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The recent handing over of Hong Kong to China was an important landmark in British history. One might question, however, whether Hong Kong is still going to be of great significance to Britain and Europe in future years and whether future business and trade will remain important. The key to the question is very much now linked to Europe. Britain’s foreign and even domestic policies are increasingly linked to our continental European partners; at the same time Europe is beginning to see Hong Kong as one of the increasingly important East Asian economies, and European businesses are starting to pay more attention to focusing on new opportunities in rapidly expanding South‐East Asian markets and indeed China. Hong Kong now with its attachments to China will be focusing more on Europe as a whole and trying to gain access to the single European market for enhanced prosperity. The recent inclusion of China in the GATT talks and the collapse of communism have made way for increased opportunity for business in the global economy. This article questions the future importance of Hong Kong for Britain and Europe and assesses whether trade links and business opportunities are likely to be greater in the future for Hong Kong and Europe. It puts specific emphasis on the more recent change in role for Hong Kong and Europe.

At the stroke of midnight on 30th June, 1997 Hong Kong was returned to the People's Republic of China. China takes justifiable pride in what has to date been a smooth transition, but the government in Beijing is now confronted by a demanding reality, the need to make detailed arrangements regulating the legal ties between the Hong Kong Special Administrative Region (SAR) and the sovereign power. Not the least of the problems concern the degree and means by which mutual legal assistance in criminal matters will be made available. The puzzle for the People's Republic is that Hong Kong's dependent status begs a high degree of mutual cooperation with China, but the procedural safeguards that exist to govern Hong Kong's cooperation with third jurisdictions may not easily be used as a model: the safeguards built into the current legislation would operate to exclude the sovereign power! On the other hand, if future cooperation between Hong Kong and China is to take place without safeguards local and international confidence may suffer.

The purpose of this paper is to examine Hong Kong's future economic diversification prospects to become a high value‐added knowledge‐based economy.

This paper is a view of the knowledge‐based economic development of Hong Kong and its potential future prospects since its re‐unification with China. It is important to have a good understanding of the past before trying to predict the future.

The key message is that Hong Kong now needs a “horizontal” support structure, a good understanding of how things work in a globalized knowledge economy, continuation of the “free market” structure and a lightweight facilitation system that supports all high‐value added economic activities in Hong Kong.

The papers provides an original viewpoint on the potential for Hong Kong's knowledge‐based economic development, in line with the rise of China as a global economic power.

This paper provides evidence on the impact of regulatory environment on financial reporting quality of transitional economies. This study compares the financial reporting quality of Hong Kong firms which are cross-listed in mainland China with those of Hong Kong firms cross-listed in China using specific earnings management metrics (earnings smoothing, timely loss recognition, value relevance and managing towards earnings targets) under pre- and post-IFRS regimes.

The financial reporting quality of Chinese A-share companies and Hong Kong listed companies are examined using earnings management measures. Using 2007 as base year, the study used a cumulative of −5 and +5 years of convergence experience which provide a total of 3,000 firm-year observations. In addition to regression analyses, we used the difference-in-difference analysis to check for the impact of regulatory environments on earnings management.

Through the lens of contingency theory, our results indicate that the adoption of the new substantially IFRS-convergent accounting standards in China results in better financial reporting quality evidenced by less earning management. The empirical results further shows that accounting data are more value relevant for Hong Kong listed firms, and that firms listed in China are more likely to engage in accrual-based earnings management than in real earnings management activities. We established that different earnings management practices that are seemingly tolerable in one country may not be tolerable in another due to level of differences in the regulatory environments.

The findings show that Hong Kong listed companies’ exhibit higher level of financial reporting quality than Chinese listed companies, which implies that the financial reporting quality under IFRS can be significantly different in regions with different institutional, economic and regulatory environments. The results imply that contingent factors such as country’s institutional structures, its extent of regulation and the strength of its investor protection environments impact on financial reporting quality particularly in transitional and emerging economies. As such, these factors need to be given appropriate considerations by financial reporting regulators and policy-makers interested in controlling earnings management practices among their corporations.

This study is a high impact study considering that China plays a significant role in today’s globalised economy. This study is unique as it the first, that we are aware of, to compare real earnings activities against accrual-based earnings management in pre- and post-IFRS adoption periods within the Chinese and Hong Kong financial reporting environments, distinguishing between cross-listed and non-cross-listed firms.

China represents around 20% of the world's population, and her economy is still performing well under economic crisis. Historical events have shaped different parts of China with different economic developments and cultural encounters. The most prominent difference is between Hong Kong and the Mainland. This chapter would like to examine the development and issues of fashion retailing in China. For better understanding, this chapter starts with a brief discussion on apparel industry development and fashion culture in Hong Kong and the Mainland, follows by historical development and then presents systems of fashion retailing in both Hong Kong and the Mainland. Desktop research and exploratory research techniques were employed. Stores of international fashion luxury brands in Hong Kong, Shanghai and Beijing were visited. Comparison of branding issues, particularly for luxury market in Hong Kong and the Mainland are discussed, so are future directions of fashion retailing in these places.

The Dim Sum bond market in Hong Kong, which allows China to regulate the amount of offshore yuans that flow back into the mainland, has grown steadily since its inception in 2007 and is expected to surpass in 2013 the threshold level that would attract insurers and long-term issuers to the market. Yet, the market has not matured sufficiently relative to the yuan deposit market in Hong Kong that has grown at a much faster pace on account of trade liberalization and the use of yuans in China’s international trade settlements. Even though Hong Kong has fulfilled its role as an offshore currency center for the yuan, it is being challenged by Taiwan, Singapore, and London in terms of being the premier location for the issuance of yuan-denominated bonds outside of Mainland China.

The paper aims to contribute to the understanding of the current valuation practices and services offered across Asia, in particular the valuation techniques and methodology used by practising valuers in Hong Kong.

In order to gain professional opinions and an in‐depth understanding of Hong Kong valuation service providers, the methods and concepts used, and the extent of involvement with Chinese clients and businesses, the paper reports the findings of interviews with major real estate valuation firms and a survey of individual valuers involved in the appraisal of properties in Hong Kong and China.

The results show that there are significant differences between the strategic management and the operational level across several facets of the valuation process in Hong Kong and China. The paper contributes to an understanding of behavioural influences within valuation.

The main limitation is the restriction of the survey on Hong Kong‐based valuers. Further research will widen evidence to valuers based in mainland China.

This paper presents the results of original empirical research utilising data drawn from interviews and survey questionnaires. The value of the work lies in the analysis of the strategic overview of the organisation, management and operation of appraisal practice in Hong Kong.

Hong Kong has been a major entrepôt for China for decades and its intermediate role has been enhanced in recent years. With the open door policy of China, Hong Kong manufacturers have relocated extensively their low‐cost operations to the Pearl River Delta in Southern China. Under the outward processing arrangement, raw materials, components and work‐in‐progress are shipped to China for further processing and the finished products are shipped back to Hong Kong for re‐export to other countries. This mode of operation has created tremendous loads on the already congested cross‐border traffic between Hong Kong and the Pearl River Delta. In order to modernize its outdated and inadequate transportation systems, China has embarked on huge infrastructure development programmes in the Pearl River Delta and other fast developing regions. Hong Kong has also launched multi‐billion‐dollar ports and airport development projects scheduled to be completed in 1997/98. On completion of these projects, the strategic position of Hong Kong as an entrepôt of Southern China will be further enhanced, despite increasing competition from neighbouring ports and airports in the medium to long term.

This paper aims to examine the determinants of foreign direct investment (FDI) in China by investigating Hong Kong’s manufacturing industries established in Guangdong province, and to compare the difference between market‐oriented and export‐oriented, and between capital intensive and labor intensive FDI in investment decision making. A questionnaire survey is used to verify our argument. It is found that most of Hong Kong’s manufacturing investments are labor‐intensive and export‐oriented. The most important determinants of Hong Kong’s manufacturing investment in China are cheap labor and land, stable political environment, government incentive policies and high investment return. The most important location‐specific advantages are geographical proximity to Hong Kong, better preferential treatment, good infrastructure, and absence of language barrier. It is also found that export‐oriented FDI tends to be efficiency‐seeking while market‐oriented FDI appears to be resource‐seeking.

This paper aims to explore the critical success factors (CSFs) necessary for adopting public private partnerships (PPPs) in both Mainland China and Hong Kong.

An empirical questionnaire survey was conducted with relevant experienced practitioners in Mainland China and Hong Kong.

Both Mainland China and Hong Kong have been keen to deliver more infrastructure service projects through PPP mode, with the former aiming to meet its rapidly growing infrastructure demand and the latter uplifting its efficiency further. The results indicate that Hong Kong does not regard multi‐benefit objectives as importantly as Mainland China. Mainland China on the contrary felt more concerned with an equitable risk sharing mechanism, which is understandable given the problems affecting the financial market in Mainland China.

It is anticipated that the results presented in this paper will assist both the public and private sectors to deliver PPP projects more successfully.