Trade

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Trade

Introductuion

Hong Kong, the pearl of Asia has been the center of trade and finance in Asia since the early 20th century. In a short history of about 150 years, Hong Kong has become the source of growth for many nearby economies. In a certain sense, it can be even said that it is a merchant city founded and managed by businessmen. Traditional "hongs" or trade houses of Hong Kong were the pillars of the economy. Jardine Matheson and Hutchison were major hongs that led the economy and the Hong Kong & Shanghi Bank were the financier of these hongs and has today grown to become one of the largest bank in the world. These firms were the critical factors of the growth for Hong Kong's economy. Their role however has changed overtime. They are no longer the de facto leaders of Hong Kong as they were in the mid 1800's. Their role has diminished as Hong Kong grew to become more international, and the 1997 handover to the People's Republic of China has further altered their position. Some hongs that adapted well to the changing times prospered while others either went bankrupt or become stagnant. Background on Hong Kong Economy The territory of Hong Kong is located at the mouth of the Pearl River, a little southwest of the Guangdong Province of the PRC. Hong Kong was ceded to the British after the Opium War in 1842. Many believe that the British hongs were behind lobbying the British government into fighting the Chinese Government and the settlement of the island. Kowloon was annexed in 1860, and the New territories were leased for 99 years in 1898. In 1984, the British and the PRC government agreed that Hong Kong as a whole would return to Chinese soverienty in 1997. However, a system of one country two systems were also agreed upon where Hong Kong would retain its status as a free port, with it's laws remaining unchanged for 50 years. It's main emphasis is to preserve Hong Kong's laws and economic freedom, thus to enhance the position of Hong Kong as a economic center.

The Large British owned hongs were originally trade and warehouse companies established by the British in the early days of Hong Kong colonialism, they have since grown in to major commerical conglomerates. They hold interest in cargo handling, manufacturing, real estate, and even retailing. They are the engine of the Hong Kong economy. Since Britain took over the port city in 1842 to...

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...tory. Large landowners like Li may have had some losses but 1999 saw the economic prices and activities picking up again.

Many say that the worst is over and that recover is in process. Already land prices have recovered a lot of its losses during the 1997-8 period. The problem in the territory is more a political one. Many incidents have brought attention to the problem of implementing the "one country, two system" policy, which is fundamental in the Hong Kong Basic Law and which will guarntee the independent governing of Hong Kong. The main attraction that has made Hong Kong what it is today is it's efficiency and lassie faire approach of the government. If the mainland interferes too much in Hong Kong, it status will decline as the international free port city that has made it so prosperous.

Bibliography

Chan, Anthong B., Li Ka Shing, Hong Kong's Elusive Billionaire, Oxford University Press, 1996.

Clifford, Mark L, The Taipan's Last Chance, Businessweek, April 26, 1999.

Kraar, Louis, Inside Li Ka Shing's Empire, Fortune, March 29, 1999.

King, Frank H H, The History of the HongKong Shanghi Banking Coporation, 4 volumes (Cambridge University Press, 1987-91)

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