Journal Issue
Share
Article

People’s Republic Of China–– Hong Kong Special Administrative Region: Staff Report for the 2018 Article IV Consultation Discussions—Informational Annex

Author(s):
International Monetary Fund. Asia and Pacific Dept
Published Date:
January 2019
Share
  • ShareShare
Show Summary Details

Fund Relations

Membership Status

As a Special Administrative Region of the People’s Republic of China, Hong Kong SAR is not a member of the Fund. However, annual consultation discussions have been held with the Hong Kong SAR authorities since October 1990, and the staff also holds discussions with the authorities in connection with the Fund’s Global Financial Stability reports. STA has provided Hong Kong SAR with technical assistance in the area of balance of payments statistics and Hong Kong SAR officials have attended IMF Institute courses on balance of payments and monetary statistics, and financial programming. The latest FSAP was undertaken in 2014 at the request of the authorities. The next FSAP is tentatively planned for 2019.

Exchange Rate Arrangement

The Hong Kong dollar has been linked to the U.S. dollar under a currency board arrangement, the Linked Exchange Rate System (LERS), since October 1983 at a rate of HK$7.8/US$1. The Hong Kong Monetary Authority (HKMA) refined the operations of the LERS in May 2005—the first changes since September 1998. For the first time since the introduction of the LERS in 1983, the HKMA explicitly committed to sell Hong Kong dollar at a preannounced price (set at HK$7.75/US$), which is referred to as the strong-side convertibility undertaking. Previously, the HKMA had only committed to buy Hong Kong dollar at a preannounced rate (the weak-side convertibility undertaking introduced in October 1998) and could sell Hong Kong dollar at any price. Along with this two-way convertibility undertaking, the HKMA also introduced a symmetric trading band of 0.6 percent around a central parity of HK$7.8/US$. There are no restrictions on current or capital account transactions in Hong Kong SAR, and the Hong Kong dollar is freely convertible. The People’s Republic of China accepted the obligations under Article VIII, Sections 2, 3, and 4 of the Articles of Agreement on December 1, 1996. The exchange regime is free of restrictions and multiple currency practices.

Resident Representative

The Hong Kong SAR sub-office of the Beijing Resident Representative’s office was opened on September 23, 2000. Sally Chen is the current Resident Representative.

Statistical Issues

(As of December 20, 2018)

I. Assessment of Data Adequacy for Surveillance
General: The economic database is generally comprehensive and of high quality, and data provision is adequate for surveillance.
National Accounts: Hong Kong SAR compiles and disseminates GDP statistics under the production and expenditure approaches . The expenditure measure of GDP which is more well established, is adopted as the single measure of GDP. The production and expenditure approaches are also compiled in chained volume terms. The statistical discrepancies are explicit under to the production approach in current terms. Quarterly GDP is available by expenditure components (current values and volume) as well as by industry value added (in volume only). GDP compilation closely follows the 2008 SNA.
P rice Statistics: The monthly CPI covers the “expenditure” of all households in Hong Kong SAR, excluding only (i) m arine population, (ii) households receiving public assistance, (iii) collective households such as those living in hospitals, prisons and homes for the aged, and (iv) households in the highest or lowest expenditure brackets which together accounted for some 10% of households. It includes 984 items. The weights are based on the Household Expenditure Surveys which is conducted once every five years. The index is disseminated with a lag no longer than 23 days after the end of the reference month. The national PPI covers the industrial sector (manufacturing industries and sewerage, waste management and remediation activities), including about 700 primary products. Weights are updated annually from the Annual Survey of Economic Activities. The index is compiled quarterly. Both price indices follow international standards.
Government Finance Statistics: Hong Kong SAR reports both cash and accrual-based annual data for the general government according to the Fund’s Government Finance Statistics Manual (GFSM 1986 and GFSM 2001, respectively). No sub-annual data are provided for publication in the IFS.
Monetary and Financial Statistics: The HKMA reports monetary data for the central bank and banking institutions to STA on a regular monthly basis, which are published in the IFS. In late 2009, the HKMA submitted quarterly monetary data (test-data) using Standardized Report Forms (SRFs) that present data consistent with the Monetary and Financial Statistics Manual. However, the SRF data for Hong Kong SAR have not been published in the IFS, which requires monthly periodicity for monetary data. The HKMA has been encouraged to compile and submit monthly monetary data using SRFs for dissemination in the IFS.
Financial Sector Surveillance: Hong Kong SAR participates in regular reporting of Financial Soundness Indicators (FSIs) to the IMF for dissemination on the FSI website. The reported data are quarterly and cover all core FSIs and 12 additional FSIs for the deposit takers sector.
External sector statistics: Hong Kong SAR publishes comprehensive balance of payments data and international investment position statistics for 2000 onwards. Hong Kong SAR disseminates the international reserves and foreign currency liquidity data template, submits quarterly external debt statistics to the Quarterly External Debt Statistics (QEDS) database, and participates in the Coordinated Portfolio Investment Survey (CPIS) and the Coordinated Direct Investment Survey (CDIS).
II. Data Standards and Quality
Hong Kong SAR subscribes to the Fund’s Special Data Dissemination Standard since 1996, and is fully compliant with its requirements.A data ROSC was disseminated in 1999
Hong Kong SAR—Table of Common Indicators Required for Surveillance(As of December 4, 2018)
Date of Latest ObservationDate ReceivedFrequency of Data5Frequency of Reporting5Frequency of Publication5
Exchange ratesSep. 2018Sep. 2018DDD
International reserve assets and reserve liabilities of the monetary authorities1Jul. 2018Aug. 2018MMM
Reserve/base moneyJul. 2018Aug. 2018MMM
Broad moneyJul. 2018Aug. 2018MMM
Central bank balance sheetJul. 2018Aug. 2018MMM
Consolidated balance sheet of the banking systemJun. 2018Aug. 2018MMM
Interest rates2Sep. 2018Sep. 2018DDD
Consumer price indexAug. 2018Sep. 2018MMM
Revenue, expenditure, balance and composition of financing3-central governmentJul. 2018Aug. 2018MMM
Stocks of central government and central government-guaranteed debt4Jul. 2018Aug. 2018MMM
External current account balanceQ2/18Jul. 2018QQQ
Exports and imports of goods and servicesQ3/18Jul. 2018QQQ
GDP/GNPQ3/18Jul. 2018QQQ
Gross external debtQ2/18May. 2018QQQ
International investment positionQ2/18Jul. 2018QQQ

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Other Resources Citing This Publication