Senior Project Proposal
Victor Y. Wang
January 10, 2012
- Title of Project:
Hong Kong: Connecting Its Tumultuous Past and Its Financial Future
- Statement of Purpose:
Hong Kong formally returned to Chinese control in 1997. However, the period leading up to, and including this period, was marked with turmoil and anxiety. Housing prices fell, stocks dropped, and people fled (Also Sprach Analyst, 2011). However, over the past decade, Hong Kong’s economy has grown, on average, 4.1% (Global Finance, 2012). What changed to allow this growth to precipitate? How does the present expansion compare to expansion before the transition? Are they bolstered by the same markets, goods, and transactions? What role does the dichotomous views of the middle class play in this growth? I will analyze and research the past and current financial structures of Hong Kong in order to determine the effects the transition has had on Hong Kong’s middle class.
- Background:
I am interested in this project because of my Western and Chinese heritage. In my past visits to China, I have noticed many lifestyle changes from my western-influenced lifestyle. Hong Kong, in this sense, is similar to me because of the intermixing of eastern and western cultures. But, whereas I am a singular body, Hong Kong is a large city, with many people and many external and internal forces. Therefore, these differences might not exist as harmoniously than in an individual. In order to analyze the intermixing of these cultures I need to look at the differences and nowhere are these differences in cultures more prevalent than in the middle class.
- Prior Research:
There has been extensive research done on this subject by many organizations and people. Research now primarily has been focused on two branches: what changes there have been and how those changes have affected economic developments. Originally, when Hong Kong’s ownership changed hands, many experts predicted that Hong Kong would be immediately reduced to “just another Chinese city.” However, fifteen years on, and judging by the enormous economic growth, it has become apparent that this has not occurred. Even more so, according to CNBC’s Jonathan Fenby article, “Hong Kong 15 Years after Handover: What’s Changed?” Hong Kong has retained its unique identity amidst the storm of change. Meanwhile, Mark Medish of the Carnegie Endowment in his article, “Riding the Dragon: Hong Kong’s Economic Developments since 1997,” talks about how Hong Kong’s change will cause it to surge ahead and become one of the leading financial centers of the world. However, not all this change has been viewed in a positive light, as Zoher Abdoolcarim from Time Magazine discusses the existential angst existing in Hong Kong in “Hong Kong’s Future: Sunshine, with Clouds.”
- Significance:
As Hong Kong continues its breakneck development and growth, it will continue to play a larger and larger part on the world stage. However, despite being a major financial player, it has had a tumultuous past and nobody can be sure how the dichotomous and bipolar views of the citizens/middle class will play in Hong Kong’s future. Will it result in instability or have the differences been exaggerated and Hong Kong is actually incredibly united? Only by extensive research can these questions be answered and Hong Kong’s role in the world become solidified.
- Description:
The main types of research I will be conducting will be interviews and observations. I will utilize my internship at a Hong Kong investment firm as a lens to analyze what has changed since 1997. In particular, I will examine changes in investment rates, diversification, income and asset levels. I will also analyze this change from the perspective of new investments; where the investments are coming from, whether there has been an increase from mainland China, and how those investments have affected the investment bank. I will then interview people in the Hong Kong region to see how their lives have changed since the handover and whether they believe their lives are better as a result. As a part of the interview process I will separate the answers based on three groups: those who stayed in Hong Kong during the change, those who fled but came back, and those who came to Hong Kong after the change. As a final product, I will write an article detailing my findings and publish it.
- Methodology:
My research will be conducted in a series of parts:
- Intern at a Shenzhen Investment Bank (~3 weeks)
- Understand how the bank works
- How much change they have experienced since 1997
- In terms of where their investments are coming from
- Location: internally vs. externally
- Classes: Middle class vs. upper class investments
- In terms of what investments they are conducting
- Foreign companies vs. Local
- Have there been a big change or negligible change
- Find out reasons for why and its effects
- Travel to Hong Kong (~4 weeks)
- Research history of Hong Kong’s growth, especially focusing on 1997 onward
- Pass out surveys/interviews to a wide range of people: elderly/younger, rich/poor, etc
- Sample survey questions:
- Where you living in Hong Kong at the time of the transition?
- How did you react to the transition? Did you move, did you save up, spend more, etc.
- How much money do you save a month, is it more than a decade ago?
- Do you go on more vacations compared to 1997?
- Do you spend more compared to before 1997?
- Would you say that you are happier with your current financial situation than you were two decades ago?
- What is the biggest change you have noticed in your finances in the past two decades?
- Compare and contrast the POV’s of those that were in Hong Kong, and those that moved here after 1997.
- Compile data ( US ~ 6 weeks)
- Research additional factors affecting Hong Kong’s Middle Class
- Focusing more on general trends
- Unemployment rates, GDP per capita, purchasing power, etc.
- Possible outcomes:
- There has not been a lot of regional growth, and people’s lives have not changed much
- There has not been a lot of regional growth, but people’s lives have changed a lot
- There has been a lot of regional growth, and people’s lives have changed a lot
- There has been a lot of regional growth, but people’s lives have not changed much
- Problems:
One problem would involve the sample size of those I interview/survey. Other major problems would revolve around dialect and language barriers. Another issue would be the accuracy of the information I will get from the interviews will be. Depending on the results, publishing them in China might be risky and instead, have to wait until I get back to the US.
Possible Solutions:
Language barriers can be solved by getting a translator, or using software. I can conduct the interviews via handout, with all questions preprinted on them and just hand them out, then have them mail/drop them off to me. This also helps solve the problem of people lying to me since they would not have to be talking in front of another problem and possibly exaggerate/feel exposed. Findings would have to be carefully scrutinized and only findings that are unbiased and neutral should be published during the stay in China. If any research turns up that might be censored, then it will have to wait until I’m in the US to be published.
- Bibliography:
Abdoolcarim, Zoher. "Hong Kong's Future: Sunshine, with Clouds." Time. Time, 07 June 2007. Web. 06 Jan. 2013.
Brown, Mariah. “How Can Cultural Differences Affect Business Communication?” Demand Media. Houston Chronicle. Web. 14 Nov. 2012.
China MidClass Consumers. Dir. HTKDC. Perf. Pansy Yau. Youtube. Google, 07 Dec 2012. Web. 12 Dec. 2012.
Farrell, Diana. “The Value of China’s Emerging Middle Class.” McKinsey Quarterly, June 2006. Web. 12 Dec. 2012.
Fenby, Jonathan. "Hong Kong 15 Years After Handover: What's Changed?" CNBC.com. CNBC, 30 June 2012. Web. 06 Jan. 2013.
Lau, Joyce H. "Has Hong Kong Changed?" In Transit: A Guide to Intelligent Travel. The New York Times, 17 July 2008. Web. 06 Jan. 2013.
Lopez, Linette. “The 10 Biggest Problems With Doing Business In China.” Business Insider: Money Game. Business Insider, 24 October 2011. Web. 14 Nov. 2012.
Kim, Eun. Yin and Yang of American Culture: A Paradox. 1st ed. Yarmouth: Intercultural Press, 2001. Print.
Medish, Mark, Stephen Cheung, Bernard Chan, and C.Y. Leung. "Riding the Dragon: Hong Kong's Economic Developments since 1997 -Carnegie Endowment for International Peace." Carnegie Endowment for International Peace. Carnegie Endowment, 18 June 2007. Web. 06 Jan. 2013.
Rapoza, Kenneth. “Within A Generation, China Middle Class Four Times Larger Than America’s.” Forbes. Forbes Magazine, 05 Sept. 2011. Web. 12 Dec. 2012.
"Smooth Hong Kong Handover Lifts Chinas Image." CNN World. CNN, 15 July 1997. Web. 06 Jan. 2013.
Street, Nancy. American Business In China: Balancing Culture and Communication. 1st ed. Jefferson: McFarland and Company, 2008. Print.
Tan, Ye. “Overestimating the Chinese Middle Class.” China.org.cn. China.org.cn, 03 Sept. 2010. Web. 12 Dec. 2012.
Wang, Helen H. The Chinese Dream: The Rise of the World’s Largest Middle Class and What It Means to You. [S.I]: Bestseller, 2010. Print.
Whitman, John, and Maria Cascales. “Hong Kong’s Financial Crisis--1997-1998.” Harvard Business Review (1999): 1-15. Web. 8 Jan. 2013.
Wong, Kelvin. “Hong Kong Middle Class Bitter as Tycoons Choose Leaders.” Bloomberg. Bloomberg, 22 Mar. 2012. Web. 12 Dec. 2012.
Zarathustra. "Hong Kong Property: Did You See The Crash Coming In 1997?" Also Sprach Analyst. Also Sprach Analyst, 23 June 2011. Web. 17 Jan. 2013.
