Hong Kong and globalization
Hong Kong is one of the special administrative regions (SAR) of the People's Republic of China. Situated on China's south coast, it runs a different economic and political system from that of mainland China, under the principle of "one country, two systems".
Alexandra Michaud TS3 Euro
How does Hong Kong implement capitalist principles? How powerful is the city on a world scale?
I/ Hong Kong : a powerful capitalist region in China and in the world
Thanks to its own capitalist economic system, Hong Kong has become the wealthiest city in China, since the reunification of the country during the early 1980s. In fact the government of Hong Kong plays a passive role in the economy and in the financial industry. It follows a policy close to non-interventionnism. Hong Kong is so characterized by low taxation, free trade and minimum government intervention. That is why it is one of the freest capitalist economies in the world. This policy has a strong impact on the economic power of the region.
It is known as one of the Four Asian Dragons, that is to say the regions of Asia, the high-income economies of which are still the world's fastest growing (Hong Kong, Taiwan, Singapore and South Korea). Hong Kong is actually one of the world's leading financial centres. It is the third financial place, following New York and London : the Hong Kong Stock Exchange is the sixth largest in the world and the Hong Kong dollar is the ninth most traded currency. The region also concentrates most of the corporate headquarters in the Asia-Pacific region. Hong Kong's GDP per capita (in purchasing power parity) is around $44,000. It is ranked tenth in the world.
II/ A place for international exchanges
Hong Kong is the eleventh largest trading entity in the world, with the total value of imports and exports exceeding its gross domestic product. Much of Hong Kong's exports consist of re-exports, which are products made outside of the territory, especially in mainland China, and distributed via Hong Kong. It also serves as a point of entry for investment flowing into the mainland. Hong Kong's largest export markets are mainland China, the United States, and Japan.
Hong Kong is also a tourist destination like the rest of China: it is often seen as a modern and dynamic city, more westernized than mainland China, since most of people speak English.
The Port of Hong Kong is one of the busiest ports in the world; it is dominated by container traffic. Hong Kong airport is also one of the most important in the world and one of the points of entry and departure into or from Asia for passengers and freight.
They both contribute to the economic and commercial power of Hong Kong in the world.
III/ Some difficulties due to the fast growth of the economy
However,Hong Kong has to face some pollution and environmental problems caused by its geography (it is surrounded by hills), its tall buildings and its large population. It suffers from increasing air pollution due to large numbers of diesel vehicles, smoke-belching factories, ceaseless construction, that is to say high-rise developments, which impact air circulation and aggravate the heat effect. This pollution reduces Hong Kong's competitiveness since workers prefer to leave the region with their families rather than risk their health.
Space is limited in Hong Kong, so there is a high density of population and many skyscrapers were built. (ther are around 800 skyscrapers in Hong Kong today while there are "only" around 200 skyscrapers in Manhattan).
There are also around 100 000 tiny cage houses where the lower classes of the city live. And the government doesn't seem to react to improve the situation as it doesn't want to disadvantage wealthy people by building social housing (which means reducing the value of accomodation).
Though Hong Kong is a powerful economic area, it remains a region, like the rest of China, with many problems of inequality and it must resolve these problems in order to become more attractive and competitive.