Asia’s International Trading and Finance Centres
Edited by François Gipouloux
Chapter 6: Hong Kong and Shanghai: Rivalry or Complementarity Among Asia’s International Service Hubs?
6. Hong Kong and Shanghai: rivalry or complementarity among Asia’s international service hubs?* 8 Sung Yun-Wing INTRODUCTION Hong Kong and Shanghai share a common history. They are two of the five trading ports along the coast of China forcibly opened by the West under the Treaty of Nanking in 1842, following the end of the First Opium War. From obscurity, both ports rose rapidly to prominence under Western influence because of their strategic location. Before World War II, whereas Hong Kong was a regional port handling the South China external trade, Shanghai had already been a global city. In the 1920s, Shanghai was known as the Wall Street of the Far East. When the Communists came to power in China in 1950, the service sector of Shanghai shrank because of Marxian bias against services. On the one hand, industrial development continued. The growth of Shanghai was above national average, and it was the number one sub-central city/ province in terms of GDP, industrial output and exports in the pre-reform era (Sung 1999: 1). On the other hand, Shanghai was no longer a global city because it was cut off from the world market. The eclipse of Shanghai as a global city provided an opportunity for Hong Kong. Many Shanghai capitalists fled to the then-British colony, providing the capital and skills for the export-oriented industrialisation of Hong Kong. The demand for services from the manufacturing sector stimulated the development of banking and business services. In the 1970s, Hong Kong began to...
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