Transcript Neo-Liberal Strategies

Topic 6
Globalization and
Community
Global City:
1. High concentrated command points in
organization of world economy
2. Key locations for finance and specialized
service firms
3. Markets for products and innovation
4. Sites of production
Entrepreneurial City:
1. Pursue innovative strategies to enhance its
economic competitiveness
2. Strategies are real and reflective, pursued in
an active and entrepreneurial fashion
3. Adopt discourse and take city as
entrepreneurial city
Economic
Innovation:
1. Introduce new types of urban
space and place
2. New methods of space
production to create locationspecific advantages
3. Open a new market
4. Find new sources of supply
5. Redefine urban hierarchy
Neo-Liberal Strategies
 Common Neo-Liberal strategy
Attract inward investment to retain extant
investment through cost-cutting and deregulatory
strategy
 Neo-corporatist, Neo-statist & Neo-liberal
Pursue some form of
structured coherence
across scales by building
links to wider economy
From industry to
Services
1979, China opened its market to foreign
investment
Provide opportunities for HK firms to adopt
glocalization strategies
Enhance competitive advantage in the
export market
Facilitated by some global strategies in
China
Hollowing out of HK as a manufacturing
centre
From industry to
Services
Globalization strategies by HK:
Low land and labour costs in Mainland
China
In mid 1990s, HK factories moved
northwards
Finance Sectors

Market-friendly environment

Opening of China market

Growing economic importance
of Asia Pacific region

Global financial liberalization and
development of international banking
and financial markets

Developments in information technology and
telecommunications

HK net recipient of overseas funds!
Real Estate Sectors
Immature debt market cannot absorb the excess
capital, which then turned into property market
1.
2.
3.
4.
5.
6.
7.
8.
HK government's historical
dependency
Pegged exchange rate
Low real estate rate
Sino-British Joint Declaration
Accumulation hard currency from
Mainland China
Growth in population during 9193
Growth of GDP
Desire of new middle classes for
property
Close Relationship between
Finance and Property Capital
3 Phenomena:
1. High loan exposure of financial
institutions to construction and
real estate
2. Half of the Hang Seng Index
made up of property or related
share
3. Interlocking relationship between
real estate and infrastructure
development
Competing
Discourses on
Globalization
Worries…
Decline of industry
Lack of high-tech
investment
Rising residential and office
rental costs
Consultancy Report
Reflect:
Advantageous mode
of inserting HK into the
multiscalar and
multitemporal divsion
of labour
Refine:
Entrepreneurialism
Competitiveness forms
New combinations to
create and sustain
competitiveness
Demonstrate
"globalization strategies" o
HK
1st Report -- HK Advantage (Harvard)
Sponsored by the Vision 2047 Foundation which groups
commercial and financial capital interests
Group promoted revisioning of Hong Kong’s future time
and space favouring its own interests
HK’s manufacturing decline and challenge of interurban
with Shanghai, Singapore and Taipei
1st Report -- HK Advantage (Harvard)
Promote HK as new identity as business / service / financial
centre with hubs functions
 portrayed HK as new type of urban economic space
 manage as ever-expanding global-regional-local flows
of production and exchange
2nd Report -- Made by HK (MIT)
Argument:
‘Made by HK’ manufacturing trajectory (low cost manufacture
of HK goods in offshore locations) is unsustainable due to rising
labour and land costs and craze property
Solution:
Produce higher-value-added goods in HK
‘Made in HK’ symbols
High-tech manufacturing centre
Requirement:
New methods of production and organization socioeconomic
space
Government support
2nd Report -- Made by HK (MIT)
High-tech manufacturing centre:
Brand name production
Original design manufacturing
Boost the entrepreneurial and self-governance
capacities:
Acquire technical knowledge from the PRC
Promoting R&D agglomeration economies
Acquire new inputs
Strengthen technological capabilities of government
Asia Crisis
Feb 97, speculators attacked Thai currency, soon spread to
HK
•
Govt response to the attack:

Intervened in money market by push up interest rates in interbanking
sector

Impose penalty interest on borrowing of HK dollar
•
Consequence:

Maintain exchange rate
BUT…

High interest rates

Capital flow out

Reduced external demand

Local stock index and property price down
•
Govt response to prevent:

Freeze land sales

Grant tax rebates to property owners
Asia Crisis
Aug 98, further attack upon yen depreciated against dollar,
propelled significant capital outflow
•
•
Govt response:

Draw on reserves to buy HK shares

Introduce technical measures to strengthen transparency and operation
of linked exchange rate system
Consequence:



•
High interest rates
Weak domestic demand
Rise unemployment
Govt response:


Resume land sales
Support property sector
New Urban Identity for a Crisis-ridden HK
Challenges:
o Over-dependence on property sector
o Vulnerability of financial and other services
o Competition from Shanghai and Singapore
o Rising tide of the
information revolution
o Recession
New Projects for
Urban Governance
in the articles
Cyberport
Silliconization
Aims
Information service sector
Information and telecom hub in Asia
Capture global information flows
Knowledge-based economy
Cyber culture critical mass to link the
global, regional and local
Symbolically bridge traditional
service-technology-property
divide in the cityspace
Now...
After the 2001 technological
stock bubbles, Cyberport
become not popular, usage of the
Cyberport is changed.
Technological companies
closed down
No further invest in information
technologies
Does Hong Kong really need
Cyberport?
Criticism
Real estate project
Not open for bidding
Using residential land to subsidise
the Cyberport
Depart from non-intervention
policy
Lack of transparency
Create favouritism
Siliconisation of Asia
Many Asia countries desired to
develop information-technology
Hong Kong compete with other east
Asia countries, such as
Singapore : Science Hubs
Malaysia : Multi-media
Supercorridor
Beijing : Zhonguancun area
Hi-tech Clusters in Singapore and Malaysia
Project costs
Singapore’s
Science Hubs
US $20 billions
Malaysia’s Multi-media
Super-corridor
US$2.9 billions
Size
434 acres
750 km2
Major Tenants
Dell, National University
of Singapore Polytechnic
Microsoft, Intel, Nippon
Telegraph and Telephone
Completion
date
Niches
Before 2013
1st phase in 2002
R&D development
2020
Software, Multimedia
products
New Project
Disneyland
•
•
Advantages:
• Attract tourists
• Create new jobs
• Project will cost an
estimated $14.1 billion which
represents a new injection of
capital expenditure into the
local economy.
Disadvantages:
• Compete with the
Shanghai’s Disneyland
• Capital return cannot be
predicted
•
Consumption and
ideology:
•
Fairy tales vs reality
•
Western culture vs local
culture
•
Corporate Brand culture
•
•
Environmental Issues:
• Men and fishes
• Villages and plants
• old historic sites
Labor Issues:
• Low paid
• Exploitation of labor in China
• Lack of Corporate Social
Responsibility
Conclusion
Rethinking the failure of various
projects
Global city vs entrepreneural city
Global city vs local community