Briefly explain the economies of Singapore and Hong Kong - Essay Example

Briefly explain the economies of Singapore and Hong Kong Introduction The brief introduction of Singapore and Hong Kong is discussed underneath: Both are small administrative states and financial centres for warehousing, shipping, finishing, MNC headquarters, banking and finance, hotels, and other services of the SE Asian region. Both are similar on a point that they get freedom from the rule of British government. In addition, both are mainly Chinese societies. Despite displaying considerable differences in their politico-economic structures both small city-state economies are capitalistic by kind along with some other similarities. Singapore Introduction It is a rapidly growing small administrative state and financial centre of the 4 million people located in SE Asian region. It remained British colony until 1959. The role of Government The government of Singapore plays its role as a co-ordinator, partner, and a monitor. It is responsible for infrastructural and educational developments. In addition, the rents and real estate sector is also controlled by the government. The government follows open trade policy and employs the tool of selective tariff to stabilize its exchange rate(S$/US£ rate). The government also conducts and sets rules for the administration of the manufacturing and service sectors like media to a certain extent. In this way, it is a controlled laissez faire economy. Politico-economic Structure The political structure of Singapore changed in 1963 when it made collaboration with Malaya and Sabah Sarawak to form Malaysia. The association tore up when Malaysia expelled her for various ethnic and political reasons. One of the main ethno-politico reasons behind the eviction of Singapore was its Chinese majority under the Peoples Action Party (PAP). The PAP was led by Lee Kuan Yew which was opposite to the Malaysian’s. After 1965 Singapore follows a basic DSM growth strategy which is the strategy under the direction of the PAP. The growth stages of Singapore after 1965 are summarized in the points given below: It became centre for US servicemen from the Vietnam War. The sector of tourism grew rapidly along with the increase in numbers of hotels and offices. A fast manufacturing of high to mid tech electronics along with rapid progress in light industrial manufacturing. The service sector started growing after the establishment of many headquarters of multinational companies. The number of financial centres increased swiftly which is evident from the fact that the regional headquarters of approximately 170 foreign banks were established in Singapore. In finance sector a big leap came with the establishment of Singapore International Monetary exchange (SIMEX) in 1984. The entrepot trade of Singapore also showed some progress after 1963. Honk Kong Introduction The end of first opium war brought Hong Kong under the rule of the British government during 1840/41. Later in 1898 – 99, the British government acquired Honk Kong on a 99-year lease in order to extend the territory of Hong Kong. A big change came in the administration of Hong Kong in 1997 when it got independence from the British rule and reverted back to China’s authority as Hong Kong Special Administrative Region (HKSAR). Honk Kong after Independence The politico-economic development of mainland China can be seen in the post-war economic development of HK which are discussed underneath: Chinese Communist Revolution came in 1949. Sino-Soviet Split occurred in 1958. The 1967 pro-Communist riots threatened the administration of Hong Kong seriously after which the colonial government started modernizing the bureaucracy. This was done to strengthen the relation between government and society. By late 1970s various industrial advisory boards and government-instigated trade were formed in order to institutionally reinforce the relation between the industry and the government. In 1978 ‘Two Systems, One Country’ Policy initiated under Deng Xiaou Ping. Finally the occurrence of HKSAR in 1997. Present situation of Hong Kong The population of Hong Kong was ¼ million in 1949 that has been rose to approx. 6 million today. The nature of the development of Hong Kong is similar to that of Singapore in following ways: The entrepot trade grew. Hong Kong became an entrepôt trading center that deals in the importation of manufactured goods from the west to Chinese market and in the exportation of Chinese products in the markets of the West. As the result of the unceasing political and economic instability during the colonial period, the majority of Chinese started migrating to Hong Kong. This change in the population composition of Hong Kong brought economic and political stability in the newly independent territory of Hong Kong. The time of 1990s was the transitional period in Hong Kong because the positive non-interventionism was putting aside to support a new approach of consensus capitalism. The reason behind this was to wide the societal and political enclosure. The numbers of headquarters of multinational companies are approximately 160 which showed a drastic increase. Regional financial centres like Hong Kong Stock Exchange grew at faster rate. The sectors of tourism hotels and manufacturing showed a rapid growth. Main differences with Singapore The central government of Hong Kong is weaker as compared to the Singapore’s. One of the primary differences between both small entities is that the domestic economy of Hong Kong is greatly ruled by private enterprises. The private conglomerates not only control most of the capital intensive sectors but also have a great political representation in the legislative body. Contrarily, the government of Singapore control the capital intensive sectors of the state to a certain extent. The above stated difference defines the effectiveness of competition law systems in both territories. This is so because varying political structures greatly influence and defines the structure of the enforcement agencies. Another main difference between both jurisdictions is the number of clients. The People’s Action Party of Singapore took a crucial decision of state intervention in the economic development of the state in 1960s. This assessment later shaped up the economic expansion of Singapore. The state intervention of Singapore government was not absolute but controlled in nature. Conclusion In few words, the difference between the numbers of the trading partners of the both jurisdictions is a great edge of Singapore over Hong Kong. The mainland China is the only major punter of the Hong Kong whilst EU27, US, Indonesia, Malaysia, and Japan, etc are the main trading partners of Singapore. References Mark, M. 2009, ‘The Lion City and the Fragrant Harbor: The political economy of competition policy in Singapore and Hong Kong compared’, Antitrust Bulletin; Fall2009, vol. 54, no. 3, pp. 517-577. Cheung, Anthony B. L. 2008, ‘The story of two administrative states: state capacity in Hong Kong and Singapore’, Pacific Review; May2008, vol. 21 no. 2, pp. 121-145. Read More