Costs
Hong Kong is a relatively pricey destination. Accommodation is the biggest expense, followed by drinking in Hong Kong’s bars. On a very tight budget you could survive on, say, $300 a day, but it would require a good deal of self-discipline. Better to budget something along the lines of $600 if you want to stay in the better class of guesthouse or cheaper midrange hotel and do more than just eat bowls of noodles. If you want to sample the finer hotels and restaurants, you’ll be paying the equivalent of most leading world cities. The real bargain compared to the likes of London and even New York is the incredibly cheap taxi fares; in fact, transport generally is excellent value.

Tipping
Hong Kong isn’t particularly conscious of tipping and there is no obligation to tip, say, taxi drivers; just round the fare up or you can throw in a dollar or two more. It’s almost mandatory to tip hotel staff $10 to $20, and if you make use of the porters at the airport, $2 to $5 a suitcase is normally expected. The porters putting your bags on a push cart at Hong Kong or Kowloon Airport Express station do not expect a gratuity, though; it’s all part of the service.

Most hotels and many restaurants add a 10% service charge to the bill. Check for hidden extras before you tip; some midrange hotels charge $3 to $5 for each local call when they are actually free throughout the territory, and some restaurants consistently get the bill wrong. If using the services of a hotel porter, it’s customary to tip them at least $10.

Economy
Hong Kong finally began booming once again after a wretched, post handover slump that saw property prices and the stock market tank and everyone from rich to poor become uncharacteristically bearish. The talk was that Shanghai was the new Asian world city and Hong Kong was doomed to remain a mere backwater.
It took several unexpected body blows to create this gloomy mood – a 1997 run on Asian currencies, September 11 2001 and the deadly SARS epidemic that virtually shut the place down.

You can’t keep the irrepressible and hard-working citizens of Hong Kong down forever, though. As China’s epoch-making rise continues, entrepreneurial Hong Kong rides its surging wave. It is once again Asia’s preeminent city state, taking a fat tithe from its mainland trade in goods and finance. Its container port is busier than ever and its booming stock market continues to underwrite a historic series of mainland public flotation, its unique status and clear rule of law attracting significant deals and, increasingly, investment from the mainland away from Shanghai’s exchange.

Hong Kong’s Stock Exchange is the seventh largest in the world, with a market capitalization of about US$1.71 trillion. In 2006, the value of initial public offerings handled here was second highest in the world after London. The easing of travel restrictions from China to Hong Kong hasn’t hurt either. Visitor numbers from the mainland have surged by half.

The fact remains, however, that while Hong Kong proudly trumpets its laissez faire economic policies, considerable sections of the economy, including transport and power generation, are dominated by a handful of cartels and monopolistic franchises. Nonetheless, Hong Kong’s economy is by far the freest in Asia, enjoying low taxes, a modern and efficient port and airport, excellent worldwide communications and strict anticorruption laws.

Critics would say that while Hong Kong’s annual per capita GDP of US$38,000 – the highest in Asia, ranking fifth worldwide (compared to $7600 in China) according to IMF figures – is less impressive than it looks. The distribution of such wealth is far from even. Hong Kong has more billionaires than most other countries, but many more people who struggle to meet much more than fairly basic levels of subsistence.

Hong Kong has moved from labor- to capital-intensive industries in recent decades – service industries employ about 85% of Hong Kong’s workforce and make up more than 88% of its GDP. Telecommunications, banking, insurance, tourism and retail sales have pushed manufacturing into the background, and almost all manual labor is now performed across the border in southern China. The shift from manufacturing to services has not been without problems.

The change may have seen a dramatic increase in wages, but there has not been a corresponding expansion of the welfare state. On the other hand generous personal tax allowances mean only a little more than 40% of the working population of 3.54 million pays any salaries tax at all and a mere 0.3% pays the full 16%.
Hong Kong has traditionally suffered from a labor shortage. Most of the manual work (domestic, construction etc) is performed by imported labor, chiefly from Southeast Asia. The labor shortage is most acute in the high-tech and financial fields, prompting the government to consider further relaxing restrictions on importing talent from the mainland, a move deeply unpopular with Hong Kong’s working class.