Teacher’s
Edition
Legend of Hong Kong’s Industry, Commerce
and Trade
A. Learning objectives

1.
2.
3.
4.
5.
6.
7.

1.
2.
3.
4.
5.

1.
2.
Knowledge
To recognise concepts related to trade
To recognise the process of trade development in Hong Kong
To analyse the internal and external factors that help Hong Kong become an international
industrial, commercial and trading centre
To understand the importance of external trade to Hong Kong
To appreciate close relationship in trade between Hong Kong and the mainland of China
To understand the challenges faced by Hong Kong trade and evaluate the ways to cope
with the challenges
To recognise the work of the HKSAR Government and other organizations and possible
solutions in promoting trade and investment
Skills
To strengthen the abilities of selecting and classifying information
To acquire skills of drawing conclusion
To acquire evaluating skills
To enhance critical thinking skills, creativity and analytical ability
To develop independent thinking
Attitude and Values
To enhance the awareness and participation of social affairs
To nurture a habit of reflection on daily life
1
B. Prior Knowledge
General Studies in primary school
Strands
Core Elements
4: Community and
 Goods, facilities and services in the community
Citizenship
 Different kinds of work in society
 Exchange of goods and services to meet our needs and
the needs of others
 The early history of Hong Kong
 Major features of the Hong Kong economy
 Factors affecting the economic development of Hong
Kong
 The benefits for Hong Kong of trading with other parts
of the world
 The functions and services provided by the government
and local institutions in response to the needs and
interests of Hong Kong residents
 Some current and relevant social issues in the community
 Suggestions for extension: studies on how government
policy affects the economic development of Hong Kong
and the economical relationship between the mainland of
China and HKSAR
6: Global
 Reasons for people to exchange information, goods and
Understanding and
services
the Information Era
 Extracting, organizing and classifying information
 Distinguishing fact from opinion
 Major current international events and their meanings to
us
 The interdependence of different parts of the world
C. Suggested no. of lessons: 11
2
D. Suggested learning activities
Lesson 1
1. Ask students to read the introduction. Conduct 【Activity 1】. It is hoped that by
stimulating students’ interests in the history of Hong Kong trade development, students
are motivated to learn this topic.
2. Distribute【Activity 2】 and Worksheet 1. Students read Source 1 and write down their
reflections. Teachers may invite students to share their reflections and link relate questions
asked by students to later discussion.
3. Before the end of the lesson, divide students into groups and distribute【Activity 3】. Ask
half of the groups in the class to finish Worksheet 2 and the rest of the groups Worksheet 3
at home. Teachers may suggest students to interview their family members to collect more
information and to add more circles to the worksheet if needed.
Lesson 2-3
1.
Students discuss their findings of Worksheet 2 and Worksheet 3 in groups.
2. Students write down their findings on the blackboard and report to the class.
3. Show the ETV programme “香港的經濟發展”which can
be found in “Personal, Social and Humanities Education: A
Collection of Education Television Programme for
Secondary School (1) ” Disc 8 “經濟教育”（File Name:
香港的經濟發展 ( AVSEQ11-14）. The aim of watching the
programme is to deepen students’ understanding in the
development of industry, commerce and trade in Hong Kong,
and to prepare for【Activity 4】.
4. Conduct【Activity 4】and distribute Worksheet 4. Students work in groups and discuss
how to put the factors into different categories.
5. Before the end of the lesson, distribute【Activity 5】, Worksheet 5 and Worksheet 6.
Divide the class into groups. Assign the odd number groups to complete Worksheet 5 and
the even number groups Worksheet 6.
3
Lesson 4-5
1.
Students discuss Worksheet 5 and Worksheet 6 in class. After the discussion, guide
students to think about the importance of external trade to Hong Kong.
2. Distribute【Activity 6】and Worksheet 7. Students read the sources first, and think about
Part A (The Challenge) for 3 minutes, Student choose one challenge which is the most
critical to the development of Hong Kong industrial, commercial and trade and discuss in
groups. Then, the group write down the toughest challenge on the worksheet. Then,
groups pass the worksheet to the next group in clockwise direction.
3. Students in the next group have to discuss and provide 3 ways to cope with the challenge
suggested by their classmates in Part A. Return the worksheet to the group when
completed.
4. When groups receive suggestions from their classmates, groups evaluate the effectiveness
of the suggestions and make notes in Part C. Students report to the class when every group
is ready.
5. In teacher debriefing, concludes the challenges encountered by Hong Kong’s industry,
commerce and trade and their possible solutions. Before the end of the lesson, distribute
【Activity 7】and ask students to complete the worksheet at home.
Lesson 6-7
1.
Students discuss【Activity 7】 in groups. Teacher may conclude that the government and
different organizations contribute a lot to promote the external trade of Hong Kong.
Given the importance of the external trade to Hong Kong, ask students to suggest how
they can contribute themselves in promoting trade and investment of Hong Kong.
2.
Distribute 【Activity 8】. With reference to what students have learnt in this topic, each
group plans a trade symposium to promote the external trade of Hong Kong. To make the
activity more meaningful and to enhance students’ participation in the activity, encourage
students to send ideas to Hong Kong Trade Development Council to show their support
to Hong Kong trade development.
3. Show students the highlights of the exhibition “Supertrader” organised by the Hong Kong
Trade Development Council (website: www.tdctrade.com/40/) to help them learn more
about the exhibition and to stimulate their thinking. Students, then, discuss in groups.
4. Before the end of the lesson, remind students that they have to present their ideas with
powerpoint presentation after a month. After the presentation, students (the audience) are
expected to raise questions or give feedback to the presentation group, while the
presenting group has to answer questions or express views on their classmates’ ideas.
4
Lesson 8-9
1. Students present their ideas on the symposium.
2. In teacher debriefing, give feedback to student presentations and show appreciation and
recognition to their effort and creativity.
Extended Activity
Lesson 10-11
1. Before the end of last lesson, ask students to prepare some advertisements from
newspaper or magazine for the next lesson.
2. In the beginning of the lesson, ask students to pay attention to the sales strategy used in
the advertisements. Then, the whole class brainstorms the features of current sales
strategy.
3. Review briefly the early trade development of Hong Kong discussed in this topic, and
point out unique and interesting features in sales strategies in the 60’s and 70’s.
4. Distribute Source 24 and Source 25. Ask students to read the sources first, then discuss
the sales strategies used in the 60’s and 70’s in groups. After that, students report the
discussion results to the class. For better learning outcome, show some product
advertisements in the 60’s and 70’s.
5. Distribute Worksheet 8. Ask students to complete Part I and think about which sales
strategy, today’s or the 60’s-70’s, they prefer.
6. Finally, students complete Part II “My Conclusion”.
5
Legend of Hong Kong’s Industry, Commerce
and Trade
In the past 40 years, with hard work, creativity and
flexibility, Hong Kong people have created a legend of
industrial and trade development.
The story began in the 1950s, when the outbreak of
the Korean War triggered an embargo which disrupted
Hong Kong's re-export trade. The disruption, however,
was a double-edged sword, as it led to the rise of Hong
Kong's manufacturing industry in the 1960s and 1970s.
By 1979, the implementation of the mainland's open-door
policy and related reforms provided unprecedented
opportunities for growth in Hong Kong's manufacturing
industry, and a booming service industry emerged in the
1980s and 1990s.
To look back, Hong Kong has passed a rough way,
but finally we went through it by turning risks to
opportunities. The way ahead is full of challenges, how
can we continue the cross-era legend?
Source: “Time Wheel”, Hong Kong Trade Development
Council –http://www.supertrader.com.hk/en/wheel_intro.htm
6
Activity 1
Where do they come from?
Take a look at your schoolbag and stationery to see where they come from. Discuss the
following questions with your classmates.

Where do most of them come from? Why are those countries willing to export
their products to Hong Kong?

Do you think people in other countries can buy products made in Hong Kong?
Why do we export products to other countries?
Today, it is very hard to find goods labeled “Made in Hong Kong”. Years ago, these goods
are everywhere.
So, how did the legend “Made in Hong Kong” begin?
7
Activity 2
An Accident of History
Read Source 1 and write down your reflection on Worksheet 1
Source 1
Hong Kong's economy began as an accident of history. Following World War ll, Hong
Kong emerged as an entrepôt 1.
In 1951, the outbreak of the Korean War triggered a US embargo2 on goods
originating from China. The embargo had a serious impact on Hong Kong's entrepôt trade,
which plummeted from HK$1.61 billion in 1951 to HK$520 million in 1952. Hong Kong
came to a halt almost overnight.
Sir Jack Cater, the second Executive Director of the TDC, recalled that at the time,
Hong Kong exporters of salted fish had to prove to the US that their catch did not originate
in Chinese waters. Similarly, exporters of preserved duck eggs had to prove that their
produce did not originate from the mainland.
The demise of entrepôt trade left Hong Kong with no choice but to develop its own
industries. Beginning in the early 1950s, Shanghai industrialists began to relocate to Hong
Kong, bringing with them capital and business skills. The southward migration of Mainland
workers also provided Hong Kong with the labour it needed to develop industries.
By 1959, these industries had begun to take shape, employing a workforce of 177,000.
Domestic exports were valued at HK$2.2 billion that year, which was more than double
that of entrepôt trade (HK$900 million). Textiles was the industry pillar at this time.
In 1961, Hong Kong's textile products came under quota3 restrictions in the European and
US markets. For the first time, Hong Kong industries had to look to other sectors and
markets. Subsequently, Hong Kong exporters turned to Northern Europe, Australia and
Canada.
Source: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_6070_accident.htm
Notes: 1. Entrepôt is a trading post where goods are imported from a place and then
re-exported to another place.
2. Embargo, quota and tariff are commonly known trading restrictions. Embargo
means a country stops importing some or all goods from a particular country. It is
the most severe punishment measure on trade and thus is seldom adopted.
3. Quota is a trade restriction which is an imposed restriction on the maximum
quantity of imported goods. Normally, a country imposes a quota or punitive tariff
(heavy tax on imported goods) on other countries to protect domestic industry and
employment opportunity of local workers.
8
Worksheet 1
“An Accident of History”
3–2–1
3 newly learnt
knowledge
points
2 interesting
Students may answer the question freely
Students may answer the question freely
things
1 question to
Students may answer the question freely
ask
Follow-up Activity
Before next lesson, complete Worksheet 2 or Worksheet 3 as assigned:


Odd number groups complete Worksheet 2; even number groups complete
Worksheet 3.
You may interview your family members to collect more information. You
may also add more circles onto the worksheet if needed.
9
Activity 3
Time Wheel
From
the
’S
to
’s
Read Source 1 (An Accident of History) to Source 6 and use your own knowledge, analyse
the favourable factors for the development of industry, commerce and trade in Hong Kong
from the 60’s to 80’s.
Source 2
Made in Hong Kong
From modest beginnings, Hong Kong, was quickly transformed
into a successful industrial city in the 1960s and 1970s on the basis
of export-oriented, labour-intensive production. Major product
categories emerged, including imitation jewellery, plastic products,
enamel ware, carpets, denim jeans, wigs and toys. The scale of production ranged from a
dozen workers in small workshops to several hundred in large factories. To keep up with
growth, factory districts mushroomed in the areas of Tsuen Wan and Kwun Tong, and the
buildings started heading skyward. While continuing to focus on production, Hong Kong
manufacturers also began to explore overseas markets.
Although "Made in Hong Kong" was synonymous with cheap products in the 1960s, the
label began to make its mark in world markets, giving "Made in Hong Kong" a whole new
meaning.
Adapted from: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_6070_made.htm
Department of Sociology, CUHK, The Support Programme on Integrated Humanities (S4-5)
Module of Globalization
http://www.cuhk.edu.hk/soc/courses/ih/globalization/lect02/e_lecture-eng-02.htm?page=2
10
Source 3
Four Asian Tigers
Apart from the internal factors, Hong Kong’s industrial rise was also benefited from the
relocation of facilites to Hong Kong from Europe and US. Starting from the 1970s, western
countries moved their labour-intensive productions to areas of lower costs, benefiting the
rise of “Four Asian Tigers”, including Hong Kong. Hong Kong, with its advantages in
geographic location, technological know-how, skilled workforce, experience
in conducting international business, a sound legal system as well as a free
economy, becomes an important destination of western production transfers.
The advantages also speed up the city’s industrial development.
Hong Kong’s manufacturing industry grew at full speed at that time, focusing on the
production of consumer goods, such as garment, electronics and toys, forming
export-oriented light industries the pillars of Hong Kong industrial sector.
Adapted from: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_6070_tigers.htm
Department of Sociology, CUHK, The Support Programme on Integrated Humanities (S4-5) Module of
Globalization http://www.cuhk.edu.hk/soc/courses/ih/globalization/lect02/e_lecture-eng-02.htm?page=2
Source 4
Through the Microscope - The Rise of Hong Kong's Electronics Industry
Technology-driven industries such as electronics and watches and clocks
developed rapidly during the 1970s. They were, however, hard pressed
by high operating costs and labour shortages. To attract workers, factories
would put out recruitment advertisements announcing a full range of
fringe benefits. These included attendance bonuses, referral bonuses, and
coach pick-up. With these benefits, many workers were willing to work hard and put in
overtime. Some factories even operated around the clock, with three shifts of workers.
Electronics production involved a high degree of precision. Many workers spent long hours
looking through microscopes during work hours. Processes such as welding, assembly, and
quality control done through "microscope looking" were hard work. Nevertheless, they paid
off handsomely in building economic momentum and improving people's lives.
Adapted from: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_7080_elec.htm
11
Source 5
Northward Expansion of the Industries
The constraints of land and labour shortages became all the more
pronounced with rapid industrial expansion. Despite many ingenious
initiatives from manufacturers, Hong Kong industries had begun to
experience a developmental bottleneck.
In 1979, China opened its doors to the world. In the mid-1980s, Hong Kong industries faced
both high production cost and competitions from new-emerging industrial economies (such as
Thailand and Indonesian), and Hong Kong manufacturers began to seek overseas
opportunities. As a result, northward expansion of Hong Kong factories became a leading
production strategy. Attracted by low labour and land costs in the mainland, Hong Kong
manufacturers began to expand northward. By 1985, just six years after China's opening up,
the mainland of China overtook the US to become Hong Kong's largest trading partner.
Adapted from: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_7080_north.htm
Department of Sociology, CUHK, The Support Programme on Integrated Humanities (S4-5)
Module of Globalization
http://www.cuhk.edu.hk/soc/courses/ih/globalization/lect02/e_lecture-eng-02.htm?page=2
Source 6
Hong Kong – An Intermediary between the Economy of the Mainland of China
and the World
It has been more than a century since Hong Kong took part in international
trade. Hong Kong has considerable strength in re-export trade, financial
exchange and other commercial service industries. Hong Kong, being the
intermediary between the mainland’s and the world’s economy in 1980s,
thus becomes the driving force and the agent of the mainland’s trade and
investment development. Hong Kong is also the mainland's major information gateway,
springboard for trade, an avenue for raising capital for the development of the mainland, a
channel for skill transfer and a training ground for the mainland's experiment with the market
economy.
Adapted from: Department of Sociology, CUHK, The Support Programme on Integrated
Humanities (S4-5) Module of Globalization
http://www.cuhk.edu.hk/soc/courses/ih/globalization/lect02/e_lecture-eng-03.htm?page=3
12
Worksheet 2
1. With reference to Source 1 to 6 and your own knowledge, analyse the favourable factors
for the development of industry, commerce and trade in Hong Kong from the 60’s to 80’s.
Embargo
imposed on
China by the US
during Korean
War
Migration of
Shanghai
entrepreneurs
and inhabitants
to Hong Kong in
the 1950’s
Economic reform
in China
Hardworking and
skilled
workforce
Favourable factors
for the development
of industry,
commerce and trade
in Hong Kong from
the 60’s to 80’s
Entrepreneurs
with flexible
minds
Favourable
geographic
location
Well-established
legal s ystem
Production
transfer from
Europe and the
US
Technological
know-how
Free econom y
Other suggestions:
 Low tax
 Stable society with good public order
 Clean and efficient government
 Free flow of information
13
’s
to
Present
Based on Source 7 to 12 and your own knowledge, analyse the factors that benefit Hong
Kong’s industrial, commercial and trade development from 1990’s to present.
Source 7
Hong Kong’s reunification with China
After the reunification of Hong Kong with China in 1997, Hong Kong
became a Special Administrative Region of the People's Republic of
China. Because of its political and economic status, Hong Kong could
utilize the accumulated economic capital of the hinterland. The
Mainland and Hong Kong Closer Economic Partnership Arrangement
(CEPA) 4 is an example of one special economic benefit that Hong Kong
has received from the mainland to enable it to gain a headstart in scouting market
opportunities before the mainland opens its door to the WTO. CEPA is a free trade
arrangement under WTO rules that takes effect on 1st January, 2004. The arrangement
gives Hong Kong business preferential access to Mainland markets.
Adapted from: Department of Sociology, CUHK, The Support Programme on Integrated
Humanities (S4-5) Module of Globalization
http://www.cuhk.edu.hk/soc/courses/ih/globalization/lect02/e_lecture-eng-03.htm?page=3
Notes:
4.
Under Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), all
goods of Hong Kong origin importing into the mainland enjoys tariff-free treatment and
thus lowers the entry threshold in some sectors and permits wider accessibility to
Mainland market. The Agreement also encourages mutual recognition of professional
qualification and allows Mainland residents of some cities to visit Hong Kong in their
individual capacity.
Notes adapted from: “CEPA感覺良好 實效商榷”, Ming Pao, 24 April 2007
14
Source 8
The change of Hong Kong’s role
Most local manufacturing firms began to adopt alternative
production strategies, for example, concentrating on trading, sales
and marketing, and coordination of transnational flow of economic
activities in the mainland. During this period, the number of cross
border economic activities grew rapidly. The economic restructuring
of Hong Kong's manufacturing facilitated the growth of various producer services, such as,
financing of production in the mainland, trade-related services, insurance, communication,
ports, transportation and logistics. These trends reflected changes in the strategies of Hong
Kong's commercial and manufacturing industries under the process of restructuring.
Adapted from: Department of Sociology, CUHK, The Support Programme on Integrated
Humanities (S4-5) Module of Globalization
http://www.cuhk.edu.hk/soc/courses/ih/globalization/lect02/e_lecture-eng-03.htm?page=3
Source 9
Globalization
Connected to the world and thoroughly globalised, Hong Kong has
scaled new heights. As the the mainland emerged as the world's
factory, an increasing demand for high-quality services from Hong
Kong was evident. The economic status of Hong Kong receives a
further boost after the reunification to China. Today, Hong Kong
serves as the dedicated financial and business services centre for the mainland.
Adapted from: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_80now.htm
http://www.supertrader.com.hk/en/wheel_80now_morph.htm
15
Source 10
A Well-Connected Logistics Hub
Hong Kong's pivotal position as a logistics centre is closely related to the rapid economic
development of the mainland. Transport and logistics-related activities (including cargo
and passenger transport) account for more than seven per cent of Hong
Kong's GDP. Hong Kong also boasts a world-class infrastructure. The
Hong Kong International Airport, which opened in 1998, provides the
foundation for Hong Kong's position as Asia's air cargo and logistics
centre.
The Pearl River Delta region becomes the “world factory” and its rising demand for raw
materials, semi-finished and finished products generates more opportunities for Hong
Kong logistics service providers.
As the mainland's transport and logistics market opens up to the world, demand for
high-quality professional logistical services from Hong Kong is set to grow. The Hong
Kong-Shenzhen Western Corridor, scheduled for completion by 2007, will be able to
handle double the current volume of cross-boundary traffic. Also, the planned Hong
Kong-Zhuhai-Macau Bridge will link Hong Kong with the western part of the PRD,
further expanding the logistics market for Hong Kong.
Adapted from: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_80now_logistics.htm
Source 11
Creative City
Creative industries are also important to Hong Kong's economy, and notable achievements
have been made in areas such as product design, packaging and promotion.
Technological advancements have also been made in the creative and design
industries.
Source: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_80now_creative.htm
16
Source 12
Economic Landmark, Trade Fair Capital
In 1988, the Hong Kong Convention and Exhibition Centre (HKCEC) opened. In 1997, the
HKCEC Extension was completed, providing more space for Hong Kong's exhibition
industry to grow. Every year, the TDC organises about 30 international trade exhibitions in
Hong Kong, of which seven are the largest of their kind in Asia. The HKCEC is a symbol of
Hong Kong's economic and trade development, advancing Hong Kong's trade fair business
in Asia.
Source: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_80now_landmark.htm
17
Worksheet 3
1. With reference to Source 7 to 12 and your own knowledge, identify the favourable factors
for the development of Hong Kong’s industry, commerce and trade since the 90’s.
Creative talents
Hong Kong’s
reunification with
China
Closer global
economic
cooperation
Favourable factors
for the development
of industry,
commerce and trade
in Hong Kong since
the 90’s
World-class
infrastructure
Economic
restructuring in
Hong Kong
Introduction of
CEPA
Rapid economic
development in the
mainland
Premier exhibition
facilities and
services
18
Activity 4
Worksheet 4
Classify the favourable factors in Activity 3 into political, economic, social and other
relevant aspects.
Categories
Political
Factors





Economic









Social




Geographical

Embargo imposed on China by the US during Korean War
Migration of Shanghai entrepreneurs to Hong Kong in 1950’s
Hong Kong’s reunification with China
Clean and efficient government
Sound legal system
Free economy
Low tax rate
International trade experiences
World-class infrastructure
Premier exhibition facilities and services
Economic reform and rapid economic development in China
Economic restructuring in Hong Kong
Closer global economic cooperation
Introduction of CEPA
Stable society with good public order
Hard-working and creative workforce
Entrepreneurs with flexible minds
Free flow of information
Favourable geographic location
Follow-up activity
Before next lesson, each group completes worksheet 5 or 6 as assigned:


Odd number groups complete worksheet 5;
Even numbers groups complete worksheet 6.
19
Activity 5
Our External trade
Since Hong Kong is a small and highly external-oriented economy, external trade plays an
important role in our economic development. Source 13 is a brief introduction of the external
trade in Hong Kong.
Source 13
External trade in Hong Kong
Hong Kong external trade comprises merchandise trade and trade in services of Hong
Kong with external parties. Merchandise trade is composed of imports, domestic exports
and re-exports of goods.
Trade in services (TIS) refers to exports of services and imports of services. Exports of
services are the sales of services to the rest of the world, whereas imports of services are
the purchases of services from the rest of the world. Imports and exports of services are
classified into different types of services, including transportation services, travel services,
insurance services, financial services, merchanting and other trade-related services, and
other services.
Source: Census and Statistics Department
http://www.censtatd.gov.hk/hong_kong_statistics/statistics_by_subject/concept/external_trade
/index_tc.jsp
20
Worksheet 5
Name the 3 most important trading partners of Hong Kong which have the highest total trade
value in 2006 in each merchandise trade category including exports, imports and re-exports.
Then answer the questions below.
Method:
Visit the web site of the Census and Statistics Department
(http://www.censtatd.gov.hk) > Hong Kong Statistics > Statistical Tables > Subject:
External Trade
Exports: External Merchandise Trade Statistics by Ten Main
Countries/Territories – Domestic Exports to Ten Main Destinations
Imports: External Merchandise Trade Statistics by Ten Main
Countries/Territories – Imports from Ten Main Destinations
Re-exports: External Merchandise Trade Statistics by Ten Main
Countries/Territories – Re-exports to Ten Main Destinations
Merchandise trade
Export
Import
Re-export
The First

Countries / Regions

Total Trade Value
( HK$ million)
The mainland of China The mainland of China
1,192,952
40,268
The mainland of China
1,115,941
The Second

Countries / Regions

Total Trade Value
(HK$ million)
Japan
USA
33,159
268,140
USA
337,971
The Third

Countries / Regions
UK

Total Trade Value
(HK$ million)
7,859
Taiwan
194,917
Japan
115,490
Questions:

In 2006, which country / region was our most important partner in merchandise trade?
The mainland of China

Following the above question, find an example in our daily life to show the merchandise
trade activities of that trading partner in Hong Kong.
Students may answer the question freely
21
Worksheet 6
Name 3 most important trading partners of Hong Kong which have the highest total trade
value in 2006 in each trade in service category including exports and imports of services.
Then answer the questions below.
Method: Go to Census and Statistics Department (http://www.censtatd.gov.hk) > Hong Kong
Statistics > Statistical Tables > Subject: External Trade
Exports of Services: Exports of Services by Main Destination of 2006
Imports of Services: Imports of Services by Main Source of 2006
Trade in services
Exports of Services
Imports of Services
The mainland of China
The mainland of China
137,007
76,486
USA
USA
The First

Countries / Regions

Total Trade Value
(HK$ million)
The Second

Countries / Regions

Total Trade Value
119,030
42,641
Japan
(HK$ million)
The Third

Countries / Regions
UK

Total Trade Value
44,238
24,276
(HK$ million)
Questions:

In 2006, which country / region was our most important partner in trade in services?
The mainland of China

Following the above question, find an example in our daily life to show the trade in
services activities of that trade partner in Hong Kong.
Students may answer the question freely
22
Activity 6
“Risks” and “Opportunities”
The economic relationship between Hong Kong and the mainland of China is getting closer.
Some say this brings Hong Kong infinite business opportunities, while others say these
opportunities may carry potential risks. In fact, whether they are opportunities or risks
depends very much on HK’s ability in coping with challenges and its time-tested creativity to
turn risks into opportunities…
Read the following information and complete worksheet 7.
Source 14
Although Hong Kong economy has successfully transformed into a commercial operation
centre, Hong Kong is no longer the only platform for trade of the mainland of China with
the world. Since China has gradually opened its door to the world in the 90’s, this
strengthens its global economic relationship. This is why more and more people are
concerned about the competition between Hong Kong and Shanghai ever since the
mid-90’s.
After China’s entry to the WTO, it began to lift economic barriers progressively. In a
sense, Hong Kong's position as China's sole trading agent will be seriously undermined.
It must therefore adjust its previous role as intermediary by finding a new strategic role to
play in the global economy.
Source：Department of Sociology, CUHK, The Support Programme on Integrated Humanities
(S4-5) Module of Globalization
http://www.cuhk.edu.hk/soc/courses/ih/globalization/lect02/e_lecture-eng-03.htm?page=3
23
Source 15
With China’s economy becoming more and more globalised and the deepening of CEPA,
it is expected that more Hong Kong industries will be relocated to the mainland. These
include some services and supporting processes originally based in Hong Kong and some
high value-added research and development business. A small number
of Hong Kong enterprises have returned to Hong Kong due to the zero
tariff benefit under CEPA. However, the number cannot be compared to
the ever-growing northward relocation cases. With the danger of hollow
economy, the government and the industries should be alerted to the
loss of talents and rebounded unemployment triggered off by the
relocation… To solve the foreseeable problems of business relocation and brain drain, it is
essential to upgrade our industries in the long run with emphasis on education including
formulating policy to foster talents to alleviate the shortage of talents.
Source from: “香港經濟未來面臨空心化問題”, Hong Kong Economic and Trade
Association http://www.hketa.com.hk/art_detail.asp?tp=180
Source 16
(Chief Economist, Trade Development Council) Leung Hoi-kwok pointed out
that there is a trend of increasing overseas buyers purchasing directly from the
mainland. It is also witnessed that overseas companies tend to relocate their
purchasing offices from Hong Kong to the mainland. After the mainland lifted
the restrictions on trade, imports and exports, more and more trade-related activities in Hong
Kong move to the Pearl River Delta region. It is a cause for concern. Hong Kong must
expand the scale of its quality international (including the mainland) buyer and supplier
groups from the mainland and worldwide, so as to maintain its status of international trade
hub…
Source: “港貿易平台漸失優勢”, Wen Wei Po, 14 November 2006
24
Source 17
……In the coming year, Hong Kong exports are going to face huge difficulties such as constant
appreciation of Renminbi, soaring production cost in the Pearl River Delta region, global trade
conflicts, the increasing influence of protectionism and the reformation of the mainland’s trade
policy…Hong Kong businessmen must carefully examine their development
strategies. For example, on the production level, they can increase product values,
improve technology and productivity. On the market level, factory owners can
improve production management and quality control so as to gain market
recognition.
Source: “港首季出口信心指數回升”, Hong Kong Commercial Daily, 14 March 2007
Source 18
The government should establish a standing mechanism and hold regular meetings
with business associations to discuss how it can help Hong Kong entrepreneurs
penetrate the Mainland market, including providing further assistance to set up
sales network in the mainland.
Regarding the group’s suggestion of establishing a high-level Hong Kong brand group to
help promote Hong Kong brands, Lau Chin-ho agrees with the proposal. He thinks that this can
help Hong Kong products enter the Mainland market, but the consolidation of the brands has to
rely on government support.
Source: “設諮詢機制收集港商對CEPA的意見”, Hong Kong Economic Journal, 16 January 2007
25
Worksheet 7
Your Questions, My Answers
This activity is divided into 3 parts.
1. According to source 14 to 18 and your own knowledge, discuss in groups the toughest
challenge faced by Hong Kong’s industry, commerce and trade. Write down your
discussion results on Part A (Challenge). (Each group should fill in one worksheet only).
Pass the worksheet to the next group in the clockwise direction when every group is
ready.
2. Discuss in your group 3 ways to cope with the challenge written on the worksheet you
receive from your classmates. After discussion, fill in Part B and pass the worksheet
back to the original group.
3. Evaluate the effectiveness of the ways suggested in Part C and present your evaluation
to the class.
Part A：Challenge
Part B：Ways to cope with the challenge
1.
Students may answer the
question freely
2. Students may answer the question freely
3.
Part C：Effectiveness of the ways to cope with the challenge
Way 1
Way 2
Way 3
Effective: Yes／No
Effective: Yes／No
Effective: Yes／No
Reason(s):
Reason(s):
Reason(s):
Students may answer the
question freely
Students may answer the
question freely
26
Students may answer the
question freely
Activity 7
Towards the World
In order to maintain our position as an international industrial, commercial and trade
centre, it is important for Hong Kong to develop a close economic relationship with business
sectors of the mainland and the world. Not only does a strong relationship consolidate Hong
Kong’s role as an intermediary between the mainland and international investors, it also helps
explore the mainland and global markets, bringing Hong Kong infinite business opportunities.
The following information helps you understand how Hong Kong develops a closer
economic relationship with business sectors of the mainland and the world. Read the
information and answer the questions below.
Source 19
Trade Development Council (TDC) helps Hong Kong factory owners explore overseas
market. By organising exhibitions and promotional activities, providing market information
and establishing online business matching service, TDC provides a platform for SMEs
(small and medium enterprises) to seek business partners from the mainland and overseas.
Regarding brand promotion, TDC highly values the market of the Pearl River Delta region.
It assists Hong Kong businessmen to explore the brand market on the mainland, and to
promote Hong Kong as a commercial and trading platform through different activities…
Adapted from: Trade Development Council
http://www.tdctrade.com/annualreport2006/chinesepdf/Coreservice-Chi.pdf
Commerce and Economic Development Bureau
http://www.cedb.gov.hk/chi/speech/pr15112006b.htm
Source 20
The CMA regularly organizes trade missions to overseas countries and international trade
fairs with a view to developing new markets and seeking economic investment
cooperation…The CMA also operates a Trade Enquiries Service to provide different kinds
of consultation services and put local and overseas buyers into direct contact with
members, so as to promote business trade…The CMA mediates trade dispute for members
or non-local merchants to reach an amicable settlement…
Adapted from: The Chinese Manufacturers’ Association of Hong Kong
http://www.cma.org.hk/eng/aboutcma/firstpage.asp
27
Source 21
The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) was
implemented in 2004. Since then, InvestHK has been actively organizing or participating in
symposiums held in North America, Europe and the Asia Pacific region, with a view to
promoting to investors from overseas, the mainland and Taiwan the strengths of
establishing business in Hong Kong under CEPA.
Adapted from : InvestHK
http://www.investhk.gov.hk/PageControl/ShowDynamic.aspx?act=newsdetail&newsid=1590
Source 22
As provided for in the Basic Law, Hong Kong continues to deal with trade matters using
the name "Hong Kong, China" (HKC) as a separate and full member after its reunification
with China. This arrangement also applies to the participation in international trade
organizations.
The principal trade organizations that Hong Kong has joined include The World Trade
Organization (WTO), Asia-Pacific Economic Cooperation (APEC), Organization of
Economic Cooperation and Development (OECD) and Pacific Economic Cooperation
Council (PECC). The membership of these organizations enables Hong Kong to cooperate
with other members on trade matters within the region, fosters economic growth and
development, improves Hong Kong’s international image and helps prevent unreasonable
and discriminative trade actions.
Adapted from: Trade and Industry Department of Hong Kong
http://www.tid.gov.hk/tc_chi/trade_relations/tradefora/tradefora_maincontent.html
Source 23
Hong Kong has one of the freest services regimes in the world. Foreign investment creates
jobs and demand for local supporting services. Our service providers also possess the
capacity to export our services. Given our already free and open regime, Hong Kong
service providers will gain much if our trading partners remove market access restrictions
in their services sectors.
Source: Trade and Industry Department of Hong Kong
http://www.tid.gov.hk/tc_chi/trade_relations/tradefora/wto_servnegot.html
28
Questions for Discussion
1. Apart from government departments and relevant organizations mentioned in Source
19 and 22, can you think of other organizations that help enhance Hong Kong
external trade and investment? Name 2 examples.
Students may answer the question freely
Example：Hong Kong General Chamber of Commerce, Federation of Hong Kong
Industries, Hong Kong Productivity Council, Hong Kong Export Credit Insurance
Corporation, etc.
2. According to Source 19 to 23 and your own knowledge, list 3 ways that you think
are most efficient in promoting Hong Kong external trade and investment. Explain
your answer.
Students may answer the question freely
29
Activity 8
Design your Trade Symposium
Apart from government departments and relevant organizations, we can also
contribute ourselves in promoting external trade of Hong Kong. This task is to plan
a symposium to promote Hong Kong external trade.
Below is the information of the symposium:

Aim:
The aim of this symposium is to promote Hong Kong as an international
industrial, commercial and trade centre, and to help the mainland and
international businessmen and organizations understand Hong Kong’s future
development in industry, commerce and trade. To explore collaboration
opportunities, local representatives from relevant industries might also be
invited to meet buyers or members of trade organizations.

Requirements:
(1) In order to achieve the aims of the symposium, you need to consider the
form of the symposium, the focus, the presentation, the target audience and the
production budget when designing the event. Give reasons to support your
design. (The questions on the next page may help you design the symposium.)
(2) You need to present your ideas and elaborate the key messages delivered in
the symposium to your classmates by using powerpoint presentation. You also
need to demonstrate and explain how the design of the symposium venue helps
convey the messages. (Your classmates will ask questions concerning the ideas
you present. You should clarify, emphasise the key messages to be conveyed or
decide if you would accept your classmates’ suggestions).
** After the presentation, you may send your proposal to the Hong Kong Trade
Development Council by post to show your support.
30
Thinking Questions:
When designing the symposium, you may consider the following points:
1.
What is the product/service you promote? Why?
2.
Who is your target group? (e.g. Mainland businessmen,
foreign trade organizations, etc.)
3.
What kind of information/content/ideas will be conveyed
in your symposium?
4.
Which
way
will
you
choose
to
promote
this
product/service? (e.g. exhibition, forum, government
officials or celebrities from the business sector as
officiating guests/guest speakers, performance show, stall
games etc.）Why?
5.
What are the advantages of the presentation?
6.
What is the estimated budget for this symposium?
7.
Others
Other Useful Information
1. The “Supertrader” by the Hong Kong Trade Development Council
www.tdctrade.com/40/
*The web site provides detail information and features of the
“Supertrader” exhibition, which is a good reference for designing the
symposium.
2. Trade and Industry Department. http://www.tid.gov.hk/
3. Census and Statistics Department. http://www.censtatd.gov.hk
4. Newspaper
31
Extended
Activity
PAST
&
P R E SEN T
In the preceding activities, we have learnt the
development of trade in Hong Kong and its
transformation from the 60’s and 70’s until now.
Take a closer look at the sales strategies of the
enterprises at that time. The features of the strategies
were unique and interesting.
Are you interested in knowing more about the
similarities and differences of the sales strategies in
the 60’s and 70’s with those of today?
32
Activity 9
Our old good days…
Read the following information carefully and complete worksheet 8.
Source 24
The Story of "Red-A"
In the 1960s, Hong Kong faced acute water shortage. In 1963, the water supply was limited
to four hours every four days and the government distributed water to dry areas using hoses
and water trucks. Turning off the tap to release water, queuing for water, carrying water and
storing water were all part of people's lives. Star Industrial Co Ltd, a plastics-ware
manufacturer, realised an opportunity and produced a line of water buckets and basins
called Red-A. These products virtually dominated the market during those years. The
company also ran an extensive promotion campaign to educate people on how to consume
just one gallon of water per shower by using a flower-style watering sprinkler. The advice
was well taken.
Source: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_6070_reda.htm
Source 25
Caring Society Looks After Household Products
In the 1960s and 1970s, material life at that time was a far cry from that of
today. "Value for money, excellent quality and durability" were key
considerations when people made a purchase. Hong Kong produced large
quantities of vacuum flasks during that time, among which the brand "Gold
Coin" was a household name. The so-called "hospital for vacuum flasks" was in fact a free
service provided by the manufacturer to replace the broken inner lining.
Nowadays, with rapid product cycles and widespread use of disposable items, the promise
of lifelong care seems to have lost its appeal. Nevertheless, a "lifetime warranty"
represented the promise of the last generation of entrepreneurs to provide premium service
to their customers.
Source: “Time Wheel”, Hong Kong Trade Development Council
http://www.supertrader.com.hk/en/wheel_6070_society.htm
33
Worksheet 8
I. With reference to Sources 24 and 25 and the advertisements you collected, fill in the left hand column of the worksheet with
features of sales strategies in the 60’s-70’s and the right hand column the features of sales strategies today. Then, write the similarities
they share on the lines between them.
Comparison of the features of sales strategies in the 60’s -70’s and those of today
Features of sales strategies
Features of sales strategies
Students may answer
the question freely
34
today
Enterprises Today
Similar features
Enterprises in the 60’s-70’s
in the 60’s to 70’s
銷售策
略，因為
II. My Conclusion
Based on part I, conclude which kind of sales strategies you prefer.
I prefer the sales strategies of
because
_________________________________________________
Students may answer the question freely
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
35