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Economic Regulation in China (M16 Ch.3), Reasons for Hong Kong Developing…

- - - - Controls on government revenue
        
        :arrow_up: tax rate
        
        Reduces the appetites for investment among enterprises
        
        Slowdown in economic growth
        
        :arrow_down: tax rate
        
        Encourage investment among enterprises
        
        Stimulate economic growth
      - Controls on government expenditure
        
        :arrow_up: expenditure
        
        :arrow_down: expenditure
    - - Control of the money supply
        
        Inject money into the market
        
        :arrow_up: money supply
        
        Enterprises easier access to loans
        
        Stimulate the economy activity
        
        :arrow_down: money supply
        
        Weakens the investment sentiment of enterprises
        
        Slowdown in economic growth
      - Adjustment of interest rates
        
        :arrow_up: interest rate
        
        :arrow_down: amount of borrowing
        
        :arrow_down: interest rate
        
        :arrow_up: amount of borrowing
  - - - Carrying out the policies or measures formulated by the government
    - - Instead of market adjustment
    - - Instead of letting market regulate itself
- - - - Brought capital, techniques & talents
        
        Industrial development
    - - Embargo posed on China by :flag-un:
        
        HK re-export trade blocked
  - - - Manufacturers moved north
        
        Reduce production cost
- - - - Transformation of HK economy
    - - Facilitated development of HK financial sector
    - - HK accounting, financial & lega systems are more well developed than mainland
        
        More confident
        
        Mainland enterprises come to HK to raise funds
  - - - Attracts more investment & trading by multinational corporations
  - - - Connected to major commercial cities in Asia within 4-hour flight
      - 5-hour flight connects to half of the world's population
    - - Fills the empty time slot between the US and Europe's closing hours of exchange
        
        Investors can trade 24 hours uninterrupted
- - - - :arrow_up: flexibility of investment
  - - - Regulates the
        
        Banking industry
        
        Securities & future industry
      - Enforce the supervision of HK financial sector & maintaining the continuity of related policies
        
        Keep internation society's faith in HK financial system
  - - - Prevent & fighting corruption
        
        Fair competition
        
        Investor's interests are fully protected & respected
  - - - Railway system
      - Cargo terminal
      - Ports
      - International airlines
      - Air cargo system
      - Efficient & convenient to travel
    - - Work efficiently & seamlessly at affordable rates
      - Acquire market information quickly & make proper investment decisions
  - - - Biliteracy
        
        Effectively facilitated commercial communication between HK and multinational corporations
        
        Encourage them to come to HK to expand business
      - Trilingualism
    - - :+1::skin-tone-2: IFC
- - - - International trading & financial activities :arrow_up:
        
        Emerges
        
        International financial centre
        
        Large number of cross-border businesses conduct transactions and raise funds across countries
        
        Functions
        
        Borrowing
        
        Currency exchange
        
        Remittances
        
        Fund raising
        
        Deposits & withdrawals
        
        Securities
        
        Futures
        
        Funds
        
        Gold trading
        
        Sales of insurance
        
        Financial consultation
- - - - They wanna set up headquarters or offices at international financial centres
        
        To conduct frequent commercial & financial activities across regions
  - - - Frequent in IFC & large amount of liquidity
  - - - Funds
        
        are limited
      - Commodity markets
      - bonds
  - - - Well-established financial infrastructure & regulatory system
    - - Regulating the banking industry & maintaining the stability of the currency
    - - Regulating the securities and futures industry
    - - Regulating the insurance industry
  - - - :arrow_down: intervention in the operation of the market :arrow_right: facilitate free trading activities
      - Information flows freely :arrow_right: speedily acquire market news & make immediate investment decisions
  - - - High contribution to the Gross Domestic Product (GDP)
        
        ~16.1% GDP
      - Driving force of other industries' development
    - - Financial services
        
        ~60% GDP
      - Tourism
      - Trading & logistics sector
      - Professional services & other producer services
- - - - Creates emplyment directly
        
        140k jobs in 2003
        
        200k jobs in 2013
    - - Their consumption could stimulate the development of the service sectors such as retail sales
    - - Creates employment for other industries indirectly
        
        Facilitates the development of HK economy
  - - - Facilitates business development
  - - - Imposes no controls on foreign exchange & transfer of funds
      - HK financial sector will be quickly affected when there are large amounts of funds flowing freely into and out of HK
        
        A deterioration of the international financial environment would therefore affect various industries & people's livelihoods
      - The government needs to formulate plans in response to the possible situations in order to minimise the damage to Hong Kong
        
        For individual investors
        
        hesitate no more and take risk management to avoid disastrous results
  - - - Innovation & technology
      - Industry
      - Art
      - Education
      - Medical
      - Increase economic risks & generate asverse affects on HK economic growth
      - Create more promising career prospects than others
- - - - Provides more ways for people to conduct various investment activities
        
        Based on their personal risk tolerance and to build wealth
        
        Currency trading
        
        Stock trading
        
        Funds investment
  - - - Manpower mismatch in society
        
        Low-skilled workers engaged in manufacturing in the past cannot meet job requirements
        
        Face emplyment difficulties or unemployment
  - - - They enjoy higher pay
        
        Wealthy
      - Able to build wealth by conducting investments & trading with their own resources
    - - Working poor problem
  - - - 0
        
        Complete equality
      - 1
        
        Most extreme wealth-inqeuality
  - - - Many poorly-educated & low-skilled workers fail to find jobs in the labour market of the knowledge economy
        
        Can only turn to low-paid jobs
        
        Financial hardship
        
        Stressful lives
        
        Family disputes
        
        Blame the government or society for not helping their career transitions
        
        1 more item...
- - - - Promotes the economic development of Hong Kong
        
        Creates additional jobs directly & indirectly
        
        Affects local employment
    - - Creates employment indirectly for other industries
        
        Facilitating the economic development in HK
  - - - Equipped with world-class financial infrastructure
        
        Bridge between mainland & international market
    - - In 12th Five-Year Plan
        
        Support for the relaxation of cross-border capital flow restrictions
        
        China is actively integrating with the world economy
        
        Expansion of the cross-border use of RMB
    - - Became a pilot zone for the use of RMB in the international market for
        
        Settlements
        
        Regarded as a starting point of the internationalisation of RMB
        
        Investments
        
        Funding currency
  - - - Provides various professional services related to financial activities
        
        Accounting
        
        Lega services
- - - - Needs to actively explore diversifies financial products
        
        Bonds
        
        Attract more investors
        
        Commodity futures
        
        Commercial trust funds
  - - - Brazil
        
        Greater impetus will be gained in the local financial market
      - Russia
  - - - Mutually beneficial & would bring more development opportunities for HK financial sector
      - Further more strengthen its position as an IFC
- - - - Tangible goods & intangible properties & capital can be imported & exported without restriction between HK & many countries or regions
      - Reputation of being a world-famous free port
    - - Duty on liquor with high alcoholic strength
      - Only 19 cigarettes max allowed
      - Bringing firearms into HK is prohibited
      - Bringing meat & live poultry into HK is not allowed
  - - - Some goods can be reassembled, processed, stored for some time
        
        Or sold freely as long as the relevant policies & regulations of the country or region are followed
    - - Economic development
      - Prosperity
      - Stability
  - - - Buyers & sellers decide on what, when, & how to buy and sell and at what price
        
        Encourages
        
        Transport industry
        
        Banking industry
        
        Exhibition industry
        
        Insurance industry
  - - - Economy bad
  - - - Total transaction value in wine auctions has soared
        
        Brought in other supporting activities
      - Benefits the wine industry
        
        Helps the development of other industries
        
        Service sector
- - - - The economy grows