PS16Design of a Free Market: Regulating Hong Kong’s Stock Exchange
University of Hong Kong, Hong Kong, Hong Kong
Seated aboard a Hong Kong harbour ferry in his 1980 PBS special, Free to Choose, Milton Friedman proclaimed, “If you want to see how the free market really works, this is the place to come!” Yet the reality of Hong Kong’s market stood in marked difference from Friedman’s neoclassical economic ideal. The same year the special aired, Hong Kong’s Legislative Council passed the Stock Exchange Unification Ordinance. The ordinance included financial regulations to restructure the colony’s four separate stock exchanges—culminating in the 1986 opening of a newly unified, and greatly expanded, Hong Kong Stock Exchange (HKEx). Then in 1993, due to post-Mao economic reform, companies from China (including State-owned enterprises) began trading shares on the HKEx for the first time internationally. This paper examines the material history of the restructuring of the HKEx within the context of its trading hall in Exchange Square, a 3.4 million-square-foot office development in Hong Kong’s financial district. Primary sources from archives of the government, developer, engineers, architects and HKEx demonstrate how the architecture of Exchange Square included cutting-edge telecommunication and construction technologies to accommodate the expanded trading, which resulted directly from these financial regulations. Digital innovations included new computer terminals, shared data-processing, and the fastest telecommunication cables available. Tectonic features included a complex beam system for the giant column-free span, and measures to isolate the hall structurally from the sway of the attached office towers. Focusing on these details within the HKEx’s trading hall—until now, a space overlooked in historical studies—shows how government regulations were pivotal in shaping Hong Kong’s free market in the late-twentieth century.