 2012, which include statistics and thresholds; they are an important mea ns to ensure the 
transparency and predictability of the government procurement regime (Table  A2.1).113 In 
particular, Hong  Kong,  China has regularly submitted statistics on contracts covered by the 
GPA 2012, and the value in national currency of the thresho lds contained in its GPA market access 
commitments.114 Hong Kong,  China's latest notification related to (i)  changes to its laws and 
regulations relevant to the GPA  2012 was made in  2003; and (ii)  modifications to the entities listed 
in its GPA  2012 market access commitments was made in  2016. The authorities have confirmed that 
during the review period there were changes made to their procurement laws and/or rules but did 
not consider them substantial and thus did not notify them to the WTO.  
3.123.   To address dispu tes in government procurement, Hong  Kong,  China has put in place a 
general mechanism in handling procurement complaints as set out in SPRs. Contractors, suppliers, 
firms, or organizations may lodge complaints about the process or result of a government 
procurement exercise to the procuring department or the relevant tender board, irrespective of 
whether the procurement exercise concerned is covered under the GPA or not. Hong  Kong,  China 
has also established the Review Body on Bid Challenges under the TID fo r handling alleged breaches 
under the GPA. The Rules of Operation of the Review Body on Bid Challenges guide its work.115 A 
tenderer may lodge a challenge to the Review Body related to procurement covered by the 
GPA 2012. Between January  2018 and June  2023,  the Review Body accepted five  applications for 
processing: one was partially substantiated and the other four were either unsuccessful or 
subsequently withdrawn.  
3.124.   In terms of preferential trade agreement commitments, Hong  Kong,  China's recent FTA with 
Australia includes a dedicated chapter, as well as a side instrument, on government procurement. 
In addition, FTAs with Chile and New  Zealand contain detailed chapters on government procurement 
with procedural rules and market access commitments.116 Hong Kong,  China has also endorsed 
APEC's Transparency Standards on Government Procurement  
3.3.7   Intellectual property rights  
3.125.   Pursuant to the Basic Law, Hong  Kong,  China pursues and develops its own policies for the 
legal protection of intellectual property rig hts (IPRs). IPRs registered in Hong  Kong,  China are 
independent and not automatically recognized in other jurisdictions. During the review period, there 
was cooperation and facilitation of IP matters with other jurisdictions. The overall structure of 
Hong Kong, China's IP protection entities has not changed. The Intellectual Property Department, 
established in 1990, is the registrar of patents, trademarks, and designs, and also oversees all 
matters related to copyright legislation. It has advisory, policy, promotion, education, and legal roles 
with respect to IP. International conventions such as the Paris Convention, Berne Convention, and 
WIPO Copyright Treaty are applied to  Hong Kong, China through China.  
3.126.   The IP  sector remains strong and an important contr ibutor to Hong  Kong,  China's economy. 
In terms of trade in services, charges for the use of intellectual property (CUIP) reached 
HKD 5,555  million for exports and HKD  15,837  million for imports in  2021. Total trade in CUIP 
accounted for about 2% of total t rade in services in  2021, up from 1.4% in  2018. The number of 
applications and the granting of IP registrations in Hong  Kong,  China during 2018 -22 showed some 
fluctuations over the period (Table  3.25). There was noticeable growth in the number of patent 
applications and the granting of patents since  2018. Trademark registrations remained relatively 
stable with some yearly fluctuations, albeit declined marginally in  2022; industrial design 
registrations declined slightly as well.  
 
113 The Note by the WTO Secretariat entitled "Systemic Compilation of Notifications under the Agreement" 
provides for a compre hensive compilation of documents relating to notifications; the Note is updated periodically 
to reflect the latest documents (WTO document GPA/S/3 and its revisions ). 
114 Hong Kong,  China's most recent notifications under the GPA  2012 include the thresholds in Appendix  I 
as expressed in national currencies for 2022 -23 (WTO document GPA/THR/HKG/3, 6  December  2021); and the 
Notification of statistics under Article  XVI:4 for 2021 (WTO document GPA/STAT(21)/HKG/1, 11  October  2022).  
115 TID, Rules of Operation of t he Review Body on Bid Challenges . Viewed  at: 
https://www.tid.gov.hk/english/aboutus/advcommittee/files/reviewbody_rules.pdf . 
116 WTO document series WT/REG400.  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.25 IPR overview, 2018 -22 
 2018  2019  2020  2021  2022  
Applications  
 Patents:  
Standard patents I  15,986  16,521  21,302  21,686  20,031  
Standard patents (O)a n.a. 11 254 257 133 
Short -term patents  791 791 689 552 579 
 Industrial designsb 2,583  
(4,435 
designs)  2,576  
(4,974 
designs)  2,015  
(3,878 
designs)  1,882  
(3,858 
designs)  1,672  
(3,286 
designs)  
 Trademarks  40,331  36,980  33,708  35,240  29,432  
Registrations  
 Patents:  
Standard patents I  9,651  6,780  7,658  14,655  11,573  
Standard patents (O)a n.a. 0 0 7 29 
Short -term patents  763 520 729 684 535 
 Industrial designs  4,547  4,579  5,045  4,206  3,319  
 Trademarks  34,970  33,371  34,743  32,719  30,630  
n.a. Not applicable.  
a The Patents Registry started receiving standard patent (O) applications upon launch of the original 
grant patent (OGP)  system on 19  December  2019.  
b More than one design can be included in a design application.  
Note:  Standard patent (O) refers to "original grant patent" (OGP) and standard paten t I refers to 
"re-registration" route for a standard patent. Geographical indications are registrable as collective or 
certification trademarks. Layout designs of integrated circuits are not registrable.  
Source:  Intellectual Property Department,  Statistics  of Trade Marks, Patents, Designs and Copyright 
Licensing Bodies . Viewed  at: https://www.ipd.gov.hk/filemanager/ipd/common/tools -resources/ip -
statistics/IPD_D1_D28 -Statistics_eng.pdf . 
3.3.7.1   Framework  
3.127.   Hong Kong,  China's basic framework for IP protection has remained largely unchanged since 
the previous Review (Table  3.26). While there was no fundamental change to the basic framework 
for the protection for trademarks, industrial designs, copyrights, geographical indications (Gis), plant 
varieties, layout designs of integrated circuits, and trade secrets, various IP laws or regulations were 
amended during the period under review (Table  A3.3). In summary, the changes include legislative 
amendments and introduction of new provisions to (i)  set up a new and direct filing route (as an 
alternative to the pre -existing re -registration route) for seeking 20 -year standard patent protection 
in Hong  Kong,  China under the "original grant patent"  (OGP) system with substantive examination, 
coupled with the concurrent launch of the refined short -term patent system that int roduced a 
mechanism for post -grant substantive examination of short -term patents; (ii)  enable 
implementation of the international registration system for trademarks, to prohibit registration of 
trademarks consisting of or containing the national anthem, an d enhance the trademark application 
and registration system; (iii)  enhance the copyright exceptions relating to persons with a print 
disability, and strengthen copyright protection in the digital environment through the introduction 
of an exclusive technol ogy-neutral communication right for copyright owners; and (iv)  prohibit 
registration of designs that consist of or contain the national flag or the national emblem or their 
designs. These have been notified to the WTO TRIPS Council.  
3.128.   There have been no chan ges to Hong  Kong,  China's rules or policies governing parallel 
imports and compulsory licensing. These remain as discussed in the previous report.117 
 
117 WTO document WT/TPR/S/380/Rev.1, 30  January  2019, Section  3.3.7. WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 3.26 Framework protecting IPRs, 2022  
IPRs  Eligibility of protection  Length of protection  
Patents  
Standard patent  Inventions that are new, involve an 
inventive step, and are susceptible to 
industrial application  
 
Grant of a standard patent can be 
obtained via  2 different routes, namely:  
(1) the OGP route for a standard 
patent  (O) (launched on 
19 December  2019), which enables direct 
filing of a standard patent application in 
Hong Kong,  China; or  
(2) the "re -registration" route for a 
standard patent I:  based on the 
re-registration  of a corresponding patent 
already granted by any of the following 
three designated patent offices outside 
Hong Kong,  China : the China National  
Intellectual Property Administration ; the 
European Patent Office (designating the 
United  Kingdom); or the United  Kingdom 
Patent Office  Renewable up to a maximum of 
20 years from : 
(1) Standard patent (O):  the 
date of filing of the patent 
application in Hong Kong,  China  
(2) Standard patent I: the date 
of filing of the corresponding 
patent application filed with the 
designated p atent office  
Short -term patent  Inventions that are new, involve an 
inventive step, and are susceptible to 
industrial application  Renewable up to a maximum of 
eight years from the date of 
filing 
Trademarks  
Registered trademarks  Marks that are capable of distinguishing 
the goods or services of one undertaking 
from those of other undertakings; there 
are absolute and relative grounds for the 
refusal of a registration  10 years from the filing date 
of the application for 
registration; may be 
renewed  indefinitely for 
periods of 10  years  
Industrial designs  
Registered industrial designs  Designs that are new and applied to an 
article by any industrial process and the 
appearance of the article is material  Renewable for periods of 
5 years up to a maximum of 
25 years from the filing date  
Copyright  
Unregistered industrial designs  Protected under the Copyright 
Ordinance (Cap.  528), for articles 
produced from the original design 
drawing. Protection is automatic  15 years from the end of the 
year in which the article was 
first marketed  
Copyright in original literary 
(including computer programs), 
dramatic, musical, and artistic 
works; sound recordings, films, 
broadcasts, cable programmes; 
typographical arrangements of 
published editions of literary, 
dramatic or musical works; 
performers, and persons that have 
exclusive recording contracts with 
performers  No formalities are required for copyright 
protection for a work in 
Hong Kong,  China. Works of authors 
from anywhere in the world, or works 
first publ ished anywhere in the world 
(including those made available to the 
public on the Internet), also qualify  Protection usually extends for 
50 years from the end of the 
year after the creator dies or 
in which the work was made 
or published. Exceptions:  
(1) protection for the 
typographical arrangement of 
published editions of literary, 
dramatic or musical works is for 
25 years from the end of the 
year in which the edition was 
first published; and  
(2) government copyright is 
protected for 125  years from 
the end of the year in which the 
work was made  WT/TPR/S/ 450 • Hong Kong, China  
 
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  IPRs  Eligibility of protection  Length of protection  
Other IPRs  
Geographical indications (Gis)  Same as for registered trademarks but 
only registrable as collective or 
certification trademarks. The use of a 
false GI applied to goods in a fashion 
calculated to mislead consumers may be 
a criminal offence under the Trade 
Descriptions Ordinance  
 
GIs may also be protected by the 
common law passing -off action (whether 
or not they are registered) if the owner 
can prove:  
(1) the goodwill or reputa tion attached to 
the relevant goods in the mind of the 
purchasing public by association with 
the GI; 
(2) misrepresentation by the defendant 
that is likely to lead the public into 
believing that the goods offered by him 
are those of the GI owner; and  
(3) the owner suffers damage by reason 
of the erroneous belief engendered by the 
defendant's misrepresentation  Same as for registered 
trademarks  
 
 
 
 
 
Protected by passing -off 
action as long as the 
relevant conditions are 
fulfilled  
Plant varieties  Proprietary rights of plant breeders, or 
the owners of the variety, over 
cultivated plant varieties they have bred 
or discovered and developed  25 years for trees and 
vines, and 20  years in 
other cases  
Layout -designs (topographies) 
of integrated circuits  Layout -designs (topographies) that 
are original  Where the layout -design has 
been commercially exploited 
with the owner's consent, 
10 years after the end of the 
year in which it was first 
exploited. Otherwise, 
15 years after the end of the 
year in which it was created  
Trade secrets and undisclosed 
information  Information disclosed to a person that is 
under a duty to keep it confidential, 
including confidential information in a 
commercial setting, such as formulae, 
methods, technologies, designs, product 
specifications, business plans, and 
client  lists Until the information 
legitimately becomes public 
knowledge  
Source:  Information provided by the authorities.  
3.3.7.2   Recent developments  
3.129.   During the period under review, Hong  Kong,  China continued its efforts to further develop 
itself as a regional IP trading centre. Hong  Kong,  China has been adopting a multi -pronged approach 
to promote IP  commercialization and trading. Policy measures under the Chief Executive's  2022 
Policy Address included strengthening the IP p rotection regime for patents, trademarks, copyright, 
and industrial designs, as well as enhancing capacity -building, promotion, education, and external 
collaboration.118 Looking forward, Hong  Kong,  China is striving to complete the preparatory work for 
implementing the international trademark registration system under the Madrid Protocol as soon as 
possible, and will initiate a review of the registered designs regime.  
3.130.   There were an increasing number of cooperative and facilitative initiatives on IP between 
Hong Kong,  China and China during the review period. One such project is the Development of the 
Qianhai Shenzhen -Hong Kong Intellectual Property and Innovation Hub, which has 16  cooperation 
 
118 "The Chief Executive's 2022 Policy Address", 19  October  2022. Viewed  at: 
https://www.policyaddress.gov.hk/2022/public/pdf/policy/policy -full_en.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  measures, such as promoting cross -boundary cooperation of IP protec tion, establishing a 
cooperation mechanism for IP arbitration, and encouraging the establishment of IP operation 
funds.119 Other facilitation measures include a pilot project, effective January  2023, for prioritizing 
examination of qualified invention paten t applications in China filed by applicants of 
Hong Kong,  China in China; cooperation with Guangdong Intellectual Property Administration on 
setting up enquiry points in Guangdong Province, China for handling enquiries about IP registrations 
in Hong  Kong,  China; and establishment of a dedicated mailbox in Hong  Kong,  China for handling 
enquiries on trademark registrations in China. Various initiatives on IP  are also being taken up under 
the Greater Bay Area  framework.  
3.131.   IP promotion activities were prominent d uring the review period. These include the 
resumption of the Business of Intellectual Property Asia Forum in physical form in  2022 after 
two years of virtual format due to the COVID -19 pandemic, which attracted 
over 14,500  participants; the release of publ icity videos and television series in  2021-22 for 
promoting Hong  Kong,  China's competitive edge in developing into a regional IP trading centre, the 
supporting services provided by the IPD, and also IP literacy among the public; and the complete 
revamp of the thematic official website "Hong Kong  – Regional IP Trading Centre", a one -stop shop 
for all IP  trading -related matters, in January  2023. A Patent Application Grant Fund is also available 
to encourage local companies to patent their inventions with tech nological elements.120 The grant is 
for 90% of the direct costs, up to a maximum of HKD  250,000.  
3.132.   In June  2020, the Trade Marks (Amendment) Ordinance 2020 was enacted and brought into 
effect so as to provide the legal basis for Hong  Kong,  China to implement the international trademark 
registration system under the Madrid Protocol. As of June  2023, the Government was completing 
various internal preparatory tasks with a view to implementing the international trademark 
registration system in Hong  Kong,  China as soon as possible. The Copyright (Amendment) 
Ordinance  2020 was also enacted in June  2020 to enhance the copyright exceptions relating to 
persons with a print disability, to bring them in line with the standards under the Marrakesh Treaty. 
In May  2023, the Copyright (Amendment) Ordinance 2022 was brought into operation for 
strengthening copyright protection in the digital environment. Key amendments include the 
introduction of a new technology -neutral exclusive communication right for copyright owners to 
communicate their copyright works to the public through any mode of electronic transmission 
(including streaming), among other things.  
3.133.   In response to the COVID -19 pandemic, Hong  Kong,  China has implemented various 
measures to facilitate applicants/owners/prop rietors to meet the deadlines for filing forms, 
submissions, and documents under the Patents Ordinance (Cap.  514), Registered Designs 
Ordinance  (Cap.  522), and Trade Marks Ordinance (Cap.  559). From January  2020 to March  2022, 
a number of Notices of Interr uption in the Operations of the Registries were issued to extend the 
official deadlines for both paper and electronic filings of documents with the Registries to later dates. 
As an alternative to physical hearings at the Registries, parties to proceedings have the options of 
requesting paper hearings or remote hearings by telephone or video conferencing, which have 
become standing options upon resumption of normalcy.  
3.134.   Furthermore, there has been an IP response from Hong  Kong,  China during the pandemic 
with t he granting of patents on COVID -19 vaccines, therapeutics, and diagnostic products 
(Table  3.27). An increasing number of patents applications were filed during 2020 -22 relating to 
these products and 32  relevant patents have been granted.  
Table 3.27 Patent applications and grants related to COVID -19 vaccines, and therapeutic 
and diagnostic products, 2020 -22 
  2020  2021  2022  Total  
Patent applications  
Standard patent  I 18 37 123 178 
Standard patent  (O) 1 1 0 2 
 
119 For the full list of 16  items see CEDB, 16 Co -operation Measures for the Development of the Qianhai 
Shenzhen -Hong Kong Intellectual Property and Innovation Hub . Viewed  at: 
https://www.cedb.gov.hk/en/policies/intellectual -property -protection -main-text-of-document.ht ml. 
120 ITC, Patent Application Grant . Viewed  at: https://www.itf.gov.hk/en/funding -programmes/fostering -
culture/pag/index.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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    2020  2021  2022  Total  
Short -term patent  1 0 4 5 
Total 20 38 127 185 
Patent grants:  
Standard patent  I 0 9 19 28 
Standard patent  (O) 0 0 0 0 
Short -term patent  0 1 3 4 
Total 0 10 22 32 
Note:  Standard patent (O) refers to "original grant patent" (OGP) and standard patent I refers to 
"re-registration" route for a standard patent.  
Source:  Information provided by the authorities.  
3.3.7.3   Enforcement  
3.135.   The C&ED is responsible for taking criminal sanctions against copyright and trademark 
infringements in Hong  Kong,  China, including the interception of p irated and counterfeit goods at 
the border.121 It has ex officio  power to seize infringing and counterfeit goods. The Hong  Kong Police 
Force (HKPF ) also has the power of arrest and seizure when suspected copies of pirated and 
counterfeit goods are found while performing their duties. The cases are passed to the C&ED for 
further investigation and prosecution. The C&ED uses a multi -pronged enforcement  strategy against 
copyright and trademark infringements through intelligence -led investigations and repeated raids 
conducted through different means, i.e.  at the border (import and export), manufacture, 
distribution, retail, and the Internet. In addition, C&ED in cooperation with industry operates a 
rewards scheme where cash rewards are paid to informants who report IPR infringements.122 
Hong Kong,  China conducts joint operations on IPR enforcement with enforcement agencies in other 
jurisdictions.123 The Carg o Big Data System was introduced in  2021 to analyse cargo data and 
identify high -risk traders/couriers for follow -up investigation.  
3.136.   The quantities of counterfeit and pirated goods seized by C&ED  fluctuated during the 
period  2018-22, and the highest value was recorded in  2022 (Table  3.28). The majority of seized 
goods are in the clothing and accessories sector, followed by the electrical and electronic goods 
sector.124 Online piracy continues to be  a growing issue, and the C&ED has invested greater 
resources in recent years. In  2022, online counterfeiting cases amounted to HKD  3.1 million and 
online pirated goods at HKD  1.99 million seized.125 Merchandise seized at the borders has generally 
been seco ndary in terms of value and quantity compared to goods seized internally (Table  3.29).  
Table 3.28 Overall IP enforcement statistics, 2018 -22 
 2018  2019  2020  2021  2022  
Prosecution and sentencing under the Copy right Ordinance and Prevention of Copyright Piracy 
Ordinance  
Persons given prison sentence  22 19 12 7 2 
Maximum sentence passed 
(months)  10 8 8 2.8 8 
% of cases with fines of:  
<HK D50,000  100 97.4 100 100 96.2 
HKD 50,000 -HKD 100,000  0 2.6 0 0 3.8 
>HKD  100,000  0 0 0 0 0 
Maximum fine (HKD)  50,000  80,000  10,000  15,000  79,000  
Total fines (HKD)  348,500  370,534  91,100  135,100  267,000  
 
121 C&ED enforces the Copyright Ordinance (Cap.  528),  the Trade Descriptions Ordinance (Cap.  362), 
and the Prevention of Copyright Piracy Ordinance (Cap.  544), and  the Trade Marks Ordinance (Cap.  559).  
122 The three reward schemes include the Anti -piracy Reward Scheme, funded by the copyright industry; 
the Rew ard Scheme to Combat Illegal Photocopying of Books and Periodicals, funded by the Hong  Kong 
Reprographic Rights Licensing Society; and the Reward Scheme to Combat Illegal Photocopying of Newspapers 
and Magazines funded by the Hong Kong Copyright Licensing Association.  
123 C&ED, Intellectual Property Rights Protection . Viewed  at: https://www.customs.gov.hk/en/service -
enforcement -inform ation/intellectual -property -rights -protection/index.html . 
124 C&ED, 2021 Departmental Review . Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/common/pdf/pdf_publications/Departmental_Review_2021_e.
pdf. 
125 C&ED, 2021 Departmental Review . Viewed  at: 
https://www.customs.gov.hk/hcms/filemanager/common/pdf/pdf_publications/Departmental_Review_202 1_e.
pdf. WT/TPR/S/ 450 • Hong Kong, China  
 
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   2018  2019  2020  2021  2022  
Prosecution and sentencing under the Trade Descriptions Ordinance  
Persons given prison sentence  35 24 31 24 17 
Maximum sentence passed 
(months)  26 6 18 8 36 
% of cases with fines of:  
<HKD  50,000  97.7 98 94.4 94.4 98.9 
HKD 50,000 -HKD 100,000  2 1 5.2 2.4 1.1 
>HKD  100,000  0.3 1 0.4 3.2 0 
Maximum fine (HKD)  100,000  150,000  101,000  150,275  70,000  
Total fines (HKD)  2,695,200  2,996,819  2,538,300  1,812,635  1,696,329  
Seizure of illegal merchandise goodsa 
Pirated goods  
Quantity ('000)  181 77 20 31 6 
Value (HKD  million)  6 3.6 0.98 2.94 3.1 
Counterfeit goods  
Quantity ('000)  1,800  2,200  1,100  3,120  630 
Value (HKD  million)  98 114 109 163 177 
a Includes inland, online, and import/export/transhipment.  
Source:  Information provided by the authorities.  
Table 3.29 Enforcement of IP at the border, 2018 -22 
 2018  2019  2020  2021  2022  
Seizure of illegal merchandise goods  
Pirated goods  
Quantity ('000)  6 0.7 6 0 2 
Value (HKD  million)  0.18 0.04 0.30 0 1 
Counterfeit goods  
Quantity ('000)  1,153  474 580 1,334  244 
Value (HKD  million)  54 25 47 83 72 
Note:  Excludes seizures of IPR  infringing goods intercepted at downtown devanning compounds and only 
those intercepted at the borders.  
Source:  Information provided by the authorities . 
 WT/TPR/S/ 450 • Hong Kong, China  
 
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  4  TRADE POLICIES BY SECTOR  
4.1  Agriculture, forestry, and fisheries  
4.1.1   Overview  
4.1.  During the review period, Hong  Kong,  China 's agriculture, fishing, and mining and quarrying 
sectors ' contribution to GDP remained modest, accounting for less than 0.1% in 2021 (the latest 
year for which sectoral GDP figures were available) (Table  1.1). The sectors ' participation in 
employment was also minimal and stood at 0.1% (or around 3,200 persons) in 2022. 
4.2.  Hong Kong,  China continues to rely mainly on imports for its food supply (Table  4.1). There is 
an estimated 7 km2 of farmed land in Hong  Kong,  China . The mos t common agricultural products 
are leafy vegetables, cut flowers, live pigs, and poultry; these are mainly consumed locally.  
4.1.2   Policy and regulatory developments  
4.3.  Between 2018 and 2022, the Agriculture, Fisheries and Conservation Department  (AFCD) 
continued t o be responsible for assisting in the production and marketing of agricultural produce, 
enforcing regulations, and preserving ecological integrity.  
4.4.  According to the authorities, there has been no change to the trade regulatory regime in the 
agriculture sec tor since the previous Review, and the focus of the agricultural policy, which is to 
promote the modernization and sustainable development of local agriculture, has remained 
unchanged under the New Agriculture Policy (NAP) issued in 2016.1 The support mea sures under 
the NAP are being implemented by the authorities progressively in stages. One of the main objectives 
of the  NAP include s establishing the Agricultural Park; Phase  1 has been commissioned progressively 
since the fourth  quarter of 2022. Meanwhile , the planning and design works for the remaining phases 
of the Agricultural Park are underway.  
4.1.2.1   Production and trade  
4.5.  Farms in Hong  Kong,  China  are mainly of small scale; in 2022, there were an 
estimated  2,500  farms, cultivating 730  ha of agricultural land.  In 2022, local production accounted 
for 100% of live poultry, 14% of live pigs , and 1.9% of fresh vegetables consumed domestically.2 
4.6.  In 2022, the value of crop production was estimated at HKD  414 million , with vegetable and 
flower production accounting f or most of the total value.3 In terms of animal production, there 
were 43 local pig farms and 29  local poultry farms in 2022. In the same year, the value of production 
was HKD  518 million for livestock and HKD  419 million  for poultry.4 
4.7.  Agricultural expor ts were on a decreasing trend during the review period. The top export 
products included fresh fruits and prepared foods. Some imports, such as plums, peaches, and 
bovine animals, also decreased until 2020.  
Table 4.1 Agricultural exports and imports, 2018 -22 
  2018  2019  2020  2021  2022  
Exportsa (USD  million)  11,775  10,604  8,021  8,903  8,090  
% of total exports  2.1 2.0 1.5 1.3 1.3 
Top 10 exports at HS  4-digit level ( % of total):  
0809 Plums and sloes, peaches and nectarines, and 
apricots, fresh  6.4 8.9 12.4 13.8 17.8 
2106 Food preparations n.e.s.  5.0 5.1 9.3 10.3 10.7 
0810 Fruit, fresh; n.e.c. in chapter 08  4.2 6.3 9.7 11.5 8.1 
 
1 Government of Hong  Kong,  China  (2016) , "Government Implements New Agriculture Policy ", 
14 January . Viewed  at: http://www.info.gov.hk /gia/general/201601/14/P201601140558.htm . 
2 AFCD , Agriculture in  Hong Kong, China . Viewed  at: 
https://www.afcd.gov.hk/english/agriculture/agr_hk/agr_hk.html . 
3 Government of Hong  Kong,  China  (2022) , Agriculture and Fisheries.  Viewed  at: 
https://www.gov.hk/en/about/abouthk/factsheets/docs/agriculture.pdf . 
4 AFCD  (2022 ), Agriculture  in Hong Kong, China . Viewed  at: 
https://www.afcd.gov.hk/english/agriculture/agr_hk/agr_hk.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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    2018  2019  2020  2021  2022  
0101 Horses, asses, mules and hinnies; live  1.2 5.4 7.1 8.1 7.1 
1905 Bread, pastry, cakes, biscuits, other 
bakers'  wares  (..) 2.6 3.2 4.2 4.8 5.6 
2208 Ethyl alcohol, undenaturedb 4.9 4.8 4.5 5.5 5.2 
0402 Milk and cream; concentrated or containing 
added  sugar or other sweetening matter  8.6 9.0 6.2 5.0 4.5 
2402 Cigars, cheroots, cigarillos and cigarettes; of 
tobacco or of tobacco substitutes  10.4 11.0 7.2 6.8 4.4 
2204 Wine of fresh grapes, including fortified wines  3.7 1.8 1.4 2.3 3.7 
0206 Edible offal of bovine animals, swine, sheep, 
goats  (..), fresh, chilled or frozen  10.0 3.9 1.7 1.3 3.2 
Importsa (USD  million)  26,038  24,423  22,150  23,545  20,299  
% of total imports  4.2 4.2 3.9 3.3 3.0 
Top 10 imports at HS  4-digit level (% of total):  
0809 Plums and sloes, peaches and nectarines, and 
apricots, fresh  3.8 5.0 4.8 7.6 7.6 
2106 Food preparations n.e.s.  4.4 4.1 4.6 5.5 6.0 
2204 Wine of fresh grapes, including fortified wines  5.9 4.6 4.4 5.8 5.0 
0810 Fruit, fresh; n.e.c. in chapter 08  2.7 3.6 4.8 5.6 4.7 
0207 Meat and edible offal of poultry, fresh, chilled or 
frozen  5.3 5.1 4.4 3.4 3.6 
0101 Horses, asses, mules and hinnies; live  1.0 2.8 3.2 3.6 3.5 
0206 Edible offal of bovine animals, swine, sheep, 
goats  (..), fresh, chilled or frozen  7.6 6.7 7.1 5.8 3.4 
0202 Meat of bovine animals; frozen  8.0 6.7 7.5 5.8 3.3 
2201 Waters, not containing added sugar  2.5 2.7 2.7 2.8 3.2 
0203 Meat of swine; fresh, chilled or frozen  2.6 2.4 3.5 3.4 3.0 
a WTO definition.  
b Ethyl alcohol, undenatured; of an alcoholic strength by volume of < 80% vol.; spirits, liqueurs and 
other spirituous beverages.  
Note:  Top 10 agricultural exports and imports by HS  4-digit are sorted by the year 2022.  
Source:  WTO Secretariat calculations, based on trade figures from UN Comtrade database.  
4.1.2.2   Farm support measur es 
4.8.  The focus of farm support measures has remained unchanged since the previous Review; it 
includes providing basic infrastructure, extension, and advisory services, as well as credit facilities 
to farmers. Support measures include the AFCD's crop speciali sts undertaking research in  pest 
control, crop husbandry, soil management, new product varieties, and production techniques. In 
addition, the AFCD has developed specific production technologies to enhance the efficiency and 
economic benefits of the industr y. During the review period, the Controlled Environment Hydroponic 
Research and Development Centre was established to advance hydroponic technology and facilities 
for the industry and investors. According to the authorities, hydroponic technologies are int ended to 
optimize use of space, reduce labour power,  and improve production efficiency. Furthermore, in 
order to improve productivity , the authorities introduced and promoted smart greenhouse 
technology and farm mechanization through a variety of modern an d labour -saving devices and farm 
machineries.  
4.9.  The AFCD and its related marketing organizations, namely the Vegetable Marketing 
Organization (VMO), also provide infrastructure support, such as the rehabilitation of fallow land and 
the improvement of irrigat ion and drainage facilities, and technical services to various primary 
industries, including crop farming and livestock keeping.5 
4.10.  During the review period, the authorities continued to provide loans on concessional terms 
and emergency relief in times of n atural disasters.6 The AFCD's total loan funds were 
HKD 50.1 million as at December  2022.7 
 
5 Government of Hong  Kong,  China  (2022) , Agriculture and Fisheries.  Viewed  at: 
https://www.gov.hk/en/about/abouthk/factsheets/docs/agriculture.pdf . 
6 AFCD , Emergency Relief Fund . Viewed  at: 
https://www.afcd.gov.hk/english/agriculture/agr_loan/agr_loan_erf/agr_loan_erf.html ; and 
https://www.afcd.gov.hk/english/agriculture/agr_loan/agr_loan_erf/files/ERF_Leaflet_May_2017.pdf . 
7 Government of Hong  Kong,  China  (2022) , Agriculture and Fisheries . Viewed  at: 
https://www.gov.hk/en/about/abouthk/factsheets/docs/agriculture.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  4.11.  The AFCD, in cooperation with the VMO, continued to manage the Accredited Farm Scheme.8 
Under the Scheme, accredited vegetable farms are monitored for pest contro l and for the proper use 
of pesticides; these farms are allowed to sell their produce at accredited retail outlets with 
the assistance of the VMO.9 As at December  2022, a total of 315  farms were accredited under the 
scheme, supplying an estimated 12  tonne s of produce daily.10 
4.12.  The AFCD also continued to provide technical support to local farmers producing organic 
vegetables and fruits; the support related to, inter alia, organic production standards and 
greenhouse technology. There were 342  organic farms producing an estimated 6 tonnes of 
vegetables a day as of  December  2022.11 
4.13.  The Sustainable Agricultural Development Fund (SADF), launched in December  2016, 
continues to provide financial support to encourage farm mechanization and implement a gricultural 
development projects.12 During the review period, the authorities commenced the consultancy study 
on agricultural priority areas (APAs) to explore the feasibility of designating large areas of quality 
agricultural land as APAs and facilitate th e use of such areas for active farming through suitable 
measures.  
4.14.  Between June  2018 and March  2023, Hong  Kong,  China  notified to the WTO  Committee 
on Agriculture all of its domestic support measures under the Green Box (i.e.  exempt from the 
reduction commi tment).13 The total value of these measures increased from HKD  123.1  million 
in 2016-17 to HKD  251.3  million  in 2022-23. Pest and disease control measures accounted for 
over 45% of total annual outlays. Hong  Kong,  China  also notified that no export subsidi es were 
provided to agriculture sector during the review period.14 
4.1.3   Rice 
4.15.  According to the authorities, the Rice Control Scheme (RCS) has remained unchanged since 
the previous Review. Rice continued to be a classified as a staple food product and is schedule d as 
a reserved commodity under the Reserved Commodities Ordinance (Cap.  296).15 There is no rice 
production in Hong  Kong,  China  and all rice for local consumption is imported. The RCS, as stipulated 
in the Ordinance, is to guarantee a stable supply of ric e by retaining a reserve stock that would be 
sufficient for domestic consumption for a reasonable period to cater for emergencies or short -term 
shortage of supply.16 The stocks have not been released from the reserve since the previous Review.  
4.16.  As in the previous review period, the Director -General of Trade and Industry issues licences 
for the import and export of rice. In general, only business registered as stockholders of rice may 
import rice, and the registered stockholders are required to make an unde rtaking to import specific 
quantities on a quarterly basis. According to the authorities, by end -April 2023, there 
were 245 registered stockholders of rice.  
 
8 AFCD, Introduction to the Accredited Farm Scheme . Viewed  at: 
https://www.afcd.gov.hk/english/agriculture/agr_accfarm/agr_accfarm_intro/agr_accfarm_ intro.html . 
9 The VMO is a statutory authority that was first established on  3 September 1946 to provide a stable 
supply of vegetables to the public. VMO, 2020-2021 Annual Report . Viewed  at: 
https://www.vmo.org/uploads/pdf/20_21 -Annual -Report.pdf . 
10 Government of Hong  Kong,  China  (2022) , Agriculture and Fisheries . Viewed  at: 
https://www.gov.hk/en/about/abouthk/factsheets/docs/agriculture.pdf . 
11 Government of Hong  Kong,  China  (2022) , Agriculture and Fisheries . Viewed  at: 
https://www.gov.hk/en/about/abouthk/factsheets/docs/agriculture.pdf . 
12 AFCD , SADF: Aim . Viewed  at: https://www.afcd.gov.hk/english/agriculture/sadf/sadf_aim.html . 
13 WTO documents G/AG/N/HKG/44, 25  June 2018; G/AG/N/HKG/44 Corr.1, 25  June 2018; 
G/AG/N/HKG/46, 25  June 2019; G/AG/N/HKG/48, 17  June 2020; G/AG/N/HKG/50, 24  June 2021; 
G/AG/N/HKG/52, 21  June 2022; and G/AG/N/HKG/54, 30  May 2023. 
14 WTO documents G/AG/N/HKG/43, 12  January  2018; G/AG/N/HKG/45, 22  January  2019; 
G/AG/N/HKG/47, 14  January  2020; G/AG/N/HKG/49, 21  January  2021; G/AG/N/HKG/51, 10  January  2022; 
and G/AG/N/HKG/53, 18  January  2023. 
15 Reserved Commodities Ordinance (Cap.  296) of 1979. Viewed  at: 
https://www.elegislation.gov.hk/hk/cap296!en?IN DEX_CS=N . 
16 Trade and Industry Department , Import and Export of Goods: Rice . Viewed  at: 
https://www.tid.gov.hk/english/import_export/nontextiles/nt_rice/nt_rice.html ; and 
https://www.tid.gov.hk/english/import_export/nontextiles/nt_rice/rice_maintain.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  4.1.4   Fisheries  
4.17.  During the review period, the capture and aquaculture fisheries continued to mainly suppl y 
local consumers. In 2022, the fishing and aquaculture supplied 17% of Hong  Kong,  China 's seafood 
consumption and pond fish farmers supplied roughly 5% of the freshwater fish consumed.17 
4.18.  Fishponds are located in the north -western part of Hong  Kong,  China and produce fish species 
such as carp, tilapia, grey mullet, jade perch, seabream, and spotted scat. In 2022, fishponds 
produced 2,073  tonnes of freshwater fish with a value of HKD  55 million. In addition, in 2022, 
marine fish culture production was 587  tonnes, valued at HKD  60 million .18 The most common 
cultured fish include green grouper, hybrid grouper, Russell's snapper, mangrove snapper, cobia , 
and pompano.  
4.19.  During the review period, th e AFCD provided assistance to fishers such as infrastructure, 
technical advice, liaison services , and training. In addition, the AFCD provided several loans and 
grants, which were dispersed to fishers and fish farmers for production and sustainable develop ment 
purposes. The loans and grants included the Fisheries Development Loan Fund (FDLF); Fish 
Marketing Organization Loan Fund (normal loan  and fishing moratorium loan); Kadoorie Agriculture 
Aid Loan Fund; and the Sustainable Fisheries Development Fund (SF DF) (Table  4.2). Between 2018 
and 2022, 2,015  loans and 24  grants with a value of HKD  577.4  million  and HKD154.8  million , 
respectively, were issued by the authorities.  
Table 4.2 AFCD l oan programmes for fisher ies, 2018 -22 
Loan fund  Loans issued  
Number  Amount  
(HKD  million)  
FDLF 17 184.1  
Fish Marketing Organization Loan Fund (normal loan)  2 1.4 
Fish Marketing Organization Loan Fund (fishing moratorium loan)  1,976  388.8  
Kadoorie  Agriculture Aid Loan Fund  20 3.1 
Total 2,015  577.4  
Grant  Grants issued  
Number  Amount  
(HKD  million)  
Sustainable Fisheries Development Fund (SFDF)  24 154.8  
Source:  AFCD. The number of loan s issued includes only those with one -off disbursement or with first 
instalment of disbursement between 1 April 2018 and 31 March  2022.  
4.20.  The AFCD aims to encourage development of sustainable fisheries and designated 4 new Fish 
Culture Zones (FCZs) with a total domestic sea area of 590  ha (three  times the total area of all the 
current FCZs). The AFCD  requires operators to obtain licences if they wish to establish in the FCZs. 
The AFCD is planning to gazette the new FCZs in late 2023 and issue licences in the new FCZs 
in early 2024.  
4.21.  On 21  August 2023, Hong  Kong,  China  deposited its instrument of acceptance of the 
Agreement on Fisheries Subsidies  (Section  2.3.1). The Agreement of Fisheries Subsidies restricts 
illegal, unreported and unregulated fishing, bans support for fishing overfished s tocks, and 
terminates subsidies for fishing on the unregulated high seas.  
4.2  Mining and energy  
4.22.  In 2021, electricity, gas and water supply, and waste management accounted for 
around  1.3% of GDP (Table  1.1). H ong Kong,  China  produces limited amount of primary e nergy; 
between 2018 and 2022, it continued to be a net energy importer. The imports and exports for 
 
17 Government of Hong  Kong,  China  (2016), "Government Implements New Agriculture Polic y", 
14 January . Viewed  at: http://www.info.gov.hk/gia/general/201601/14/P201601140558.htm . 
18 Government of Hong  Kong,  China  (2016), "Government Implements New Agriculture Policy", 
14 January.  Viewed  at: http://www.info.gov.hk/gia/general/201601/14/P201601140558.htm . WT/TPR/S/ 450 • Hong Kong, China  
 
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  primary energy requirements in Hong  Kong,  China  in 2022 were 861,407  TJ and 3,308  TJ, 
respectively.19 
4.2.1   Policy and regulatory developments  
4.23.  The legislation regulating market conditions in the energy sector has remained largely 
unchanged since the previous Review.20 The Environment Bureau was renamed the Environment 
and Ecology Bureau after the government reorganization in 2022. According to the au thorities, the 
Bureau monitors prices and the strategic reserves of energy and formulate policies and targets 
relating to the future fuel mix for electricity generation having regard to the energy policy and 
climate change objectives . 
4.24.  The authorities issue d the ninth Technical Memorandums I in 2021 under the Air Pollution 
Control Ordinance (Cap.  311) to set the emission caps on three air pollutants (sulphur dioxide  (SO2), 
nitrogen oxides (N ox), and respirable suspended particulates (RSP)) for power plants f or 2026 and 
beyond. Compared with the first TM, the emission allowances for power plants on  SO2, N ox, and 
RSP under the ninth TM have been reduced by about 89%, 74% , and 71%, respectively. According 
to the authorities, Hong  Kong,  China  has achieved the emi ssion targets for 2020 (reducing emissions 
of SO2, N ox, and RSP by 55%, 20% , and 25% , respectively , compared with the  2010 levels).  
4.25.  The inter -departmental Steering Committee on Climate Change and Carbon Neutrality 
formulates the overall strategy and overse es the coordination of various actions, while the Council 
for Carbon Neutrality and Sustainable Development advises the Government on decarbonization 
strategies and promotes participation in deep decarbonization by different sectors of the community. 
Hong Kong,  China has set a target to achieve carbon neutrality before 2050 and the interim 
decarbonization target to reduce its carbon emissions by 50% before 2035 , as compared with 
the 2005 level. In October  2021, the Government launched the Climate Action Plan 2050, which lists 
four decarbonization strategies: net -zero electricity generation, energy saving and green buildings, 
green transport , and waste reduction.21 
4.26.  In 2015, Hong  Kong,  China  announced an increase in the percentage of local gas -fired 
generation electricity to around 50% of the total fuel mix in 2020. In addition, the target for nuclear 
imports is 25% of the fuel mix, while the remaining demand for electricity would be met by coal -fired 
generation. According to the authorities, Hong  Kong, China  achieved the fuel mix targets set 
for 2020; gas -fired generation currently provides about half of Hong  Kong,  China 's electricity as 
compared with about a quarter in 2015, while nuclear import s account for around a quarter of the 
fuel mix. The shar e of coal -fired generation has dropped to about a quarter, substantially lower than 
its share in 2015 (about 50% ). 
4.27.  According to the authorities, the electricity market (electricity generation, transmission , and 
distribution) in Hong  Kong,  China  is regulate d by the Scheme of Control Agreements (SCAs) signed 
between the authorities and the two power companies, each composed of two companies: (i)  CLP 
Power Hong Kong Ltd and Castle Peak Power Company Ltd (CLP); and (ii)  the Hong  Kong Electric 
Company Ltd and HK  Electric Investments Ltd (HEC). All four are privately owned. The SCAs set out 
the rules and obligations that CLP  and HEC must adhere to. The SCAs also set the amount of returns 
to shareholders and monitor CLP 's and HEC's electricity -related financial aff airs. 
4.28.  The price of electricity is also based on mutual agreements between the authorities and CLP 
and HEC under the SCAs, with the rate of the basic tariffs unchanged since the previous Review. 
The SCAs set the regulation of tariffs and permitted rates of return. Electricity companies do not 
have any exclusive rights. The current SCAs with CLP and HEC were signed on 25  April 2017 and 
took effect on 1  October  2018 for CLP and 1  January  2019 for HEC.  
 
19 Census and Statisti cs Department. Hong Kong Energy Statistics Annual Report. Viewed  at: 
https://www.censtatd.gov.hk/en/wbr.html?ecode=B11000022022AN22&scode=90 . 
20 The Electricity Ordinance (Cap.  406) and the Gas Safety Ordinance (Cap.  51) regulate the supply of 
electricity and gas, the registration of generating facilities, contractors, and workers for electrical and gas 
installations, wiring and gas installation standards, and the distribution and use of electricity and gas.  
21 Environment and Ecology Bureau  (2021),  Hong Kong's Climate Action Plan  2050. Viewed  at: 
https://c nsd.gov.hk/wp -content/uploads/pdf/CAP2050_booklet_en.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  4.29.   CLP supplies electricity to Kowloon and New Territories, i ncluding several outlying islands. 
HEC supplies electricity to Hong Kong Island, Lamma Island , and Ap Lei Chau.  
4.30.  In Hong  Kong,  China , there are no restrictions on the import and distribution of refined oil 
products (e.g.  petroleum, diesel, and liquefied pet roleum gas (LPG)). LPG was used for household, 
commercial and industrial purposes in 2022.22 In addition, the majority of taxis use LPG and the 
remaining use petrol and electricity, while over 50% of public light buses use  LPG as 
of March  2023.23 
4.31.  Hong Kong,  China  imports and exports a limited amount  of electricity through a grid 
connected with Ch ina. A total 558  million  kWh (556  million  kWh under Shekou Supply Contract 
and 2 million  kWh under economy interchange) were exported to China in 2018, while no electricity 
was exported to China in 2022. According to the authorities, CLP and HEC import all  of their natural 
gas through pipelines connected to China. CLP imports natural gas from two sources, one from gas 
fields in the South China Sea via a 780  km submarine pipeline, another from the Second West -East 
Natural Gas Pipeline through Shenzhen DaChan  Island to its power stations for electricity generation. 
In addition, HEC supplies natural gas from the LNG terminal in Shenzhen (Dapeng  Bay) through a 
93 km submarine pipeline for electricity generation.  
4.32.  According to the authorities, since 2017 CLP and H EC have been jointly developing an offshore 
LNG terminal within Hong  Kong,  China  waters with submarine pipelines connecting to the power 
plants at Black Point and Lamma. The LNG terminal is scheduled to commence operation at the end 
of 2023 and will provid e an alternative gas supply source to meet the fuel supply needs of the two 
power companies. The intention is to enhance the diversity and security of Hong  Kong,  China 's gas 
supply. Furthermore, the authorities envision that it will enable the power compan ies to have direct 
access to the international LNG market, thus strengthening their bargaining power in obtaining 
competitively priced gas. This may reduce the fuel costs of the power companies , ultimately 
benefit ing consumers.  
4.33.  During the review period, Ho ng Kong,  China  implemented renewable energy policies to 
address the challenges posed by climate change. In 2018, the Feed -in Tariff (FiT) Scheme 
(implemented by  SCAs with CLP and HEC) was developed to encourage private -sector investment 
in renewable energy.24 In order to recover investment costs in renewable energy technology (such 
as wind and solar) by individuals, the scheme allows them to sell the renewable power they 
generated to power companies at a rate higher than the normal electrici ty tariff rate.25 It is estimated 
that about  300 million  kWh of electricity will be generated each year , which would be sufficient to 
meet the electricity demands of about 90,000  households.26 
4.3  Manufacturing  
4.34.  The GDP share of the manufacturing sector was stable during the review period, at 1.0% 
in 2021 (Table  1.1). Similarly, the employment share during the same period remained relatively 
stable, accounting for 2.1% of total employment in 2022 (Table  1.1). In 2021, 98.6% of enterprises 
in the manufacturing sector were small - and medium -sized enterprises (SMEs), employing less 
than 100 persons each. During the review period, Hong  Kong,  China  did not implement any new 
regulations. In terms of policy, the authoriti es released the Hong Kong Innovation and Technology 
 
22 Census and Statistics Department , Hong Kong Energy Statistics Annual Report 2022 . Viewed  at: 
https://www.censtatd.gov.hk/en/wbr.html?ecode=B11000022022AN22&scode=90 . 
23 Transport Department , Monthly Traffic and Transport Digest , March 2023. Viewed  at: 
https://www.td.gov.hk/en/transport_in_hong_kong/transport_figures/monthly_traffic_and_transport_digest/2
023/202303/ind ex.html . 
24 Government of Hong  Kong,  China , Feed-in Tariff . Viewed  at: 
https://www.gov.hk/en/residents/environment/sustainab le/renewable/feedintariff.htm . 
25 In 2022, the FiT rates were HKD  4 per unit for RE systems of generating capacity up to 10  kW; 
HKD 3 per unit for renewable energy systems of generating capacity above 10  kW and up to 200  kW; and 
HKD 2.5 per unit for renewable energy systems of generating capacity above 200  kW and up to 1  MW. The 
Government of the Hong  Kong, China , Feed-in Tariff . Viewed  at: 
https://www.gov.hk/en/residents/environment/sustainable/renewable/feedintariff.htm . 
26 Government of Hong  Kong,  China  (2022), "Government Announces New Feed -in Tariff Rates and 
Introduces Facilitation Measure s on Installation of Solar Photovoltaic Systems in Open Car Parks by Private 
Sector", 26  April. Viewed  at: 
https://www.info.gov.hk/gia/general/202204/26/P2022042600448.htm?fontSize=3 . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Development Blueprint in December  2022; the Government plans to focus on developing technology 
industries in which Hong  Kong,  China  enjoys competitive advantages and are of strategic 
significance , includi ng advanced manufacturing.  
4.4  Services  
4.35.  The services sector is the main contributor of GDP and employment (Section s 1.1 and 1.2.1). 
Total trade in services amounted to HKD  1,143  billion (41% of GDP) in 2022. In 2021, the value of 
exports in commercial services  was USD  77 billion (rank ed 22nd among the leading exporters of 
commercial services).27 Analy zed by service subsectors, transport was the largest component in 
exports of services followed by financial services. In the same year, imports of commercial services 
were valued at USD  62 billion  and transport and manufacturing services were the main contrib utors 
to services imports.  
4.36.  Hong Kong,  China 's General Agreement on Trade in Services (GATS)  commitments have not 
changed since the previous Review.28 In terms of its FTA commitments regarding services, changes 
to existing FTAs included those with China and  Chile (Table  2.2). During the review period, new 
agreements with services commitments entered into force , including an FTA with Georgia FTA  
(13 February  2019). Modifications compared with Hong  Kong,  China's GATS  commitments have 
been made in sectors such as business services, communications services,  distribution services, 
financial services, tourism and travel -related services, and transport services. In addition, the FTA 
with Australia, which entered into force on 17  January  2020, specified modifications  compared with 
Hong Kong,  China 's GATS commitments were made on sectors such as professional services, 
transport services, financial services, telecommunication services , and various business services.29 
The FTA with ASEAN entered into force on 12 February  2021 and also included commitments on 
trade in services (Section  2.3.2.1).  
4.4.1   Financial services  
4.4.1.1   Overview  
4.37.  Hong Kong, China  is one of the leading international financial centre s30; highlighting the 
importance of the sector for the economy. The shar e in GDP of the finance and insurance sector has 
risen to  21.3% in 2021, from 19.8% in 2018 (Table  1.1), reflecting both the strength of the sector 
and the fact that financial and insurance services were less impacted by the COVID -19 pandemic 
than were other sectors in the economy , such as transportation. In line with its growth, the financial 
and insurance services sector's contribution to total employment rose from 6.8% in 2018 to  7.4% 
in 2022. 
4.38.  The trade surplus of financial and insurance services grew du ring the review period. Net 
financial services exports (excluding insurance and pension services) at current market prices 
increased from HKD  125,478  million in 2018 to HKD  147,449  million  in 2022. Exports of financial 
services in real terms also increased  in 2020 mainly due to active cross -border financial and 
fundraising activities.31 By contrast , net exports of insurance and pension services at current market 
prices decre ased during the same period. The total stock of outward direct investment by 
Hong Kong, China 's enterprise groups (HKEGs) whose major economic activities are financial 
services (banking, insurance , and financing) increased from HKD 735.6  billion  in 2018 to 
HKD 1,106.4  billion  in 2021. 
 
27 WTO (2022), World Trade Statistics Review 2022 . Viewe d at: https://www.wto.org/english/  
res_e/booksp_e/wtsr_2022_e.pdf . 
28 WTO document WT/TPR/S/380/Rev.1, 30  January  2019. 
29 WTO document WT/REG400/N/1,  17 January  2020. 
30 Hong Kong Monet ary Authority.  Hong Kong as an International Financial Centred . Viewed  at: 
https://www.hkma.gov.hk/eng/key -functions/international -financial -centre/hong -kong-as-an-international -
financial -centre/ . 
31 Government of Hong Kong , China  (2021) , 2020 Economic Background and  2021 Prospects . 
Viewed  at: https://www.hkeconomy.gov.hk/en/pdf/er_20q4.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  4.4.1.2   Banking services  
4.39.  Despite the uncertain domestic macro -environment and instability in international financial 
markets, the banking services subsector maintained its resilience during the period under review.32 
According to the authorities, i n 2018, 186  banks were operating in Hong  Kong,  China , of which 
42 were overseas -controlled banks and 135  were branches of overseas -incorporated banks 
(Box 4.1); in 2022, there were 182 banks , including 43 overseas -controlled banks and 129  branches 
of overseas -incorporated banks . The top t hree banks' assets as a share of the total assets of all 
commercial banks increased between 2018 -22. 
Box 4.1 Banking subsector  
Number of banks and recent consolidations  
Number of banks by type (2022): 155 licensed banks; 15 restricted licence banks; 12 deposit -taking 
companies; and 37 local representative offices of overseas banking institutions  
The top three banks' assets as a share of the total assets of all commercial banks 2018 -22 
2018: 33%; 2019: 33%; 2020: 34%; 2021: 36%; 2022: 37% 
Authorized institutions (AIs)  total assets at end -2018 and end -2022 
2018: HKD  24,043  billion  (of which, overseas -controlled: HKD  7,595  billion ; branches of foreign -overseas -
incorporated: HKD  10,161  billion)  
2022: HKD  27,029  billion  (of which, overseas -controlled: HKD  9,395  billion ; branches of foreign -overseas -
incorporated: HKD  9,710  billion ) 
Lending activities  (AI loans outstanding at end -2018 and end -2022)  
2018: HKD  9,723  billion  (of which domestic lending:  70%; overseas lending: 30%) 
2022: HKD  10,571  billion  (of which domestic lending: 73%; overseas lending: 27%) 
AI investment in listed and unlisted shares at end -2018 and end -2022 
2018: HKD  240 billion ; 2022: HKD  510 billion  
Source:  Information provided by the authorities.  
4.40.  The Hong Kong Monetary Authority (HKMA) remains mainly responsible for the authorization, 
regulation , and supervision of banks.33 As a supervisory authority, the HKMA  aims to ensure that 
banks are resilient to shocks and able to recover their positions in response to crises, ultimately 
helping to prevent failures. The HKMA is also responsible for the authorization of licensed banks,  
restricted licence banks , and deposit -taking companies (collectively known as authorized 
institutions  (AIs)).  
4.41.  During the review period, several regulations (including those relating to the identification of 
Systemically Important Banks and the Countercyclical Capital Buffer) were updated and enhanced. 
The Interest Rate Risk in the Banking Book (IRRBB) standard , part of the Basel Framework , was 
implemented in 2019 to ensure local banks are sufficiently resilient to adverse interest rate 
movements . The HKMA  enhanced the supervision of AIs' credit and housing market risk 
 
32 Hong Kong Monetary Authority  (HKMA) , Annual Report 2022 . Viewed  at: 
https://www.hkma.gov.hk/media/eng/publication -and-research /annual -report/2022/AR2022_E.pdf . 
33 HKMA , Banking Regulator y and Supervisory Regime . Viewed  at: https://www.hkma.gov.hk/eng/key -
functions/banking/banking -regulatory -and-supervisory -regime/ . WT/TPR/S/ 450 • Hong Kong, China  
 
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  management.34 The HKMA also assisted AIs  to fur ther develop their operational and cyber resilience. 
A new Supervisory Policy Manual (SPM) module  OR-2 on operational resilience and a revised version 
of the SPM module  TM-G-2 on business continuity planning were published on 31  May 2022. 
Relatedly, the SP M Module OR -1 on operational risk management was revised in July  2022 to 
implement the corresponding updated Basel principles. The HKMA issued the "All banks go fintech" 
initiative in 2021 as part of its Fintech 2025 programme to promote the adoption of Fintech by AIs 
and encourage them to fully digitalize their operations.  
4.42.  In view of the rapid development of Buy Now, Pay Later (BNPL) products and associated 
concerns over impulsive borrowing and even over -borrowing by customers, the HKMA issued 
on 2 Septemb er 2022 regulatory guidance on enhancing consumer protection regarding these 
products . The measures include promoting responsible borrowing, disclosure of fees and charges, 
key facts statement, chargeback mechanism, and creditworthiness assessment. Banks were required 
to implement these measures not later than the end of 2022. In the same year, the  HKMA also 
introduced an  additional payment arrangement for property refinancing in collaboration with the 
banking industry. The additional arrangement, known formally as the Payment Arrangements for 
Property Transactions (PAPT), enables mortgage customers to transfer siz eable  payment s of funds 
required for a residential property transaction directly from bank to bank, as an alternative to the 
prevailing practice of routing such payments via law firms. The additional arrangement aims to 
facilitate the development of digital financ e and better protect mortgage customers against any 
unforeseeable circumstances leading to their funds being frozen.  
4.43.  During the review period, the HKMA also worked with the Securities and Futures Commission 
(SFC) to put in place a regulatory framework for sustainable development of virtual assets and to 
provide guidance on distribution of insurance -linked securities and related products, streamlined the 
investment product selling process , and introduced a new regulatory regime on trust business.  
4.44.  The HKMA  launched the Credit Reference Platform (CRP) in 2022. The industry associations 
then selected three credit reference agencies (CRAs) to provide consumer credit reference services 
under the Multiple Credit Reference Agencies Model.  
4.45.  According to the authorities, during the COVID -19 pandemic, some residents 
in Hong Kong,  China faced difficulties in reactivating their dormant or suspended bank accounts 
in China because of their inability to visit the banks' branches in China in person due to the travel 
restrictions  or expired travel documents . In 2022, the HKMA coordinated with the relevant banks 
and Chinese authorities and issued guidance to banks to facilitate reactivation of such accounts 
without the need for customers to go to China in person.  
4.46.  The anti-money laundering and counter -financing of terrorism (AML/CFT) risk assessment 
guidelines were revised on  30 September  202135, with t he aim of strengthen ing the AML/CFT  system 
by the introduction of the Fraud and Money Laundering Intelligence Taskforce, and the improvement 
of response to scams.  
4.47.  During the review period, the HKMA  implemented the Basel large exposures framework and 
continued to implement other international supervisory standards, including the revised Basel capital 
standards on counterparty credit risk and banks' equity investments in funds and disclosure 
requireme nts associated with the regulatory capital standards. The HKMA is also taking steps to 
implement the Basel  III final reform package (and associated disclosure requirements) on a date no 
earlier than 1  January  2024. The HKMA also continued to operationalize  the resolution regime 
established under the Financial Institutions (Resolution) Ordinance. Two  rules were made and 
five Code of Practice chapters were issued during the review period , setting out the resolution 
standards regarding loss -absorbing capacity  (LAC)36, operational continuity, early termination risk, 
 
34 IMF (2022), Staff R eport for the 2022 Article  IV Consultation , IMF Country Report No.  22/69. 
Viewed  at: https://www .imf.org/en/Publications/CR/Issues/2022/03/07/Peoples -Republic -of-China -Hong-Kong-
Special -Administrative -Region -2022-Article -IV-513945 . 
35 SFC (2021) , Prevention of Money Laundering and Terrorist Financing Guideline Issued  by the 
Securities and Futures Commission for Associated Entities . Viewed  at: https://www.sfc.hk/ -
/media/EN/assets/components/codes/files -current/web/guidelines/prevention -of-money -laundering -and-
terrorist -fi/AML -Guideline -for-AEs_Eng_30 -Sep-2021.pdf?rev=d29f4f8d2f10433e9ad44366f3cfd116 . 
36 Loss-absorbing capacity is defined as when sufficient financial resources are required to absorb losses 
and to recapitalize a failing financial institution. HKMA, Loss-absorbing Capacity . Viewed  at: WT/TPR/S/ 450 • Hong Kong, China  
 
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  and liquidity and funding.  Resolution planning has been advanced for the large locally incorporated 
banks in coordination with home and host authorities. In particular, the domestic systemically 
important banks have built up a new layer of LAC resources by further issuing capital and non -capital 
LAC debt instruments.  In addition, the HKMA continued to participate in international and cross -
border resolution cooperation, including through the Financial  Stability Board, Executives' Meeting 
of East Asia -Pacific Central Banks , and crisis management groups for global banks.  
4.4.1.3   Insurance services  
4.48.  Hong Kong,  China 's insurance penetration as a percentage of GDP and insurance density 
increased during the review pe riod (Table  4.3). In 2022, the insurance penetration increased further  
as pandemic and travel restrictions eased and Chinese customers resumed business in 
Hong Kong,  China .37 In 2020, the insurance services sector employed 2% of the total employment 
(72 70 0 persons).38 The insurance industry comprises the following groups life insurance 
underwriting; non -life insurance underwriting; and activities auxiliary to insurance and pension 
funding.  
Table 4.3 Insurance penetration and density, 2018  and 21 
  2018  2021  
Insurance penetration (% of GDP)  18.1 20.2 
Insurance density (USD/inhabitants)  8,853  10,060  
Source:  Information provided by the authorities.  
4.49.  According to the authorities , the life insurance premium volume to GDP increased from  16.2% 
to 18.1% in 2021. Similarly, the non -life insurance premium volume to GDP increased in the same 
period from 1.9% to 2.1%. In 2022 the subsector was composed of 164  insurance companies, 
slightly  up from 161 in 2018 (Table  4.4). 
Table 4.4 Insurance companies operating in Hong  Kong,  China , by type of activity , 
2018  and 2022 
(Number)  
Type of insurance compan y 2018  2022  
Direct life insurers  49 53 
 Incorporated inside Hong  Kong,  China  21 26 
 Incorporated outside Hong  Kong,  China  28 27 
Non-life insurers  93 89 
 Incorporated inside Hong  Kong,  China  57 59 
 Incorporated outside Hong  Kong,  China  36 30 
Composite  19 19 
 Incorporated inside  Hong Kong,  China  11 10 
 Incorporated outside Hong  Kong,  China  8 9 
Special purpose  0 3 
Total  161 164 
Source:  Information provided by the authorities.  
4.50.  Insurance industry assets increased between 2018 and 2022 due to further increases in  
business receipts and other income of the insurance industry (Table 4.5).39 
 
https://www.hkma.gov.hk/eng/key -functions/banking/bank -resolution -regime/bank -resolution -standards/loss -
absorbing -capacity/ . 
37 Insurance Busines s. Hong Kong insurance industry expected to rebound in 2023 . Viewed  at: 
https://www.insurancebusinessmag.com/asi a/news/breaking -news/hong -kong-insurance -industry -
expected -to-rebound -in-2023-432053.aspx . 
38 Census and Statistics Department. Hong Kong Monthly Digest of Statistics April  2022. Viewed  at: 
https://www.censtatd.gov.hk/en/data/stat_report/product/FA100091/att/B72204FB2022XXXXB0100.pdf . 
39 Census and Statistics Department . Hong Kong Monthly Digest of Statistics April 2022. Viewed  at: 
https://www.censtatd.gov.hk/en/data/stat_report/pr oduct/FA100091/att/B72204FB2022XXXXB0100.pdf . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table 4.5 Insurance industry assets, 2018  and 2 022 
(HKD  billion)  
  2018  2022  
Industry total assets  3,210.4  4,606.7  
Life industry total assets  3,004.3  4,327.3  
Non-life industry  
total assets  206.1  279.4  
Source:  Information provided by the authorities.  
4.51.  The Insurance Authority (IA) is the independent statutory regulator that issues licences to 
and supervises insurers and insurance intermediaries.40 It also has regulatory powers in relation to 
licensing, inspection, investigation, and disciplinary sanctions. The authorities state that, 
betwe en 2018 and 2022, there were changes in the regulatory regime of insurance services such as 
the introduction of regulatory initiatives to strengthen the regime and the adoption of new measures 
aimed at safeguarding the interest of insuring public.  
4.52.  The Insurance Ordinance (Cap.  41), which regulates the provision of insurance services, was 
amended a few times during the period under review.41 On 23  September  2019, the IA became the 
sole regulator to licence and supervise all insurance intermediaries in Ho ng Kong,  China .42 It took 
over this task from the three Self -Regulatory Organi zations, i.e.  the Insurance Agents Registration 
Board, the Hong  Kong Confederation of Insurance Brokers, and the Professional Insurance Brokers' 
Association.  
4.53.  Since  2018, there ha ve also been revisions and updates to the prudential regulations. The  IA 
issued a Guideline on Enterprise Risk Management on 5  July 2019 in accordance with Section  133 
of the Insurance Ordinance  (Cap.  41) to regulate and supervise the insurance industry for the 
protection of existing and potential policyholders.43 The Guideline requires insurers to establish an 
enterprise risk management framework for solvency purposes to identify, measure, report, monitor , 
and manage the insurers' risk exposure.  In addition, it requires insurers to provide Own Risk and 
Solvency Assessment Report to the IA. The IA further issued key observations from the first  Own 
Risk and Solvency Assessment Report on 28  March  2022.  
4.54.  On 29  March  2021, amendments to the Insurance O rdinance (Cap.  41) on the group -wide 
supervision (GWS) framework became effective.44 The GWS framework also includes the Guideline 
on Group Supervision45, which spells out principles and standards for designated insurance holding 
companies on various areas  including enterprise risk management, corporate governance, capital 
requirements , and public disclosure.  The GWS framework aims at aligning the regulatory regime 
with the international standards and best practices, with a view to positioning Hong  Kong,  China as 
an attractive base for group headquarters and a fitting regional co -ordinator of relevant jurisdictions. 
On the same date, the bespoke regulatory regime for special purpose insurers became effective; 
this aims to facilitate  insurance -linked securiti es (ILS) issuance in Hong  Kong,  China. The 
Government launched a two -year pilot ILS grant scheme in 2021, which was extended for another 
two years from 2023.46 
 
40 IA, Statutory Functions . Viewed  at: https://www.ia.org.hk/en/aboutus/role/statutory_functions.ht ml. 
41 Insurance Ordinance (Cap 41). Viewed  at: https://www.elegislation.gov.hk/hk/cap41 . 
42 IA, History . Viewed  at: https://www.ia.org.hk/en/aboutus/role/history.html . 
43 IA, Guideline on Enterprise Risk Management . Viewed  at: 
https://www.ia.org.hk/en/legislative_framework/files/GL21.pdf . 
44 IA (2021), "Commencement of the Group -wide Supervision Framework and Regulatory Regime of 
Insurance -linked Securities Business" , 29 March . Viewed  at: 
https://www.ia.org.hk/en/infocenter/press_releases/20210329.html . 
45 IA, GL32: Guideline on Group Supervision . Viewed  at: 
https://www.ia.org.hk/en/legislative_framework/guidelines.php . 
46 IA, Insurance -linked Securities ("ILS") . Viewed  at: 
https://www.ia.org.hk/en/reinsurance_specialty/ILS_HK.html ; IA, Letter dated 3  May 2021 regarding Pilot 
Insurance -linked Securities Grant Scheme. Vie wed at: 
https://www.ia.org.hk/en/reinsurance_specialty/files/Pilot_ILS_Grant_Scheme.pdf ; and IA (2023), "Insurance 
Authority W elcomes Initiatives Announced in the 2023 -24 Budget", 22  February. Viewed  at: 
https://www.ia.org.hk/en/infocenter/press_releases/20230222.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  4.55.  The Guideline on Cybersecurity (GL20)47 was issued on 28  June 2019 to set the minimum 
standard t hat insurers are expected to implement for cybersecurity in accordance to Section  133(1) 
of the Insurance Ordinance. In addition, the Guideline also set s out the principles that the IA applies 
in assessing the effectiveness of an insurer's cybersecurity fr amework.  
4.56.  With the aim of ensuring transparency of authorization application process as stipulated in 
Section  133 of the Insurance Ordinance (Cap.  41), the IA published, on 30  June 2022, the revised 
Guideline on Application for Authorization to Carry on Ins urance Business in or from 
Hong Kong,  China.48 The Guideline lists the procedures, requirements, and key documents required 
by the IA in order to assess an application for authorization.  
4.57.  The IA formalized the process for the assessment on investment -linked assurance 
schemes  (ILAS) by issuing a note  on 28 December  2021 in respect of the Guideline on Underwriting 
Class C Business (GL15).49 Authorized insurers underwriting Class C business are required to comply 
with the requirements under GL15; authorization by the SFC pursuant to the Securities and Futu res 
Ordinance (CAP.  571) must be obtained when marketed to the public unless an exemption applies.50 
4.58.  During the review period, the IA also developed several guidelines to encourage best industry 
practices for consumer protection in the insurance subsector.51 
4.4.1.4   Securities  
4.59.  Hong Kong,  China  is one of the major regional hubs for securities and stock market services. 
During the review period, the subsectors grew, as t he capitalization of listed companies increased 
significantly (HKD  35,667  billion at the end  of 2022) (Box 4.2). 
Box 4.2 Stock exchange and securities subsector , 2018 , 2021, and 20 22 
Capitalization of the companies listed  
2018: Total market cap. HKD  29,909  billion  (10.5 times the 2018 nominal GDP)  
2021: Total market cap. HKD  42,381  billion  (14.8 times the 2021 nominal GDP)  
2022: Total market cap. HKD  35,667  billion  (12.7 times the 2022 nominal GDP)  
Average daily stock market total turnover to GDP (% ) 
2018: 3.8% (HKD  107.4  billion ) to 2018 nominal GDP  
2021: 5.8% (HKD  166.7  billion ) to 2021 nominal GDP  
2022: 4.4% (HKD  124.9  billion ) to 2022 nominal GDP  
 
 
 
47 IA, GL20: Guideline on Cybersecurity. Viewed  at: 
https://www.ia.org.hk/en/legislative_framework/files/GL20.pdf ; and IA, Letter dated 28  June 2019 regarding 
GL20: Guideline on Cybersecurity". Viewed  at: 
https://www.ia.org.hk/en/legislative_framework/circulars/reg_matters/files/Not_signed_GL20_Circular_to_all_
author ized_insurers.pdf . 
48 IA, Letter of 30  June 2022 regarding GL5: Guideline on Application for Authorization to Carry on 
Insurance Business in or from Hong  Kong and GL1: Authorization Guideline . Viewed  at: 
https://www.ia.org.hk/en/legislative_framework/circulars/reg_matters/files/Circular.GL5.30.6.2022.pdf . 
49 IA, GL15: Guideli ne on Underwriting Class  C Business. Viewed  at: 
https://www.ia.org.hk/en/legislative_framework/files/GL15.pdf . 
50 IA (2021) , "Insurance Authority  Formalises the Green Light Process for Assessment of Investment -
Linked Assurance Scheme (ILAS) Products and Ushers in Protection Linked Plans ", 28 December . Viewed  at: 
https://www.ia.org.hk/en/infocenter/press_releases/20211228.html . 
51 The following guidelines were adopted for consumer protection during the pe riod under review: 
Guideline on Underwriting Class C Business ( GL15); Guideline on Underwriting Long Term Insurance Business 
(other than Class C Business) ( GL16); Guideline on Offering of Gifts ( GL25); Guideline on Sale of Investment -
Linked Assurance Schem e Products ( GL26); Guideline on Long Term Insurance Policy Replacement  (GL27); 
Guideline on Benefit Illustrations for Long Term Insurance Policies ( GL28); Guideline on Cooling -off 
Period  (GL29); Guideline on Financial Needs Analysis ( GL30); and Guideline on Medical Insurance 
Business  (GL31). IA, Regulations and Industry Practices Associated with the Sale of Insurance Policies . 
Viewed  at: https://www.ia.org.hk/en/consumer/industry_practices_associated_with_the_sale_of_Insurance_po
licies.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  Securities turnover on the stock exchange (secondary market, December  2022) 
80.1% of equities; 3.9% of derivative warrants; 4.8% of Callable Bull / Bear Con tracts (CBBCs) and 11.0% 
of Unit Trusts (include ETFs)  
Source:  Information provided by the authorities.  
4.60.  The SFC  is the regulatory agency responsible for the securities and futures markets. The 
Securities and Futures Ordinance (Cap.  571) (SFO) sets out the SFC's  responsibilities and provides 
the legal basis for the SFC 's regulatory responsibilities . The main objecti ve of the  SFC is to maintain 
and promote a fair and competitive securities and futures industry.52 The regulatory framework of 
the securities market remained largely unchanged during the review period.  
4.61.  The enhanced entry requirements for licence applicants  and the ongoing competency 
standards for intermediaries and individual licensees took effect on 1  January  2022, under which the 
competency framework was brought up to date in view of the changing regulatory landscape, 
evolving financial markets , and the d evelopment of new financial products. The proposed 
enhancements have been reflected in the revised Guidelines on Competence53 and Guidelines on 
Continuous Professional Training .54 
4.62.  The SFC introduced the Type  13 regulated activity (RA  13), a new regime to r egulate 
depositaries (i.e.  top-level trustees and custodians) of SFC -authorized collective investment 
schemes, which will come into effect on 2  October  2024. The RA  13 regime is intended to enhance 
the regulation of public funds and is part of the strategy to reinforce Hong  Kong,  China as an 
international, full -service asset management centre.  
4.63.  The SFC actively engages with representatives of the private equity (PE) industry to 
understand their views on the regulatory framework for PE firms and provi de them with guidelines 
on how the regulatory requirements are applied. For instance, a circular was issued 
on 7 January  202055 to provide general guidance for PE firms seeking  to be licensed  by the SFC to 
carry on a business of regulated activities in Hon g Kong,  China  under Part  V of the SFO. Quick 
reference guides for family offices56 and PE firms57 were published by the SFC on 22  March  2023 to 
facilitate the industry's understanding of the licensing requirements.  
4.64.  The SFC also issued the Guidelines for Se curities Margin Financing (SMF) Activities 
on 4 October  2019. The guidelines provide guidance on risk management standards expected of 
SMF brokers conducting securities margin financing activities.58 The authorities consider that the 
control measures liste d in the guideline s are the minimum standards expected of SMF brokers. The 
guidelines set out the qualitative requirements and quantitative benchmarks for margin lending 
policies and key risk controls.  
 
52 SFC, Regulatory Objectives . Viewed  at: https://www.sfc.hk/en/About -the-SFC/Our -role/Regulatory -
objectives . 
53 SFC (2022) , Guidelines on  Competence . Viewed  at: https://www.sfc.hk/ -
/media/EN/assets/compone nts/codes/files -current/web/guidelines/guidelines -on-competence/Guidelines -on-
Competence.pdf?rev=17109ba82b614119a9c463d08e6e344f . 
54 SFC (2022) , Guidelines on Continuous Professional Training . Viewed  at: https://www.sfc.hk/ -
/media/EN/assets/com ponents/codes/files -current/web/guidelines/guidelines -on-continuous -professional -
training/Guidelines -on-Continuous -Professional -Training.pdf?rev=50728987dec448b0a2ae9e9e7f658354 . 
55 SFC, Circular to Private Equity Firms Seeking to Be Licensed . Viewed  at: 
https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/intermediaries/licensing/doc?refNo=20EC2 . 
56 SFC, Quick Reference Guide to Licensing Requirements – Family Offices . Viewed  at: 
https://www.sfc.hk/en/ Regulatory -functions/Intermediaries/Licensing/Quick -licensing -guide/Family -Offices . 
57 SFC, Quick Reference Guide to Licensing Requirements – Private Equity Firms . Viewed  at: 
https://www.sfc.hk/en/Regulatory -functions/Intermediaries/Licensing/Quick -licensing -guide/Private -Equity -
Firms . 
58 SFC, Guidelines for Securities Margin Financing Activities . Viewed  at: https://www.sfc.hk/ -
/media/EN/assets/components/codes/files -current/web/guidelines/guidelines -for-securities -margin -financing -
activities/guidelines -for-securities-margin -financing -activities.pdf?rev=753d9c64cd484a308ee11dedbc046df5 . WT/TPR/S/ 450 • Hong Kong, China  
 
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  4.4.1.5   Mutual funds and asset management  
4.65.  The number of unit t rusts and mutual funds authorized for offer to the public of 
Hong Kong,  China increased from  2,195 as at 31  December  2018 to 2,324 as at 31  December  2022. 
The total net asset value of these authorized unit trusts and mutual funds increased from 
USD 1,432,5 47 as at 31 December  2018 to USD 1,581,542 as at 31  December  2022.  
4.66.  The SFC's prior authorization is required for unit trusts and mutual funds to be offered to the 
public of Hong  Kong,  China . The SFC  issued a circular59 on managing the liquidity risk of funds 
on 23 August  2019, which reminds fund managers to implement robust risk management systems 
and establish well -documented liquidity risk management policies and procedures for the funds they 
manage. Accordingly, the SFC authorized funds are required to perform ongoing liquidity risk 
assessment to assess the liquidity profile of their liabilities and assets. In addition, the SFC conducts 
ad hoc enquiries on specific fund managers for more granular data in response to l atest market 
development for supervisory and monitoring purpose. In view of the international regulatory 
development, starting from 2022, the SFC has expanded the data collection framework to collect 
more granular data ( e.g. detailed breakdown of liquidity  profile, credit ratings, currency exposure) 
from fund managers for supervisory and monitoring purpose.  
4.67.  According to the authorities, changes in the Mandatory Provident Fund (MPF) sector since the 
previous Review include enactment of certain provisions of the Mandatory Provident Fund Schemes 
(Amendment) Ordinance  2021 on 29  October  2021 to provide for the implementation of the 
eMPF Platform to enhance operational efficiency and reduce administration cost, and enactment of 
the Employment and Retirement Schem es Legislation (Offsetting Arrangement) (Amendment) 
Ordinance  2022 to abolish the use of accrued benefits of employers' mandatory contributions under 
the MPF System to offset severance payment and long service payment, which is to come into effect 
on 1 May 2025.  
4.4.1.6    Financial technology (Fintech)  
4.68.  Hong Kong,  China  aims to foster innovation in Fintech and e -payments, and the SFC  has 
continued to adopt its regulatory approach to support enterprises and innovation while maintaining 
financial soundness. In 2022, Hong  Kong,  China  had 800  Fintech companies and start -ups, including 
8 virtual banks, 4 virtual insurers, and 2 licensed vi rtual asset trading platforms (VATPs).  
4.69.  A Fintech Advisory Group was formed by the SFC with the aim of providing information on the 
latest trends; collect ing stakeholders' input on specific themes; identify the opportunities, risks , and 
regulatory  parameter s implications; and broaden the understanding of Fintech as an evolution of 
the financial services industry.  
4.70.  The SFC introduced the first Fin tech Regulatory Sandbox in 2018. The Sandbox is available 
to both licensed corporations and start -up firms that int end to carry on a regulated activity under 
the SFO. The qualified firm must be fit and proper, utilize innovative technologies , and be able to 
demonstrate commitment to carry on regulated activities through the use of Fintech. The 
establishment of these fi rms is intended to increase the range and quality of products and services 
for investors and benefit the financial services industry.  
4.71.  In October  2022, a Policy Statement on Development of Virtual Assets (VA) was issued, 
setting out the vision and policy di rection of the Government with a view to facilitating the 
sustainable and responsible development of VA sector.  
4.72.  The Anti -Money Laundering and Counter -Terrorist Financing (Amendment) Bill was adopted 
in December  2022; it introduced a licensing regime for VA  service providers. The licensing regime 
has been operational since June  2023. Under the new regime, all centralized VATPs carrying on 
business in Hong  Kong,  China  or actively marketing to Hong  Kong,  China  investors must be licensed 
by the SFC. According t o the authorities, the new regulatory framework allows licensed VATPs to 
serve retail investors on compliance with a range of investor protection measures including ensuring 
suitability in the onboarding process, good governance, enhanced token due diligen ce, admission 
 
59 SFC, Circular to Licensed Corporations M anaging the Liquidity Risk of Funds. Viewed  at: 
https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/intermediaries/supervision/doc?refNo=19EC54 . WT/TPR/S/ 450 • Hong Kong, China  
 
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  criteria , and disclosures. The regulatory framework is intended to provide clarity and consistency to 
the market, with the aim to foster innovation, market development , and investor protection.  
4.4.2   Telecommunication s services  
4.4.2.1   Overview  
4.73.  Information and communication services contributed 3.6% to GDP in 2021 (Table  1.1). 
Hong Kong,  China continues to have high mobile and broadband penetration rates ( Table  4.6). The 
gross output of the telecom industry increased during the review period and stood at HKD  108 billion 
in 2021, up from HKD 96 billion in 238018. Exports and imports in the sector also saw an increase 
during the same period.  
Table 4.6 Main economic indicators of the telecommunications sector, 2018 -22 
  2018  2019  2020  2021  2022  
Gross output of the 
telecom industry 
(HKD  billion)  96 102 104 108 .. 
Employment  20,000  20,100  20,100  19,500  18,600  
Exports (HKD  million)  14,827  15,756  17,708  20,364  .. 
Imports (HKD  million)  9,312  9,802  10,288  11,886  .. 
Penetration rates (as of July  2022)  
Total telephone 
subscribers 
(per 100 inhabitants)  .. .. .. .. 366.8  
Total mobile customers  .. .. .. .. 23,439,175  
Total telephone lines  .. .. .. .. 3,750,968 (reflecting 
sum of exchange lines 
and non -exchange 
lines)  
Fixed telephone 
subscribers 
(per 100 inhabitants)  .. .. .. .. 51.4 
Mobile phone subscribers 
(per 100 inhabitants)  .. .. .. .. 315.4  
Fixed (wired) -broadband 
subscriptions  
(per 100 inhabitants):  .. .. .. .. 40.5 
Mobile broadband 
subscriptions 
(per 100 inhabitants)  .. .. .. .. 314.7  
Internet users 
(per 100 inhabitants)  90.5%  91.7%  92.4%  93.1%  .. 
Broadband Internet 
subscribers 
(per 100 inhabitants)  .. .. .. .. 355.2 , of which 40.5 
is fixed 
(wired) -broadband 
subscriptions per 
100 inhabitants and 
314.7 is mobile 
broadband 
subscriptions 
per 100 inhabitants.a 
.. Not available . 
a "Fixed (wired) -broadband subscriptions" refers to the sum of cable modem, digital subscriber line 
(DSL) , and fibre -to-the-home/building broadband Internet subscriptions to the public Internet, 
and "wireless -broadband subscriptions" refers to the sum of terrestrial fixed wireless -broadband and 
active mobile -broadband subscriptions to the  public Internet.  
Source:  Information provided by the authorities; and ITU, Statistics , Viewed  at: https://www.itu.int/en/ITU -
D/Statistics/Pages/stat/default.aspx . 
4.74.  As at 31  October  2022, the sector comprises 584 licensees authorized to provide value -added 
telecom services. In addition, the sector had 27  carrier licensees  authorized to provide local -fixed 
telecommunications services, and 40  carrie r licensees authorized to provide external WT/TPR/S/ 450 • Hong Kong, China  
 
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  fixed-telecommunications services. In terms of Internet services, as of  30 September  2022, there 
were 301  authorized facility -based and service -based telecommunications service providers. 
Average telecommunication s prices in Hong  Kong,  China continue to be substantially lower than the 
world averages (Table  4.7). 
Table 4.7 Average telecom prices, 2022  
Type of telecom service  % of gross national 
income per capita  Comparable statistics for 
world average  
Data-only mobile broadband prices (2  GB) 0.13 1.25 
Mobile data and voice low -consumption prices 
(70 mins + 20  SMS + 500  MB) 0.18 2.02 
Mobile data and voice high -consumption prices 
(140 mins + 70  SMS + 2  GB) 0.26 2.86 
Mobile -cellular low -usage prices (70  mins + 20SMS)  0.05 1.06 
Fixed -broadband prices (5  GB) 0.53 2.98 
Source:  ITU, ICT Statistics Digital Development Dashboard Price Baskets . Viewed  at: 
https://www.itu.int/en/ITU -D/Statistics/Pages/ICTprices/default.aspx . 
4.75.  The authorities do not maintain a list or statistics regarding overse as ownership of 
telecommunications licence s and are not in the position to give information on individual firms. There 
is no direct government ownership in the telecommunications sector and there are no restrictions of 
overseas ownership (Section  2.4.3). 
4.76.  During the review period, especially in 2020 fuelled by the COVID -19 pandemic, there was an 
increase in the growth of e -commerce as consumer behaviour shifted with the use of the Internet 
for commercial purposes.60 In 2020, business receipts from Internet sales amounted to 
HKD 563.6  billion (increas ed by 14.6% in 2018).61 
4.4.2.2   Policy and regulatory developments  
4.77.  The Communications Authority (CA)62 and the Office of the Communications Authority 
(OFCA)63, the CA's executive arm, continue to oversee the telecommunications sector. The trade 
regulatory regime of telecommunication s services has remained largely unchanged since the 
previous Review.  
4.78.  On 24  June 2021, the authorities adopted the Telecommunications (Amendment) 
Ordinance  202164 (the Amendment Ordinance), which came into operation on 24 June 2022. The 
Ordinance includes the following major measures: stipulating the powers of the CA on regulating the 
telecommunications functions of smart devices; strengthening the protection of underground 
telecommunications infrastructure; simplifying the licensing framework to facilitate the introduction 
of innovative services by the industry; and improving the appeal mechanism by expanding the 
functions and powers of the previous Telecommunications (Competition Provisions) Appeal Board, 
which has been renamed as the Telecommunications Appeal Board (TAB).  
4.79.  According to the authorities, since 2021 the TAB has been delegated to review existing 
decisions of the CA in relation to exploitative conduct engaged by licensee under Section  7Q of the 
Telecommunicat ions Ordinance (Cap.  106)65; the TAB is mandated to oversee certain regulatory 
 
60 Research Office, Legislative Council Secretariat, Information Technology and Broadcasting. 
E-commerce in Hong  Kong. Viewed  at: https://www.legco.gov.hk/research -publications/english/1920issh34 -e-
commerce -in-hong-kong-20200708 -e.pdf. 
61 C&SD, Report on the Survey on Information Technology Usage and Penetration in the Business 
Sector , various editions 2019 and 2021 . Viewed  at: 
https://www.censta td.gov.hk/en/EIndexbySubject.html?pcode=B1110005&scode=590 . 
62 CA. Viewed  at: https://www.coms -auth.hk/en/home/index.html . 
63 OFCA, Roles & Functions . Viewed  at: 
https://www.ofca.gov.hk/en/about_us/roles_and_functions/index.html . 
64 Telecommunications (Amendment) Ordina nce 2021 ( Ord. No.  38). Viewed  at: 
https://www.elegislation.gov.hk/hk/2021/38!en . 
65 Telecommunications (Amendment) Ordinance 2021 ( Ord. No.  38). Viewed  at: 
https://www.elegislation.gov.hk/hk/2021/38!en . WT/TPR/S/ 450 • Hong Kong, China  
 
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  decisions of the CA under the Telecommunications Ordinance. In addition, if licensees object to 
certain regulatory decision of the CA, they are entitled to lodge an appeal with the TAB.  
4.80.  Under the Telecommunications (Registration of SIM Cards) Regulation, users should complete 
real-name registration for their SIM cards issued and used in Hong  Kong,  China with their 
telecommunications service providers from 24  February  2023 onwards . The registration requirement 
aims to enhance the integrity of the telecommunications regime in Hong  Kong,  China  and minimize 
illegal activities involving anonymous SIM cards.  
4.81.  The authorities introduced a subsidy scheme in 2018 to encourage telecommunicat ions 
companies to extend fibre -based networks to villages in remote areas to meet the demand for 
high-speed broadband services.66 The authorities also implemented the Subsidy Scheme for 
Encouraging Early Deployment of 5G in May  2020, to encourage timely adoption of 5G  technology 
in certain sectors to encourage innovation and improve efficiency of operations and quality of 
services.67 
4.82.  Hong Kong,  China 's GATS commitments have remained unchanged since the previous 
Review. Three  FTAs and one subsidiary agreement under the CEPA with China that entered into force 
contain provisions regarding telecommunications (Box  4.3). 
Box 4.3 Bound trade regimes of the telecommunications sector  
FTA commitments  
Hong Kong,  China  – Georgia FTA  (entered into force on 13  February  2019)  
Local services: In addition to GATS commitments, two more subsectors were libera lized: telex services and 
telegraph services.  
Market access: Modes  1 and 2: same commitments as GATS; Mode  3: none; Mode  4: commitment on business 
visitors, in addition to GATS commitments.  
National treatment: same commitments as GATS.  
International servic es: 
Market access: Modes  1, 2, and 3: same commitments as GATS; Mode  4: commitment on business visitors, 
in addition to GATS commitments.  
National treatment: same commitments as GATS.  
Value -added services:  
Market access: Mode  1: none; Mode s 2 and 3: same commitments as GATS; Mode  4: commitment on 
business visitors, in addition to GATS commitments.  
National treatment: Modes  1 and 2: none; Modes  3 and 4: same commitments as GATS.  
CEPA with China  (entered into force on 29  June 2003; its subsidiary agreement, the Agreement on Trade in 
Services, entered into force on 27  November  2015; and the Agreement concerning Amendment to the 
Agreement on Trade in Services of CEPA, entered into force on 21  November  2019). 
Paragraph  2 of Article  3 of the  Agreement on Trade in Services stipulates that Hong  Kong,  China  will not 
impose any new discriminatory measures on China's services and service suppliers in the areas where  China 
has undertaken specific commitments on the liberalization of trade in servic es for Hong  Kong,  China. The 
two sides will formulate further liberalization of trade in services of Hong  Kong,  China  for China's services and 
service suppliers. The Agreement concerning Amendment to the Agreement on Trade in Services of CEPA does 
 
66 OFCA, Subsidy Scheme to Extend Fibre -based Networks to Villages in Remote Areas . Viewed  at: 
https://www.ofca.gov.hk/en/industry_ focus/infrastructures/subsidy_scheme_to_extend_fibre_based_networks
/index.html . 
67 OFCA , Subsidy Scheme for Encouraging Early Deployment of 5G . Viewed  at: 
https://www.ofca.gov.hk/en/industry_focus/industry_focus/5g_subsidy/index.html . WT/TPR/S/ 450 • Hong Kong, China  
 
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  not amen d the aforementioned provision of the Agreement on Trade in Services and such provision is still 
valid and shall continue to be implemented.  
Hong Kong,  China  – Australia FTA  (entered into force on 17  January  2020) 
Full liberalization except for the followi ng reservations:  
- no reservation for existing non -conforming measures on telecommunications services; this regime is 
applied  to all. 
- Hong Kong,  China  reserves the right to adopt or maintain any non -conforming measures to the obligations 
of market access suc h that commitments made by Hong  Kong,  China  shall not prevent it from adopting 
or maintaining non -discriminatory measures that restrict or require specific types of legal entity through 
which a service supplier may supply a service, to achieve a legitimate  policy objective (Schedule to 
Annex  II). 
The agreement also included a set of regulatory principles that enhance transparency in licensing process, 
safeguard the access to and use of public telecommunications services/facilities, ensure the independence a nd 
impartiality of telecommunications regulatory bodies, and prevent anti -competitive practices.  
Hong Kong,  China  – ASEAN FTA  (entered into force in full  on 12  February  2021) 
This FTA has been covered by the previous Review ( WTO document WT/TPR/S/380/Rev.1, Box 4.2). 
Information therein remains valid.  
Source:  Compiled by the WTO Secretariat based on i nformation provided by the authorities and WTO RTA  
database.  
4.4.3   Transport  
4.4.3.1   Maritime transport  
4.83.  Hong Kong, China continues to be one of major global maritime hubs. In  2021, the Port of 
Hong Kong,  China handled around 18  million twenty -foot equivalent units  (TEUs) of containers. In 
the same year, the port and maritime sector directly contributed 4.1% to GDP and 2.1% to total 
employme nt. Hong  Kong,  China had 2,661  merchant vessels of over 100  Gross Tonnage  (GT), 
representing 207.8  million Deadweight Tonnage (DWT) or 9.5% of the world fleet as 
at 1 January  2022.  
4.84.  The Marine Department is responsible for port administration and long -term strategic planning 
for port facilities and the provision of necessary supporting infrastructure including ferry terminals. 
The Department is also responsible for ensuring compliance with safety and environmental 
standards. Hong  Kong,  China's port facilitie s are owned and operated by the private sector. With a 
view to ensure Hong  Kong,  China's position as an international shipping centre, the authorities 
intend to continue their promotional efforts and introduce measures to attract more high 
value -added mari time enterprises to establish presence. The authorities plan to formulate an action 
plan to promote high value -added modern logistics development to reinforce intermodal transport, 
and to encourage a wider application of smart logistics solutions by the lo gistics trade to enhance 
competitiveness through technology.  
4.85.  As an Associate Member of the International Maritime Organization (IMO), Hong  Kong,  China 
has from time to time incorporated the latest requirements of the IMO into local legislation. To 
implemen t the relevant technical and operational requirements of the International Convention for 
the Safety of Life at Sea for ships operating in polar waters, Hong  Kong,  China enacted two new 
pieces of subsidiary legislation in  2019 under the Merchant Shipping ( Safety) Ordinance (Cap.  369) 
and the Merchant Shipping (Seafarers) Ordinance (Cap.  478). In  2020, new subsidiary legislation 
was made under the Merchant Shipping (Prevention and Control of Pollution) Ordinance (Cap.  413) 
to implement the International Conv ention for the Control and Management of Ships' Ballast Water 
and Sediments.  
4.86.  Hong Kong,  China does not apply any specific restrictions to market access or national 
treatment on the exercise of maritime activities onshore from overseas. There are no restric tions on WT/TPR/S/ 450 • Hong Kong, China  
 
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  inbound direct investment in port facilities or maritime services, exceptions to national treatment, 
market access restrictions for multimodal transport operators, general and bulk shipping lines, 
shippers, and intermediaries, to rent or lease tru cks, railway carriages, or barges and related 
equipment for inland forwarding of cargo. Hong  Kong,  China's GATS commitments on maritime 
transport services have not changed since the previous Review.  
4.87.  Vessels used solely within domestic waters are required t o be licensed by the Marine 
Department in accordance with the Merchant Shipping (Local Vessels) Ordinance (Cap.  548). This 
does not entail a flag obligation; labour legislation of Hong  Kong,  China must be abided by aboard 
those ships.  
4.88.  Conditions to fly the  Hong Kong,  China flag are that a majority interest in the ship is owned 
by citizens of Hong  Kong,  China, or a locally incorporated company, or a non -Hong Kong,  China 
company registered in Hong  Kong,  China, or the ship is on charter to such a company. A 
representative person, either the owner or a locally incorporated ship management company, needs 
to be appointed in relation to the ship.  
4.89.  There are no restrictions on the nationality of seafarers working on board 
Hong Kong,  China -registered ships provided th eir competency complies with the requirements of the 
International Convention on Standards of Training, Certification and Watchkeeping for Seafarers. 
The Hong  Kong,  China flag does not give access to any specific subsidies nor to any specific cargoes 
(e.g. government cargo, food aid, or specific import or export cargo).  
4.90.  The authorities confirm that Hong  Kong,  China does not provide any support measures 
(e.g. subsidies, tonnage tax, or second register) to the maritime transport sector. Income derived 
from th e international operation of Hong  Kong,  China registered ships is exempted from profit tax.  
4.91.  Hong Kong,  China has no bilateral or plurilateral agreements entailing cargo -sharing or 
preferential establishment onshore.  
4.4.4   Tourism  
4.92.  The Tourism Commission is respon sible for formulating and coordinating tourism development 
policy and strategy. The Tourism Commission works closely with the Hong  Kong Tourism Board 
(HKTB), established under the Hong Kong Tourism Board Ordinance (Cap.  302), and other relevant 
organizatio ns. The HKTB is responsible for marketing and promoting Hong  Kong,  China as a global 
tourist destination. It makes recommendations to the Government concerning tourism -related 
policies, and it maintains a hotel classification system, which gives a composit e score to a hotel.68 
4.93.  On 1 September  2022, in accordance with the Travel Industry Ordinance (Cap.  634) and 
related regulations, the Travel Industry Authority (TIA), a statutory body established 
in January  2020, took over the licensing and trade regulatory functions from the Travel Agents 
Registry and the Travel Industry Council of Hong Kong, respectively. The TIA is responsible for the 
licensing and regulation of travel agents, tourist guides, and tour escorts. The TIA is also responsible 
for the administra tion of the Travel Industry Compensation Fund, which provides payments for 
outward travellers that suffer from the closure of licensed travel agents or accidents during outward 
travel activities.  
4.94.  Visitor arrivals to Hong  Kong,  China declined from 55,912,60 0 persons in  2019 
to 3,568,900  persons in  2020; visitor arrivals were 91,400  persons in  2021 and 604,600  persons 
in 2022. Visitor arrivals in April  2023 were provisionally recorded at 2.89  million persons; the daily 
average figure for April was equivalent to about 58% of that before the pandemic 
(2017 -19 average).69 
4.95.  Facing the decline in visitors, the HKTB gave substantial resources to promoting local tourism 
and boosting consumption, such as the launch of various campaigns to increase business 
opportunitie s for travel agents and practitioners, and the dining, retail, hotel, and other 
 
68 WTO document WT/TPR/S/241/Rev.1, 25  January  2011.  
69 Hong Kong Tourism Board (2023), "HKTB Announces Provisional Visitor Arrivals for April", 15  May. 
Viewed  at: https://partnernet.hktb.com/en/industry_news/hktb_updates /index.html?id=5607 . WT/TPR/S/ 450 • Hong Kong, China  
 
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  tourism -related sectors. During the pandemic, the Government provided travel agents and 
practitioners of the tourism industry with various schemes and arrangements to prepare f or the 
anticipated restart of tourism activities when the pandemic is over. Such support measures included 
the Green Lifestyle Local Tour Incentive Scheme, the Cultural and Heritage Sites Local Tour Incentive 
Scheme, and the Travel Agents Incentive Scheme.  The authorities consider that these measures 
support trade in tourism to resume in a gradual manner.  
4.96.  In February  2023, upon resumption of quarantine -free travel, the Government launched a 
large-scale global promotional campaign ("Hello Hong  Kong"). The HK TB adopted a series of 
promotional activities to aim at a speedy recovery of the tourism industry, which included issuing 
new video clips featuring travel experiences, offering a series of rewards to visitors in collaboration 
with local commercial outlets,  arranging familiarization visits by trade and media representatives as 
well as key opinion leaders from overseas, and arranging trade representatives to participate in 
industry events on tourism trade and Meetings, Incentive Travels, Conventions and Exhib itions trade 
shows in global markets to explore business opportunities. The HKTB has also resumed staging 
large-scale events to enhance the tourism appeal of Hong  Kong,  China . 
 WT/TPR/S/ 450 • Hong Kong, China  
 
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  5  APPENDIX TABLES  
Table  A1.1 Merchandise imports by HS section and major HS chapter/heading, 2018 -22 
HS section/chapter/heading  2018  2019  2020  2021  2022  
Total imports (USD  billion ) 627.3  578.6  573.1  713.2  668.5  
 (% of total imports)  
01 Live animals and products  2.1 2.1 1.9 1.5 1.3 
02 Vegetable products  1.1 1.1 1.1 1.0 0.9 
03 Fats and oils  0.0 0.0 0.0 0.0 0.0 
04 Prepared food, beverages and tobacco  1.6 1.5 1.4 1.3 1.3 
05 Mineral products  2.6 2.6 1.7 1.7 2.3 
 27 Mineral fuels and oils  2.5 2.5 1.5 1.6 2.2 
06 Chemicals and products thereof  2.3 2.3 2.9 2.5 2.5 
07 Plastics and rubber  1.7 1.5 1.4 1.3 1.0 
08 Raw hides and skins; leather, furskins and articles 
thereof  1.1 1.1 0.8 0.7 0.6 
09 Wood, cork, straw  0.1 0.1 0.1 0.1 0.1 
10 Pulp of wood; paper and paperboard  0.5 0.5 0.4 0.4 0.3 
11 Textiles and textile articles  3.0 2.8 2.1 1.8 1.5 
12 Footwear, headgear, etc.  0.6 0.7 0.4 0.4 0.4 
13 Articles of stone, plaster, cement  0.4 0.5 0.6 0.4 0.3 
14 Precious stones and metals  10.4 9.4 9.6 10.8 12.7 
 7102 Diamonds, not mounted or set  3.3 3.1 2.0 2.2 2.3 
 7108 Gold, unwrought or in semi -manufactured 
forms, or in powder form  3.8 2.4 3.3 4.1 5.7 
 7113 Articles of jewellery and parts thereof, of 
precious metal  2.1 2.4 2.0 2.5 2.8 
15 Base metals and articles thereof  1.3 1.3 1.1 1.4 1.3 
16 Machinery, electrical equipment  64.0 64.6 67.8 68.1 67.4 
 84 Machinery and mechanical appliances, parts 
 thereof  11.7 11.5 11.7 11.6 11.2 
 8471 Automatic data processing machines (..)  3.9 3.5 3.6 3.8 3.6 
 8473 Parts automatic data processing machines, 
etc. (..)  3.9 3.6 3.6 3.8 3.8 
 85 Electrical machineries and parts thereof  52.3 53.2 56.1 56.5 56.2 
 8517 Telephone sets, including telephones for 
cellular networks or for other wireless 
networks  (..) 12.3 12.4 12.1 11.5 8.9 
 8541 Diodes, transistors, similar semiconductor 
devices (..)  2.5 2.6 2.7 2.8 2.8 
 8542 Electronic integrated circuits  25.0 26.1 29.5 31.0 33.2 
17 Transport equipment  1.1 1.1 0.9 0.8 0.9 
18 Precision equipment  4.3 4.5 4.2 4.1 3.4 
 90 Optical, photo, technical, medical, etc. apparatus  2.8 3.1 3.1 2.9 2.2 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  1.3 1.2 1.0 1.0 0.9 
21 Works of art, etc.  0.5 0.8 0.5 0.7 0.9 
Other  0.1 0.2 0.2 0.2 0.2 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table  A1.2 Merchandise imports by origin, 2018 -22 
  2018  2019  2020  2021  2022  
Total imports (USD  billion ) 627.3  578.6  573.1  713.2  668.5  
 (% of total imports)  
Americas  6.4 6.3 5.2 5.6 5.6 
 United  States  5.1 4.7 4.0 4.2 4.2 
 Other – America  1.4 1.5 1.2 1.4 1.4 
 Canada  0.4 0.5 0.2 0.4 0.5 
 Chile 0.2 0.3 0.2 0.3 0.2 
 Brazil  0.4 0.4 0.4 0.3 0.2 
Europe  9.3 8.9 7.4 7.2 8.2 
 EU-27 5.1 5.2 4.4 3.9 4.0 
 Germany  1.1 1.2 1.1 1.0 1.0 
 France  1.1 1.2 1.0 0.8 0.9 
 Italy 1.1 1.1 0.8 0.8 0.7 
 Belgium  0.5 0.5 0.4 0.3 0.3 
 Netherlands  0.4 0.4 0.4 0.3 0.3 
 EFTA 2.5 1.8 1.2 1.9 1.5 
 Switzerland  2.5 1.8 1.2 1.9 1.4 
 Other Europe  1.7 1.9 1.7 1.4 2.7 
 United  Kingdom  1.6 1.8 1.6 1.2 2.5 
CISa 0.1 0.2 0.2 0.2 0.3 
 Russian  Federation  0.1 0.2 0.2 0.2 0.3 
Africa  0.6 0.5 0.5 0.5 0.6 
 South  Africa  0.5 0.3 0.3 0.4 0.3 
Middle East  1.4 1.4 1.7 1.9 2.0 
 United  Arab Emirates  0.7 0.8 1.3 1.4 1.5 
 Israel  0.4 0.3 0.2 0.2 0.2 
Asia 82.1 82.8 84.9 84.6 83.3 
 China  44.8 45.7 43.8 44.3 40.1 
 Japan  5.5 5.8 5.8 5.2 5.3 
 Other – Asia 31.8 31.2 35.3 35.1 38.0 
 Chinese  Taipei  6.9 7.3 9.4 9.9 11.3 
 Singapore  6.4 6.5 7.2 7.6 7.7 
 Korea, Republic of  5.7 4.9 5.7 5.9 5.6 
 Malaysia  3.8 3.6 3.7 3.0 3.4 
 Viet Nam 1.3 1.7 2.7 2.1 2.7 
 Philippines  1.8 1.7 1.8 1.7 2.0 
 Thailand  1.9 2.0 2.1 1.9 1.9 
 India 1.9 1.7 1.3 1.5 1.5 
 Australia  1.1 0.8 0.6 0.7 0.9 
 Indonesia  0.5 0.5 0.4 0.3 0.5 
 Macao,  China  0.2 0.2 0.2 0.2 0.2 
Other  0.003  0.01 0.01 0.01 0.01 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
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  Table  A1.3 Merchandise exports by HS section and major HS chapter/heading, 2018 -22 
HS section/chapter/subheading  2018  2019  2020  2021  2022  
Total exports (USD  billion ) 569.1  535.7  551.5  670.9  610.1  
 (% of total exports)  
01 Live animals and products  0.8 0.6 0.4 0.3 0.3 
02 Vegetable products  0.6 0.6 0.5 0.5 0.5 
03 Fats and oils  0.0 0.0 0.0 0.0 0.0 
04 Prepared food, beverages and tobacco  0.8 0.8 0.6 0.6 0.6 
05 Mineral products  0.1 0.1 0.1 0.1 0.1 
06 Chemicals and products thereof  1.6 1.7 2.0 1.9 1.6 
07 Plastics and rubber  1.9 1.8 1.5 1.5 1.0 
08 Raw hides and skins; leather, furskins  and articles 
thereof  1.0 1.0 0.8 0.6 0.6 
09 Wood, cork, straw  0.0 0.0 0.0 0.0 0.0 
10 Pulp of wood; paper and paperboard  0.5 0.6 0.4 0.4 0.3 
11 Textiles and textile articles  3.6 3.4 2.4 2.0 1.6 
12 Footwear, headgear, etc.  0.6 0.6 0.4 0.4 0.4 
13 Articles of stone, plaster, cement  0.6 0.6 0.6 0.5 0.4 
14 Precious stones and metals  12.0 10.1 12.8 10.7 11.3 
 7102 Diamonds, not mounted or set  2.8 2.6 1.9 2.1 2.3 
 7108 Gold, unwrought or in semi -manufactured forms, 
or in powder form  6.5 4.7 7.5 4.6 4.9 
15 Base metals and articles thereof  1.2 1.2 1.0 1.2 1.1 
16 Machinery, electrical equipment  67.5 69.3 70.0 73.0 74.3 
 84 Machinery and mechanical appliances, parts thereof  13.1 13.2 13.6 14.1 13.5 
 8471 Automatic data processing machines (..) 4.1 3.9 4.4 4.7 4.4 
 8473 Parts automatic data processing machines, 
etc. (..) 4.7 4.5 4.7 5.1 4.9 
 85 Electrical machineries and parts thereof  54.4 56.2 56.5 58.9 60.8 
 8517 Telephone sets, including telephones for cellular 
networks or for other wireless networks (..)  13.7 13.9 12.3 11.4 9.0 
 8541 Diodes, transistors, similar semiconductor 
devices (..)  2.5 2.6 2.6 2.7 2.9 
 8542 Electronic integrated circuits  23.2 25.1 27.9 31.5 35.0 
17 Transport equipment  0.4 0.5 0.4 0.3 0.3 
18 Precision equipment  4.7 4.9 4.4 4.2 3.7 
 90 Optical, photo, technical, medical, etc. apparatus  3.2 3.4 3.3 3.0 2.6 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  1.7 1.4 1.1 1.1 0.9 
21 Works of art, etc.  0.3 0.5 0.3 0.5 0.9 
Other  0.1 0.1 0.1 0.2 0.2 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/ 450 • Hong Kong, China  
 
- 108 - 
 
  Table  A1.4 Merchandise exports by destination, 2018 -22 
  2018  2019  2020  2021  2022  
Exports (USD  billion ) 569.1  535.7  551.5  670.9  610.1  
 (% of exports)  
Americas  10.2 9.6 9.1 8.1 8.3 
 United  States  8.0 7.3 7.2 6.0 6.2 
 Other – America  2.2 2.3 1.9 2.1 2.1 
 Mexico  0.8 0.9 0.6 0.8 0.9 
 Brazil  0.3 0.3 0.4 0.4 0.4 
 Canada  0.4 0.4 0.4 0.4 0.3 
Europe  9.9 10.3 13.0 9.2 8.6 
 EU-27 7.4 7.3 6.6 6.5 6.6 
 Netherlands  1.6 1.6 1.5 1.5 1.7 
 Germany  1.7 1.7 1.5 1.4 1.4 
 France  0.8 0.8 0.7 0.7 0.6 
 Italy 0.6 0.6 0.5 0.5 0.5 
 Belgium  0.5 0.4 0.3 0.3 0.3 
 Hungary  0.3 0.3 0.3 0.3 0.3 
 EFTA 1.1 1.2 2.8 0.9 0.8 
 Switzerland  1.0 1.1 2.7 0.9 0.7 
 Other – Europe  1.4 1.9 3.6 1.8 1.3 
 United  Kingdom  1.1 1.6 3.3 1.5 1.0 
CISa 0.7 0.7 0.8 0.8 0.6 
 Russian  Federation  0.7 0.7 0.7 0.7 0.4 
Africa  1.0 1.0 1.1 0.9 0.6 
Middle East  2.1 2.4 2.1 2.1 2.8 
 United  Arab Emirates  1.3 1.5 1.3 1.5 2.1 
 Israel  0.4 0.3 0.3 0.3 0.3 
Asia 76.1 75.9 73.9 78.9 79.1 
 China  55.3 55.3 55.2 59.9 57.4 
 Japan  2.9 2.9 2.6 2.3 2.1 
 Other – Asia 17.9 17.7 16.1 16.7 19.5 
 India 3.1 2.9 2.4 2.6 3.7 
 Chinese  Taipei  2.1 2.2 2.4 2.8 3.3 
 Viet Nam 1.9 1.9 2.0 2.0 2.4 
 Singapore  2.2 2.0 2.0 1.6 2.0 
 Korea, Republic of  1.4 1.4 1.3 1.5 1.7 
 Thailand  2.4 2.0 1.5 1.5 1.7 
 Macao,  China  1.1 1.3 1.0 1.2 1.3 
 Malaysia  0.8 0.8 0.8 0.8 0.9 
 Philippines  0.7 0.8 0.7 0.7 0.7 
 Australia  0.8 0.8 0.8 0.7 0.7 
 Indonesia  0.6 0.7 0.6 0.6 0.6 
Other  0.002  0.02 0.04 0.02 0.02 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
 WT/TPR/S/ 450 • Hong Kong, China  
 
- 109 - 
 
  Table A2. 1 Selected notifications to the WTO, January  2018-June  2023 
WTO  Agreement  Description  Document symbol  Date 
Agreement on Agriculture  
Articles 10 and 18.2 
(ES:1)  Export subsidies 
commitments  G/AG/N/HKG/53  
G/AG/N/HKG/51  
G/AG/N/HKG/49  
G/AG/N/HKG/47  
G/AG/N/HKG/45  
G/AG/N/HKG/43  18/01/2023  
10/01/2022  
21/01/2021  
14/01/2020  
22/01/2019  
12/01/2018  
Article  18.2 (DS:1)  Domestic support  G/AG/N/HKG/54  
G/AG/N/HKG/52  
G/AG/N/HKG/50  
G/AG/N/HKG/48  
G/AG/N/HKG/46  
G/AG/N/HKG/44  
G/AG/N/HKG/44/Corr.1  30/05/2023  
21/06/2022  
24/06/2021  
17/06/2020  
25/06/2019  
25/06/2018  
28/06/2018  
General Agreement on Trade in Services (GATS)  
Article  III:3 Notification pursuant to 
Article  III:3 of the GATS  S/C/N/1115  
S/C/N/1114  
S/C/N/1113  
S/C/N/1064  
S/C/N/874/Add.1  
S/C/N/917  21/10/2022  
21/10/2022  
21/10/2022  
28/09/2021  
27/09/2019  
25/09/2018  
Article  V:7(a)  Notification of Regional 
Trade Agreement: ASEAN, 
Australia, Chile, China, 
and Georgia  S/C/N/773/Add.1  
S/C/N/1043  
S/C/N/264/Add.11  
S/C/N/264/Add.11/Corr.1  
S/C/N/986  
S/C/N/923  06/04/2023  
11/02/2021  
20/03/2020  
27/03/2020  
17/01/2020  
12/02/2019  
Article  VII:4 Notification pursuant to 
Article  VII:4 of the GATS  S/C/N/1116  21/10/2022  
GATT  1994  
Article  XVII:4(a) and 
Paragraph 1 of the 
Understanding on the 
Interpretation of 
Article  XVII State trading activities  G/STR/N/19/HKG  
G/STR/N/18/HKG  
G/STR/N/17/HKG  01/06/2022  
03/06/2020  
19/01/2018  
Article  XXIV:7(a)  Notification of Regional 
Trade Agreement: ASEAN, 
Australia, China, and 
Georgia  WT/REG448/N/1  
WT/REG400/N/1  
WT/REG162/N/1/Add.11  
WT/REG397/N/1  11/02/2021  
17/01/2020  
05/03/2019  
12/02/2019  
Agreement on Government Procurement 1994  
Appendix  I Thresholds  GPA/THR/HKG/2  03/12/2019  
Article  XIX:5  Statistical submissions  GPA/STAT(20)/HKG/1  
GPA/STAT(19)/HKG/1  
GPA/STAT(18)/HKG/1  
GPA/STAT(17)/HKG/1  03/08/2021  
28/07/2020  
19/07/2019  
28/05/2018  
Agreement on Government Procurement 2012  
Article  XVI: 4 -5 Statistics  GPA/STAT(21)/HKG/1  
GPA/STAT(20)/HKG/1  
GPA/STAT(19)/HKG/1  
GPA/STAT(18)/HKG/1  
GPA/STAT(17)/HKG/1  11/10/2022  
03/08/2021  
28/07/2020  
19/07/2019  
28/05/2018  
Appendix  I Thresholds  GPA/THR/HKG/3  
GPA/THR/HKG/2  06/12/2021  
03/12/2019  WT/TPR/S/ 450 • Hong Kong, China  
 
- 110 - 
 
  WTO  Agreement  Description  Document symbol  Date 
Agreement on Import Licensing  
Article  1.4(a)  Publication  G/LIC/N/2/HKG/21  
G/LIC/N/2/HKG/20  
G/LIC/N/2/HKG/18/Corr.1  
G/LIC/N/2/HKG/18  17/08/2022  
28/07/2022  
27/01/2022  
09/11/2021  
Article  5.1 to 5.4  Licensing procedures or 
changes in these 
procedures  G/LIC/N/2/HKG/23  
G/LIC/N/2/HKG/22  
G/LIC/N/2/HKG/21  
G/LIC/N/2/HKG/20  
G/LIC/N/2/HKG/18/Corr.1  
G/LIC/N/2/HKG/19  
G/LIC/N/2/HKG/18  
G/LIC/N/2/HKG/17  
G/LIC/N/2/HKG/16  
G/LIC/N/2/HK G/15/Corr.1  
G/LIC/N/2/HKG/15  
G/LIC/N/2/HKG/14  
G/LIC/N/2/HKG/13  
G/LIC/N/2/HKG/12  
G/LIC/N/2/HKG/11  
G/LIC/N/2/HKG/10  
G/LIC/N/2/HKG/9  01/06/2023  
01/06/2023  
17/08/2022  
28/07/2022  
27/01/2022  
25/01/2022  
09/11/2021  
27/04/2021  
26/08/2020  
02/06/2020  
19/05/2020  
24/02 /2020  
10/09/2019  
06/03/2019  
28/01/2019  
28/01/2019  
28/01/2019  
Article  7.3 Replies to the 
questionnaire  G/LIC/N/3/HKG/26  
G/LIC/N/3/HKG/25  
G/LIC/N/3/HKG/24  
G/LIC/N/3/HKG/23  
G/LIC/N/3/HKG/22  30/09/2022  
29/09/2021  
30/09/2020  
27/09/2019  
04/10/2018  
Agreement on Trade Facilitation  
Articles 1.4, 10.4.3, 
10.6.2, 12.2.2  Notification of category 
commitments  G/TFA/N/HKG/1/Rev.3  
G/TFA/N/HKG/1/Rev.2  
G/TFA/N/HKG/1/Rev.1  07/10/2022  
18/03/2021  
08/03/2019  
Decision on Notification Procedures for Quantitative Restrictions  
G/L/59/Rev.1  Notification of QRs  G/MA/QR/N/HKG/6  
G/MA/QR/N/HKG/5/Add.1  
G/MA/QR/N/HKG/5  
G/MA/QR/N/HKG/4  28/10/2022  
12/04/2022  
30/10/2020  
14/05/2020  
Agreement on Rules of Origin  
Paragraph 4 of Annex  II Preferential rules of origin  G/RO/N/221  
G/RO/N/193  
G/RO/N/185  
G/RO/N/170  29/04/2021  
18/02/2020  
15/04/2019  
24/05/2018  
Agreement on Subsidies and Countervailing Measures  
Article  25.1 and 
GATT  1994 Article  XVI:1  Subsidies  G/SCM/N/401/HKG  
G/SCM/N/372/HKG  
G/SCM/N/343/HKG  30/06/2023  
29/06/2021  
01/07/2019  
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article  7 Annex  B SPS regulations  11 notifications (series G/SPS/N/HKG/ or see 
http://spsims.wto.org/ ) 
Agreement on Technical Barriers to Trade  
Article  2.9 Technical regulations  G/TBT/N/HKG/54  
G/TBT/N/HKG/53  17/10/2022  
17/10/2022  
Article  5.6 Conformity assessment 
procedures  G/TBT/N/HKG/52  
G/TBT/N/HKG/51  
G/TBT/N/HKG/50  05/07/2022  
23/08/2019  
08/02/2018  
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article  63.2 Notification of laws and 
regulations  IP/N/1/HKG/40; IP/N/1/HKG/C/4; 
IP/N/1/HKG/I/5  
IP/N/1/HKG/39; IP/N/1/HKG/D/6  
IP/N/1/HKG/38; IP/N/1/HKG/D/5  
IP/N/1/HKG/37; IP/N/1/HKG/C/3; 
IP/N/1/HKG/I/4  
IP/N/1/HKG/35; IP/N/1/HKG/I/2;  
IP/N/1/HKG/T/8  
IP/N/1/HKG/36; IP/N/1/HKG/I/3;  
IP/N/1/HKG/T/9  
IP/N/1/HKG/33; IP/N/1/HKG/P/10  
IP/N/1/HKG/34; IP/N/1/HKG/P/11  02/06/2023  
 
15/12/2022  
14/12/2022  
30/09/2020  
 
10/07/2020  
 
10/07/2020  
 
24/01/2020  
24/01/2020  
Source:  Compiled by the WTO Secretariat  based on notification documents .WT/TPR/S/ 450 • Hong Kong, China  
 
- 111 - 
 
  Table A3. 1 Incentives  
Programme  Objective  Agency in 
charge  Form of support  Total amount 
2018 -22 
(HKD  million)  
Small and Medium Enterprises (SMEs)  
Dedicated Fund on Branding, 
Upgrading and Domestic Sales 
(BUD Fund)  
https://www.bud.hkpc.org/en  To support enterprises to 
enhance their 
competitiveness and 
further their business 
development in  China and 
other economies with 
which Hong  Kong,  China 
has signed FTAs and/or 
Investment Promot ion and 
Protection Agreements 
through developing 
brands, upgrading and 
restructuring their 
operations, and promoting 
sales.  Trade and 
Industry 
Department 
(TID)  The Government 
provides funding for 
a maximum of 50% 
of the total approved 
project cost.  
 
The cumulative 
funding ceiling per 
enterprise is 
HKD 7,000,000 
(~USD  897,000), 
while the funding 
ceiling for each 
approved project is 
HKD 1,000,000 
(~USD  128,000).  
 
Funding support will 
be granted to each 
enterprise for a 
maximum of 
70 approved 
projects.  2018 (Note 1): 
HKD 217.88  
2019: HKD  419.27  
2020: HKD  584.63  
2021: HKD  634.48  
2022: HKD  969.65  
 
 
Note 1: Includes 
funding approved 
under the 
Enterprise Support 
Programme only  
SME Export Marketing Fund 
(EMF)  
https://emf.tid.gov.hk/en/  To help SMEs expand their 
businesses through 
participation in export 
promotion activities such 
as trade exhibitions, trade 
missions, placing 
advertisement s on trade 
publications, conducting 
promotion through 
electronic platforms/media 
and setting up/enhancing 
corporate websites/mobile 
applications.  
 
To help enterprises 
explore local business 
opportunities and develop 
business under the new 
normal through 
participation in exhibitions 
targeting the local market 
and online exhibitions 
under a special measure 
from 30  April 2021 to 
30 June 2026.  TID The Government 
provides funding for 
a maximum of 50% 
of the approved 
expenditure, subject 
to a ceiling of 
HKD 100,0 00 
(~USD  12,800) per 
application.  
 
The cumulative 
funding ceiling for 
each enterprise is 
HKD 1,000,000 
(~USD  128,000).  2018: HKD  167.08  
2019: HKD  299.02  
2020: HKD  239.67  
2021: HKD  232.44  
2022: HKD  331.57  WT/TPR/S/ 450 • Hong Kong, China  
 
- 112 - 
 
  Programme  Objective  Agency in 
charge  Form of support  Total amount 
2018 -22 
(HKD  million)  
SME Financing Guarantee 
Scheme (SFGS)  
https://www.hkmc.com.hk/en
g/our_business/sme_financing
_guarantee_scheme.html  The Scheme aims at 
helping local SMEs and 
non-listed enterprises 
(collectively, 
"Enterprises") to obtain 
financing from 
participating lenders 
("Lenders") for meeting 
their business needs so as 
to enhance their 
productivity and 
competitiveness in the 
rapidly changing business 
environment.  Hong Kong 
Mortgage 
Corporation 
Ltd (HKMC)  Under the Scheme, 
the HKMC Insurance 
Ltd, a wholly owned 
subsidiary of the 
HKMC, may provide 
guarantee coverage 
of 50%, 60%, 70%, 
or 80% to the credit 
facilities of eligible 
Enterprises 
approved by the 
Lenders.  
 
As businesses have 
been hard -hit by the 
COVID -19 epidemic 
and the global 
economic downturn 
in recent years, the 
Government has 
kept on enhancing 
the SFGS with a 
view to providing 
greater support to 
SMEs, including 
introducing 
guarantee products 
with a higher 
Government 
guarante e ratio (viz. 
the 90% Guarantee 
Product in 
December  2019 and 
the Special 100% 
Loan Guarantee in 
April 2020), raising 
the maximum loan 
amount per 
enterprise, 
extending the 
repayment period 
and introducing the 
principal moratorium 
to allow borrowers 
to choos e to repay 
only interest during 
the moratorium 
period.  The Government's 
total commitment 
under the SFGS 
amounts to 
HKD 280 billion. As 
at end -
December  2022, 
around 
HKD 211 billion of 
total guarantees 
have been 
approved 
(equivalent to 
around 
HKD 233 billion  of 
total approved loan 
amounts) under the 
SFGS  
SME Loan Guarantee Scheme 
(SGS)  
 
[Ceased to receive 
applications from 
1 April 2021.]  To help SMEs secure loans 
from participating lending 
institutions (PLIs) for 
acquiring business 
installations and 
equipment and for general 
business use in meeting 
working capital needs.  TID The Government 
provides up to 50% 
guarantee to loans 
granted by PLIs to 
SMEs, subject to a 
maximum guarantee 
amount of 
HKD 6 million 
(~USD  769,000) per 
SME. 
 
Each SME is also 
allowed to recycle 
the guarantee once 
after it has fully paid 
up the loan backed 
up by the 
guarantee, subject 
to a maximum 
guarantee amount of 
another 
HKD 6 million 
(~USD  769,000).  2018: HKD  908.97  
2019: HKD  817.95  
2020: HKD  172.80  
2021: HKD  62.23  WT/TPR/S/ 450 • Hong Kong, China  
 
- 113 - 
 
  Programme  Objective  Agency in 
charge  Form of support  Total amount 
2018 -22 
(HKD  million)  
Trade and Industrial 
Organisation Support Fund 
(TSF)  
https://www.smefund.tid.gov.
hk/english/tsf/tsf_objective.ht
ml To provide funding support 
to non -profit-distributing 
organizations, such as 
trade and industrial 
organizations, professional 
bodies or research 
institutes, to carry out 
projects which aim at 
enhancing the 
competitiveness of 
Hong Kong,  China 
enterprises in general or in 
specific sectors.  TID The Government 
provides funding for 
a maximum of 90% 
of the total approved 
project expenditure, 
subject to a cap of 
HKD 5 million 
(~USD  641,000) for 
each approved 
project.  2018 (Note 2): 
HKD 73.54  
2019: HKD  71.93  
2020: HKD  54.70  
2021: HKD  20.03  
2022: HKD  32.11  
 
Note 2: Includes 
funding approved 
under the previous 
SME Development 
Fund and the 
Organisation 
Support Programme 
under the BUD Fund  
Innovation and technology (I&T)  
Distance Business Programme  
https://bee.hkpc.org/en/fundi
ng-schemes/dbiz/  A one -off, time -limited 
funding scheme launched 
under the Anti -epidemic 
Fund in May  2020 to 
support enterprises to 
adopt Information 
Technology (IT) solutions 
to continue their business 
and services during the 
epidemic.  Innovation 
and 
Technology 
Commission 
(ITC) Funding is provided 
to eligible 
enterprises for 
adopting IT solutions 
under specified IT 
solution categories 
with a ceiling of 
HKD 300,000 for 
each enterprise.  HKD 1.53 billion  
Enterprise Support Scheme 
(ESS)  
https://www.itf.gov.hk/en/fun
ding-programmes/supporting -
research/ess/index.html  To support companies 
undertaking in -house R&D 
projects with a view to 
encouraging more private -
sector R&D investment in 
Hong Kong,  China.  ITC Funding is provided 
on a dollar -for-dollar 
matching basis, with 
a ceiling of 
HKD 10 million 
(about 
USD 1.28 million) 
for each approved 
project . It may be 
used for meeting 
labour costs, the 
procurement of 
equipment, and 
other direct costs 
specifically requi red 
for conduct ing the 
project . 2018: HKD  87.60  
2019: HKD  137.85  
2020: HKD  109.05  
2021: HKD  74.09  
2022: HKD  61.37  
General Support Programme  
https://www.itf.gov.hk/en/fun
ding-programmes/fostering -
culture/gsp/index.html  To support projects that 
contribute to fostering I&T  
culture in 
Hong Kong,  China , and 
those beneficial to the 
upgrading and 
development of its 
industries.  ITC Support is given as 
a grant, with at 
least 10% of the 
project cost 
contributed by the 
applicant's sponsor.  2018: HKD  53.16  
2019: HKD  57.44  
2020: HKD  54.66  
2021: HKD  83.65  
2022: HKD  125.91  
Guangdong -Hong Kong 
Technology Cooperation 
Funding  
https://www.itf.gov.hk/en/fun
ding-programmes/supporting -
research/tcfs/index.html  To enhance the level of 
collaboration on R&D  
among universities, 
research institutes and 
technology enterprises in 
Hong Kong,  China  and 
Guangdong/Shenzhen, 
China.  ITC Funding support is 
normally given as a 
grant, which may be 
used for meeting 
labour costs, costs 
for the procureme nt 
of equipment, and 
other direct costs 
specifically required 
for the conduct of 
the project  2018: HKD  3.97 
2019: HKD  32.10  
2020: HKD  21.84  
2021: HKD  16.18  
2022: HKD  45.41  
Innovation and Technology 
Fund for Better Living  
https://www.itf.gov.hk/en/fun
ding-programmes/facilitating -
technology/fbl/index.html  To fund innovation and 
technology projects which 
will make people's dail y 
living more convenient, 
comfortable and safer, or 
address the needs of 
specific community 
groups.  ITC A grant up to 90% 
of the eligible costs 
of the approved 
project or 
HKD 5 million, 
whichever is less.  2021: HKD  8.33 
2022: HKD  24.15  WT/TPR/S/ 450 • Hong Kong, China  
 
- 114 - 
 
  Programme  Objective  Agency in 
charge  Form of support  Total amount 
2018 -22 
(HKD  million)  
Innovation and Technology 
Support Programme (ITSP)  
https://www.itf.gov.hk/en/fun
ding-programmes/supporting -
research/itsp/index.html  To support midstream/ 
downstream R&D projects 
undertaken mainly by 
universities, and R&D 
centres in collaboration 
with private companies, 
industry support 
organizations, professional 
bodies, and trade and 
industry associations.  ITC Funding support is 
normally given as a 
grant, which may be 
used for meeting 
labour costs, costs 
for the procurement 
of equipment, and 
other direct costs 
specifically required 
for the conduct of 
the project.  2018: HKD  827.41  
2019: HKD  907.35  
2020: HKD  561.04  
2021: HKD 850.32  
2022: HKD  639.35  
Innovation and Technology 
Venture Fund (ITVF)  
https://www.itf.gov.hk/l -
eng/ITVF.asp  To attract more venture 
capital (VC) funds to co -
invest in local I&T start -
ups and creating a more 
vibrant I&T ecosystem in 
Hong Kong,  China.  ITC The ITVF co -invests 
with VC  funds 
selected as co -
investment partners 
(CPs)  in eligible local 
I&T start -ups at a 
matching ratio of 
approximately 
1 (Government): 
2 (CP) in eligible 
local I&T start -ups. 
The CPs are 
responsible for 
recommending 
suitable investment 
targets to the 
Government.  Up to May  2023, 
the ITVF has 
selected 17  VC 
funds as ITVF's CPs. 
Besides, the ITVF 
has co -invested in 
27 local I&T start -
ups. The 
Government's 
investment has 
amounted to 
approximately 
HKD 209 million, 
attracting over 
HKD 2.1 billion of 
private investment. 
The business areas 
of these I&T 
start-ups include 
supply chain 
management, 
e-commerce, 
financial 
technology, 
biotechnology and 
artificial intelligence  
Mainland -Hong Kong Joint 
Funding Scheme  
https://www.itf.gov.hk/en/fun
ding-programmes/supporting -
research/mhkjfs/index.html  To support joint R&D 
projects between 
Hong Kong,  China  and 
China to further 
strengthen R&D 
cooperation between the 
two. ITC Funding support is 
normally given as a 
grant, which may be 
used for meeting 
labour costs, costs 
for the procurement 
of equipment, and 
other direct costs 
specifically required  
for the conduct of 
the project.  2020: HKD  1.65 
2021: HKD  71.50  
2022: HKD  54.61  
Partnership Research 
Programme (consolidated from 
the previous University -
Industry Collaboration 
Programme)  
https://www.itf.gov.hk/en/fun
ding-programmes/supporting -
research/prp/index.html  To stimulate private -sector 
interest in R&D thro ugh 
leveraging the knowledge 
and resources of 
universities.  ITC The support is given 
as a grant, subject 
to a cash 
contribution by the 
company amounting 
to no less than 50% 
of the project cost.  2018: HKD  33.10  
2019: HKD  89.05  
2020: HKD  167.28  
2021: HKD 139.78  
2022: HKD  118.89  
Patent Application Grant  
https://www.itf.gov.hk/en/fun
ding-programmes/fostering -
culture/pag/index.html  To assist local companies 
and individuals who have 
never owned any patents 
in any countries or 
territories to apply for 
patents for their own 
inventions.  Hong Kong 
Productivity 
Council 
(HKPC)  A grant of up to 
HKD 250,000 or 
90% of the total 
direct cost  of the 
patent application, 
whichever is lower.  2018: HKD  45.75  
2019: HKD  41.00  
2020: HKD  19.50  
2021: HKD  28.25  
2022: HKD  28.25  
Public Sector Trial Scheme 
(including a one -off special call 
for PSTS -COVID -19) 
https://www.itf.gov.hk/en/fun
ding-programmes/facilitating -
technology/psts/index.html  To support the production 
of prototype s/ samples 
and the conducting of trial 
schemes in the public 
sector to promote the 
realization and 
commercialization of R&D 
results under Innovation 
and Technology Fund 
(ITF) projects; arising 
from incubatees/ graduate 
tenants of the Hong  Kong 
Science and Technology 
Parks Corporation ITC A grant not 
exceeding 50% of 
the actual cost of 
the original R&D 
project (and up to 
100% for projects 
initiated by 
R&D centres).  
 
For incubatees/ 
graduate tenants of 
the HKSTPC and 
Cyberport and 
technology 2018:  HKD 39.99  
2019: HKD  110.03  
2020: HKD  216.65  
2021: HKD  70.75  
2022: HKD  103.74  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Programme  Objective  Agency in 
charge  Form of support  Total amount 
2018 -22 
(HKD  million)  
(HKSTPC) and Cyberport 
or technology companies 
conducting or planning to 
conduct R&D activities in 
Hong Kong,  China.  companies 
conducting or 
planning to conduct 
R&D activities in 
Hong Kong,  China, a 
maximum grant of 
HKD 1 million per 
application applies.  
R&D Cash Rebate Scheme  
https://www.itf.gov.hk/en/fun
ding-programmes/supporting -
research/crs/index.html  To reinforce the research 
culture among business  
enterprises and encourage 
them to establish stronger 
partnerships with 
designated local public 
research institutions.  ITC Cash rebate 
equivalent to 40% 
of the expenditure 
in: projects under 
the ITF, and 
projects funded 
entirely by the 
companies and 
conduc ted by 
the designated local 
research 
institutions.  2018: HKD  115.94  
2019: HKD  155.09  
2020: HKD  141.61  
2021: HKD  135.86  
2022: HKD  115.16  
Reindustrialization and 
Technology Training 
Programme  
https://www.itf.gov.hk/en/fun
ding-programmes/nurturing -
talent/rttp/index.html  To subsidize local 
enterprises to train their 
staff in advanced 
technologies, especially 
those related to 
"Industry  4.0". Vocational 
Training 
Council 
(VTC)  Funding support on 
a 2(Government):  
1(enterprise) 
matching basis . 
Maximum funding 
support at 
HKD 500,000 for 
each enterprise in 
each financial year. 2018: HKD  1.79 
2019: HKD  11.22  
2020: HKD  12.55  
2021: HKD  49.28  
2022: HKD  163.39  
Re-industrialization Funding 
Scheme  
https://www.itf.gov.hk/en/fun
ding-programmes/facilitating -
technology/rfs/index.html  To subsidize 
manufacturers to set up 
new smart production 
lines in Hong  Kong,  China.  ITC Funding support on 
a 1 (Government): 
2 (company) 
matching basis. 
Maximum funding 
support is one  third 
of the total approved 
project cost or 
HKD 15 million per 
project, whichever is 
lower.  2021: HKD  42.88  
2022: HKD  121.87  
Research Talent Hub  
https://www.itf.gov.hk/en/fun
ding-programmes/nurturing -
talent/research -talent -
hub/index.html  To support the recruitment 
of research talents to 
assist in R&D projects 
funded by the ITF or R&D 
work undertaken by 
incubatees or I&T tenants 
of HKSTPC and Cyberport 
or technology companies 
conducting or planning to 
conduct R&D  activities in  
Hong Kong,  China.  ITC A maximum monthly 
allowance of 
HKD 20,000 for 
graduates with a 
Bachelor's degree, 
HKD 23,000 for 
those with a 
Master's degree, and 
HKD 35,000 plus an 
additional 
HKD 10,000 living 
allowance for those 
with a doctoral 
degree awarded by 
either a local 
university or a well -
recognized non -local 
institution.  
Each ITF project and 
eligible company can 
engage 
four research talents 
for 36  months.  2018: HKD  438.36  
2019: HKD  766.90  
2020: HKD  591.96  
2021: HKD  998.74  
2022: HKD  961.97  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Programme  Objective  Agency in 
charge  Form of support  Total amount 
2018 -22 
(HKD  million)  
STEM Internship Scheme  
https://www.itf.gov.hk/en/fun
ding-programmes/nurturing -
talent/stem -internship -
scheme/index.html  To provide allowance to 
university students taking 
full-time Science, 
Technology, Engineering 
and Mathematics (STEM) 
programmes to enrol in 
short-term internships, so 
as to encourage such 
students to gain 
I&T-related work 
experience during their 
studies and to foster their 
interest in pursuing a 
career in I&T after 
graduation.  ITC A monthly allowance 
of HKD  10,500 is 
provided to each 
student intern under 
the Scheme, with a 
cap of three  months 
in each academic 
year. The monthly 
allowance was 
increased to 
HKD 11,190 
effective from 
1 April 2023.  2020: HKD  36.37  
2021: HKD  76.09  
2022: HKD  89.01  
Technology Start -up Support 
Scheme for Universities  
https://www.itf.gov.hk/en/fun
ding-programmes/supporting -
start-ups/tsssu/index.html  To provide funding to 
designated universities to 
support their teams in 
starting technology 
businesses and 
commercializing their 
R&D results.  ITC An annual funding of 
up to HKD  8 million 
is provided to each 
of the designated 
universities. Each 
funded technology 
start-up may receive 
up to 
HKD 1.5 million each 
year for no more 
than three 
consecutive years.  2018: HKD  24.00  
2019: HKD  48.00  
2020: HKD  48.00  
2021: HKD  48.00  
2022: HKD  48.00  
Technology Voucher 
Programme  
https://www.itf.gov.hk/en/fun
ding-programmes/facilitating -
technology/tvp/index.html  To support local non -listed 
enterprises in using 
technological services and 
solutions to improve 
productivity, or upgrade or 
transform their business 
processes.  ITC Funding of no more 
than three quarters 
of the total approved 
project cost. Subject 
to a cumulative 
funding ceiling of 
HKD 600,000, up to 
six projects from 
each eligible 
enterprise may be 
approved.  2018: HKD  94.46  
2019: HKD  125.29  
2020: HKD  239.17  
2021: HKD  563.21  
2022: 
HKD 2,129.46  
Services  
CreateSmart Initiative (CSI)  
https://csi.createhk.gov.hk/en
/index.html  To support initiatives that 
contribute towards the 
development of creative 
industries (e xcept the film 
industry).  Create 
Hong Kong 
(CreateHK)  The CSI provides 
funding in the form 
of grants, which 
may be used for 
meeting labour 
costs, the costs for 
the procurement of 
equipment, and 
other direct costs 
specifically required 
for the conduct of 
the project.  2018: HKD  223.52  
2019: HKD  305.20  
2020: HKD  355.12  
2021: HKD  259.82  
2022: HKD  267.69  
Film Development Fund (FDF)  
https://www.fdc.gov.hk/en/ap
plications.php  To support projects and 
activities which contribute 
towards the development 
of Hong  Kong,  China's film 
industry.  CreateHK  There are a number 
of different funding 
schemes under FDF 
to support different 
natures of film 
projects along four 
strategic directions, 
namely nurturing 
talent, enhancing 
local production, 
expanding markets 
and building 
audience.  2018: HKD  65.01  
2019: HKD  55.74  
2020: HKD  108.10  
2021: HKD  127.36  
2022: HKD  175.33  
Green and Sustainable Finance 
Grant Scheme  
https://www.hkma.gov.hk/eng
/key-functions/international -
financial -centre/bond -market -
development/tax -concessions -
and-incentive -schemes/  To promote green and 
sustainable financing 
activities in 
Hong Kong,  China by 
providing s ubsidy to 
eligible bond issuers and 
loan borrowers to cover 
their expenses on bond 
issuance and external 
review services.  Hong Kong 
Monetary 
Authority 
(HKMA)  Subsidies are 
provided for the 
(i) general bond 
issuance costs and 
(ii) external review 
costs, cap ped at 
HKD 2.5 million and 
HKD 800,000 
respectively per 
eligible bond 
issuance/ loan.  The total subsidies 
granted in:  
2021 (since the 
scheme was 
launched in May): 
HKD 56 
2022:  HKD 94 WT/TPR/S/ 450 • Hong Kong, China  
 
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  Programme  Objective  Agency in 
charge  Form of support  Total amount 
2018 -22 
(HKD  million)  
Pilot Green and Sustainable 
Finance Capacity -Building 
Support Scheme  
https://www.greentalent.org.h
k/ To support talent 
development in green and 
sustainable finance by 
providing subsidies to 
market practitioners, 
students and graduates in 
taking up relevant training 
and acquiring relevant 
professional qualifications.  Centre for 
Green and 
Sustainable 
Finance 
(GSF 
Centre)a Subsidies are 
provided for the 
training and 
acquisition of 
relevant professional 
qualifications in 
sustainab le finance.  
After completing 
eligible 
programmes, each 
applicant may apply 
for a subsidy of up 
to HKD  10,000.  The Scheme was 
officially launched 
in December  2022, 
with 
HKD 200 million 
earmarked over a 
three -year pilot 
period.  
Professional Services 
Advancement Support Scheme 
(PASS)  
https://www.pass.gov.hk/  To provide 
HKD 200 million funding 
support for non -profit -
distributing organizations 
operating as trade and 
industrial org anizations, 
professional bodies, 
research institutes, etc. to 
carry out projects aimed 
at increasing exchanges 
and cooperation between 
Hong Kong,  China 's 
professional services and 
external counterparts, 
promoting relevant 
publicity activities, and 
enhancin g the standards 
and external 
competitiveness of 
Hong Kong,  China 's 
professional services.  
 
With a view to stepping up 
the promotion of 
Hong Kong,  China 's 
competitive edges and 
professional services to 
cities in China (including 
the Greater Bay Area) and 
overseas markets, 
HKD 50 million has been 
set aside under PASS to 
subsidize major 
professional bodies to 
participate in relevant 
exchange, promotion and 
professional standard 
enhancement activities 
organized by the 
Government and the Hong 
Kong Trade Developm ent 
Council after the pandemic 
situation has stabilized.  Commerce 
and 
Economic 
Develop -
ment Bureau 
(CEDB)  The maximum grant 
for each approved 
project is 
HKD 3 million or 
90% of the total 
eligible project cost, 
whichever is lower.  The total PASS 
grant committed at 
end-October of  
2018: HKD  20.1 
2019: HKD  15.5 
2020: HKD  11.3 
2021: HKD  2.3 
2022: HKD  5.6 
a The GSF Centre was launched in July  2021 by the Green and Sustainable Finance Cross -Agency 
Steering Group, which was jointly initiated by the HKMA and the Securities and Futures 
Commission  (SFC) and established in May  2020. Other members include the Environment and 
Ecology Bureau  (EEB), the Fi nancial Services and the Treasury Bureau (FSTB), Hong  Kong 
Exchanges and Clearing Ltd (HKEX), the Insurance Authority (IA) , and the Mandatory Provident 
Fund Schemes Authority (MPFA).  
Source:  Information provided by the authorities.  
  WT/TPR/S/ 450 • Hong Kong, China  
 
- 118 - 
 
  Table A3. 2 Main changes to the Stores and Procurement Regulations  resulting from the 
new pro -innovation government procurement policy in 2019  
Chapter  Changes  
I New pro -innovation policy  
Government procurement principles  
Value for money re-defined  
IA Annual review of undertakings by officers involved in procurement  
Avoiding and managing conflict of interests when engaging outside technical experts  
II Departmental limit increased to HKD  10 million  
Use of marking schemes and setting essen tial requirements on tenderer's experience for 
procurements within the quotation limit  
Email accepted as a form of written quotation  
Quotation negotiations  
Cancellation of quotation exercise  
III Direct engagement of contractors/suppliers/service providers  
Purchase of a prototype or first good or service may justify the use of restricted/  
single tendering  
Approving authorities of restricted/single tendering and direct engagement  
No misplaced tenders accepted during tender invitation  
Approving authority for the threshold of legal vetting for works contracts delegated to 
Permanent Secretary for Development (Works)  
No essential requirement on tenderer's experience in general for non -works 
procurements  
Encourage wider use of marking schemes and introduce the Sta ndard Marking 
Scheme  (SMS) Framework  
Marking schemes of works contracts continue to be approved by relevant tender board  
IV Technical weighting for assessment of consultancy proposal should normally be 
60%-70%. Marking schemes require approval from the re levant consultants selection 
board / committee.  
The financial limit of the Departmental Consultants Selection Committee increased to 
HKD 10 million  
V Updated definition of "original contract value" in the context of variation of non -work 
contracts  
Appendix  III(F)  Encourage market research and engagement  
SMEs or start -ups friendly tender specifications  
Appendix  III(G)  Approving authorities for exceptions to the SMS Framework  
Approving authorities for the adoption of marking schemes in works tenders  
Blanket approval for individual marking schemes in works and non -works procurement  
Appendix  III(G)1  Engagement of outside technical experts in government procurement  
Appendix  III(I) Updated requirements for submission to Central Tender Board and subsidia ry boards  
Source:  FSTB, Financial Circular No.  2/2019 . Viewed  at: 
https://accessinfo.hk/en/request/533/response/1514/attach/6/FC02%202019.pdf?co okie_passthrou
gh=1 . 
  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Table A3. 3 Intellectual property laws and regulations, 2023  
Title Description  
Patents  
Patents Ordinance (Cap.  514) Makes provisions for patents and related matters.  
 
Amended on several occasions, most recently by the Patents (Amendment) 
Ordinance 2016 to provide for the legal framework for setting up an OGP 
system, refine the pre -existing short -term patent system, and introduce an 
interim measure to prohibit the use of certain misleading or confusing titles and 
descriptions relating to provision of patent agency services. The Amendment 
Ordinance entered into force in December  2019 (WTO document 
IP/N/1/HKG/33; IP/N/1/HKG/P/10 , 24 January  2020).  
Patents (Transitional 
Arrangements) Rules  (Cap.  514B)  Provides transitional arrangements for the registration of patents in the Register 
of Hong  Kong,  China  for patents registered under the old Registration of Patents  
Ordinance, which was repealed in 1997, and cer tain patents registered under 
the United  Kingdom Patents Acts 1949 and 1977.  
Patents (General) Rules  
(Cap.  514C)  Prescribes provisions and procedures under the Patents Ordinance (Cap.  514).  
 
Amended on several occasions, most recently in 2019 to specify a nd regulate 
the necessary practices and procedures for introduction of the OGP system and 
refinement of the pre -existing short -term patent system, pursuant to the 
framework enshrined in the Patents (Amendment) Ordinance 2016 (WTO 
document IP/N/1/HKG/34; IP /N/1/HKG/P/11 , 24 January  2020). 
Patents (Designation of Patent 
Offices) Notice  (Cap.  514A)  Makes designations under Section  8 of the Patents Ordinance (Cap.  514).  
Plant varieties  
Plant Varieties 
Protection Ordinance 
(Cap.  490) Provides, inter alia, a sui generis regime for the granting and protection of 
proprietary rights to persons who breed or discover and develop plant 
varieties.  
Amended in 2009 to extend its application to the three offices set up 
by China in Hong  Kong,  China (WTO doc ument IP/N/1/HKG/20, 
17 March  2010).  
Plant Varieties 
Protection Regulation 
(Cap.  490A)  Prescribes provisions and procedures under the Plant Varieties Protection 
Ordinance (Cap.  490).  
Trademarks (including trade descriptions)   
Trade Marks Ordinance 
(Cap.  559) Makes provisions for the registration of trademarks and related matters.  
 
Amended on several occasions, most recently in 2020 to⎯ 
(i) empower the Registrar of Trade Marks  to make essential procedural rules 
for implementing the international trademark registration system under the 
Protocol Relating to  the Madrid Agreement Concerning the International 
Registration of Marks (Madrid Protocol) in Hong  Kong,  China ; confer powers 
on the Customs and Excise Department (C&ED) to enforce t he criminal 
provisions  of the Trade Marks Ordinance; and enhance the trademark 
application and registration system of Hong  Kong,  China  (WTO document 
IP/N/1/HKG/35 , IP/N/1/HKG/I/2 , IP/N/1/HKG/T/8,  10 July 2020); and 
(ii) prohibit registration of a  trademark cons isting of or containing the national 
anthem  (WTO document IP/N/1 /HKG/36 , IP/N/1/HKG/ I/3, IP/N/1/HKG/T/9 , 
10 July 2020).  
Trade Marks Rules  (Cap.  559A)  Prescribes provisions and procedures under the Trade Marks Ordinance 
(Cap.  559).  
 
Amended on several occasions, most recently in 2020 to enhance the trademark 
application and registration system of Hong  Kong,  China  (WTO  document 
IP/N/1/HKG/35 , 10 July 2020). 
Trade Descriptions Ordinance 
(Cap.  362) Contains provisions prohibiting the use of false trade descriptions and the 
forgery of trademarks in relation to goods.  
 
Amended in 2020 for amendments to the definition of "trademark" therein 
(WTO document IP/N/1/HKG/35 , IP/N/1/HKG/I/2 , IP/N/1/HKG/T/8 , 
10 July 2020).  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Title Description  
Geographical indications (GIs)  
Trade Marks Ordinance 
(Cap.  559) 
Trade Descriptions Ordinance 
(Cap.  362) Enables GIs to be registered as certification or collective trademarks. The use of 
a false GI applied to goods in a fashion calculated to mislead consumers may be 
classed as a criminal offence under the Trade Descriptions Ordinance.  
Copyright and related  rights  
Copyright Ordinance (Cap.  528) Makes provisions in respect of copyright and related rights and for related 
purposes.  
 
Amended on several occasions, recently in 2020 to enhance the copyright 
exceptions relating to persons with a print disability, to bring them in line with 
the standards under the Marrakesh Treaty to Facilitate Access to Published 
Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled 
(Marrakesh Treaty)  (WTO document IP/N/1/HKG/37 , IP/N/1/HKG/C/3 , 
IP/N/1/HKG/I/4, 30  September  2020), and also in 2022 to strengthen copyright 
protection in the digital environment, including the introduction of a new 
technology -neutral exclusive communication right for copyright owners to 
communicate their copyright works to the public through any mode of electronic 
transmission (including streaming) (WTO document IP/N/1/HKG/40 , 
IP/N/1/HKG/C/4 , IP/N/1/HKG/I/5, 2  June 2023). 
Prevention of Copyright 
Piracy Ordinance (Cap.  544) Makes provisions for the prevent ion of copyright piracy using the medium of 
optical discs (including stampers). Sets out a statutory licensing scheme for 
manufacturers of optical discs in Hong  Kong,  China , and requires optical discs 
manufactured in Hong  Kong,  China  to be marked with an a ssigned 
manufacturer identification code. Counteracts bootlegging of copyrighted work 
by stipulating that the unauthorized possession of video recording equipment 
in certain places of public entertainment is an offence.  
Industrial designs  
Registered Designs Ordinance 
(Cap.  522) Establishes a system for the registration of new designs.  
 
Amended on several occasions, most recently in 2021 to prohibit registration  of 
a design that consists of or contains the national flag, the national emblem or 
their designs  (WTO  document IP/N/1/HKG/38 , IP/N/1/HKG/D/5, 
14 December  2022). 
Registered Designs Rules  
(Cap.  522A)  Prescribes provisions and procedures under the Registered Designs Ordinance 
(Cap.  522).  
 
Amended on several occasions, most recent ly in 2021 to provide that the 
evidence of entitlement to give consent to the registration of a design (on  which 
any armorial bearings,  etc. appears) is subject to the prohibition of registration 
of a design consisting of or containing the national flag or the national emblem, 
or their designs  (WTO  document IP/N/1/HKG/39 , IP/N/1/HKG/D/6, 
15 December  2022). 
Copyright Ordinance (Cap.  528) Provides protection for commercially exploited artistic works.  
Layout -designs (topographies) of integrated circuits  
Layout -design (Topography) 
of Integrated Circuits 
Ordinance (Cap.  445) Provides a sui generis IP regime for the protection of layout -designs 
(topographies) of integrated circuits and for legal remedies against 
infringement.  
 
Amended on several occasions, most recently in 2017 to reflect the 
latest membership position of the Paris Convention (WTO  document 
IP/N/1/HKG/32 , IP/N/1/HKG/L/5, 18  April 2017). 
Layout -design (Topography) of 
Integrated Circuits 
(Designatio n of Qualifying 
Countries,  Territories or Areas) 
Regulation  Designates countries, territories or areas as qualifying countries, territories or 
areas under Section  24 of the Layout -design (Topography) of Integrated 
Circuits Ordinance (Cap.  445).  WT/TPR/S/ 450 • Hong Kong, China  
 
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  Title Description  
Protection  of undisclosed information  
Non-statutory protection 
of undisclosed information  Protection under the common law on confidentiality.  
Personal Data (Privacy) Ordinance  Sets out the Data Protection Principles and outlines how data users should 
collect, handle and use personal data, complemented by other provisions 
imposing further compliance requirements.  
Source:  Information provided by the authorities.  
__________