Research Stories

Trade and opening up to China have fuelled Hong Kong’s phenomenal economic success in recent decades, but they have also left greater inequality in their wake.

Hong Kong’s open port and free trade economy have often been touted as the secrets to its economic success. Over most of the last decade, as trade with the world has become freer, the city has experienced strong economic growth and low unemployment. But there has been a downside to this: Hong Kong has one of the highest rates of inequality among highly-developed economies, according to the UN Human Development Report. Why is there this disparity?

An HKU report commissioned by the Asian Development Bank (ADB) offers some answers. It is part of a global series of reports that aims to improve understanding about the relationship between trade and unemployment around the world.

Dr James Vere, of the School of Economics and Finance, conducted the Hong Kong study and says the picture here has been complicated by more than just freer global trade. The opening up of China, which is also intertwined with trade issues, has had a significant impact on employment.

"The mere fact that a sector is adding jobs does not necessarily imply that workers in that sector are doing well."

Dr James Vere

  

The full version of this article was originally published in Bulletin. Please click here to view this HKU publication.