Chinese Offshore RMB Currency and Bond Markets： The Role of Hong Kong

This paper discusses the role of Hong Kong in China’s grand scheme to build up the RMB as a global reserve currency.We highlight the economic importance of Hong Kong to China in terms of channeling foreign direct investment into China,some of which,in the future,will be denominated in the RMB.We discuss the development of China’s RMB currency swap and deposit markets in Hong Kong.These offshore markets enable the RMB to trade freely, setting the stage for the RMB to become fully convertible and allowing market forces to play a role in pricing the value of the RMB,and help in the development of the RMB-denominated bond(or dim sum bond)market in Hong Kong.Finally,we present evidence of the phenomenal growth of the dim sum bond market in Hong Kong,which can further enhance and strengthen the use of the RMB outside China.     

TECHNOLOGY TRANSFER TO CHINA BY HONG KONG'S CROSS‐BORDER GARMENT FIRMS

Hong Kong manufacturers have historically been one of the main sources of foreign direct investment to China, but their contribution to the transfer of technology to the mainland has been questioned due to the generally labor‐ rather than capital‐intensive, low‐value‐adding activities they perform there. Using data from eighty‐four Hong Kong‐based garment manufacturers that have invested directly in mainland China, this paper examines the role of Hong Kong FDI in the transfer of technology to China. Analyses show that Hong Kong garment firms are in fact human‐capital‐intensive and are endowed with valuable managerial technology and, moreover, act as effective channels for the transfer of such technology to mainland China.     

Inflation Transmission in Greater China

This paper examines inflation dynamics in Greater China. Using an asymmetric error correction model, we investigate how inflation in Hong Kong and Macao are related to inflation in Chinese Mainland. Our results based on data from July 1997 to December 2012 reveal that a long‐term equilibrium relation exists between inflation in Chinese Mainland and inflation in both Hong Kong and Macao, the two Special Administrative Regions of China. The degree of inflation pass‐through is higher for Macao than for Hong Kong. Moreover, we find no evidence of asymmetries in either Hong Kong and Macao's adjustment speeds towards long‐run equilibrium or in the short‐run pass‐through of accelerating or decelerating inflation in the Mainland. Collectively, our results show a close relationship among price dynamics of the three economies and call for a reconsideration of the exchange rate anchor in the Greater China Region.     

Development trajectories: Hong Kong vs. Shanghai

Over the past three decades, Shanghai and Hong Kong, leading cities in China's Yangzi River Delta and Pearl River Delta, respectively, have seen rapid economic development and institutional transformation. Shanghai has experienced a major breakthrough in its export‐driven economy and in industrial upgrading since the opening of the Pudong area in the 1990s. Shanghai has also ramped up its efforts to catch up with Hong Kong and has already become one of the world's foremost manufacturing and export hubs. At the same time, and particularly following the 1997 Asian economic crisis, Hong Kong has redoubled efforts to identify shortcomings in its economic architecture; and has explored plans to transcend its traditional role as a financial hub, to attract entrepreneurial hi‐tech talent, and to overcome inequitable income growth. This paper explores the development trajectories of these two cities and how they depart from the pre‐1978 development models. The paper also examines the extent to which the current trajectories are complementary or in competition.     

One Country,Two Prices? A Study of the Deflationary Effect of Price Convergence on Hong Kong*

Consumer prices in Hong Kong at the time of writing have declined by 15 percent from the peak recorded in 1998. We investigate the deflationary impact on Hong Kong of price convergence with the Mainland China, using 1990–2001 annual data on commodity prices in the former and in major cities of the latter. We find evidence of price convergence between the two economies over the past decade. Furthermore, price convergence is estimated to have accounted for one‐fifth of the deflation in Hong Kong. The results suggest that a significant portion of the deflation in Hong Kong is attributable to a process of structural adjustment due to growing economic integration with the Mainland.     

Lean Hong Kong Harvest and the Doha Round of Multilateral Trade Negotiations

Abstract

The biennial Ministerial Conferences are the most important event of the WTO regime. The Hong Kong Ministerial Conference was the sixth biennial conference of the WTO, which aimed at a low-level equilibrium and achieved it. While it successfully eschewed another Cancún-like disappointing failure, the Hong Kong Ministerial did not achieve much of substance. If success is defined as not failing, the Hong Kong Ministerial Conference could be adjudged a success. Few bold decisions were attempted and important outstanding decisions were put off for the future. Liberalization of multilateral trade in agriculture was the most important as well as the most contentious issue in Hong Kong. A good number of significant secondary areas were also under negotiations. Core modalities that were to be determined on these issues in Hong Kong were not. A reasonably successful Hong Kong Ministerial Conference would have helped in advancing the Doha Round, which in turn would have meant welfare gains to the global economy, and its different regions and sub-regions. This opportunity was evidently missed.     

A Eurasian Economic Vision for the Twenty-first Century

Widespread corruption in mainland China adversely affects the overall economy in general and international business in particular. Prior to the establishment of the Independent Commission against Corruption (ICAC) in 1974, corruption was also rampant in Hong Kong. The ICAC effectively cleaned corruption in Hong Kong within a short period of time. Hong Kong's success in this area has prompted the Chinese government to learn from Hong Kong's experience. This article reviews the factors that contributed to Hong Kong's success in fighting corruption and discusses whether China can learn from the Hong Kong experience. From this, we can conclude that, first, Hong Kong's experience demonstrates that a corruption‐prone culture can be changed in a relatively short period of time; second, in order for China to learn from Hong Kong's experience, there must be substantial changes in China's political and economic institutions.     

REARGUARD POLITICS: HONG KONG'S MIDDLE CLASS

This paper reports on the emergence of the middle class in contemporary Hong Kong First, it gives the historical background of the rise of the middle class in the 1970s. This historical background is important to our understanding of Hong Kong's middle class because it highlights its symbolic significance—the realization of the so‐called Hong Kong dream—in the context of the local society. It is also relevant to our understanding of the shaping of its political outlook. The second section explores why the middle class stayed away from politics when the future of Hong Kong and democratization were the main topics in the political agenda of the 1980s and 1990s. Finally, the paper rounds up its discussion by reporting on the new grievances of the middle class amid the economic downturn after the Asian Financial Crisis.     

THE SOCIAL SECURITY SYSTEM IN HONG KONG: ESTABLISHMENT AND READJUSTMENT OF THE LIBERAL WELFARE MODEL

Hong Kong's social security system has followed a “liberal” welfare state regime. The system has undergone changes along with the high economic growth, changes in the labor market, and transformation of the political environment, but has retained the fundamental principle of a social security system led by the private sector. In recent years, Hong Kong has responded to the aging population and growing unemployment by introducing the Mandatory Provident Fund Scheme that requires individuals to join private‐sector pension schemes and by intensifying cooperation with nongovernmental organizations. This indicates the deep‐seated nature of the influence of the liberal regime in Hong Kong.     

Output and Productivity Performance of Hong Kong and Singapore's Transport and Communications Sector, 1990 to 2005*

This paper uses the industry of origin approach to analyze value added and labor productivity outcomes arising from progressive liberalization of government and from statutory board control of transport and communications in Singapore. The paper compares these outcomes with those from the market‐orientated, more privatized transport and communications sector in Hong Kong, for the benchmark year 2004 and a review period from 1990 to 2005. The study is among the first to carefully compare labor productivity in specific sectors between the two countries. Although Singapore generally recorded higher levels of labor productivity, there was some catch‐up by Hong Kong in the later part of the review period. There was also substantial variation in labor productivity performance within sectoral branches in the two sectors. The study suggests there is some evidence that the different political–economic structures and policy approaches to deregulation and liberalization played a role in determining productivity performance in the transport and communications sectors in Singapore and Hong Kong. The analysis infers a potential, increasing focus on privatization as the driving force for further liberalization of the transport and communications sector in Singapore.     

Who Plays the Key Role among Shanghai, Shenzhen and Hong Kong Stock Markets？

In this paper we examine the daily frequency stock market indices of Shanghai, Shenzhen and Hong Kong from January 2000 to June 2012, and use the Morlet wavelet coherence model to determine who is playing the most important role in the financial markets of China. We find that there are significant comovements between these stock markets in the medium and long run. This provides investors with opportunities to increase their capital gains. The Hong Kong stock market plays a leading role in the long run, but its leader position is threatened by fast‐growing Chinese mainland stock markets, especially the Shanghai Stock Exchange. Based on our analysis, the following suggestions apply to the Chinese stock markets: establish and improve international and regional finance centers in Chinese mainland; encourage more qualified institutional investors; reposition the market relations among Hong Kong, Shanghai and Shenzhen; and increase deregulation and internationalization to speed up the integration of financial resources.     

香港早期华商精神:十九世纪的观察

香港自19世纪40年代以降进入商业社会,以商立市,商人精神自是香港文化最主要的源泉之一。一个地域的商人精神必然有其历史继承性,香港19世纪的商人精神经过历史的选择、沉淀和承继,仍然会对现代的商人予以无形的影响。从19世纪香港华商崛起的历程中观察当时香港华商的精神,有助探究和理解当代香港独特的华商精神。     

经济一体化与香港股市的国际联动实证研究

本文从汇率制度、利率水平、国际贸易、投资群体等方面,分析香港股票市场所处的宏观管理运行环境,考察香港和美国的密切经济关系,研究全球一体化不断加深的情形下香港、日本和美国股市的动态关系。研究结果表明,三大市场的动态关系依然存在;但恒指跟上证指并不存在协整关系。     

粤港澳大湾区建设中的税制差异研究

粤港澳大湾区要实现经济一体化,必然要克服香港、澳门和广东三地之间的税制差异带来的冲突问题。香港和澳门在"一国两制"的基础下被赋予税收立法权,税制协调的基础是保障香港和澳门的税收独立。粤港澳三地之间的税制差异主要表现在税率、税种、税收特点、税收管辖、税收征管等方面,正是这些差异使得在大湾区建设中产生重复征税、逃税避税、税收利益分配不均衡以及征管机构行政管辖权冲突等问题,从而阻碍粤港澳三地的经济发展。     

The empire strikes back: Hong Kong and the decline of sterling in the 1960s1

The aftermath of the sterling devaluation of 1967 is usually portrayed only in terms of the performance of the British economy, but it had more far‐reaching implications, exposing the changed financial relationship between Britain and its overseas dependencies and prompting the end of the sterling reserve system. This article explores the reasons why Britain was forced to offer its first exchange guarantee to Hong Kong in May 1968. Prolonging the colonial monetary system devised in the period from the 1930s to the late 1960s created problems for Britain that shifted the balance of power to the point where Hong Kong and other colonies were able to force a re‐negotiation of their link to sterling.     

Stock market performance in Hong Kong: an exploratory review

This paper reviews the origin and development of the stock market in Hong Kong. The first formal stock exchange, the Association of Stockbrokers in Hong Kong, was formed in 1891. However, the activities of the stock exchange are generally regarded as insignificant until the 1970s. Since the 1980s, there have been a number of major reforms and some significant developments. These include the unification of four stock exchanges; the establishment of the Securities and Futures Commission; the closer economic relations with Mainland China; the merger of the Hong Kong Stock Exchange and the Hong Kong Futures Exchange to form the Hong Kong Exchanges and Clearing Limited (HKEx); the launch of the second board (Growth Enterprise Market); and the demutualisation of the HKEx. The Exchange generally responded positively to these reforms and developments. As a result, the Hong Kong stock market experienced significant growth in terms of its market capitalisation ratio, turnover ratio, and the total value traded ratio. Despite the impressive growth in various stock market indicators, however, the Hong Kong stock market still faces some challenges, including regulatory challenges, as well as some concern over its future viability as a global equity hub.     

University Students' Entrepreneurial Intentions: A Comparative Analysis of Hong Kong and Guangzhou

Based on original survey data, this paper analyses and compares the role of personal traits and networks in determining entrepreneurial intentions of students in Hong Kong and in Guangzhou. The two cities are culturally closely related but differ strongly with respect to their labor market conditions and the maturity of their legal and business environments. We find that the determinants of students' entrepreneurial intentions differ substantially between Hong Kong and Guangzhou, with the findings for Hong Kong showing much similarity with previous findings for Western economies. This suggests that differences in labor market prospects and in the maturity of their legal and business environments might be more important than cultural (dis‐)similarities in identifying key factors forming students' entrepreneurial intentions.     

Are stronger executive incentives associated with cross-listing? Evidence from China

This study examines whether firms incorporated in mainland China benefit from cross-listing in Hong Kong, China. The Hong Kong Stock Market has more stringent rules regarding corporate governance and a better system of investor protection than the mainland market. Hong Kong companies generally provide strong incentives to executives via equity-based compensation. Have cross-listed companies learned from Hong Kong firms about adopting these strong executive incentives? The evidence from this study suggests that changes in top executive compensation are more sensitive to sales growth in cross-listed firms than they are in mainland firms without cross-listing. However, compared to Hong Kong firms, cross-listed firms are less sensitive to stock returns. Further, this study shows that it is necessary to differentiate between state-owned companies and private companies, as cross-listing may have a greater impact on executive incentives in state-owned companies than it does in private companies.     

香港FDI进入中国大陆的决定因素——基于省级面板数据的实证研究

进入中国大陆的FDI主要来自日本、美国、中国香港等国家和地区。进入中国大陆的香港FDI主要有港商投资、在港中资机构投资和“假外资”投资等三种类型。中国大陆东部沿海地区是香港FDI进入的优先区域，并向内地呈梯度分布。我们以1980—2008年的中国省级面板数据为基础，实证研究了香港FDI进入中国大陆的决定因素。本文结论显...     

香港旅游业的"内地化"弊端与国际化走向

针对香港旅游业出现的"内地化"趋势,从香港旅游业在国际旅游体系的地位及其发展状况出发,分析香港旅游业"内地化"存在的弊端,认为"国际化"才是香港旅游业发展的方向,并提出应加大海外市场推广和宣传工作、加强大珠三角旅游合作、利用香港的优势在全球范围内推出"过境游"及举办旅游会展活动等政策措施,以保障香港旅游业能有效地在"国际化"道路上发展。