Research – Hong Kong

Hong Kong & Pearl River Delta – A research paper which focus the current issues between Hong Kong and China

HONG KONG is a multi-cultural city and acts as a trading hub between China and the rest of the world. In its pre-colonial stage, Hong Kong was a small fishing village with a small population. However, the British found that Hong Kong had potential to become one of the major doors to open opium business to China. Therefore, British acquired Hong Kong as a colony from the Opium war in 1841. After 150 years of colonization, the British government not only took advantage of the opium business but also developed Hong Kong into a Mega City. They developed a free education system, corrupted free government, and opened a financial market. Those developments not only civilized Hong Kong but also became a driver for population growth.

Hong Kong became a colonial city in 1841 and experienced significant population growth over 50 years. Each spurt in population growth was affected by war, economy migration, and political change. The first significant population change was during the end of World War II. According to the research from Jainfa Shen and Erbiao Dai, after the war, many Chinese refugees escaped and landed in Hong Kong from the 1940s to the 1950s. They became a main bulk of the population, shifting the labor focus to intensive industrialism during the 1960s to the 1970s. These labor focuses further contributed to the growth of Hong Kong.

In the early 1970s, the entire Hong Kong government system permeated with corruption. In the police department, from the seniors down to the police officers, the system was totally involved in corruption and excessively hindered government operations. In 1973, the current Governor of Hong Kong, Murray Maclehose, decided to face the corruption head on and established the Independent Commission Against Corruption (ICAC). ICAC was successfully in terminating corrupt practices and helped Hong Kong become one of the least corrupt societies in the world. It developed a notable trading environment in the Asia and foreigners were willing to invest in Hong Kong. In comparison to China, local corruption still manages to affect government operations. It ultimately makes Hong Kong different than China.

In 1978, the government introduced a free system with a 9-year universal basic education. Hong Kong government allowed free education over 34 years, beginning from year one in primary school to third year in secondary school. The benefits of free education enhanced the knowledge to those in commercial-based business environments in Hong Kong. The following generation starting from 1978 became major factors for Hong Kong in migrating economy sectors from a secondary industrial economy to a tertiary commercial and service economy.
After the 1980s, the cost of labor was continuing to grow. Hong Kong firms began to reduce production costs by migrating their production line in China, particularly in the Pearl River Delta in southern China. In the early 1980s, Hong Kong’s investors in China became diversified and the Pearl River Delta government began providing trade benefits to attract investors to invest in property, infrastructure, and technology. Hong Kong invested gradually and the whole labor-intensive operation completely relocated to China. In the early 1990s, Hong Kong investors only maintained operation offices in Hong Kong in order to communicate with oversea clients. In the meantime, the financial economy became mature.

In the 1997, Hong Kong experienced administrative migration from British to China. British were legitimately after ended 156 years of colonial administration. Then Hong Kong experienced China administration. In the outbreak of SARS in 2003, it directly impacted the service industry in Hong Kong. For example, foreign tourism dropped significantly. The China government announced in the first financial policy, Closer Economic Partnership Arrangement (CEPA), to strengthen its financial activity between PR Delta and Hong Kong. The CEPA covered three major areas: namely trades in goods, trades in services, and trades in investment facilitation. Under the framework of CEPA, it officially allowed Chinese tourists to visit Hong Kong. It strengthened tourism and related service business. However, the most important aspect of CEPA was providing a framework for simplification of trade and investment. It simplified customs clearance, inspection, and ensured food safety and standardization. That framework further optimized over information exchange. Moreover, China cooperation took advantage of CEPA and established their stock in the Hong Kong stock market in order to collect capital and further investment. CEPA developed a deeper relationship between Hong Kong and Pearl River Delta.

Besides the implementation of the trading policy, a new infrastructure will further link the Pearl River Delta and Hong Kong together physically. The project was proposed in December 15, 2009 and is a large sea crossing bridge connecting Hong Kong – Zhuhai – Macao Bridge (HZMB). The new transport link will cross both east and west coasts of the Pearl River. The project is expected to finish at the end of 2016. The main objective of the project is to enhance the physical trading and sustainable development in those three areas. Moreover, the physical connection will not only encourage the trading connection, but also will allow more cultural exchange between China and Hong Kong.
The bigger mega city plan from China is merging Hong Kong with the Guangdong Province in Pearl River Delta. According to BBC new, reporter Vaudine England stated that the China government planned to merge Hong Kong and its 7 Million residents with Shenzhen’s 13million people. A new mega city of 20 million people will strengthen the financial transition, cultural exchange, and political control. The merge will create a bigger metropolis. It will generate more trade opportunity in long term business competition. Moreover, the Hong Kong Government is planning to serve large-scale development in order to deal with the demand in living area, the need of job opportunities, and future population growth. North East New Territories will become the major project to address those potential issues.
The Hong Kong government is now partnering with ARUP to develop the outline of three large-scale mix-use projects. The government proposed three local projects in North East New Territories next to Shenzhen in order to establish a deeper connection. The implementation plan includes infrastructure and economic integration between Hong Kong and Shenzhen. The whole project will provide about 54,000 new housing units and 52,000 new employment opportunities. In order to increase the job openings, the project will reserve areas for industrialism in order to attract manufacturers back to Hong Kong. The Metro will link up these three projects and will connect Shenzhen and other major cities in China. In the coming future, the Hong Kong government will focus on expanding existing infrastructure and deeper trading activity in Pearl River Delta. Data exchange and physical trading will become the furfure key feature of Hong Kong.




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