1. Hong Kong and the Global Economy
Chapter 2
Hong Kong and the Global Economy

2. Factors affecting business decisions
The business environment is affected by:
Political and legal factors
Economic factors
Business Environment
Technological factors
Social and cultural factors
Physical factors

3. Hong Kong’s economic and business relationship with the Mainland
Hong Kong has a close economic and business relationship with the Mainland in the following areas:
The flow of goods and services
The flow of investment
The flow of people
The flow of information

4. Economic policies in the Mainland
The Chinese government announced its open-door policy in It then started to introduce various reform policies to develop the economy. The reform policies include:
Special economic zones and coastal port cities
Enterprise reforms
Financial reforms
Entry into WTO

5. Business practices in the Mainland
A country’s social, political and legal environment has a great impact on business practices. In China, business practices that affect business decisions include:
The importance of guanxi
Corruption
Business ethics
Flows of capital and information

6. Globalisation of business
Globalisation is a series of ________, ___________, _______, ______ and _______ changes which have led to the increasing _________ and _____________ of people and firms around the world.
economic
technological
cultural
social
political
integration
interdependence
Changes in:
Economic
Social
Integration
Cultural
Political
Interdependence
Technology

7. Globalisation of business
In the process of globalisation, many firms have ________ their markets beyond the _______ boundaries of a single country. These firms have become ___________________ (MNCs).
expanded
national
multinational corporations
Examples of MNCs):

8. Globalisation of business
Drivers of globalisation
Since the 1980s, the process of globalisation has gained momentum. There are four driving forces of globalisation.
The success of Japan and the ‘Four Little Dragons’
Economic reforms in China, India and Eastern Europe
Development of information and communication technology
Advances in transport technology

9. Globalisation of business
Impact of globalisation on business
Business managers should be aware of the impact of globalisation on business when making decisions.
Expanding markets
Recognising cultural differences
Increasing competition and specialisation
Encouraging global sourcing and outsourcing
Encouraging technology transfers

10. Major international trade organisations
The following international and regional trade organisations have been established to promote and facilitate international trade and investment.
International
Monetary
Fund