Hong Kong is a major trading partner with the EU. The importance of Hong Kong to the EU as a trading partner is not only down to the volume of trade between the two, but also because Hong Kong acts as an entry point into China.
Bilateral Trade Relations
The EU is Hong Kong’s second largest trading partner after China, for both imports and exports, while Hong Kong is among the top 20 trading partners for the EU. Total trade in goods between Hong Kong and the EU was €45.3 billion in 2014.
The EU is also a major source of foreign direct investment in Hong Kong — the third largest after China and the British Virgin Islands. It is also the largest source of foreign companies in Hong Kong. At the same time, Hong Kong investment in Europe has grown rapidly in recent years, and in 2014 it became the seventh largest foreign investor in the EU in terms of direct investment stock.
Hong Kong as a Key Channel for EU-China Trade
Hong Kong is an important channel for trade and investment between the EU and China, the world's largest exporter.
According to the Hong Kong Trade and Industry Department, re-exports of EU origin goods through Hong Kong to China have grown by an average rate of more than 30 % per year since China adopted its open door policy in 1978. In 2013, €9.5 billion of China's import of goods from the EU went via Hong Kong, and about €27.4 billion worth of goods went the other way.
Hong Kong's role as a channel to China means it offers high-value opportunities for EU companies. In fact, the EU is the leading source of foreign companies using the Hong Kong-Mainland China Closer Economic Partnership Arrangement (CEPA). Because of the high potential of CEPA, the EU and Hong Kong regularly communicate on CEPA developments and explore ways to maximise the opportunities for EU companies and investors.