TY - JOUR
T1 - The impact of the China factor on the pre-1997 Hong Kong economy
T2 - A macroeconometric analysis
AU - Ma, Yue
AU - Tsang, Shu-Ki
AU - Tang, Shu-Hung
N1 - Funding Information:
This paper is another result of an ongoing project on the macroeconometric modelling of the economic integration process among Mainland China, Hong Kong and Taiwan, which was initially financed in 1995 by a grant of the British Council under the UK-Hong Kong Joint Research Scheme. Given additional funding from Hong Kong and the UK, we have succeeded in constructing an open-economy econometric model of China (Tsang & Ma, 1997). In summer 1996, the Research Grants Council of Hong Kong kindly provided a grant to enable the continuation of the project under the direct responsibility of Tsang Shu-ki and Tang Shu-hung for three more years. The present paper represents the findings of the Hong Kong model. All past and present financial supports, as well as the very competent research assistance of Miss Florence Wan Lai-shan, are gratefully acknowledged by the authors. They also wish to thank two anonymous referees of this Journal for useful comments and suggestions.
PY - 1998/1
Y1 - 1998/1
N2 - After the reunification of Hong Kong and China in 1997, Hong Kong is assured of a high degree of autonomy by the Basic Law. However, there remains some worry about the territory's economic viability and financial stability. Whether Chinese policies and China's remarkable growth momentum could continue to boost Hong Kong's prosperity has become an issue of concern. As the Chinese economic reform proceeds, the 'China factor' has been generating an increasing influence on the performance of the Hong Kong economy. Unfortunately, there have been very few rigorous quantitative analyses of this rapidly evolving development. To fill the gap, we have constructed a macroeconometric model of Hong Kong which takes into detailed account the linkages of the two economies including trade and capital flows. Estimation of the model incorporates error correction techniques to establish short-run dynamics and long-run equilibria. Our findings have identified crucial channels through which the 'China factor' has exerted impact on the Hong Kong economy. It is shown that the factor was not overwhelming up to the recent past, in terms of its stabilizing effects in the financial market and its stimulation on growth, although its influence may rise in the post-1997 era.
AB - After the reunification of Hong Kong and China in 1997, Hong Kong is assured of a high degree of autonomy by the Basic Law. However, there remains some worry about the territory's economic viability and financial stability. Whether Chinese policies and China's remarkable growth momentum could continue to boost Hong Kong's prosperity has become an issue of concern. As the Chinese economic reform proceeds, the 'China factor' has been generating an increasing influence on the performance of the Hong Kong economy. Unfortunately, there have been very few rigorous quantitative analyses of this rapidly evolving development. To fill the gap, we have constructed a macroeconometric model of Hong Kong which takes into detailed account the linkages of the two economies including trade and capital flows. Estimation of the model incorporates error correction techniques to establish short-run dynamics and long-run equilibria. Our findings have identified crucial channels through which the 'China factor' has exerted impact on the Hong Kong economy. It is shown that the factor was not overwhelming up to the recent past, in terms of its stabilizing effects in the financial market and its stimulation on growth, although its influence may rise in the post-1997 era.
UR - http://www.scopus.com/inward/record.url?scp=0040934658&partnerID=8YFLogxK
U2 - 10.1080/026921719800000027
DO - 10.1080/026921719800000027
M3 - Journal article
AN - SCOPUS:0040934658
SN - 0269-2171
VL - 12
SP - 89
EP - 106
JO - International Review of Applied Economics
JF - International Review of Applied Economics
IS - 1
ER -