A lot of people in the West might think that after the handhover Hong Kong is just another Chinese City. Hong Kong has changed very little after 1997. The One Country, Two Systems extends to almost every aspect of doing business in Hong Kong, from transparency and rule of law to currency. Not surprisingly so China wants to ensure that Hong Kong continues to prosper.
Hong Kong’s currency, availability of information, infrastructure, freedom of speech and the government’s attitude to non-intervention in business have been maintained since the changeover. The currency is still pegged to the USD Dollar and freely convertible, the legal and judicial systems carry over from their British antecedents, and information flows freely.
It has the world’s most efficient container port, the busiest international air cargo centre and being within 6 hours flying time of the entire Asian region. It houses a world class convention and exhibition centre that enables it to host many of Asia’s most important industry fairs. With advanced telecommunication links and backed by its physical infrastructure Hong Kong has become a premier trade, transportation and logistics hub in the Asia-Pacific region.
Hong Kong’s highly developed infrastructure, open environment, free port status, business-friendly government enables it to be perhaps the most cost-effective place to set up business in the Far East.
China’s accession to the World Trade Organisation will open up opportunities for Hong Kong. It will take some time for China’s market opening commitments to be fully implemented. Moreover, China is a complex market. It is comprised of many regions at different stages of economic development and with different needs, priorities and consumer preferences. In the early years after China’s accession into the WTO, companies doing business there will continue to need good access to local market knowledge, contacts and experience. They will also need effective co-ordination and logistic support.
Although some larger overseas companies will continue to go direct to China, the advantages of using Hong Kong as a base and partner will become increasingly apparent to new market entrants. Hong Kong is made up of small and medium-sized enterprises with exceptional experience in three key areas: running operations in the Chinese mainland; understanding the needs of overseas companies entering the mainland, and providing integrated support services for business there.
With China’s WTO accession it is estimated that China’s trade will double in five years. The scale of support needed to handle this trade growth is hard to imagine. Hong Kong’s sophisticated service sector is well positioned to help fill in the gap as well as help China develop its own service industries.
Hong Kong has the advantage of being Asia’s financial centre, China’s opening up means, in effect, that it will also open up to Hong Kong, now its biggest source of foreign investment.
E-commerce is fast gaining ground in Hong Kong and the region. Hong Kong is rich with business information news connections, market intelligence, practical experience, relationship networks, business contact and deal opportunities. With a critical mass of international information and talent based in Hong Kong the scope of its content is local, regional and global. Hong Kong has unrestricted freedom and expertise to prepare, reformulate, apply and distribute such content. It manages, process and distribute value-added information about the Chinese mainland to the world vice versa it is a provider for mainland enterprises seeking information and analysis on overseas markets.
With the spread of E-commerce Hong Kong is ideally positioned to be one of Asia’s key fulfilment centres; a place where the commissioning, quality control, logistics and delivery of products and services are all handled.
The advantages of continuing to use Hong Kong as a base to do business in China are :
- It’s ideal geographical location with China.
- It has a strong educational work force, English being widely used.
- Its importance as a financial centre with a strong stock market for future growth.
- Since liquidity is essential for acquisitions in China, Hong Kong serves as a major source of funds to finance growth in China.
- Its experience in doing business with China.
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