4 ms·
GDP != Value. HK continues to be the jurisdiction of choice for mainland companies wishing to do business with the west and vice versa because the rule of law i
by throwaway1997 7y ago
GDP != Value. HK continues to be the jurisdiction of choice for mainland companies wishing to do business with the west and vice versa because the rule of law increases people's confidence in the validity of any contracts signed.
The HK property and stock market is also where a huge amount of of Chinese money is parked.
Neither of these contribute to GDP but provide a lot of value to the mainland.
- starfallg 7y agoCan't stress this enough. The number one priority for the political and business classes is to tunnel their wealth overseas and the first port of call is usually Hong Kong. In the last decade, much of the HK stock market (and economy) is propped up by Chinese money and these outflows. Shell companies are sold in Hong Kong just because they are listed on the stock exchange - the underlying businesses are often spun-off as a part of the transaction and the resulting operation just a way to funnel money and business outside of Chinese capital controls. The property market is also full to the brim with money from the mainland. Hong Kong has a much stronger hand than most people realise, because of the fact that the Chinese elite themselves lack confidence in their own system on the mainland.
- csomar 7y ago> The HK property and stock market is also where a huge amount of of Chinese money is parked. I wonder if this is the reason China wants to get rid of Hong Kong. Their capital restrictions are useless if Chinese can move a ton of value through Hong Kong. The world still needs China, though. So it'll make a new way to China. Maybe China has figured out: Value from Hong Kong < Value going to Hong Kong.
- flag23147 7y agoMoving capital to HK from mainland is largely subject to the same rules and regulations as moving capital to a foreign country. The reason Chinese money is parked here is because HK offers a convenient way for mainland assets to be listed. Without HK, these assets can be listed elsewhere e.g. US or UK. In this sense, the existence of HK as an international finance center brings money closer to mainland rather than further away.
- csomar 7y agoIf you were to be moving capital illegally, my bet is that Hong Kong is the way you go if you are Chinese. It's close, people speak the language, lots of established chinese companies there; and if the gov. find out you just hide there since they can't extradite you?
- api 7y agoThe world might not need China as much as Xi Jinpeng thinks. A lot of production is already moving, and China is less and less valuable as you move up the value chain. Most high-end engineering and other high value stuff is not in China.
- monocasa 7y agoChina is trying to replace those companies anyway. That's the shtick of their Made in China 2025 plan.