Hong Kong
Hong Kong remains wrapped in an enigma. Its intermediaries of capital, who include traders, financiers, and corporate managers, have made Hong Kong the pivot of decision-making about the exchange of capital within Asia and between that region and the rest of the world (Meyer 2000). Yet, for 150 years, this tiny island and adjacent peninsula could not even lay claim to status as a city-state. When Britain declared sovereignty over Hong Kong in 1841, after taking it from China under the terms of the Treaty of Nanking that settled the Opium War, the government and merchants had to build a town. The British viewed Hong Kong as their emporium of trade in the Far East, but they did not aspire to transform it into a commercial-military power. The impetus for Hong Kong’s return to China rested in the ticking clock of an obscure treaty from 1898 when Britain acquired the New Territories; the lease terminated on July 1, 1997 (Meyer 2000).
Hong Kong has survived the challenge of the 1997 Handover from British to Mainland Chinese control and the economic reversal caused by the unrelated events of the Asian financial downturn and the September 11 disaster. Although the latter has had more impact on the lives of everyday people, the Handover was a cause for a certain amount of nervousness about the future with concerns raised about change to civil, administrative and economic freedoms. The passing of colonialism has allowed some examination of Hong Kong cultural identity in government programs and through other venues, but much of the focus has been on maintaining its economic advantage in the region as the economy has slowed in growth (Hall & Tucker 2004). Moreover, the tourism market appeal of Hong Kong as a brand changed after the Handover, causing some disappointment among economic forecasters and tourism authorities. A number of aggressive new marketing strategies have been adopted, which present an artificial summary of its cultural identity, race relations and attitudes to colonialism (Hall & Tucker 2004). Hong Kong is one of the two special administrative regions belonging to China. Hong Kong over the years has developed into a leading financial theater through the economic changes it made in the region.
With regard to the Hong Kong economy, there is a clear commitment from Beijing in the Basic Law to maintain after 1997 the capitalist economic and trade systems practiced in Hong Kong, and to retain Hong Kong’s free port status and free trade policy, which includes the free movement of goods and capital. Further, the Hong Kong Special Administrative Region (HKSAR) government will be committed to safeguard the free operation of financial business and the free flow of capital within, into and out of Hong Kong. Within this framework, decisions on economic, trade, monetary and fiscal policies are to be taken by the HKSAR without any necessity for these policies to be adjusted in line with those in operation in the rest of mainland China (Ash et al, 2000). The situation in the Hong Kong economy and business has undergone various changes. One change is the merger of business. This paper takes a look at the merger between the mass transit railway and Kowloon Canton Railway.
Mergers and Mass transit railway
Mergers and takeovers even those of the mega variety have become commonplace events. Nothing is considered too large or too ambitious. Looking back at a history of mergers and acquisitions, it is clear that not all of these deals are successful; indeed, both the successes and failures have been fairly well chronicled in the press and in management literature. By some estimates about two-thirds of deals that are publicly announced will ultimately either fail to take place or will fail to produce anywhere near the shareholder value anticipated. The factors driving the high level of mergers and acquisitions activity are many and varied (Carey & Ogden 2004). Deregulation is toppling governmental barriers, while the globalization of business is rendering geographic obstacles meaningless. Market volatility is creating new buying opportunities, particularly in Asia, while at the same time producing paper profits to be utilized by potential purchasers. The world’s best strategy and projections mean little if a company does not possess a management team capable of carrying out well-laid plans (Carey & Ogden 2004).
When determining if, how, and when to proceed with a particular deal, perhaps the most important consideration in the calculus has to do with people. People are always complex and a merger magnifies those complexities in many overt and subtle ways (Carey & Ogden 2004). Mergers happen because companies want to expand their long term profitability. Most mergers have the tendency to fail; one exception is the merger between Mass transit railway and Kowloon-Canton Railway Corporation. In Hong Kong the Mass Transit Railway (MTR) is a unified complex which carries throughout its entities a single semiotic system. The code preference system is uniform, but in the case of the MTR it is Chinese which is placed in the upper position, English in the lower (Scollon, R & Scollon, S 2003). The Mass Transit Railway Corporation (MTRC) is one of the two government-based corporations at present operating the railway network system of Hong Kong. At present there are 5 underground railway lines operated by the corporation serving mainly within the metro areas. They are the Island Line running along the northern coast areas of Hong Kong Island; the Quarry Bay Line running from the eastern part of Hong Kong Island through a submerged tube across the harbor to the central-eastern part of Kowloon (Council on Tall Buildings and Urban Habitat 2001).
The Tsuen Wan Line running from Central of Hong Kong Island, then across the harbor and serves the western portion of Kowloon until it reaches Tsuen Wan. The Tung Chung Line runs from Central to the new town of Tung Chung at Lantau Island. The last one is the Airport Express Line providing direct link from Central to the new airport at Chek Lap Kok (Council on Tall Buildings and Urban Habitat 2001). MTR Corporation belongs to the transport and property industry. It produces railway systems for Hong Kong and some other countries. The company currently underwent a merger with Kowloon-Canton Railway Corporation. The merger provided to be a success and it helped MTR a good standing it its industry.
Credit:ivythesis.typepad.com
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