ABSTRACT
The most distinctive feature of Hong Kong is that, unlike the other three economies we have discussed, its colonial government came to be regarded as an archetype of laissez-faire regimes, where the state restricts its activities to a minimum, leaving the market to allocate resources (Rabushka 1979; Friedman and Friedman 1980). Yet it was also able to achieve comparable growth rates, sustained over several decades. Hong Kong’s real GDP growth rates in the postwar period have averaged over 8 per cent per annum (Sit and Wong 1989) and by 1993 it had matched the per capita GDP of the United Kingdom. Like the other economies, it has established a limited range of export-oriented manufacturing industries and achieved high savings rates. It is similar to Taiwan in that it has a predominance of SMEs, but differs from both South Korea and Taiwan in that it has always allowed the free movement of capital. Internationally, Hong Kong is ranked as the eighth largest trading entity (HK Government 1995a: 64). If all this has been achieved through the operation of market forces, it would tend to contradict the lessons we have drawn from the other three societies’ experience about the importance of the state coordinating the demand for skill and its supply through the activities of the various branches of government.
