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Introduction to Economics
The Barrier-free travel scheme
Presentation outline
• Introduction of The Barrier-free travel scheme • The consuming mode• Case study of SASA• Employment situation• Comparison of Hong Kong and Macau• Social Problems• Conclusion
Introduction
• Recession period in
Hong Kong
• China Joining the WTO
China action – helping Hong Kong
• CEPA (29th June 2003 ) – Allow dwellers traveling
by their own identity
– Barrier-Free Travel
Scheme visa
The consuming mode
General condition
• Increasing quantity on tourist
• Consume HK$5,000-7,000
per tourist
• 70% mainland tourist
stay overnight
The per capita consuming mode of stay overnightmainland tourist under Barrier-Free Travel Scheme
59%
14%
14%
3%
3% 7%
Shopping
Accommadations
Meals
entertainment
Sightseeing
Ohters
Special situation
• Golden week
• National Day
• Lunar New Year
• The per capita
consumption can reach HK$10,000
The top ten consumption
• Clothes and ornaments (famous brands)• Accommodation• Jewelry• Electronic equipment• Timepieces• Cosmetic and perfume• Leather products• Computer products• Daily commodities• Video products
Barrier-free travel scheme’s impact on Hong Kong business
Case study of SASA
Case study of SASA
Basic Background:
•a listed company
•cosmetic retail, cosmetic wholesales, facial and gymnastic services
•business on Hong Kong, China, Singapore, Malaysia and Taiwan
•internet purchasing
Interim report on retail and wholesales business inHong Kong and Macau
585.9 620.8836.6
0
500
1000
2002/2003 2003/2004 2004/2005year
Retai
l and
who
lesale
sbu
sines
s in
Hong
Kon
gan
d M
acau
(mill
ion
HK$)
Analysis
Tourists
affect
SASA
Benefit form the Barrier-free travel scheme
Analysis • SASA’s strategies---1. buying behaviors of the tourists2. A larger spatial for shopping
• Real benefit from the Barrier-free travel scheme—
1. “the favorite Hong Kong brand of the China tourists” ( 中國旅客最喜愛香港品牌 )
2. “the highest vote of the China tourist” ( 國內旅客投票最高榮譽大獎
• The future of open market in the mainland--1. Short term2. Long term
Barrier-Free Travel scheme
AND
Employment situation
Unemployment rate 1997-2005
1997
1998
1999
2000 2001
20022003
2004
2005
0
1
2
3
4
5
6
7
8
9
years
perc
enta
ge
Census and statistics department/unemployment statistics/:
Graph showing the derived demand for labor
Product market Labour market
Q
P P
Q
S
D2D1D1 D2
P1
P2
Q1 Q2
The growth rate of employment between 3rd 2003 to 1st 2004 The growth rate of Employment between 3nd 2003 to 1st 2004
-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
Industries
Empl
oym
ent c
hang
e(no
. of p
eopl
e)
Import and Export industries
Wholesaling, Retailing, Catering andHotel industries
Real estate and Business serviceindustries
Construction industry
Public administration Education、 、Medical treatment Other Health care、and Welfare service industries
Others
綜合住戶統計調查按季統計報告書
Private consumption expenditure
Census and statistics department/Hong Kong Statistics/Private consumption expenditure /:
Labour market (low technique’s job)Wage
P2
P1
Q1 Q2
D1 D2
S
Comparison of Hong Kong
AND
Macau
Why we choose Macau forcomparison?
Hong Kong Macau
Mark six and horse racing
CasinosEntertainment
Shopping
Theme park
Art and culture
The aims of visiting
Quality Tourism Services Scheme (QTS)
Stable exchange rate to mainland
The Hong Kong Disneyland and the Ocean Park
The Fisherman’s Wharf
Culture and arts were well promoted
Government allocated little on Culture and arts
Visiting, shopping and playing in the theme parks
Investment, entertaining in the casinos
Social Problems
Of
Barrier-free travel schedule
Disadvantages
• Illegal workers• Prostitution• Beggars
- 197 beggars in 2004
• The doubtful accounts of Hong Kong Hospital - healing patients first and then charging fees- 95 % Chinese travelers
Advantages
• Economy
• Employment
• Education
- Cantonese
- English
- Putonghua
Case Study on Disney
Positive Effect• Economy • Unemployment
Negative Effect• Hygiene
Hong Kong’s reputation
Conclusion
Conclusion
Barrier-Free Travel scheme creates prosperous tourism
increasing economic profit
Equation in accountant way:
Economic profit= total revenue – economic cost
i.e Accounting profit= total revenue – explicit cost
Comprehensive economic profit
• Considering the cost of implicit
• negative social effects derived from that scheme
• Equation:
• Economic profit= total revenues- explicit cost- implicit cost.
Other factors lower the profit
• The implement of CEPA
• HK companies expand their business in China
• Total revenue decrease
• The imposition of custom tax
• Increasing the cost of travelers
Conclusion
• Barrier-Free Travel scheme creates economic profit in the short run
• Suggestion:
• Diverse the development of various industries
The End