THE HONG KONG ECONOMY

The Hong Kong Economy

The Hong Kong Economy

Since the 1970s, the finances of Hong Kong has been ruled both under British and Chinese direct under an financial principle named Positive non-interventionism espoused by previous economic receptionist John James Cowperthwaite. (Schenk 2001) Hong Kong appears expected to stay a highly free market-enterprise society. Such things as political output designing and cost and trade controls are basically incompatible with the kind of globally open, comparable financial natural environment in which Hong Kong companies and commerce operate.

During Hong Kong's time as a British Colony, Positive non-interventionism was the economic policy of Hong Kong. It was first officially implemented in 1971 by John James Cowperthwaite, who observed that the economy was doing well in the absence of government intervention. The policy was continued by subsequent Financial Secretaries, including Sir Philip Haddon-Cave. (Goodstadt 2007) Hong Kong's model allowed for the flexibility and renovation of any given industry in a very short time[citation needed].

Because of this, a 1994 World Bank report stated that Hong Kong's GDP per capita grew in real terms at an annual rate of 6.5% from 1965 to 1989. This consistent growth percentage over a span of almost 25 years is remarkable for any economic analysis. By 1990 Hong Kong's per capita income officially surpassed that of the ruling United Kingdom.

Most Hong Kong residents were also first- or second-generation immigrants (and often refugees). Like the United States of a century or so earlier, the society was essentially a new one. In such societies, political cultural etc. orientations tend to be towards libertarianism/individualism - thus reinforcing the generally favorable environment for enterprise and economic growth. (Barber 2004)

By the late 20th century, many other countries in Asia and elsewhere had effectively made the transition from statist-collectivism to modern market capitalism. However, Hong Kong still stood out in terms of its high levels of business-economic freedom, growth, and prosperity. Not just foreign direct investors but indigenous firms have been greatly aided by Hong Kong's international openness and dependence on trade.

After a slump caused by the regionwide Asian financial crisis that began in 1997, Hong Kong's economy had been on the rebound. Real GDP growth was 4% in 1999 and reached double digits in the first half of 2000. However, the dot-com bubble in the second half of 2000, the 9/11 terrorist attacks upon the United States in 2001 and the SARS outbreak in 2003 had severely damaged the economy of Hong Kong. In 2004 and 2005, real GDP grew by 8.5% and 7.1% respectively. (Goodstadt 2007)

Hong Kong deliberately began collecting and regularly publishing economy-wide data much later than its East Asian peers. The earliest gross domestic product estimates (for 1961 and subsequent years) were only released in 1973 and other basic data such as for the balance of payments were not compiled until 1999. Any GDP formed prior to this period was based on international trade statistics that came after 1971.(Schenk 2001)

The chart below shows the change in real and nominal GDP by decades ...