Impact of US monetary policy rate shock and other external shocks on the Hong Kong economy: A factor‐augmented vector autoregression approach

This paper uses the factor‐augmented vector autoregression framework to study the impact on the Hong Kong economy of the diverging monetary policies by the Fed, the European Central Bank (ECB) and the Bank of Japan as well as the slowdown of the Mainland economy. The empirical results show that shocks in US monetary policy rate mainly affect interest rate‐sensitive sectors in Hong Kong and that monetary easing from the European Central Bank and the Bank of Japan somewhat offsets the impact of tightening of the Fed. The transmission of external shocks is through trade and capital markets. Real variables such as real GDP growth and the unemployment rate are more sensitive to the economic slowdown in Mainland China. It is estimated that the combined effect of the four external shocks will on average lower Hong Kong's quarterly GDP growth by 0.6 percentage points and quarterly inflation by 0.2 percentage points in the first four quarters. However, Hong Kong's financial stability, particularly with regard to loan quality, banks’ capital and liquidity, is well maintained by macroprudential policies, suggesting that Hong Kong's financial system is resilient to external shocks.     

港澳台—中国对外开放的独特优势

中国对外开放三十多年,经济发展速度之快举世瞩目。作为对外开放的典型标志,对外贸易和引进外资更是突飞猛进,成为世界贸易排名第二、发展中国家引进外资最多的经济体。中国对外开放之所以取得如此成就,港澳台地区功不可没,甚至可言,如果没有同文同种的新型工业化经济体港澳台与中国内地的密切经贸往来,中国对外开放将经历较长的探索阶段。港澳台地区是中国对外开放最早的也是迄今最主要的投资者,是中国承接国际产业转移最重要的推动者,也是中国进军国际市场的最重要中介与平台。无论是珠三角经济带还是长三角经济带,港澳台企业都是重要的支柱力量。中国最早的区域经济一体化协议,是与香港和澳门签署的,今后中国的自贸区战略,港澳台地区将成为核心。     

回归以来香港经济竞争力的变化状况及原因分析

本文首先从香港在世界经济竞争力的排名、在中国经济版图中的地位以及在时间序列上发展等角度剖析其经济竞争力的变化,然后利用主成分因子分析方法构造一个描述香港绝对经济竞争力的指数,量化分析香港经济竞争力的变化。结果表明香港金融、贸易和物流、旅游服务和专业服务竞争力在受到一系列事件的冲击下产生波动,但是总体上还是维持在一个较高水平,具有较强的竞争力。随后对香港经济竞争力变化的原因进行剖析,最后对如何提升香港经济竞争力给出了政策建议。     

ECONOMIC INTERACTIONS: CHINA VIS-A-VIS HONG KONG

Hong Kong's role has been integral to China's unprecedented economic growth, but privatization ranks first in importance. Another key factor is Beijing's putting economic reform before political reform. Giving democracy to a society in chaos likely makes matters worse. Hong Kong and China both have profited from their partnership. As China has opened up to allow transformation into a market economy, Hong Kong has provided informational impetus for change, a capitalist model to copy, and middleman functions for China to participate in outside-world goods and financial markets. The collapse of Communism in China and elsewhere has increased the supply of cheap labour perhaps by 2 billion. Manufacturing countries with expensive labour and high cost welfare programmes—such as those in the United States, Canada, and Europe—will have difficulty. Capitalists in these countries will do well by investing abroad but not in their own countries. Though wrong in detail, the factor price equalization theorem—that international movement of goods and international movement of factors of production are equivalent—basically is correct. If China continues moving toward privatisation and joining the international community, it will become fiercely competitive, and prospects will be bright for both China and Hong Kong. However, China's recent drift from capitalism clouds those prospects. Fundamentally, three kinds of rights systems exist: (i) a capitalist system, with well defined private property rights, protected by law, where control of resources is based on ownership; (ii) a hierarchical system, such as Communism, where control of resources is based on one's rank in the hierarchy; (iii) a system of corruption, where control of resources is based on bribes and patronage. China rapidly had been making a transition from the second system to the first but recently seems to have derailed into the third. In any case, Communism's collapse is one of the great events in human history. The hero of that event is Deng Xiaoping—not Gorbachev, nor Thatcher, nor Reagan. Hong Kong, by contributing significantly to China's capitalist movement, has led the Communist world to change.     

Growth of Hong Kong Before and After its Reversion to China: The China Factor

The paper focuses on the Hong Kong economy and attempts to measure the contribution of Hong Kong's integration with mainland China to its GDP growth rate. Two linkages have received particular attention, namely, Hong Kong's foreign direct investment (FDI) in China and immigrants from China. While the former is assumed to stimulate capital investment in Hong Kong but at the same time to reduce human capital formation (owing to a shrinkage of its domestic manufacturing sector), the latter is assumed to further reduce Hong Kong's average human capital because immigrants tend to be less educated. By making some assumptions about the future trajectories of Hong Kong direct investment in China and Chinese immigrants into Hong Kong after its reversion to China, the paper offers some predictions about Hong Kong's future economic growth.     

The Role of Productivity and Financial Frictions in the Business Cycles of a Small Open Economy: Hong Kong 1984–2011

This paper analyzes the business cycle properties of the Hong Kong economy during the 1984–2011 period, which includes the financial crisis experienced in 1997/98 and the economic crisis of 2008–2010. We show that the volatility respectively, of output, of the growth rate of output and of real interest rates in Hong Kong are higher than the corresponding average volatility among developed economies. Furthermore, interest rates are countercyclical. We build a stochastic neoclassical small open‐economy model estimated with a Bayesian likelihood approach that seeks to replicate the main business cycle characteristics of Hong Kong, and through which we try to quantify the role played by exogenous total factor productivity (TFP) shocks (transitory and permanent), real interest rate shocks and financial frictions. The main finding is that financial frictions, jointly with the assumption that the country spread is endogenous, seem important in explaining the countercyclicality of the real interest rates.     

The United States Boom, 'Clintonomics' and the New Economy Doctrine: A Neo-Gramscian Contribution

The financial crisis that struck South Korea with such ferocity in mid 1997 appeared to take many by surprise. Throughout the 1990s and up until the onset of the crisis, foreign lenders demonstrated their confidence in the Korean economy by literally pouring capital into the country, swelling foreign debt to unprecedented levels. Such confidence was bolstered by the affirmations of international credit rating agencies that attached positive ratings to the Korean economy right up until mid 1997. No one, it seemed, at home or abroad, believed that the Korean star that had risen so quickly and shone so brilliantly could fall as far and as fast as it did. However, barely had the dust settled behind the ‘electronic herd's’ mass exodus when tales of the ‘inherent instabilities’ of the Korean economy began to emerge. The Korean government bore the brunt of heaviest international criticism, its ‘interventionist’ financial policies widely blamed for distorting the market mechanism, leading to the misallocation of economic resources and ultimately precipitating the crisis. Such interpretations of Korea's crisis have, however, since been called into question on numerous grounds.     

中欧关系中的香港因素探析

在一个半世纪的英殖民统治时期．香港就逐渐成为中国与欧洲乃至西方交流的一座桥梁。自1997年主权回归后。香港在“一国两制”下的特殊地位以及欧盟对香港经济政治事务的密切关注使其在中欧关系中发挥着独特的影响。香港既可以成为中欧之间密切经贸联系的桥梁和纽带,也可能因其内部政治事务的发展而对中欧关系构成挑战。为此,我们在战略性地推动香港在中欧关系中的“门户”作用的同时,也不能忽视外来势力对中国主权与安全构成的潜在威胁。     

Australian Opportunities through the Chinese Structural Transformation

China is now Australia's largest trading partner, continuing to increase its relative importance. Its growth and structural change have been the major determinants of the conditions under which Australia relates to global markets for goods, services and capital. China has been a labour surplus economy. Over the past half‐dozen years, China has entered the ‘turning point’ in economic development, in which labour becomes scarce, real wages rise rapidly, the surplus of savings over investment falls and there is some easing of growth rates in sectors that use resources intensively. This changes the nature of Australian opportunities in China.     

ECONOMIC BENEFITS OF GLOBALIZATION: THE IMPACT OF ENTRY TO THE WTO ON CHINA'S GROWTH

A panel data method is used to evaluate the impact of China's accession to the WTO. Time‐series data for China, Australia, Austria, Canada, Denmark, Finland, France, Germany, the UK, Hong Kong, Singapore, Korea, Japan, the Philippines, Indonesia, Malaysia, Thailand, the USA and Taiwan are used to construct the growth path that what would have been followed had there been no entry by China to the WTO. We find that from 2002 to 2007, accession to the WTO raised China's real economic growth rate by 2.4%, its export growth rate by 13.2% and its import growth rate by 18.89% a year.     

The Credibility of the PRC Commitment to a Market Economy in Hong Kong: Hypotheses and Evidence

How credible is China's commitment to a market economy in Hong Kong after 1997? Events signaling changes in commitment and the movement of time closer to 1997 should reduce the relative prices of immobile assets if commitment is not fully credible. Several factors may offset these effects: anticipatory adaption, growing dependence on China-related trade, and Chinese investment in Hong Kong. Analysis of data on incorporation and investment decisions, the relative sensitivity of the stock prices of firms with different asset mobility to political events, and the market for office space most strongly support hypotheses about credibility, adaption, and demand augmentation.     

Employment impacts of a ‘green’ energy transition in China

Before the US financial crisis that began in 2008, China was the ‘factory’ of the world, utilizing energy intensively for such processes as steelmaking, papermaking and concrete production. As such, energy emissions in China increased dramatically until 2007, with much of the energy being provided by the labor-intensive coal industry. Under the 11th five-year plan, China resolved to increase its energy efficiency, setting out to reduce energy consumption while continuing to increase economic growth, and to increase the usage of ‘green’ technologies to 15% of all energy used by 2020. The Renewable Energy Law of 2007 set a guideline for China's energy reduction goals, to quadruple the national GDP while only doubling the country's electricity usage by the year 2020. Currently, there are virtually no studies on the employment effects of a ‘green’ transition to explore what impact the current energy goals, or potentially ‘greener’ energy goals, would have on China's labor force. This paper seeks to analyze the effects on employment of a ‘green’ transition.     

金融危机对民营经济的冲击及对策

随着我国经济发展,民营经济越来越成为国民经济的重要组成部分,并成为国民经济中最富活力的经济增长点。全球金融危机的爆发对我国民营经济产生了巨大冲击。为应对金融危机的巨大冲击,应该从加强民营企业自身和民营企业发展环境两方面进行治理。     

China's Post-Listian Rise: Beyond Radical Globalisation Theory and the Political Economy of Neoliberal Hegemony

While China's rise has been much discussed, its meaning continues to be contested. This is true in radical international political economy, where, for example, it was the subject of (often polarised) debates between Giovanni Arrighi and David Harvey prior to Arrighi's death in 2009. This reflected a broader debate in IPE between development theory and radical globalisation analysis. The key point of contention is whether China's rise represents a challenge to or further consolidation of neoliberal hegemony on a global scale. This article critically scrutinises some of the key assumptions of the radical globalisation approach, specifically, that China represents another form of the ‘competition state’ whose development aspirations have been radically constrained by global ‘new constitutionalism’ and American monetary power so as to conform to neoliberalism. Deploying a structurationist approach to global governance and an eclectic/regulatory analysis of the Chinese state, I argue that China has challenged neoliberalism by projecting its growing power through constitutionalised global governance. In the face of (declining) American power, global constitutionalism has provided an opportunity structure that may help China consolidate its long-term strategy of consensual development. Far from anchoring ‘neoliberal hegemony’, global economic governance is increasingly central to its unravelling.     

Endogenous Government Expenditure: A Test of Wagner's Hypothesis For Hong Kong

In the last two decades a revival of interest in wagner's thesis of an endogenous public sector has led to a series of empirical tests of its validity. In its barest essentials, this paper attempts to find efficient estimates of income elasticities of demand for real total government expenditure as well as for its disaggregated functional groups as a means of verifying Wagner's expectation for the Hong Kong economy. Our empirical estimates indicate that Hong Kong's public finance setting is a synchronization of a worldwide tendency for public sector expansion according to the Wagnerian expectation. These findings lead us to raise a number of policy questions concerning the financial sustainability of Hong Kong's budget system over time. [320]     

The behaviour of Hong Kong stock prices

The primary function of a stock market is to allocate resources to the most profitable investment opportunities. If stock prices provide accurate signals for resource allocation, firms are able to make correct production–investment decisions, and investors are able to choose the most suitable stocks for investment. These choices are only possible if the market is efficient, that is, if stock prices ‘fully reflect’ all available information.

Hong Kong is now an international financial centre. Although Hong Kong's stock market is ranked as one of the five largest in the world in terms of turnover, little research has been devoted to the behaviour of its stock prices. This is a study of the efficiency of Hong Kong's stock market. It is based upon two widely accepted statistical tests, namely, serial correlation analysis and runs tests. Data used cover the daily prices of 28 major Hong Kong stocks over a period of four years from 1977 to 1980. The evidence is mixed; it does not provide clear support for the efficient market hypothesis.     

全球化时代的中国经济及其世界性影响

全球化进程决定了中国经济的高度开放,造就了双重资本积累模式,即内资主导的工业化城市化积累和外资主导的全球低端制造平台积累.这一模式加速了中国经济增长,同时削弱了经济自主.反过来,中国对世界经济造成了多方面影响,包括改变劳资利益格局,推动各国产业重组,改变金融市场结构,加强中美金融依赖等,这些影响随着中国的经济增长和结构升级将日趋显著.因此,中国必须立足内需实现可持续增长,并依靠技术创新来控制资源和环境成本.     

中国大陆、香港和澳门地区的收入收敛性

香港和澳门在20世纪90年代末作为两个特别行政区回归中国。由于历史的原因,中国大陆的人均收入水平曾远远落后于香港和澳门地区。然而,在过去的30年里,由于中国大陆经济的快速发展以及香港、澳门和中国大陆的投资与人力资源的双向互动,三地经济出现了显著收敛现象。中国大陆的经济成功得益于香港、澳门地区与沿海各省市尤其是广东省在技术溢出、大规模的投资和贸易行为方面的一体化,而经济溢出、投资和贸易行为必定推动经济一体化和收入收敛行为的出现。本文旨在探讨中国大陆与香港、澳门地区的收敛趋势并研究三地收入收敛性的决定因素。本文使用参数和非参数方法定量分析了中国大陆各省市与香港、澳门地区在过去40多年间人均收入的收敛速度问题,结果表明,在经济改革之前,中国大陆、香港与澳门地区不存在人均收入的收敛行为,而在经济改革之后,却出现了显著的绝对和相对收敛。在经济改革期间,如果模型不考虑贸易和对外开放因素,这一收敛速度将不超过0.01,如果考虑贸易和对外开放因素,这一速度则超过0.02。     

金融发展与全要素生产率增长:区域差异重要吗?——来自中国省级面板数据的经验证据

基于1997-2008年中国省级面板数据以及分全国层面、沿海地区与内陆地区三个样本对金融发展与全要素生产率增长的联系及其中间渠道重新进行检验,结果发现:中国金融发展的全要素生产率增长效应与区域因素有关;中国金融发展促进全要素生产率增长的中间渠道是技术进步效应而非技术效率增长效应。这意味着,加快中国金融体系改革,从而推动金融发展对于经济增长质量的提高是非常重要的。     

Climate threshold,financial hoarding and economic growth

We use an iterative finite difference method to establish theoretical models that reflect the relationships among climate threshold, financial hoarding and economic growth. We build a simultaneous equations model to conduct an empirical analysis based on China’s statistical data from 1979 to 2012. Our study yields the following results: China’s climate threshold has shown a zigzag-shaped rising trend since 1979; the main reasons for the rapid expansion of financial hoarding were high savings rate, savings leakage, higher marginal efficiency of financial hoarding compared to capital efficiency or higher internal creativity of the financial sector; there were positive cumulative effects between financial hoarding and economic growth, which were significantly inhibited by climate threshold; the climate threshold had discrepant influences on different industries. To achieve a balanced economy, more money should be invested in the real sector to appropriately reduce the rate of savings leakage; the financial sector should move from scale expansion to service efficiency improvements to increase its marginal contribution to the economy and to enhance capital efficiency; the real sector should improve technological innovation and speed up the adaptive adjustment in climate-sensitive industries to move from economic growth to advanced development.