Work-in-Progress Workshop in Hong Kong Studies 2024 #4

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Title: The Role of China in Hong Kong’s Industrialization: Towards an Explanation of the Puzzle of Manufacturing Capacity

Presenter: Dr. Macabe Keliher, Southern Methodist University

Project type: Book chapter

Abstract:

Hong Kong was one of the fastest growing economies in the postwar world, regularly posting annual GDP increases over 20 percent. Scholars frequently explain this development as a result of the perfect combination of macroeconomic stability, rule of law, and free markets. What existing studies have been unable to show, however, is advances in Hong Kong firms’ manufacturing capacity: How did firms acquire the necessary technology to move up the value chain and not only diversify production but also increase productivity?

Focusing on the political economy of postwar East Asia, this study argues that Hong Kong’s growth cannot be explained purely by economic factors, as often assumed; rather, increases in manufacturing capacity were a result of political competition and economic warfare between the KMT led ROC on Taiwan and the CCP led PRC. Drawing on firm-level interviews and Taiwan archives, this study traces the role and development of the largest industrial machine supplier in Hong Kong, Universe Machinery Enterprises; it shows that Hong Kong firms acquired advanced manufacturing capacity in key industries from the PRC through Universe. Established by a Guangdong entrepreneur in the 1950s, Universe became the front company for the CCP-run China Resources Co. and came to supply over half of the Hong Kong market with advanced manufacturing equipment both to help the PRC raise necessary foreign reserves but also to compete directly with ROC run companies in Hong Kong.

Keywords:
Hong Kong, industrialization, manufacturing capacity, East Asia political economy, business history, machine tools

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Title: Regaining Colonial Airspace: Discussion over ATLA Reform in the 1980s

Presenter: Wong Kang Shing, James, Chinese University of Hong Kong

Project type: Journal article

Abstract:

This study delves into the dynamic changes that Hong Kong experienced during the 1980s, driven by policy shifts ahead of political transition. A pivotal aspect of these changes was the reform of air service regulations, particularly evident in the amendment of the Air Transport (Licensing of Air Services) Regulation in 1985. The amendment empowered Hong Kong’s civil aviation authorities to grant operating permits to foreign and British airlines, a power previously held by the British government. Historically, Hong Kong’s landing rights were negotiated between the UK and foreign countries. The main context of this paper is the enduring discussion between Hong Kong and Britain concerning the reformation of the air service licensing framework in the early 1980s. At the heart of this discussion was the Air Transport Licensing Authority (ATLA), a local statutory body set up in 1949 to licence scheduled air services between Hong Kong and other destinations. The paper investigates the evolving perspectives of both Hong Kong and British governments in light of incidents that significantly impacted the colony’s future, including the Sino-British air services negotiations, Cathay Pacific’s bid to operate Hong Kong/London flights, and the signing of the Joint Declaration. The study further examines how local and British air carriers addressed their concerns and identified new opportunities during the Hong Kong-UK discussion. Some changes were met with resistance, notably from British Airways, which faced a potential disruption to its longstanding privileged position in Hong Kong. Meanwhile, Cathay Pacific aimed to challenge both British Airways and other competitors by expanding its long-haul flight operations. Additionally, local Chinese entrepreneurs established Dragonair, a venture aimed at offering scheduled flights between Hong Kong and mainland China. This paper pioneers a fresh analytical approach to unravel the interplay between decolonisation and business development in Hong Kong.

Keywords:
Civil aviation; air services; Hong Kong government; Cathay Pacific; British Airways