Asian Economic Growth

Abstract

Given the state of the global economy, most leaders are desirous of putting their countries on the path for economic growth. The United States is no longer the leader in macroeconomics. That title belongs to China. China has seen drastic economic growth over the past decade. The world now looks to them for a model in stimulating the economy and moving forward. Today we will examine the growth of Hong Kong and Singapore in terms of a small company looking to grow and increase their own microeconomics.

Earlier this year, Singapore become the sixth most expensive city to live, in Asia. (TMCnet.com, 2011) After ten years of coming behind Hong Kong, Singapore is experiencing strong economic growth. How does a small firm in either of these cities take advantage of the prosperous economic conditions?

Both Hong Kong and Singapore offer extremely low tax incentives to attract and maintain small firms in their respective cities. In 2008, Hong Kong cut taxes for corporations to 16.5% (Leung & Petrie). Reduced tax rates are obvious benefits for any corporation competing in today's market. Often times, we see that a corporation will leave its home city, state, or even country in order to pursue lower taxes which enable them to keep more of their profits.

Singapores location is another major benefit for any corporation. Singapore has one of the largest ports in the world, making it a highly desired place of business. Having such a large port requires that a large amount of commerce pass through Singapore before making its way elsewhere in Asia. Such a position is not only good for the economy, but it brings commerce into the city itself thereby contributing to increased revenues.

Hong Kong is considered to be the highway to business in China. (The Diplomat, 2009) Most of China's imports pass through Hong Kong, and like Singapore this is a major advantage for any corporation in the city. The government in Hong Kong is like that of Britain which is why trade is so profitable and makes it a major contributor to the GDP.

All in all, both Hong Kong and Singapore would make great places for a corporation to place its roots. The fact that both cities allow foreigners to own their companies 100% makes them all the more attractive. After all, the goal of all companies is to maximize profits. Most attractive is the tax rates and the Westernized standards of living which make living in a foreign country more conducive for most business owners.

REFERENCES

Leung, Sophie and Petrie, Daniel. (2011). H.K.'s Tsang Struggles to Meet Tax Vow as Singapore Threat Looms. Bloomberg Businessweek. Retrieved from http://www.businessweek.com on December 9, 2011.

The Diplomat. (May 7, 2009). Hong

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