What is the economic system of Hong Kong? The economy of Hong Kong is based on a mixed economy. The country’s economic system combines elements of a market economy and a planned economy.
In Hong Kong, the economy is composed of a private sector, consisting of individuals and businesses that make autonomous decisions based on self-interest, and a public sector, where the state determines the production and distribution of certain goods and services. No country is purely capitalist or purely communist.
What do the freedom indexes tell about the economic system of Hong Kong?
In a similar way, the 2022 Freedom House index evaluates the state of political rights and civil liberties globally. Generally, market economies tend to align more with democracy and freedom, while command economies tend to be characterized by greater state control and fewer democratic and civil liberty protections. Hong Kong gets a score of 43/100, which qualifies it as Partly Free. Hong Kong is considered to have a government that does not control what people do, and people can make their own economic decisions, but it is only considered an electoral democracy, lacking full liberal democratic protections.
The Link Between Public Sector Employment and the Economic System of Hong Kong
An indicator of the extent to which the State is involved in the economy is the number of public sector employees. In Hong Kong, according to ILOSTAT, the number of public sector employees as a percentage of the total workforce is 7.1% (2014). In the country’s mixed economy, the number of public sector employees as a percentage of the entire workforce varies based on the specific policies and practices adopted by the State. Some economic activities are left to the private sector while others are under government control. The bigger the public sector the closer is the economy to being a command economy.
What does the biggest company in Hong Kong say about the country’s economic system
The biggest company in Hong Kong should also be looked at, as well as whether it is a state-owned or private company. In this case, China Mobile is a telecommunications giant from Hong Kong, providing mobile services to over 900 million customers in mainland China.
The company is directly controlled by the government of the People’s Republic of China. The Company’s ultimate controlling shareholder is China Mobile Communications Group Co., Ltd. (“CMCC”), which, as of 30 June 2022, directly and indirectly, held approximately 69.82% of the total number of issued shares of the Company. The remaining approximately 30.18% was held by public investors.
The historical factors that have influenced the economic system of Hong Kong
The current mixed economy system of Hong Kong in the last century is the result of a combination of factors, including the British colonial period, the 1997 handover to China, and the city’s open market policies.
The British colonial period saw the introduction of free trade and a strong focus on economic growth, while the handover to China brought with it a more open and liberal economic system. Finally, Hong Kong’s open market policies have allowed for the growth of a vibrant, open, and diverse economy.