The impact of China’s WTO accession (2001) on Hong Kong’s trade development

Abstract

This paper sought to analyze the impact of China’s accession to WTO (2001) on Hong Kong's trade development. Hong Kong, as a main financial center in Asia, also an important international port, plays an important role in the world economy and global trade market. Hong Kong achieved rapid trade expansion during the 1970s-1990s and remained the stable increase trend till today. As a bridge of communication and information exchange between overseas markets and Mainland China, Hong Kong gained numerous economic benefits through imports and exports trade, also promotes the economic expansion in Mainland China. Since China's entry into WTO, Mainland China obtains a noticeable trade increase and affects Hong Kong’s commercial trade in a certain way. To test the impact of China’s accession to WTO (2001) on trade development in Hong Kong during 1970 to 2019, I argue that China’s accession to WTO (2001) created a higher trade diversion in Hong Kong than trade creation; China’s entry in WTO affects the shift of Hong Kong’s total export composition: increasing its re-exports at the expense of domestic exports.