project n781

Our Members List: 

Our Members List Group leader : Chan Yuen Wing (24) Group members: Ip Chu Wah (8) Chan Hau Wun(21) Chan Ka Hang(22) Chan Yuk Yu (25) Kong Man Ching(31)

Introduction: 

Introduction From 1997-2007, Hong Kong has been making a lot of changes. E.G 1 Educational development HK's government provides 9-compulsory education . E.G 2 Political affairs HK has got back the rights to control HK since 1-7-1997. So, we use HK's Economic development as our topic to look for more knowledge about economy.

Contents: 

Contents 1.Great event occurred in 1997-2007 2.Reasons OF The financial crises -U.S.A -Curb Inflation -Interests offer by banks 3. Main Causes of Financial Crisis 4.The Hong Kong Financial Crisis in 1997 5.The effects on financial crises 6.Questionnaire Results Conclusion 7. The differences of 97 and 07 economy

1.Great event occurred in 1997-2007 : 

1.Great event occurred in 1997-2007 1997 – H5N1 occurs , many chickens were killed -financial crises occurs 1998 - Hang Seng Index dropped 62%, the HK government put $1200billion to rise up 8000 points of HSI。 1999 – established ‘YIN FU’capaital , sold official stock 2002 – Tung Kin Wah continued be the Chief Executive of the HKSAR , officials’responses 2003 – many mainland tourists came to visit HK (promoting HK economic development) - SARS occurs 2004 – The Link was marketed . 2005 – Donald Tsang has been the Chief Executive of the HKSAR of the People's Republic of China -HK Disneyland were built and opened 2007- America linked to a small scale economic downturn. HK Hang Seng Index rised twelve thousand

2.Reasons OF The financial crises: 

2.Reasons OF The financial crises

A.The Bank: 

A.The Bank -In 90s, the economy develops rapidly, many countries appear economic problems. -East Asian countries’ bank system had many problems before East Asian financial crisis. -There was economic recessions, some trades suffered deficit and the government needs to pay back . The bank system collapsed. -Business owed money which creates problems for bank assets.

B.Interests offered by banks: 

B.Interests offered by banks 1997 – 2007 : Interests offer by banks were mainly Advantage: it can reduce the cost of the loans of people who are paying for their own houses. It can promote property agents as people can pay little for new houses and business. Disadvantage: people would earn little as their money put in banks for less interest.

C.Background of U.S.A: 

C.Background of U.S.A In 1995 – 2005 the United States accounted directly for one-third of global economy. 1983 – 2004 soaring U.S. imports accounted nearly 20 percent of the increase for the world's exports. The U.S. economy cruised along in the early 2000s : a stock market crash, terrorist attacks, wars in Iraq and Afghanistan, corporate accounting scandals, widespread hurricane destruction, surging energy prices, sliding real estate values. After a mild recession in March-November 2001, the U.S. economy resumed to expand.

The effect of U.S.A on HK: 

The effect of U.S.A on HK When U.S.A reduces interests , Hong Kong’s banks also reduce interests . It is because U.S.A AND HK has established close contact with each other , the rate of exchanging money is HK$7.8 = US$1. (Hong Kong and the Mainland China have the relationship in economic development. The mainland China followed U.S.A to reduce interests. ) So, Hong Kong followed the mainland China based on the U.S.A’s reduction of interests. As a result , Hong Kong becomes economic inflation .

Hong Kong Economic Sources: 

Hong Kong Economic Sources needs to depend on the international trade  lack of natural resources food and raw materials are major come from foreign countries Hong Kong trade and investment are mainly come from foreign country In 1989 and 1997 , the total value of the mainland production increased 5%. In 1998, financial crisis of Asia the total value of the mainland production are decrease 5%. The whole world of economic have been depressed and Hong Kong is affected .

D.Curb Inflation: 

D.Curb Inflation the prices of goods are rising continue, but the prices of currency decrease. Economics inflation have two different balance: > Book value -----consumer price index > New product and inflation services’ GDP index

Reasons of Curb Inflation: 

Reasons of Curb Inflation Exchange rate of U.S.A and Renminbi speeds up appreciation Economic markets are not very stable there is a economic downturn in U.S.A -The prices of fossil fuel costs and electricity costs are increasing -transportations, agribusiness and products are rising sharply.

Slide14: 

3 .Main Causes of The financial crises ~the Newly Industrial Economics invested in Southeast Asia (China has given business to trade, so business invest too much, some products did not sell well. Business owed money which created asset problem of the bank . ) ~Plenty of exchanges ~The rise of wages and lend to the waste ~Southeast countries’ economic develop rate much higher than the other place. ~ ↑ demand of currency in the Southeast countries

Slide15: 

The government lowered down the value of local currency to keep the exports’ competitive ; on the other hand investors only care about how to earn money . Too many exchange come to Southeast Asia , the “foam economy ’’ was formed in the real property and the stock market. The bank system collapsed . East Asian countries’ companies the administration was also bad. FINANCE CRISES

4.The Hong Kong Financial Crisis erupted in 1997: 

4.The Hong Kong Financial Crisis erupted in 1997 The Massive speculative attack In mid 1997, the ‘Thai baht’ was hit by massive speculative attacks. The government decided to float the ‘baht’, cutting its link to the USD. The forced devaluation caused the collapse of its currency and the stock market. Then the crisis spread to other Southeast Asia countries. In the fall of 1997, Hong Kong dollars also came under speculative pressure. The government had defended the Hong Kong dollars by maintaining its link with US dollars. However, the cost was high, as this required interest rate to be raised.

Slide17: 

The spread of the contagion The impassive growth of economic among the Southeast Asian countries, fuelled by high capital inflows, created a big Asian bubble. When it burst, the fallout spread far and wide. The growth of derivatives and modern information technology accelerated the speed of the contagion. Hong Kong could not be immune from the crisis. Political uncertainty (return of sovereignty to China) The uncertainty regarding the future of Hong Kong led to the withdrawal of international capital and worsened the situation.

5.The effects on East Asian Financial Crisis: 

5.The effects on East Asian Financial Crisis According to the great event occurred in 1997-2007, we can figure out the effects on financial meltdown. Firstly, in 1997 financial crises occur red. The economic and stock market of Hong Kong is badly affected. In 1998, Hang Seng Index dropped by 62%, the stock market continued to slump. Another great effect is in 2003, SARS occurs red. SARS seriously affected the world’s finance. The stock market became decrease and unstable. Also, it affected the financial sector later on. So we can know that the great events could be badly affected the finance.

6.questionnaire : 

  1.Did you read any financial news in past one year？  □　Yes　　　　　　　　　□　No　　　 2.Have you buy any stocks？  □　Yes 　（Go to question３，５to１０）　 □　No （Go to question４and１１） 3.Why did you buy stocks？   □　Want to Earn more money　　□　Because there is some money left　　□　To While Away the Time　　 □　Learn the Skills of Manage Finances　　 □　Others：______________________ 　　　　　　 4.Why didn’t you buy stocks？  □　It’s because working to earn money is more reality □　It’s because there is no money left □　It’s because I am afraid that I will lose the money □　Others：______________________ 5.How much money you spend on buying stocks？  □　Below ＄１０００　　　　　　□　＄１００１to＄３０００ □　＄３００１to＄５０００　　　□　＄５００１to＄８０００ □　＄８００１to＄１００００　　□　＄１０００１to＄１５０００ □　＄１５００１to＄２００００　□　＄２０００１or above 6.Have you borrowed money to buy stocks yet？  □　Yes　　　　　　　　　□　No　　　 7.How did you buy stocks？  □　Though The Bank　　　　　□　On the Net　　　　　 □　Others：__________________________ 8.Where did you know the information of the stocks？  □　Bank　　　　　□　Newspaper　　　　　□　Internet　　　　　 □　Others：_________________________ 6.questionnaire

Slide20: 

9.How much time you spend on stocks（in one week）？ □　Under３hours　　　 □　４to１０hours　　 □　１１to１５hours　　□　１６to２０hours　　 □　２１to２５hours　　□　２６to３０hours　　 □　３１to３５hours　　□　３６to４０hours　　 □　４１to４５hours　　□　４６hours or above 10.Then , What is the results？  □　Earn Money　　　　　　　□　Lose Money　　　　　　　 11.What do you think the advantages of buying stocks？ □　Earn Many Money　　　　　　 □　Learn the Skills of Manage Finances □　Others：____________________________ 　　　　　　　　　　　　　　 12.If there any disadvantages of not buying stocks？If there is , what is it then？ □ Yes □　Less a chance to earn money □　Know Nothing about the Skills of Manage Finances □　Others：________________________________　　　　　　　　　　　　　　　　　 □ No 13.What did you think about the future of the stocks market in Hong Kong？ □　Big Rise　□　Little Rise　□　Little Drop　 □　Big Drop　□　No opinions　□　I don’t know 14.Did you / your husband raise the salary in this year？ □ Yes　　　　　　　　　□　No　 15.What did you think about the Commodity price？ □Big Raise 　□　Little bit Raise　□　Little Bit Drop　□　Big Drop　 □　Around the Same　□　I don’t know　□　Others：_____________________  

Slide21: 

16.How much money you spend on catering and entertainment each months？  □　Below ＄１０００　　　　　 □　＄１００１to＄３０００ □　＄３００１to＄５０００　　　□　＄５００１to＄８０００ □　＄８００１to＄１００００　　□　＄１０００１to＄１５０００ □　＄１５００１to＄２００００　□　＄２０００１or above 17.What did you think about the Interest rate？   □　Big Raise　 □　Little bit Raise　□　Little Bit Drop　□　Big Drop　 □　Around the Same　□　I don’t know　 □　Others：__________________ 18.What do you think about ‘H.K. economy will become better’？ □　Optimistic　 □　Firm　 □　Half believe　□　Hopelessness　 □　No opinions　□　I don’t know　□　Others：____________________     Personal Information Age： □　Below age１８　 □　Age１９to２５　　□　Age２６to３０ □　Age３１to３５　□　Age３６to４０　　□　Age４１to４５ □　Age４６to５０　□　Age５１to５５　　□　Age５６or above Sex： □　Male　　　　　　　　　□　Female　　 　　　　　　　 Qualification: □　Below or Primary Standard　　□　Secondary 3　　□　Secondary 5　　 □　Secondary 7　　　　□　University degree or have already graduated Jobs：_________________ Month Salary： □　Below ＄１０００　　　　　 □　＄１００１to＄３０００ □　＄３００１to＄５０００　　 □　＄５００１to＄８０００ □　＄８００１to＄１００００　 □　＄１０００１to＄１５０００ □　＄１５００１to＄２００００　□　＄２０００１or above 　 　

Results: 

Results In the result , we asked around 200 people about the questionnaire face to face . People want to buy stocks they want to earn more and more money and there is some money left . Many people think that the advantages of buying stocks: can earn more money , the Hong Kong stocks market will raise little from the time being. the commodity prices are increasing when compare the past.  mainly optimistic and firm on the better future of Hong Kong economy . Only little part of people who didn’t buy stocks, there is no money left,  more half of people who raise salary this year. At last Our data: Though this questionnaire, we knew more about what people think on buying stocks and know what people think about the Hong Kong Economy. We presented our findings and data in charts. Some of them as shown in the following pages.

7. The differences between 97 and 07 economy crises: 

7. The differences between 97 and 07 economy crises In 1997, many people invest the stock market, many stocks values are turn aside, but many people invested the stock continuously. The value of Hong Kong dollars are decrease many people lose all their money broke out ’97 East Asian Financial Crisis’. After the stock market was broken down, people lost their saving no one wants to invest in Hong Kong The development of economy was badly affected. However, in 2007, many people invest the stock and many stocks values are turn aside, but no such Financial Crisis was broken out.

8.Our Preview in Future: 

8.Our Preview in Future Hong Kong’s economy has been well developed during 1997-2007. People earned more ;living standards has been improved. more families go out for meals to year . (Information from the Government of the HKSAR) So we expect that Hong Kong’s economic will boom and to be better than now in the future . However, Hong Kong economy in short time will not change much due of the inflation problems in Hong Kong .

9.Opportunities and challenges: 

9.Opportunities and challenges The possible opportunities during 1997-2007 in HK: as the economic development is well developed during 1997-2007, more international investors had came to HK, for example people may open restaurants,  more people can get job opportunities. when there has more exchange activities in Hong Kong, other countries will know more the quality of Hong Kong’s products, it helps to develop the Hong Kong positions in the world.

Slide30: 

The possible challenges during 1997-2007 in HK:  After China 's accession to the WTO, HK lost its position as the gateway of China. As a result, many foreign countries would invest in China directly without first establish in HK. However, HK is still the leading financial center in China, and has the best financial professions. HK as the leading financial center in China can assist other parts of China to reach continues to grow; in the meantime, HK can also get benefits.

10.Our Reflection: 

10.Our Reflection Hong Kong’s future will have a new challenge the stock market is unsteady  may cause a new stock crisis easily. Hong Kong people may have many opportunities  the unemployment rate was lowered, more people can get a job in Hong Kong. the economy rise and the income increase , Hong Kong will become prosperous and steady. In 1997, many people buy stocks but lost much of their money, as well as even suicide. These affected Hong Kong’s fame that no one wants to invest. Therefore, the economic development was badly affected. In2007, the stock market is also unsteady so there are not many people buy stocks and flats thus can’t break out a new stock crisis. The foreign businessman wouldn’t invest. Therefore, this challenge Hong Kong economic development as if it can solve this problem, the economic development would also turn for the better.

11.Resources : 

11.Resources We have searched for background information on the topic through various sources. We have search for some information on the Internet, most information we search is in wikipedia, the website of the Hong Kong government, yahoo knowledge. Some information we refer to the book called “Elementary Economics for Hong Kong” that published by PPC.

‘‘THE END’’: 

‘‘THE END’’