Trade Issues | |
Hong Kong - Example of Free Trade Success |
With protectionism much in the news and in political debate recently,
parties to the discussion might keep in mind the example of Hong
Kong.
Following World War II, economic conditions were grim in the British
Crown Colony. Refugees from Communist China were streaming in
with only the possessions they could carry. The Colony received
little or no foreign aid to assist in the assimilation of the
refugees. Nor did it have any significant natural resources,
except for its harbor.
But Hong Kong established a policy of no tariffs on imports, no
subsidies to exports, no fixing of prices or wages, absolutely
minimal regulations, low taxes (a maximum average of 15 percent
on personal income) and government spending.
The Colony thrived under policies diametrically opposed to those
socialist policies being pursued in the mother country. And while
Hong Kong was achieving this miracle, Britain stagnated.
Source: Milton Friedman (Hoover Institution), "Hong Kong
Vs. Buchanan," Wall Street Journal, March 7, 1996.
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