Economic Development of Hong Kong

Economic Development of Hong Kong

Economic Development of Hong Kong

Introduction and Literature Review

Hong Kong enjoys a free market that relies on international trade. The value of goods and services traded in the city has continuously grown with a higher value of services than goods. A greater contributor to the high GDP of the city is the larger re-export of goods and services. Hong Kong also employs zero tariffs on imported goods, which is responsible for the robust GDP of the city. The city’s tax authority only levies duties on alcohol and tobacco with no quotas or dumping laws. The tax system exemplifies the city as a self-fulling authority, a contribution that has greatly raised its currency among the competing currencies like the US dollar, euro, and sterling pound.

The economic development of Hong Kong city can be best explained by the phenomenon of wealth distribution between nations. The phenomenon looks into wealth disparities between nations, which determine the flow of goods and services between their markets. The model also determines time, speed, and direction of economic development. According to Mookherjee, and Ray (2001), the Robert Solow hypothesis explains the dominant paradigm in inter-nation convergence. The Robert Solow theory explains that the law of diminishing return to inputs requires poor nations to exhibit high rate of capital return. Further, considering constant savings and fertility rates across the nation, the per capita income in the developing nations should grow faster till it matches the living standards of the developed nation. Continuous disparity in wealth and development between the nations would only be best explained by other indirect economic factors such as population and socio-cultural inequity. The explanation confirms the difference between the societies, particularly Hong Kong and its neighbors. However, the proximity of the city to highly developed nations like China and Singapore stimulates its economic development following the Robert Solow’s model. The difference between their development accounts for what the author’s terms as the variance of economic development. The other difference can also be explained by ethical breeds and attitude towards transformative economic policies. The policies are explained by factors of savings, investment, population growth, labor, and socio-political amenities. The political factors like security and infrastructural development determines the direction and speed of a nation’s economic development.

Robbins (1968) makes great contribution with the mercantilism theory of economic development. The theory applies to the development of Hong Kong as a trade city based on Adam Smiths’ thought of wealth creation and accumulation. The theory’s relevance to the study focuses on the segment of economic and trade policies formulated to steer development of a city. Through a favorable balance of trade, the city was able to objectively grow over time. As desired by Adam Smith, polices allowed nations to accumulate more precious metals within available time by trading what they possessed. The wealth accumulated acted as reserve to future economic turbulences. The system, therefore, allowed creation of credit facility to traders, which expanded the economy through employment creation. The Smith hypothesis, though difficult in modern day practical objectivity, proposed that economic growth can be achieved through increased production due to sufficient wealth that can secure future contingencies. With time, it led to specialization, which increased efficiency and productivity of nations. As witnessed in Hong Kong, the economy grew into a satisfactory service economy due to its efficient service provision than its competitors. Therefore, the city has accumulated more wealth to sponsor its growth and safeguard it against modern economic turbulences.

Robbins (1968) also explores the Neo-Classical theory. According to the author, the theory purports that an increase in capital or labor to some level causes diminishing returns. As such, the author assumes that increase in capital will only have limited impact on economic growth up to the point of saturation, after which further increase will reduce income earned. The saturation stage of economic development is often signaled by stagnant growth, unemployment, and rise in inflation. Moreover, to attain an economic growth, the model proposes increase in GDP invested. Hong Kong has experimented steady increase in GDP reinvested, leading to economic growth witnessed in the last decades. In addition, the city has heavily invested in technology, which has increased labor productivity. However, the theory is criticized for its argument that poor nations that increase their investment have a chance of matching their economic development with the developed nations. However, the model does not explain the cause of investment disparities between nations as percentage of their GDP. Also, it fails to exemplify the fact that some nations are underdeveloped due to poor structural and systemic investment. As such, the author concludes that the model must be applied diligently without overlooking its shortcomings on measurability of economic development.

Copestake (1999) uses his seminal paper to discuss economic development under various circumstances, including free trade. Under consideration of closed economies, the author disregards his previously discussed theories due to clack of free trade economy. He argues that external market effects are crucial in industrialization of an economy with least cap of the internal authority. He quotes Ricardo’s theory of Comparative advantage as most explicit theory of free trade. According to Copestake (1999), allowing free goods and service specialization is the most amicable way of enhancing income growth between trading partners. For instance, good specialization between a developing and a developed nation can foster profitable business and economic growth between the countries regardless of the difference in production efficiency and technology. For example, for the case of Hong Kong, the service industry specialization guarantees the city’s formidable trade with Singapore and Chinese partners; thus enhancing its economic growth.

Minardi and Loiselle (2013) exploit the post-revolutionary Hong Kong to present day economic development. According to them, Hong Kong’s economic development was realized in its transition from a commodity production giant to a self-sufficient service industry. Hong Kong’s production shift was caused by mainland China’s foreign investment policy change in 1978 led by Deng Xiaoping, which no longer favored Hong Kong. The high price of land and labor made many investors shift production from Hong Kong to mainland China. Therefore, Hong Kong remained a service industry characterized by unique features that propel its economic development.

Minardi and Loiselle (2013) acknowledge the free-market institution as the greatest propeller for Hong Kong’s economic development. Hong Kong’s sovereign entitlement in economic return to China is based on the continuity of their trade. The decision gives Hong Kong all the reasons to ensure retention of its free-market economy with the least uncertainty in their economic relationship, which can only be achieved through responsive maintenance of the city’s free-market model. In addition, the Sino-British joint declaration and other political agreements such as with China have ensured political stability of the city, a considerable factor for its economic development. The Sino-British Joint Declaration ceased Hong Kong from being a British colony on July 1, 1997. The “One Country, two systems” principle is also impactful in the stability of the city. The system grants the city autonomy by allowing continuity of the capitalistic system until the year 2047 (Minardi, & Loiselle, 2013). As such, there is undeniable sectoral development realized in Hong Kong City.

Factors of Economic Development

Hong Kong’s economic development is based on certain economic considerations that can be termed as the pillars of its growth. These are factors of production, management, consumption, and growth retention, which can promote the city’s economic development. They include a free market economy, export-led growth, special economic zones, labor supply, and political stability.

Free-Market Economy

Hong Kong has one of the world’s most transparent and responsive free-market economy. With no government intervention and levies, the City’s economic system is fully reliant on the market forces of supply and demand, which has been in practice since 1978, giving a mature system that relies on what it produces against what it consumes to gauge prices, supply, and re-exportation. In addition, the market system gives foreign investors the surety of investing in the city, hence creating an influx of foreign investment. It has also strengthened its currency against global giant currencies like the US dollar, euro, and sterling pound. The free-market economy model has therefore managed to retain Hong Kong on the global market, thereby being the most effective driver of economic development.

Service Industry and Export-led Growth

Hong Kong’s economy is based on service production as opposed to commodity production. The conversation of the economy from the commodity industry to the service industry was due to the increased cause of land and labor in Hong Kong. With increased investment in the 1970s, the city moved most of its commodity industry to mainland China that offered lower prices for land and labor. Therefore, the moves left the city service based, which proved cheaper to produce under least space. Today, Hong Kong makes a great investment through its service industry with the least cost of production and efficiency in service delivery. In addition, Hong Kong pursues an export-led development model. It aims to export more than it imports to boost its local manufacturers and strengthen its economy in the global space. The most explorative example of the service industry and export-based production in Hong Kong is the tourism industry, which contributes 40% of the service earning received (Wong, 2017).

Economic Zones and Location

The listing of Hong Kong among the Special Economic Zones and 14 Open Cities gives it the opportunity to enjoy unlimited economic freedom. These include, among others, relaxed policies and no government interference, which makes the city attract to more investors. The zoning offers the city investment incentives that are shared to investors through non-tariffs and low taxes for corporation and individuals. For example, negotiated 16.5% corporate tax, 15% personal tax, and zero after sale tax gives enough reason to invest in the city (Wong, 2002). In addition, the geographical location of Hong Kong puts it closer to a large market in China, Japan, Taiwan, and other Asian countries. As such, proximity to China offers it the largest market for Hong Kong goods and services (Wong, 2002).

Labor Supply and Political Stability

Hong Kong has a steady supply of skilled labor that steers its manufacturing industry. A constant supply of skilled labor is obtained from expertise learning institutions like Hong Kong University. More labor is obtained from China and its highly industrialized market. In addition, the city’s mile labor laws attract many skilled laborers to the city, which also enjoys stable politics due to none politicization of its business operations. Its political leadership embraces the free market model without infringing on the market operations.

Key Options

The market model adopted by Hong Kong gives it a unique approach that must be considered in the formulation of its strategic plan. The plan must, therefore, come at the cost of an alternative model that drives its business-oriented approach against the social-benefit approach adopted by other cities in the region. Unlike other Asian cities, Hong Kong’s model is entirely business oriented. That can best be explained by its budget that only allocates 19% to socio-political expenditure while retaining the larger remainder for investment budget (Wong, 2002). The result of such a model has caused social complaints due to the hard life experienced by the middle and low-class members of society who are increasingly becoming unable to afford basic amenities, particularly housing and food whose prices are exaggerated due to uncontrolled investment.

Formulation of a strategic plan must, therefore, consider the most appropriate model for the socio-economic benefit of the city. This study proposes a reconsideration of the social apathy of the city in its strategic plan. 
The Key Options spell opportunities for improvements that for Hong Kong city. The recommendations suggest ways to patch some of the socio-economic challenges facings the city. They are as listed below.
ü  There is a need for increased social investment to cater for the needs of the middle and low-income earners. An example is investing in equitable social amenities like hospitals and schools to cut down on the expenditure disparities of these facilities between the social classes. The result would increase savings of the middle and low class income earners hence more purchasing power. 
ü  There is a need to plan for a price cap to avoid exaggeration of market prices, particularly in the housing market.
ü  The government must also implement policies that would ensure sustainable land use and planning around the city. There should be a proper urban segment that distinguishes industrial, commercial and residential quarters to cup unplanned expansion. The planning would ensure balanced urban growth under interest of all stakeholders. 
ü  The city must also reconsider commodity production since nearly every industry participating in good production offers services for its products. The option would also reduce high good importation from China that costs its citizens’ job opportunity. 
ü  There should also be increased investment in infrastructure, particularly transportation. The congestion of the city requires intense planning of the city’s transport system that would ease congestion and efficient transportation of goods and services. 
Push Back and Response
   With the continuous growth of the Hong Kong economy, the push backs may exist in infrastructural development, social and community interest, sustainable land use and political stability. According to Wong (2017), the city is already faced with challenge of socio-economic inequality which stands to jeopardize its growth. To solve this problem, the government must reinvest in social amenities to strike a balance between the low and high income earners. The increased cases of congestion and jam should also be tackled by seeking for various alternative modes of transport and restricted development to secure enough roads, rails, and air transport for everyone. The government should also put in place proper planning for the scares land available, and this includes discouraging commercial construction in residential areas and vice versa.
The city’s growth may also be pushed back by increasing political quest to have the city autonomous to Chinese leadership. Wong (2017) believes that increasing cases of riots to have an autonomous governance may tamper with its economic pace. The city’s authority should respond by gesturing goodwill to destruct people from future riots that ruin its economy. A designated body can then be formed to investigate into the issue without taking any inappropriate decision that may jeopardize the success of the city.

Elements of Strategic plan

Hong Kong’s economic development plan may prove challenging if no good strategic plan is contemplated. The plan must consider most import segments of the economic development; otherwise, it may ruin its economic structure. A good plan offers a good opportunity to learn about the city’s model. Therefore, this study recommends five key elements that must be present in a responsive strategic plan for the city (Poister, & Streib, 2005).

  1. The Plan Must Determine the City’s Location or Zone

There is a great concern for crafting a strategic plan that displays the city, that is, how foreign investors would like to see it, not domestic investors. The element would ensure that investors and customers’ expectations are met. Fortunately, this idea has been in the interest of the city. However, the city seems to have overlooked the needs of the local market, particularly from the middle and low-income earners.

  • Acknowledgment of What is Important

The strategic plan must then consider where it desires to see the city in future. Strategic plans are primary tools for economic development and must hence have a goal achievable within a specified time. The goal would set the direction for the city by clearly defining its mission in terms of production, consumption, and sustainability. However, it may be in the interest of the city to prioritize its goals with regard to task involved, cost, and completion time. For example, the objectives can be divided into short and long term goals, hence making it efficiently implementable.

  • Define what to be achieved

A good strategic plan must clearly define the objectives of the course. These must include micro and macro objectives in favor of priority and other economic considerations.

  • Management

The strategic plan must clearly outline who is accountable for each task. The element gives the purpose of direction as there is a sense of task ownership. If need be, it should be expanded to indicate resource and time allocation to avoid a collision of interest.

  • Review of the Strategic Plan

A responsive strategic plan must be reviewed comprehensively. The purpose of the review is to implement the plan as desired and make adjustment where need calls. The study recommends a professional review of the plan at least every quarter of the year.


Copestake, J. (1999). Theories of Economic Development. Department of Economics and International Development, University of Bath, UK. Article for the UNESCO Encyclopedia of Life Sciences, 20(5). https://utd.edu/~mjleaf/Copestakeunesco.html

Minardi, J. F., & Loiselle, M. J. (2013). Hong Kong: The Ongoing Economic Miracle. Montreal Economic Institute.  Retrieved from http://mobi.iedm.org/files/note1113_en.pdf  

Mookherjee, D., & Ray, D. (Eds.). (2001). Readings in the theory of economic development. Oxford: Blackwell Publishers. https://www.econ.nyu.edu/user/debraj/Papers/DevReaderIntro.pdf

Poister, T. H., & Streib, G. (2005). Elements of strategic planning and management in municipal government: Status after two decades. Public administration review, 65(1), 45-56.  Retrieved from http://www.msu.ac.zw/elearning/material/1284547370strgt%20planning%20students.pdf  

Robbins, L. (1968). Theory of Economic Development in the History of Economic Thought. Springer. https://mises.org/sites/default/files/The%20Theory%20of%20Economic%20Development_2.pdf

Wong, Y. C. R. (2002). The Role of Hong Kong in China’s Economic Development. The University of Hong Kong Working Paper Series, 2002, 26.  Retrieved from http://www.agi.or.jp/7publication/workingpp/wp2002/2002-26.pdf  

Wong, Y. C. R. (2017). Fixing Inequality in Hong Kong. Hong Kong University Press. Retrieved from  https://www.hkupress.hku.hk/pro/con/1618.pdf [Accessed on March 8, 2019]


Tired of Guidelines or Lack Time to Work on Your Paper, Get Original Custom Research Paper Writing Service

Thecustomwriting.com research paper writing service has saved thousands of students from stressful college life. Writing a custom research paper may be challenging, considering it has to be plagiarism-free. And it is better not to do your project than to hand in plagiarized work or hurriedly complete it if you do not have time.

Academic integrity is so vital that you may get a suspension or an expulsion because of a copy-pasted work. Writing a custom research paper requires research and writing skills to produce original content. Here are essential things to know about getting the best and legit assignments help websites.

Perfection is vital

Every website will promise you that they produce high-quality work. However, you put your money for your end-of-semester paper only to get a pass. You must learn how to identify the best writing service before committing.

Thecustomwriting.com produces quality content at all times. Rather than a quality promise, quality assurance is what you should consider before hiring a research writer. Best writing services are reliable. You don't want to partner with a cheap research paper writing service that will deliver poorly written essays hours after the due date.

Quality writers are part of the best writing service. A company that has untrained writers will fail you. Before committing, ensure that the people who will write your paper are academicians and professionals. It would help if you had a writer who will be prompt to respond to your questions and follow instructions. Writers who do not fear to ask for clarification where they don't understand are the best for you.

Beware of Scammers Posing to Provide Custom Research Paper Writing Service

It may take time and effort to find a legit custom research paper writing service. Most of the websites claiming to offer writing service trades your paper with another student. For example, if you order your paper today to submit it next week, you may find that another student has already handed over the same document.

Your money is gone, you have no paper to submit, and the deadline is in two hours. You can only sit and cook up some stories for your lecturer. Otherwise, wait for a penalty or suspension.

Others will give you half-baked papers in the name of cheap essays. Apart from reselling your paper, some companies will offer you copy-pasted work. If you don't have tools such as Turnitin or Copyscape to check plagiarism, you may find yourself in the dean's office explaining why you copied your work from the internet word-to-word.

We offer one of the best research paper writing services in the USA and the U.K.

You won’t regret choosing Thecustomwriting.com to handle your research. Your project is an essential part of your academic work. It determines whether you will move on to the next semester or if your name will appear on the graduation list. Do not gamble your education by hiring any cheap essay writing website you find on the internet. Look for a custom research paper writing service reviews before commit.

Avoid scandals by hiring Thecustomwriting.com. Count yourself lucky if you are reading this article. You are in the right direction in finding the writing service for your paper. Though many websites could have frustrated you, Thecustomwriting.com is committed to providing you with reliable service for your paper.

Thecustomwriting.com offers quality services at affordable prices, and they deliver your work on time. They have native English writers that write your paper using the correct language.

Plagiarism Free Custom Research Paper Writing Service

Our writers understand the seriousness of writing plagiarized papers. Every institution has regulations that govern how a research project is conducted. Universities and colleges take plagiarism as gross misconduct. The best writing services are those that will deliver plagiarism-free papers.

Plagiarism involves, among others, copying a published work and delivering it to your lecturer as your own without acknowledging the sources.

Another way your work can be plagiarized is the failure to include the source of your content in a research paper. If you are using someone's thought, you need to include a reference and in-text citations to show that you are using another scholars' worker.

It's a gross mistake to write a five-page paper without a single source unless the paper's nature does not require you to rely on any sources. Here are some tips our writers use to avoid accidental plagiarism:

  • Cite direct quotes, statistics, and paraphrased content.
  • Ensure that all in-text citations are included in the biography and vice versa.
  • Directly quoting not more than 2% of the paper, if quoting is necessary (some papers are exempted from this rule, especially literature).
  • Stick to high authority, scholarly sources. Our writers will hardly paraphrase content from third party blogs and other questionable sites.
  • Consider Buying A Custom Research Paper from Thecustomwriting.Com

    Consider hiring an expert essay writer if you are not sure about your capabilities. Referencing and citations can be challenging, especially if you try to do it for the first time. It's even harder when your lecturer asks you to use a hard referencing style. For example, Harvard requires you to include page numbers, dates, and the author's name in the text. If you have several papers with a strict deadline, you should consider hiring a custom research paper writing service to help you work on your essays.

    However, ensure the website you want to hire offers legit writing service. A good website should at least charge for its services. You will find many websites willing to provide you with free services. No one is that idle to sit and write a paper for free. Sites that provide free or cheap services hooks you when you least expect.

    Also, consider the price of writing a paper. Though cheap essays are of low quality, other sites may have inflated prices for their rate, making you needlessly break your bank.

    Thecustomwriting.com understands the need for a fair and reasonable price for most students. We know that most students need service, but they do not have enough resources. We, therefore, offer quality service that you can afford.

    Benefits of using custom research paper writing service

    If this is your first time considering using a custom writing service, the first thing is to know why taking such an action is the best. Choosing Thecustomwriting.com ensures professional writers handle your paper. Letting a qualified person handle your project can boost your grade. You cannot afford to fail in the upcoming end-of-semester project. In any case, your progress to the next level will be determined by how well you perform in your essay.

    Thecustomwriting.com ensures the timely delivery of your work. The good thing about legit essay writers is that they can write your essay within the shortest time possible, with one page taking up to one hour at most. It doesn't matter what time you want your work done: Thecustomwriting.com is always ready for a task.

    We will give you a paper written explicitly for you. We will ensure that your paper is not delivered to someone else.

    Come to think of this; if five of your classmates decide to order an essay for the same class, five writers will be assigned to work on different papers instead of paraphrasing one paper and sending it to five of you.

    Frequently Asked Questions (FAQ)

    Do subject specialist writers handle my research paper?

    It's our responsibility to ensure that someone from your field handles your paper. Our company has enough writers from every discipline. We provide only a research writer qualified in your subject to handle your paper. After placing an order, the first step is to screen the question and requirement and match it with the best writer. The less qualified writer has a college diploma, and they only handle high school papers. All other writers are bachelor, masters, and PhD degree holders.

    Are your researchers qualified enough to know the core of the research?

    We commit to quality content. We understand that failure to deliver quality service will result in the loss of clients. Therefore, we only hire qualified writers who have an in-depth understanding of your paper. Whether you want quantitative research done using Chi-square or qualitative research, Thecustomwriting.com’s writers will comfortably handle any discipline or type of paper. Besides, we offer research paper service from college to PhD. Therefore, we cannot afford to have unqualified writers. Our researchers take every instruction keenly when writing your essay.

    Should I worry about order placement?

    There is nothing to worry about placing your order. Our platform has a simple, user-friendly interface that enables you to navigate to different functionalities with ease. We offer quality custom research paper writing services; thus, you don't have to worry about getting value for your money. Besides, you can track your order's progress. Our system progressively send you email notifications regarding every stage of your orders' progress; thus, you don't even have to log in to track down your order. You will also see the progress on the dashboard when you log in. Moreover, our support team will contact you when the writer needs any clarification.

    Can I have direct communication with the writer after the order placement?

    Our system is designed in such a way that it allows you to communicate with your writer directly. We understand the need to clarify things yourself to the writer. Furthermore, our support team is available 24 hours to ensure that urgent matters are communicated swiftly with the writer.

    Will I get any discount on recommendation?

    The answer is yes. We value your efforts and trust to recommend us to your friends. We will offer you a discount on your next order if a client mentions your email when placing an order.

    What guarantees should customers look for?

    We have a written list of what we guarantee our clients in our terms. We guarantee the quality, confidentiality, free revision, original content, and timely delivery. We also guarantee money-back if, in the unlikely event, you are not happy with the quality of the paper.

    What makes a reliable writing company?

    It's easy to know a reputable company. First, they are transparent about their services. They offer multiple methods of communication and have qualified writers. Most importantly, they deliver your work on time, deliver original content, and honour what they have guaranteed.

    Why should customers not opt for cheap essay writing services?

    Cheap essay services will only waste your time. They have foreign writers who will produce plagiarized content full of grammar errors. You will waste your precious time waiting for a paper that you can't give your lecturer.

    Is buying essays online safe?

    It's safe to buy your essay if you take the right precaution. Before putting your money on a strange site, explore the website to see whether you will get customer reviews. They will help you make the right decision.

    How do I hire someone to write an essay for me?

    These are common questions with most clients. It's effortless to get a professional writer. The first step is to identify a custom research paper writing service that is legit and sign up. After that, they will guide you on how to place your order and get a writer. Some companies will allow you to choose a writer for yourself or choose a writer for you.

    What types of writing services can I order online?

    Our website offers a variety of legit essay services. We provide any academic assistance, including research projects, assignments, and admission letters. Visit our website to see what each service entails.

    What benefits and additional features do Thecustomwriting.com services offer?

    We offer several free services to our customers. We offer free revision, a discount on your first order, and free pages such as references and cover pages. Also, we have a quality control department that ensures that all papers are of high quality before delivering them to you.

    Do websites maintain your privacy? Are orders secured?

    Your privacy is our top priority. You will be recognized by your I.D. assigned to you after signup instead of your name. The only person who can access your account is you or anyone else you give your password. Your payment is through a third party. Therefore, your personal information will never reach our site without your consent.

    What are the pros of ordering from custom writing services?

    You get quality papers. We have writers with decades of experience delivering quality papers worth the client's money and much more. We understand your power to influence our progress. Your paper will be delivered on time and written by professional writers.

    Hire a professional writer

    Now that you know what to look for when considering the custom research paper writing services, it's time to try us. Sign up and get a discount on your first order. You don't have to worry about quality, timely delivery, and price. We know they are essential to you.

    Calculate your order
    Pages (275 words)
    Standard price: $0.00
    Client Reviews
    Our Guarantees
    100% Confidentiality
    Information about customers is confidential and never disclosed to third parties.
    Original Writing
    We complete all papers from scratch. You can get a plagiarism report.
    Timely Delivery
    No missed deadlines – 97% of assignments are completed in time.
    Money Back
    If you're confident that a writer didn't follow your order details, ask for a refund.

    Calculate the price of your order

    You will get a personal manager and a discount.
    We'll send you the first draft for approval by at
    Total price:
    Power up Your Academic Success with the
    Team of Professionals. We’ve Got Your Back.
    Power up Your Study Success with Experts We’ve Got Your Back.