Whither Hong Kong in an open-door, reforming Chinese economy?
With scarcely four years to go before sovereignty reverts to China, the British enclave of Hong Kong on the South China coast, has greatly benefited from the open-door policy of China and its celebrated move from a centrally planned Soviet-style system to a market-type economy. Trade, investment, and financial flows across the 18-mile land border have greatly increased over the past decade or so. Particularly spectacular is the massive relocation of the colony’s manufacturing activities to the Pearl River Delta in neighbouring Guangdong province to take advantage of cheap labour and land costs. The allocative resource realignment has brought about an intricate process of ‘de-industrialization’ in Hong Kong in favour of the tertiary sector. But it has nonetheless hardly helped to mitigate the acute labour shortage which has faced the colony since the mid-1980s.
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