Globalization and

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Topic 6 Globalization and Community

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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
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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
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Economic Innovation

• Introduce new types of urban space and place
• New methods of space production to create
  location-specific advantages
• Open a new market
• Find new sources of supply
• Redefine urban hierarchy

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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

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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

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From industry to Services

• Globalization strategies by HK
• Low land and labour costs in Mainland China
• In mid 1990s, HK factories moved northwards

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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!

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Real Estate Sectors

• Immature debt market cannot absorb the excess
  capital, which then turned into property market

• 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 91- 93
• Growth of GDP
• Desire of new middle classes for property

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Close Relationship between Finance and Property
Capital

• 3 Phenomena
• High loan exposure of financial institutions to
  construction and real estate
• Half of the Hang Seng Index made up of property
  or related share
• Interlocking relationship between real estate and
  infrastructure development

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Competing Discourses on Globalization
Worries Decline of industry Lack of high-tech
investment Rising residential and office rental
costs
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Consultancy Report

• Refine
• Entrepreneurialism
• Competitiveness forms
• New combinations to create and sustain
  competitiveness
• Demonstrate "globalization strategies" of HK

• Reflect
• Advantageous mode of inserting HK into the
  multiscalar and multitemporal divsion of labour

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1st Report -- HK Advantage (Harvard)

• Sponsored by the Vision 2047 Foundation which
  groups commercial and financial capital interests
• Group promoted revisioning of Hong Kongs future
  time and space favouring its own interests
• HKs manufacturing decline and challenge of
  interurban with Shanghai, Singapore and Taipei

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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

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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

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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 RD agglomeration economies
• Acquire new inputs
• Strengthen technological capabilities of
  government

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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

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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

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New Urban Identity for a Crisis-ridden HK

• Challenges
• Over-dependence on property sector
• Vulnerability of financial and other services
• Competition from Shanghai and Singapore
• Rising tide of the
• information revolution
• Recession

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New Projects for Urban Governance in the articles

• Cyberport
• Silliconization

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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

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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?

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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

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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
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Hi-tech Clusters in Singapore and Malaysia
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New Project

• Disneyland

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• 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 Shanghais Disneyland
• Capital return cannot be predicted

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• Consumption and ideology
• Fairy tales vs reality
• Western culture vs local culture
• Corporate Brand culture

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• 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

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Conclusion

• Rethinking the failure of various projects
• Global city vs entrepreneural city
• Global city vs local community