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Unformatted text preview: nskilled workers in the metropolis lost their jobs. Not
a big problem if adjustment is gradual. Serious if
adjustment is rapid, as a huge wage-gap had emerged
between HK & the mainland in the Cold War era
before China’s opening in ’79. Difference in Pace of Job Creation in Two
Phases of Outsourcing Difference in Pace of Job Creation in Two
Phases of Outsourcing Start with manufacturing in ‘79, followed by services
since ‘92. FDI in services is limited by the pace of
China’s economic reforms. FDI in services largely not
permitted till Deng Xiaoping’s ’92 southern tour in
support of economic reforms.
1st phase extremely smooth. Though manufacturing
employment fell greatly ,many more new jobs in
services were created.
Easier for manufacturing to expand output because it is
tradable. Service firms have to expand through FDI. HK has a temporary monopoly in services in South
China till the mid 1990’s because China’s service
sectors are underdeveloped.
The vast industrial base of HK in Guangdong depended
on HK for...
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This document was uploaded on 03/26/2014.
- Spring '14