- 21
ho
hum
Issues in Hong Kong
3.13 Just as social upheaval in China could damage Hong Kong's reputation so too could social problems inside Hong Kong. Pressure for greater democracy could be one, though perhaps unlikely source of tension. More likely is a developing fear of repressive Chinese rule, and this tension could develop both before and after 1997.
17
3.14 Also worth noting is the process of sinification in Hong Kong which will no doubt gather pace. It is possible that this could be seen from outside as reducing Hong Kong's attractiveness as a business centre because of the erosion of English as a prominent
language and of the influence of Anglo-Saxon culture. Hong Kong's reputation for non-interference by the government might also be damaged if the business community takes the view that sinification of the authorities is also a process of increasing Chinese influence on
Hong Kong affairs.
3.15
Historically one might argue that both Hong Kong and Singapore
have enjoyed considerable political stability through the 1960s, 1970s and up to the early 1980s when Hong Kong retrocession was being negotiated. The extent to which Hong Kong now faces increased political uncertainty is of course hotly debated. However, it is perhaps less debatable that, if the political outlook for Hong Kong's relationship with China, or that for China itself becomes significantly more uncertain or is perceived to be more risky, Singapore and other locations will be more likely to play host to new
international companies establishing regional offices and to
companies relocating away from Hong Kong.
REVIEW OF SUPPLY FACTORS
(i) Factors of Production
Relative Costs
3.16 The direct costs of financial firms are small relative to their
turnover of financial assets and consequently cost competitiveness is less important than in, say, manufactured goods. Nevertheless a recent Euromoney supplement about Hong Kong as a financial centre noted that Hong Kong's current relatively high rate of inflation is
seen as a significant potential threat to its future position. The
No comments yet.
Private notes are available after approval.