HK vs China GDP: A sobering reality

HKEJ June 09, 2017 11:50

Failing to transform its economy sufficiently and come up with new growth engines, Hong Kong has seen its GDP, as a proportion of China's economy, shrink substantially over past two decades.

Hong Kong's economy relative to China's gross domestic product (GDP) has fallen from a peak of 27 percent in 1993 to less than 3 percent in 2017.

In 1997, when Britain handed the city back to Chinese sovereignty, Hong Kong's GDP was still around 20 percent the size of the mainland economy, as the territory played the vital role of a middleman in China's trade and investments with the rest of the world.

Through the years, however, China underwent enormous economic growth. Cities such as Shenzhen and Shanghai developed rapidly and continued to attract huge foreign investment.

The Chinese government also launched a slew of policies, such as the establishment of free trade zones, to further stimulate the nation's economic expansion.

As for Hong Kong, it failed to change its economic structure sufficiently, leading to lack of new growth engines.

So now, twenty years after the handover, we have a situation where Hong Kong's GDP is equivalent to just 2.9 percent of China's economy.

YH/RT/RC

HKEJ

Hong Kong Economic Journal

Hong Kong

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