This study seeks to review the characteristics of Hong Kong’s economic development, identify the significance of the handover from a capitalist Hong Kong to socialist China; and thus, suggest counterstrategies for Korean companies involvement.
Just looking at some of the recent external developments of Hong Kong raises questions on ‘whether 1997 really is a difficult time for them.’ Hong Kong’s GDP per capita was already 21,650 USD in 1994, surpassing that of its home country the United Kingdom. In addition, the economy marked a growth of 4.6% compared to the previous year while the financial markets recorded a growth of 30%. The real estate market is also very active if not overheated, in spite of uncertainties from Hong Kong’s scheduled return to China.
With such stable economic growth over the past few years, many foreign companies hold a rosy future of Hong Kong’s future, but not everyone. As both optimistic and pessimistic forecasts exist with regards to the country’s future, Hong Kong is expected to continue to carry out its role as a hub for transit trade even after its return to China. However, as mainland-Chinese influence is expected to affect the political, economic, social and cultural aspects of Hong Kong, the currently-established factors of liberalism are expected to fade away while factors of person-based politics is likely to expand.
Despite such changes, Hong Kong is still expected to carry out its role as a business bridge for mainland China. This is primarily because a new substitute that can carry out all the roles of Hong Kong’s international finance center, transit trade hub, and information house is difficult to develop within the next twenty years.
With China’s accession to the WTO and its market-opening efforts, Hong Kong’s potentials will accelerate the formation of the Huanan economic bloc including the Chinese southern regions–Guangdong and Fujian provinces, Taiwan and Southeast Asia. Furthermore, this bloc is forecast to spread its influence to mainland China, leading to the formation of the Greater Chinese Economic Bloc.
In response to the expected changes in Hong Kong, Korea will have to adjust to the Chinese-style atmosphere before anything. Thus, more effort will have to be exerted on building ties between the Chinese government or companies as they emphasize guanxi (relationships) instead of the current way of dealing with Hong Kong’s government or English companies. It is through this guanxi that the country will have to develop a strategy to enter the so-called Greater Chinese Economic Bloc.
홍콩 반환의 의미와 우리의 대응전략(Study of the significance of Hong Kong’s handover and Korea’s counterstrategy)
서울 : 한국개발연구원
|Series Title; No||정책포럼|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic Administration
Government and Law < General
|Holding||KDI; KDI School|