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To help you understand the hot issues and common terms related to economics, this column has selected some examples from local, national and international aspects, with concise explanations and hyperlinks to related websites.
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1. Nine Plus Two Cooperation
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- "Nine Plus Two" Cooperation or Pan-Pearl River Delta Regional Cooperation refers to the plan, which was firstly proposed by the Party Secretary of Guangdong province, Mr. Chang De-jiang, in 2003, that nine provinces of the mainland located near the Pearl River Delta including Guangdong, Fujian, Jiangxi, Hunan, Guangxi, Hainan, Sichuan, Guizhou, Yunnan, plus two special administrative regions which are Hong Kong and Macau, cooperate with each other to promote trade and economic development in the regions.
- Details can be found in these websites:
http://www.info.gov.hk/info/9%2b2/eng/
http://www.tdctrade.com/tdcnews/speech/040601.htm
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2. CEPA
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- CEPA stands for "The Mainland and Hong Kong Closer Economic Partnership Arrangement". This is to promote trade and investment opportunity between the two sides under the rules of the WTO that products of Hong Kong origin can access to the mainland market without much tariff or non-tariff protective measures.
- It has been implemented on 1st January 2004.
- Details can be found in these websites:
http://www.tdctrade.com/cepa/index.htm
http://www.tid.gov.hk/english/cepa/index.html
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3. Individual Visit Scheme
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4. The Link
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- The Link Management Limited is a new company set up to manage an extensive portfolio of retail and car park facilities across Hong Kong, all of which will be divested by the Hong Kong Housing Authority.
- Details can be found in this website:
http://www.thelinkreit.com/en/index.html
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5. Tracker Fund of Hong Kong
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- The unit trust listed on the Hong Kong Stock Exchange in 1999 to dispose of part of the Exchange Fund's Hong Kong equity portfolio (a collection of company shares and other investment owned by a particular person or an organization).
- Details can be found in this website:
http://www.trahk.com.hk/eng/index2.html
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6. Development of the West Kowloon Cultural District
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- The HKSAR government is going to develop the reclaimed land of the West Kowloon into an integrated arts, cultural and entertainment district to make it a new landmark of Hong Kong.
- The government invited for proposals from the market for the development plan and finally three proposals are under serious assessment for final selection.
- Details can be found in this website:
http://www.hplb.gov.hk/wkcd/eng/public_consultation/intro.htm
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7. 3-3-4 System
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- Under this system, all students finished 3-year lower secondary education (current S1-S3), will receive a further 3-year senior secondary education. Meanwhile, current two public exams (the HKCEE and the HKALE) will be reduced to one public exam only which leads to HK Diploma of Secondary Education. Besides, the length of normal undergraduate degree will be extended from three to four years.
- Under this system, all senior secondary school students have to study four core subjects including Chinese Language, English Language, Mathematics and Liberal Studies, plus two to three other selected subjects provided by their schools.
- Under this system, resources in the secondary schools and the tertiary institutions may need to be rearranged, otherwise there may be redundancy in human resources in secondary schools and lack of capital in financing the extension of the length of undergraduate degree courses.
- Details can be found in this website:
http://www.emb.gov.hk/index.aspx?nodeid=3998&langno=1
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8. Hunghom Peninsula Incident
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- The Hunghom Peninsula is an estate constructed in 2002 under former Home Ownership Scheme. But after the HKSAR government's announcement of the cancellation of selling Home Ownership flats in the same year, all 2 500 flats of this estate has remained unsold for two years.
- In 2004, the government sold it to the private developers for $806.4 million. In order to maximize its potential market value, the developers decided to demolish it and turn it into luxurious apartments. This plan aroused strong repercussion from the social and green groups. Finally, the estate developer is forced to abandon the plan to rebuild it, but renovate it to sell the flats at a higher prices.
- Details can be found in these websites:
http://www.foe.org.hk/welcome/geten.asp?id_path=1,%207,%2026,%202449
http://www.hkptu.org/hunghom-peninsula/news041112e.htm
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9. More about Financial terms
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9(a) Aggregate Balance
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- The total of licensed banks balances in their clearing accounts maintained with the HKMA for the account of the Exchange Fund.
- It is also an indicator of Hong Kong dollar fund flows.
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9(b) Convertibility Undertaking
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- The undertaking given by the HKMA to licensed banks to sell US dollars to them for the Hong Kong dollar balances in their clearing accounts at the fixed exchange rate of HK$7.80 to US$1.
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9(c) Deposit Protection Scheme
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- A scheme being established by the Hong Kong Deposit Protection Board under which each eligible depositor will be paid compensation up to a maximum of HK$100,000 in the event of a bank failure.
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9(d) Intermediation
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- The important process of channelling savings into investments that justifies the existence of the financial system and financial intermediaries.
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9(e) Lender of Last Resort
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- A function of the HKMA, for safeguarding the stability and integrity of the banking system of Hong Kong by providing support, where necessary, to banks that are basically solvent (having enough money to repay to creditors) but are troubled by short-term funding difficulties.
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9(f) Negative Equity
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- A problem created in Hong Kong by the bursting of the property bubble in the late 1990s. The problem has greatly diminished over the last 18 months.
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9(g) US Fed Funds Target Rate
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- A key policy interest rate in the US. The Base Rate under the HKMA Discount Window is determined with the floor set at this US policy rate plus a premium.
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9(h) Discount Window
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- The facility through which banks can borrow Hong Kong dollar funds overnight from the HKMA through repurchase agreements using eligible securities including Exchange Fund paper as collateral.
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9(i) Discount Rate
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- The interest rate at which banks obtain overnight Hong Kong dollar liquidity from the HKMA through repurchase agreements involving Exchange Fund paper or other eligible paper under the Discount Window.
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9(j) Repurchase Agreements (repo)
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- A transaction in which one party sells securities to another party in return for cash, with an agreement to repurchase equivalent securities at an agreed price and on an agreed future date.
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9(k) HIBOR
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- Hong Kong Interbank Offered Rate (HIBOR) is the rate of interest offered on Hong Kong dollar loans by banks in the interbank market for a specified period ranging from overnight to one year.
(Extracted from the HKMA website:http://www.info.gov.hk/hkma/eng/viewpt/index.htm)
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1. Economic Integration of the Yangzi River Delta
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- Economic Integration of the Yangzi River Delta has been started since 1992. The strong economic growth of Shanghai is considered as the result of the co-ordinated efforts of the 15 cities of the Yangzi River Delta, led by Shanghai, Nanjing and Hangzhou.
- With about 6% of the nation's population, the Delta contributed to more than 17% of the mainland's GDP according in 2002.
- Details can be found in this website:
http://www.tradelink-ebiz.com/english/2m599em7b74er/newscast/ct_hg_0301a.html
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2. Western Region Development
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- In order to accelerate the development of the Western Region, the Central Government has launched the Western Region Development scheme in which tax concessions has been granted to those Foreign Invested Enterprises (FIEs) located in the Region.
- There are 12 Municipals / Provinces / Regions concerned in this scheme: Chongqing Municipality, Gansu Province, Guizhou Province, Qinghai Province, Shannxi Province, Yunnan Province, Sichuan Province, Ningxia Hui Autonomous Region, Xinjiang Uygur Autonomous Region, Tibet Zang Autonomous Region, Inner Mongolia Autonomous Region and Guangxi Autonomous Region.
- Details can be found in this website:
http://www.tdctrade.com/gowest/investment/index.htm
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1. OPEC
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- Organization of the Petroleum Exporting Countries (OPEC) is an international Organization of 11 oil-exporting developing nations that co-ordinates and unifies the petroleum policies of its Member Countries, so as to stabilise oil prices in international oil markets for the sake of its Member Countries.
- Details can be found in this website:
http://www.opec.org
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2. European Union
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- European Union (EU) is an organization consisted of 25 European countries, including France, Germany, Italy, the United Kingdom, Belgium, Luxembourg, etc., aimed at fostering trade and economic activities by eliminating trade barriers among the Member Countries.
- Currently, there are 12 Member Countries adopts euro, the single currency of EU, as their legal tenders, they are Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland.
- Details can be found in this website:
http://europa.eu.int/index_en.htm
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3. Association of Southeast Asian Nations
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- Association of Southeast Asian Nations (ASEAN) established on 8 August 1967, is an organization composed of 10 Southeast Asian nations, like Indonesia, Thailand, Singapore, Vietnam, etc., which is aimed at accelerating economic growth by forming a free trade area in the region.
- Details can be found in this website:
http://www.aseansec.org/64.htm
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