Research Topics: Hong Kong Economy

Negative Impact Of Inflation In Hong Kong

NEGATIVE IMPACT OF INFLATION IN HONG KONG       Hong Kong is highly recognize as a worldwide trading hub pride of Asia it is one of the world’s largest international financial center and a free trading policy that capture the world global position to transact business in this region. Hong Kong continue to exercise a strong capitalist economy in Asia, major corporate business groups all over the world conduct business and concentrate in this region because this city alone consist of more than 7 million highly dense population but they still manage to improve in economy. Hong Kong is recognized as a tiger economy of Asia. Figure shows that during 1961 to 1997 their Gross Domestic Product has grown as high as 180 times, their stock market is the 7th largest in the world. Since then, Hong Kong open up economic transaction for import and export market, Information and Communication Technology revolution takes place; they have become the central economic hub not just in Asia but the world.         While Hong Kong still experience a decent economic condition up to the present times they can’t help but be affected by worldwide economic crisis during 1998 that there are slight changes in business and economic trading practices usually inflation rate sets in that causes a downturn that decreases their purchasing power. The inflation has been affected by the recent Sever Acute Respiratory Syndrome (SARS) that invaded the city during 2003, during those times the economy of Hong Kong has been greatly affected the business trading decreases, hotels and restaurant and tourism has become very slow and weak the stock market falls heavily and most import and export trading has been delayed because of the SARS outbreak that even their people would simply stay at home to protect themselves from such deadly disease.       The average inflation rate of Hong Kong is 4.63% that goes down to a record low of -6.10 in 1999. The recent record of inflation for the last three years goes up to 6.2 in 2008 and recovered in 2009 to negative and rise again up to 2.3% in 2010 and continue to increase up to 5.8 in September in this recent year of 2011 and still it is expected to rise or maintain its composure in the next few years. The negative impact of high inflation rate higher than its average is the low purchasing power of people to afford the rising prices of basic goods and services; according to Hong Kong Council of Social Service Advisory Council shows that there are 1.26 million residents that are living in Hong Kong in poverty state because of the ever increasing inflation. According to Financial Secretary John Tsang that the inflation continue to heat up in the city, according to other economist in other countries in Europe and Australia that their prediction shows that the inflation will even increase in the next few months or years to come. The Hong Kong government has a program that started to subsidize electrical supplies to help residents in the rising cost of electricity they also put the minimum wage up to HK per hour last May of 2011. ·         In particular the negative impact of inflation rate in Hong Kong is currently transparent in their sudden changes in standard of living that they are suffering from structural changes; there are manufacturing, production and sales company that shifted their operation to mainland China. The integration of Hong Kong to mainland China shifted its way to protect some business sectors but not the employees who instantly loss their job. ·         The unemployment rate also increases rapidly, they also experienced severe labor shortage in industries including finance, insurance, real estate and other agency who tried to retrench their labor force in order to cut cost their expenses to save their company from falling down. ·         One of the most negative impacts of inflation is a weak Hong Kong currency that if the Hong Kong dollar depreciated its value the trading of US dollar depreciates as well. The link between Hong Kong and US dollars are sometimes criticized by its people and there are proposals that they should have a steady alteration linkage between countries but the government has rejected the proposal and continue to gain confidence between this links. ·         Another negative impact of inflation rate to their country is the delay of infrastructure and government projects to balance their expenditure and spend the government fund to a social welfare and development.       The inflation rate battle is definitely a competitive struggle in economic recovery in Hong Kong that has brought a devastating effects on price of basic commodities and livelihood including the business sectors has been affected especially the real estate industry and small enterprise, the government revenue shows a varying degree in Gross Domestic Products (GDP) Budget deficit is still a significant problem. Although Hong Kong continues to struggle from inflation, the unification and bond between the mainland China and the continuous international business participation in World Trade Organization will soon find its way to bring back the economic strength to where they have left. Their government is confident about this condition.    Credit:ivythesis.typepad.com

Negative Impact Of Inflation In Hong Kong

NEGATIVE IMPACT OF INFLATION IN HONG KONG Hong Kong is highly recognize as a worldwide trading hub pride of Asia it is one of the w...

Sample Essay about Hongkong as an Ideal Place for Business

Hong Kong: Ideal Place for Business   Economy of Hong Kong Hong Kong has a free market, entrepot economy, highly dependent on international trade. Natural resources are limited, and food and raw materials must be imported. Gross imports and exports (i.e., including re-exports to and from third countries) each exceed GDP in dollar value. Even before Hong Kong reverted to Chinese administration on 1 July 1997, it had extensive trade and investment ties with China. Hong Kong has been further integrating its economy with China because China’s growing openness to the world economy has made manufacturing in China much more cost effective. Hong Kong’s re-export business to and from China is a major driver of growth. Per capita GDP is comparable to that of the four big economies of Western Europe. GDP growth averaged a strong 5% from 1989 to 2005, but Hong Kong suffered two recessions in the past eight years because of the Asian financial crisis in 1997-1998 and the global downturn in 2001-2002. Although the Severe Acute Respiratory Syndrome (SARS) outbreak also battered Hong Kong’s economy, a solid rise in exports, a boom in tourism from the mainland because of China’s easing of travel restrictions, and a return of consumer confidence resulted in the resumption of strong growth from late 2003 through 2005 (The World FactBook, CIA). In August 1998, the government intervened in the stock, futures, and currency markets to fend off “manipulators.” The banking sector remains solid, and the government is committed to the U.S.-Hong Kong dollar link. Hong Kong’s Victoria harbour has facilitated rapid development of foreign trade. Hong Kong’s principal trading partners include Mainland China, the United States, Japan, Taiwan, Germany, Singapore, and South Korea. Hong Kong enjoyed economic growth in the past because of its strong manufacturing sector, but in recent years the service sector has surpassed it in importance and now accounts for 85% of GDP. The major components of Hong Kong’s service trade are shipping, civil aviation, tourism, and various financial services. Hong Kong has one of the world’s most sophisticated telecommunications and information technology infrastructures and functions as a major regional and international financial and commercial center. Economy and Foreign Investments             Hong Kong encourages free enterprises and a free trade economy.  The government makes no distinction between local and foreign companies and welcomes investment from both.             The Basic Law (which is the highest constitutional law of Hong Kong) provides that Hong Kong can enjoy a high degree of autonomy as a Special Administrative Region (SAR) of the People’s Republic of China.  Hong Kong’s social and economic systems, as well as its lifestyles, would remain unchanged for 50 years after the handling over in 1997, and China’s socialist system and policies are NOT to be practiced in the SAR.             Hong Kong has one of the least restricted economies in the world and is basically duty-free. It is the world’s 10th largest trading entity and 11th largest banking centre. The dominant presence of international trade is reflected in the number of consulates located in the territory: As of June 2005, Hong Kong had 107 consulates and consulates-general, more than any other city in the world. Even New York City, host of the United Nations, only has 93 consulates.  In terms of per capita GDP (PPP), Hong Kong is even higher than Japan making it one of the richest territorial regions in Asia.  Hong Kong Lifestyle             Food & Drinks             Hong Kong is one the great centers for international cooking.  Apart from Chinese food, which is excellent, there are also many Indian, Vietnamese, Filipino, Singapore/Malaysian and Thai restaurants.  It is the home of authentic Chinese food from all the regions of China, which may be sampled on a sampan in Causeway Bay, on a floating restaurant at Aberdeen, in a Kowloon restaurant, in a street market or at a deluxe hotel.  Hotels serve European and Chinese food but there are also restaurants serving every type of local cuisine.  Specialities include Dim Sum (savory snacks, usually steamed and served in bamboo baskets on trolleys).  Nightlife There are many nightclubs, discotheques, hostess clubs, theatres and cinemas. Cultural concerts, plays and exhibitions can be seen at Hong Kong’s City Hall which also has a dining room, ballroom and cocktail lounge. Shopping Whether one is shopping in modern air-conditioned arcades or more traditional street markets, the range of goods available in Hong Kong is vast. Many famous-name shops have opened in Hong Kong, bringing the latest styles in great variety. Places that display the HKTA sign (Hong Kong Tourist Association) are the best guarantee of satisfaction. Bargaining is practiced in the smaller shops and side stalls only (moveandstay.com). Investing Agencies in Hong Kong             Being open to foreign trade and to the world market, Hong Kong investors congregate in the place for their business to grow and have indeed been growing.  There are currently 60 local and foreign companies in Hong Kong, 15 banks and 11 Transportation companies.  Why Invest in Hong Kong? Hong Kong which reverted to Chinese rule in 1997 remains a vibrant economy with a relatively high standard of living.  Although the population is small, businessmen and women are used to western business practices and competition is intense.  New products can and do gain market share very quickly in Hong Kong. Hong Kong is a gateway to Chinese Market.  Many businesses in Hong Kong have their manufacturing in Guandong province.  Hong Kong’s strengths are in high-tech sectors and well capitalized banking sector. Hong Kong named ‘Asian City of the Future’ by fDi Magazine Hong Kong was selected as the Overall Winner “Asian City of the Future 2005/6″ in a competition organized by the fDi (ForeignDirectInvestment) magazine, which is part of the Financial Times Business group. The results are announced and detailed in the magazine’s December 2005/January 2006 issue. fDi invited investment promotion agencies, development authorities and national and regional governments to submit applications. There were more than 60 entries. HK’s entry was submitted by InvestHK. The panel of judges was comprised of fDi’s editorial team and business executives based in the Asia Pacific region. Hong Kong was the winner of 4 of the 7 categories:  Best Transport; Best IT & Telecommunications; Best Quality of Life; Best FDI Potential.  Hong Kong was also the runner-up in the Best Human Resources category (InvestHK). Hong Kong ranked as the world’s freest economy for the 12th consecutive year Hong Kong retains its position as the freest economy in the world for the 12th consecutive year; that is every year since the Index of Economic Freedom was first published in 1995.  The score of Hong Kong improved from 2005 due to the city attaining better scores in respect of “government intervention in the economy” and “fiscal burden of government”. Hong Kong’s scores for all the other eight factors remain unchanged.  Hong Kong was ranked first in six broad factors, namely trade, monetary policy, foreign investment, banking finance, property rights, and regulation.   Credit:ivythesis.typepad.com

Sample Essay about Hongkong as an Ideal Place for Business

Hong Kong: Ideal Place for Business Economy of Hong Kong Hong Kong has a free market, entrepot economy, highly dependent on internati...

Energy resources are an obvious example of limited resources whose use can have major impacts

Chapter 1 Introduction Technology provides the means for modifying the natural environment for human purposes providing basic requirements like shelter, food, warmth, as well as communications, transport and a range of consumer products and services. All of these activities have some impact on the environment. Energy resources are an obvious example of limited resources whose use can have major impacts. Energy use is now central to most human activities and many of the environmental problems could be described in terms of energy-getting and energy-using technologies. The most obvious environmental impacts are the physical impacts of mining for coal and drilling for oil and gas, and distributing the resultant fuels to the point of use. However, increasingly it is the use of these fuels that presents the major problems (2003).Burning these fuels in power stations to generate electricity, or in homes to provide heat, or in car engines to provide transport, generates a range of harmful gases and other wastes, and also, inevitably, generates carbon dioxide, a gas which is thought to play a key role in the greenhouse global warming effect. The pattern of energy production has undergone some significant changes in recent years, particularly in relation to electricity generation in some of the industrialized countries, with gas beginning to replace coal (2003). Electricity like other energy resources has become important resources for man.  The production of such resource can have varying effects to the environment. That is why governments devise means to monitor the consumption of electricity and other energy resources. This study will focus on the different methods for forecasting electricity consumption. Problem Statement Like other countries, Hong Kong has raised its concern for the consumption of electricity. The concern of Hong Kong leads to the need to know methods to identify the electric consumption.  This paper will determine different methods for forecasting electricity consumption in different markets such as commercial, industrial, residential, export, street light and etc.  This paper will study different model features for forecasting electricity consumption and then choose some suitable models for implementation of forecasting electricity consumption.   Research Questions In order to complete the goals of this particular academic activity as well as to set the objectives of the study, the following research questions will be presented and discussed in the entirety of the research paper focusing on the study the different methods to measure electricity consumption. Such information can be acquired through answering the following questions:  <li class="MsoNormal" style="text-align: justify; line-height: 200%"> How often does the consumption of electricity change?</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> What causes the change in the consumption of electricity? </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> What businesses consume high rates of electricity</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> What are the available methods to measure consumption of electricity?</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> What methods fit the situation in the Hong Kong environment? </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> What methods can help in determining the effect of too much electricity consumption to the environment?</li> Objectives of the study The research questions referred to the information that the researcher intended to question while the objectives will focus on the problems that should be clarified in order to gather the intended information. The aims and objectives of the study include <li class="MsoNormal" style="line-height: 200%"> Determine the how electricity is consumed in Hong Kong </li> <li class="MsoNormal" style="line-height: 200%">  </li> <li class="MsoNormal" style="line-height: 200%"> Identify the different means to measure electricity consumption. </li> <li class="MsoNormal" style="line-height: 200%"> Compare the different methods to measure electricity consumption.</li>   Importance of the Study             The study is important to Hong Kong and other nations since they can compare the methods to measure electricity consumption and how they respond to changing electricity consumption in their countries. This study can provide to the government of Hong Kong and other nations, the ability to gauge how useful the methods to measure electricity consumption are.  With the establishment of the goals given, this study may also be of importance to the goals that have been set. By fulfilling the aims that were stated in the objectives section, this study will be helpful for other researchers who may be focusing on unique means of measuring electricity consumption. The data that will be gathered will be helpful for researchers in establishing related studies that will help in determining the best method to use  The notable significance of this study is the possibility that other researchers may be able to use the findings in this study for future studies that will create a huge impact in society.  This study’s findings can be used for other findings that might prove to be helpful in introducing the change the world needs. The research and analysis methods that this study will use need to be credible because it will help researchers in knowing how to look for particular information and then know how to analyze them. It is through this that researchers will then be able to find out how they will be able to focus on their investigation on a particular instance and also know the possible methods that they may choose in the possible time that they may choose to conduct another study. Thus, another significance of this study is to serve as a guide for researches that focus on the analysis of a country’s venture into strategies that will help it maintain its dignity, image and global competitiveness.   Structure of dissertation There are different chapters for this project. Each chapter has a different focus for a specific course of action that will benefit the study. The different chapters will contribute to the success of the study and it can be used as a starting point for further studies. The first chapter was the introduction part wherein general ideas and goals of the study were discussed.  The second chapter will be the literature review part. The second chapter used various resources to gather necessary data. This data have a relation to the goal of the paper which is to study the different means to measure electricity consumption in Hong Kong. The literatures presented will come from books and other sources that are deemed to be helpful in the advancement of awareness concerning the subject. The third chapter will focus on discussing the instruments and methods used for the study to be a success. The fourth chapter will focus on the presentation of demographic data, the ideas of the respondents, and analysis of data. The fifth chapter will demonstrate how the results from the researches link to the literature review results. The last chapter will focus on discussing the Summary of the data acquired, Conclusions and Recommendations.   Chapter 2 Literature Review Hong Kong Hong Kong remains wrapped in an enigma. Its intermediaries of capital, who include traders, financiers, and corporate managers, have made Hong Kong the pivot of decision-making about the exchange of capital within Asia and between that region and the rest of the world (2000). Yet, for 150 years, this tiny island and adjacent peninsula could not even lay claim to status as a city-state. When Britain declared sovereignty over Hong Kong in 1841, after taking it from China under the terms of the Treaty of Nanking that settled the Opium War, the government and merchants had to build a town. The British viewed Hong Kong as their emporium of trade in the Far East, but they did not aspire to transform it into a commercial-military power. The impetus for Hong Kong’s return to China rested in the ticking clock of an obscure treaty from 1898 when Britain acquired the New Territories; the lease terminated on July 1, 1997 ( 2000).Hong Kong has survived the challenge of the 1997 Handover from British to Mainland Chinese control and the economic reversal caused by the unrelated events of the Asian financial downturn and the September 11 disaster. Although the latter has had more impact on the lives of everyday people, the Handover was a cause for a certain amount of nervousness about the future with concerns raised about change to civil, administrative and economic freedoms. The passing of colonialism has allowed some examination of Hong Kong cultural identity in government programs and through other venues, but much of the focus has been on maintaining its economic advantage in the region as the economy has slowed in growth (2004).    Moreover, the tourism market appeal of Hong Kong as a brand changed after the Handover, causing some disappointment among economic forecasters and tourism authorities. A number of aggressive new marketing strategies have been adopted, which present an artificial summary of its cultural identity, race relations and attitudes to colonialism (2004). Hong Kong is one of the two special administrative regions belonging to China.  Hong Kong over the years has developed into a leading financial theater through the economic changes it made in the region. The defense of Hong Kong’s territory and foreign affairs lies on the Central people’s government but its internal issues and problems is managed by the government it has created. Hong Kong is on the continuous path for improvement. Hong Kong has created changes on some of its landmarks and physical features this contributed to the state becoming a tourist destination. Being a tourist destination means more consumption of electricity.   Hong Kong Economy On the question of the economic situation there is greater cause for concern, and there is the distinct possibility that here the pessimists are gaining the upper hand, at least in the short term. There can be no question that Hong Kong’s economy has carried hidden structural weaknesses for some time, and that these are now being exposed. Hong Kong has lost virtually its entire manufacturing base to China, and there is little doubt that this pattern will continue into the future given the mainland’s comparative advantage in land and labor factor costs ( 2000).  Externally, the position of the pessimists also seems to be gaining ground. The large re-export component of the Hong Kong economy is highly vulnerable to external developments. The improvements in the standard of professionalism of Chinese producers make it less necessary to ship goods initially to Hong Kong, for quality inspection, packaging and overseas transportation, on the way to their final destination. It is reasonable to assume that the lucrative margin earned on consumer goods by Hong Kong middleman will certainly decrease over time (2000).   The likely eventual agreement for direct air and sea links between the mainland and Taiwan thus bypassing Hong Kong will also have a significant negative impact on economic activity in Hong Kong. The effects of continued growth and success of Shanghai, and other mainland coastal areas, should also not be underestimated. By the time of the handover, the Hong Kong economy was very strong. Growth remained around 6 per cent per annum, and unemployment was low. The only significant problem was the property market, which had clearly been bubbling up for the previous few months. All of this suggested that the economy ought to be fairly well protected against speculation (2000). Hong Kong stood out as the only open economy in the region that had not suffered devaluation. Suddenly, its own US billion reserves did not look so impregnable and even though the obstacles for speculators were large, the very challenge encouraged some of them because the HK dollar would have to settle at a much lower level against the US dollar if the peg to the US dollar were broken. The profits for speculators would then be correspondingly greater and it might easily lead to a further round of devaluations in the region, with renewed opportunities for speculative profits. Given all the recent turbulence in the world and especially the region’s financial markets in recent years, it is impossible to guarantee that the peg will survive forever at its current rate (2000).   With regard to the Hong Kong economy, there is a clear commitment from Beijing in the Basic Law to maintain after 1997 the capitalist economic and trade systems practiced in Hong Kong, and to retain Hong Kong’s free port status and free trade policy, which includes the free movement of goods and capital. Further, the Hong Kong  (HKSAR) government will be committed to safeguard the free operation of financial business and the free flow of capital within, into and out of Hong Kong. Hong Kong will be allowed to raise its own taxes and control revenue. The Hong Kong dollar will continue to circulate and remain freely convertible to the US dollar and other hard currencies. Within this framework, decisions on economic, trade, monetary and fiscal policies are to be taken by the HKSAR without any necessity for these policies to be adjusted in line with those in operation in the rest of mainland China (2000).Since the return of Hong Kong to mainland China, the issue of Taiwan has received increased attention on both sides of the Taiwan Strait. With Hong Kong being an SAR of mainland China, Hong Kong-Taiwan relations naturally constitute a special component of cross-Strait relations. Hong Kong’s Chief Executive has expressed a strong desire to improve cross-Strait relations and is willing to facilitate mainland China Taiwan exchanges through Hong Kong ( 2000).     It is expected that the interaction of the mainland, Taiwan, and Hong Kong will create better understanding, promote mutual benefits, and reduce misconceptions, thus reducing the scope for conflict. Hong Kong’s return to mainland China in July 1997 can be seen as an opportunity for both Taiwan and China to develop their ways of interacting, with Hong Kong as intermediary. Pending establishment of the three direct links across the Strait, or the final unification of Taiwan and mainland China, it may be expected that Hong Kong’s role will continue well into the future (2000).  Hong Kong’s economy is one of most improved in the world. It survived different threats and problems to its economy. It was able to withstand the different changes and challenges that its government has undergone. Emerging economy From an economic point of view, the most significant developing countries are those whose economies are ‘emerging’ both in terms of market opportunity and in the sense that they are coming out from the constraints of state administration and restrictions on foreign trade. These economies are now seeking to modernize rapidly with the assistance of foreign governments and companies (1998).  The faster rate of growth in emerging countries starts from a less-developed economic base, which means that they manifest a high level of demand for both consumer and industrial products and services. Their economies therefore offer the most significant opportunities for companies from the developed countries to expand their markets ( 1998).   While acquisitions are generally the favored mode of expansion into developed-country markets, cooperative forms such as joint ventures tend to be the most prevalent in emerging economies. This is partly a result of host government preferences for local firms to share in the ownership of foreign funded ventures in the expectation that such participation will increase their opportunities to acquire new technology, management skills, and other expertise. It also reflects a frequently found preference among foreign investing companies, at least in the early years, to reduce their exposure to risk, and to co-opt the assistance of a local partner in navigating through an unfamiliar environment. The cultural and institutional features of the emerging economy are normally quite different from those of the foreign partner’s home country and this creates additional complexity for that partner (1998).  Secondly, the nature of partner objectives and the achievement of complementarily between them differ from those applying to most alliances between partners from developed countries. Thirdly, the differences between emerging and developed countries in culture and environment, together with the fact that in some cases the emerging economy has a colonial legacy with the sensitivities attaching to this, can give rise to special difficulties in the process of managing alliances ( 1998).   When one country is said to be an emerging economy it means that it has passed the different economic challenges that they have encountered. The emerging economies have come back from problems in their economies and they find ways to conquer such problem. Major emergent economies are on the fast track to economic growth but yet beset by critical challenges to the sustainability of their business environment.   Hong Kong is an emerging economy it has faced different kinds of economic problems over the years. It is still facing some of the economic problems and they are finding solutions for it.  The blockages for the continuous growth of the countries ‘economy is the corruption happening in the country, its lack of drive to live up to the things expected of them and  the different debts they have incurred over the years. The different blockages should not be a problem for the country; it is supposed to be a challenge to them so that in the future the country will be economically mature.  Competitive economy Even in advanced countries technological developments, where they tend to increase the degree of complementarily between different investment decisions, may have a profound effect on market structure. There exist between the firms in a modern competitive economy complex interrelationships of ownership and control, which are abstracted from in much of our more formal analysis; their justification derives, in part, from the need to co-ordinate complementarily activities. And the optimum size of the firm may be determined, not so much by the scale economies associated with any particular operation, but by the number of operations which require planned co-ordination ( 1997). Nevertheless, as we have seen, all the forces do not work in the direction of integration. The inevitable imperfection of the entrepreneur’s knowledge, both about technical conditions and about the prospects of other firms, checks his willingness both to make long-term binding commitments and to throw in his lot with that of others. The counterpart of entrepreneurial reluctance to make binding commitments will be a policy of deliberately limiting the degree of integration provided for in the plan ( 1997).    Close complementarily between several investments is equivalent to a conductor of error; some degree of independence acts as insulation. The greater the extent to which the profitability or propriety of any one investment depends on others being implemented exactly according to plan, the wider will be the area over which the consequences of any particular failure will be felt. The absence of a sufficiently wide consensus about the profitability of simultaneous investment in related directions is also a check to concerted activity in both kinds of economy; in a planned system the combined investment can still proceed, provided the controlling authority issues the appropriate fiat. Whether this is a desirable outcome, however, depends of course on whether its assessment of the situation is correct ( 1997). Opinions about the best allocation of resources are weighted in a competitive economy by the wealth and the credit which those holding them can command; in a planned system, by the position of those holding them in the hierarchical structure. In a competitive economy, the command over resources exercised by any particular entrepreneur, and therefore the weight to be given to his estimates depends on the extent of his capital and of his credit (1997).   In the competitive economy, the ultimate tribunal is composed of particular owners of wealth who feel able to form an opinion on the matter (1997). To have a competitive economy means that the country can match with the kind of economy other emerging economies are having. It shows how well the country has performed and maintained its status. It shows how effective a country’s economic policies and procedures are.   Hong Kong is attempting to be a competitive economy that can conquer any attempts to destabilize its economy and prevent it from gaining economic growth. The country can attain economic competitiveness through making sure that the tourist in the country remains high at the same time the country takes care of its environment. Hong Kong and its management of the environment Most governments now have environmental ministries and some kind of requirement for assessment of the environmental impact of activities prior to their being approved. In some instances, such initiatives have occurred only very recently and environmentalists wonder if they are adequate for the task. Hong Kong established an , and has taken some steps to lessen air, noise, and water pollution ( 1993). Thus, noise controls were put in place, the use of high-sulfur fuels in factories was banned, and a clean-up plan was launched. Despite these efforts Hong Kong still looks, smells and sounds like a highly polluted city and will continue to do so for many years. Although widely recognized as a serious problem for decades, governments have provided only limited resources for dealing with the problem. This situation has improved slightly in recent years. The evaluation of energy policy needs to be conducted within a context that is more conscious of environmental issues. Governments must realize that environmental considerations, and their effect of energy, are just as much a limit to growth as transportation infrastructure or energy shortage itself ( 1993).                                    Portions of academia and the political elite recognize that economic development is not threatened by environmentalism; rather, long-term economic and political stability are threatened by a lack of attention to the environment. Only by grasping this dialectical relationship and carefully managing the environment can help modernization to succeed. Failure to do so will result in flood, drought, and blight: the familiar signs that the rulers have lost the Mandate of Heaven. Responsible businesses or countries have always sought to comply with the law and failure to do so can have disastrous consequences for the balance sheet ( 1993). Even minor breaches can damage profits beyond the cost of fines imposed. If the company is liable to pay compensation for damage caused it may be able to meet the costs of reparation from insurance. In terms of policy formulation, environmental issues have, in fact, been incorporated into government planning. Development plans have included a few clauses concerning forestry protection and conservation of natural resources, with a corresponding budget allocation. Policy is one thing, implementation is another. The distance from words to practices has been especially great (1993).    Failure in the implementation of environmental policies can be seen as resulting from the insincerity of the country’s decision makers, the inefficiency of government agencies, and widespread corruption. While some agencies have no direct administrative authority for managing the environment, the agencies with such authority are numerous and their actions are largely uncoordinated, with each perceiving environmental problems as only part of their other wider responsibilities. Moreover, these agencies have no authority to take legal action against violators. The common practice used in response to these problems is to set up additional agencies or committees and to draft additional ineffective regulations ( 2004). Countries like Hong Kong have been more responsive for calls to manage the environment.  The need to manage the environment Life on earth has shown a surprising resilience in withstanding changes in the environment, and humanity in particular has adapted well to changing climate after the last glaciations some 10,000 years ago when most of the northern hemisphere was covered by ice and snow. However, all the natural changes in the environment, except natural disasters, occurred slowly over long periods of time, typically centuries. After the industrial revolution at the end of the eighteenth century, and particularly in the twentieth century, anthropogenic aggression to the environment has become more important due to population growth in developing countries and the enormous increase in personal consumption, mainly in the industrialized countries ( 2000). What characterizes these environmental changes caused by man is that they took place in a short period of time, typically decades. Broadly speaking all these problems have a multitude of causes, such as population increase, and the growth and changing patterns of industry, transportation, agriculture, and even tourism. The way energy is produced and used, however, is at the root of many of these causes ( 2000).    Energy sources are distributed around the globe in a fashion that is frequently not matched to the location of the consumption centers. Access and distribution to most of them creates numerous problems such as global insecurity, of which the volatile political situation of the Middle East is an example. Other global problems are those originating in the use of nuclear energy for electricity generation, which creates the risk of nuclear weapons’ proliferation. Conventional wisdom says that economic growth is roughly proportional to the growth in consumption of raw materials and energy, and the resulting pollution ( 2004). The empirical evidence for such correlation is in general based on studies over limited intervals of time. If such proportionality was to last for many decades the consequences would be disastrous, because the economies of a number of very populous developing countries are growing, as well as GDP per capita, and will soon approach the level of the developed countries. This would result in great strains in the access to raw materials and energy, as well as an increase in environmental degradation ( 2004).   The environmental consequences of industrial development and associated energy consumption in developing countries are beginning to reach such proportions that they not only threaten the local population but represent a sizeable contribution to global climate change, mainly due to increased fossil fuel consumption ( 2004).The world today has a rich North and a poor South with pockets of poverty in the former and some very affluent people in the latter. Most of the world’s population aspires to the material lifestyles and consumption patterns apparent in richer nations. Others may be less secular and look forward to non-material development in the shape of an increase in contentment, more sense of security, religious or cultural enrichment ( 2005).  The former, material, outlook is dominant and with growing populations the question is, will the Earth’s environment support these hopes? The environmental manager is concerned with exploring what can be done to improve people’s lifestyles, given the structure and function of the environment, and then implementing it. Some countries have achieved what they and others see as development, thanks to one or more of the following: agriculture, science, industrial expansion, natural resource exploitation, colonial expansion, trade and intellectual skills. Development is thus widely seen as a goal and an ongoing process, but there is less certainty over its exact meaning or how it functions, or the strategy that is best adopted to pursue it ( 2005).     Environmental management is no longer just concerned with physical and largely quantitative data it now deals with historical data, policy formulation, social capital and institutional issues, qualitative information from focus groups and questionnaires, advice from political ecologists, the findings of cultural ecology, anthropology, and much more. On the whole, it has become more co-ordinatorial and participatory and much more integrative. Modern environmental management also tends toward less compartmentalization, more encouragement and support than enforcement, and often a bottom-up approach. There is also a shift toward continuous improvement and environmental stewardship, rather than command and control and solution of problems after they occur (Barrow 2005).   There is an imminent need to manage the environment due to global issues that have risen in the past few years. The need for managing the environment results to countries like Hong Kong to understand the best means to measure and monitor electricity consumption. Electricity Consumption Energy use is characterized by very high dependence on coal and coal-fired electricity production, massive investments in producing oil from coal and gas, intensive use of energy in the industrial development sector, and energy scarcity among low income households. Domestic consumption of electricity varies greatly across the socioeconomic spectrum. Wealthier households are heavy consumers, whereas poorer homes use mainly paraffin, candles, and rechargeable batteries. There is also local fuel wood collection. People that live in dwellings without electricity are exposed to health risks associated with the fuels they use. Domestic health risks have the greatest direct impact on women and children, who are confined for the longest periods to indoor domestic environments ( 2001). The factors that affect electricity consumption are associated with a person’s conditions of life, whereas his or her orientation of life including values and thinking on environmental issues has only limited effect. Also, the existence of codes of eco friendly conduct within a person’s social network has no significant effect on electricity consumption ( 2001)   This contrasts with the relationships found between way of life and ecologically aware consumption in general. The consumption of eco friendly products is governed primarily by the codes of conduct, and the attention paid to environmental issues, within the social network. In addition, those people who do not know the size of their electricity bill have relatively larger electricity consumption, but also a relatively larger consumption of green products. This indicates a discrepancy in pattern of behavior between electricity consumption and consumption of green products. An explanation for this could be that electricity consumption is basically invisible and tends to be forgotten by the consumers ( 2001).  Moreover, serious reductions in consumption of electricity would likely interfere with the routine of daily life. Standard rate-making practice has been to establish revenue requirements and set overall electricity prices to cover average historic accounting costs. These may bear little relationship to current marginal, or opportunity costs of electricity, which reflect forward-looking conditions (1994). Market imperfections are often cited as a major reason that customers do not adopt higher levels of energy efficiency. Non market costs of externalities resulting from production of electricity are generally not taken into account explicitly in setting electricity prices. Thus, the price seen by consumers and utilities does not reflect all societal costs of producing electricity, possibly resulting in a greater than socially optimal level of consumption of electricity. Electricity provides the means for consumers to enjoy the benefits of myriad energy services, including light, comfort, refrigeration, and motive power. The marginal, or incremental, value of electricity is reflected in its price; that is, consumers are willing to consume electricity up to the point where its incremental value just equals its price, which represents the incremental cost seen by the consumer (1996). Electricity consumption is one of the things monitored by governments and consumers.  Various instruments are used to measure the consumption of electricity. Credit:ivythesis.typepad.com

Energy resources are an obvious example of limited resources whose use can have major impacts

Chapter 1 Introduction Technology provides the means for modifying the natural environment for human purposes providing basic requiremen...

HONGKONG GOVERNMENT POLICIES ON TRADE

Hong Kong Government Policies on Trade   Introduction               This papers aims at discussing different policies employed by Hong Kong government in different areas of concern.  First of which is the discussion on government policy on the labor markets.  Second is the fiscal matter and how does the Hong Kong government respond with this respect.  Third is the discussion of government policy on the monetary or money supply in Hong Kong.  Last is the discussion of the government action and policy towards international trade or relevant international matters.  These four related areas are based on four separate articles in the latest released development in each respective area.                   I.      Government Policy on Labor Markets Article Title: Labor Market in Hong Kong     Hong Kong has the very converse of an over-regulated inflexible market.  Notwithstanding its market inflexibility, Hong Kong has passed a considerable amount of labor legislation aimed at improving the working conditions and welfare of the workers.  On example and the main labor ordinance passed is the Employment Ordinance.  Under this ordinance is the preset condition of service in general employment and which includes provisions for paid holiday leave, sickness allowances and severance pay.             Another important ordinance set by the Hong Kong government with regards to its labor market is the Factories and Industrial Undertakings Ordinance.  Such government action serves for the purpose of strictly regulating the employment practices of the “sweat shop economy” with which Hong Kong has long been associated.  According to the provisions of the Employees Compensation Ordinance, injured workers can claim compensation for work related injuries.  If employment disputes should happen, it will come before the labor tribunal whose proceedings are conducted in Cantonese and are generally very informal.                Notwithstanding all the above-mentioned government actions on its labor market, a survey in 2002 cast some doubt on the competitiveness of the Hong Kong labor force.  The survey, however, was looking primarily at the quality of labor within the Asian region as a whole.  The survey then suggested the inadequate education investment and rising labor costs have meant that although salaries for white collar workers and managerial staff are higher, the quality of services provided is not necessarily any greater than that provided by labor in other Asian countries.                In its positive findings, the survey showed that the jurisdiction still excels in terms of language skills, overall professionalism, and technical expertise, but warned that on a comparative ‘value for money’ basis, the competitive margin between Hong Kong and the Chinese mainland is narrowing, and regional rivals such as Singapore, Taiwan, and India have overtaken the Special Administrative Region ().               The Department of Labor in Hong Kong promotes several programs for the labor and employment.  One in which is the Employee Rights and Benefits Program that was setup to establish and enhance employment standards in Hong Kong.  Aside from that, is also serves for the purpose of creating a balance between the interests of employers and employees.                In promoting safety and occupational health in the region, the Department of Labor provides training courses, training providers and the registration of safety officers/auditors for companies.  In showing the output of the department, there were over 800 training courses held on occupational safety laws in Hong Kong in 2004 including more than 300 custom sessions.  That totaled for up to 13,000 employees and employers who attended the training sessions during the year.              Aside from the above-stated labor training programs, the Department of Labor also fights unemployment through different areas.  For young workers, the department established the Youth Work Experience and Training Scheme (YWETS) that offers guidance and counseling services to youth and focuses on such areas as communication and interpersonal skills.  For Mid-Level Workers, the department launched the Re-employment Training Program in 2003 that aims at assisting those who are age 40 and above in finding new employment opportunities ( 2005).                  II.      Government Policy on Fiscal Matters Article Title:  Hong Kong’s Fiscal Policy – Look beyond the good times     The fiscal performance of Hong Kong has improved sharply since the depths of the Sars crisis in mid-2003.  This is due to the rapid growth of gross domestic product helped by a robust global expansion and strengthening integration with the mainland including deeper financial cooperation and a surge in tourist arrivals.  The fiscal policy of Hong Kong government has been apparently successful.  Additionally, an improvement in public finances also provides additional confidence in the sustainability of the currency board system – which locks the value of the Hong Kong dollar to that of the US dollar – and assures markets of the predictability of Hong Kong’s low-tax environment.      However, these financial improvements came along with fiscal challenges.  According to the commentary of  (2006), there are three challenges that Hong Kong has to face.  The Hong Kong government has to broaden the tax base and reduce reliance on such unstable income.  Several options are being proposed including the introduction of a consumption tax.     Public policy concerning this issue would be much better served by fully and openly debating these matters in the context of formulating a longer-term budget strategy rather than speculating over how much taxes can be cut this year, says (2006).  Hong Kong government should take a hold of the opportunity provided by the good times.                III.      Government Policy on Monetary Affairs Article Title:  Base II Compliance in Hong Kong   The Hong Kong Monetary Authority conducted a seminar on the update of the implementation issues in relation to the Basel Committee on Banking Supervision’s revised capital adequacy standards for banks (or what is known as “Basel II”).  The said seminar focused on the practical steps to be taken by authorized institutions to achieve compliance by the implementation date of 1 January 2007.                Hong Kong is the first wave of jurisdiction to introduce the new requirements in conjunction with other major international financial centers such as London, Paris, Frankfurt and Tokyo.  This implementation of Hong Kong government can enhance institutions’ reputation and standing and the stability and effective working of the banking sector.                Moreover, the implementation approach has been developed in close collaboration with the industry, the emphasis being on cost-effectiveness and pragmatism.  The possible drawback to the said implementation approach would be the high cost.  However, Mr. , speaker of the seminar (HKMA Executive Director) said that they have developed a range of approaches so that there is an option that is suitable and of course cost-effective for every institution ranging from the smallest DTC to the largest internationally-active bank.                In further supporting the government’s stand on the issue, Mr.  added that much of the cost attributed to Basel II compliance is in fact necessary expenditure to upgrade risk management systems which institutions would have been undertaking for business reasons even if there had been no Basel II.                In addition to Mr. ’s support, Dr. shows up his side through presenting on internal ratings-based (IRB) systems (cited in  2006 March 17).  Furthermore, he highlighted the considerable potential benefits to institutions of developing such systems to help enhance their credit risk management.  Dr. additionally said that there is considerable scope for institutions in Hong Kong to make greater use of internal ratings systems.                         IV.      Government Policy on International Trade Article Title:  Do Business with the Mainland through Hong Kong   Hong Kong is amenable and accessible to investment and does not discriminate between foreign and domestic investors.  As of the moment, the government of Hong Kong has a worldwide network of economic and trade offices to promote overseas investment in Hong Kong.  Hong Kong’s foreign relation and international trade are considered widely beneficial, even crucial for economic stability.      Hong Kong government has created the CEPA (Closer Economic Partnership Arrangement).  In particular, CEPA is a World Trade Organization (WTO)-compliant, free trade agreement.  Generally, CEPA aims at accessing more markets and saving on tariffs.  In other words, CEPA paved the way for greater market access.  In such policy, Hong Kong opens new trade opportunity in cross-border trade and investment between Hong Kong and the Mainland.  Additionally, CEPA reinforces Hong Kong’s role as a bridge between China and the rest of the world.      Signed in 2003 by the Central People’s Government and the Government of Hong Kong, CEPA has its main provision of preferential access to the Mainland market and reduced tariffs for the export of certain finished goods and services by certain enterprises and individuals in Hong Kong both locally or foreign-owned.    Moreover, CEPA II was created that effect from 1 January 2005.  This development serves as the second phase of the Mainland and Hong Kong Closer Economic Partnership Arrangement.  Effective 1 January 2006 is the CEPA III.  Under the newly-signed arrangement, all finished goods of Hong Kong origin may be exported tariff free to the Mainland upon the CEPA rules of origin being met.  Of course, such policy has exception for prohibited articles and articles that are subject to special requirements.      The current CEPA has been greatly perceived to have a significant effect on trade in goods, trade in services, and trade and investment facilitation.  These CEPA benefits are exclusive to Hong Kong, that is to say no other jurisdiction in the world can enjoy these preferential market access and import tariff rules.  This package further strengthens Hong Kong’s position as the ideal location from which to do business with China and underlines Hong Kong’s importance as an international trade and business center ().     Hong Kong government has also been looking forward for the advantages CEPA will bring on investing multinational companies and firms.  CEPA offers advantages to these overseas investors.  One way is through partnering with, investing in or buying a CEPA-qualified firm in Hong Kong to gain full benefits from the Arrangements.  In this way, overseas investors can take advantage of zero tariffs by manufacturing brand name products or locating manufacturing processes with high value-added content.  Another reason for the Hong Kong government in creating CEPA is the faster market liberalization measures for trade in services to secure a first mover advantage for Mainland markets.  As a final point, overseas investors can take advantage of broader benefits afforded by CEPA as it is WTO accredited ().      REFERENCES   Credit:ivythesis.typepad.com

HONGKONG GOVERNMENT POLICIES ON TRADE

Hong Kong Government Policies on Trade Introduction This papers aims at discussing different policies employed by Hong...

Hong Kong: Ideal Place for Business

Hong Kong: Ideal Place for Business   Economy of Hong Kong Being a free market, Hong Kong is apparently dependent on international trade.  Though natural resources are inadequate, food and raw materials must be gained from imports.  Gross imports and exports (i.e., including re-exports to and from third countries) each exceed GDP in dollar value. Even before Hong Kong reverted to Chinese administration on 1 July 1997, it had extensive trade and investment ties with China. Hong Kong has been further integrating its economy with China because China’s growing openness to the world economy has made manufacturing in China much more cost effective. Hong Kong’s re-export business to and from China is a major driver of growth. Per capita GDP is comparable to that of the four big economies of Western Europe. GDP growth averaged a strong 5% from 1989 to 2005, but Hong Kong suffered two recessions in the past eight years because of the Asian financial crisis in 1997-1998 and the global downturn in 2001-2002. Although the Severe Acute Respiratory Syndrome (SARS) outbreak also battered Hong Kong’s economy, a solid rise in exports, a boom in tourism from the mainland because of China’s easing of travel restrictions, and a return of consumer confidence resulted in the resumption of strong growth from late 2003 through 2005 (). The government interfered in the stock, futures, and currency markets in August 1998 to ward off manipulators.  With the intervention, banking sector in Hong Kong remains solid, and the government is dedicated to the U.S. – Hong Kong dollar link. Victoria Harbor gave way to the rapid development of foreign trade.  It serves as the bridge to Hong Kong’s principal trading partners – Mainland China, the United States, Japan, Taiwan, Germany, Singapore, and South Korea. Because of its strong manufacturing division, Hong Kong enjoyed economic growth in the past years but recently the service sector has exceeded it in importance and accounts for 85% of GDP.  Its major components of service trade are shipping, civil aviation, tourism, and various financial services.  Additionally, Hong Kong has one of the world’s most sophisticated telecommunications and information technology infrastructures making Hong Kong as a major regional and international financial and commercial center.   Economy and Foreign Investments             Hong Kong gives confidence to free enterprises and a free trade economy.  There is no government distinction as to the local and foreign companies consequently welcome investment from both. The Basic Law (which is the highest constitutional law of Hong Kong) provides that Hong Kong can enjoy a high degree of autonomy as a Special Administrative Region (SAR) of the People’s Republic of China.  Hong Kong’s social and economic systems, as well as its lifestyles, would remain unchanged for 50 years after the handling over in 1997, and China’s socialist system and policies are NOT to be practiced in the SAR. Hong Kong lies in the advantage of having the least controlled economies in the world.  Ranked as the world’s 10th largest trading entity and 11th largest baking center, Hong Kong is additionally duty-free.  The number of consulates located in the region revealed a dominant presence of international trade.  Hong Kong had more consulates and consulates-general than any other city in the world.  Even the busiest City (New York) has lesser consulates than Hong Kong.  Moreover, Hong Kong is astoundingly higher than Japan in terms of per capita GDP (PPP).  And with this, Hong Kong is one of the richest territorial regions in Asia. Hong Kong Lifestyle             Food & Drinks             Hong Kong is one the great centers for international cooking.  Apart from Chinese food, which is excellent, there are also many Indian, Vietnamese, Filipino, Singapore/Malaysian and Thai restaurants.  It is the home of authentic Chinese food from all the regions of China, which may be sampled on a sampan in Causeway Bay, on a floating restaurant at Aberdeen, in a Kowloon restaurant, in a street market or at a deluxe hotel.  Hotels serve European and Chinese food but there are also restaurants serving every type of local cuisine.  Specialities include Dim Sum (savory snacks, usually steamed and served in bamboo baskets on trolleys).  Nightlife There are many nightclubs, discotheques, hostess clubs, theatres and cinemas. Cultural concerts, plays and exhibitions can be seen at Hong Kong’s City Hall which also has a dining room, ballroom and cocktail lounge. Shopping Whether one is shopping in modern air-conditioned arcades or more traditional street markets, the range of goods available in Hong Kong is vast. Many famous-name shops have opened in Hong Kong, bringing the latest styles in great variety. Places that display the HKTA sign (Hong Kong Tourist Association) are the best guarantee of satisfaction. Bargaining is practiced in the smaller shops and side stalls only (). Investing Agencies in Hong Kong             Being open to foreign trade and to the world market, Hong Kong investors congregate in the place for their business to grow and have indeed been growing.  There are currently 60 local and foreign companies in Hong Kong, 15 banks and 11 Transportation companies.  Why Invest in Hong Kong? Hong Kong which reverted to Chinese rule in 1997 remains a vibrant economy with a relatively high standard of living.  Although the population is small, businessmen and women are used to western business practices and competition is intense.  New products can and do gain market share very quickly in Hong Kong. Hong Kong is a gateway to Chinese Market.  Many businesses in Hong Kong have their manufacturing in Guandong province.  Hong Kong’s strengths are in high-tech sectors and well capitalized banking sector. Hong Kong named ‘Asian City of the Future’ by Magazine Hong Kong was selected as the Overall Winner “Asian City of the Future 2005/6″ in a competition organized by the fDi (ForeignDirectInvestment) magazine, which is part of the Financial Times Business group. The results are announced and detailed in the magazine’s December 2005/January 2006 issue. fDi invited investment promotion agencies, development authorities and national and regional governments to submit applications. There were more than 60 entries. HK’s entry was submitted by InvestHK. The panel of judges was comprised of fDi’s editorial team and business executives based in the Asia Pacific region. Hong Kong was the winner of 4 of the 7 categories:  Best Transport; Best IT & Telecommunications; Best Quality of Life; Best FDI Potential.  Hong Kong was also the runner-up in the Best Human Resources category (). Hong Kong ranked as the world’s freest economy for the 12th consecutive year Hong Kong retains its position as the freest economy in the world for the 12th consecutive year; that is every year since the Index of Economic Freedom was first published in 1995.  The score of Hong Kong improved from 2005 due to the city attaining better scores in respect of “government intervention in the economy” and “fiscal burden of government”. Hong Kong’s scores for all the other eight factors remain unchanged.  Hong Kong was ranked first in six broad factors, namely trade, monetary policy, foreign investment, banking finance, property rights, and regulation.   Credit:ivythesis.typepad.com

Hong Kong: Ideal Place for Business

Hong Kong: Ideal Place for Business Economy of Hong Kong Being a free market, Hong Kong is apparently dependent on international tr...

Examine the subvention mechanism of non-profit organizations, with special reference to lump sum grant. What are the implications?

THE LUMP SUM GRANT SUBVENTION SYSTEM: AN HK VIEW   Introduction             The government of Hong Kong’s decision is two-fold in that it should ensure economic progress for public welfare while maintaining its culture from other nations.  These conflicting functions for the state enable it to initially guard its political boundaries but ultimately persisting to relax this aspect in order for economic boundaries to propagate its uncultivated land.  In analogy, this situation had affected how it manages its currency exchange and its valuation.  The HK government created monetary and fiscal policies as well as subvention systems like lump sum grants to control foreign investments and local activities for the greater good of its constituents.  Thus, Hong Kong’s implementation of the lump sum grant subvention system is a popular global story since each of them have individual interest to perform well economically reflected in Balance of Payments.  Presented in this paper is the classic lump sum grant subvention system of Hong Kong that has implications to its welfare system.  There is also a discussion about the effects of lump sum grant subvention system to the NGOs of Hong Kong wherein hypothetical cases are discussed and given bearing to analysis.  Lastly, a conclusion is installed to illustrate key findings in the paper.         DISCUSSION               1) Illustrate the development of lump sum grant subvention system in Hong Kong.             It is the case of the already economic-awaken Hong Kong.  By opening its doors to commerce, its lump sum grant subvention system aroused concerns from the world commodity currency of United States Dollar.  Thus, the formerly fixed lump sum grant subvention system had to realize appreciation which is out of the conventional state-owned decision-making and policy.  The Hong Kong’s Central Bank is unwilling to accept command from the US, partly some of inherent protection to Western imperialism, rather chose to act according to its own will.  Due to this, it is slowly but indirectly granting the wishes of the commodity currency through seemingly adapting some features of the lump sum grant subvention system.  Perhaps, one of the unchallenged consequences of international trade, lump sum grant subvention system ensures that the economic performance of a nation will be reflected through its own currency.  As in the case of the reincarnated Hong Kong, foreign direct and portfolio investments serve as key contributors to its fast surging economy.  A lively-active market entails inflation which in turn increases the local demand for the currency of both consumers (to buy the products) and producers (to finance capital requirements).  Hence, as supply and demand law posits, its currency faces appreciation. However, tagging the country as one of the best destinations of FDI, due to demand potential of its enormous consumers and labor-cost advantages, did little to tickle government authorities.  Emanated by 8.03 to 8.02 appreciation against the dollar, such minimal increase posted the highest gain of the currency since it began revaluing lump sum grants to accord international market forces.  Can be viewed as highly conservative lump sum grant subvention system, it also recently allowed its major NGOs to reflect revaluation trends.  But why is Hong Kong so conservative to embrace the “invisible hand” of lump sum grant subvention system?  Is it purely political regimen to imply world power, protection of local producers/ consumers or simply adaptation flaws for a millennia-old centrally-planned form of governance? Probably, Hong Kong does not want risks to emerge abruptly parallel to its abrupt adaptation of the lump sum grant subvention system.  It can lead to inflation and adverse effects to balance of payments which the state cannot act on readily because national forces widened into complex and ever-changing international forces.  Rather the state wanted a smooth shift as it builds the necessary institutions to help its policies address the subvention system issues in the future.  Thus, the gradual approach of Hong Kong to freely implement the lump sum grant subvention system among its NGOs is preferred both for the benefit of its population and install supremacy of its government against other countries.  Local NGOs are given the time to obtain efficiency in its operations, as reflecting the measure of the lump sum grant subvention system could mean more expensive grants detrimental to its balance of payments.  In a similar way, NGOs are provided with cues on what to expect to their lump sum grants in the upcoming future, therefore, preventing public panic of any abrupt development.  Lastly, Hong Kong avoids its political ideals to be inflicted by other customs especially to affect the minds of its citizens.  This argument is concretized how the government created their own internet search engine to filter down political and “destructive” global information.      (2) Describe the LSG and the assessment tools.             Money is often referred as the lifeblood of the business since it is use to source out factors of production. Lump sum grant (LSG), on the other hand, is money that provides certain path, guidance and basis of spending, investing or saving for its grantees like NGOs.  Without a clear vision in mind, the LSG grantee would not achieve optimize returns since it cannot anticipate the risks and costs involve in its future transactions.  It is also difficult to establish certain goal in mind because such firm tends to operate without performance control and measurement.  Since the conditions of organizations that wish to receive LSG vary, so is the LSG budgets prepared for them. The basic principle of forecasting for control is the same for all businesses. It must be emphasized that the LSG is an instrument of control. It can be used by management in the determination of the amount of the deviations form plans and its possible causes. If there is a negative controllable cause, management should act to remove it. That is the meaning of control via LSG. The most important thing here is the comparison of the actual with the planned results, since this comparison reflects the operating conditions of the business.    (3) The two types of lump sum grant in Hong Kong Two basic types of lump sum grant exist in Hong Kong. One is LSG through cash (TYPE A) that provides an estimate of the cash position of the NGO in a given period. This is the type of LSG that NGOs in Hong Kong normally prefer, because Cash LSG involves the consideration of the liabilities of the NGO and schedules the payment of these liabilities according to the schedule of the receipt of revenue by the NGO. Cash LSG starts with a list of the starting cash balance followed by expected revenue for the period covered by the budget added to the starting cash and then followed by the expenses such as liabilities deducted from the total cash balance. The positive remaining amount determines the cash earned by the business. ,  & , 2005, , 2000) Another is operating LSG (TYPE B) that serves to forecast the revenues and expenditures for a year or less of the NGO involved. This involves the listing of income and expenses into two columns, with every source of income and areas of spending of the NGO itemized to compare the difference in total income and total expenditures. This method is helpful in mapping the revenue generation and spending of every area and stage of the NGO. Using this method enables the owners/managers to determine and evaluate the financial soundness of the NGO (, 2003; , 2000). (4) Impact on social welfare service by the lump sum grant system The current state of Hong Kong is highly dependent on its economy and therefore also constitutes the various businesses and companies that are within the country. Even with the consideration for these, there is also the need to identify with the culture of the people and include practical ideas that will also involve beliefs from various parts of the country while also including the ideas that will generally be helpful for the rest of the citizens. Such considerations take some time to work, and there is always the decision to focus on the possible ways that these can be achieved. The government, being a public figure, has the responsibility of specifying the definitions that should be included in the regulations.             The welfare state is provided by the government to the public as per their rights for living and for survival. This responsibility stems from the idea that the country should righteously provide for their citizens, including their basic needs and some of their requirements. This does not necessarily mean, however, that everything should be given, rather some specific needs—such as health services and rights to living and for protection—should also be considered. These benefits being offered to the people are part of what the government may be able to offer according to the economy that they have and how they can seriously provide for the needs of the people. One of the greater reasons for this is to avoid the possibility of poverty overrunning the country and also immobilizing the state.             Hong Kong has a very serious regard for the welfare states and for their citizens. The social policies include the needs and advantages that the citizens will be able to gather as per their rights. The responsibility on providing for them is based on the government, yet an exchange is also expected. Insurances for the people have been made, and thus has also been one of the priorities of many countries, including Hong Kong. However, despite the idea that the benefits are actually provided only by the government, there is also the idea of exchange between the citizens and the government itself, in order to give each other their own advantages and benefits. Impact on the Social Worker Of course, societal concern should be bigger than personal motives.  Here, corruption’s wicked meaning is transformed into an acceptable one when translated as efficient corruption (, 2003).  This is so because the excess of one sector of the community can be diverted to the less fortunate through political intermediaries.  Resources that should be turned into investments by a private firm are delayed as to obtain sector balance, of say, farmers.  Thus, a minimal LSG budget can be optimized in favor of community goals through political manipulation.  In effect, leadership and decision-making capabilities including values of social workers are challenged.  Such motivation would likely not happen if LSG budget is in appropriate level.  Activities before the LSG release The LSG serves as the major weapon of the public to instill responsibility and accountability among NGOs in Hong Kong (,  &  2001).  This somewhat drives public servants to avoid, if not hide, their deviations from such expectations as it could mean public speculation that if proven can result to ouster or election defeat.  On the other end, at times of perceived short LSG budget, they could resort to receive “grease money” from sectors/ businesses/ entities where the purpose of doing so is primarily for the public welfare.  However, the latter statement is prone to public speculation and legal counteraction even under the shadow of good deed.  Nonetheless, the given LSG budget confronted by politicians suggests how they would handle the risk and returns of filling the gap of the budget against their tenure goals.  The motivation comes from personal interests initially, but ultimately, results to embody political aspirations for their constituents.    Since it is unlikely on the average that NGOs in Hong Kong will resort to robbery to obtain the right LSG budget, “grease” money especially from the business sector is a very lucrative source of financing.  The motivation to do so which substantially deviate from honesty virtues has been enforced by public expectation lingered when the candidate announced his formal cause.  To make NGOs efficient and moving cause, they should accept trade-offs between doing the right and wrong or returns and risks.  Activities after the LSG release Using LSG budget outsourcing at times of recession makes NGOs in Hong Kong trustworthy and dishonest as well as situational and relative heroes.  They become vigilant in the process in both environmental scanning for greener industries and internally generating strategies that will connect them to their budget needs.  Strategies include increasing registration and renewal fees, under-the-table settlements, front-up subsidy in favor of tax rate increase, among others.  It motivates his inner circle political organization to remain in continues communication and efficient transactions to avoid being caught by the media or public.  Also, his office would remain collaborative with all the sectors of community not only to scan public opinions and speculations but also to identify opportunities to increase the LSG budget.    (5) The relationship between “the management ability of NGOs” and “the LSG system” Applying managerial motives of the firm theory ( &  2001), managers cannot obtain their self-vested interest as well as those of the NGOs without a hefty LSG budget to implement acquisition and other diversification strategies.  Without minimization of agent risk to job loss or maximization of compensation, managerial motivation would collapse.  On the other hand, the LSG system requires the accurate management of physical, financial and organizational resources that may have complex consequences.  Expansion is a major corporate restructuring which entails strategic actions/ responses.  Being so, when implemented, reversing the strategy would be very costly and has long-term adverse effects.  Without the LSG budget to support managerial entrepreneurship and leadership including their market value, NGOs would feel unchallenged and less well-off than peers in other NGOs.  Turn-over and internal corruption would tend to be seen as worthwhile options.  Departmental networks of NGOs also often argue about appropriation of annual LSG budgets for their specific causes.  When LSG budgets fail to meet expectations of such NGO units, it may result to reduced motivation and even firm rebellion particularly against the finance division.  For instance, a cut LSG budget due to conservation endeavors by the NGO may hurt the annual targets of a department to be able to get their productivity bonuses.  On the other hand, a department may develop envy from the same unit due to higher LSG budget of the latter due to intensified customer focus for year.  The perceived excessive LSG budget could have been used to buy new machineries or train new employees.  These intra- and inter-unit bottlenecks that stemmed in LSG budget allocation have also their impact to unit, relational and overall performance.               Applying performance LSG budgeting to these instances can mitigate the destructive speculation of excessive/ meager LSG budget allocations.  Managers will be periodically audited in the post-expansion implementation to identify discrepancies from the original shareholder promises.  In the same manner, departments who feel aggrieved will be provided with performance targets within the capacity of their budget level.  Since this LSG budgeting system is result-oriented, it should be coupled with ethical committee oversight to regulate unacceptable level of immorality to obtain intended results.  Allocation of the LSG budget and selecting the appropriate model should be inferred in firm specific aspects in order to identify motivational points. In this process, the level of LSG budget is undermined in favor of value-creating results it can offer to the NGO after implementation of the strategy.  The rules of the game are more important than the competencies of the NGO (firm) in this case.  Even though that the probability of losing is over 70%, the manager only expects his players to do their best to beat an unbeatable opponent.  By doing so, employee motivation will meet its target no matter how much departmental LSG budgets are.  Managers, on the other hand, will enhance their strategic decision-making motivation with increased accountability.  In effect, the NGO will have a culture of meeting calculated expectations based on budget limits.  Incentives can increase the boundaries of such approach that will reward performance that exceed a certain level or performance that surpass an operational difficulty and still obtain its goal. (6) How the NGOs use the resources after the LSG system             The financial situation of the NGOs who received LSG budgets is observed to have specific loopholes and sub-optimal performance particularly in financial accounts such as cost of operations, portfolio investments and debts However, with the introduction of LSG control techniques, these NGOs have been able to cut down on costs, establish weal-maximizing investments, avoid excessive debts due to efficiency, and improve division/ subsidiary output.  In this view, it can be said that these NGOs benefit so much from LSG budget control.  Further, this implies the vitality of financial approach to an NGO profitability and long-term growth.  It is important to know that LSGs do not function well when treated as an isolated business procedure.  In order to be successful in this approach, it is essential that the management of the NGO associates the LSG to the other key processes such as sales, public relations and advertising, and accounting. The process of utilizing the LSG is made up of activities that include the development, implementation, and evaluation of a plan for the wise spending of services and capital assets. An effective LSG budget process includes several essential features, which includes, but are not limited to the following: ·         The LSG budget process incorporates a long-term perspective; ·         The LSG budget process establishes links to broad organizational goals; ·         The LSG budget process focuses the budget decisions on results and outcomes; ·         The LSG budget process involves and promotes effective communication with stakeholders; ·         The LSG budget process is based on a “team approach” for program managers and administrative management; and ·         The LSG budget process provides incentives to management and employees.   Since there are so many NGOs in Hong Kong that wish to receive LSG, the managements of these NGOs are aware that it is a good idea to spreadsheet all known revenue producing areas as well as to understand all of the expense categories.  In this way, they are able to start getting a grasp of its peak periods as well as it’s off periods. As a result, these NGOs begin to get an understanding on which this work will be rendered. Utilizing the LSG is not necessarily meant above the tables of the finance and accounting departments.  When the NGO is strict in implementing policy with the CEO as the approving officer, inter-organizational conflicts and reduced motivation would ensue.  This is why many of the NGOs have scheduled and even created management teams composed of different department and division heads.  Based on my own experience, management meetings are held without staff involvement.  The latter are only allowed observing management reports and operational outputs without the “right” environment to comment or suggest.                The absence of the “right” environment is the root cause of boredom, indifference and detachment with my company policies, standards and culture.  Unit managers are acting like Gods because what they say is what would employees are intended to do.  Even though at the end of every presentation the question “Is there any reactions?” would be invoked, such is only a dummy to imply everybody should affirm to make things simply and efficient.  Budget matters are worst.  Managers are only allowed to contribute even though employees are affected by its consequences.  As illustrated, the communication system of the organization directly affects the procedure of making the firm’s budget.  The problem of the model, however, is that the process becomes financially-centered without valuing (or respecting) its effects to employees especially for unit managers who have new or unattached subordinates.  CONCLUSION The results of the analysis carried out on the LSGs among Hong Kong NGOs indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the operations of these NGOs could still be expected to improve faster than average. The review of the capabilities and resources of Hong Kong’s NGOs revealed very little inconsistencies regarding their strategies in managing LSG. This is coherent with their traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for the NGOs. The analysis among the environment as well as the management capabilities of the NGOs in Hong Kong revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the NGO’s competitiveness. Also, NGOs in Hong Kong have to find a balance between adherence to internal forces within the management and to the changing forces of the environment in order to implement such strategic options in handling LSG.     REFERENCES     Credit:ivythesis.typepad.com

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