About HKTDC | Media Room | Contact HKTDC | Wish List Wish List () | My HKTDC |
繁體 简体
Save As PDF Print this page

Building and Construction Industry in Hong Kong


  • Hong Kong companies have earned a reputation over the years in rapid construction of quality high-rise apartment blocks and office towers. The adoption of specialised construction techniques, such as reclamation and design-and-build methods, has made Hong Kong a regional leader.
  • Hong Kong’s construction industry performed well in 2015, with the gross value of construction work performed by main contractors increasing by 12.1% YOY to HK$223.9 billion (US$28.9 billion). In Q2 2016, gross value went down by 1.5% to HK$54.2 billion (US$7.0 billion).
  • Most of the export markets for Hong Kong’s building and construction services are in Asia, with the Chinese mainland being a major one. Major services exports include project management, contracting and engineering consulting.
  • In addition to the rolling out the Ten Mega Infrastructure Projects in phases, Hong Kong’s Third Runway System (3RS) has started construction since August 2016. 
  • Under the 13th Five-year Plan announced in 2016, China will focus its attention on infrastructure upgrade, including trans-regional railways and highways systems.

Industry Data

Table: Industry Data (Building and Construction Industry)
Table: Industry Data (Building and Construction Industry)
Table: Major Indicators of the Building and Civil Engineering Industries
Table: Major Indicators of the Building and Civil Engineering Industries

Range of Services

Construction activities can broadly be classified into three categories, namely buildings (residential, commercial, and industrial/storage/service), structures and facilities (transport, other utilities and plant, environment, and sports and recreation), and non-site activities (decoration, maintenance and repair, etc.).

In recent years, the construction work performed by main contractors in Hong Kong has been driven mainly by public expenditure on the Ten Major Infrastructure Project announced in the 2007-2008 Policy Address. These include transportation infrastructure projects of high gross value, such as the Hong Kong-Zhuhai-Macau Bridge, Guangzhou-Shenzhen-Hong Kong Express Rail Link, expansion of railway networks comprising the South Island Line and the Shatin-Central Link, as well as new highways such as Tuen Mun-Chek Lap Kok Link and Island Eastern Corridor Link. In the second quarter of 2016, construction activities dropped by 1.5% year on year (YOY) to HK$54.2 billion as value of public sector sites fell by 8.3% YOY, while that of private sector sites showed a sustained increase of 7.4%.

To expand land supply and enhance infrastructure, the government is planning for new town extensions and new development areas, such as North East New Territories New Development Areas, Hung Shui Kiu New Development Area, Tung Chung New Town Development Extension and the airport's North Commercial District. These works include land formation, road construction and laying of water mains. As the infrastructure projects are being rolled out, the demand for construction services in Hong Kong, particularly public sector demand, will remain high.

Table: Gross Value of Construction Works Performed by Main Contractors
Table: Gross Value of Construction Works Performed by Main Contractors

Services Providers

Hong Kong's construction industry is characterised by a small number of large local contractors, a high level of subcontracting, presence of a large number of overseas contractors, with a substantial proportion of companies being both developers and contractors.

Most of Hong Kong's construction companies are small in size and those with less than HK$10 million (US$1.3 million) in annual gross value of construction work account for as high as 96% of the construction industry. The majority of the small ones act as subcontractors to the large companies, which tend to be main contractors. There are quite a number of big construction companies capable of handling projects requiring sophisticated technology and strong financial background and are expanding their business across the region.

Hong Kong contractors are experienced and highly skilled in building works. Because of the growing size and complexity of the projects, the current industry trend is to award large and complex building contracts as a single package to multi-disciplinary contractors. There is no formal restriction for entry to the contracting business in Hong Kong. Foreign and local contractors are treated alike, and they are allowed to tender local public sector projects.


Hong Kong's expertise in construction of quality high-rise residential and commercial buildings is internationally renowned and in great demand in overseas markets, especially in Asia. The Middle East has arisen to be a market with growing potential for Hong Kong’s construction companies. Government infrastructure plans as well as commercial projects provide good support to construction activities in the Gulf region. For example, the Hong Kong-based construction company, China City Construction Group (formerly known as Chun Wo Development), launched a luxury residential project ‘Reem Diamond Residence’ in Abu Dhabi, the United Arab Emirates (UAE) in 2014.

Major types of Hong Kong's exported services include project management, contracting and engineering consulting.

Table: Hong Kong Exports of Construction Services
Table: Hong Kong Exports of Construction Services

Industry Development and Market Outlook

New momentum in public infrastructure

To achieve the objective of promoting economic growth through infrastructural development, the Hong Kong government has been increasing its infrastructure investment over the past few years. Some of the mega infrastructure projects announced in the Policy Address in 2007 have had their details published and tenders released, thereby driving up local construction activities. Below is a summary of the ten infrastructure projects:

Table: Ten Mega Infrastructure Projects
Table: Ten Mega Infrastructure Projects

Apart from the ten infrastructure projects, the Hong Kong government has also forged ahead with other works, such as the Liantang/Heung Yuen Wai Boundary Control Point project. In addition, further development of the Hong Kong International Airport, including the construction of the third runway, has started since August 2016. 

In the 2016-17 Budget, the Hong Kong government projected public expenditure on capital works to reach HK$79 billion for the fiscal year ending March 2017. In recent years, government investment in land development, transport network, hospitals, schools and other large-scale infrastructure projects has exceeded HK$70 billion annually. With a number of projects at their construction peaks, capital works expenditure is expected to remain at similar levels in the coming few years.

Infrastructure projects and property developments in the region

To accommodate the urbanisation process, many Asian countries are upgrading their basic infrastructure such as road networks, port facilities and housing. Commercial, retail and residential projects are springing up in many developing Asian countries, typically India, Indonesia, the Philippines, Thailand, Malaysia and Vietnam, where Hong Kong construction companies are actively seeking opportunities. For examples, Luks Group engages in cement production and property development in Vietnam, while Hongkong Land has participated in residential and office building projects in Indonesia, as well as luxury residential developments in the Philippines.

The Middle East is another market which has attracted many Hong Kong companies, with many projects won in many Middle East countries. Hip Hing Construction has won contracts in Abu Dhabi’s carbon-free city Masdar, as well as in Dubai to build a 72-storey residential building through joint venture with a local contractor. Paul Y was awarded a contract worth US$77 million to build the 54-storey Arraya Office Tower in Kuwait.

China's construction market

Rapid urbanisation has driven up China’s infrastructure development. To expand domestic consumption, China’s urbanisation plan 2014-20 aims to increase the proportion of urban population from 53.7% in 2013 to 60% by 2020. The higher rate of urbanisation will generate huge demand for public infrastructure, housing and transport networks.

Table: Selected Key Indicators
Table: Selected Key Indicators

In the 13th Five-Year-Plan (FYP), the Chinese government announced plans to further develop transport infrastructure as part of the efforts to promote an efficient, green and connective infrastructure network. The proposed projects include new railway lines, highways and airports (see table below).

Table: Transportation Construction Plans under the 13th FYP
Table: Transportation Construction Plans under the 13th FYP

In the past years, local governments have been building a lot of new towns along the outskirts of China’s second- and third-tiers cities as part of their efforts to achieve the urbanisation target. However, a lack of supportive infrastructure and transport network has left most of these newly built apartments empty, creating an increasing number of “ghost towns”. Together with a deceleration of economic growth, as China enters a “new normal” mode, the property market has softened in early 2014. After some downward adjustments, the property market is showing signs of stabilisation. In the first nine months of 2016, nationwide sales of floor space in residential buildings across China climbed 27% YOY, while the value soared 43% YOY, according to the National Bureau of Statistics.     

Belt and Road opportunities

In March 2015, China’s National Development and Reform Commission issued The Vision and Actions on Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road, outlining the framework of the Belt and Road Initiative (BRI), co-operation priorities and mechanisms. It is estimated that at least US$1.2 trillion could be invested into infrastructure projects along the BRI routes, with a large portion of the funding expected to go to transport infrastructure projects covering the construction of ports, railways, and roads.The implementation of the BRI, along with China’s 13th Five-year Plan, will be closely scrutinised for business opportunities. In his 2016 Policy Address, Chief Executive CY Leung proposed to set up a Belt and Road steering committee in formulating strategies and policies for Hong Kong's participation in the Initiative, as well as a Belt and Road Office to take forward the related studies and co-ordination work.

Hong Kong is renowned for its excellent professional services including building and construction. With transport networks and infrastructure being the first stage in development of the BnR Initiative, Hong Kong professionals in consultancies, construction, project management and related fields are expected to benefits from the ample opportunities ahead.

The Closer Economic Partnership Arrangement between Hong Kong and the Mainland (CEPA)

Under CEPA, construction professional services include construction design services, engineering services, integrated engineering services, urban planning and landscape design services (except overall urban planning services).

According to the Regulations on Administration of Foreign-Invested Construction Enterprises promulgated in end-2002, the application for and approval of the establishment of foreign-invested construction enterprises has been further relaxed. However, CEPA still enjoys a number of preferential treatments compared with China’s WTO commitments.

In applying as a wholly-owned construction and engineering design enterprise, foreign service providers who have been qualified as certified architects or certified engineers in China shall not be fewer than 1/4 of the total certified professionals required under the qualification grading criteria (1/8 for a joint-venture (JV) construction and engineering design enterprise), and the foreign service providers who have the relevant design experience shall not be fewer than 1/4 of the total key technical personnel required under the qualification grading criteria (1/8 for a joint-venture construction and engineering design enterprise). Under CEPA, Hong Kong Service Suppliers (HKSS) can employ mainland registered professionals to fulfill the requirements.

In addition, for a foreign enterprise applying for a JV enterprise, the proportion of total capital contributed by mainland partners of JVs should be no less than 1/4 of the registered capital, whereas mainland partners of HKSS are not subject to the required proportion of the registered capital.

Implemented in March 2015, the Agreement between the Chinese mainland and Hong Kong on Achieving Basic Liberalisation of Trade in Services in Guangdong (i.e. the Guangdong Agreement) granted HKSS national treatment to provide various construction and related engineering services, including general construction work for buildings, installation and assembly work, building completion and finishing work services in Guangdong.

On the basis of the Guangdong Agreement, the Agreement on Trade in Services (“ATIS”) was signed in November 2015, extending the geographical coverage to the whole mainland for basic liberalisation of trade in services from June 2016. Unlike the previous CEPA Supplements which adopted a positive-list approach to introducing liberalisation measures, the two latest CEPA agreements adopt a hybrid approach to granting preferential access to Hong Kong using both positive and negative lists. Further information on the latest CEPA agreements can be found here.

As of 30 November 2016, there were 105 approved HKSS in the sector of construction professional services, and construction and related engineering services.

Content provided by Picture: Winnie Tsui
Comments (0)
Shows local time in Hong Kong (GMT+8 hours)

HKTDC welcomes your views. Please stay on topic and be respectful of other readers.
Review our Comment Policy

*Add a comment (up to 5,000 characters)