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Hong Kong

10. Political and Security Environment

Hong Kong is politically stable. Demonstrations are almost always peaceful. The U.S. Consulate General is not aware of any recent incidents involving politically motivated damage to projects or installations.

However, violence erupted in the streets of Mong Kok on the night of February 8, 2016, after a municipal crackdown on illegal outdoor food vendors rapidly escalated. A few hundred people gathered in the streets. Dozens of protesters hurled bottles and garbage cans at police officers and tore bricks from the pavement to be used as weapons. Police responded with pepper spray and batons, and also fired two warning shots into the air.

11. Labor Policies and Practices

In the 1980s and much of the 1990s, Hong Kong’s unemployment rate hovered around two percent. Reflecting structural changes in the local economy and weak global economic conditions, Hong Kong’s unemployment rate rose slightly to 3.3 percent by the end of February 2017. In 2016, skilled personnel working as administrators, managers, professionals, and associate professionals accounted for 38.0 percent of the total working population. Hong Kong has a significant number of imported low-skilled workers, who are predominantly domestic helpers. As at May 2016, there were a total of 346,027 foreign domestic helpers in Hong Kong. In 2016, about 19,052 foreign professionals came to work in the city. The Employees Retraining Board provides skills re-training for local employees to cope with ongoing structural change in the economy. To address a shortage of highly skilled technical and financial professionals, the HKG has made efforts to attract qualified foreign and Mainland-Chinese workers. As of July 2003, conditions for admitting Mainland Chinese for employment were eased and aligned with those applicable to foreign nationals.

The Employment Ordinance (EO) and the Employees’ Compensation Ordinance prohibit the termination of employment in certain circumstances: 1) Any pregnant employee who has at least four weeks’ service and who has served notice of her pregnancy; 2) Any employee who is on paid statutory sick leave and; 3) Any employee who gives evidence or information in connection with the enforcement of the EO or relating to any accident at work, co-operates in any investigation of his employer, is involved in trade union activity, or serves jury duty may not be dismissed because of those circumstances. Breach of these prohibitions is a criminal offence.

According to the EO, an employee employed under a continuous contract for not less than 24 months is eligible for severance payment if: 1) dismissed by reason of redundancy; 2) under a fixed term employment contract that expires without being renewed due to redundancy; or 3) laid off.

Unemployment benefits are income tested and asset tested on an individual basis if living alone; if living with other family members, the total income and assets of all family members are taken into consideration for eligibility. Recipients must be between the ages of 15-59, capable of work, and actively seeking full-time employment.

In 2015 (latest available figure), membership in Hong Kong’s 821 registered unions totaled 869,528, a participation rate of about 24.3 percent. Hong Kong has implemented 41 conventions of the International Labor Organization in full and 18 others with modifications.

Local law provides for the right of association and the right of workers to establish and join organizations of their own choosing. The government does not discourage or impede the formation of unions. Workers who allege discrimination against unions have the right to have their cases heard by the Labor Relations Tribunal. Although legislation does not prohibit strikes, in practice, most workers must sign employment contracts that state that walking off the job is a breach of contract and can lead to summary dismissal. Collective bargaining is legal in Hong Kong, but there is no obligation on employers to engage in it. In practice, collective bargaining is not widely used. For more information on labor regulations in Hong Kong, please visit the following website: http://www.labour.gov.hk/eng/legislat/contentA.htm  (click on Chapter 57 “Employment Ordinance”).

The Labor Relations Ordinance stipulates a series of conflict resolution mechanisms for settling disputes. A dispute may be referred to the Labor Department for ordinary conciliation. If such conciliation does not settle the case, the Commissioner for Labor may appoint a special conciliation officer to undertake conciliation, or may appoint a mediator or a board of mediation and refer the dispute to mediation without seeking prior consent of the parties concerned. If ordinary and special conciliation fail to settle the dispute, the Chief Executive in Council (ExCo, the cabinet of advisors to the Chief Executive) has three options: 1) referring the dispute to arbitration with the consent of the parties; 2) referring the dispute to a board of inquiry; or 3) taking any other action as warranted by the circumstances of the dispute. If the dispute has caused grave harm to the economy or seriously jeopardized the well-being of a substantial number of persons, the ExCo may invoke a cooling-off period.

In January 2011, LegCo passed Hong Kong’s first statutory minimum hourly wage, set at HKD 28 (USD 3.6) starting May 2011. After increasing the minimum hourly wages in 2013 and 2015, the government raised the minimum hourly wage to HKD 34.5 (USD 4.4) starting May 2017.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2016 $319,117 2015 $309,235 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2015 $40,333 2015 $64,049 BEA data available at http://bea.gov/international/direct_investment_
multinational_companies_comprehensive_data.htm
 
Host country’s FDI in the United States ($M USD, stock positions) 2015 $10,987 2015 $11,102 BEA data available at http://bea.gov/international/direct_investment_
multinational_companies_comprehensive_data.htm
 
Total inbound stock of FDI as % host GDP 2015 514% 2015 544% N/A

*Source: Hong Kong Census and Statistics Department. Note: The FDI statistics of the U.S. Department of Commerce differ from Hong Kong data because the Hong Kong Census and Statistics Department “country” designation refers to the immediate source/destination economy and does not necessarily reflect the country from/in which the funds are initially mobilized or ultimately used.
Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 1,394,580 100% Total Outward 1,383,586 100%
British Virgin Islands 551,685 40% China, P.R.: Mainland 607,960 44%
China, P.R.: Mainland 349,028 25% British Virgin Islands 526,214 38%
Netherlands 89,095 6% Cayman Islands 56,381 4%
Cayman Islands 85,268 6% Bermuda 43,024 3%
Bermuda 73,910 5% United Kingdom 30,933 2%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 1,256,929 100% All Countries 789,089 100% All Countries 467,839 100%
Cayman Islands 321,664 26% Cayman Islands 309,525 39% China, P.R.: Mainland 135,517 29%
China, P.R.: Mainland 316,944 25% China, P.R.: Mainland 181,426 23% United States 100,359 21%
Bermuda 152,600 12% Bermuda 151,306 19% Japan 37,830 8%
United States 123,595 10% United Kingdom 47,632 6% Australia 24,356 5%
United Kingdom 63,896 5% Luxembourg 28,115 4% Luxembourg 22,330 5%
Investment Climate Statements
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