This paper analyzes Hong Kong's economy mainly from the perspective of GDP, and then analyzes its fiscal and monetary policies implemented by the Hong Kong government and its monetary authority . Hong Kong is one of the world's leading financial centers and is a free market economy focused on services and efficiency. Hong Kong's economic freedom score is 90.1 on a 100-point scale, making it the highest-scoring economy in the index for the 20th consecutive year (Heritage.org, 2014). Hong Kong's economy is normally characterized by its low taxes, light regulation and well-established international business environment. Current position of the economyDiagram 1. Hong Kong's economy recovered to achieve moderate growth in 2013As the diagram above reveals, over the past 5 years, Hong Kong's economy has experienced moderate growth. Economic performance experienced two major declines. The worst happened during the subprime mortgage crisis that began in 2007. Hong Kong's rate of change in real terms declined significantly from its growth trend in previous years. However, compared to other countries, such as the United States and the United Kingdom, the country has been less affected by the cycle and the recovery of Hong Kong's economy has been better. Another decline occurred in 2012, after a few years of recession, and the reasons for this decline will be presented below. According to Chart 1, Hong Kong's economic performance maintained gradual growth in 2013, with real GDP increasing moderately by 2.9%, compared with 1.5% in 2012, keeping the labor market in a full state. employment (Hong Kong Economy Report, 2014). Overall, in 2013, Hong Kong's foreign and domestic sectors performed better than in 2012. As for the overseas sector, total export...... average of paper......RMB ion. In a situation where the RMB continues to gain value and the HKD loses value, Hong Kong people lose confidence in the HKD. Thus, stabilization of the HKD/RMB exchange rate is necessary, for example an adjustable parity policy, which would help alleviate pressure on the HKD. ConclusionIn summary, Hong Kong quickly discharged the recession and its economy maintained a positive trend after 2012. The latest fiscal and monetary policies carried out by the Hong Kong government and the Monetary Authority have promoted its economic development by stimulating investment and consumption as well as stabilizing the price level. It is suggested that Hong Kong increase the tax on the rich to narrow the wealth gap and distinguish the rich and poor in the expansion and contraction of fiscal policies and adjust the policy pegging policy monetary to achieve optimal results..