Following British rule from 1842 to 1997, the Chinese regained sovereignty of Hong Kong. One of the important factors of Hong Kong is its economy. Hong Kong’s economy is characterized by low taxes, minimum government intervention and free trade. It is one of the largest trading economies in the world, as well as a major service economy, with strong links to the mainland China, and other countries in Asia. Hong Kong is also responsible for intermediating forty percent of China’s external trade.
Hong Kong is governed by a principle of “one country, two systems”, which is where China has agreed to give Hong Kong a high degree of autonomy – the right of self-government, and to preserve its economic systems for fifty years. China controls Hong Kong’s foreign and defense policies, but Hong Kong has its own laws and currency.
Hong Kong has designed a simple tax system that does very little damage to the economy. Unlike the United States, the taxation on the people is very generous, that most of the people owe little or no tax on salaries. Hong Kong has no tariffs on imports, no general sales or value – added tax and no personal tax on income from financial assets. It has something called a “Dual Tax” which is progressive tax rates on labor income. Also, the low tax on profits brings in a lot more revenue than salary taxes, compared to the United States, which collects little from profits taxes that are twice as high.
Hong Kong is one of the world’s leading exporters of a wide range of goods including clothing, toys jewelry, etc. about eighty percent of Hong Kong’s manufactured goods are for export. Hong Kong follows the economic policies of free trade. There are no tariffs, or taxes, on imports. The Trade and Industry Department is responsible for running Hong Kong’s international trade, and providing general support services for industries.
Hong Kong also has a harbor, which provides safe and good access for ships...
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