An Analysis of the Impact of RMB Depreciation on Hong Kong

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

No 83, Studies in Applied Economics from 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.

Keywords: RMB; China; Hong Kong; Asian financial crisis; FDI; trade; tourism; retail sales (search for similar items in EconPapers)
JEL-codes: E39 O53 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2017-07
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jhisae:0083

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