Chapter 5

Commerce and Industry

Hong Kong’s low tax rates, first-class infrastructure,
effective legal system and free flow of capital and information
all contribute to an environment in which business can flourish.
The city is an important gateway to the Mainland of China
and one of the world’s most dynamic economies.

Hong Kong is a leading international trading and services centre as well as an important
command and control centre for manufacturing activities in the region. It is recognised as one
of the freest economies in the world, a model for international trade and the most strategic
gateway to the vast Mainland market. The government is firmly committed to free trade and
sees its task as facilitating commerce and industry within the framework of a free market. As a
separate customs territory, the Hong Kong Special Administrative Region (HKSAR) does not
impose any tariffs and works at enhancing customs clearance efficiency while maintaining
effective control. Hong Kong also adopts an open and liberal investment policy and proactively
encourages inward investment.

Merchandise Trade Performance

Hong Kong’s external trade grew notably in 2021. Total merchandise trade increased
25.3 per cent to $10,268.4 billion compared with 2020. Total exports increased 26.3 per cent to
$4,960.7 billion, while imports increased 24.3 per cent to $5,307.8 billion. The territory’s biggest
trading partner was the Mainland, followed by Taiwan and the United States. Hong Kong was
the world’s sixth-largest trading entity in terms of value of merchandise trade.

Total Exports
In 2021, electrical machinery, apparatus and appliances and electrical parts thereof worth
$2,264 billion were the principal commodities exported, followed by telecommunications and
sound recording and reproducing apparatus and equipment ($752.7 billion) and office
machines and automatic data processing machines ($562.5 billion). The Mainland, the US and
Taiwan were the main destinations, accounting for 59.5 per cent, 6.2 per cent and 2.9 per cent
respectively of the total value of total exports.

Imports
In 2021, electrical machinery, apparatus and appliances and electrical parts thereof constituted
the largest share of total imports at $2,322.1 billion, followed by telecommunications and sound
recording and reproducing apparatus and equipment ($756 billion) and office machines and

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automatic data processing machines ($457.1 billion). The Mainland, Taiwan and Singapore were
Hong Kong’s major suppliers, accounting for 45.8 per cent, 10.3 per cent and 7.8 per cent
x
respectively of the total value of imports.
x
Services
Hong Kong is one of the world’s most service-oriented economies. The services sector’s share
of Gross Domestic Product (GDP) in 2020 was 93.4 per cent and it provided employment for
3,230,000 people, making up 88.5 per cent of total employment in 2021.
1
The total services trade of Hong Kong amounted to $1,076.27 billion in 2021, the world’s 20th
2
largest in value. The territory exported $596.7 billion worth of services, contributing to
20.8 per cent of GDP, compiled based on the change of ownership principle. It ranked sixth in 3

the region after the Mainland, India, Singapore, Japan and Korea in total value of services
exported, and 21st in the world.

The main components of Hong Kong’s exports of services were in transport and financial
services, accounting for 41.8 per cent and 30.8 per cent respectively of the total value. The
territory is a net exporter of services and had an overall surplus of $117.1 billion in 2021,
including surpluses of $126 billion and $88.4 billion in financial services and transport
respectively.

Manufacturing
Hong Kong is a command and control centre for manufacturing with a globalised production
network. Domestic manufacturing contributed 1 per cent of GDP in 2020 and provided
employment for 78,800 people in 2021, making up 2.2 per cent of overall employment.

Food and beverage producers are the largest employers in the sector, followed by employers in
the printing and reproduction of recorded media industries. Chart 1 shows the breakdown of
manufacturing employment.

Chart 1 Number of People Employed by

Manufacturing Sector as at December 2021

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Inward Direct Investment

According to the World Investment Report 2021 issued by the United Nations Conference on
Trade and Development, Hong Kong was the world’s third-largest recipient of inward direct
investment in 2020, after the US and the Mainland. The Census and Statistics Department’s
report External Direct Investment Statistics of Hong Kong 2020 indicated Hong Kong’s foreign
direct investment (FDI) inflow in 2020 amounted to $911.1 billion. At the end of 2020, the
total stock of inward direct investment1 amounted to $15,883.5 billion. The vast stock of external
direct investment in Hong Kong testifies to its status as a prominent international financial centre
and commercial hub, as well as its attraction to multinational corporations as a base to manage
their investments and businesses around the world. Chart 2 shows selected major investor
countries and territories of inward direct investment. The British Virgin Islands and the Mainland
were the two largest, accounting for 31.6 per cent and 27.1 per cent of the total respectively.
Chart 3 shows the major economic activities of Hong Kong enterprise groups2 having received
inward direct investment. Those engaged in investment and holding, real estate, and
professional and business services took up the largest share, at 65.2 per cent of the total.

According to the latest survey in 2021, the number of overseas and Mainland companies in
Hong Kong reached 9,049, an all-time high, covering companies across different sectors, sizes
and origins of parent companies.

Chart 2 Stock of Hong Kong’s Inward Direct Investment

at Market Value by Selected Major Investor
Country/Territory# at end-2020

# Selected based on the stock of Hong Kong’s inward direct investment from individual investor countries/territories in
recent years.
Note: Individual percentage shares may not add up to 100 due to rounding.

1 According to international statistical standards, the total stock and flow of inward direct investment presented in this
paragraph is compiled based on the asset/liability principle, while detailed inward direct investment figures analysed
by country/territory and by major economic activity of Hong Kong enterprise groups presented in charts 2 and 3
respectively are based on the directional principle. Owing to the adoption of different presentation principles, the total
stock of inward direct investment is different from the sum of the detailed inward direct investment figures by country/
territory or by major economic activity of Hong Kong enterprise groups.
2 A Hong Kong enterprise group consists mainly of a Hong Kong parent company and its Hong Kong subsidiaries,
associates and branches.

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Chart 3 Stock of Hong Kong’s Inward Direct Investment

at Market Value by Major Economic Activity of
Hong Kong Enterprise Groups at end-2020

Note: Individual percentage shares may not add up to 100 due to rounding.

Institutional Framework
Commerce, Industry and Tourism Branch
The Commerce, Industry and Tourism Branch of the Commerce and Economic Development
Bureau formulates and coordinates policies and strategies in relation to Hong Kong’s external
commercial relations, tourism, inward investment promotion, convention and exhibition
services, intellectual property protection, industry and business support, trade facilitation,
consumer protection, promotion of competition, postal services and meteorological services.
It also sets the overall policy for the HKSAR’s participation in the Belt and Road Initiative and
coordinates the work of the HKSAR Government on the initiative. The branch is assisted by
the Trade and Industry Department, Invest Hong Kong, Customs and Excise Department,
Intellectual Property Department, Hongkong Post and Hong Kong Observatory. It is also
supported by overseas Hong Kong Economic and Trade Offices (ETOs).

Trade and Industry Department

The Trade and Industry Department handles the HKSAR’s commercial relations with its trading
partners, and protects Hong Kong’s trading rights and trade interests.

The department provides locally based trade and industry organisations and businesses with
services, including issuing certificates of origin, import and export licences and certificates of
Hong Kong service suppliers. It offers general support to various sectors, in particular small and
medium enterprises (SMEs), and provides local enterprises with updated information on
changes in major trading partners’ trade-related laws, regulations and policies.

Invest Hong Kong

Invest Hong Kong (InvestHK) attracts and retains FDI that is of strategic importance to the
territory’s economic development. It supports overseas and Mainland companies to set up and
expand their operations in Hong Kong. Investment promotion activities are conducted through
its 16 investment promotion units worldwide, as well as its overseas consultants in another
15 strategic global locations.

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Customs and Excise Department

The Customs and Excise Department enforces certain trade control systems for the issue of
certificates of origin, including those under the Mainland and Hong Kong Closer Economic
Partnership Arrangement (CEPA) and other free trade agreements (FTAs) signed with Hong
Kong’s trading partners; the import and export of strategic commodities, pharmaceutical
products and medicines, reserved commodities, rough diamonds and other prohibited articles;
as well as compliance with the Chemical Weapons Convention. It collects import and export
declarations, declaration charges and the clothing industry training levy, and enforces statutory
controls.

The department also enforces the criminal laws that protect copyrights and trademarks, and
consumer protection legislation relating to the safety of consumer goods, fair trade practices
and the integrity of weights and measures.

Intellectual Property Department

The Intellectual Property Department operates four registries for trademarks, patents, designs
and copyright licensing bodies; makes recommendations on intellectual property policy and
legislation; provides civil legal advice on intellectual property matters to the government; and
promotes public awareness of and respect for intellectual property rights. It also facilitates and
promotes Hong Kong’s development as a regional intellectual property trading centre.

Overseas Hong Kong Economic and Trade Offices

There are 14 overseas Hong Kong ETOs, in Bangkok, Berlin, Brussels, Dubai, Geneva, Jakarta,
London, New York, San Francisco, Singapore, Sydney, Tokyo, Toronto and Washington. The
Geneva ETO represents Hong Kong, China as a member of the World Trade Organisation (WTO)
and as a participant at the Trade Committee of the Organisation for Economic Cooperation
and Development (OECD), while the other ETOs promote Hong Kong’s economic and trade
interests in the countries under their respective purviews by enhancing understanding of
Hong Kong among opinion-formers, monitoring developments that may affect Hong Kong’s
economic and trade interests, and liaising with government bodies, politicians, businesses, think
tanks and the media. They organise events to promote Hong Kong’s image, and those with
investment promotion units also offer support to individual enterprises interested in setting up
operations or expanding their presence in Hong Kong.

The Brussels ETO represents Hong Kong’s overall economic and trade interests in Europe,
particularly in dealings with the European Union, including the European Commission and
European Parliament. It also promotes Hong Kong’s bilateral relations with 15 European
countries. The Berlin ETO covers eight countries in central and eastern Europe, while the
London ETO is responsible for nine countries and is also the base of Hong Kong’s representative
to the International Maritime Organisation.

The Washington ETO represents Hong Kong’s overall economic and trade interests in the US,
monitors developments that may affect Hong Kong’s interests, and promotes Hong Kong’s
bilateral relations with the US. The New York and San Francisco ETOs cover 31 eastern states and
19 western states of the US respectively.
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The ETOs in Sydney, Tokyo and Toronto are responsible for bilateral economic and trade
relations in their host countries. In addition, the Sydney ETO covers New Zealand and the Tokyo
ETO covers Korea. The Jakarta ETO represents Hong Kong in dealing with the Association of
Southeast Asian Nations (ASEAN) as a whole, and in particular matters with Indonesia, Brunei
Darussalam, Malaysia and the Philippines. The Bangkok ETO covers Thailand, Bangladesh,
Cambodia and Myanmar, while the Singapore ETO covers Singapore, India, Laos and Vietnam.

The Dubai ETO commenced operation in October. It is Hong Kong’s first ETO in the Middle East
region and is responsible for bilateral economic and trade relations with the United Arab
Emirates and other member states of the Cooperation Council for the Arab States of the Gulf,
namely Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.

Promotional activities organised by the ETOs are set out in the ‘Promoting Hong Kong
Worldwide’ section of Chapter 17 Media and Communications.

External Commercial Relations

Participation in World Trade Organisation
The rules-based multilateral trading system under the auspices of the WTO is the cornerstone
of Hong Kong’s external trade policy. Hong Kong is a founding member of the WTO and has
continued its separate membership under the name ‘Hong Kong, China’ since the
establishment of the HKSAR. Hong Kong takes part in WTO negotiations and discussions to
safeguard and advance Hong Kong’s trade interest.

Regional Economic Cooperation

Hong Kong takes part as a full and separate member in the Asia-Pacific Economic Cooperation
(APEC), a regional forum for high-level dialogue and trade and economic cooperation, under
the name ‘Hong Kong, China’. In 2021, Hong Kong conducted about 86 per cent of its external
trade with the other 20 APEC member economies.

Hong Kong also takes part in the Pacific Economic Cooperation Council, which is a regional
forum comprising government officials, business leaders and academics working on policy
issues to enhance trade, investment and economic development in the Asia-Pacific region.

Organisation for Economic Cooperation and Development

Hong Kong takes part in the Trade Committee of the OECD, which is an important forum for
discussing policies on international trade.

Free Trade Agreements

Hong Kong has signed six FTAs with 18 foreign economies to secure more favourable market
access for Hong Kong goods and services, thereby creating new opportunities for Hong Kong
businesses and promoting free trade. All FTAs have come into effect, including one with ASEAN
which came into effect in full in February. Hong Kong is seeking to join the Regional
Comprehensive Economic Partnership and continues exchanges with other trading partners to
explore possible FTAs.
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Mainland and Hong Kong Closer Economic Partnership Arrangement

The Mainland’s economic and trade growth boosts Hong Kong’s trade in goods and services.
Both sides work to broaden the coverage of CEPA, signed in 2003, and to deepen liberalisation
in trade and investment. CEPA has become a comprehensive FTA, covering trade in goods,
trade in services, investment and economic and technical cooperation. The Agreement
Concerning Amendment to the Agreement on Trade in Services under CEPA, implemented in
2020, makes it easier for Hong Kong service suppliers, including professionals, to develop
business in the Mainland.

Investment Promotion and Protection Agreements

Hong Kong has signed 22 investment promotion and protection agreements with 31 foreign
economies to assure overseas investors that their investments in Hong Kong are protected and
to enable Hong Kong investors to enjoy similar protection overseas. In February, the investment
agreement signed with ASEAN came into force in full. The agreement signed with Mexico came
into force in June, while negotiations with Russia and Turkey continued.

Trade in Goods
In 2021, the Customs and Excise Department carried out 33,703 factory and consignment
inspections and concluded 249 investigations to ensure compliance with factory registration
conditions and import and export licensing requirements. The department also conducted
19 ‘blitz’ operations on consignments of goods at various import and export control points.
It prosecuted 54 companies and 17 offenders successfully, leading to fines totalling $1.1 million.

Trade in Strategic Commodities

The Trade and Industry Department maintains a comprehensive import and export licensing
system for strategic commodities. It also administers a permit system for certain chemicals in
order to implement the requirements under the Chemical Weapons Convention. Hong Kong
works with its trading partners to keep abreast of international developments on strategic trade
controls and to ensure its control arrangements are in line with international standards.

In 2021, the Customs and Excise Department successfully prosecuted 34 companies and seven
offenders involved in the unlicensed import and export of strategic commodities, resulting in
fines totalling $560,000. Goods valued at $1.07 million were confiscated.

Customs Cooperation
The Customs and Excise Department plays an active role in the work of the World Customs
Organisation (WCO) and APEC’s Sub-Committee on Customs Procedures. It liaises with the
WCO and seconds one officer each to the WCO Compliance and Facilitation Directorate in
Brussels, the WCO Regional Intelligence Liaison Office for Asia and the Pacific in Seoul, and the
WCO Asia Pacific Regional Office for Capacity Building in Bangkok.

Local companies that satisfy the department’s security standards may be accredited under
the Hong Kong Authorised Economic Operator Programme and enjoy customs facilitation,
including reduced inspection and prioritised clearance of their goods in Hong Kong and in
economies with mutual recognition arrangements with Hong Kong. As at December, these
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economies included the Mainland, Australia, Canada, India, Israel, Japan, Korea, Malaysia, Mexico,
New Zealand, Singapore and Thailand.

The department shares intelligence and enforcement experience with other law enforcement
agencies. It also maintains bilateral cooperation arrangements with a number of customs
administrations.

Participation in Belt and Road Initiative

The government adopts a whole-government approach to further consolidate Hong Kong’s
position as both a key link and the prime functional platform for Belt and Road.

In January, the bureau, together with the State-owned Assets Supervision and Administration
Commission of the State Council (SASAC) and the Hong Kong Monetary Authority, organised
an online high-level roundtable to promote exchanges and cooperation between state-owned
enterprises and Hong Kong’s businesses and professional services sector.

In May, the bureau, in conjunction with SASAC, launched the Mainland Enterprises Partnership
Exchange and Interface Programme, and organised its first sharing session. Around 50 business
matching sessions were held on the day, promoting ties between Mainland enterprises and
Hong Kong’s professional services sector.

In June, the bureau’s Belt and Road Office and the Commercial Office of the Economic Affairs
Department of the Liaison Office of the Central People’s Government in the HKSAR jointly
organised two webinars on business development in five of the Economic and Trade
Cooperation Zones in Southeast Asia.

In July, the fourth Joint Conference on Advancing Hong Kong’s Full Participation in and
Contribution to the Belt and Road Initiative was convened by the government and the
Mainland authorities to follow up on the implementation of measures set out in the relevant
arrangement signed between the National Development and Reform Commission and the
HKSAR Government in 2017.

On 1-2 September, the government and the Hong Kong Trade Development Council (HKTDC)
co-organised the 6th Belt and Road Summit. Over 6,000 government officials, entrepreneurs
and professionals from more than 80 countries and regions signed up to participate online, and
over 770 one-on-one business matching sessions were arranged for some 260 projects. At the
summit, the government and the Ministry of Commerce signed a memorandum of
understanding on enhancing exchanges and cooperation in promoting high-quality
development of overseas Economic and Trade Cooperation Zones.

In September and November, through the Belt and Road Office, the government co-organised
webinars respectively with the governments of Vietnam and Cambodia to explore collaboration
opportunities in such fields as trade, investment, professional services and innovation and
technology.
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Inward Investment Promotion

In 2021, InvestHK helped 333 overseas and Mainland companies set up or expand operations in
Hong Kong, involving direct investment of more than $22.3 billion and the creation of more
than 3,050 jobs within the first year of their operation or expansion3.

InvestHK promotes the city’s business advantages by organising investment promotion

activities in the Mainland and key overseas markets, and by sponsoring important events to
bring FDI to Hong Kong. In 2021, it collaborated with relevant Mainland cities to promote
Hong Kong as a two-way platform to attract overseas companies to invest in the Mainland via
Hong Kong, and to encourage Mainland enterprises to use Hong Kong to go global.
It organised five hybrid events in Jiangsu, Yunnan and Hong Kong. The department also
organised a hybrid investment promotion symposium in Sydney in March to promote the latest
development and business opportunities of the Guangdong-Hong Kong-Macao Greater Bay
Area (GBA) to the Australian business community. It completed 83 investment projects from the
Mainland in 2021, representing 25 per cent of its total number of completed projects.

InvestHK’s StartmeupHK initiative aims to attract global start-ups to set up in Hong Kong,
promote the territory as a leading hub for start-ups and entrepreneurship, and support the
development of the local start-up ecosystem. It hosted the week-long virtual StartmeupHK
Festival in May to promote innovation and technology, attracting close to 39,000 participants.

InvestHK’s financial technology team helps overseas and Mainland fintech-related companies
establish their presence in Hong Kong and organises international events, such as the annual
Hong Kong Fintech Week, which attracted over 20,000 attendees and more than 4 million
online views, and more than 400 exhibitors and over 300 speakers from 87 economies to its first
virtual and physical hybrid iteration in November.

Industrial Policy
Leveraging Hong Kong’s competitive edge, the government develops a high value-added and
diversified economy which embraces the development of new economic sectors. The
government also encourages industry participation to capitalise on opportunities emerging
from the Belt and Road Initiative and the GBA development, in order to generate new impetus
for the territory’s economic development.

Small and Medium Enterprises

SMEs are manufacturing businesses that employ fewer than 100 people and non-
manufacturing businesses with fewer than 50 employees in Hong Kong. As at end-2021, there
were about 350,000 SMEs, representing over 98 per cent of all local enterprises and employing
about 1.2 million people. The government’s funding schemes help SMEs secure loans from
lending institutions, explore new markets and enhance their competitiveness.

3 As reported by some of the companies assisted by InvestHK. Not all the companies disclosed their data.

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Protection of Intellectual Property Rights

Hong Kong maintains a robust regime for protecting intellectual property rights that features
comprehensive legislation, convenient registration systems, rigorous enforcement and
comprehensive public education programmes. This has earned Hong Kong a reputation for
effective protection of intellectual property.

Registration
The Intellectual Property Department provides electronic registration and management
services through the internet. Its e-registers allow free data searches in Chinese or English, while
the e-filing system enables intellectual property owners and agents to file their applications
securely and to make changes to certain particulars of their registrations and applications
directly. In 2021, 81 per cent, 97 per cent and 86 per cent of applications for trademarks, patents
and designs respectively were filed electronically.

Trademarks
The Trade Marks Registry received 35,240 applications in 2021, a 4.5 per cent increase from 2020.
It registered 32,719 marks, taking the number of registered marks to 476,443 by end-2021. Of
the 106 countries and regions that filed applications, the principal ones were:

Hong Kong 14,224 France 766

Mainland 5,918 United Kingdom 756
US 3,687 Singapore 692
Japan 2,363 Germany 676
Korea 930 Switzerland 628

The government is pressing ahead with the preparatory work to implement the international
registration system under the Protocol Relating to the Madrid Agreement Concerning the
International Registration of Marks, including preparing the related subsidiary legislation and
setting up the required information technology system.

Patents
The original grant patent system, launched in 2019, provides a direct route for applicants to file
standard patent applications in Hong Kong that are subject to the Patents Registry’s substantive
examination. The pre-existing re-registration system is retained to grant standard patents based
on corresponding patents granted by one of three designated patent offices, namely the China
National Intellectual Property Administration, UK Intellectual Property Office, and European
Patent Office in respect of patents designating the UK. The short-term patent system has also
been refined, enabling short-term patent owners or third parties having a legitimate interest in
the validity of a patent to ask the registry to carry out post-grant substantive examination.

The registry received 21,686 standard patent (by re-registration), 257 standard patent (by
original grant) and 552 short-term patent applications in 2021. It granted 14,655 standard
patents (by re-registration) and 684 short-term patents, respectively 91.4 per cent higher and
6.2 per cent lower than in 2020. Seven standard patents by original grant were granted in 2021.
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Designs
In 2021, the Designs Registry received 1,882 applications to register 3,858 designs and
registered 4,206 designs, a 16.6 per cent decrease from 2020.

Copyright
The Copyright Ordinance protects original literary, dramatic, musical and artistic works,
typographical arrangements of published editions, sound recordings, films, broadcasts, cable
programmes and performers’ performances irrespective of the domicile of the authors and
performers. No registration is required to obtain protection.

To revive the Copyright Ordinance amendment exercise, a public consultation on updating

Hong Kong’s copyright regime in the light of the digital environment was launched in
November.

Enforcement
The Customs and Excise Department enforces criminal sanctions against the infringement of
intellectual property rights. It investigates reports of copyright infringement and trademark
counterfeiting; maintains licensing control on all optical disc and stamper factories; and takes
action against the manufacture, distribution, sale, import and export of pirated and counterfeit
goods and the possession of such goods for business use. The department liaises with
businesses to investigate cases and promote protection of intellectual property rights.

In addition to targeted raids, officers carry out intensive and high-profile patrols in high-risk
areas to deter the peddling of pirated and counterfeit goods, including street sales. In 2021, the
department arrested 70 people in 52 piracy cases and confiscated goods, mostly electronics
and pirated optical discs, worth $2.94 million. It also seized counterfeit goods worth
$163 million and arrested 366 people in 690 cases of forged trademarks.

Public Education
The Intellectual Property Department promotes the value of intellectual property trading and
the importance of protecting intellectual property rights. In 2021, 12 trade associations with
over 1,600 retail merchants, covering more than 7,000 outlets and online shops, took part in its
No Fakes Pledge scheme. Through school talks and interactive drama programmes, the
department reached out to 140 schools and over 35,600 students.

Intellectual Property Trading

The National 14th Five-Year Plan supports Hong Kong’s development into a regional intellectual
property trading centre. The Intellectual Property Department will continue to implement
initiatives to promote the commercialisation and trading of intellectual property in Hong Kong.
The department offers free consultation, the Intellectual Property Manager Scheme Plus and,
in collaboration with stakeholders, seminars and training courses. It also showcases success
stories of enterprises that engage in intellectual property trading in the GBA, and works with
the Department of Justice to promote arbitration and mediation in resolving intellectual
property disputes.
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Cooperation with Mainland

The Intellectual Property Department works with its Mainland counterparts, including those in
the GBA, to promote intellectual property protection, management and trading.

The Customs and Excise Department exchanges experience and information with its Mainland
counterparts on the detection and prosecution of intellectual property-related offences.
It conducts joint operations with Guangdong Customs to intercept the cross-boundary
movement of infringing goods, and works with the Economic Crime Investigation Bureau of
the Guangdong Provincial Public Security Department to share intelligence and provide mutual
assistance in combating cross-boundary infringing activities.

Participation in International Organisations

The Intellectual Property Department takes part in events of the WTO’s Council for Trade-
Related Aspects of Intellectual Property Rights and the World Intellectual Property Organisation,
and attends meetings of the APEC Intellectual Property Rights Experts Group.

Trade Documentation
Hong Kong is a free port and most products do not need licences to enter or leave. Licences
are required mainly to fulfil Hong Kong’s international obligations; to protect public health,
safety, the environment and intellectual property rights; and to ensure the territory’s continued
access to advanced technologies and high-tech products. An origin certification system is also
in place to facilitate exports.

Road Cargo System

The Customs and Excise Department’s Road Cargo System facilitates customs clearance of road
cargo through prior risk-profiling. Under the system, a shipper or his agent submits key cargo
information electronically before the consignment is imported to or exported from Hong Kong.
As a result, cross-boundary goods vehicles, except those selected for inspection, may go
through seamless customs clearance at land boundary control points.

Intermodal Transhipment Facilitation Scheme and Single E-lock Scheme

The Intermodal Transhipment Facilitation Scheme (ITFS) seeks to simplify customs clearance
procedures for air-land and sea-land intermodal transhipment cargo. Enrolment is voluntary.
Participating enterprises convey their cargo using vehicles installed with electronic locks and
Global Positioning System devices recognised by the department. The cargo normally
undergoes inspection only once, if selected at all, when entering or leaving Hong Kong.

The Single E-lock Scheme (SELS) streamlines customs clearance procedures by connecting the
ITFS to a speedy clearance system operated by Mainland customs. Mutually recognised
electronic locks are used to minimise duplicate inspections of the same consignment at the
boundary. The SELS network covers all nine Mainland municipalities in the GBA. As at 2021,
there were 76 clearance points in total (13 in Hong Kong and 63 in Guangdong).
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Free Trade Agreement Transhipment Facilitation Scheme

The Free Trade Agreement Transhipment Facilitation Scheme allows consignments passing
through Hong Kong to enjoy preferential tariffs under FTAs signed between the Mainland and
its trading partners. The department supervises such consignments and issues certificates of
non-manipulation, enabling traders to claim preferential tariffs from the authorities at the
importing end.

Government Electronic Trading Services

The Government Electronic Trading Services allows the trading community to submit key
trade-related documents to the government electronically to fulfil statutory obligations in a
cost-effective and environment-friendly manner. Three government-appointed operators
selected by open tender provide the services. They processed more than 23 million transactions
in 2021.

Trade Single Window

The government is setting up the Trade Single Window in three phases to allow one-stop
lodging of over 40 types of trade documents with the government for trade declaration and
customs clearance. All the 14 types of documents under phase 1 have been launched.
Phase 2 willl be rolled out by batches from 2023, adding another 28 types of documents. The
government is finalising the implementation details of phase 3 which will cover documents
required for the import and export of all goods.

Trade and Industrial Support Organisations

Hong Kong Trade Development Council
The statutory HKTDC promotes, assists in and develops Hong Kong’s external trade. With
50 offices globally, including 13 in the Mainland, it promotes Hong Kong as a two-way global
investment, trade and business hub.

The council organises international exhibitions, conferences and business missions to create
business opportunities for companies, particularly SMEs, in the Mainland and around the world.
It also provides business support programmes, up-to-date market insights and product
information via sourcing platforms, research reports and digital news channels.

Hong Kong Export Credit Insurance Corporation

The statutory Hong Kong Export Credit Insurance Corporation encourages and supports export
trade by providing insurance protection for Hong Kong exporters against non-payment risks
arising from prescribed circumstances.

Amid the gradual global economic recovery, the corporation’s total insured business and
gross premium income respectively rose by 8.4 per cent to $133.5 billion and 12.9 per cent
to $323.6 million in 2021, while payment of claims decreased by 93.7 per cent to $41 million.
To support exporters during the pandemic, the validity period of the 100% Credit Limit Top-up
Scheme has been extended three times, to end-June 2022. The corporation is introducing three
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new initiatives to enhance support for exporters. They are the Export Credit Guarantee
Programme to be piloted, the Flexible Indemnity Ratio arrangement and EC-Reach 2.0, the
upgraded online self-service platform, launched in December.

Other Trade and Industrial Support Organisations

The Federation of Hong Kong Industries, Chinese Manufacturers’ Association of Hong Kong,
Hong Kong General Chamber of Commerce, Chinese General Chamber of Commerce, Hong
Kong Chinese Enterprises Association and Hong Kong Chinese Importers’ and Exporters’
Association promote the interests of, and foster relationships among, their members. There are
also overseas chambers of commerce, SME organisations and other associations representing
specific sectors or interests.

Promotion of Competition
The government promotes sustainable competition to enhance economic efficiency and the
free flow of trade, benefiting both consumers and businesses. The Competition Ordinance
provides a legal framework to tackle anti-competitive conduct in different sectors. Serious anti-
competitive conduct includes price fixing, market sharing, bid rigging and output limitation.

The government-appointed Competition Commission enforces the ordinance and investigates

possible contraventions, promotes public understanding of the ordinance, carries out market
studies and advises the government on competition matters. In 2021, the commission received
256 complaints and 308 enquiries. It also started initial assessments of 19 meritorious cases and
escalated four cases to in-depth investigation. During the year, the commission brought two
cases to the Competition Tribunal and issued infringement notices to seven entities in another
case.

In 2021, the tribunal handed down judgment on sanctions in one case and four other cases
were either pending trial or judgment.

Creative Industries
Create Hong Kong
Hong Kong’s creative industries cover eight sectors: advertising, architecture, design, digital
entertainment, film, music, printing and publishing, and television. The government supports
their development through Create Hong Kong (CreateHK), under the bureau’s Communications
and Creative Industries Branch.

Support for Film Sector

Film Development Council
The Film Development Council advises the Secretary for Commerce and Economic
Development on policies, strategies and arrangements to promote and develop the film
industry, and the use of the Film Development Fund (FDF) to support film-related projects and
activities to nurture talent, enhance local production, expand markets and build audiences.
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Film Development Fund

The FDF supports film productions and other film-related projects to sustain and develop the
industry. The government has injected $1.54 billion into the fund since 2005. Around
$130 million was committed to 18 film productions and 13 other film-related projects in 2021.

Nurturing Talent
The First Feature Film Initiative identifies new directors through a competition of screenplay
and production proposals, and subsidises the winners to make their first feature-length
commercial films. In 2021, two past winners’ films were released commercially.

The Directors’ Succession Scheme invites experienced directors to partner with one or two
up-and-comers to co-produce films, aiming to nurture young talents and enhance the quality
and quantity of local productions. In 2021, proposals from three teams were approved.

The FDF supports the industry to provide local and overseas training in different areas of
filmmaking, including post-production services.

Enhancing Local Production

In 2021, 15 films, engaging eight new directors and two new producers, were approved under
the Film Production Financing Scheme and its relaxation plan, and three films funded by the
Film Production Grant Scheme were released commercially.

Expanding Markets and Building Audiences

Due to the pandemic, the annual Entertainment Expo Hong Kong was held mostly online,
drawing an audience of more than 300,000.

The FDF subsidises distribution and publicity of Hong Kong-produced Cantonese films in the
Mainland, as well as participation by Hong Kong films at international film festivals. It also
subsidises screenings, seminars and film appreciation courses by trade organisations for the
local community, especially young people. In 2021, CreateHK supported the screening of over
70 Hong Kong films at 12 international film festivals or overseas film events by direct subsidy or
in collaboration with Hong Kong ETOs.

CreateHK organised a film-related photo exhibition in Guangzhou from April to May, and the
‘Hong Kong Film Show in Guangdong’, presenting over 50 screenings of nine Hong Kong films
in three cities of the Greater Bay Area from December.

Support for Other Creative Sectors

CreateSmart Initiative
The CreateSmart Initiative (CSI) supports promotional and nurturing projects from seven other
creative sectors, providing about $260 million to 40 such projects in 2021.

Nurturing Talent and Facilitating Start-ups

Through the CSI, CreateHK supports the manpower development of creative industries and
nurturing of start-ups.
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Support arrangements include: the Design Incubation Programme, for design start-ups; the
Fashion Incubation Programme, for up-and-coming fashion designers; graduate programmes,
providing internships at digital advertising, digital entertainment and design companies; the
DFA Hong Kong Young Design Talent Award, which selects winners to receive government
funding to pursue work attachments or further studies overseas; the Animation Support
Programme, funding original animation by start-ups and small companies; the Hong Kong
Game Enhancement and Promotion Scheme, which supports game companies to develop
marketing campaigns and enhance the quality and profitability of their products; the Support
Programme for Advertising and Music Talents (Microfilm Production), which offers funding and
mentorship to advertising production companies and directors; and the Hong Kong Publishing
Biennial Awards, which recognise outstanding Chinese books published in Hong Kong.

Creative talent is also sponsored to participate in digital entertainment events, such as

DigiCon6 Asia.

Exploring Markets
CreateHK supports these creative sectors to bring high-value customers to Hong Kong, and
takes local talent and products to Mainland and overseas markets. CSI-sponsored activities in
2021 included the promotion of local fashion brands and designers at Centrestage 2021 in
Hong Kong, and the promotion of local product design at trade fairs in Shenzhen and
Shanghai.

Promoting Hong Kong as Asia’s Creative Capital

Hong Kong fosters collaboration with Mainland and overseas cities to raise the profile of its
creative industries locally and internationally. The CSI provided around $83 million for nine such
projects in 2021.

Events in 2021 included the Hong Kong Collateral Event at the 17th Venice Biennale of
International Architecture Exhibition, with a response exhibition in Hong Kong, and the
Business of Design Week, an international design industry event.

CreateHK also organised exhibitions in four cities of the Greater Bay Area, namely Shenzhen,
Zhuhai, Foshan and Dongguan, from November to December, showcasing the strengths of
Hong Kong’s creative industries.

Consumer Protection
Consumer Council
The government-appointed Consumer Council protects and promotes the interests of
consumers of goods and services and purchasers, mortgagors and lessees of immovable
property.

The council tests consumer products, conducts market surveys, monitors prices and trade
practices, handles complaints and enquiries, advises the government and public authorities on
consumer protection issues, and raises public awareness of consumer rights. It maintains close
contact with its overseas counterparts to promote and protect consumer interests, and
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administers the Consumer Legal Action Fund to enhance consumer access to legal remedies.
In 2021, the council received 27,382 consumer complaints and 67,080 consumer enquiries, and
completed 45 product tests, 26 surveys and 13 in-depth studies. It published the findings and
disseminated practical consumer advice in its monthly magazine, Choice.

Enforcement of Legislation
The Customs and Excise Department enforces the Consumer Goods Safety Ordinance, Toys and
Children’s Products Safety Ordinance, Trade Descriptions Ordinance and Weights and Measures
Ordinance.

The Trade Descriptions Ordinance prohibits unfair trade practices commonly deployed against
consumers of goods and services, including false trade descriptions, misleading omissions,
aggressive commercial practices, bait advertising, bait-and-switch, and wrongly accepting
payments.

The Toys and Children’s Products Safety Ordinance is updated regularly to ensure toys and other
children’s products supplied in Hong Kong comply with operative, up-to-date international
safety standards.

The department carries out spot checks and investigations to ensure toys, children’s products
and consumer goods supplied locally are safe and that the quantity of goods supplied in the
course of trade by weight and other measures is accurate, and to guard against false trade
descriptions and other unfair trade practices over goods and services. In 2021, the department
carried out 8,827 spot checks and concluded 220 enforcement cases.

The Government Laboratory provides analytical and advisory services to the department in the
enforcement of consumer protection legislation, and conducts on-site investigations to support
the enforcement of the Weights and Measures Ordinance. In 2021, the laboratory carried out
34,571 tests to check the compliance of toys, children’s products and consumer goods with
safety standards, and to determine the weight of retail goods. It also carried out 4,709 tests to
examine the authenticity of commodities and the correctness of trade descriptions under the
Trade Descriptions Ordinance.

Trade in Endangered Species

The Protection of Endangered Species of Animals and Plants Ordinance implements the
Convention on International Trade in Endangered Species of Wild Fauna and Flora. It regulates
the import, export, re-export, introduction from the sea or possession of endangered species.
The commercial import, export and re-export of highly endangered species are prohibited, and
international trade in other endangered species is subject to licensing requirements.

The ordinance is enforced by both the Agriculture, Fisheries and Conservation Department and
the Customs and Excise Department. It provides for a maximum fine of $10 million and
imprisonment of up to 10 years. In 2021, there were 13,439 licences and certificates issued and
38 convictions.
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Websites
Commerce and Economic Development Bureau: www.cedb.gov.hk
Competition Commission: www.compcomm.hk
Consumer Council: www.consumer.org.hk
Create Hong Kong: www.createhk.gov.hk
Film Development Council: www.fdc.gov.hk
Film Services Office: www.fso-createhk.gov.hk
Intellectual Property Department: www.ipd.gov.hk
Special Effects Licensing Unit: www.createhk-esela.gov.hk

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