Kong's Role Research Articles

NFT and Art Finance in Hong Kong: Overview and New Opportunities

As the traditional art market faces the challenge of transformation under the wave of digitization, Hong Kong's role as a “super-connector” will continue to play a significant role in the era of fully embracing virtual assets. Utilizing both documentary and empirical research methods, the article reviews the history and connection between NFT and art finance events, aiming to explore the possibility of their mutual empowerment and the future outlook of their synergistic development in Hong Kong.

Assessing Hong Kong as an International Financial Centre

By the end of the 20th century, Hong Kong had emerged as one of the world's major international financial centres. Today, while finance remains central Hong Kong's future, it is facing unprecedented challenges, in China, in the region and globally. In the context of China, the continuing process of economic reform and financial development raises many opportunities but at the same time brings into question Hong Kong's traditional role as the primary intermediary between China and the global financial system. At the same time, the global and European financial crises have raised fundamental questions about finance, exchange rate systems, the global position of China, and the future role of the renminbi, including Hong Kong's role therein. Reflecting the centrality of finance Hong Kong, Article 109 of the Hong Kong Basic Law, ascribes the Hong Kong Government an obligation to provide an appropriate economic and legal environment for the maintenance of the status of Hong Kong as an international financial However, Hong Kong has yet take a comprehensive approach this obligation or consider its strategic and practical implications. While the creation of the Hong Kong Financial Services Development Council (FSDC) is a very important step, more remains be done. There is no question that Hong Kong has developed impressively and is performing very well as an international financial centre. This is clear and well established and is thus not the central theme of this report. Rather, this report seeks consider areas where Hong Kong could do better. Thus, the central theme of this report focuses on the need for a more strategic approach Hong Kong’s future as a financial centre, based on an analysis of academic and policy research and current expectations of regulatory and commercial practice. This report is the first of a major research project on Enhancing Hong Kong’s Future as a Leading International Financial Centre, funded by the Hong Kong Research Grants Council Theme-based Research Scheme. Throughout this report (and in the two others which will follow in 2015 and 2017) our analysis seeks answer one specific question: What policies and legislative/regulatory changes will maximise the long-run, risk-adjusted value of financial activities Hong Kong, given that other international financial centre policymakers react strategically such policies? In addressing this issue, the report provides 21 recommendations focusing on five major areas: The first grouping addresses methods help improve the way the public contributes financial sector policymaking. The second group proposes ways that the directing minds of Hong Kong’s financial and commercial organisations can participate more actively in ensuring Hong Kong’s regulators adopt policies which actually improve Hong Kong’s competitiveness among international financial centres (rather than just copy international best practice). The third grouping looks at ways broaden cooperation with China. The fourth grouping looks at ways diversify Hong Kong’s financial sector access opportunities beyond those presented by the Mainland. The final grouping of recommendations discusses ways of improving the way Hong Kong’s regulators work help maximise the risk-adjusted returns the financial sector as a whole.

Noise from railway expansion under close watch

New railway projects are underway in Hong Kong, not only to strengthen transport connections across different districts, but also to provide a high-speed link to enhance Hong Kong's role as the southern gateway to Mainland China. While the new railway systems are expected to provide the much-needed travelling facilities, their construction would inevitably generate noise. These projects are usually subject to tight time-frames and quiet technologies would have to be used when night-works are critically wanted for meeting the deadlines. That major parts of those new railways are constructed in densely populated areas would also increase the technical difficulty in meeting stringent noise criteria. This paper will describe the legislative framework in controlling the construction noise impact in particular from mega railway projects, including (i) various issues considered at the early planning stage by identifying potential noise impacts and recommending effective noise mitigation measures; (ii) the permit systems that govern the construction phase of the projects; and (iii) a transparent monitoring and audit scheme, in order to safeguard the well being of the people being affected.

Hong Kong's Role in Mainland China's Logistics Industry

The importance of Hong Kong's role as fnancier, coach, and physical gateway in the development of container ports and highways in China is diminishing. However, the development of the global supply chain transcends physical boundaries: Hong Kong adapts continuously, and is now taking on bridging and differentiating roles in third-party logistics services.

The Role of Hong Kong in Mainland China's Modernization in Manufacturing

We examine Hong Kong's role in the modernization of manufacturing industries in Mainland China and its province of Guangdong. Hong Kong's role has evolved from trading intermediary to low-cost mainland manufacturer to provider of key business, fnancial, and supply chain services.

Financial Regulation in Hong Kong: Time for a Change

The global financial system experienced its first systemic crisis since the 1930s in autumn 2008, with the failure of major financial institutions in the United States and Europe and the seizure of global credit markets. Although Hong Kong was not at the epicentre of this crisis, it was nonetheless affected. Following an overview of Hong Kong's existing financial regulatory framework, the article discusses the global financial crisis and its impact in Hong Kong, as well as regulatory responses to date. From this basis, the article discusses recommendations for reforms in Hong Kong to address weaknesses highlighted by the crisis, focusing on issues relating to Lehman Brothers 'Minibonds.' The article concludes by looking forward, recommending that the crisis be taken not only as the catalyst to resolve existing weaknesses but also to strengthen and enhance Hong Kong's role and competitiveness as China's premier international financial centre.

Financial Regulation in Hong Kong: Time for a Change

AbstractThe global financial system experienced its first systemic crisis since the 1930s in autumn 2008, with the failure of major financial institutions in the United States and Europe and the seizure of global credit markets. Although Hong Kong was not at the epicentre of this crisis, it was nonetheless affected. Following an overview of Hong Kong's existing financial regulatory framework, the article discusses the global financial crisis and its impact in Hong Kong, as well as regulatory responses to date. From this basis, the article discusses recommendations for reforms in Hong Kong to address weaknesses highlighted by the crisis, focusing on issues relating to Lehman Brothers “Minibonds.” The article concludes by looking forward, recommending that the crisis be taken not only as the catalyst to resolve existing weaknesses but also to strengthen and enhance Hong Kong's role and competitiveness as China's premier international financial centre.

An Evaluation of the Intermediation Role of Hong Kong in Chinese Foreign Trade

Two different data sources can be used to study Hong Kong's role in intermediating China's foreign trade. One is the bilateral trade statistics between Hong Kong and the Chinese Mainland reported by National Bureau of Statistics of China, and the other is the bilateral trade statistics published by Census and Statistics Department, Hong Kong. The corresponding statistics are not comparable to each other because of the different statistical criteria adopted by each source. Hong Kong's intermediation role has been declining since the mid-1990s. A major long-run factor contributing to the decline is the structural change in Hong Kong's industry led by Hong Kong direct investment in China. The Chinese currency appreciation will have a further negative effect on Hong Kong's intermediation role. Hong Kong's off- shore trade has increased rapidly in recent years, but its impact is not strong enough to offset the declining share of Hong Kong in Chinese foreign trade.

Intermediaries in Entrepôt Trade: Hong Kong Re‐Exports of Chinese Goods

In this paper, we examine Hong Kong's role in intermediating trade between China and the rest of the world. Hong Kong traders distribute a large fraction of China's exports. Net of customs, insurance, and freight charges, re‐exports of Chinese goods are much more expensive when they leave Hong Kong than when they enter. Hong Kong markups on re‐exports of Chinese goods are higher for differentiated products, products with higher variance in export prices, and products sent to China for further processing. These results are consistent with the view that traders resolve informational problems in exchange. Additional results suggest that traders price discriminate across destination markets and use transfer pricing to shift income from high‐tax countries to Hong Kong.

US Permanent Normal Trade Relations with China: What is at Stake? - A Global CGE Analysis

The China-US trade relation has been plagued by the threat of MFN revocation in the past 10 years and will continue to be haunted by similar threats. This paper tries to assess the stakes of the PNTR in the US-China trade relation, by simulating the removal of MFN with special attention given to Hong Kong's re-export trade and MFA. It has the following findings: (1). Revoking China's MFN in the US improves the welfare of other regions at the expense of the US, China and Hong Kong; (2) The existence of MFA provides the US an opportunity to buffer the damage by relaxing the quota restrictions on textile and clothing on its part, but the effectiveness of this option is diminishing with the phase-out of the MFA under Uruguay round agreement; (3). Ignoring Hong Kong's role in US-China trade over-states the damage done to the US.

ECONOMIC INTERACTIONS: CHINA VIS‐A‐VIS HONG KONG

Hong Kong's role has been integral to China's unprecedented economic growth, but privatization ranks first in importance. Another key factor is Beijing's putting economic reform before political reform. Giving democracy to a society in chaos likely makes matters worse. Hong Kong and China both have profited from their partnership. As China has opened up to allow transformation into a market economy, Hong Kong has provided informational impetus for change, a capitalist model to copy, and middleman functions for China to participate in outside‐world goods and financial markets. The collapse of Communism in China and elsewhere has increased the supply of cheap labour perhaps by 2 billion. Manufacturing countries with expensive labour and high cost welfare programmes—such as those in the United States, Canada, and Europe—will have difficulty. Capitalists in these countries will do well by investing abroad but not in their own countries. Though wrong in detail, the factor price equalization theorem—that international movement of goods and international movement of factors of production are equivalent—basically is correct. If China continues moving toward privatisation and joining the international community, it will become fiercely competitive, and prospects will be bright for both China and Hong Kong. However, China's recent drift from capitalism clouds those prospects. Fundamentally, three kinds of rights systems exist: (i) a capitalist system, with well defined private property rights, protected by law, where control of resources is based on ownership; (ii) a hierarchical system, such as Communism, where control of resources is based on one's rank in the hierarchy; (iii) a system of corruption, where control of resources is based on bribes and patronage. China rapidly had been making a transition from the second system to the first but recently seems to have derailed into the third. In any case, Communism's collapse is one of the great events in human history. The hero of that event is Deng Xiaoping—not Gorbachev, nor Thatcher, nor Reagan. Hong Kong, by contributing significantly to China's capitalist movement, has led the Communist world to change.