The birth rate in Hong Kong had been declining for the past 10 years. What measures can the Hong Kong government do to ensure enough supply of labor in the market for the next 10 to 20 years? In what ways the “low birth rate” will affect the economy of Hong Kong in the coming future?
Previously only the European countries were facing problems of an aging population and declining birthrates however, now the trend has been depicted in parts of China and Hong Kong as well. “With an average of 0.9 children per woman in Hong Kong, the birthrate has shot down to one of the lowest in the world. Issues of money, space, stress, and competition of having and raising a child, contribute largely to this gradual trend of the birthrate in Hong Kong. These issues do not seem to surprise the many observers familiar with Hong Kong’s dense, fast-paced, and high-intensity culture, yet this receding population trend is alarming to even the most Hong Kong acquainted observers” (Zhen, 2007)
The consequences of a declining birthrate mean slower economic growth for the country as the productivity of the country decrease with the decreasing workforce and population. Fewer people available in the future to enter the job and skilled workforce market mean that there would be constrained or low availability of labor supply in the market.
It is very much possible for the government of Hong Kong to implement policies that can aid in increasing the declining birthrate of the country and insure that a steady flow of labor supply is available in the market. The following strategies can help in increasing the declining birth rate and increasing the supply of workforce and labor in the future.
The Hong Kong government can sponsor support for families having children. A reward/ support plan can be set up whereby the parents can be asked to place an amount in the bank account for their children aged 6 and above, up to a specified limit like $6000 and the government would match 25 percent of it every year till the child turns 12. This fund could be termed as a child development fund which can be used to fund the raising and the education of the child.
Other strategies that can be employed by the government include providing assistance with medical help by discounting the medical bills of families with more than one child. The government can also propose additional vacation and sick days for parents having children and employed in the workforce, i.e., an extra week of leave/ sick days off for the employed parents. Support can also be provided to the parents in the form of reduction of levy on childcare, reducing the levy on nanny and maid services as well as making it mandatory for all companies and businesses to offer their employees who are parents with small children high standard daycare facilities.
The last resort that can be employed by the Hong Kong government to increase the availability of the workforce in the future is to establish a more open immigration policy that will allow foreigners to enter the labor market and fill the increasing gaps in the supply of labor.
Hong Kong Government has been limiting the supply of land in the real estate market in the past. In view of the present situation of Hong Kong, should the Government keep or abort this policy? Why? How will it affect the overall economy of Hong Kong?
The Hong Kong Government has been implementing policies whereby the availability of land is being restricted in the real estate market. The main reason for this is due to the increase in concrete construction and urbanization in the region and the reduction of space available in Hong Kong City. In order to preserve the environment and have some green spaces and green belts in the region, the government has restricted the supply of real estate in the market.
Due to the present situation, the economy of the country can face constraints and obstacles for growth in the near future. The restriction of supply of land to the real estate market means, that the business and the companies have less land for their operations. This reduces their size and capacity to produce therefore limiting their productivity. Moreover, if the country launched policies to increase the population by addressing the declining birth rate in the region, in the future the population in the region is going to increase. People are going to demand living spaces for their households which would be very much limited in supply.
Moreover, the stunted growth of the economy and the limited scope of the businesses in the region would limit the job opportunities in the market as well. As a result, it is possible that the people from Hong Kong might migrate to other countries in search of opportunities for jobs, and better-living places.
However if the government is to increase the land available fin the real estate market, the region would suffer in terms of its environment, and climate due to the reduction of the green spaces and the green lands. The quality of life in terms of outdoor and recreational activities would also be limited with limited space available for recreational activities. The company might face economic growth for some time, but when the small size of the region catches up with the population in the long term, the country will face stunted and limited economic growth. Aside from this the tourism and recreational sports industry in the region would dramatically decrease with the increase in the supply of land in the real estate market.
The best strategy that is available to the Hong Kong government is to restrict the supply of land in the short term. In the long-term, however, the government should develop new channels and methods of conducting business and increasing the economic productivity of the region through internet-based operations.
The transfer of the business to the virtual market would reduce the land demanded in the real estate market by corporations and businesses making more of it available for households and recreational activities. Aside from this, the country will also have to invest in developmental projects to create housing for the masses and provide increased capacity for operations and productivity on a smaller space. Vertical construction and renovation/ reconstruction of old vacant buildings can aid the government in recycling and reusing its land resources.
References
‘Can Policies Boost Birth Rates?’, Organization For Economic Co-Operation And Development, 2007. Web.
‘Incentives to Increase Fertility Rates: What Policies for Whom’, 2002. Web.
Zhen, S., ‘Hong Kong’s Birthrate on the Decline’, 2007. Web.