Hong Kong and Macau_ City Guide (Lonely Planet, 14th Edition) - Andrew Stone [24]
For better or worse, Hong Kong’s economic well-being is increasingly tied to the fortunes of China. Mainland tourists, having surged by half since the easing of travel restrictions, are now the largest source of tourism dollars. Local enterprises, from banks to retailers, are eager to tap the northern market for profit.
Hong Kong has the world’s third-busiest port and the seventh-largest stock exchange, with a market capitalisation of $1.62 trillion. The value of initial public offerings handled here is second-highest in the world after London. And the city’s economy is the most liberal in Asia, enjoying low taxes, a modern and efficient port and airport, excellent worldwide communications and strict anticorruption laws.
Critics would say that while Hong Kong’s annual per capita GDP of US$29,134 (compared to China’s $2982) makes it one of the richest cities in Asia, it is less impressive than it looks. The distribution of that wealth is far from even. Hong Kong has more billionaires than most countries, but many more people – in particular the losers of the knowledge economy and mainland migrants – struggle to meet fairly basic levels of subsistence.
In recent decades, Hong Kong has moved from labour- to capital-intensive industries –
service industries employ about 85% of Hong Kong’s workforce and make up more than 88% of its GDP. Telecommunications, banking, insurance, tourism and retail sales have pushed manufacturing into the background.
The change may have seen a dramatic increase in wages, but there has not been a comparable expansion of the welfare state, though welfare spending has shot up much faster than government spending since the 1990s. On the other hand, the government maintains a low tax regime, relying heavily on revenue from land sales and stamp duty on stock trading. Profit tax is only 16%. Generous personal tax allowances mean only a little more than 40% of the working population pays any salaries tax at all and a mere 0.3% pays the full 16%. The heaviest tax burden falls on the middle class, engendering much dissatisfaction.
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ENVIRONMENT & PLANNING
THE LAND
Hong Kong measures 1104 sq km and is divided into four major areas: Hong Kong Island, Kowloon, the New Territories and the Outlying Islands.
Hong Kong Island covers 81 sq km, or just over 7% of the total land area. It lies on the southern side of Victoria Harbour, and contains Central, the main business district. Kowloon is a peninsula on the northern side of the harbour. The southern tip, an area called Tsim Sha Tsui (pronounced jìm-sàa-jéui), is a major tourist area. Kowloon only includes the land south of Boundary St, but land reclamation and encroachment into the New Territories gives it an area of about 48 sq km, or just over 4% of the total. The New Territories occupies 747 sq km, or more than 68% of Hong Kong’s land area, and spreads out like a fan between Kowloon and the border with mainland China. What was once the territory’s rural hinterland has become in large part a network of ‘New Towns’. The Outlying Islands refers to the territory’s 234 islands, but does not include Hong Kong Island or Stonecutters Island, which is off the western shore of the Kowloon peninsula and has been absorbed by land reclamation. Officially, the Outlying Islands are part of the New Territories and their 228 sq km make up just over 20% of Hong Kong’s total land area.
Almost half the population lives in the New Territories, followed by Kowloon (30%), Hong Kong Island (19%) and the Outlying Islands (2%). A tiny percentage (about 3000 people) live at sea. The overall population density is 6400 people per sq km and the population may already have reached seven million.
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GREEN