Hong Kong Advantages: Fast tracking your China business

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Hong Kong AdvantagesFast tracking your China
business

• Bassanio So
• Director
• Hong Kong Economic and Trade Office

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Businesspeople pick Hong Kong

• 6,000 overseas companies
• Over 3,600 regional HQs
• 90 of the Fortune lists of IT companies
• 70 of worlds top 100 banks
• All major Canadian banks
• Regional Offices of NYSE and London Stock Exchange

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Businesspeople pick Hong Kong

• Second-best performing host economy for foreign
  direct investment in Asia
• Almost US14 billion in 2003
• Above US24 billion in first nine months of 2004

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Why Hong Kong?

• Proximity to China, yet one country, two
  systems
• Strategic two-way platform for trade with and
  investment in mainland China
• springboard to China
• window to the world
• Co-operation with mainland China

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Why Hong Kong?

• International Financial Centre
• Logistics hub of Asia
• Worlds freest economy
• Familiar and friendly business environment
• World-class city

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Proximity to China

• Over 340,000 people cross between Hong Kong and
  Mainland daily
• 600 scheduled flights a week between Hong Kong
  and about 40 Mainland cities
• Links with the Pearl River Delta Economic Zone
• Unique advantage for access to China

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One Country, Two Systems

• Capitalist system
• Common law
• English as official language
• Independent judicial system
• HK

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Springboard to China

• About 32 of Chinas imports and 28 of exports
  are handled through Hong Kong
• Largest external investor in China, accounting
  for US223 billion or 45 of total
• 60,000 HK-invested companies employ a total of 11
  million people in Pearl River Delta

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Window to the World

• Chinas first trading company since 1872
• Over 2,000 Chinese companies
• 304 Chinese companies listed in HK (US250
  billion)
• Over 100 Chinese companies have regional
  headquarters, hundreds more with regional or
  local offices

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Co-operation with Mainland

• Service centre for PRDs factories
• High-end service, administrative, managerial, and
  financial centre for Pan-PRD
• Closer Economic Partnership Arrangement (CEPA)

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International Financial Centre

• 1st in Asia and 3rd in the world in terms of
  capital raised (2004)
• US34 billion raised in 2004 (gt London and Tokyo
  Stock Exchanges)
• Regional offices of New York and London Stock
  Exchanges

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Logistics Hub of Asia

• Worlds busiest container port
• Worlds busiest international air cargo hub
• Best airport worldwide in 2004 (ACI and IATA)
• 50 world population within five-hour flight
• Prime location at mouth of PRD factory of the
  world

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Worlds Freest Economy

• 11 consecutive years by Heritage Foundation
• Fraser Institute since 1996
• Free trade, free market, free flow of capital
• No foreign exchange controls
• Stable and freely convertible currency
• No investment restrictions

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Friendly Business Environment

• Common Law
• English as official language
• Rigorous enforcement of IP rights
• Regional arbitration centre
• Low and stable taxes (No VAT, GST, etc)
• Excellent communications infrastructure

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World-class City

• Excellent banking service
• Well-educated workforce
• Clean and efficient civil service
• Tough anti-corruption agency ICAC
• Level playing field for business
• Global market network

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PRD Engine of economic growth

• Definition
• Hong Kong,
• Macau
• PRD Economic Zone
• Combines
• Manufacturing powerhouse in Guangdong
• Financial, service excellence in Hong Kong
• Tourism development in Macau

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PRD Engine of economic growth

• Leading regional economy in China
• Population 55 million people
• 2003 GDP US305 billion
• 2003 GDP per capita US5,500
• 2008F GDP US514 billion (assuming CAGR 11)
• If a country would be
• The worlds 18th largest economy (Switzerland
  just ahead)
• The worlds 11th leading exporter (just ahead of
  S. Korea)

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New directions Pan-PRD or 92

• Nine provinces in south China 2 SARs
• Roughly 1/4 of Chinas land and 1/3 of Chinas
  1,228 million population
• Yet, in contributes to over 45 of Chinas GDP

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Opportunities for HK

• Multi-provincial regional economy development
• Financial, trade and commercial flows to
  intensify
• Greater market for HK goods and services

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CEPA
Closer Economic Partnership Agreement (CEPA)
Hong Kongs First Mover Advantages

• Tariff eliminated on imported goods of Hong Kong
  origin in stages (1,108 tariff codes)
• Early market access granted to Hong Kong service
  providers in 26 sectors.
• More liberalization through ongoing negotiation
  with the Mainland.

• Duty eliminated for Hong Kong export to Mainland
  China.
• Earlier market access to 26 service sectors in
  China
• More control through holding of wholly-owned
  enterprises.

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No better place to find partners

• Huge pool of entrepreneurs with solid China
  experience
• Close economic and social ties between Canada and
  Hong Kong over 250,000 Canadian passport holders
  in Hong Kong over 500,000 Hongkongers in Canada
• Strong Canadian Chamber of Commerce in Hong Kong
  (over 1,300 members)

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Getting into action

• Free-of-charge services provided in Canada
• Hong Kong Economic and Trade Office
  (www.hketo.ca)
• Hong Kong Trade Development Council
  (www.tdctrade.com)
• InvestHK (www.investhk.gov.hk)

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Getting into action

• Ottawa Conference on 30 May 2005
• Joint Guangdong-HK promotion on 24 October 2005
• Hong Kong Forum/World SME Expo in November 2005

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Getting into Action

• Sunzi The Art of War
• Turning the devious into the direct
• Start after the enemy but arrive before them
• Use HK to fasttrack your business in China

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Thank you