FOLLOWING several decades of reform and opening up on the mainland, cross-boundary economic ties are now stronger than ever. Throughout the period, the flow of goods, services, people and capital between Hong Kong and the mainland, and between the mainland and the world through Hong Kong, have flourished and brought significant mutual benefits to the two places. With total trade surging from US$281 billion in 1995 to US$4 trillion in 2015, the mainland plays an increasingly prominent role in the global economy, and Hong Kong has benefited substantially from the mainland’s phenomenal trade growth.

The mainland has long been Hong Kong’s largest trading partner. Cross-boundary trade accounted for more than half of Hong Kong’s total trade value in 2015. On the other hand, Hong Kong is the mainland’s second-largest trading partner after the United States, accounting for about 9 percent of the mainland’s total trade value in 2015. More than half of Hong Kong’s exports to the mainland in 2015, which were mainly re-exports, involved raw materials, reflecting the latter’s role as a production hinterland and the highly integrated production network within Asia. Also, Hong Kong’s exports of consumer goods, mainly re-exports, to the mainland have increased by nearly 50 percent over the past decade.

The Central Government’s goal of restructuring economic growth towards domestic consumption, makes the mainland market a huge business opportunity for Hong Kong’s exporters. Hong Kong also serves as the principal gateway to and from the mainland for business and tourism. In 2015, foreign visitors to the mainland made 3.6 million trips through Hong Kong, while mainland residents made 45.8 million trips to or through Hong Kong.

Hong Kong remains the largest external investor in the mainland. According to the mainland’s statistics, the cumulative value of Hong Kong’s realized direct investment in the mainland had reached US$833 billion by the end of 2015, accounting for more than half of the total. Reciprocally, Hong Kong is the first port of call for the mainland’s outward direct investment. Based on the mainland’s statistics, the mainland’s stock of outward direct investment to Hong Kong accounted for 58 percent of its total outward direct investment as of the end of 2014, reflecting Hong Kong’s role as a platform for mainland companies to explore other markets and go global.

The construction of several major cross-boundary infrastructure projects continues in 2017, including the Hong Kong-Zhuhai-Macao Bridge and the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. Upon completion, this infrastructure will facilitate the flow of people and goods, further deepening the economic and trade relations between Hong Kong and the mainland.