Hong Kong

Topics: Economics, Economy of the People's Republic of China, Economy Pages: 6 (2167 words) Published: February 28, 2013

* Discuss the factors which have promoted the growth of Hong Kong as a ‘global city’, and the forces which will determine its future growth development.

Word count: 1952 words

Globalisation that is happening in the world today gives rise to the context of global cities. This global city is advanced culturally, socially, politically and especially economically. Hong Kong is considered as a major city in the world. In fact, it is regarded as the 5th global city in the world. According to Mr. Andrew Chen of Hong Kong company incorporation agency, Janus Corporate Solutions, it acts as a finance hub, business and commercial hub, arts hub, and cultural hub, all rolled into one (Ali, 2010). Factors such as connectivity, proximity to China, low tax system, ease of Hong Kong company setup, and excellent infrastructure have made Hong Kong the centre of business activity in Asia (Ali, 2010).

Much of the global cities in the world had distinguishing history that makes them an important city in the world today. Hong Kong owes its status now because of its history too. Hong Kong was a colonial city, founded by the British in 1840s, and it became the second most important port centre after Shanghai on the China coast during the century following its founding (Williams, 1983). According to Williams (1983), the importance of Hong Kong was due to its site and location, which was suitable for trading. Since Hong Kong did not possess natural resources that could be deemed as sustainable for their population, it depended on trade and imports by traders coming into their city. Its mid-location which is between UK, China and India made it a location easy for travellers and merchants to harbour. British also introduced free taxes to encourage more economic activities and business opportunities, and to make Hong Kong one of the most important ports in the world.

After 1949 when Shanghai became part of socialist China and its functions as a major financial centre for the China coast and East Asia ceased, along with its trading function with the outside world, Hong Kong’s locational advantage became more important (Williams, 1983). Hong Kong did not adopt socialist system as Shanghai did, so trade and business were still dominant. This means that much of the trade that took place in Shanghai would be pushed to Hong Kong. It had the opportunity to expand more of its trading and importing from the outside world. But according to Williams (1983), things looked bleak during the Korean War (1950 – 1953). Due to the close proximity of Hong Kong to Korea, it might be affected by the ongoing war. Thus UN blockade effectively shut off most of the colony’s port, and in turn, the colony was flooded with refugees from the mainland (Williams, 1983). In fact, the population soared from half a million in 1946 to over 2 million in 1950 (Williams, 1983). This means that there was a huge number of population, and there was a strain for the colony to cater for its booming number of people. Thus the British decided that instead of trading only, manufacturing and exporting of goods would be implemented (Williams, 1983). Therefore from the history, Hong Kong began to gain an importance to the global world.

Economy plays a part in the success of Hong Kong as a global city in the world. Since the British decided to diversify the economy after the Korean War, the industries have flourished. Industrialization, expansion of banking sector and later on, tourism and real estate trading in 1980s all helped boost economic power of Hong Kong. The earliest industrialization for Hong Kong was in the 1950s in the production of light industrial goods, particularly textiles (Williams, 1983). After that, expansion of business began, and soon other businesses start to thrive. Due to the political unrest in China, much of the investors and business activities move to Hong Kong. Low taxation and free trade are some attractions for the investors to come...

References: * Ali, S. (2010). Hong Kong, Fifth Most Global City in the World. Retrieved March 19, 2011, from http://blog.guidemehongkong.com/economy/b821-hong-kong-fifth-most-global-city-in-the-world
* Clifton, J. (2011). Hong Kong - The Global City of Southeast Asia. UBD.
* Cullinane, S. & Cullinane, K. (2003). City Profile of Hong Kong. Cities 20, 279 - 288.
* Hall, P. & Pfeiffer, U. (2000). Urban Future 21: A Global Agenda for Twenty-First Century Cities (p. 126). London: E & FN Spon.
* Rimmer, P. J. & Dick, H. (2009). The City in Southeast Asia: Patterns, Processes and Policy (pp. 59). Singapore: NUS Press.
* United Nation (2011). Human Development Index and Its Components. Retrieved March 19, 2011 from http://data.un.org/DocumentData.aspx?id=227
* Wikipedia (2011). Hong Kong. Retrieved March 19, 2011, from http://en.wikipedia.org/wiki/Hong_Kong
* Williams, J. F. (1983). Cities of East Asia. In Brunn, S. D. & Williams, J. F. (Eds.) Cities of the World: World Regional Urban Development (pp. 423 - 425, 430 - 431). New York: Harper & Row.
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