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.     

Hong Kong joins the National People's Congress: A first test for one country with two political systems

Before its reversion to Chinese sovereignty in July 1997, Hong Kong was preoccupied with safeguarding its autonomy while China insisted on keeping separate the two political systems of Hong Kong and the mainland. Toward these ends, everyone focused on Hong Kong's own governing councils and ignored its future status within China's congress system. Not until the December 1997 deadline approached for naming Hong Kong's delegation to the March 1998 meeting of China's new Ninth National People's Congress, did the full implications of this oversight become apparent. Hence, the institutional channels whereby the two systems must interact are actually rooted in the reforming structure of China's congress system. Delegate selection in Hong Kong revealed a new ‘bridging’ function whereby the two legislative systems are linked through the old organization tactic of concurrent membership. The bridging function also illuminates previously unheralded features of Hong Kong's new post‐1997 government, as a replica and appendage of China's people's congress network.     

WTO and China's Financial Services Sector

Financial services, particularly securities markets, insurance and commercial banking, have played a crucial role in China's post-1978 economic reforms. China has so far established a market structure and a legal framework, and has a growing understanding of how financial services operate in the modern world economy. We will review China's progress in financial services reforms over the last 22 years, describe the commitments China has made to gain WTO entrance, and then evaluate the potential benefits and costs to China's financial sector of WTO accession. We conclude that even with the substantial challenges presented by greatly increased post-WTO foreign competition, China will benefit from the WTO because of a number of factors including a growing pool of well-trained personnel, lessons learned from domestic and foreign development experiences, increasing Chinese economic strength, and continual advancement of China's financial infrastructure.     

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.     

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.     

China's Sovereign Wealth Funds: origins,development, and future roles

China has established two of the world's newer large sovereign wealth funds (SWFs): the official China Investment Corporation (CIC), and the non-official and less transparent State Administration of Foreign Exchange (SAFE) Investment Company (SIC). Both provide alternative investment opportunities for China's exploding foreign exchange reserves, at US$2.4 trillion at the end of 2009, the largest in world history. This paper will address how China has accumulated its huge and growing foreign exchange reserves, and what roles these reserves, until 2007 managed only by the State Administration of Foreign Exchange (SAFE), have played in the establishment and development of China's two new SWFs. We will look specifically at why China's foreign exchange reserves have developed, and how the new SWFs are a part of broader efforts to provide investment alternatives for China's ballooning foreign exchange surpluses, particularly in light of the inflow of ‘hot’ foreign speculative funds. We will then point out some of the difficulties for China's financial officials of SWFs as they try to pursue multiple and sometimes competing goals, set by boards of directors representing different bureaucratic and economic interests, all within the context of a general lack of transparency and a rapidly growing economy. Finally, we will present our conclusions about the future roles of the two SWFs as well as of the policies being developed to decentralize foreign exchange reserve holdings while at the same time not slowing the growth of China's foreign trade surpluses, nor its foreign direct investments, nor its overall economic growth. We will also examine the effects of US-promoted Chinese currency appreciation on the future of China's foreign exchange reserves and its sovereign wealth funds.     

MARKET WATCH

Cooling the Rush China has pushed all the buttons to tame the red-hot property market where price surges are bringing worries of a bubble burst to a boiling point.     

How Do Americans Evaluate China's International Responsibility? An Empirical Assessment

China in recent years has been asked by other major powers to take a greater share in international responsibility in response to the rise in China's national capability. Negative perceptions about how China is dodging its international responsibility exist not only among policy makers around the world, but have spread to worldwide mass publics, especially across the American people. In this article, we apply the dataset from the ‘Americans’ Attitudes toward China Survey' (AACS) to investigate what the American public think of China's international responsibility and which factors explain the varying evaluations from different theoretical perspectives. The results indicate that Americans' negative evaluations of China's international responsibility are associated with poor ratings regarding China's fulfillment of its domestic obligations and apprehension regarding China's potential threat, but has little to do with China's international behavior. To reduce these negative evaluations, China needs to improve its human rights conditions, give people more political rights, and convince the American public of the benevolence of its ascending power. In addition, persistent efforts toward soft-power construction are also very important since Americans who are interested in Chinese culture or knowledge tend not to think that China is dodging its international responsibility.     

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.     

‘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.     

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.     

Emergence of the Greater China Circle Economies: Cooperation versus competition

The integration of the so-called greater China economies among Mainland China, Taiwan, and Hong Kong is one part of the global trend of regionalism. The significance of integration in terms of foreign trade and foreign direct investment demonstrates not only rapid growth but also diversity, ever since Mainland China pursued her open door policy of economic reform in 1979. For instance, the combined volume of Hong Kong and Taiwan accounted for as much as 74.1% of Mainland China's capital utilization in 1993, which in turn contributed to the rapid economic growth of Mainland China over the last two decades. The membership of Mainland China and Taiwan to the WTO, as expected by the end of 2001, will facilitate a more official arrangement of intergovernmental coordination within these Triangle Economies. However, the government of Taiwan will continue to evaluate the cross-strait relations in the context of the nation's overall political and economic security as long as the government of Mainland China does not renounce the use of military force against Taiwan.     

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.     

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.     

Rethinking the Chinese World Order: the imperial cycle and the rise of China

Looking to China's imperial history to understand how China as a great power will behave in the twenty-first century, some scholars have rediscovered the concept of the traditional Chinese world order coined by John K. Fairbank in the 1960s in the reconstruction of the benevolent governance and benign hierarchy of the Chinese Empire, and portrayed its collapse as a result of the clash of civilizations between the benevolent Chinese world order and the brutal European nation-state system. China was forced into the jungle of the social Darwinist world to struggle for its survival. As a result, China's search for power and wealth is to restore justice in an unjust world. China's rise would be peaceful. This article finds that while imperial China was not uniquely benevolent nor uniquely violent, the reconstruction of China's imperial past to advance the contemporary agenda of its peaceful rise has, ironically, set a nineteenth century agenda for China in the twenty-first century to restore the regional hierarchy and maximize China's security by expanding influence and control over its neighborhoods.     

Foreign banks in the People's Republic of China

Many foreign banks are attracted to the PRC economy, as a result of its continuing economic growth and financial liberalisations. This paper provides an empirical analysis of the factors contributing to this development and of the features of those foreign banks choosing to enter this market. In addition, a survey questionnaire permits an assessment of the attractions and weaknesses of the PRC banking market as perceived by foreign banks. It has been shown that large, financially sound foreign banks have helped to stimulate trade and investment in the PRC. However, China's restricted movement of capital and inadequate legal framework has reinforced the need for international banking services from Hong Kong.     

China's Economic Diplomacy towards the Arab Countries: challenges ahead?

Since the outbreak of the Arab revolts in late 2010, China has adhered to its ‘business-first’ economic diplomacy towards the Arab countries, a policy driven by China's ongoing geoeconomic interests. The ten-year-old China–Arab States Cooperation Forum serves as the nucleus for China's economic diplomacy in the region. The Chinese authorities have also initiated interagency coordination and central–local governments' power sharing in order to pursue this diplomacy successfully. However, while its economic diplomacy may be evolving, China, unlike what it has achieved in Black Africa, seems to have failed to develop strategic, political and cultural exchanges with its Arab counterparts. The intertwined geopolitical and geoeconomic factors that have emerged since the Arab revolts might make it harder for China to reap economic benefits while shelving political entanglement to sustain this economic diplomacy in the longer run.     

As a Hundred Television Formats Bloom,a Thousand Television Stations Contend

This paper looks at the growing trend towards television format adaptation as an industry development strategy in China. As China's television industry professionals imagine a commercial future, this vision is tempered by the reality of a deficit of quality content. Program schedules exhibit limited variety and are dominated by cheap variety show formats, royal court television dramas, game shows, and news. In search of new ways to stimulate audiences, producers have looked outside China to formats successful in Taiwan, SAR Hong Kong, Japan, Europe and the US. The localization of foreign programs represents a more useful experiment for China's domestic industry than the importation of finished programs. Unlike finished programs the format can be 'filled' with culturally specific content, and where licensed co-productions ensue there is the potential for added value in terms of technology transfer. I argue, however, that the strategy of format adaptation is a short-term solution to program development that is unlikely to stimulate a creative media-based economy.     

Reform ideology,political commitment and resource transfor: An alternative model for the explanation of China's economic reform∗

One of the most intriguing ironies of our era is the result of recent changes in the former communist world. Whereas the “democratizing” Russia and Eastern European countries are caught in repeated political as well as economic crises, the “unrepentant” authoritarian China and Vietnam are seeing their economies booming and more market‐oriented. Such an irony poses many important questions. One of the questions is how China has managed to get where it is. This paper represents an attempt to address this question. Firstly, it will briefly outline where economic reforms have brought China so far. Secondly, it will discuss two popular models used to explain China's economic performance. And finally, it will develop an alternative model that combines politics and economy in accounting for China's reform experience.     

Information Exchange,Headquarters Economy and Financial Centers Development: Shanghai,Beijing and Hong Kong

Over the past several years, China has consistently maintained economic growth and at the same time emerged as a new global giant in the international arena, despite the distractions caused by the global financial crisis, which was triggered by the US Sub-prime Mortgage Crisis of 2007 and the recent bond crisis that emerged in the European Union in 2011. Concurrent with China's growing interaction with the global economy and robust growth of its domestic economy, competition for the status of national and even international financial centers in the region has become fierce. This study focuses on a ‘local’ examination of internal conditions for the emergence and growth of Chinese financial centers over the next 10–20 years. Cities contending for the top slot in the roster of Chinese cities, like Beijing, Shanghai and Shenzhen, are striving to become international financial centers and are trying to compete with Hong Kong. This study investigates the development potentials, future prospects and division of functions between different financial centers within China regarding Hong Kong, Beijing and Shanghai, with special reference to the role of information and locations of MNCs' regional headquarters.