Geographically Convenient Location (Southern Gate of China)
Hong Kong is strategically located at the southeastern tip of China, and at the same time, at the heart of the rapidly developing East Asia region. With a total area of about 1,100 square kilometers, Hong Kong consists of Hong Kong Island, the Kowloon Peninsula, which is separated by a stretch of sea, and the New Territories, where most of the suburbs are concentrated. The 235 outlying islands of Hong Kong are also included in the New Territories, the most widely known of which is Lantau Island. Lantau is home to Hong Kong's new airport and the site of Hong Kong Disneyland (scheduled to open in 2005). The center is easily accessible by car or rail. Hong Kong companies have established extensive business connections in Asia and around the world, and Hong Kong entrepreneurs are well known overseas for their business acumen and "business acumen". With a deep-water port and a population of 6.8 million, Hong Kong has a deep connection with China and its spirit of hard work and endurance. Hong Kong people are flexible, well-educated and entrepreneurial, which explains the city's incredible productivity and creativity. Hong Kong's special geographical location, when the night falls in North America, and the morning dawns in Europe, Hong Kong is already shining. In other words, multinational corporations with offices in both North America and Hong Kong, or Europe and Hong Kong, can actually take advantage of the time difference between the two places and operate 24 hours a day to handle different projects. This is undoubtedly very convenient for companies in the information technology and financial services industries.
Global Service Center
Over 80% of Hong Kong's gross domestic product (GDP) comes from the service sector. The services sector encompasses a wide range of businesses, from air and sea transportation around the world to contract manufacturing and software design, all of which are at the cutting edge of international standards. In view of the keen competition, the charges for many services in Hong Kong are among the lowest in the world. With the liberalization of the international long-distance telephone market in recent years, Hong Kong's long-distance telephone charges have also dropped significantly, and now the charges for calls from Hong Kong to the United States are even cheaper than those for calls between states in the United States.
Regional headquarters of multinational corporations
In 1999, 880 companies *** used Hong Kong as their regional headquarters in Asia. The United States had the largest number of regional headquarters in Hong Kong (205), followed by Japan (114) and the United Kingdom (82). In addition, some 1,650 countries have chosen Hong Kong as their regional offices. These regional headquarters are mainly engaged in the businesses of wholesale/retail, import/export trade, other business services (e.g. accounting, advertising, legal and other industries), finance and economics, manufacturing, transportation and related services.
Streamlined government administration
Hong Kong has a streamlined and efficient government. Corporate and personal tax rates are low and easy to calculate. The Hong Kong Government is also known for its efficiency, transparency and fairness, supporting business and industry with minimal intervention in the marketplace. For the past six consecutive years, Hong Kong has been ranked by the Heritage Foundation as the world's freest economy.
Investing in Hong Kong
Hong Kong's openness to information, rule of law and open and honest government are the main factors attracting companies to choose to do business in Hong Kong. According to the Industry Department's Survey of Representatives of Overseas Companies in Hong Kong 1999, there are 2,400 foreign enterprises in Hong Kong, of which 840 are regional headquarters and 1,650 are regional offices. Respondents indicated that a clean government, openness of information, political stability, good banking and financial facilities, geographical location and tax regime were their primary considerations in making investment decisions. The vast majority of respondents believe that Hong Kong is highly rated because of its advanced information technology, first-class banking and financial facilities, low and simple tax rates, excellent infrastructure and clean government.
Hong Kong is the gateway for business and investment to and from the Chinese mainland, and provides the expertise and capital needed to modernize the mainland economy. At present, about half of all exports are still transshipped to the Mainland through Hong Kong, and Hong Kong's investment in the Mainland accounts for about 50% of the total foreign direct investment there. Every day, there are about 800 ferries, 100 flights, 35 trains and 27,000 vehicles plying between Hong Kong and the Mainland. About 50,000 Hong Kong companies have their own production facilities in South China, employing about 5 million people. About 100,000 Hong Kong people are currently working in the Mainland, mainly in management and training positions.
On the other hand, Mainland China is also a major investor in Hong Kong's economy, with about 2,000 enterprises registered in Hong Kong, with assets totaling nearly US$200 billion, making it the third largest foreign direct investor in Hong Kong. With China's imminent accession to the WTO, Hong Kong will be able to strengthen its position in the world trade market with its own technology and connections with Mainland organizations. If China's accession to the WTO is successful, a number of sectors of the Hong Kong economy will have good prospects. With the liberalization of the financial sector, retail and institutional investors interested in investing in the East Asian region will gradually increase their investments, and small and medium-sized foreign enterprises are also expected to further increase their direct investments, a development that will benefit Hong Kong given its long-standing intermediary brokerage role. With China's accession to the World Trade Organization (WTO), Hong Kong is also expected to benefit indirectly from a number of ancillary services such as trade support, consultancy, accounting and legal services.
Hong Kong's telecoms industry will also benefit as businesses and the growing popularity of Internet services will create demand for telecoms in the coming years, and the country introduces new regulations that will allow foreign telecoms providers to operate in the country if they have a 50% stake. Some also expect Hong Kong to take the lead in developing new Internet software and in developing specific software and Internet materials to cater for the needs of domestic users and the Chinese community around the world. For the industry, the rise of the small-company stock market in Hong Kong and elsewhere in the region, coupled with increasing avenues for foreign investors and venture capital firms to participate in the development, will certainly help the business grow.
Hong Kong's links with the outside world
China-Hong Kong linksMany of the books written on doing business in the Chinese mainland encourage companies to make advance connections in order to cope with the complexities of the mainland business environment. There are a number of important personalities in China who can have an impact on a company's business, so relationships and reputation are often the most important assets a company can have when negotiating business in China.
Relationships are the strength of Hong Kong entrepreneurs. Hong Kong agents are well traveled in the Mainland and know local factories, suppliers and retail buyers, so they can easily identify distributors, conduct market research, and are familiar with the land authorities in different places, as well as the tricks of the trade with provincial and municipal governments. Building relationships with key people and organizations can make a difference. These relationships can be expensive, but Hong Kong agents, consultants and entrepreneurs usually already have them. Foreign businessmen wishing to do business in the Mainland, whether to sell their products there or to engage in local production, can work with Hong Kong enterprises or engage Hong Kong agents to save time in getting started and to make their business development smoother. The Hong Kong General Chamber of Commerce (HKGCC), local trade organizations and management consultants can provide you with information on identifying partners with experience in doing business in China.
Connections with China and neighboring regions
Another advantage of Hong Kong is its strong connections with different enterprises in Mainland China and Southeast Asia. This allows Hong Kong producers to access raw material supplies at low prices and quickly from factories in Asia, India, and even as far away as the Middle East and West Africa. Hong Kong garment companies can sew large quantities of shirts to the specifications provided by retailers in a matter of weeks. Hong Kong companies can rely on familiar suppliers and factories to place orders at very short notice, ensuring that overseas partners can secure good prices and quality goods at limited notice and that the goods are delivered quickly.
Telecommunications network services in Hong Kong
With the expiry of Hong Kong Telephone Company Limited's franchise for local telephone services on 30 June 1995, three companies were licensed to operate fixed telecommunications services on a competitive basis.
Hong Kong was the first major city to have a fully digitalized telephone network. It also has one of the highest telephone densities in Asia and globally, with 72 telephones or 55 telephone lines for every 100 people.
In 2000, there were about 4.9 million telephones in Hong Kong. Telephones and ancillary equipment are readily available to the public at competitive prices and are connected directly to the local telephone network.
In addition, Hong Kong people have access to a wide range of data communications services. In December 1996, caller ID was introduced in Hong Kong. A wide range of public payphones are available for both local and overseas calls. Local calls are charged at HK$1, which is cheaper than in many major cities.
As of April 2000, there were 392,000 fax lines in Hong Kong (24 fax lines for every 100 business lines), with a growth rate of around 2,000 lines per month. Currently, there are over 2.3 million Internet user accounts in Hong Kong.
Tourism in Hong Kong
Tourism Hong Kong is a tourist hotspot, attracting visitors from all over the world. Hong Kong has a wide range of hotels, a wide range of restaurants***6,000 restaurants, and numerous tourist attractions.
Economic benefits to Hong Kong
At current prices, Hong Kong Disneyland is expected to bring to Hong Kong a total *** value-added economic benefits of about $148 billion over the next 40 years, such as profits for various industries and income for employees. Hong Kong Disneyland is expected to attract over 5 million visitors in its first year of operation. This will increase to a maximum of 10 million per year in about 15 years' time. In its first year of operation, Hong Kong Disneyland will attract about 3.4 million overseas visitors (including 1.4 million additional visitors).
After 15 years, the number of visitors is expected to increase to 7.3 million (including 2.9 million additional visitors). The additional spending by visitors to HKD is estimated to be about $8.3 billion in the first year of operation, rising to $16.8 billion per year from the 20th year onwards.
Information Technology (IT) Education in Hong Kong
At present, about one-fifth of the students in the tertiary education sector are enrolled in IT or engineering-related courses. About 10% of research grants are allocated to IT. In addition, tertiary institutions are committed to providing and upgrading equipment and improving the teaching and learning process so as to increase students' exposure to the latest information technology to meet the new challenges of the megatrend. Moreover, online courses are a new trend in higher education. The OUHK plans to offer some of its courses mainly on-line in the next two to three years. The OUHK also has the largest e-library in Asia. Separately, the UGC has recently allocated $51 million to support three local universities*** to jointly develop a project on information technology (IT) as one of the areas of excellence in Hong Kong. In addition, the Government has been vigorously implementing various major initiatives, including the procurement of computers for primary and secondary schools, connecting all schools to the Internet, providing professional and technical support to teachers through the IT in Education Resource Centers, etc., as well as implementing a pilot scheme in selected primary and secondary schools to develop a set of best practices in the use of IT in teaching and learning.
Infrastructure in Hong Kong
Hong Kong has a number of infrastructure programs underway that are conducive to industrial development. Major infrastructure projects are often completed on time, with few delays and without the need to go through complicated approval procedures. The railroads, tunnels and roads built in recent years have all been completed on time. Over the next five years, the Government will spend over HK$235 billion (US$30 billion) on a number of major railroad, road, land and port construction projects, as well as many smaller projects. These projects will not only help maintain Hong Kong's position as a regional transportation hub, but will also improve the quality of life for the people of Hong Kong and provide tens of thousands of jobs to stimulate our economic growth.
Six railroad projects are being planned and implemented, which will add more than 60 kilometers to Hong Kong's existing 143-kilometer rail network and help develop the northwest New Territories for further growth. Planned road works include the improvement and construction of about 100 kilometers of strategic roads, which will not only help relieve congestion in the urban areas, but will also provide important new road links to the border, connecting Hong Kong with southern China and other parts of the Mainland. Planned land projects will open up more than 600 hectares of new land in Kowloon, Hong Kong Island and the New Territories for housing, commercial, retail and recreational uses.
Hong Kong's culture
Hong Kong's rich heritage, both ancient and modern, is best reflected in the cultural museums and art galleries that dot the territory. Because of their deep cultural roots, Hong Kong's museums and art galleries display not only valuable historical Chinese artifacts, but also many contemporary art masterpieces, a unique blend of Chinese and Western artifacts. Hong Kong's museums and art galleries are educational and fun to visit, and should not be missed.
The Hong Kong Science Museum's exhibits are interactive, educational and fun; the Hong Kong Space Museum offers a wide-screen, all-area movie and a fascinating program on the heavens; and the Hong Kong Museum of Art, Hong Kong's largest museum, has a permanent exhibition of Chinese art, showcasing ancient Chinese art. Those interested in the art of tea should not miss the Flagstaff House Museum of Tea Ware on Hong Kong Island, where they can relive the art and essence of the tea ceremony from the Chinese culture.
In terms of language, Hong Kong is multilingual, with Cantonese (Cantonese) and English both being official languages in Hong Kong. Cantonese is the dialect of southern China and the most commonly spoken language in Hong Kong, with 97% of the population knowing it. Many people can also understand and speak English, which is also used in government departments and courts in Hong Kong. Some people in Hong Kong can speak and generally understand Putonghua, the official language of Mainland China. There are also some speakers of other Chinese dialects, mostly residents of southern China and coastal provinces. Hong Kong is a cosmopolitan city with a highly adaptable and educated workforce.
Policing in Hong Kong
Hong Kong is a very safe city. The crime rate is comparable to that of Singapore, and actually lower than that of Tokyo. The crime rate is much lower than that of London and the major cities in the United States. Possession of firearms is a serious offense in Hong Kong. Anyone can walk the streets without fear, day or night. Hong Kong's population is largely Chinese, mainly from southern China. At the end of 1999, there were 495,200 foreigners in Hong Kong. There are also significant numbers from North America, Southeast Asia, Australia, the United Kingdom and India.
Healthcare in Hong Kong
Hong Kong has one of the most comprehensive healthcare systems in Asia, with care comparable to the best hospitals in the world. All healthcare professionals speak English and all major specialties are available in Hong Kong. There are many hospitals in Hong Kong, with different fees for different types of rooms. The cost of healthcare and insurance in Hong Kong is lower than in most Western countries, and the quality of care is excellent and easy to access.