Economic Crisis and Social Development in Hong Kong Since 1997

Abstract

Hong Kong emerged from the Asian financial crisis with record-high levels of unemployment and budget deficit, though its currency is stable as the exchange rate of the Hong Kong dollar is linked to the U.S. dollar. With soaring rates of unemployment, poverty, income inequality, and salary cuts, the popularity rating of Chief Executive Tung Chee Hwa is plunging to another all-time low. This paper examines the economic and social problems in Hong Kong since 1997, and discusses attempts made by the Hong Kong government to tackle the financial crisis. It calls for a reexamination of the effectiveness of such measures to a change of mindset by policymakers from the neo-liberal tradition to the Social Development approach.

“In the face of our current economic difficulties, the most reliable source of strength is ourselves—the people of Hong Kong. In the past, when confronted with adversity, Hong Kong people always rise to the occasion. We maintain our composure, walk the extra mile, strive for excellence, better ourselves and break new ground. I firmly believe that with our intelligence, determination and adaptability, we can overcome all difficulties as we forge ahead towards a bright future.”—Chief Executive Tung Chee Hwa, 2001 policy address, October 10, 2001