Sovereignty reversion hong kong became an sar on 1

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Unformatted text preview: egration is slow. Sovereignty Reversion Hong Kong became an SAR on 1 July 1997 under the “one country, two systems” framework. Governed by the Basic Law that maintained Hong Kong’s capitalist economy. Self-rule principle ensures local autonomy except in areas of sovereignty, diplomacy and military deployment. Before 1997 Handover: Political Concern. After 1997 Financial Crisis: Economic Concern. 2 schools on post-1997 Hong Kong: Hong Kong will lose many of its pre-1997 characteristics; become another advanced Chinese city. “Hostage effect” where the Mainland will keep Hong Kong stable due to its large investment in the Mainland. Structural Problems and Limitations of Hong Kong’s Growth before 1997 Opening of China in 1979 was opportune for Hong Kong. Relocating the labour-intensive processing to China, it led to the export-oriented industrialization of Guangdong. Hong Kong can concentrate on the higher value-adding services. Outward processing generates wealth for Hong Kong but the gain is once-for-all. By the time of Hong Kong’s reversion, the process of relocating labour intensive manufacturing...
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