Introduction to Economics

1. Introduction to Economics The Barrier-free travel scheme

2. Presentation outline • Introduction of The Barrier-free travel scheme • The consuming mode • Case study of SASA • Employment situation • Comparison of Hong Kong andMacau • Social Problems • Conclusion

3. Introduction • Recession period in Hong Kong • China Joining the WTO

4. China action – helping Hong Kong • CEPA (29th June 2003 ) • Allow dwellers traveling by their own identity • Barrier-Free Travel Scheme visa

5. The consuming mode

6. General condition • Increasing quantity on tourist • Consume HK$5,000-7,000 per tourist • 70% mainland tourist stay overnight

8. Special situation • Golden week • National Day • Lunar New Year • The per capita consumption can reach HK$10,000

9. The top ten consumption • Clothes and ornaments (famous brands) • Accommodation • Jewelry • Electronic equipment • Timepieces • Cosmetic and perfume • Leather products • Computer products • Daily commodities • Video products

10. Barrier-free travel scheme’s impact on Hong Kong business Case study of SASA

11. Case study of SASA • Basic Background: • a listed company • cosmetic retail, cosmetic wholesales, facial and gymnastic services • business on Hong Kong, China, Singapore, Malaysia and Taiwan • internet purchasing

13. Analysis Tourists affect SASA Benefit form the Barrier-free travel scheme

14. Analysis • SASA’s strategies--- • buying behaviors of the tourists 2. A larger spatial for shopping • Real benefit from the Barrier-free travel scheme— • “the favorite Hong Kong brand of the China tourists” (中國旅客最喜愛香港品牌) • “the highest vote of the China tourist” (國內旅客投票最高榮譽大獎 • The future of open market in the mainland-- • Short term • Long term

15. Barrier-Free Travel scheme AND Employment situation

16. Unemployment rate 1997-2005 Census and statistics department/unemployment statistics/:

17. Graph showing the derived demand for labor Product market Labour market P P S P2 P1 D1 D2 D2 D1 Q Q Q1 Q2

18. The growth rate of employmentbetween 3rd 2003 to 1st 2004 綜合住戶統計調查按季統計報告書

19. Private consumption expenditure Census and statistics department/Hong Kong Statistics/Private consumption expenditure /:

20. Labour market (low technique’s job) Wage S P2 P1 D1 D2 Q1 Q2

21. Comparison of Hong Kong AND Macau

22. Why we choose Macau forcomparison?

23. Hong Kong Macau Mark six and horse racing Casinos Entertainment Stable exchange rate to mainland Quality Tourism Services Scheme (QTS) Shopping The Hong Kong Disneyland and the Ocean Park Theme park The Fisherman’s Wharf Government allocated little on Culture and arts Culture and arts were well promoted Art and culture Investment, entertaining in the casinos Visiting, shopping and playing in the theme parks The aims of visiting

24. Social Problems Of Barrier-free travel schedule

25. Disadvantages • Illegal workers • Prostitution • Beggars - 197 beggars in 2004 • The doubtful accounts of Hong Kong Hospital - healing patients first and then charging fees - 95 % Chinese travelers

26. Advantages • Economy • Employment • Education - Cantonese - English - Putonghua

27. Case Study on Disney Positive Effect • Economy • Unemployment Negative Effect • Hygiene  Hong Kong’s reputation

28. Conclusion

29. Conclusion Barrier-Free Travel scheme creates prosperous tourism increasing economic profit Equation in accountant way: Economic profit= total revenue – economic cost i.e Accounting profit= total revenue – explicit cost

30. Comprehensive economic profit • Considering the cost of implicit • negative social effects derived from that scheme • Equation: • Economic profit= total revenues- explicit cost- implicit cost.

31. Other factors lower the profit • The implement of CEPA • HK companies expand their business in China • Total revenue decrease • The imposition of custom tax • Increasing the cost of travelers

32. Conclusion • Barrier-Free Travel scheme creates economic profit in the short run • Suggestion: • Diverse the development of various industries

33. The End