Comparison of Hong Kong And Taiwan Economic Development in the Context of the Oil Crisis

Abstract

Hong Kong and Taiwan are part of China and are similar in politics, economy, culture, etc. But in response to the two oil shocks in the 1970s, the two places showed different patterns of economic decline. Taiwan's economy reacted quickly to the oil shock, but the decline was more moderate, while Hong Kong's recession tended to lag global crises, but the reduction was more significant. From the perspective of industrial structure, this paper analyzes the differences in development strategies and industrial structure before the first oil strike and between them through case comparison. This paper finds that Taiwan's economic decline pattern was closely related to its vigorous development of the import substitution industry. In contrast, Hong Kong's industry and trade were less affected, but the rapid growth of finance and real estate at that time created economic instability. The author believes retaining a specific high-end manufacturing industry can stabilize the local economy. The conclusions of this paper can be used for reference in the economic transformation of developing regions.