Wednesday 24 June 2009

Economic relationship between Hong Kong and other countries

(too much tables on relationship between HK and mainland, included in the .doc. verison) Division of labour refers to the production of good or service is divided into different production stages and each worker specialises in one or more stages. International division of labour Different countries/regions specialise in different production stages – with improvement in communication and transport facilities, business man act as the middlemen to separate production into different stages. Different countries/regions specialise in producing different products – This country/region can produce these products or services at a lower cost than others. International trade refers to the buying and selling of goods and services between different countries and regions. It has the following advantages: 1) Acquire resources – This satisfies the demand of residents and supports industrial and commercial development. e.g., HK acquire raw materials through importing. 2) Improve living standard – Through international division of labour, countries/regions can engage in economic activities that they’re good at, and exchange good and services they need, and raise quantity and quality of output, thereby improving people’s standard of living. (e.g. HK imports car to give residents more transportation options) 3) Earn foreign exchange – through international trade, manufacturers earn foreign exchanges, they’re used to purchase raw material or for investment, and further promote Hong Kong’s economic development. 4) Provide job opportunities – International trade provides job opportunities. 5) Facilitate international understanding and exchange – through economic corporation, countries can get know of others’ strengths and needs and strengthens the link between HK and other countries, and promote mutual understanding and exchange of technology. Hong Kong participate to international organizations to foster trade liberalization and international economic corporation, and use the name “Hong Kong, Chine” according to the Basic Law. World Trade Organisation (WTO) – set up multilateral trade system; promote liberalization of international trade and conduct trading business. Asia-Pacific Economic Cooperation (APEC) – Regional forum for senior government official to discuss issues on promoting economic growth and cooperation, and trade and investment as well. Pacific Economic Cooperation Council (PECC)- Promote active collaboration on matters of common interest. Organisation for Economic Co-operation and Development (OECD) – Promote economic development among members and assist development on industrialized countries and emerging countries.

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