Industry and trade in Hong Kong is unique for a number of reasons. Upon its handover to China in 1997, Hong Kong was thrust into the world of economic globalization and competition overnight, much of that competition coming from mainland China. However, Hong Kong’s free market approach and favorable geographic position (which includes a superbly sheltered natural harbor) opened up a vast number of trading opportunities that have proven highly beneficial for the territory. Given that most of Hong Kong’s residents were first or second-generation immigrants and refugees during the period of industrialization and capitalization, the society was basically a “young” one throughout much of the 20th century—a situation that lent itself to libertarianism and individualism, both of which provided a high favorable environment in terms of economic opportunity and the growth of enterprise.

Following World War II, Hong Kong went through a period of rapid industrialization, briefly became a major manufacturing center (primarily the manufacturing of textiles and similar products), then quickly converted to a service-based economy in the 1980s. A skilled, adaptable, and hard-working labor force coupled with Hong Kong’s adoption of modern British (i.e., western) business practices guaranteed that opportunities for the growth of domestic industries, external trade, and foreign investment were all maximized.

Today, Hong Kong ranks as the 11th largest trading entity in the world, with the total value of its imports and exports exceeding the GDP on an annual basis. Having very few natural resources and little arable land available for agricultural purposes, Hong Kong must import the majority of its food and raw material, with annual imports totaling US$368.4 billion (as of 2007). Hong Kong’s major import partners are all Asian Pacific countries, including mainland China (46.3%), Japan (10.0%), Taiwan (7.1%), and Singapore (6.8%). Primary imports are foodstuffs, transport equipment, raw materials, semi-manufactures, and petroleum. Large shares of these commodities, however, are re-exported to other countries, as opposed to being kept for domestic use. Hong Kong’s largest exports markets are China, the United States, Japan, and Germany. Exports totaled US$344.9 billion in 2007, with primary exported commodities being clothing, textiles, footwear, electrical appliances, watches and clocks, toys, plastics, and precious stones.

All this being said, Hong Kong’s economy is almost entirely driven by its service sector, with heavy industry and agricultural accounting for a mere 9% of the GDP, and the service sector accounting for a whopping 90% (the majority of this service industry activity comes from the business and financial sector). Hong Kong’s tourism industry is also on the rise, gaining a significant boost from the opening of the Hong Kong Disneyland Resort in 2005.