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Source : Census and Statistics Department : Hong Kong Statistics Table 006
None of the counties could expect to have full employment, Hong Kong is not an exception. However, since the handover, Hong Kong government has been praising the narrative of backing from the motherland regardless of the political connotations the economic integration of these two is inevitable. As a result, this section is to examine China factors in the role of creating job opportunities for Hong Kong as well as the impact that China has brought to Hong Kong against the backdrop of the rhetoric of ‘’ backing from the motherland’’. (Tai-Lok-Lui 2012)
As mentioned earlier that Hong Kong played a critical role in facilitating China’s economic transformation at the time of China’s open door policy, which coincided with Hong Kong’s rising labor costs. As a result, Hong Kong capitalize on China’s abundant and cheap labor forces by relocating its labor intensive
manufacturing to China in the 1980s and employed 3 million people at the time.
(Tai-Lok-Lui 2012)
2.2
4.7 6.2
4.9 5.1 7.3 7.9 6.8
5.6 4.8 4 3.5 5.3 4.3 3.4 3.3 3.4 2
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Unemployment rate%
Hong Kong
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However, the benefits of cheap labors offered by China led to the sluggish technological upgrading. (Tai-Lok-Lui 2012) But Hong Kong took this opportunity to reinforce its producer services and business services and rapidly turned into
service-oriented economy. According to Census and statistics department report of Hong Kong Residents working in the Mainland of China in 2010, 64,200 Hong Kong people were working in mainland in 1992, the number increased substantively to 190,800 in 2001 and 244,00 in 2004, but that figure dropped to 175,100.
According to the same report, the types of work that Hong Kong people do in mainland, the category of craft and related workers, plant, machine operators and assemblers accounted for 28.4 % of Hong Kong people in Mainland in 1992 but dropped dramatically to only 7.6% in 2010. While managers and administrators accounted for 50 % among all the occupations which pointed out that the Hong Kong workers in labor intensive industries have been replaced by locals after they had learned the needed skills to maintain the productions. More jobs offered in China are white collar level. In 2010 managers and administrators with professionals and associate professionals accounted for 83 percent of Hong Kong people working in mainland, that signified the fact that the job opportunities offered for Hong Kong people shifted from labor intensive one in the 1990s to the more white color one in 21st century after China’s demand for the skilled laborer got replaced by the locals and a greater demand for the highly educated, experienced one. (Tai-Lok-Lui 2012)
This indicates that China no longer needs skilled manufacturing workers anymore and the job opportunities offered are largely for those experienced, educated, and managerial level of jobs. As the statistics showed that in 2010, 74 percent of
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Hong Kong people working in mainland were aged 40 or above which signaled the fact that young people and blue colors have less opportunities to find a job in mainland, Tai-Lok-Lui (2012) argued that it is the opposite of what Hong Kong government touting about the slogan of backing from the motherland particularly when the opportunities have been limited to the exclusive one rather than the
opportunities that are available to public, and that might sow the seed of social tension in a long run.
2.6 Hong Kong inward direct investment
Hong Kong has a freest economy in the world and is the best gateway to Chinese market. What we could infer is that many investors would prefer to pour its investment into Hong Kong and further connect it with Chinese market. The
executive director of British Virgin Islands international finance center Elise Donovan remarked in 2013 in an interview that’’ Hong Kong is very important to BVI. It continues to be an important bridge to China and Asia. We are very keen to ensure BVI continues to serve the region and the business continues to grow’’3. The comment has been reflected in the figures of the inward direct investment to Hong Kong, as you can note that the Inward DI from BVI has since been surging
substantialy after the handover, reaching 3677.3 HK$ billion in 2007 as the best one ever, and 3341 HK$ billion in 2013. (see chart 5)
China on the other hand has roughly the same vast amount of investment going
3 Elise Donovan the executive director of BVI International Finance Centre, remarked in an interview with South China Morning Post that "Hong Kong is very important to BVI. It continues to be an important bridge to China and(Asia. http://www.scmp.com/news/hong-kong/article/1213467/british-virgin-islands-picks-hong-kong-be-its-as ia-hub)
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to Hong Kong as BVI did since 1998 and that undoubtedly could be attributed to the economic integration between the two as well as China’s 12th Five Year Plan which encouraged mainland enterprises to’’ go out’’ to seek investment and business opportunities. Hong Kong subsequently, with the reputation of being a financial center and freest economy, vibrant capitalism has become the largest recipient of China’s outward investment that accounting for 57 percent of China’s outward FDI.
(Hong Kong Trade Department Council 2015)
The other major foreign investors in Hong Kong are including Bermude, Japan, Netherlands, USA, United Kingdom. Though, all the investments from those
countries combined are still less then either BVI or China.
However, investments from those countries have neither been scaled back nor up dramatically, but grow slightly year by year, which could be interpreted as the
confidence of those long term investing partners has not been deflated since the handover, and which also indicates the fact that Hong Kong’s unswerving faith in its own principles and mechanism of the markets as well as China’s restraint from putting its hands into the operation of Hong Kong’s market play a critical role in ensuring Hong Kong’s prosperity.
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