ns,
the number of mainland tourists to the territory has surged from 4.5
million in 2001 to 13.6 million in 2006, when they outnumbered
visitors from all other countries combined. Hong Kong has also
established itself as the premier stock market for Chinese firms
seeking to list abroad. Bolstered by several successful initial
public offerings in early 2007, by September 2007 mainland companies
accounted for one-third of the firms listed on the Hong Kong Stock
Exchange, and more than half of the Exchange's market
capitalization. During the past decade, as Hong Kong's manufacturing
industry moved to the mainland, its service industry has grown
rapidly and now accounts for 91% of the territory's GDP. Hong Kong's
natural resources are limited, and food and raw materials must be
imported. GDP growth averaged a strong 5% from 1989 to 2007, despite
the economy suffering two recessions during the Asian financial
crisis in 1997-98 and the global downturn in 2001-02. Hong Kong
continues to link its currency closely to the US dollar, maintaining
an arrangement established in 1983.

Hungary
Hungary has made the transition from a centrally planned to
a market economy, with a per capita income nearly two-thirds that of
the EU-25 average. The private sector accounts for more than 80% of
GDP. Foreign ownership of and investment in Hungarian firms are
widespread, with cumulative foreign direct investment totaling more
than $60 billion since 1989. Hungary issues investment-grade
sovereign debt. International observers, however, have expressed
concerns over Hungary's fiscal and current account deficits. In
2007, Hungary eliminated a trade deficit that had persisted for
several years. Inflation declined from 14% in 1998 to a low of 3.7%
in 2006, but jumped to 7.8% in 2007. Unemployment has persisted
above 6%. Hungary's labor force participation rate of 57% is one of
the lowest in the Organization for Economic Cooperation and
Development (OECD). Germany is by far Hungary's largest economic
partner. Policy challenges include cutting the public sector deficit
to 4% of GDP by 2008, from about 6% in 2007. The government's
austerity program of tax hikes and subsidy cuts has reduced
Hungary's large budget deficit, but the reforms have dampened
domestic consumption, slowing GDP growth to about 2% in 2007. The
government will need to pass additional reforms to ensure the