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Hong Kong Economic Modernization Research Paper


Introduction

For a long time now, Hong Kong has acted as the bridge linking China to the rest of the world. Seemingly, this is no longer the case since China is further opening up. China is growing very fast and the current situation is far much different from what used to be the case close to two decades ago (Austin and Carr 2000, 4).

The Bloomberg, which gives the US dollar performance for different economies, has for the last two to three decades showed that Hong Kong’s economic performance is way above Shanghai’s but this is no longer the case.

Economists at action point in Singapore state that, going by the current numerals, Shanghai’s economy has slowly overtaken that of Hong Kong (Bray 2009, 12). This can be attributed to a multitude of current economic abilities and disabilities of the two well-performing economies.

Going back to history, these two economies started performing immediately China opened up following the head of state, Deng Xiaoping’s move to unfetter the communists’ seizure of the economy back in 1978 (Cheng 1987, 33).

Economists are stating that Shanghai is right back on its track to regain position as the economic hub of China. This is a position that the city held during the pre-war era. Competition between these two cities rightly exists and is quite healthy since it is enhancing positive economic competition.

Hong Kong

Hong Kong is a capitalistic service economy in China. Hong Kong’s economy exhibits low tax rates and free trade situations and its currency is the Hong Kong dollar. The economy of Hong Kong is based on the principle of positive non-interventionism and the city is very dependent on international or rather external trade and finance.

Hong Kong boasts a sound and strong banking system. It has no existing public debts and its legal system is very strong and effective in running the city’s economic affairs.

Hong Kong posses a large foreign exchange reserve and its anti-corruption policies are strong enough to keep all corrupt practices at bay (Zaffron and Steve 2009, 9). Hong Kong also has very close links to China, which is the Mainland, and this has enabled it to quickly change things to fit into the requisites of the market for its goods and any other economic occurrences that need rapid adjustments.

Economists postulate that Hong Kong’s economy is larger than that of Israel and even Ireland. Hong Kong’s GDP per capita based on purchasing power parity is placed at number six globally according to 2011 economic data (Branford 2000, 13). The GDP per capita is placed at a position higher than that of the United States of America, Netherlands and slightly higher than that of Brunei.

One way Hong Kong has been able to achieve greatly is through its modernization in terms of all sectors of the economy. Hong Kong is at present a modern society and consequently a modern economy, as per the measurements of the preset modernization standards.

Firstly, Hong Kong has recently joined the league of industrialized regions. However, Hong Kong maintains the position of being Chinese (Cheng 1996, 2). It is said that China consumes so much inanimate energy and power such that its rate of fuel consumption outdoes its population growth and size.

Hong Kong has gladly joined the ecological phase 4 societies, which are characterized by nations whose inhabitants depend on extrasomatic energy. This is the consumption of energy separate from the energy produced by the human body.

The occupants or rather the natives of Hong Kong are ardent participants in the issues of mass media (Cheng 1997, 43). This has helped Hong Kong build a labor force consisting of technologically enlightened persons.

Shanghai

Shanghai has a human population of about 19 million people. This is close to thrice the population of Hong Kong. Shanghai has been an international city with an economy that had links to great economy.

This was the case even in the 19th century. It was the case until the communists grabbed the economy. Back in those days, Hong Kong used to be a mere ‘colonial outpost’. Apart from Shanghai being the largest port in China, it is also the center of trade, information, technique finance and even culture (Daniels 2004, 23).

Shanghai is well known for its vastness. It is among the biggest cities in the world. It is also one of the most famous ports. In the recent economic times, Shanghai has slowly taken over as China’s economic powerhouse reporting a Gross domestic product of 540.876 billion Yuan.

Shanghai’s economic underpinning is owed to the secondary and tertiary industries that are poised to support and sustain the region’s economy. Shanghai boasts the largest industrial ability with 157 of China’s 166 different industries being situated in Shanghai.

Shanghai is the top producer of steel and iron in China. When this is coupled with the fact that the chemistry and oil industries in Shanghai are fast developing and currently including more than twenty special oilfields and chemistry industries, it makes Shanghai the economic hub of China.

Shanghai is currently leading in polyester production and motorcar industry, with all these industries attaining international standards. Shipbuilding, textile industries, instruments plus a number of other traditional industries are rapidly advancing in operation and output. It is important to note that all these have developed as a result of the open and reform policies.

Difference between the two cities

Seasoned businesspersons spot the difference between the two economic regions’ legal systems. This is arguably one parameter that has very prominently brought out the economic difference between the two economic powers. Shanghai’s legal system is relatively less developed as compared to that of Hong Kong, which is free of rather stringent bureaucratic measures (Bacal 2002, 44).

In addition, another difference between the two regions is that majority of the Fortune 500 companies that are aiming China’s domestic market. They are found in Shanghai while majority of exporters and advanced service industries are found in Hong Kong.

Competition and what the future holds for the two cities

These two regions are actively competing for the market for their produce. The competition is even further strengthened by the fact that they produce similar products. The future is bright for these two cities since their economic goals and vision are poised towards expanding markets and venturing into new areas such as Africa for more business opportunities.

Although Shanghai’s power surpasses that of Hong Kong, these two cities feed from each other’s palm (Routledge and Francis 2009, 1). It is noted that the Hong Kong executives have trained their Shanghai counterparts in all aspects pertaining to the running of the market economy and even on how to deal with the media. China’s top political leaders are spending time talking about the way forward for Hong Kong.

References

Austin, John., and James Carr. 2000. Shanghai’s Surprising Take-over. New York: Context Press.

Bacal, Robert. 2002. Shanghai’s economic performance. Stanford: Stanford University Press.

Bransford, Jim. 2000. Modernization and Chinese Culture in Hong Kong. Washington: National Academy Press.

Bray, Mildred. 2009. Economic and social development in Hong Kong and Southern China: Implications for social work. New York: Sage.

Cheng, Leonard. 1996. Hong Kong: The Fragile Economy of Middlemen. New York: John Wiley and Sons.

Cheng, Leonard. 1987. The Chinese Economy Hong Kong, PhD Thesis. London: University of London Institute of Education.

Cheng, Leonard. 1997. The Meaning of Decentralization: Looking at the Case of China. McGinn: Cummings & N.F.

Daniels, Aubrey. 2004. Competition Between Sahanghai and China. New York: Context Press.

Routledge Taylor., and Francis Gregory. 2009. Journal of World Economic Trends, Published quarterly. Royal Holloway: University of London press.

Zaffron, Lendman., and Steve Deeds. 2009. Shanghainese Economy: Present & Future. New York: John Wiley and Sons.

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IvyPanda. (2019, December 30). Hong Kong Economic Modernization. Retrieved from https://ivypanda.com/essays/hong-kong-economic-modernization/

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"Hong Kong Economic Modernization." IvyPanda, 30 Dec. 2019, ivypanda.com/essays/hong-kong-economic-modernization/.

1. IvyPanda. "Hong Kong Economic Modernization." December 30, 2019. https://ivypanda.com/essays/hong-kong-economic-modernization/.


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IvyPanda. "Hong Kong Economic Modernization." December 30, 2019. https://ivypanda.com/essays/hong-kong-economic-modernization/.

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IvyPanda. 2019. "Hong Kong Economic Modernization." December 30, 2019. https://ivypanda.com/essays/hong-kong-economic-modernization/.

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IvyPanda. (2019) 'Hong Kong Economic Modernization'. 30 December.

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