Trade, Industrial Restructuring and Development in Hong Kong

315 Pages·1992·29.45 MB·English

by  Yin-Ping Ho (auth.)

TRADE, INDUSTRIAL RESTRUCTURING
AND DEVELOPMENT IN HONG KONG
STUDIES IN THE ECONOMIES OF EAST AND SOUTH-EAST ASIA
General Editors: Peter Nolan, Lecturer in the Faculty of Economics and Politics, University of
Cambridge, and Fellow and Director of Studies in Economics, Jesus College, Cambridge,
England; and Malcolm Falkus, Professor of Economic History, University of New England,
Armidale, New South Wales, Australia
In the last decades of the twentieth century the small-and medium-sized nations of East and
South-East Asia have begun a process of potentially enormous political and economic
transformation. Explosive growth has occurred already in many parts of the region and the
more slowly growing countries are attempting to emulate this vanguard group. The impact of
the region upon the world economy has increased rapidly and is likely to continue to do so in
the future.
In order to understand better economic developments within this vast and diverse region, this
series aims to publish books on both contemporary and historical issues. It includes works both
by Western scholars and by economists from countries within the region.
Pllblished titles inclllde:
Melanie Beresford
NATIONAL UNIFICATION AND ECONOMIC DEVELOPMENT IN VIETNAM
John H. Drabble
MALAYAN RUBBER: THE INTERWAR YEARS
Yin-Ping Ho
TRADE, INDUSTRIAL RESTRUCTURING AND DEVELOPMENT IN HONG KONG
Jomo K. S.
GROWTH AND STRUCTURAL CHANGE IN THE MALAYSIAN ECONOMY
Lee Sheng-Yi
MONEY AND FINANCE IN THE ECONOMIC DEVELOPMENT OF TAIWAN
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Customer Services Department, Macmillan Distribution Ltd,
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Trade, Industrial
Restructuring and
Development in
Hong Kong
Yin-Ping Ho
Lecturer in Economics
Chinese University of Hong Kong
M
MACMILLAN
© Yin-Ping Ho 1992
Softcover reprint of the hardcover 1s t edition 1992
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham
Court Road, London WI P 9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages. .
First published 1992 by
THE MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire R021 2XS
and London
Companies and representatives
throughout the world
ISBN 978-1-349-11040-7 ISBN 978-1-349-11038-4 (eBook)
DOI 10.1007/978-1-349-11038-4
A catalogue record for this book is available
from the British Library
Contents
List of Tables viii
List of Abbreviations Xl
Preface Xlii
1 Introduction 1
1.1 Tale of the 'Barren Island' I
1.2 Early Entrepot Trade 2
I.3 The Rise of Export Industrialism 4
1.4 The Present Status 9
2 Growth Experience and Structural Changes 20
2.1 Overall Growth Record 21
2.2 Basic Factors Underlying Economic Success 27
2.3 Structural Changes in the Economy 32
3 External Orientation and Patterns of Trade 44
3.1 External Orientation 45
3.2 Changes in Overall Trade Patterns 47
3.3 Direction of Trade 51
3.4 Changes in Trade Balance 61
3.5 Some Concluding Remarks 64
4 Comparative Advantage in Trade in Manufactures 68
4.1 Comparative Advantage and Trade Theories 69
4.2 Some Salient Features of Hong Kong's 75
Manufactured Exports
4.3 Hong Kong's Experience with Changing 79
Comparative Advantage
4.4 Whither Hong Kong's Comparative Advantage Goes? 82
S Labour and Labour Market Adjustment 8S
5.1 The Demand for labour 86
5.2 The Supply of Labour 90
v
vi Contents
5.3 Labour and Labour Market Characteristics 95
5.4 Wage Determination and Labour Market Adjustment 99
5.5 Recent Developments 102
6 Small-Scale Enterprises in the Process of Industrial 107
Development
6.1 Size Advantages and the Case for Small Firms 108
6.2 Size Structure and Contributions of Hong Kong's 111
Small Firms
6.3 The Continuous Rise of Small Entrepreneurs 118
6.4 The Social Implications of SSE ~roliferation 122
6.5 Future Viability 125
7 Inward Investment in the Course of Industrial 129
Development
7.1 Some Theoretical Issues in Direct Inward Investment 130
7.2 The Pattern of Industrial DFI in Hong Kong 133
7.3 Direct Economic Contributions and Comparative 139
Performance
7.4 Other Qualitative Impacts 147
7.5 Some Concluding Remarks 151
8 Industrial Restructuring: Issues, Past Efforts and 155
Problems
8.1 Pressures to Restructure 156
8.2 The Meaning and Possible Forms of Industrial 160
Restructuring
8.3 Past Restructuring Efforts and Existing Growth 164
Constraints
8.4 Concluding Comments 189
9 Public Finance and Public Policy for New Development 194
Needs
9.1 The Public Finance Setting 195
9.2 The Basic Public Policy Stance and Economic 201
Success
9.3 Changing Public Policy Stance for New 205
Development Needs
Contents vii
9.4 Evolving Policy Measures and Options for Structural 207
Adjustment
9.5 Some Concluding Remarks 224
10 The China Factor and the Economic Future of Hong Kong 229
10.1 Economic Aspects of the China Factor and the 230
Hong Kong Factor
10.2 Implications of the China Factor for Hong Kong's 233
Industrial Restructuring
10.3 The Sino-British Agreement on the Future of 237
Hong Kong
10.4 Problems and Prospects 240
11 Conclusion 251
11.1 Some Final Reflections 252
11.2 Arguments for Development Lessons in Perspective 255
11.3 A Closing Note 269
Bibliography 272
Index 291
List of Tables
1.1 Hong Kong's position among leading world exporters, 11
1960-88
1.2 Growth of per capita GDP: Hong Kong compared with 14
other East Asian NIEs, Japan, the United Kingdom and
the United States, 1961-88
2.1 Major growth indicators of economic activity in 22
Hong Kong
2.2 Capital formation analysed by private and public sectors 26
and by type of assets, and investment ratio in Hong
Kong, 1961-88
2.3 The sources of growth of real GDP in Hong Kong, 30
1955-84
2.4 Changes in Hong Kong's industrial structure: percentage 33
contribution by industrial sectors to GDP (at factor cost),
1961-88
2.5 Some labour force characteristics and distribution of 36
working population by industry in Hong Kong, 1961-88
3.1 The changing pattern of external trade and degree of 46
external orientation in Hong Kong, 1961-88
3.2 Retained imports analysed by end-use category, 1961-88 50
3.3 Distribution of Hong Kong's domestic exports by regions 52
and principal organisations, 1961-88
3.4 Distribution of Hong Kong's domestic exports by major 53
importing economies, 1961-88
3.5 Distribution of Hong Kong's re-exports by major 56
economies of destination, 1961-88
3.6 Distribution of Hong Kong's imports by major source 59
economies, 1961-88
3.7 Hong Kong's global trade balance and bilateral trade 62
balances with major trading partners, 1961-88
4.1 Export commodity structure of Hong Kong'S domestic 76
manufactures, 1961-88
5.1 Distribution of Hong Kong's manufacturing working 87
population by major industrial groups, 1961-88
5.2 Occupational structure and distribution of Hong Kong's 89
working population in major economic sectors
viii
List a/Tables ix
5.3 Distribution of Hong Kong's pre-war and post-war 91
population by age and sex
5.4 Rates of age-sex specific labour force participation in 93
Hong Kong
5.5 Student ratios to population, by age.group, and 95
educational attainment of Hong Kong's working
population
5.6 Number of work stoppages and distribution of total 98
working days lost by major economic sectors in Hong
Kong, 1969-88
6.1 Number of manufacturing establishments and average 113
number of workers employed per establishment in Hong
Kong's major industrial groups, 1973-88
6.2 Distribution of establishments and persons engaged in 114
Hong Kong manufacturing by establishment size,
1977-87
6.3 Contribution to total value added and value added per 116
employee in Hong Kong manufacturing by establishment
size, 1977-87
6.4 Comparative performance of manufacturing 117
establishments in Hong Kong by size sectors, 1977-87
6.5 Distribution of economically active population in Hong 121
Kong by activity status
7.1 Direct overseas investment capital stock and 135
establishments in Hong Kong manufacturing by source
economies, 1971-88
7.2 Direct overseas investment capital stock and companies in 137
Hong Kong manufacturing by industrial groups, 1971-88
7.3 Country-industry specific distribution of direct overseas 138
investment capital stock in Hong Kong manufacturing, at
end 1988
7.4 Firm size and distribution of DFI employment in Hong 140
Kong manufacturing by industrial groups, 1981-88
7.5 Proportion of DFI employment to total manufacturing 141
employment in Hong Kong by industrial groups, 1981-88
7.6 Market-industry specific distribution of product sales 143
from Hong Kong DFI firms, 1988
7.7 Distribution of establishments and persons engaged in 144
Hong Kong manufacturing by percentage share of
overseas interest, 1983-87