Ever since the reform and opening up, Hong Kong has begun its close relationship with the Mainland China and served as a Centre for trade between China and the universe. In 2003, the Closer Economic Participation Arrangement ( CEPA ) was signed between China and Hong Kong, which marks a milepost in the procedure of economic integrating. So far, Hong Kong has become the largest beginning of abroad investing in the Mainland and the biggest abroad investing finish, and therefore is the mainland ‘s most of import trading spouse. Hong Kong and the Mainland have achieved a great economic development by profiting each other, which farther strengthen Hong Kong ‘s position as an international fiscal, transportation and trade centre. However, with the fast economic development in the Mainland, Hong Kong as China ‘s most competitory metropolis has been challenged by Beijing and Shanghai. For illustration, Shanghai outnumbers Hong Kong and becomes the universe ‘s biggest container ports in 2010. Due to such challenges, Hong Kong should farther incorporate with Mainland to set up a clear way and placement for future development and maintain a competitory advantage. In the undermentioned, we discuss the economic integrating between Mainland and Hong Kong from different positions so as to make a alone placement for Hong Kong.
Hong Kong, with a merger of Chinese and Western civilizations and besides as a free port with no import duties ( responsibilities ) on goods come ining Hong Kong, has a alone advantage as a tourer metropolis. It is without a uncertainty that touristry in Hong Kong is dining and will maintain on dining in the hereafter. Ever since 2003, travellers from the mainland China can see Hong Kong easy and handily under the solo travel policy ( STP ) where occupants in certain metropoliss of the mainland can acquire the permission to see Hong Kong for a upper limit of seven yearss each clip. This strategy has a important impact on Hong Kong ‘s economic system since retail industries account for a big proportion of the GDP in Hong Kong.
Mainland occupants, particularly from those economically fast-developing metropoliss, such as Beijing, Shanghai, Guangzhou and Shenzhen, prefer to purchase imported foreign manner labels than the local 1s and that is why they choose to go and shop in Hong Kong. Furthermore, with the serious issue of nutrient security in mainland China, together with the turning CPI and currency rising prices, more and more people come to Hong Kong for shopping articles for day-to-day usage. It is estimated that the figure of mainland occupants sing Hong Kong in the hereafter will travel on turning. However, Hong Kong authorities and the retails industries are sing a constriction for suiting a immense figure of travellers from mainland. For illustration, mainland occupants are often waiting for a long clip to traverse the boundary line in weekends, non to advert in the aureate hebdomad. The retail industries are besides sing a constriction for supplying certain nutrient such as babe milk pulverization. The authorities and the retail industries should better their capablenesss to run into the challenges in the hereafter.
2. Industrial upgrading
Ever since 1980s, Hong Kong-based enterprisers have made a batch of investings in Mainland China, most in Guangdong. They operate as owner of the works mill in mainland while as bargainers in Hong Kong, where they import goods from their mills in mainland and export those goods to the remainder of the universe. Hong Kong-based enterprisers have taken advantage of the abundant and comparatively inexpensive labour and resource in the mainland to cut down the fabrication cost successfully.
With the diminution of the US economic system, China ‘s foreign trade export is significantly reduced. The Guangdong fabrication environment has been altering dramatically and the Guangdong authorities has advocated industrial upgrading, which aims to cut down the traditional labour-intensive high-polluting industry and promotes high and new engineering industries. Further, the cardinal authorities has launched a set of new policies, for case, cancellation and decrease of revenue enhancement refunds for low-end goods exports and the debut of a labour jurisprudence to protect employees ‘ involvement, which farther hurts the low-end and low-priced fabrication. Under such context, Hong Kong entrepreneurs find it hard to keep their operation in Guangdong. In such a altering environment, invention is the lone manner for Hong Kong enterprisers to last in Guangdong. The Hong Kong enterprisers should collaborate with Shenzhen to turn Shenzhen-Hong Kong part into a planetary fiscal centre, logistics centre, trade centre, invention centre and International Cultural and Creative Industry Center.
3. Fiscal industry
Hong Kong has ever been a gateway for mainland endeavors traveling planetary, and for foreign houses seeking entree to the Mainland, therefore Hong Kong ‘s strategic advantage in linking planetary capital and China led to the rapid development of its fiscal industry. Although Beijing, Shanghai, and Shenzhen continue to develop their finance sectors, they seem far from endangering Hong Kong ‘s place. Table 1 shows the Global Financial Centre Index ( GFCI ) for Hong Kong, Shanghai, Beijing, and Shenzhen. As shown in Table 1, there is still a long manner to travel for the mainland metropoliss to catch up with Hong Kong in fiscal industry.
Table 1. GFCI ranks and rankings from 2010-2012
Further, due to the corruptness and the insider trading in Mainland China, Hong Kong has the advantage in establishment, which offers a just trading environment compared to Mainland. Nevertheless, Hong Kong is easier to be attacked by fiscal crisis ( for illustration, 1997 Asiatic fiscal crisis ) , therefore it should trust on the Mainland supply-side strengths ( a immense sum of capitals ) to keep its leading as a fiscal centre in Asia. For case, Hong Kong should develop a more geographically diverse base for fiscal services in mainland China so as to pull more capitals.
4. Service industry
Hong Kong is the most unfastened and broad economic system in the universe and it has so many advantages in instruction, regulative, and legal system and it can offer suggestions and put a good illustration for the Mainland to analyze.
Through absorbing the advanced experience of the universe, Hong Kong ‘s instruction system and mechanism, every bit good as learning methods, have a wide planetary position and a broad scope of international channels of communicating. In the Mainland China, there are rich instruction resources, particularly solid quality of basic instruction. The instructors have a strong desire to understand the universe and the pupils are by and large hard-working. The Mainland and Hong Kong can put up more cooperation undertakings and developing plans to foster the instruction communicating.
Compared with Hong Kong, Mainland China has a weak regulative and legal system. Despite the great economic accomplishment, Mainland China has to maintain on bettering its regulative and legal system, where they can larn from Hong Kong ‘s experiences. Hong Kong should besides develop concern to supply confer withing service to the Mainland.
Due to the societal and economic ties between Hong Kong and the mainland, they have become inseparable from each other. With Mainland China ‘s rapid economic development, Hong Kong should foster its economic integrating with the Mainland to maintain its prosperity. As a tourer metropolis, Hong Kong should better its installations to run into the challenge of an increasing figure of Mainland people sing. The enterpriser from Hong Kong should upgrade their concern in the Mainland and invest more in high engineering oriented concern so as to last. Despite the immense sum of capital in Mainland China, Hong Kong is still the fiscal Centre in Asia and it can trust upon the Mainland ‘s supply-side strengths to make more concern and keep its advantage. Mainland China and Hong Kong should beef up cultural exchanges so that the Mainland can hold a wide planetary position and Hong Kong can understand the Mainland more to farther cooperation in other countries. Although Mainland China has experienced singular economic growing for the last 30 old ages, they have a weak regulative and legal system compared to Hong Kong, which is important for healthy and long-run economic development. Therefore, Mainland should larn from the experiences of Hong Kong and seek to supply a stable environment for the sustained and sound development of China ‘s economic system.