The Reason of Hong Kong Being an International Trading Region
“Business-friendly environment, rule of law, free trade and free flow of information, open and fair competition, well-established and comprehensive financial networks, superb transport and communications infrastructure, sophisticated support services, and well-educated workforce complemented by a pool of efficient and energetic entrepreneurs. Added to these are substantial foreign exchange reserves, a fully convertible and stable currency, and a simple tax system with low tax rates.”
Hong Kong has become an international trading region in the world, as several elements/reasons involved and mentioned, these lead Hong Kong step-by-step to be well-known trading region.
For further discussion and thorough understanding the reasons of Hong Kong being well-known trading region in the world, the following paragraphs will provide detailed points concerning successful elements included to make Hong Kong being an international trading region.
Hong Kong’s economic policy has long been well-known as its market-led. The Government does not establish the plan/policy for monitoring or controlling the market or the economy since the Government understands that investors and entrepreneurs are deemed to know thorough markets far better and more than officials. Private sector initiatives are a straight and accurate way to build Hong Kong’s prosperity than the bureaucrat’s blueprints. Thus, economic policy is the key to maintaining competitiveness for all people in Hong Kong.
To provide business-friendly environment for all people who operate their business in Hong Kong, the Government adopts ‘Maximum support and minimum intervention’ attribute to maintain mentioned condition. It involves personal liberty, the rule of law, clean and efficient administration, and a level playing field for all businesses, and the land and a large deal of infrastructures such as airports and ports of Hong Kong. In addition, the Government has taken several actions for removing market restrictions and promoting fair competition to protect its image of open and fair market such as liberalizing the securities, futures and banking industries, and opening up the telecommunications, information technology and broadcasting markets.
On the other hands, the Government promotes its reputation to attract commercial interest in the international arena, it is through representation in the international forums such as the World Trade Organization (WTO) for improving and promoting its reputations.
Prudent Fiscal Practice is the Government to maintain a simple tax structure with low tax rates, which sustain workers incentive to work, and entrepreneurs’ incentive to invest. According to Government figure of tax rates, corporate profits tax rate, at 16.5% in 2008/09 onwards, is lower than other cities and low by international standards. Hence, it is one of successful elements to lead Hong Kong being international trading region.
As we know that, Hong Kong, which is one of the well-known international financial centers, is in connection with network of other financial institutions and markets. The role of the Government is to maintain and develop legal, regulatory, infrastructural and administrative framework. The purpose of action taken by the Government is to provide a level playing field for all market parties, maintain the stability of the financial and monetary systems and enable Hong Kong to compete effectively with other major financial centers.
Another important factor to make Hong Kong being popular trading region is its favorable geographical position, which bridges the time gap between North America and Europe, links with the Mainland and other countries in South-East Asia. In addition, excellent communications with the rest of the world helps Hong Kong to be world class of financial centers. Another important factor of stepping into world class of financial centers is its...