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Hong Kong as a Partner in World Trade
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THE most important characteristic of the Hong Kong economy is its almost total dependence on trade with the world outside its borders. This is hardly surprising. How else could a tiny enclave, in size not much more than 1 000 square kilometres and most of that outlying islands, or hilly and not suitable for development, manage to feed, clothe, house, transport and provide other amenities for as many as 5.5 million people? If Hong Kong were isolated and forced to live off its own resources it could only support a very much smaller population - farmers, fishermen, some craftsmen, perhaps a number of small and inefficient industries - and at a very much lower standard of living.
Everything that has been developed in present day Hong Kong - the mass of sometimes magnificent buildings, the roads, railways, waterworks, schools and universities, hospitals, the airport and container port, satellite telecommunications and public housing for half the population - has arisen because Hong Kong is not isolated. Rather, and quite the contrary, it has developed over the years into one of the world's greatest trading emporia, with commercial links extending to all the inhabited continents. In terms of goods alone, that is leaving aside the plethora of services in which Hong Kong also conducts trade, it is, with its working population of about 2.5 million, the 13th largest trading entity in the world, with total imports and exports of goods amounting to some 180 per cent of its gross domestic product (GDP), which is roughly the output of the whole economy. If trade in services is included, total trade comes to more than double the GDP.
So, how is it that, to repeat Lord Palmerston's disparaging and oft-quoted words of some 140 years ago, ‘a barren rock with hardly a house upon it' developed, through trade, into one of the greatest and most exciting cities in the world? What factors were responsible and what policies were adopted? Above all, are there any lessons to be learned from the experience that might have some application to the wider world scheme?
There are other reasons, also, why the present may be a particularly appropriate time to examine Hong Kong's role as a partner in trade and the contribution it thereby makes to the health of the world economy. If there was one catalyst which most helped to bring about the successful conclusion of the recent negotiations on the future of the territory, it was probably the agreement of both the governments of the United Kingdom and the People's Republic of China that their common aim was the maintenance of the stability and prosperity of Hong Kong. Furthermore, both sides came to recognise that an important, indeed essential, condition for stability and prosperity would be the continuation of Hong Kong as a free port with its free trade policy, a separate customs territory and indeed a separate capitalist economic and trade system able to decide its economic and trade policies on its own and maintain and develop its own economic and trade relations with the outside world. It was in this spirit and in accordance with the terms of the Joint Declaration that the two governments agreed in April 1986 that Hong Kong should become the 91st
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