BTEC Level 3 Business

UNIT 38: Assignment 2

Dominic Clark

Government Policies
In Hong Kong the government policies are decided by the Chief Executive and discussed by the
HKSAR legislative committee before they are publicly put into effect. These policies are divided
into numerous areas and each have an individual impact on businesses in the region. In this report, I
will explain exactly how six policies in Hong Kong effect the housing realtor, Midland Realty and
explain the pros and cons of each policy.
Governments set policies that range over a wide variety of polices such as:
Education
Criminal
Immigration
Health & Safety
Transport
Trade
Foreign
Home Affairs
Culture Taxation

TABLE OF CONTENTS
1.0 HONG KONG IMMIGRATION POLICY
1.1 Advantages of The Hong Kong Immigration Policy
1.2 Disadvantages of The Hong Kong Immigration Policy
2.0 HONG KONG TRADES POLICY
2.1 Advantages of The Hong Kong Trades Policy
2.2 Disadvantages of The Hong Kong Trades Policy
3.0 HONG KONG EDUCATION POLICY
3.1 Advantages of The Hong Kong Education Policy
3.2 Disadvantages of The Hong Kong Education Policy
4.0 HONG KONG HOUSING POLICY
4.1 Advantages of The Hong Kong Housing Policy
4.1 Disadvantages of The Hong Kong Housing Policy
5.0 HONG KONG LAW AND ORDER
5.1 Advantages of Hong Kong Law and Order
5.2 Disadvantages of Hong Kong Law and Order
6.0 HONG KONG COMMUNICATION & ICT POLICY
6.1 Advantages of Hong Kong Communication & ICT Policy
6.2 Disadvantages of Hong Kong Communication & ICT Policy
7.0 HONG KONG TRANSPORT POLICY
7.1 Advantages of Hong Kong Transport Policy
7.2 Disadvantages of Hong Kong Transport Policy

BTEC Level 3 Business

UNIT 38: Assignment 2

Dominic Clark

1.0 HONG KONG IMMIGRATION POLICY

An immigration policy is a grouping of specific guidelines that state the regulations for permitting
people into a country. Different countries require different immigration documents and entry or visa
application may be dependant by passport.
The Hong Kong immigration service has a relatively liberal immigration policy as they stamp all of
their visitors with 90-day stamps, as well as the GEP (General Employment Policy). This makes it
easy for anyone to enter Hong Kong with a valid passport and no major criminal records. In terms
of residence, the immigration department is again very liberal in the sense that as long as the
individual has a sponsoring company providing a contract of employment, they will be permitted a
residency visa.
1.1 Advantages of The Hong Kong Immigration Policy
For Midland Realty, there is a fair amount of benefits of having such a liberal immigration system.
Firstly, provided as employees can easily enter the country to perform their duties for their chosen
job means that they will need to obtain property in Hong Kong when they arrive to the city. The
easy system of admitting individuals with residency visas increases the potential of more business
for the realtor.
In addition, many expats are brought into Hong Kong to perform executive and senior roles,
therefore they may opt for higher-costed property options.
Also adding onto sales, Midland can benefit from maximising their management and performance
by brining in expatriate talent from anywhere in the world. This means that they can sponsor
individuals and easily bring them to reside and work in the city with little or no issues.
1.2 Disadvantages of The Hong Kong Immigration Policy
There are very few disadvantages to the liberal immigration system in Hong Kong as it is very good
for their business. The disadvantages that may occur are that costs may be very high provided that
many people have to enter the city and seek property. As a result, Midland Realty may have to
continuously recruit new staff and open new branches to match the demand, which costs the
business money.
2.0 HONG KONG TRADES POLICY
A trade policy is a set of legal guidelines that state the methods and regulations of trade in a specific
economic environment or country. This is how import and export are dealt with in the area and
whether or not their is a duty to be paid on either.
Hong Kong has a free trade policy. What this means is that goods being exported and imported in
Hong Kong are exempt from tax or any payments. As a result, it has made the city one of the
worlds largest trading economies, as well as one of the worlds largest shipping lanes.

BTEC Level 3 Business

UNIT 38: Assignment 2

Dominic Clark

2.1 Advantages of The Hong Kong Trades Policy

A free trade policy appeals to many international businesses to set up in Hong Kong, and in turn,
provides an extensive number of employees migrating to the city. Increased employees for
companies result in an increased population, and more so, an increase in employed citizens. With
more individuals with money, and needing housing to reside in, it becomes a major benefit for
Midland Realty to sell property. There will be more people looking for housing, as well as more
people looking for high-end living property who work in large firms that move to the city. This
increases both demand and prices for the property firm which positively effects their business, sales
revenue and therefore, properties.
2.2 Disadvantages of The Hong Kong Trades Policy
As the Trades policy benefits Hong Kong with a vast number of businesses, there are really very
few downsides to the free trades policy. The disadvantage of free trade to Hong Kong results
Midland in the situation of having to supply more services by employing more staff and populating
their offices in more places in Hong Kong, increasing the costs of the company.
3.0 HONG KONG EDUCATION POLICY
An education policy is the benefit of education children within a specific country is entitled to, as
well as other regulations/legislations for how education is delivered and given out to citizens. This
could be the amount of years of government-funded education a single individual is entitled to.
Hong Kong currently has an education subvention of 12 years. This means that permanent residents
of Hong Kong are entitled to receive a free education of no less than 12 years. In the last ten years,
this has increased from nine years of subsidy. The Hong Kong government put strong emphasis on
education, provided their large budget of HK$79.3 Billion, which accounts for 18% of their total
government expenditure. The HKSAR emphasise this to the extent that they even partially
subsidises the English-Speaking private schools in the city.
3.1 Advantages of The Hong Kong Education Policy
There are a vast number of advantages which are associated with having a strong education system
in Hong Kong for Midland Realty. The education system makes Hong Kong a very attractive place
to work and set up business as families can rest assured that there is education in the city that the
government indicate the importance of. This attracts more people to the city, allowing a larger
potential sales percentage for Midland Realty.
In regards to the Hong Kong citizens that already live in Hong Kong, it is good for Midland as
education and wealth go hand in hand. As education is strong in the city, this means the level of
education in the city is higher. This makes people more successful and potentially richer, allowing
an increased ability to purchase/rent better housing. This drives up demand and ultimately, prices.
For Midland Realty, it is also beneficial to their corporate structure. Having good education in the
city allows for more skilled individuals readily available in the city for the company to employ. This
eliminates the need to bring in expats from abroad, and decreases costs for the business.

BTEC Level 3 Business

UNIT 38: Assignment 2

Dominic Clark

3.2 Disadvantages of The Hong Kong Education Policy

The disadvantages for the government means that there is less tax spending elsewhere as such a
large amount of it is being spent on education for the population. The disadvantage for Midland
Realty is that employing an educated workforce means that they need to pay more wages to their
staff which increases their costs.
4.0 HONG KONG HOUSING POLICY
A housing policy is a policy that is put in place to improve the stock of housing within a country
and economic environment. This is to enforce the safety regulations of housing for residents as well
as the quality assurance. Some countries even try to help their citizens be able to purchase housing.
Hong Kong have this present in their housing policy and it is called the Home Ownership Scheme
(HOS).
4.1 Advantages of The Hong Kong Housing Policy
The advantages of the Hong Kong housing policy are plentiful due to the help from the government
and the already-high demand. The Home Ownership Scheme assists residents of Hong Kong to be
able to purchase property, and therefore drive up the demand of housing. Due to there being such a
low interest rate, this scheme opens up to a fair amount of citizens in the city, which is very
beneficial to Midland. This creates a lowered barrier for buying property in Hong Kong. As a result
of the housing policy scheme, the profits of Midland Realty would increase.
4.2 Disadvantages of The Hong Kong Housing Policy
Unfortunately, on the other hand there are some downsides to the Hong Kong housing policy. Some
policies are not well regulated and have a major impact on the demand of purchasing property. An
example in Hong Kong is the quality assurance of the buildings. Many of the pipes in buildings are
not well regulated, and can supply tainted water to residents. As a result, this could decrease the
probability of individuals purchasing property in Hong Kong.
5.0 HONG KONG LAW AND ORDER
A Law and Order policy is a policy that sets the control of violence and law enforcement within a
economic environment/country. This policy runs the rules of society and how people are to be
punished. Law and Order in Hong Kong is of high standard as it is a very safe environment to live
and work in, as a result of the low crime rate.
5.1 Advantages of Hong Kong Law and Order
The advantages of Hong Kong Law and Order is that it is strong, giving the city a very safe status
amongst other major cities. The service is well funded and well-monitored. Expats can rest assured
that they are living in a safe environment, and be happy to raise their children in the city. As it is a
safe city, it is a very competitive city to work and live in, making the demand for property in the
city which has a major benefit for Midland Realty.
A safe environment means that employees of companies can be safe from any dangers that could be
found in other countries. This means that more people will be inclined to want to move to the city,
and therefore purchase/rent property.
In addition, a good law and order system creates jobs in the public sector, decreasing the population
and therefore having a wealthier population to be able to afford property in the city. The public
sector is a large employer, accounting for a whole range of jobs in the city.

BTEC Level 3 Business

UNIT 38: Assignment 2

Dominic Clark

5.2 Disadvantages of Hong Kong Law and Order

On the other hand, there are also some disadvantages to the Hong Kong Law and Order system. The
public services cost a lot of money to the Hong Kong government and minimise the spendings
elsewhere such as the Housing Ownership Scheme that directly increases demand for the housing
market in Hong Kong which has a better benefit on Midland Realty.
As the law and order system is strong, a large workforce is needed. Because of this, the government
provide a large quantity of government housing units, where public servants can obtain property for
cheaper. This has a negative effect on Midland Realty.
6.0 HONG KONG COMMUNICATION & ICT POLICY
A Communication and ICT policy is policy that is set for the development of ICT progressions in an
economic environment. Hong Kong is a very fast developing city and is very high-tech due to the
large investment in the communication infrastructure of the city. This is proven in the level of
internet and data speeds in the city, as well as the octopus card (credit purchase cards).
6.1 Advantages of Hong Kong Communication & ICT Policy
The strength of the Communication and ICT policy makes Hong Kong a very attractive place to
both live and work in. It allows businesses to sell their products and services easier and makes them
contactable all the time. A high level of technology also decreases the costs for businesses as jobs
can be taken up by technology. Being at the front-line of technology attracts many businesses, and
therefore people that need to purchase/rent property.
As the government have trained people well of how to use this developing technology, it creates
many jobs in the city, increasing the wealth of the population. As a result, there would be a lessened
unemployment rate and allows more people to purchase property.
6.2 Disadvantages of Hong Kong Communication & ICT Policy
The disadvantage of the policy is that it increases tax for midland realty as there are increased
amount of people purchasing property. As Midland would have to meet the standard of the city, they
will also have a lot to spend on technology, increasing their costs. It also means that more
employees may have to be employed to monitor and maintain this technology.
7.0 HONG KONG TRANSPORT POLICY
A transport policy is a set of plans for the progressions and developments of transportation within a
country or economic environment. Hong Kong has many plans for their transport policy with large
development projects in place. The Hong Kong public transport carries over 4.5 million residents
per day and provides their transport solutions. They have plans in place for links to Mainland China
which currently is over-budget on their already-large investment.
7.1 Advantages of Hong Kong Transport Policy
The advantages of the Hong Kong Transport Policy is that the great variety of transport in the city,
increasing the efficiency and connivence for residents, makes Hong Kong a very attractive place to
live and work. This increases the number of people that would be happy to move to Hong Kong and
purchase/rent property.

BTEC Level 3 Business

UNIT 38: Assignment 2

Dominic Clark

Businesses would be attracted by the easy link to China, making doing business with the mainland
easier. It makes Hong Kong a better place to do business and can cause many companies to open up
offices in Hong Kong.
The transport department also creates many jobs in the city, allowing for the unemployment rate to
be reduced and therefore, have a wealthier population. Again, this increases the likelihood of more
residents being able to purchase property.
7.2 Disadvantages of Hong Kong Transport Policy
The issues with the transport policy is that it increases the population and can potentially over
capacitate the city with new residents where the supply could be greater than the demand, causing
Midland Realty to have acquire new properties to sell which could cost them money in the process.

Bibliography

http://www.immd.gov.hk/eng/services/visas/immigration-entry-guideline.html
Bevan. J., Coupland-Smith. H., Dransfield.R. Goymer.J., Richards., BTEC National Business Student Book 2010