Hong Kong is closely linked to both China and the United States. This article discusses Hong Kong's economy and the effects that Sino-American relations will have on Hong Kong as the new Special Administrative Region of the People's Republic. It provides a critique of both the pessimistic and the optimistic views of Hong Kong's future: Hong Kong will prosper because China will ensure its success, or Hong Kong will suffer from China's political control. Analysis of the economic factors suggests that the territory is likely to fare quite well in the years following the transition. Nonetheless, the potential effect of political changes in China, the possibility of troubles in Sino-American relations, and the difficulty of reforming China's economy and integrating it into that of the world are some of the factors suggesting that the long-term outlook appears less favorable.
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References
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1. Hong Kong Trade Statistics (Hong Kong: Hong Kong Government, various issues through May 1995).
2.
2. Brantly Womack and Guangzhi Zhao, “The Many Worlds of China's Provinces: Foreign Trade and Diversification,” in China Deconstructs: Politics, Trade, and Regionalism, ed. David S. G. Goodman and Gerald Segal (London: Routledge, 1994), p. 164.
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See also Y. Y. Kueh, “Foreign Investment and Economic Change in China,”China Quarterly, 131:637-690 (Sept. 1992).
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4. Winston Lord, “Hong Kong's Transition to Chinese Sovereignty: Prospects for 1997” (Text of prepared testimony for U.S., Senate, Committee on Foreign Relations, Subcommittee on East Asian and Pacific Affairs, 6 June 1995.) See also Richard W. Mueller, “America's Long-Term Interest in Hong Kong,” this issue of The Annals of the American Academy of Political and Social Science.
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Y. P. Ho , Trade, Industrial Restructuring, and Development in Hong Kong (London: Macmillan, 1992).
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6. In 1992, the category “financing, insurance, real estate, and business services” contributed 24.5 percent of GDP, closing quickly on the 26.2 percent contributed by the category “wholesale, retail, and import/export trade and restaurants and hotels.” Manufacturing had fallen to 13.7 percent from 46.0 percent in 1980. See Hong Kong's Manufacturing Industries (Hong Kong: Hong Kong Government, 1994).
7.
Joseph S. Y. Cheng and Sonny Shui Hing Lo, eds., From Colony to Special Administrative Region: Hong Kong's Challenge Ahead (Hong Kong: Chinese University Press, 1994).
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8. “The Hong Kong Economy in the 21st Century,”Hang Seng Economic Monthly (Sept. 1994).
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Lieberthal , “Future of Hong Kong,” pp. 672-673.
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10. David S. G. Goodman and Feng Changyi, “Guangdong: Greater Hong Kong and the New Regionalist Future,” in China Deconstructs, ed. Goodman and Segal, p. 178.
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11. Segal, Fate of Hong Kong, p. 329.
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12. See Sung, China-Hong Kong Connection.
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James T. H. Tang , “Hong Kong's International Status,”Pacific Review, 6(3):205-215 (1993).
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14. Gerald Segal, “Deconstructing Foreign Relations,” in China Deconstructs, ed. Goodman and Segal, p. 327.
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15. Lieberthal, “Future of Hong Kong,” p. 674.
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16. Louis Kraar, “The Death of Hong Kong,”Fortune, 26 June 1995, p. 42.
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17. See Max J. Skidmore, “Promise and Peril in Combating Corruption: Hong Kong's ICAC,” this issue of The Annals of the American Academy of Political and Social Science.
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18. T. Wing Lo, Corruption and Politics in Hong Kong and China (Philadelphia: Open University Press, 1993).
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See also Karin Chai, “Export-Oriented Industrialization and Political and Class Development: Hong Kong on the Eve of 1997,” in Modernization in East Asia: Political, Economic, and Social Perspectives, ed. Richard Harvey Brown and William T. Liu (Westport, CT: Praeger, 1992), pp. 99-119.
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20. Alan Nash, “Hong Kong's Business Future: The Impact of Canadian and Australian Business Migration Programs,” in Pacific Asia in the 21st Century: Geographical and Developmental Perspectives, ed. Yue-man Yeung (Hong Kong: Chinese University Press, 1993), pp. 309-339.
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21. See Khun Eng Kuah, “Negotiating Emigration and the Family: Individual Solution to the 1997 Anxiety,” this issue of The Annals of the American Academy of Political and Social Science.
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Zhang Jialin , “Trade Issues in the Light of China-U.S. Relations: A Chinese Perspective” (Paper delivered at the International Conference on Sino-U.S. Economic Relations, Centre for Asian Pacific Studies, Lingnan College, Hong Kong, 21-23 June 1995).
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Nicholas R. Lardy , China in the World Economy (Washington, DC: Institute for International Economics, 1994).
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Kueh , “Foreign Investment.”
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25. Goodman and Feng, “Guangdong,” p. 199.
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26. Y. Y. Kueh and Thomas Voon, “The Role of Hong Kong in Sino-American Economic Relations” (Paper delivered at the International Conference on Sino-U.S. Economic Relations, Centre for Asian Pacific Studies, Lingnan College, Hong Kong, 21-23 June 1995).
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27. See Harding, “Politics of Sino-American Economic Relations.”
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For a study of Hong Kong, see Ho, Trade, Industrial Restructuring, and Development.
29.
“Outlook for the Reminbi Exchange Rate,” ibid. (Feb. 1995).
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Gary Silverman , “The Price of Success,”Far Eastern Economic Review, 6 July 1995, p. 56.
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31. For a discussion of a range of educational issues facing Hong Kong, see Gerald A. Postiglione, ed., Education and Society in Hong Kong: Toward One Country and Two Systems (Armonk, NY: M. E. Sharpe, 1992).
32.
32. Sanlai yibu literally means “three comings, one compensation.”“Three comings” refers to processing materials supplied from outside the country, assembling parts supplied from outside, and manufacturing on specification. “One compensation” refers to the contract between Hong Kong and Chinese partners under which the Hong Kong side supplies machinery and processing materials while the Chinese side supplies labor with the agreement that the Chinese side will be compensated for their costs by the eventual transfer of ownership of the machinery.
33.
33. Kueh and Voon, “Role of Hong Kong,” p. 3 n.
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34. K. C. Fung, “Accounting for Chinese Trade: Some National and Regional Considerations” (Paper delivered at the Conference on Research in Income and Wealth Geography and Ownership as Bases for Economic Accounting, Washington, DC, 19-20 May 1995).
