Hong Kong

A meeting of capitalism and communism

The Basics

Special Administrative Region (SAR) Approx. 1100 sq km, divided into 4 regions Population of ~7M, 98% Chinese Officially bilingual: Cantonese and English Principal religions are Taoism & Buddhism Currency is the HK$, pegged to US$ at a rate

of 7.80 to 1

History First settled 6,000 yrs ago by fishermen and farmers 1500 yrs of ruling dynasties, governed by magistrate Many races: Cantonese, Hakka from the North, and

Tankas who lived on the water in boats Villages clan based, self-contained and fortified Eventually, trade is established with Western civilizations

through small outposts on fringes of Chinese empire Opium trade developed to address trade imbalance Chinese attempt to abolish this trade, and British take

HK Island in 1st Opium War Kowloon and Stonecutter Islands ceded to British in 2nd

Opium War,1856

History, cont.

British acquire northern area of Kowloon peninsula, or Northern Territories, through China’s loss in Sino-Japanese War, 1898

Turn of 20th century, improvements in manufacturing Japanese occupation 1941-45 1950, Communists come to power causing traders and

businessmen to flee to HK, creating industrial centre HK returned to China in 1997 with same legal and

capitalistic system for next 50 yrs Exodus of educated professionals, collapse in tourism,

loss of int’l business confidence

A Mixture of Architectural Styles Skyscrapers of Central district, ramshackle town

housing, and centuries old Chinese temples Design guided by the principles of FengShui Literally “wind & water,” reflects Taoist beliefs in

interconnectedness of all parts of the universe Seeks harmonious relationship between natural

forces and peoples’ living environments Examples are mirrors above doors and woks

placed outside windows Technical term is “geomancy”

Hong Kong Island

HK’s economic heart, home to towering skyscrapers and Central, the business district of HK

Traditional China nearby in areas of Sheung Wan, Hollywood Rd, and Kennedytown Herbalists, raucous mkts, smoky temples, calligraphy stalls in

cramped alleys largely unchanged since colonial times

Victoria Peak, 550m by tram or foot East of Central: Wan Chai and Causeway districts

Shops, restaurants, bars, and nightlife

South of Central: bays and beaches Aberdeen’s floating restaurants, Stanley Mkt, Shek O beach

Hong Kong Island, cont.

The place for reasonably priced food and nightlife is the Lan Kwai Fong neiborhood

Victoria Park weekday mornings to see “slow motion forest of tai chi practitioners”

Zoo-like 4 story Central Market selling everything from quails to eels

Macau side-trip Portuguese colonial architecture, relaxed atmosphere,

casinos, islands of Taipa and Coloane

Kowloon

Home to Tsim Sha Tsui shopping centres Nathan Road and The Golden Mile

Find anything, stolen or traded More North, less Western and more authentic

Noisy residential and shopping areas of Yau Ma Tei and Mongkok (one of the worlds most densely populated areas) Yuen Pro Street Bird Mkt, Flower Mkt, Jade Mkt, and

the Temple Street Night Mkt

Outlying Islands

234, but only 4 have significant populations ~90% of Hong Kong land mass Less than 1 hr ferry ride from Central Isolated temples, traditional villages, colonial forts, and

ornamental gardens Lamma - renowned fresh seafood restaurants Lantau - white sand beaches Cheung Chau - fishing villages and remote beaches Peng Chau – smallest and most traditional, narrow alleys

and open-air meat and vegetable markets

New Territories

Mainland between Kowloon and Chinese border Best insight into the real HK, with traditional rural

life, but in transition Exemplified in towns like Shatin, Tsuen Wan,

Tuen Mun, Yuen Long Sai Kung Peninsula: country parks, islands,

beaches and bays Walled villages of Kam Tin area

Shui Tau, 17th century, prow shaped roofs decorated with dragons and fish

Shopping!

Tax free zone except for alcohol, tobacco, perfume, cosmetics, and cars

HKTB’s Guide to Quality Merchants and Official Shopping Guide

Most shops open 7 days/wk, street markets open late Bargaining is expected, but not in larger stores Antiques – Hollywood Rd area Porcelain – traditional export of HK for 100’s of yrs Clothes – Best buy in HK, Granville Rd, Austin Ave Computers & electronics – big discount on older gear Jewelry – low prices as stones imported w/out duty

Nightlife

bc magazine and HK magazine for updates & reviews Newer, trendier bars in Central Lan Kwai Fong and Wan Chai areas open till breakfast Many open around the clock, most have no closing time San Miguel is HK brew, also Tsingtao from China and

countless imports

Expensive to drink - $US 5-8 / drink

Eating HK Chinese live to eat, one of world’s widest selection of

cuisines, excellent Indian and Pakistani Keep an open mind, some of the best food is in the most

unlikely looking places Dai pai dongs, or street vendors

serve dumplings, noodle soup, intestines, and fish Fresh food cooked in front of you

Dim Sum served for breakfast and lunch Steamed or braised dumplings served in bamboo baskets, all varieties, stuff yourself for $HK 100

Cantonese, Chiu Chow, Beijing (Peking), Hakka, Szechuan, Shanghai

Fill others first, no chopsticks in rice, clean bowls

Night View of Hong Kong

Hong Kong in the daytime

GDP Growth in Hong Kong-- Recovering from Asian financial Crisis of 1997

Real GDP Growth

-4

-2

0

2

4

6

8

10

12

1996 1997 1998 1999 2000 2001 2002 2003

(%)

Hong Kong

China

Japan

USA

Germany

Industry and Trade in HK

Main industry: Financial, sightseeing, real estate, electronics, Fiber etc

Major Trade Partners: Export: China, USA, Japan Import: China, Japan, Taiwan

Constitute a big industrial area with neighboring big cities such as Guangzhou (Canton). This area produces the largest number of PCs in the world.

(Appendix)Big Industrial Areas in China Beijing/Tianjin: R&D of IT industry (software)

Shanghai: Center of banking and commerce

High-end manufacturing (Celphone,Semiconductor etc)

Guangzhou (Canton)/Hong Kong: Produces the largest number of PCs in the world. Many parts companies are available.

Hong Kong as a gate city to mainland China Many international firms had established Hong Kong

offices as a base for mainland China.

But recently many firms moved their Asian HQ from Hong Kong to Shanghai to get better relationship with Chinese Government.

ex) HSBC --- Government is in Beijing. But most of the influential

person of the Government is from Shanghai.

Can Hong Kong continue to attract international firms?

Company Visit

(1)JP Morgan

(2) Hong Kong University of Science and Technology (HKUST)

The new JP Morgan Chase

Created on July, 2004 by the merger between J.P. Morgan Chase(No.2 in USA) and Bank One(No.6 in USA).

The world’s second-largest financial organization next to Citi Bank

Serves more than 30 million individual, corporate, institutional and government clients

Headquartered in New York employs about 110,400 people. Assets: $1.1 trillion and operations in more than 50

countries Revenues: $44,363 million (FY2003)

Major lines of business

Asset & Wealth Management Card Services Commercial Banking Investment Banking Retail Financial Services Treasury & Securities Services

History of JP Morgan(1)

Began in 1838 in London, UK. Adopted its current name in 1861. Expanded its business internationally, and by 1895

had operations in New York, Philadelphia, London, and Paris.

In response to the US banking act of 1933, which separated commercial, and investment banking, the company decided to concentrate on its commercial banking activities. Some partners left and formed Morgan Stanley.

History of JP Morgan(2)

Merger of JP Morgan and Chase Manhattan in 2001 created a company strong both in investment banking and commercial banking.

In 2001 Badly affected by the Enron collapse, writing off $451 million of its Enron exposure in the last quarter of the year.

Merger between J.P. Morgan Chase(No.2 in USA) and Bank One(No.6 in USA) on July, 2004 created the current JP Morgan.

JP Morgan in Hong Kong

One of the key offices in Asia/pacific Region

(Revenue by region)

FY2004 FY2003 FY2002

Americas $ 6,870 $ 7,250 $ 6,360

Europe/Middle East/Africa 4,082 4,331 3,215

Asia/Pacific 1,653 1,103 1,107

Hong Kong University of Science and Technology (HKUST)

Founded to propel Hong Kong towards a knowledge- based economy, and provide the entrepreneurs and innovative ideas; the scientists and groundbreaking research; the engineers, global business managers and other leaders necessary.

Admitted its 1st students on October 1991.