Topic 6 Globalization and Community

1. Topic 6 Globalization and Community

2. Global City: • 1. High concentrated command points in organization of world economy • 2. Key locations for finance and specialized service firms • 3. Markets for products and innovation • 4. Sites of production

3. Entrepreneurial City: • 1. Pursue innovative strategies to enhance its economic competitiveness • 2. Strategies are real and reflective, pursued in an active and entrepreneurial fashion • 3. Adopt discourse and take city as entrepreneurial city

4. Economic Innovation: Introduce new types of urban space and place New methods of space production to create location-specific advantages Open a new market Find new sources of supply Redefine urban hierarchy

5. Neo-Liberal Strategies • Common Neo-Liberal strategy Attract inward investment to retain extant investment through cost-cutting and deregulatory strategy • Neo-corporatist, Neo-statist & Neo-liberal Pursue some form of structured coherence across scales by building links to wider economy

6. From industry to Services • 1979, China opened its market to foreign investment • Provide opportunities for HK firms to adopt glocalization strategies • Enhance competitive advantage in the export market • Facilitated by some global strategies in China • Hollowing out of HK as a manufacturing centre

7. From industry to Services • Globalization strategies by HK: • Low land and labour costs in Mainland China • In mid 1990s, HK factories moved northwards

8. Finance Sectors • Market-friendly environment • Opening of China market • Growing economic importance of Asia Pacific region • Global financial liberalization and development of international banking and financial markets • Developments in information technology and telecommunications • HK net recipient of overseas funds!

9. Real Estate Sectors • Immature debt market cannot absorb the excess capital, which then turned into property market • HK government's historical dependency • Pegged exchange rate • Low real estate rate • Sino-British Joint Declaration • Accumulation hard currency from Mainland China • Growth in population during 91- 93 • Growth of GDP • Desire of new middle classes for property

10. Close Relationship between Finance and Property Capital • 3 Phenomena: • High loan exposure of financial institutions to construction and real estate • Half of the Hang Seng Index made up of property or related share • Interlocking relationship between real estate and infrastructure development

11. Competing Discourses on Globalization Worries… Decline of industry Lack of high-tech investment Rising residential and office rental costs

12. Consultancy Report • Refine: • Entrepreneurialism • Competitiveness forms • New combinations to create and sustain competitiveness • Demonstrate "globalization strategies" of HK • Reflect: • Advantageous mode of inserting HK into the multiscalar and multitemporal divsion of labour

13. 1st Report -- HK Advantage (Harvard) • Sponsored by the Vision 2047 Foundation which groups commercial and financial capital interests • Group promoted revisioning of Hong Kong’s future time and space favouring its own interests • HK’s manufacturing decline and challenge of interurban with Shanghai, Singapore and Taipei

14. 1st Report -- HK Advantage (Harvard) • Promote HK as new identity as business / service / financial centre with hubs functions • portrayed HK as new type of urban economic space •  manage as ever-expanding global-regional-local flows of production and exchange

15. 2nd Report -- Made by HK (MIT) Argument: • ‘Made by HK’ manufacturing trajectory (low cost manufacture of HK goods in offshore locations) is unsustainable due to rising labour and land costs and craze property Solution: • Produce higher-value-added goods in HK • ‘Made in HK’ symbols • High-tech manufacturing centre Requirement: • New methods of production and organization socioeconomic space • Government support

16. 2nd Report -- Made by HK (MIT) High-tech manufacturing centre: • Brand name production • Original design manufacturing Boost the entrepreneurial and self-governance capacities: • Acquire technical knowledge from the PRC • Promoting R&D agglomeration economies • Acquire new inputs • Strengthen technological capabilities of government

17. Asia Crisis Feb 97, speculators attacked Thai currency, soon spread to HK • Govt response to the attack: • Intervened in money market by push up interest rates in interbanking sector • Impose penalty interest on borrowing of HK dollar • Consequence: • Maintain exchange rate BUT… • High interest rates • Capital flow out • Reduced external demand • Local stock index and property price down • Govt response to prevent: • Freeze land sales • Grant tax rebates to property owners

18. Asia Crisis Aug 98, further attack upon yen depreciated against dollar, propelled significant capital outflow • Govt response: • Draw on reserves to buy HK shares • Introduce technical measures to strengthen transparency and operation of linked exchange rate system • Consequence: • High interest rates • Weak domestic demand • Rise unemployment • Govt response: • Resume land sales • Support property sector

19. New Urban Identity for a Crisis-ridden HK • Challenges: • Over-dependence on property sector • Vulnerability of financial and other services • Competition from Shanghai and Singapore • Rising tide of the • information revolution • Recession

20. New Projects for Urban Governance in the articles • Cyberport • Silliconization

21. Aims • Information service sector • Information and telecom hub in Asia • Capture global information flows • Knowledge-based economy • Cyber culture critical mass to link the global, regional and local • Symbolically bridge traditional service-technology-property divide in the cityspace

22. Now... • After the 2001 technological stock bubbles, Cyberport become not popular, usage of the Cyberport is changed. • Technological companies closed down • No further invest in information technologies • Does Hong Kong really need Cyberport?

23. Criticism • Real estate project • Not open for bidding • Using residential land to subsidise the Cyberport • Depart from non-intervention policy • Lack of transparency • Create favouritism

24. Siliconisation of Asia • Many Asia countries desired to develop information-technology • Hong Kongcompete with other east Asia countries, such as • Singapore : Science Hubs • Malaysia : Multi-media Supercorridor • Beijing : Zhonguancun area

25. Singapore’s Science Hubs Malaysia’s Multi-media Super-corridor Project costs US $20 billions US$2.9 billions Size 434 acres 750 km2 Major Tenants Dell, National University of Singapore Polytechnic Microsoft, Intel, Nippon Telegraph and Telephone Completion date Before 2013 1st phase in 2002 2020 Niches R&D development Software, Multimedia products Hi-tech Clusters in Singapore and Malaysia

26. New Project • Disneyland

27. Advantages: • Attract tourists • Create new jobs • Project will cost an estimated $14.1 billion which represents a new injection of capital expenditure into the local economy. • Disadvantages: • Compete with the Shanghai’s Disneyland • Capital return cannot be predicted

28. Consumption and ideology: • Fairy tales vs reality • Western culture vs local culture • Corporate Brand culture

29. Environmental Issues: • Men and fishes • Villages and plants • old historic sites • Labor Issues: • Low paid • Exploitation of labor in China • Lack of Corporate Social Responsibility

30. Conclusion • Rethinking the failure of various projects • Global city vs entrepreneural city • Global city vs local community