Hong Kong vs. Mainland China: Understanding the Economic and Financial Differences

Hong Kong vs. Mainland China: An Overview Many people know Hong Kong as an international financial hub , business center, shopping paradise, and tourist destination. However, it is also a special administrative region (SAR) of the People’s Republic of China. As such, Hong Kong is an inalienable part of China and, at times, has resisted Beijing’s interference in its political life.1 Pro-democracy activists in Hong Kong would like the region to remain distinct from other Chinese cities. That makes the relationship between Hong Kong and mainland China complex. However, mainland China and Hong Kong complement each other economically even if their political differences remain entrenched. Key Takeaways Hong Kong is a Special Administrative Region controlled by the People’s Republic of China and enjoys limited autonomy. Mainland China’s principle of one country, two systems allows for the coexistence of socialism and capitalism within China. The Hong Kong economy is characterized by low tax rates, free trade, and limited government interference. The mainland Chinese stock markets are more conservative and restrictive than that of Hong Kong. The Shanghai and Hong Kong Stock Exchanges are two of the largest in the world. Practice trading with virtual money Find out what a hypothetical investment would be worth today. Select a Stock TSLA Tesla Inc NKE NIKE INC AMZN Amazon.com, Inc WMT Walmart Inc Select A Purchase Date 5 years ago 2 years ago 2 years ago 5 years ago 5 years ago 10 years ago 10 years ago Hong Kong Britain negotiated a 99-year lease with China on its Hong Kong colony in 1898. That lease ended in 1997, at which time Britain returned Hong Kong to China. Hong Kong then became the Hong Kong SAR of the People’s Republic of China.2 Under the doctrine of one country, two systems, China allows the […]

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