THE FREE MARKET OF HONG KONG Katie Floyd, Elise Argall, Kaitlin Oswald, Lynn Davies

The Economic System of Hong Kong  On July 1, 1997, Hong Kong became the Hong Kong Special Administrative Region (SAR) of the People’s Republic of China.  “one country, two systems”  China promises that its socialist economic system will not be imposed upon Hong Kong except in foreign and defense affairs for 50 years.  Hong Kong has a free market economic system.  Hong Kong has been ranked as having the freest economy in the Wall Street Journal and Heritage Foundation’s Index of Economic Freedom.

Why is Hong Kong a free market?  Hong Kong has a favorable geographical position for trading opportunities and wealth-generating assets.  It has a sheltered harbor- good for trading  Hong Kong has an abundance of labor.  The combination of an adaptable labor force with British and Western business methods and technology creates the opportune place for external trade and investment.  They are able to tax the land and use this profit to build schools, hospitals, roads, and other public facilities.

What major historical events have affected Hong Kong’s economy?  From the 1970s up until 1997, there has been both Chinese and British rule in Hong Kong using an economic policy called positive non-interventionism.  Positive non-interventionism- comprehensive laissez- faire, no government intervention  9/11 terrorist attacks on the U.S. and the SARS outbreak in 2003 severely hurt the economy of Hong Kong  The current economic crisis in the U.S. is affecting countries worldwide, including Hong Kong.

What products/industries does Hong Kong specialize in?  Always based on trade, commerce, and shipping  A leading producer of textiles, watches, plastics, and clocks  It is a leading center for management, information, coordination, finance, and professional services. Labor growth is particularly high in communications, international trade and financial sectors.  Some other major products and industries that Hong Kong exports are footwear, electrical appliances, toys, and precious stones.

How has the economy of Hong Kong impacted the rest of the world?  Hong Kong principal trading partners are China, the United States, Taiwan, Germany, Singapore, South Korea, and Japan.  Hong Kong’s economy exemplifies the benefits and disadvantages of a free market.  There are so many products and industries that are produced in Hong Kong, and without them other countries would have to adapt to replace them.

Works Cited “Economy of Hong Kong.” Wikipedia: The Free Encyclopedia. 19 Feb Feb “Hong Kong.” The World Factbook. 10 Feb Central Intelligence Agency. 23 Feb “Hong Kong: A Symphony of Lights.” Thomas White Global Investing. Thomas White International, Ltd. 23 Feb