Hong Kong Stimulus Paper

Hong Kong is a city in transition from an industrial to a knowledge-based economy confronted by extensive migration from mainland China posing poverty, skill, and exclusion issues...

Introduction of the city

Hong Kong was formally ceded by China to the UK in 1842.  After an agreement signed by China and the UK in 1984, the British Government agreed to transfer sovereignty of Hong Kong to China on the 30th June 1997; in return, the Beijing Central Government agreed that Hong Kong would be a Special Administration Region with its own economic, judicial and education systems. In this agreement, China promised that, under its "one country, two systems" formula, China's socialist economic system would not be imposed on Hong Kong and that Hong Kong would enjoy a high degree of autonomy in all matters except foreign and defense affairs for the next 50 years.

The Hong Kong Administration adheres strongly to free-market economic principles and implements conservative, pro-business fiscal policies that result in it having one of the lowest tax rates in the world.  The social welfare system is based on low public expenditure, piecemeal, pragmatic and ad hoc welfare policies and limited commitment to the notion of welfare as a right of citizenship.

During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly and in 2009 accounted for more than 90% of the territory's GDP.  Providing ancillary business and professional services for multinational corporations and being the mediator and coordinator of international trade and finance has become the mainstay of the economy of Hong Kong.  The four core industries in Hong Kong are financial services, producer services, logistics and tourism.  Hong Kong's open economy has left it exposed to the global economic slowdown, but its increasing integration with China has helped it recover from the downturn. Hong Kong over the past few years has become increasingly integrated with China through trade, tourism, and financial links. The mainland has long been Hong Kong's largest trading partner, accounting for nearly half of Hong Kong's exports by value. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 16.9 million in 2008, when they outnumbered visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. More than one-third of the firms listed on the Hong Kong Stock Exchange are now mainland Chinese companies, and they account for 60% of the Exchange's market capitalization. Hong Kong's natural resources are limited, and food and raw materials must be imported. GDP growth averaged 5% from 1989 to 2007. Hong Kong's GDP fell in 2009 as a result of the global financial crisis, but third quarter 2009 real GDP grew over the second quarter.

Current situation

As Hong Kong has shifted from being an industry-based to a knowledge-based service economy, knowledge generation and innovation with application to local industry and economic enterprises have become increasingly important in renewing and revitalizing the local economy.  However, from a society point of view, there are other macro forces that have impacted upon the society and which makes the distribution of economic benefits unequal or difficult to access.  Increased level of human mobility for instance, makes the composition of a population heterogeneous and immigrants to a society often face difficulties in adapting to a knowledge-based service-oriented city economy because of their lack of qualification, language skills and insufficient social support for their settlement.  Big disparity between the rich and the poor also makes the latter difficult to catch up with rapid technological changes and their previously learnt skills become redundant.   A society without an effective government programme to reskill, retrain or reequip the poor and the immigrants to adapt to a knowledge-based service economy will find social problems abound and poverty becomes chronic.

Since the 1990s, Hong Kong has experienced big inflow of Chinese migrants from the mainland.  Out of a population of 6.7 million, newly arrived mainland Chinese migrants have reached approximately one tenth of the total population.  A substantial number of them will be officially classified as living in low-income households and the number of people living in such households has reached over one million.  A considerable number of the migrants are marriage migrants who have moved to Hong Kong after marrying to older Hong Kong men.  Many of them are middle-aged, poorly educated women who come from mainland China and speak a different dialect and have different cultural habits than inhabitants of Hong Kong.  They have difficulties in meeting the skill needs of the knowledge-based, service-oriented economy in Hong Kong and therefore have to engage in low-wage jobs as cleaners or janitors. Their husbands on the other hand are also likely to be displaced workers of the previous industrial era and therefore have the same difficulties in engaging with the present economy effectively.  Many of their children have difficulties in wrestling themselves out of the poverty trap because most of them live in urban migrant enclaves which have insufficient public facilitates and support to allow them to effectively engage with the education system.  Some local district councils have implemented district-based poverty alleviation programmes.  The Sham Shui Po District Council, one of the 19 district councils in the territory, with the help of local NGOs, has implemented two major poverty alleviation projects to help address the needs of the community and create suitable job opportunities for its inhabitants.  The Sunny Family Project for instance attempts to train and pay new migrant housewives to help clean 500 homes of the elderly living in the district.  Children of these migrant women are trained as community reporters to visit and interview old people whose homes have been cleaned by their mothers.  The children are not only encouraged to write reports but also to create art works to reflect how they think about the efforts of their mothers and the old people.  Working with 12 NGOs in the districts, the Shep Kip Mei Creative Arts Centre Community Outreach Project helps to train Sham Shui Po inhabitants to become artists and tour guides in the creative arts centre which is located in the heart of the district.   Both these projects attempts to increase the social capital, create job opportunities, foster social networks and increase the self-esteem and belonging of the people living in the district.    The effects of these small-sized social projects however are still not yet significant compared with the size of the problem.  These projects also do not address directly the needs of the migrant children in an increasingly elitist schooling system.  As the government Hong Kong is not implementing any comprehensive measures to address the needs of immigrant families and their members in the territory, there is therefore a need to implement new initiatives that will help lift this group of people out of poverty and allow them to participate effectively in the city’s economy.

An inclusive learning city that will help foster the schooling of immigrant children and the retraining of immigrants or the dislocated industrial workers will have much impact on social development of Hong Kong.  Some points for consideration with regard to such an initiative in the context of Hong Kong will include:

• How to extend the culture of learning to urban migrant enclaves? 
• What sort of hardware outside schools can be constructed to facilitate children in an urban migrant enclave to become more equipped to meet the challenges of a knowledge-based economy?
• How to foster a stronger community in support of a culture of learning that is based outside schools and in a wider community?
• What sort of support will be needed from the business, government, NGOs, arts groups and local district councils?
• What sort of niche in the current economy can be found for male displaced industrial workers and what sort of career ladder and training pathways can be constructed for the group?
• What sort of niche in the current economy can be found for middle-aged female migrant workers which can provide them with a career ladder and what sort of training pathways can be constructed?

Co-ordinator

Professor Rupert Maclean - Director of Centre for Lifelong Learning Research and Development at the Hong Kong Institute of Education.  Previously worked in UNESCO for 19 years as Director of UNESCO-UNEVOC Centre.  Recently awarded the UNESCO Chair for technical and vocational education and training and lifelong learning. 

Participant

Ada Lai - received her PhD on female ethnic minority migration in southwestern China in England.  Has worked in different research projects in Hong Kong, China and England related to low-wage work, conditions of female factory worker, education of new migrant children etc.