Elena Tung F.4B (27)
There have a plan that drafted by the Hong Kong government for a trial scheme. This
trial scheme is about the Hong Kong government wishing to start projects with the
mainland China under the Closer Economic Partnership Arrangement (CEPA) can apply
to import labour.
There have two arguments about this trial scheme:
For the government, the Secretary for Economic Development and Labour said that the
proposed scheme was aimed at creating jobs for local workers. Below is a diagram to
show the changes in supply and demand:
P
Excess supply 1
S
Mp
Excess supply 2
Pe
D1
0
Mp: market prices/market wages
Pe: price equilibrium
D2
local workers
Q
To sum up, the aim of the government is to provide more job opportunities for the local
workers. It is because when more jobs are available for the workers, the demand curve
shift to the right, there have less worker being unemployment, as shown by excess supply
becoming smaller.
However the unions leaders do not agree with the government. Let’s see the situation:
P
Excess supply 1
S1
S2
Mp
Mp: market prices/market wages
Pe: price equilibrium
Excess supply 2
Pe
D
0
local workers
Q
In conclusion, the opinion of the unions leaders: when the mainland workers are imported
by the government, there is an increase in supply of workers, so the supply curve will
shift to the right, the excess supply will become larger.
Elena Tung F.4B (27)
By the way, I agree with the opinion of the union leaders. It is because when more
workers were imported from mainland, employers may choose the labour that come from
China, so less job opportunity for the local workers. Besides, Mr.Yip do not explain how
does import labour form China can help to solve the unemployment of local workers.
The final result depends on which effect is larger. If the increase in demand is greater
than the increase in supply, then the unemployment rate will fall.