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Economic Integration - Hong Kong and Mainland China

 


             First and the foremost, Individual Visit Scheme can be used as an example to discuss the impacts. In 2003, after the SARS broke out, the economy of Hong Kong had collapsed at that time. The purchasing power of Hong Kong people was very low and the housing property market had been blown. For the sake of recovering the economy, the Hong Kong government implemented the Individual Visit Scheme. With this scheme, Mainlanders are allowed to visit Hong Kong freely, which implies the economic integration between Hong Kong and Mainland. On the other hand, many Mainland people gained more chances and interests in purchasing goods in Hong Kong regions and this leads to the increasing capital inflow to Hong Kong. As the Mainlanders are used to visit Hong Kong through tourism, the retail industry in Hong Kong is stimulated with the accelerating export of goods and services. This brings positive impact to the growth of Hong Kong GDP. The growth of GDP is the priority for Hong Kong economic development. Hence, in the economic aspect, the economic integration helps to expand the Hong Kong market to the mainland region. More mainlanders are able to consume in Hong Kong, which fosters Hong Kong economic development.
             Secondly, because of the Shanghai-Hong Kong Stock Connect, the cooperation between the markets of Hong Kong and Shanghai could be strengthened; the position of international financial centre of two cities could be consolidated as well. It is a reciprocal policy to both of Hong Kong and Mainland. Without a restricted stock market, Hong Kong people and mainlanders can speculate their capital. Hong Kong is a well-known stock market in the world, which provides a fundamental ground for mainland entrepreneur to invest. In this way, both Mainland and Hong Kong can gain the benefits. For the Mainland, the mainland companies can raise their funds in Hong Kong market; Hong Kong can absorb more non-local capital and favors the investment expenditure, which is included in the calculation of Hong Kong GDP.


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