Negotiating positive non-interventionism: regulating Hong Kong’s finance companies, 1976-86

Schenk, C. R. (2017) Negotiating positive non-interventionism: regulating Hong Kong’s finance companies, 1976-86. China Quarterly, 230, pp. 348-370. (doi: 10.1017/S0305741017000637)

Abstract

Since colonial times to the present day, Hong Kong's position as a global financial centre is one of the enduring economic strengths of the territory. This success is often attributed to the distinctive role of the state, coined in the 1970s by the-then financial secretary, Sir Philip Haddon-Cave, as “positive non-interventionism.” The relationship between the market and the state has also been characterized as a form of corporatism, particularly in the financial sector as bankers were able to influence policy. However, closer examination of the behind-the-scenes relations between bankers and the state reveals a much more complex relationship, with the banks seeking protection that the government was not willing to provide. Moreover, the reluctance to regulate financial markets resulted in piecemeal interventions and weak implementation that undermined the stability of this sector and of the economy as a whole. This paper demonstrates the confusion over the concept and practicalities of positive non-interventionism, even for Haddon-Cave, and how the concept evolved towards a policy of “when in doubt, do nothing” during a period of financial instability. Along the way, the paper presents new evidence about the origins of Hong Kong's current banking structure.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Schenk, Professor Catherine
• Authors: Schenk, C. R.
• College/School: College of Social Sciences > School of Social and Political Sciences > Economic and Social History
• Journal Name: China Quarterly
• Publisher: Cambridge University Press
• ISSN: 0305-7410
• ISSN (Online): 1468-2648
• Published Online: 18 May 2017
• Copyright Holders: Copyright © 2017 SOAS University of London
• First Published: First published in China Quarterly 230:348-370
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher