This rich collection of papers covers the evolution of Hong Kong SAR's unique monetary and financial arrangements throughout most of the twentieth century, including its colonial history and interaction with Mainland China, the development of the currency board, and its transformation as an international financial centre.

There is much useful material here for international economists and economic historians; for academics and policy makers; for students and professors; for specialists and laymen. Having written extensively on currency board arrangements (CBA), I nevertheless learned a great deal from this book about how CBAs operate in practice. But the appeal – and usefulness – of this volume goes far beyond any minutiae of monetary arrangements. By rooting itself in historical perspective, and by providing fascinating detail on how changes in Hong Kong SAR's monetary arrangements actually came about (including chapters by two key players, John Greenwood and Joseph Yam), this book offers valuable insights to anyone interested in the dynamics of economic policy making.

Catherine Schenk introduces the volume with a historical overview of Hong Kong SAR's monetary arrangements, which provides a useful roadmap for readers unfamiliar with Hong Kong SAR's unique monetary history. This is followed by two chapters on Hong Kong SAR's interaction with Mainland China covering both an earlier period (1912–35) and a key post-war period (1965–75). I particularly enjoyed reading about the 1912–13 ‘tramway boycott’ and the 1925–6 Canton–Hong Kong strike-boycott for the insights they offer regarding the politico-economic dimensions of relations with the mainland.

The second part of the book is on Hong Kong SAR's currency board arrangement. Unlike most modern CBAs, such as Argentina's (1991–2002) arrangement or those operating in Eastern Europe, Hong Kong SAR's regime went through significant evolution as power over the ability to determine monetary policy was wrested from the commercial banks (surely a unique situation in modern times) and given to what eventually became the Hong Kong Monetary Authority. Leo Goodstadt sets the stage by showing how thinking about ‘laissez-faire’ monetary policy gradually changed in the light of various bubbles and crises. The chapter by Tony Latter will be of particular interest to students of monetary and exchange rate regimes as it explores the scope for discretionary monetary policy within what would normally be considered a tight rules-based regime. The last two chapters of this section provide a fascinating juxtaposition between the writings of John Greenwood in the Asian Monetary Monitor, where in the late 1970s and early 1980s he was arguing forcefully for monetary reform (and eventually for the CBA) in Hong Kong SAR – and (in the chapter by Joseph Yam) both the official and private reactions of government officials to his then-controversial position that the government needed to exercise greater control over monetary policy and the exchange rate. For students of the ‘political economy’ of government decision-making, this is essential reading.

The final part of the book, consisting of just one chapter by David Meyer, looks at the transformation of Hong Kong as an international financial centre (IFC). Again, there is plenty of useful and interesting detail that provides texture to the story of Hong Kong SAR's economic and financial evolution, as well as a more conceptual discussion of what it means to be an international financial centre – and alternative metrics of the importance of financial centres. As Meyer points out, Hong Kong SAR has been, is, and is likely to remain a pivotal meeting place in Asia of Chinese and foreign social networks of capital. This is manifested in various ways, including the large number of international firms that choose Hong Kong SAR as their regional headquarters, and the specialized financial services and trade-related logistic services that Hong Kong offers. All these make Hong Kong SAR a key international financial centre that is of greater significance than traditional measures of the importance of IFCs.

It is sometimes said that the twenty-first century will be an Asian century. If so, Hong Kong SAR will undoubtedly play a critical economic and financial role – and the insights offered in this slender volume will surely be invaluable for understanding how that role may evolve.

Highly recommended.