Notes 6 Public Finance and Fiscal Policy

P.1- Economic Times| The Basic Law| Guiding Principles,

P.2 -Distincitive Features of HKs Taxation System| Profits Tax and Property tax
P.3 -Salaries Tax, Major Sources of Income Tax Revenue| Capital Revenue or Non-income Tax Revenue
P.4 -Fundamental Change in Property Market(graph)| Capital Revenue or Non-income Tax Revenue
P.5 -Capital Revenue or Non-income Tax Revenue| What are taxes? |The Benefit Principle|
The Ability-to-pay Principle
P.6 -The Ability-to-pay Principle| Any Positive Taxation Principle? |(Graph)Tax data
P.7 -(graph) tax data| The Tax Base| Public Expenditure Growth Relative to the GDP
P.8 -Government Expenditure data(graph) |Structural versus Cyclical Budget
P.9 -Structural Distortion and Fiscal Expansion| Fiscal Prudence|
Substantial increase in elderly dependency ratio| Welfare Expenditure
P.10 Number of CSSA Cases(graph)| Challenges(past and Ahead)| Strategies
P.11 Conclusion

Notes 7 Hong Kong Dollar- HKD

P.1 Monetary Base | Money Supply | On HKD and non-HKD money supply
P.2 History of HKs Exchange Rate Systems| External Stocks| Exchange Fund | Currency Board System|
P.3 Currency Board Monetary Rule| The LER as a Convertibility Undertaking | Currency Attacks|
Seven Technical Measures
P.4 Seven Technical Measures| Three Refinements| HKD Exchange Rate| Interest Rate Adjustment
Mechanism
P5 HKs CB-Based peg | Advantages vs Disadvantages| The Cost of Adjustment to RER Misalignment
P6 Seigniorage

Notes 8 Hong Kong Residential Market

P.1 Introduction| Importance of Residential Market| Residential Prices and Stock Market(graph)
P.2 Data of Housing Prices(graph)| Supply
P.3 Data of Land+ Housing Supply(graph)| Housing Stock vs No. of Households (plus graph)
P.4 Data of Housing Stock, Transactions and Affordability (graph)
P.5 Data of Affordability, Interest Rates (graph)
P.6 Affordability Ratio and Case Study| Level of Speculation | 97 Policy address and Market Response|
Changes in Housing Policy during Tungs Term
P.7 Current Government Measures |Monetary Tightening Measures |Anti-speculation Tightening
Measures
P.8 Estimation of Property Demand Function| Developers & Speculators| Governments Two Roles|
Public Rental Housing
P.9 Public Rental Housing(graph) | Wealth Accumulation
P.10 Income And Net Asset Limits| Supply Overlap in the Small/medium-sized Ownership Market|
Community Goods| Challenges
P.11 Challenges

Notes 9 The Monetary and Financial Sectors

P.1 Introduction| Criteria as an International Financial Centre|
P.2 Strengths of Hong Kong as a Financial Centre| HKMA& Other Regulatory Authorities|
Development of Banking
P.3 Banking Business| Banking Lending(graph)| Profitability(graph)
P.4 The Three-tier Banking System| Capitalization| Bank Loan Classifications
P.5 Changes in Banking Environment| Reforms and Innovations| Debt Market|
Retail Participation in Debt Market
P.6 Exchange Fund Bills and Notes (EFBNs) | Measures to Facilitate Market Development| Benefits|
Equity Market History and Development
P.7 HK Stock Exchange| Highlights of Stock Market (data)| Global Trends & Challenges
P.8 HK Derivatives Market| Contract Volume & Percentage of Total by Product (graph)|
HKs Foreign Exchange Market | Most Traded Currencies (data)
P.9 Financial Centers Comparison| Types of Financial Centre| Features of different Financial Centers|
Service Penetration
P.10 Market Scale and Variety | Ability of Financial Innovation |
Recent Development of HK Financial Sector
P.11 Opportunities of HK | Renmenbi Business (data+graph)
P.12 Payment and Settlement Infrastructure| Challenges and Regional Competition| Strategies and
Conclusion

Notes 10 Economic Integration

P.1 Mainland and HK| Transportation & Strategic Location| Live in HK, Do Business in PRD
P.2 HK-Guangdong| Advantages of Hong Kong | HK-Guangdong Co-operation | Framework Agreement
P.3 Framework Agreement| Smoother Cross Boundary Freight Flow| Competitive vs Complementary|
HKs Two-Leg Strategy
P.4 Pan-PRD & Southeast (SE) Asia | Benefits | The Ten Areas of Pan-PRD Cooperation |
Role and Challenges of HK in Pan-PRD
P.5 CEPA| The Main Provisions of CEPA | Benefits and Implications of CEPA for HK
P.6 Challenges| Individual Visit Scheme| One Belt One Road
P.7 One Belt One Road| Hong Kongs Survival | Competitors of HK in China | Conclusion