The Role of Hong Kong in China's Economic Development1
Yue-Chim Richard Wong
The University or college of Hong Kong
This paper studies the continuing role of Hong Kong in China's economical development after Hong Kong's return to Chinese sovereignty in 1997. Focus is placed upon three areas. First, the growing financial integration with Guangdong Region, especially the Gem River Delta, in the progress an export oriented mild industrial production platform. Characters from a recently conducted survey realize that Hong Kong primarily based manufacturing and import/export corporations employ more than 11 , 000, 000 workers inside the Chinese Mainland, and is accountable for intermediating forty five percent of China's exterior trade and one-third of total foreign direct expenditure flows in the Mainland in 2000. Second, export of services take into account an increasingly significant share of Hong Kong's total export products and amount to one-quarter of Hong Kong's GDP. Service exports serve an important because producer solutions in support of the export oriented manufacturing basic in Guangdong Province. The service can be provided for products that are routed through Hk as re-exports or to get offshore operate that does not go through Hong Kong. Hong Kong's function as a regional headquarter for foreign businesses operating in Asia has as a result been developing. Third, Hong Kong's role as China's international economical center does not appear to have been eclipsed following its come back to Chinese sovereignty. Shanghai's part as an international financial centre is growing nevertheless the gap between your two urban centers remain significant and Hong Kong continues to offer an important role to play in taking care of China's money and hazards.
Hong Kong's economic ties with the Mainland, expanded in the late 1972s, have focused further as its return to China's sovereignty in 1997. Hong Kong's monetary links with the Mainland expanded rapidly in the 1980s plus the first portion of the 90s, with Hong Kong turning into the most important transact and worldwide fund raising center for the Mainland.
Hong Kong at the moment intermediates about 40 percent of China's external operate. As developing moved across the border, Hong Kong gravitated toward intermediation, as well as its re-exports control, almost all relevant to the Landmass of China, is now bigger than its GROSS DOMESTIC PRODUCT at 128 percent. Entrepot trade with the Mainland and related companies are therefore critically important to the Hong Kong economy.
This paper was presented by as a part of ICSEAD's Public Lectures on Asia Series (Ajia Kouza) upon 12 The fall of 2002.
Hong Kong has been the most important way to obtain international capital for the Mainland. Total foreign immediate investment (FDI) from Hk was estimated at about US$171 billion as of 2000, or perhaps about fifty-five percent of China's total FDI. Even though the share of FDI moves from Hong Kong has decreased recently, this still accounted for more than a third of total FDI goes to the Landmass in 2150. All but one of many 58 China state-owned enterprises (SOEs) listed abroad by end2001 had been listed in Hk, having elevated a cumulative of US$16. 6 billion dollars. In 2k, China-related businesses (both so-called " red-chip" and " H-shares" ) raised a list US$44 billion dollars in the Hk market.
China and tiawan has increased more than US$23 billion in the Hong Kong relationship market (out of $28 billion put outside the Mainland) in the last 10 years. Seven Landmass sovereign bonds were issued in Hk, and 18 Mainland concerns of nongovernment bonds had been listed on the Hk exchange at end-2000.
The stock of Hong Kong banks' direct loaning to Landmass entities totaled some US$37 billion it happened in 1999, or about 70 percent of total overseas bank lending towards the Mainland. Loaning to the Mainland by Hk banks provides since declined, in part due to the financial challenges of some debtors.
Hong Kong banks are also active in arranging syndicated loans and floating charge notes use with the Landmass. At the optimum in...