March 13, 2011
Two of the Four Dragons
Hong Kong has a unique history as they were occupied by the United Kingdom (UK) for approximately 99 years beginning in 1841. An agreement was reached in 1984 between China and the UK where Hong Kong would go back under Chinese rule with some unique exceptions. Hong Kong would operate under China’s “one country, two systems” formula for the next 50 years. Ultimately this meant China’s socialist society would not be forced on Hong Kong allowing their autonomy for the next 50 years, except in matters of foreign and defense affairs. On December 19, 1984, a new agreement was signed between China and the UK transferring the rule of Hong Kong back over to China. It took some time to develop the specifics of governance and Hong Kong officially came under China on July 1, 1997. This day is celebrated as Hong Kong Special Administrative Region Establishment Day (Central Intelligence Agency, 2011).
For now Hong Kong operates under a free market economy and highly dependent on international trade and finance. The value of their goods and services exported (including re-exports) are four times the GDP. Hong Kong’s GDP in comparison to the world is number 47 and in 2010 their official exchange rate in 2010 was estimated at $226.5 billion with 5.7% GDP significantly improving from -2.8% GDP in 2009. In 2008 the GDP per capita was $44,800 and then declined in 2009 with the global economic downturn to $43,400 GDP (PPP) and then improving to $45,600 in 2010. Hong Kong made a quick recovery after the global financial economic crisis beginning in Q4 of 2009 and grew 10% in 2010 (Central Intelligence Agency). Hong Kong has an extremely low debt, low tariffs and minimal corruption and is considered to be one of the most economically free countries ( Hernandez, 2009).
Hong Kong grew from a relatively backward economy prior to the 1970’s to what is considered today as a Newly...