Not a big problem if adjustment is gradual serious if

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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.

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