Hands On or Hands Off?
The Nature and Process of Economic Policy in Hong Kong
Publication Year: 2007
Published by: Hong Kong University Press, HKU
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Hong Kong prides itself as a place where the economy is allowed to run with the minimum of government interference. Slogans ranging from the "positive non-intervention" of the 1970s to today's "maximum support and minimum intervention" and "market leads, government facilitates" epitomise the image which the government seeks to project. And the government is ...
Part I. Status and Image
1. Economic Background
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Few people would challenge the assertion that Hong Kong has been a success story in terms of economic performance. In terms of gross domestic product per head, Hong Kong ranks either 27th or 8th in the world, depending on the method of currency conversion (see Table 1.1). One recognises, of course, that this is not a precise measure of standard of living, and does not ...
2. Fretting over the Image: External Perceptions and Relations
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Hong Kong brands itself as 'Asia's world city' and is much concerned with its image and reputation to the outside world. Sometimes this concern seems Thus, the Hong Kong government takes great pride in having been in first place for more than ten years in the global league table of economic freedom produced by the Heritage Foundation, the US-based right-wing ...
Part II. Economic Policies and Their Application
3. Government Involvement in the Economy: Words and Actions
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The government has a somewhat ambivalent view of its own role in the economy. It adopts various slogans, such as 'positive non-interventionism' (first coined by Philip Haddon-Cave, who was financial secretary from 1971 to 1981), 'maximum support and minimum intervention' and 'market leads, government facilitates' (the catchphrase of the recent financial secretary, ...
4. The Budget and Public Finances
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The scale of a government's budget and the nature of its actual expenditures provide a guide, albeit a qualified one, to the scale of its involvement in the economy. Despite fiscal deficits for most of the period from 1998 to 2005, Hong Kong is one of very few economies, and one of even fewer economies of significant size, where the government has had a tradition of budget surpluses, ...
5. Monetary Policy
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In the realm of monetary policy, Hong Kong's currency board is perhaps just about as 'hands-off an arrangement as an economy could possibly have. Nevertheless, there have been occasions when the system has been characterised by its critics as suppressing market-determined adjustment, or when accusations of disproportionate intervention in markets have been ...
6. Competition Policy and Competitiveness
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Even the most ardent advocates of laissez-faire would accept that appropriate laws and regulations need to be in force governing various aspects of business or personal life. Most countries recognise, in this context, the need to control or eliminate monopolies and cartels that may operate against the public interest. In Hong Kong, the government's philosophy of non-interference,...
Part III. The Policy Process
7. The Institutional Framework
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Hong Kong practises executive-led government. Policies are handed down by the chief executive of the Hong Kong SAR (prior to July 1997 the British-appointed governor) on the advice of the Executive Council. The Legislative Council has a role in passing laws and approving budgetary disbursements, but only in strictly limited circumstances can it formally ...
8. How Economic Policies Emerge
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You do not have to be in Hong Kong for very long before you realise that there is something strange about the policy formation process, whether in economics or any other policy domain. Moreover, depending on what you read or whom you listen to, there is a mixture of frustration, embarrassment, resignation and even, among the establishment, a sort of collective guilt ...
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As China re-emerged from political and economic isolation in the final quarter of the twentieth century, so Hong Kong re-emerged as the dominant entrepot trading and business centre for China. Hong Kong is now being swept along by China's rapid growth. It may no longer possess the quasi-monopolistic advantages that it once enjoyed, when it was virtually the only ...
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Page Count: 164
Publication Year: 2007