ABSTRACT
This chapter reviews the developments from Hong Kong's perspective and aims to assess Hong Kong's prospects in remaining a dynamic export-oriented free economy in the post-1997 years. Since its founding as a British colony, Hong Kong’s development has been based on dynamics often at loggerheads with the conditions of its immediate hinterland—Guangdong Province. Growth and development of this British enclave in the post-World War II period had further drawn it away from its nearby Chinese province. Statistics for Guangdong also indicated an increased flow of Hong Kong investment for the same period. Cheaper factor inputs of labor and land exerted a forceful enough economic pull to lure Hong Kong investments into Guangdong. The unresolved issue at present is how to upgrade the cooperation at an intergovernmental level, which seems to be the precondition for the next stage of Hong Kong-Guangdong economic integration and development.
