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An Analysis of the Impact of RMB Depreciation on Hong Kong

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  • Li, Richard (Ziyuan)

    (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)

Abstract

Hong Kong is one of the main economies operating a currency board system today. With its currency fixed to the U.S. dollar, the system has functioned successfully since it was restarted in 1983. The last time it faced severe challenges was during the East Asian financial crisis of 1997-98. However, with the comparatively large depreciation of renminbi (RMB, and sometimes referred to as Yuan) during the past two years, a rising question is how Hong Kong might be affected by a possible future crisis originating from China. In this paper, we examine the impact of RMB depreciation on Hong Kong, with a focus on three sectors of Hong Kong’s economy: foreign direct investment, external trade, and tourism.

Suggested Citation

  • Li, Richard (Ziyuan), 2017. "An Analysis of the Impact of RMB Depreciation on Hong Kong," Studies in Applied Economics 83, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    • Handle: RePEc:ris:jhisae:0083
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    References listed on IDEAS

    as
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    4. Kun‐Ming CHEN & Hsiu‐Hua RAU & Chia‐Ching LIN, 2006. "The Impact Of Exchange Rate Movements On Foreign Direct Investment: Market‐Oriented Versus Cost‐Oriented," The Developing Economies, Institute of Developing Economies, vol. 44(3), pages 269-287, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    RMB; China; Hong Kong; Asian financial crisis; FDI; trade; tourism; retail sales;
    All these keywords.

    JEL classification:

    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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