Hong Kong: Economic Development, Change of Sovereignty and Crisis of Southeast Asia

On July 1, 1997, under the “one country, two systems” formula, Hong Kong rejoined Chinese sovereignty amid a climate of optimism, economic stability and development. Meanwhile, the economies of the region were showing problems and symptoms that the growth attained in previous years could not be sustained, were beginning to exhibit the crisis that could affect such a solid economy as that of Hong Kong. The efficiency and competitiveness of the economy, however, added to the legal system and the Hong Kong government’s determination, made the effects of the crisis slighter than in the rest of the region’s countries. In contrast to them, the currency was not devalued in Hong Kong, and the economic adjustments were made quickly, although the real-estate, tourist and export sectors were seriously affected. The success of Hong Kong’s economy is based mainly on a government participation that is restricted to providing a transparent legal system in which regulations are applied uniformly and consistently, and on adequate infrastructure. Jarque Uribe concludes with a deliberation on the lessons that developing countries like Mexico must learn from the South East Asian crisis. He also highlights the advantages of the freemarket, a product of globalization.