Sky-high cost of living - Adjust the linked exchange rate system in Hong Kong
The Consumer Price Index of Hong Kong raises over four times since 1980`s(MTR,2014), which means the cost of living in Hong Kong went up with an exaggerated speed. Cost of living is a general term for the price of goods and services required for maintaining an average level standard of living(Business dictionary,2017). Although high cost of living might be common in the world, the situation of Hong Kong differ from other countries or cities, as the cost of living in Hong Kong was ranked as the highest in Asia (Expatistan,2016). Not only the highest rank in Asia, the Cost of living Index in Hong Kong is also ranked as 14th ranking in the world(Financial Times,2017), …show more content…
First and foremost, a continuously increasing price level could induce a situation which is the increase in cost of living is greater than the increase in income of workers, and this situation could be found in several industries(HKGov,2017). As a result, those workers`s real income would decrease, and they would make less consumption than before, even they might have to bear heavier financial burden. In other words, their living standard will decrease(Chen.F,2015). Additionally, the sky-high cost of living can lead more disputes in different relationships, such as some families may have more argument on how their money should be spent, so tension or stress may exist, and they might have less happiness than before(Survey R,2016). If no actions are taken in these cases, the high price level would negatively influence all Hongkongers to a greater …show more content…
If the government implement rent control on entrepreneurs, the rental cost would be much lower than before, which can eliminate the burden of high rent(Numbeo,2017). Consequently, the businesses could have lower operation costs, and the general price level of products will tend to decrease due to lower operation costs, which means the cost of living will also decrease. As the government had past experience in Hong Kong before(Legislative Council Secretariat, 2017), it would be much easier to implement rent control in order to cool down the price level. However, this action is a type of market intervention by government(Jenkins,B,2017), which would affect the market freedom in Hong Kong, and affect the reputation of Hong Kong in the global
The Consumer Price Index of Hong Kong raises over four times since 1980`s(MTR,2014), which means the cost of living in Hong Kong went up with an exaggerated speed. Cost of living is a general term for the price of goods and services required for maintaining an average level standard of living(Business dictionary,2017). Although high cost of living might be common in the world, the situation of Hong Kong differ from other countries or cities, as the cost of living in Hong Kong was ranked as the highest in Asia (Expatistan,2016). Not only the highest rank in Asia, the Cost of living Index in Hong Kong is also ranked as 14th ranking in the world(Financial Times,2017), …show more content…
First and foremost, a continuously increasing price level could induce a situation which is the increase in cost of living is greater than the increase in income of workers, and this situation could be found in several industries(HKGov,2017). As a result, those workers`s real income would decrease, and they would make less consumption than before, even they might have to bear heavier financial burden. In other words, their living standard will decrease(Chen.F,2015). Additionally, the sky-high cost of living can lead more disputes in different relationships, such as some families may have more argument on how their money should be spent, so tension or stress may exist, and they might have less happiness than before(Survey R,2016). If no actions are taken in these cases, the high price level would negatively influence all Hongkongers to a greater …show more content…
If the government implement rent control on entrepreneurs, the rental cost would be much lower than before, which can eliminate the burden of high rent(Numbeo,2017). Consequently, the businesses could have lower operation costs, and the general price level of products will tend to decrease due to lower operation costs, which means the cost of living will also decrease. As the government had past experience in Hong Kong before(Legislative Council Secretariat, 2017), it would be much easier to implement rent control in order to cool down the price level. However, this action is a type of market intervention by government(Jenkins,B,2017), which would affect the market freedom in Hong Kong, and affect the reputation of Hong Kong in the global