How The Trade Started
Hong Kong was found under the British Crown Colony and is situated on the southern coast of Guangdong, China. The British rule expired on July 1, 1997 thus restoring the country to Chinese sovereignty. Britain acquired Hong Kong for its magnificent natural dock known as the Victoria Harbor. In the 19th century, it was the main port for the commerce between China and the Western nations. In fact, one-thirds of the China's imports passed through the waterfront.
Before the end of the first half of the 20th century, the traditional trade with China declined. During this point, Shanghai businessmen coming from the Communists side together with Hong Kong's local entrepreneurs and British trading houses established many industries. The exports of Hong Kong were sent to Europe and North America thus attracting foreign investments from American and Japanese firms. The prime commodities exported to other nations are textiles, watches, clothing, electronics, plastics and domestic appliances.
In the mid 1980's, bulk of the production processes from Hong Kong were transferred to China. This was practiced to save on labor cost since the latter has cheaper rates. The British Colony was also very successful in the banking industry. It is considered the second largest among all countries in the Pacific Region where Japan takes the lead.
The status of Hong Kong in the world economy was strengthened under the British rule. After the years they spent under the colony, they have to be handed over to China. Even before the turnover, The United States played a vital role in the progress of Hong Kong. In fact, the former supported the latter in its prosperity measures as well as in major aspects of lifestyle and autonomy.
Under the aspect of autonomy, United States exerted efforts to introduce bilateral agreements and promoted trade and investment schemes. The other key areas which were concentrated on are law enforcement, culture and education. Hong Kong is also a supporter of the anti-terrorism efforts of the United States. All of these things provided a link between these two progressive nations.
Major Exports and Imports Between the Two Nations
The major exports of Hong Kong to other countries include electrical machinery and appliances, apparel, textiles, footwear, clocks and watches, toys, plastics, precious stones and printed material. Its prime imports from other countries are fuel, raw materials and semi-manufactures, capital and consumer goods and foodstuffs. The major export partners of Hong Kong are China, United States and Japan while its major importers are China, Japan, Taiwan, Singapore, US and South Korea.
The very strong trade of Hong Kong with US is evidenced by several facts. In 2005, US ranked second among all Hong Kong export partners while it was number five among all major import partners of the country. The US Census Bureau had already recorded the trade balances as late as October 2008. For the ten-month period beginning January 2008, US exports to Hong Kong amounted to $18.74 billion while the imports of the former from the latter amounted to $5.63 billion. The same bureau had recorded the 2007 statistics between the two nations with the following data:
The US-Hong Kong Policy on Trade
- Hong Kong Exports to US. Hong Kong goods made their own stint on the US grounds. In fact, 2007 records showed that exports from Hong Kong to US totaled $7.03 billion. Out of this total amount, apparel and household goods from cotton were sold for $1.68 billion which is equivalent to approximately 23.90% of the year's total. Accompanying this prime commodity were: jewelry, watches and rings; US goods returned, and reimports; telecommunications equipment; apparel and household goods from other textiles; clocks, portable typewriters and other household goods; electric apparatus and parts; toys, shooting and sporting goods and bicycles; other parts and accessories; and books, magazines and other printed matter. The last goods were sold for a total of $181.64 million or 2.58% of 2007's total.
- Hong Kong Imports from US. The goods coming from the United States sold in Hong Kong made more income than the goods from the latter to the former. For 2007, the total imports from the US amounted to as much as $20.12 billion. Of this total amount, semiconductors led the other prime commodities with sales of $3.21 billion which is 15.95% of the year's total. Aside from these goods, included on top of the charts were: gem diamonds; telecommunications equipment; computer accessories; electric apparatus; civilian aircraft; plastic materials; jewelry; other industrial supplies; and other chemicals. Other chemicals were sold for a total of $369.35 million which is 1.84% of 2007's total.
- Fastest-Growing US Exports to Hong Kong. The sales increases for goods sold in Hong Kong coming from US were very remarkable. Percentages were seen at very significant increases with unmanufactured tobacco topping the list. The said commodity was sold for a total of $3.01 million which is higher by 590.78% than in 2006. Other goods which were found outstanding were: civilian aircraft; other commercial vessels; other precious metals; and sorghum, barley and oats. The latter made $552 thousand in the Hong Kong market which made an increase of 219.05% from 2006.
- Fastest-Growing US Imports from Hong Kong. The sales of goods exported by Hong Kong to US made raves in the market as well. Topping the list of commodities which made an outstanding increase from the previous year were other precious metals. The said goods made $15.17 million which was 7,187% higher than its sales in 2006. Other remarkable goods on the list were: zinc; dairy products and eggs; computers; and unmanufactured steelmaking and ferroalloying materials. The last product made a total of $2.48 million which is good enough for an increase in sales of 561.54% from its 2006's records.
There have been a dozen of bilateral trade agreements between the two including the Air Services Agreement, Mutual Legal Assistance Agreements and the Extradition, Prisoner Transfer. However, there was still a need to have a policy on trade. This agreement covers several vital aspects of the economy. Each aspect is addressed to provide a better foundation on the friendship of US and Hong Kong. Here are some of the inclusions in the policy:
US-Hong Kong Trade Conflicts
- Anti-Terrorism Cooperation. International war on terrorism was a primary concern of the United States especially after the September 11 attacks on the Twin Towers. Hong Kong was said to be one of the supporters of US in its war against terror. In fact, through the policy on trade, Hong Kong passed and implemented laws for counterterrorism.
- Autonomy. Independence in Hong Kong had been around for a decade and up to now the nation is still enjoying its sovereignty. Since US is after the desire of Hong Kong to continue its autonomy, the policy on trade was of great help. The pact promoted the opportunity for the latter to have a voice in politics and other economic issues. Aside from political stability, economic autonomy is also one of the things enjoyed by the locals. This had fortified its trade relations not only with US but other countries as well.
- Civil Liberties. In its effort to support autonomy, the US formulated the trade policy to provide Hong Kong nationals to exercise its liberty through freedom of speech, press, religion, association and assembly. Basic human rights were also focused on.
There were several flaws between the trade of the two nations. Both sides have their various concerns which have to be addressed. Specifically, the following things had affected the trade between US and Hong Kong at a certain extent:
The Future Trade of the Two Nations
- US's concern on war against terrorism. The US saw that there was a felt need for Hong Kong's financial institutions to focus on their guidelines. Some of the rules of banking and finance were not strictly followed. The American government encouraged proper identification of persons opening an account in a reasonable and practical extent. This is for the protection of the institution and the public. Furthermore, information such as the name and address of the person should be held intact. Government agencies must also provide financial establishments a list of suspected as well as known terrorists and organizations for such purpose. The errors were to be corrected for the purpose of setting a war against terrorism.
- Educating Hong Kong firms. There were several instances when illegal re-exports of US's technology was made with China. These firms were said to be subsidiaries and partners of Hong Kong companies. In order to solve the problem, US and Hong Kong agreed on educating the said establishments in terms of the laws set by trade between the two nations.
The US had always been vocal about its confidence with the kind of trade practiced by Hong Kong. In fact, the government of America says that the practice of the latter should be emulated. Despite enjoying a mere decade of independence, Hong Kong had already proved itself in international trade.
The support the two nations have for each other will lead them to better understanding in the future. They will definitely uphold what they had begun. There is no need to be worried about how the upcoming generations will accept the ties that bond their alliance. The existing governments will surely pave the way for brighter days to come.
US-Hong Kong References