Money & 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, HK$300 a day, but it would require a good deal of self-discipline. Better to budget something along the lines of HK$600 if you want to stay in the better class of guesthouse or cheaper midrange hotel and do more than just eat bowls of noodles. If you want to sample the finer hotels and restaurants, you’ll be paying the equivalent of most leading world cities. The real bargain compared to the likes of London and even New York is the incredibly cheap taxi fares; in fact, transport generally is excellent value.
Prices here are quoted in Hong Kong dollars ($). For current exchange rates see www.xe.com.
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 HK$10-20, and if you make use of the porters at the airport, HK$2-5 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 HK$3-5 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 HK$10.
Hong Kong finally began booming once again after a wretched, posthandover 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 flotations, 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 capitalisation 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 labour- 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 labour 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 labour shortage. Most of the manual work (domestic, construction etc) is performed by imported labour, chiefly from Southeast Asia. The labour 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.
Hong Kong Automated Teller Machines (ATMs) can be found almost everywhere and are usually linked up to international money systems such as Cirrus, Maestro, Plus and Visa Electron. Some HSBC so-called Electronic Money machines offer cash withdrawal facilities for Visa and MasterCard holders; American Express (Amex) cardholders have access to Jetco ATMs and can withdraw local currency and travellers cheques at the Express Cash ATMs in town.
One of the main reasons why Hong Kong has become a major financial centre is because it has no currency controls; locals and foreigners can bring/send in or take out as much money as they like.
Banks in Hong Kong generally offer the best rates, though two of the biggest ones – Standard Chartered and the Hang Seng Bank – levy a $50 commission for each transaction on nonaccount holders. Avoid HSBC where this charge is $100. If you’re changing the equivalent of several hundred US dollars or more, the exchange rate improves, which usually makes up for the fee.
There are licensed moneychangers, such as Chequepoint, abundant in touristed areas, including Tsim Sha Tsui and the Shun Tak Centre, from where ferries depart for Macau. While they are convenient (usually open on Sunday and holidays and late into the evenings) and take no commission per se, the less-than-attractive exchange rates offered are equivalent to a 5% commission. These rates are clearly posted, though if you’re changing several hundred US dollars or more you might be able to bargain for a better rate. Before the actual exchange is made, the moneychanger is required by law to give you a form to sign that clearly shows the amount due to you, the exchange rate and any service charges. And try to avoid the exchange counters at the airport: they offer some of the worst rates in Hong Kong. The rates offered at hotels are only marginally better.
One moneychanger that we’ve been using since the ink was still wet on the Treaty of Nanking is Wing Hoi Money Exchange (2723 5948; Ground fl, shop No 9B, Mirador Mansion Arcade, 58 Nathan Rd, Tsim Sha Tsui; 8.30am-8.30pm Mon-Sat, 8.30am-7pm Sun). It will change just about any currency as well as travellers cheques.
No foreign currency black market exists in Hong Kong. If anyone on the street does approach you to change money, assume it’s a scam.
The most widely accepted credit cards in Hong Kong are Visa, MasterCard, Amex, Diners Club and JCB – and pretty much in that order. When signing credit card receipts, make sure you always write ‘HK’ in front of the dollar sign if there isn’t one already printed there.
If you plan to use a credit card, make sure you have a high enough credit limit to cover major expenses such as car hire or airline tickets. Alternatively, leave your card in credit when you start your travels. And don’t just carry one card, go for two: an Amex or Diners Club card with a MasterCard or Visa card. Better still, combine cards and travellers cheques so you have something to fall back on if an ATM swallows your card or the bank won’t accept it.
Some shops in Hong Kong may try to add a surcharge to offset the commission charged by credit companies, which can range from 2.5% to 7%. In theory, this is prohibited by the credit companies, but to get around this many shops will offer a 5% discount if you pay cash. It’s your call.
If a card is lost or stolen, you must inform both the police (2527 7177) and the issuing company as soon as possible; otherwise, you may have to pay for the purchases that the unspeakable scoundrel has racked up on your card. Some 24-hour numbers for cancelling cards:
American Express (2811 6888)
Diners Club (2860 1888)
JCB (001 800 0009 0009 toll free)
MasterCard (800 966 677)
Visa (800 900 782)
The Visa number may be able to help you (or at least point you in the right direction) should you lose your Visa card but, in general, you must deal with the issuing bank in the case of an emergency. Round-the-clock emergency bank numbers:
Chase Manhattan Bank (2881 0888)
Citibank (2860 0333)
HSBC (2748 4848)
Standard Chartered Bank (2886 4111)
Travellers cheques offer protection from theft but are becoming less common due to the preponderance of ATMs. Most banks will cash travellers cheques, and they all charge a fee, often irrespective of whether you are an account holder or not. HSBC, Standard Chartered and Hang Seng banks all charge commissions, whether this be a flat amount or a percentage of the total exchanged.
If any cheques go missing, contact the issuing office or the nearest branch of the issuing agency immediately. American Express (3002 1275) can usually arrange replacement cheques within 24 hours.
Taxes & refunds
There is no sales tax in Hong Kong. The only ‘visible’ tax visitors are likely to encounter is the 3% government tax on hotel rates.