Abstract
Hong Kong is closely linked to both China and the United States. This article discusses Hong Kong's economy and the effects that Sino-American relations will have on Hong Kong as the new Special Administrative Region of the People's Republic. It provides a critique of both the pessimistic and the optimistic views of Hong Kong's future: Hong Kong will prosper because China will ensure its success, or Hong Kong will suffer from China's political control. Analysis of the economic factors suggests that the territory is likely to fare quite well in the years following the transition. Nonetheless, the potential effect of political changes in China, the possibility of troubles in Sino-American relations, and the difficulty of reforming China's economy and integrating it into that of the world are some of the factors suggesting that the long-term outlook appears less favorable.
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