China's Future Economic Regionalization

This paper investigates China's economic growth potentials and limitation up to 2020 and recommends a trend of economic regionalization. A sustainable growing economy is a necessity for China's future stability. The growth sustainability of the Chinese economy depends essentially on its continued commitments to institutional reform and economic deregulation. China's relaxation of government intervention in economic activities has led and will be leading China to decentralize its central governmental authority over economic planning and control. This will consequently stimulate the emergence of regional economies in Mainland China. In the next two decades, there will likely be 10 regional economies with relatively independent industrial structures emerging in Greater China (or the Chinese Economic Area of Hong Kong, Macao, Taiwan and the Mainland) as a result of economic liberalization and decentralization.     

CEPA: a milestone in the economic integration between Hong Kong and Mainland China

Since 1979, when Mainland China began to open up its economy, a process of economic integration has been going on between Hong Kong and Mainland China. The return of Hong Kong to Mainland China in 1997 speeded up the integration process. China's entry into the World Trade Organization (WTO) at the end of 2001 further intensified the integration process. In June 2003, CEPA (Closer Economic Participation Arrangement) was signed between Mainland China and Hong Kong, which set a further important milestone in the economic integration between them. In June 2004, the concept of regional economic integration was inaugurated in the Pan-Pearl River Delta Regional Cooperation and Development Forum. This article attempts to review the economic integration process after the signing of CEPA. Issues related to the implementation of CEPA are also examined and discussed. It is hoped that both the Hong Kong business sector and potential foreign investors can have a comprehensive picture of CEPA so that they can design appropriate actions to benefit most from CEPA.     

Hong Kong in United States‐China relations: The international politics of Hong Kong's reversion to Chinese sovereignty

This article examines the implications of the political transition of Hong Kong on US‐China relations in strategic, political and economic dimensions. It evaluates the impact of Hong Kong's changing status in the context of the engagement‐containment debate on China policy in the US. It suggests that US concerns over questions such as democracy and human rights and China's rejection of foreign interference’ in Hong Kong would turn the territory into a source of political conflict between the US and China. Finally it points out that any major trade confrontation between the two countries would have serious implications for the territory. The article concludes by arguing that if Hong Kong could continue to be a prosperous and free society with a global outlook, it would facilitate China's integration with the global community, but if a reversion to authoritarian rule occurred in Hong Kong, US‐China relations will be aversely affected.     

‘Three Chinas’ and international organizations after 1997

This article analyzes the effects of the transfer of Hong Kong's sovereignty to China in 1997 on the participation of Hong Kong and Taiwan in international organizations. It identifies the conditions under which China tolerates co‐existence with Taiwan as members of eleven intergovernmental organizations as of 1996. It concludes with two observations: one, international organizations are not monolithic entities; two, although China has overwhelming influence over Hong Kong's participation in these organizations, it depends also on how the Hong Kong Special Administrative Region government is going to manage its relations with China.     

The Hong Kong Policy of the People's Republic of China, 1949-1997

China's policy toward Hong Kong in the period 1949-1997 was primarily driven by utilitarian calculations of national interests and the interests of the Chinese Communist Party. The Hong Kong policy of China, as an integral part of its foreign policy, was distinctive in that ideological fervor and nationalist passions had limited influence. The goals to be achieved by the Hong Kong policy remained unchanged throughout the period; the strategies adopted, however, changed in accordance with the changing international situation and the national interests as defined by the Chinese leaders. The primary goals of the Hong Kong policy were to secure a less threatening external political environment for China and to make calculated use of Hong Kong for China's economic development. By tolerating Hong Kong as a British colony, China also depended on Britain to control the potentially threatening anti-Communist Chinese population there. The 'over-dependence' on the British to control the Chinese people in Hong Kong on the eve of Hong Kong's reversion to China, however, alienated the Hong Kong people as well as impeded the formation of local political leaders in the territory. As a result, the acquisition of Hong Kong by China in 1997 has not been accompanied by political rapport between the Chinese government and the Hong Kong people, thus sowing seeds for lingering friction between them.     

Bond Market Integration: the Chinese Mainland and Hong Kong

This paper seeks to examine the integration of the evolving bond markets in the Chinese Mainland (CM) and Hong Kong (HK). To tap the international pool of capital, the CM government and CM enterprises have issued foreign currency bonds in HK and other developed markets. Since 1998 offshore CM bonds offered to the public have not been denominated in HK dollars probably because of concerns over the stability of HK's linked exchange rate and the differential credit ratings of the two economies. Even though HK has become increasingly well equipped to handle the clearing, settlement and custody of local and foreign currency bonds across its borders, it needs to continue to lobby for and attract CM government and corporate issues of foreign currency bonds (and Rmb bonds, if this were to be permitted) if it is to establish itself as a regional bond centre in Asia.     

From Fortress Hong Kong to Hong Kong–Shenzhen Metropolis: the emergence of government-led strategy for regional integration in Hong Kong

The Hong Kong government was less active in regional integration before 2003. This study explores what conditions have contributed to the shifting of the Hong Kong government's stance on Hong Kong–Shenzhen integration from protectionism to cooperation since 2003. In addition to secondary data, a questionnaire survey and interviews were conducted in this study. Various external and internal economic, political and social factors that have contributed to the emergence of government-led strategy for regional integration in Hong Kong are analyzed. It is found that regional integration is facilitated by consensus building among the government, political parties, other interest groups and residents within Hong Kong.     

Identity,Sovereignty, and Economic Penetration: Beijing's responses to offshore Chinese democracies

Investigating how the PRC responds to democratization in Taiwan and Hong Kong, this paper argues that the Chinese Communist leadership has mainly developed three strategies in managing the complicated crises, including Beijing's own legitimacy crisis and the integration crisis of the Chinese nation, caused by the rise of offshore Chinese democracies. These strategies are: identity politics, sovereignty politics, and economic penetration. With ‘identity politics’, Beijing identifies ‘identification with the Communist leadership’ as the sole Chinese national identification, and utilizes the nationalistic passions of mainland and even overseas Chinese people against democrats in Taiwan and Hong Kong, by labeling the latter as ‘separatists’ or ‘national traitors’. Further, Beijing defines ‘sovereignty’ in a way in which the ‘central’ government monopolizes all possessions of the nation, and excludes ‘people's sovereignty’ from the politics of national reunification or the ‘one country, two systems’ model actualization. While appealing to both ‘soft power’ based in ‘patriotic nationalism’ and ‘hard power’ embedded in national sovereignty, however, the Chinese regime also mobilizes business resources and opportunities provided by China's growing economic power and China's dominance in Greater Chian economic integration for its political purposes of curbing offshore Chinese democracies.     

Hong Kong's policy possibilities and directions toward the mainland‐Taiwan conflict

On 1 July 1997, Hong Kong was returned from British colonial rule to Chinese rule under the sovereignty of the People's Republic of China (PRC). The change in political status of Hong Kong has great impacts on the triangular relationship between Hong Kong, the mainland and Taiwan, in which the mainland and Taiwan are still in a state of intense political conflict and competition. This paper examines the policy possibilities and directions for Hong Kong as a Special Administrative Region of the PRC in handling its relations with Taiwan. It argues that both Beijing and Taipei want to preserve the existing Hong Kong‐Taiwan relations for political and practical purposes but at the same time will try to avoid being forced into a suspected political trap—for Beijing the recognition of Taiwan as an independent political entity and for Taipei the subordination of Taiwan to PRC sovereignty. Between these two baselines, the paper points out that Hong Kong should pursues its own Taiwan policy built upon the interests of Hong Kong and depoliticization of Hong Kong‐Taiwan relations.     

Hong Kong's ‘One Country,Two Systems’ Experience under the Basic Law: two perspectives from Chinese legal scholars

Hong Kong is an administrative and economic entity under Chinese sovereignty. Essentially, the local political system that Hong Kong has adopted is that of a non-sovereign state as well as a non-political entity. It is neither entirely occidental nor completely oriental, but an executive-led system which has developed according to Hong Kong's characteristics and has proved to be an effective one. 1997 was not the end of the ‘One Country, Two Systems’ policy, but its beginning. To guarantee the policy's success is in the overall interest of both Hong Kong and China. As such, China has no greater interests in Hong Kong than to maintain its stability and prosperity. The Chinese Central Authorities will continue to abide by the ‘One Country, Two Systems’ policy and the Basic Law whenever problems regarding Hong Kong arise.     

Traditional Orientations and Political Participation in Three Chinese Societies

Based on three large-scale sample surveys in Mainland China, Taiwan and Hong Kong, this study purports to delineate the relation between traditional political orientations and political participation. It is found that among all three societies, Chinese in the Mainland are most traditional. In general, the negative impact of traditional political orientations on political participation is small once education is controlled for. In particular, political participation in Hong Kong is more individually based, facilitated primarily by modernization pressures. In Taiwan, institutional factors such as democracy, elections and civic associations are paramount and are buttressed by a rising white-collar class. In Mainland China, traditional political orientations have a positive impact on participation and this impact stays much the same even after controlling for education. The positive impact can be explained by institutional interference whereby traditional political orientations exert influence differently on different modes of participation: negative on adversary and protest activities but positive on voting, campaign and appeal activities. The findings of this paper imply that the argument that Confucian political culture makes a democratic China impossible is incomplete and will become irrelevant.     

Governing Greater China: dynamic perspectives and transforming interactions

The composition of Greater China among the PRC, Hong Kong and Taiwan entails an emerging form of micro governance where an ecological evolution of sub-group interaction and crossover of economic and social activities has been generating a dynamic of change within the East Asian region. The constitution of Greater China by social, economic, political, business and even daily commuting creates some soul searching questions about the possible outcomes of their intense interaction. To what extent has integration been made within Greater China through these interactions? Is China the economic linchpin or does China need to cooperate in one way or another to facilitate the modes of economic development? What are the attitudes and strategies used by Hong Kong or Taiwan when confronted with such an economic cum social entity? More importantly, where, and, under what conditions, will the interactions among the PRC, Taiwan and Hong Kong lead to? In this paper, I am going to use a conceptual model which includes four interactions: integration, interdependence, identity and independence (Four Is) to capture the catalyst of change that collectively entails these intermingled economic, social and cultural elements. People who live in the vast context of this geographical region experience the change. Through daily interaction, they help write the context of change through business activities, investment, migration, trade, culture, academic exchange, political and social development along the Four Is.     

One Formula,Two Experiences: political divergence of Hong Kong and Macao since retrocession

Since the return of Hong Kong's sovereignty to the People's Republic of China, the territory's political development has diverged from that of Macao. The poverty of leadership, state–society confrontations, deinstitutionalization and Beijing's explicit intervention have marked Hong Kong's political development from 1997 to 2004. Since April 2004, the Hong Kong governing style has converged with that of Macao in terms of its pragmatism. Although Macao's political development is characterized by leadership finesse, state–society partnership and institutionalization, its relatively weak civil society and lack of democratic reforms are by no means an attractive ‘one country, two systems’ model to Taiwan; nor does Hong Kong's ‘one country, two systems’ appeal to the Republic of China. Yet, the political corruption and chaos that punctuate Taiwan's democracy have failed to have any positive demonstration effect on Hong Kong and Macao. While the models of Hong Kong and Macao are bound to diverge from that of Taiwan, political development in the two Chinese Special Administrative Regions is gradually converging.     

A “greater China“?

This paper sees “Greater China” as a would‐be reunited China that includes the present PRC, Taiwan, Hong Kong and Macao. The coming into being of a “Greater China” hinges on future domestic politics in the PRC and Taiwan and among the triangle of Beijing‐Taipei‐Hong Kong. It also hinges on American, British, and Japanese policies addressing the current trends of economic integration and political accommodation among the three Chinese entities. Of the external variables, future U.S. politics toward the PRC, and toward the evolution of political exchanges on the Beijing‐Taipei trajectory will be the most decisive. Economic and political developments in the past fifteen years have brightened the prospect of Chinese reunification, but national reunification remains a complicated and protracted process.     

Stock market integration in Hong Kong and China

The Hong Kong Stock Exchange currently ranks sixth in terms of trading volumes in the world while China's fledgling securities industry at Shanghai and Shenzhen Stock Exchanges combined is barely more than 7 years old. With 1997 handover of Hong Kong to China, the securities industries of the two sides ought to integrate into one market. However, the Basic Law governing Hong Kong maintains unchanged British Common Law system as well as the life style of Hong Kong capitalist society, at least for the next 50 years. To understand how the stock exchanges operate under such a situation and how they cooperate in the future is the theme throughout this paper. This paper first describes the market backgrounds separately in Hong Kong and China. It intends to answer how, what and why China needs Hong Kong market and how, what and why Hong Kong, at a different level, needs China's. Then it deals with the interactions or cooperation in the primary market operations. The paper also deals with broader issues such as the RMB convertibility with respect to the integration of the stock exchanges and tries to forecast the future trend in the regional as well as international perspectives. It concludes that as part of the ‘one country, two systems’, the SEHK will be stronger as it has an added value to China's financial window to the world.     

Socio-political Embeddings of South Asian Ethnic Minorities' Economic Situations in Hong Kong

This paper aims to develop a better understanding of the economic situations of South Asian minorities in Hong Kong. A theoretical perspective emphasizing the embedding of economic behavior within social relationships and socio-political processes will be employed. This study will examine how three macro-historical processes, namely, colonization, industrialization and globalization, induce the different configurations of three structural factors, namely, government policy, societal reception and co-ethnic community, affecting the economic wellbeing of South Asian minorities in Hong Kong. The authors argue that Hong Kong Chinese and South Asians coexisted peacefully without major conflict or discrimination during the early colonial age. However, when the colonial government started to develop unique Hong Kong Chinese identity and as the HK Chinese became wealthier, well-educated and successful, ethnic tensions began to occur. In this era of globalization, Hong Kong encounters the serious problem of economic restructuring, and the continuous inflows of migrants from developing countries engender keen competition with lower-class Hong Kong citizens for low-end service jobs. South Asians are no longer enjoying positive societal reception from the Hong Kong Chinese. The co-ethnic community factor for Hong Kong South Asians has not significantly changed since the pre-war years. Their sub-communities' internal resources may secure their economic wellbeing through mutual assistance. However, under a very harsh external environment, whether sufficient resources can still be continuously drawn remains questionable.     

两制与两岸架构下的澳台区际关系

内地、香港、澳门、台湾都是中国的组成部分,但香港、澳门是中国＂一国两制＂框架中的特别行政区,台湾则是中国主权统一、治权分离架构下的特殊地区,澳台关系既有＂一国两制＂之主权统一、高度自治的成份,又有主权统一、治权分离内涵。澳台关系因为澳门被殖民统治、台湾被日本殖民统治、中国内战及主体资格的改变、澳门主权回归中国而分为多个阶段。澳门回归后的澳台关系,既属于一个国家内的＂两区＂关系,但又因治权自立而呈现＂两境（治权境界）关系＂。     

Business as usual: The dynamics of government‐business relations in the Hong Kong special administrative region

This is an attempt to evaluate the implications of Hong Kong's political transition to post‐colonial rule for economic governance in the SAR beyond the ‘Beijing versus Hong Kong’ perspective. The article examines the changing government‐business dynamics in Hong Kong after the reversion by focusing on three inter‐related dimensions: economic ideology; institutional and policy framework; and the new political environment in post‐colonial Hong Kong. By challenging the assertion that Hong Kong is returning to the pre‐Patten colonial order under Chinese management, it argues that economic governance in Hong Kong has always been more complex than has been characterized in the literature. A conceptual framework incorporating the dynamic interplay of domestic and international factors is needed to comprehend the changing nature of government‐business relationships in the SAR.     

Hong Kong redux

There are surprises ahead for both Hong Kong and the China of which it will become a part. This article focuses on how the reversion of Hong Kong will affect the future of politics in both societies. Even though rule by Beijing will change Hong Kong's commercial and political life, China will also be changed by having to deal with the emerging elite of Hong Kong and those persons from the mainland who have been educated in the West. This will not produce democracy in either Hong Kong or China but it will reduce the likelihood that China will become a hegemonic power in East Asia.     

Goodwill and Proactive Exchange Policy: How Taipei manages the cross-strait relations

Dynamic developments within both Mainland China and Taiwan have compounded the uncertainties looming across the Taiwan Strait. Since mid-2000, the cross-strait relationship has evolved into a mixture of four elements: lingering, though less confrontational, political stalemate; growing and even accelerating economic exchanges; rapidly expanding social interactions; and heightened military competition. Since July 1999, four distinct periods have marked Beijing's tactical operations toward Taiwan: military intimidations and verbal threats (9 July‐21 September 1999); verbal threats (21 September 1999‐18 March 2000); passive observation (18 March‐20 June 2000); and the two-pronged campaign (20 June‐present). Beijing's two-pronged campaign is well-coordinated and full-scaled. One soft prong aims at winning 'the hearts of Taiwanese people'. The soft prong includes the following elements: softening of rhetoric without concrete change of behavior; escalated efforts to invite opinion leaders in Taiwan; mentioning preferential treatments for Taiwanese investors on the Mainland; and allowing a dramatically increased number of Mainland visitors to Taiwan since July 2000. On the other hand, the hard prong seeks to put 'appropriate pressure' on Taipei to accept Beijing's precondition of resumption of cross-strait talks, and eventually Beijing's terms on unification. The hard prong includes the following elements: continuing to conduct military exercises with no reduction in frequency and scale; continuing strangulation of Taipei's international living-space with a new twist of diplomatic war in Africa; mobilizing Chinese overseas globally to oppose Taiwanese independence; escalating Beijing's pressure on Washington not to include Taiwan in the theater missile defense program, and not to transfer arms to Taiwan. The new Taiwan government has adopted much continuity in its cross-strait policy from the previous one. The new administration seeks a structured and constructive cross-strait relationship, holds no precondition for the resumption of cross-strait talks, continues to express maximum goodwill, exercises absolute restraint to avoid being seen as provocative, and takes a proactive approach on promoting socio-economic exchanges across the Taiwan Strait.