Hong Kong Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Hong Kong is one of two special administrative regions of the People’s Republic of China. It is located on the eastern side of the Pearl River Delta. The territory includes Hong Kong Island, Lantau Island, the Kowloon Peninsula, and the New Territories. Its total area is 1,104 sq. km. The population was recorded as 6.99 million in 2006. Over 90 percent of the population are Chinese. The second half of the 20th century saw dramatic growth in Hong Kong’s population, beginning with an influx of refugees from the mainland following the communist victory and the founding of the People’s Republic of China (PRC). Thus, most Hong Kong residents are first or second-generation immigrants. Hong Kong is one of the world’s leading financial centers and was said to be the most economically free in the world from 1995 to 2008 according to the Heritage Foundation’s Index of Economic Freedom.

Hong Kong was a small fishing community early in the 19th century. Its development began when it became a British colony following the signing of the Treaty of Nanking on August 29, 1842, when Hong Kong Island was ceded to Britain “in perpetuity.” In 1860, after China’s defeat in the second Opium War, Britain claimed the areas south of Boundary Street on the Kowloon Peninsula and Stonecutter’s Island. These were ceded to Britain under the Convention of Peking. On June 9, 1898, the New Territories, including part of Kowloon and over 200 islands, were leased to Britain for 99 years. Hong Kong’s administration followed the pattern for a British colony, with a governor nominated by Whitehall. In the late 19th century, Hong Kong was a major trading port of the British Empire in Asia. The Hong Kong and China Gas Company developed in 1861, the Peak Tram in 1885, and the Hong Kong Electric Company in 1889; China Light and Power followed in 1903, the electric tramways in 1904, and the Kowloon-Canton Railway in 1910.

Hong Kong’s population suffered under Japanese occupation during World War II, but recovered quickly as mainland immigrants, fearing communist reprisals, sought refuge in the colony following the capitulation of the Nationalist forces and the establishment of the PRC in 1949. Many companies in Shanghai and Guangzhou shifted their operations to Hong Kong. Thus, the textile and other manufacturing industries grew and Hong Kong’s population dramatically increased in the 1950s as people flocked to Hong Kong for jobs and security. Thousands of immigrants lived in squatter areas all over the colony, the most infamous of which became Shek Kip Mei. The Christmas Day fire of 1953 left 53,000 people homeless and galvanized the British rulers into developing Hong Kong’s first public housing program. From its very humble beginnings, this program has developed to include general public housing (rent only) and home ownership schemes covering a wide range of salaries and needs in a territory where home purchase is out of financial reach of the majority.

During the 1960s, the textile industry made up about half of Hong Kong’s domestic exports in value. From the 1960s to the 1980s, the manufacturing sector gradually moved from simple labor-intensive products to high–value added products. At that time, secondary production included manufacturing and construction, which made a significant contribution to the gross domestic product (GDP), while primary production became insignificant. The open door policy and economic reforms adopted by China in the 1980s provided (and continue to provide) Hong Kong’s industrialists with cheaper labor and land. Using the cheaper supply of land and labor in the Pearl River Delta, industrialists gradually expanded their production bases across the border into mainland China while retaining their offices in Hong Kong. This operation mode enables the continuous economic development in Hong Kong.

In addition, Hong Kong’s economy has become increasingly service-oriented since the 1980s. The share of the tertiary services sector in GDP rose from 71 percent in 1985 to 91 percent in 2005. The wholesale, retail, and import/export trades and hotels is the largest services sector and accounted for 29 percent of GDP in the services sector, followed by finance, insurance, real estate, and commercial services, which account for 22 percent; financial services, 13 percent; professional services, 11 percent; logistics, 10 percent; and tourism 3 percent. Hong Kong’s total services trade amounted to US$13.8 billion in 2006, which is the world’s 16th largest trading entity in value.

The largest share of total imports is electrical machinery, apparatus, and appliances, which was in total US$80.7 billion in 2006. This is followed by telecommunication equipment (US$43.0 billion) and office machines (US$36.5 billion). China, Japan, and ures in 2006 were US$17.2 billion, mainly from clothing and office machines. China, the United States, and the Netherlands are Hong Kong’s largest markets. Reexports are the most important trade for Hong Kong. The main origin primary re-export countries are China and the United States. Re-exports increased by 11.6 percent to US$333.3 billion in 2006. Electrical machinery, apparatus, and appliances are the main items. The Chinese mainland has long been Hong Kong’s largest trading partner, accounting for about half of Hong Kong’s total trade. Almost all re-export trade is related to mainland China.

Hong Kong’s per capita GDP was US$27,680 in 2006, one of the highest in Asia. Hong Kong has a well-established and efficient infrastructure. It operates one of the busiest container ports and airports in the world. Hong Kong is the sixth-largest foreign exchange market in terms of turnover in the world and second-largest stock market in Asia in terms of market capitalization. Total market capitalization was US$1,710 billion at the end of 2006.

The Hong Kong stock market is an important fund-raising platform for mainland China companies. There are 367 China enterprises listed on the Stock Exchange of Hong Kong. In 2006 equity funds raised by China enterprises totaled US$49.3 billion. About US$39 billion were raised in initial public offerings (IPO) on the stock exchange, which constitutes 91 percent of total equity funds raised in IPOs. The total annual trading turnover of China enterprises accounted for 60 percent of the total annual trading turnover of the whole Hong Kong stock market. Moreover, Hong Kong’s financial markets are operated in line with international standards, and ease of entry for professionals from outside contributes to the development of financial markets.

The Hong Kong government continues to improve Hong Kong’s transport system to strengthen its competitive advantage in the city, especially the railway system. Rail travel constitutes about 35 percent of the total daily public transport volume. Hong Kong’s Mass Transit Railway (MTR) has been in operation since 1979. The Light Rail system started operation in 1988 in the northwestern New Territories. A new international airport has been in operation at Chek Lap Kok since 1998. The Tseung Kwan O MTR line has been in operation since 2002, and the Disneyland

Resort Line began operation in 2005. The Ma On Shan rail link between Tai Wai and Ma On Shan in the New Territories was opened in 2004, providing rail transport to the population in the eastern New Territories. The Sheung Shui to Lok Ma Chau line opened in 2007 to relieve the congestion at Lo Wu and shorten the travel time between Hong Kong and Shenzhen, one of the special economic zones in China and the closest to Hong Kong.

The tourism industry is one of Hong Kong’s major sources of income. Tourist hot spots include Hong Kong Disneyland, Ocean Park, Hong Kong’s Wetland Park, the Ngon Ping 360 cable car ride on Lantau Island, and the Peak Tram and Victoria Peak Tower. Over 25 million tourists visited Hong Kong in 2006 and the number of arrivals has continued growing steadily. Mainland China tourists account for over half of Hong Kong’s visitors due to the opening and simplification of policies in certain cities in China on travel applications to Hong Kong. In addition, Hong Kong is recognized as providing some of the world’s best convention and exhibition facilities. In 2006 there were over 200 international conventions and nearly 100 exhibitions, in turn attracting nearly one million attendees.

Bibliography:

Hong Kong Year Book, 2007, www.yearbook.gov.hk (cited March 2009);
Janet Ng, Paradigm City: Space, Culture, and Capitalism in Hong Kong (State University of New York Press, 2009);
Catherine R. Schenk, Hong Kong SAR’s Monetary and Exchange Rate Challenges: Historical Perspectives (Palgrave Macmillan, 2009);
Ming Sing, Politics and Government in Hong Kong: Crisis under Chinese Sovereignty (Routledge, 2009).

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