Compare and Contrast the Economic Development in Hong Kong and Shanghai

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Introduction Hong Kong and Shanghai have undergone rapid economic development under British influence since 1842. They share a geographical advantage as a core city in the Pearl River Delta (“PRD”) region and Yangtze River Delta (“YRD”) region respectively. Despite these similarities, the cities experienced different levels of economic development due to their changing locations in the regional, national and global economy. This essay seeks to compare the location and economic development of both cities in three historical periods: 1.1840-1949, 2.1949-1978 and 3.1978-2008. It attempts to examine the relationship between the changing location of the cities and their respective growth and structural change. 1. 1840-1949 Hong Kong After’s China defeat in the Opium War in 1842, Hong Kong was ceded to Britain as a colony. Since Hong Kong provided “political and social access to the governor to influence British policies regarding China trade” (Meyer, 2000, p.57), it was proclaimed as the headquarters and ‘the grand emporium of Eastern Asia’ (Fairbank, 1969, cited by Meyer, 2000, p.60). Since then, Hong Kong emerged as an important entrepot by the early twentieth century. The location as an entrepot prompted merchants to invest in industries relating to entrepot trade, including banking, insurance and shipbuilding. The government also spent more on infrastructure, including transport and communication systems, to support trading activities. Shanghai Similar to Hong Kong, Shanghai’s location has been influenced by Western colonialism and it was designated as a treaty port in 1842 (Abbas, 2000). The city then gradually developed into the leading industrial and commercial centre in the national economy by 1920. Before the start of the Second World War, while Hong Kong remained as a regional entrepot, Shanghai has already transformed into “the largest
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