The Dragon and the Goose (What Becomes of the Golden Eggs?)

Abstract

Abstract : On July 1, 1997, Hong Kong territories will transition to a Special Administrative Region under the People's Republic of China; ending over 150 years of British colonial rule. This transfer of sovereignty is speculated to have profound effects on businesses and industries, foreign and domestic. International and regional political and economic implications are also expected. What is not known is just what these implications will be, how they will effect U.S. Hong Kong relations and more importantly, what changes could occur to the already fragile U.S. China alliance. Economics plays the pivotal role in understanding, evaluating, and speculating on future scenarios. Economic issues such as free trade, open markets, and import/export capability are at the forefront of what motivates Hong Kong, China, and the United States actions. The need for economic stability is the primary driver for China's development of a Special Administrative Region, meant to allow Hong Kong freedom to be economically influential in the international trade community. This very influence will enable Hong Kong to remain a Special Administrative Region, without major controversy, for the next 50 years. Economic growth and well being will continue to be the glue that keeps the United States and China cooperating to resolve future issues.