Abstraction: In the past 15 old ages since the backsliding of the sovereignty of Hong Kong to China, both of Mainland China and Hong Kong have benefited from their economic integrating. However, big betterment infinite still exists in this integrating process, for the hapless proficient efficiency public presentation of mainland China and the deficiency of proficient advancement in Hong Kong. Therefore, we seek in this study to research the economic integrating between mainland China and Hong Kong SAR from a proficient efficiency position. This study is organized as follows. First, an overview of the economic integrating between the two economic systems is provided ; and so a brief debut of the proficient efficiency position of the mainland China and Hong Kong is given ; at last how to implement economic integrating between the two economic systems from a proficient efficiency position is discussed, followed by a decision of this study.
The economic integrating between Mainland China and Hong Kong SAR has ever been a hot subject since the backsliding of the sovereignty of Hong Kong to China. Standing at this point in clip of the fifteenth day of remembrance of the return of Hong Kong to look back to the integrating of the two economic systems, we may happen that both of them have benefited from this integrating. For case, with the development in the past 15 old ages, Hong Kong has become the mainland ‘s biggest abroad investing beginning, the largest abroad investing finish, the most of import trading spouse and besides the most of import contract undertakings and labour services market ( Wu 2012 ) .
However, big betterment infinite still exists in this integrating process, for the hapless proficient efficiency public presentation of mainland China and the deficiency of proficient advancement in Hong Kong ( Li et al. 2011 ) . Therefore, we seek in this study to research the economic integrating between mainland China and Hong Kong SAR from a proficient efficiency position. But before that, to acquire a better apprehension of the economic integrating, I ‘d wish to look back to the bing literatures on economic system integrating by replying the undermentioned three inquiries: ( 1 ) what is economic integrating, ( 2 ) why to incorporate, and ( 3 ) how to implement economic integrating.
1.2 What is economic integrating?
Harmonizing to the bing literatures in economic sciences, economic system integrating refers to “ the extent to which resources contributed by different confederation members and subsequent operations utilizing these resources are efficaciously blended into an confederation ‘s value concatenation to the point where if one member withdraws, the staying members suffer great loss ( Yadong 2008 ) ” . In general, it is about mutuality between exchange members with regard to resources pooled by these members and the subsequent operations using these resources. Here, mutuality refers to the grade to which confederation members interact to find an result jointly, which can be farther divided into three classs, i.e. pooled, consecutive, and mutual mutuality. In the context of involvement in this study, economic system integrating means an economic agreement between different parts ( i.e. mainland China and Hong Kong SAR ) marked by the decrease or riddance of trade barriers and the coordination of pecuniary and financial policies.
1.3 Why to incorporate them?
By and large talking, the purpose of economic system integrating is to cut down costs for both consumers and manufacturers, every bit good as to increase trade between the states taking portion in the understanding. The more incorporate the economic systems become, the fewer trade barriers exist and the more economic and political coordination there is between the member states. On the one manus, by incorporating the economic systems of more than one state, the short-run benefits from the usage of duties and other trade barriers is diminished. On the other manus, the more incorporate the economic systems become, the less power the authoritiess of the member states have to do accommodations that would profit themselves. In periods of economic growing, being integrated can take to greater long-run economic benefits ; nevertheless, in periods of hapless growing being integrated can really do things worse. In pattern, many states or parts have had a attempt to economic integrating, such as North American ( Rugman 1993 ) , European Union ( Simonds 2012 ) , Mexican ( Alarcon 2003 ) , and Nordic states ( Benito et al. 2003 ) .
1.4 How to implement economic system integrating?
Economic integrating is non an exogenic phenomenon but instead a strategic determination by all confederation participants, and is non automatic for it requires joint attempts from all parties ( Yadong 2008 ) . In general, there are changing degrees of economic integrating, including discriminatory trade understandings ( PTA ) , free trade countries ( FTA ) , imposts brotherhoods, common markets and economic and pecuniary brotherhoods. Besides, four properties ( including input growing, adjusted graduated table consequence, proficient advancement, and efficiency growing ) compose the economic and productivity growing of mainland China and Hong Kong ( Li et al. 2011 ) . For the hapless proficient efficiency public presentation of mainland China and the deficiency of proficient advancement in Hong Kong ( Li et al. 2011 ) , big betterment infinite still exists in this integrating process. Therefore, we seek in this study to research the economic integrating between mainland China and Hong Kong SAR from a proficient efficiency position.
The remainder of this study is organized as follows. First, the proficient efficiency position of the mainland China and Hong Kong is introduced ; and so how to implement economic integrating between the two economic systems from a proficient efficiency position is illustrated, followed by a decision of this study at last.
2. The Status of Technical Efficiency in Two Economies
Technical efficiency, which is defined as the ratio of ascertained end product to maximum executable end product ( Aigner et al. 1968 ) , is another constituent of Entire Factor Productivity ( TFP ) apart from proficient advancement and graduated table consequence ( Kumbhakar et al. 2000 ) . It has been surveies in both ( 1 ) industry-level such as commercial Bankss ( George et al. 2011 ; Liu 2010 ) , insurance ( Yao et al. 2007 ) , and Fe and steel industry ( Movshuk 2004 ) , information and communicating engineering ( Jose et al. 2009 ) , and ( 2 ) country-level such as China ( Kalirajan et al. 1997 ; Yelping et Al. 1998 ) and United States ( Lin 2009 ) . There are two types of integrating: one type involves increasing integrating of the Hong Kong economic system into the Chinese economic system ; the other type involves control by mainland Chinese houses over assets located in Hong Kong ( Huang 1997 ) . In this subdivision, the proficient efficiency position of both mainland China and Hong Kong is introduced, with the hope of supplying the grounds for researching the economic integrating from the proficient efficiency position and set uping foundations for the 3rd subdivision.
The mainland China ‘s economic system is basically composed of three sectors, province industry, rural industry, and agribusiness, which accounts for approximately 70 % of the gross end product of the economic system and 75 % of entire employment ( Wu 1995 ) . Before the reform, the mainland China ‘s economic system was characterized by resource deformation and economic inefficiency, because of province planning ( Perkins 1986 ) and a closed-door economic policy of autonomy with a socialist political orientation characterized by state-ownership and communes ( Li et al. 2011 ) . With the reform and open-door policy carried, the mainland China ‘s economic system has taken on a new expression. For illustration, it has experienced addition in end product and productiveness growing since reform. However, proficient inefficiencies remain and represent a important retarding force on mainland China ‘s productiveness growing ( Li et al. 2011 ) . Take the Fe and steel industry for illustration, while the production possibility frontier of examined endeavors was switching upward, their proficient efi¬?ciency did non better signii¬?cantly, and was even deteriorating in the mid-1990s ( Movshuk 2004 ) . Besides, the proficient efficiency in Mainland China ‘s economic development nowadayss important regional differences ( Li et al. 2011 ) . Overall, the mainland China is still in hapless proficient efficiency public presentation, therefore, it needs to larn from others. In contrast, Hong Kong, as the most unfastened and broad economic system in the universe, has enjoyed a high degree of proficient efficiency, to be specific, Hong Kong ‘s positive proficient efficiency alterations contrast aggressively with negative efficiency alterations in mainland China ( Li et al. 2011 ) .
In amount, the differences in proficient efficiency between mainland China and Hong Kong with the latter holding higher proficient efficiency than the former, would do it possible to further hike the two economic systems ‘ integrating. In the following subdivision, how to implement economic integrating between mainland China and Hong Kong from proficient efficiency is discussed.
3. Economic Integration from Technical Efficiency
Given that both mainland China and Hong Kong face a challenge of an indispensable factor to their entire factor productiveness ( i.e. mainland China is hapless in proficient efficiency, while Hong Kong ‘s proficient advancement is low ) , it ‘s necessary for them to larn from each other ‘s strong points to countervail one ‘s failing, and finally accomplish a win-win aim. As the focal point of this study is proficient efficiency, the undermentioned portion provides a treatment on how to larn from Hong Kong for mainland China. Specifically, we think that attempts should be made to it from the undermentioned three facets: ( 1 ) the exchange of top endowment ; ( 2 ) the cooperation in higher instruction ; and ( 3 ) farther reform and adjust international trade.
3.1 Enhance the Exchange of Top Talent
The original ground for proficient inefficiency in mainland China is the lake of top endowment in some industries. Given that Hong Kong is a topographic point that plentifulness of top endowments gather about, the mainland China should promote some of these endowments to participant in the professional resources exchange between the two economic systems by decreeing a series of policies. For case, the Chinese Thousand Person Plan could be more unfastened to the professionals in Hong Kong. Meanwhile, it ‘s indispensable for some professionals that are necessary to Hong Kong to be exchanged from the mainland China to Hong Kong through the Admission Scheme for Mainland Talents and Professionals. Merely after that can the two economic systems benefit from the integrating in a long term.
3.2 Enhance the Cooperation in Higher Education
Looking back to the development history of Hong Kong, we can see that instruction ever played an of import function in its policy, particularly for higher instruction. Therefore, in order to basically work out the job of deficit of top endowment in mainland China, it ‘s necessary to heighten the cooperation with Hong Kong in higher instruction. Although some universities in mainland China have participated in cooperation undertakings with Hong Kong ‘s universities, the figure of people involved is really limited. Therefore, one option for the mainland China is to spread out the cooperation graduated table. In add-on, in order to promote more pupils to go to in these undertakings, it is really of import for the instruction section of the mainland China to do certain about the corresponding grade hallmark for those pupils in the cooperation undertakings.
3.3 Further Reform and Adjust International Trade
Since the terminal of the Second World War, Hong Kong has been one of the fastest turning East Asiatic economic systems ; with sovereignty reversion to China in 1997, it is even more relevant to see how economic freedom is determining and accommodating to the new environment ( Li 2012 ) . Therefore, likewise, farther reforming and seting its international trade to accommodate growing and efi¬?ciency betterment is necessary for mainland China to keep a sustainable, high-velocity development ( Zhou et al. 2011 ) . To be specific, foreign direct investings have an of import and big positive consequence on proficient efi¬?ciency, but it should be farther encouraged to neutralize the downward tendency of the consequence. What ‘s more, the mainland China should attach great importance to its substructure policy and reappraise the substructure development policy to positively impact proficient efi¬?ciency.
In decision, this study explored the economic integrating between mainland China and Hong Kong SAR from a proficient efficiency position. After an overview of the economic integrating between the two economic systems, how to implement economic integrating between the two economic systems from a proficient efficiency position is discussed. Specifically, this study proposes three actions that can be used to better the proficient efficiency in mainland China: foremost, heighten the exchange of top endowments with Hong Kong ; secondly, heighten the cooperation with Hong Kong in high degree instruction ; and thirdly, farther reform and adjust international trade by larning from the successful experience of Hong Kong.