Regulatory Environment Of Hong Kong

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1.Political- regulatory environment

Political environment
According to World Bank Group(2016), Hongkong is the fifth ease place of doing business with DTF score of 83.67, which means the regulation environment in Hong Kong helps the starting of a joint venture in general. This represents in the sector of paperwork for starting a business, burden of tax compliance, ease of enforcing a contract and the matters relating to trade.
Political Risks
Hong Kong is a free port and does not levy any customs tariff (i.e. border tax) on imports and exports. However, Hong Kong levies an excise duty on liquor (with an alcoholic strength of more than 30% by volume measured at a temperature of 20℃) of 100% of its value(Customs and excise department 2016). Whiskey is with an alcoholic strength of more than 40%(Wikipedia 2016), which means the costs will double if imported whiskey from Tasmania and sell in Hongkong. This regulation will have negative effect on the price and the quantity of whiskey in the market.

Just like other standard demand and supply diagram(Figure1), an unregulated market of whiskey leads to equilibrium price(P1) and quantity(Q1) at the intersection of the marginal private cost (MPC) curve and the demand curve (Weidenbaum L. 2004). However, consumption of whiskey generates some external effects such as adverse health effects, reduced productivity, increased crime and violence, road traffic accidents and premature death(Doran C &Jainullabudeen T. 2012). There is a
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