Economics unit 4 DB

Economics Unit 4 DB

Hong Kong is one of the flourishing cities in terms of economic growth In fact , Hong Kong has implemented a free-trade pact because of its favorable location as a trading center , macroeconomic policies implemented , reforms and the certainty in the success of the pact Although it may be endangered because of the implementation of protectionism from main trading partners , it may still be able to retain growth . Nevertheless , the future of the economy of Hong Kong is nowhere near declination because of their restricting the government expenditure

to what the revenues can offer keeping in mind fiscal balance and the budget should also be maintained proportional to the GDP ( IMF praises Hong Kong economic policies

The main factor of the development of China and Singapore are the implementation of policies regarding to their strong sector exportation . Both countries have small domestic markets and the agricultural sector is weak . The only strong point of both countries is the harbors in the country

Both countries were obtained by the British in the early 19th century as a trading hub . Hong Kong was set to be the trading center for China and Singapore was utilized to challenge the existing Dutch monopoly in the South-East Asian naval market . Consequentially , both countries prospered because of the trading activity going on and later on also embarked on labor-intensive production for the global market during the 1950s for China and only in 1965 for Malaysia (Tan , 2002

The strategy behind the economic growth of Singapore is the open trade and the investment environment in the country . It is also corrupt-free pro-business regulatory structure , stableness in the political status public outlay in infrastructure , high reserves , and rational fiscal management which protects the reserves of the country very well efficient management of labor leading to no strikes occurrence and reasonable taxes for foreigners . There is also a compulsory saving fund for both employees and employers considered as a form of social security ( Singapore economic policy and trade practices , 1994 . On the other hand , Hong Kong economic strategies are as follows : free market generally laissez-faire policies which induced great growth in the economy , little rate of unemployment , increasing wages and one of the areas which have the highest per-capita GDP levels globally . Despite the increasing excise , properties and business taxes , it still generated sufficient revenue for the government . Also , the personal income tax is maintained at 15 ( Hong Kong : 1994 Country report on economic policy and trade practice , 1994

In case that the developing country has a weak internal economic activity , openness in investments from foreigners , both an asset of Singapore and China , can greatly help establish economic growth . In connection with openness in investments , reasonable taxes for foreigners can be helpful . However , the exploitation of the industry in the country may pose as a threat for being lax in investments . Since Singapore and China are already established countries , their openness in investments may be secured

Also , the stableness of the political structure in Singapore can...