The Free Economic System And The Development Of Foreign Economic Relations In Hong Kong

A free economy system is considered the soul of Hong Kong's economy. From the time of the British colonial governance to the turnover under the Chinese sovereignty, the concept of a free economy remains fundamental in instituting administrative policies in Hong Kong. Alongside with the pursuit of a open and free economy, Hong Kong has always engaged actively in international trade throughout the years. As a result, Hong Kong has successfully built an extensive network of connections with other economies worldwide and firmly established its leading position as a global business center. In recent years, Hong Kong has re-focused its foreign trade strategy that leverages on the emerging economic power of Mainland China. Translated as "Confronting the world with back up support by the Motherland", the idea is to ride on Hong Kong's existing competitive advantages and reinforces its role as the bridge between China and the international community. At the same time, Hong Kong's successful experiences in its economic development serve as a catalyst for the economic developments in Mainland China.This paper is divided into six chapters: The first part consists of an overview of Hong Kong's free economy system and its developments in foreign economic relationships. The second part is an analysis of how the free-port and the active non-intervention policies during the period of British colonial governance had affected and shaped up the foreign trade relationships in Hong Kong. A substantial portion of the paper also discusses the continued development of the free economy system since the turnover of Hong Kong back to China, and forecasts the prospects in future foreign economic relationships. Lastly, it points out that the successful case in Hong Kong becomes a reference model for the economic developments in Mainland China.The focus of the paper is: 1) to examine respectively the free economy system and foreign economic relationship before and after Hong Kong's turnover back to China, including their essence, function and mutual impact. From the investigation, we try to probe the prospects of future economic developments. 2) To draw a conclusion of how a free economy system can help to promote the development of the foreign economic activities. 3) To put forth a reference model through the successful experiences in Hong Kong and thereby sheds light to the future developments of the Mainland China economy.