hong kong's role in the chinese economy since 1997?

Answer 1

"One Country, Two Systems" dictated that Hong Kong keep an independent economy from China. However, this does not mean that Hong Kong has not had an impact on the rest of China.

The key roles of Hong Kong have been:

1) Important capital market (e.g. IPOs, parallel listings, bond raising) - especially since domestic PRC markets have been floundering.

2) Major port of re-exporting. China's ports are still up and coming with many exports still coming through Hong Kong's ports.

3) Travel hub to Taiwan. Direct flights are still not allowed between the two. Flights are usually carried through Hong Kong.

4) Financing center - Hong Kong's banking system is much more advanced than China's. As a result, Hong Kong is a still a vital center for project financing and commercial banking.

5) Entry way for FDI. China disallowed foreign investment ahead of certain WTO concessions over the past few years. Hong Kong was given concessions to allow head start. As a result, FDI flooded through Hong Kong shell companies to allow early entry into the market.

6) Liberal role model. Hong Kong, generally a center of laissez-faire, has acted as a role model to help liberalize China from Socialist country toward "Capitalism with a Chinese face". Granted, there has been some hiccups along the way, but China has exceeded many expectations for liberalization (e.g. some foreign media rules liberalization this week)

Answer 2

Role model of modern capitalism.