Hong Kong Overview
The island of Hong Kong was ceded to the United Kingdom in 1842, with the Chinese defeat in the Opium War . The Kowloon peninsula came under British control in 1860, while the new territories were leased in 1898.
The United Kingdom appointed the Legislative and Executive councils. In 1984, China and the United Kingdom entered into an agreement with the motto “one country, two systems”
The protectorate returns to China’s sovereignty on July 1, 1997. with the status of Special Administrative Region. Hong Kong is expected to maintain its economic system, currency and a high degree of administrative autonomy until 2047. China will be responsible for foreign policy and defense of the region.
In Hong Kong’s free trade paradise, the entire land belonged to the British Crown and the government did not sell it, but leased it for a certain period of time, in a land market entirely manipulated by government control to increase public revenue. This agrarian policy also allowed the government to subsidize housing projects, as well as to develop urban industrial projects and “apartment factories” that played an extremely important role.
During the crucial years of the economic takeoff (1949-1980), while GDP grew 13 times, real public spending increased 26 times and public investments in social programs grew dramatically.
Exports have been concentrated over time in the same few sectors – textiles, clothing, footwear, plastics, consumer electronics.
The most fundamental was the flexibility of Hong Kong manufacturers to adapt quickly and effectively to the demand of world markets in the same industries. Thus, industry flexibility and competitive prices based on relatively low production costs were the main factors in explaining Hong Kong’s growth.
The popular housing system and the specific type of welfare state that emerged in Hong Kong subsidized workers and allowed them to work long hours without putting so much pressure on employers, most of them with little scope to withstand wage increases.
After the signing of the 1984 Sino-British agreement on the transfer of sovereignty in the historic year of 1997, Hong Kong adopted a new model of development, also driven by the new competitive pressures of the world economy and the imminent transformation of its institutional scenario.
The new economy had three main strategic initiatives:
♦ Hong Kong has further engaged the export industry, decentralizing most of the production across the Peari Delta River, across the border. In the mid-1990s, depending on the estimate, ten, six, or at least five million employees worked for Hong Kong industries on Pearl Deita River and neighborhoods in Guandong province.
♦ Hong Kong expanded its role in the international business center established in the 1980s, taking advantage of its important characteristics: flexible financial regulation, excellent business and communications infrastructure and network connections.
♦ Hong Kong has become, as it has been throughout history, but this time on a much larger scale, the connection to China and the Chinese miracle. Most investments in China circulate through Hong Kong. Thus, Hong Kong anticipated its destiny, making it indispensable for the incorporation of China into the global economy and betting on its ability to adapt to a new environment and prosper in the century of the Pacific region, potentially dominated by the Chinese.