Hong Kongs Economy - Background, GDP, Growth Rate - Essay Example

Download file to see previous pages The service sector occupies a larger portion of the economy when compared to the manufacturing sector whose contribution is 2.3% only.

Briefly identify and explain three methods intended to encourage economic growth for the typical firm in Hong Kong.

Currently, various methods are being enacted by the government to encourage economic growth. These include:
Adoption of free trading market policies
Free markets have increased exports resulting in an increased revenue and surplus trading balance that increases the GDP, overall.
Modern technological & labor advancement
Boosting the technological sector has not only resulted in grooming Hong Kong as a financial hub but has also increased the quality & quantity of production which has upgraded the manufacturing sector. Increased adoption of technology has improved the performance of labor, considerably.
Adapting a limited taxation strategy to attract Foreign Direct Investment
Limited-tax policies, upgraded infrastructure, and lenient incorporation procedures have played a major role in attracting Foreign Direct Investment. This capital inflow has not only increased revenue but has also decreased the unemployment level. Foreign Direct Investment is a major contributor to the economy’s growth.

Explain, with appropriate economic rationale, which method would you suggest for the typical Hong Kong firm and why?

Suggestion for a typical company in Hong Kong
Increased technological advancement along with increased skilled labor is suggested.
The adoption of improved technologies and the availability of a skilled workforce will help in boosting the manufacturing and service sector. This will increase economic growth but will give rise to inflation. However, if economic growth is encouraged by productivity promotion, by the supply side of the economy, then there will be an increase in aggregate supply as well as aggregate demand resulting in non-inflationary growth.

Briefly describe Singapore’s economy (background, GDP, growth rate, etc.)

Singapore is an open, trade-oriented economy that has a corruption-free government, a skilled workforce, and a highly developed infrastructure with a good manufacturing sector mainly led by electronics and biomedical manufacturing industries.
• GDP (2009): $182.23 billion
• GDP real growth rate (according to IMF 2009): negative 1.3%
• GDP real growth rate (according to CIA World of fact book 2010): 14.6%
• Per capita GDP (2009): $36,537 ...Download file to see next pages Read More