Hong Kong:
Asia’s World City for Business
Hong Kong Economic and
Trade Office (Toronto)
September, 2013
1
Hong Kong Economic Updates
GDP growth in real terms
• 1st quarter 2013: 2.9%
• 2nd quarter 2013: 3.3%
• 2013 forecast: 2.5% to 3.5%
Underlying consumer price inflation
• 1st quarter 2013: 3.8%
• 2nd quarter 2013: 3.9%
• 2013 forecast: 4%
External trade (exports growth in real terms)
• Exports of goods: 6.2% in the 2nd quarter 2013
• Exports of services: 8.1% in the 2nd quarter 2013
Labour market
• Unemployment rate at 3.3%
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Hong Kong: an international
financial centre
• 3rd in the Global Financial Centre Index (after London and
New York)
• 1st in Financial Development Index (World Economic Forum)
• Financial services sector contributing to 16% of GDP
3
Hong Kong: an international financial centre
Banking sector
• Global ranking: 7th in the world and 2nd in Asia (in terms of
outstanding amount of external transactions)
• 201 authorized institutions (156 licensed banks) and 61 local
representative offices from 35 economies
• 70 of the world’s 100 top banks operating in Hong Kong
4
Hong Kong: an international financial centre
Securities
• 1,575 companies listed on the Stock Exchange of Hong Kong
• 6th in the world and 2nd in Asia in terms of market
capitalization (USD 2,773 billion in end July 2013)
• IPO funds raised: 1st from 2009 to 2011, among the top five
for the past decade
• 1st in terms of cross-border listings and capital raised by
offshore companies (2012)
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Hong Kong: an international financial centre
Asset management (as at end 2012)
• Combined fund management business: HKD12,587 billion, 39.3% growth
from 2011
• Asset management business:HKD8,246 billion ,1st in Asia
Insurance sector
• 13 of the world’s top 20 insurers operate in Hong Kong
• Highest concentration of insurers in Asia (153 authorized insurers as at end
July 2013)
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Hong Kong: an international financial centre
RMB trade settlement in HK
• RMB 1,980 billion (Jan – July 2013). More than 80% of Mainland’s
total trade settlement in RMB
Liquidity pool of RMB in HK
• RMB 695 billion of deposits and RMB 161.9 billion of certificates of deposit,
totaling RMB 856.9 billion (as at end of July 2013)
RMB bond issuance cumulative total of 297 batches with outstanding amount
of RMB 296 billion (as at end August 2013)
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Hong Kong as a premier logistics hub
• World’s number one air cargo hub in terms of total air cargo
handled in 2011
• World’s 3rd busiest port in terms of total container throughput
in 2012
• Trading and logistics industry accounting for 26% of Hong
Kong’s GDP
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Recent development to support Hong Kong’s
logistics and related business
• Central Government indicated support for Hong Kong’s
development into a high value goods inventory
management and regional distribution centre
• New lands allocated and reserved for construction of
modern logistics facilities
• Cross border infrastructure development for more efficient
flow of goods and people between Hong Kong and
Mainland China
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HK-Zhuhai-Macao Bridge General Layout
HZMB Whole Project
(14km link road + 23km bridge + 7km tunnel + 12km link road)
30km
廣珠西線
Guang-Zhu
West Expressway
Hong Kong Boundary
Crossing Facilities
14km
12km
Zhuhai Link Road
(14 km)
Hong Kong Link Road
(12 km)
Cable Stayed Bridge
Deep Immersed Tunnel
Zhuhai and
Macao BCF
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Connectivity of HZMB to Major Cities
at Pearl River West
Beijing
往北京
To BEIJING
現存道路
EXISTING ROAD
Guangzhou
計劃中 / 興建中道路
ROAD UNDER PLANNING / CONSTRUCTION
廣州市
GUANGZHOU SHI
肇慶
往廣西梧州
ZHAOQING
To WUZHOU, GUANGXI
West of China
佛山市
FOSHAN SHI
Destinations
Zhuhai/
Macao –
HK Airport
往湛江市
To ZHANJIANG SHI
About
4 hrs
汕頭市
SHANTOU SHI
鹽田
京珠高速
香 港 國 際 機 場
HONG KONG
INTERNATIONAL
AIRPORT
香港
HONG KONG
中山
Jingzhu Highway
ZHONGSHAN
Zhuhai / Macao
澳門
MACAO
HZMB
Destinations
陽江
YANGJIANG
Over
200km
深圳市
YANTIAN
SHENZHEN SHI
珠海
ZHUHAI
Southwest of
China
Travel Time
東莞市
DONGGUAN SHI
廣珠西線
Guangzhu West
Highway
江門
JIANGMEN
Distance
Zhuhai/
Macao –
HK Airport
Hong Kong
Distance
About
42km
Travel Time
About
45 mins
(>80%
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reduction)
Benefits to be brought by the HKZMB
The Hong Kong-Zhuhai-Macao Bridge •
Improve connectivity to west of Pearl River Delta
•
Accelerate the integration of Guangdong, Hong Kong and Macao
•
Support the continuous economic growth in PRD
•
Enhance HK’s position as a trade and logistics hub
Guangzhou-Shenzhen-Hong Kong Express Rail Link
HK Section
26km
Mainland Section
116km
(XRL) Alignment
Hong Kong
Route
Journey
to Futian
to Guangzhou
South
30 km
142 km
14 mins
48 mins
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XRL Benefits
•
Enhance Hong Kong status as the Southern Gateway of China
•
Promote various sectors of industry including convention and exhibition, catering and
retail and tourism etc.
•
Materialize the idea of “one hour living circle” between Hong Kong and the Pearl River
Delta region
•
Attract more visitors for “one-trip multi-stops” by the XRL
•
Average time saving: 40 million hours / year
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Hong Kong: strong professional services
• High quality workforce, common use of
English which is one of HK’s official
languages
• 8,200 local lawyers and over 1,350 registered
foreign lawyers, 1,600 qualified mediators
from legal and non-legal sectors
• Over 32,000 certified public accountants
• Over 5,300 chartered company secretaries
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Hong Kong: regional centre for disputes
resolution
• Strong legal services, the only city within China with common
law legal system
• Presence of international legal organizations: e.g. the Asia
Pacific Regional Office of the Hague Conference on Private
International Law, the Secretariat of the International Court of
Arbitration of the International Chamber of Commerce
• Arbitration order awarded by courts of Hong Kong enforceable
in over 140 jurisdictions including Mainland China
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Hong Kong: regional centre for disputes
resolution
• The new Arbitration Ordinance took effect in June 2011, in line
with the latest and best international practice
• The new Mediation Ordinance came into operation in January
2013, providing legal framework for the conduct of mediation
• The Hong Kong Mediation Accreditation Association Limited
established in August 2012 to perform accreditation and
disciplinary functions
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New growth areas: innovation and technology
Research centres
• Five R&D centres set up by government to
facilitate technology transfer and
commercialization of research projects
• Focus areas: ICT, nanotechnology, logistics and
supply chain management enabling technologies,
textiles and clothing, automotive parts and
accessory systems
• Extensive network with local and overseas
research institutions as well as with industries in
the Pearl River Delta Region
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New growth areas: innovation and technology
R&D Funding Support
Small Entrepreneur Research
Assistance Programme (SERAP)
HK registered companies < 100 staff
Up to $6m matching-grant/interest free
loan for in house R&D
for max 2 years
Application process: up to 2 months
Innovation and Technology Support
Programme (ITSP)
Through Government’s 5 R&D Centres
Grant of up to 50% project cost
for exclusive IP ownership
Application process: 3~6 months
University-Industry Collaboration
Programme (UICP)
Through 6 local research-based
universities
50/50 matching grant
IP goes to the company
Application window: twice a year
R&D Cash Rebate Scheme for up to 30% of cash rebate for R&D investments
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New growth areas: innovation and technology
Hong Kong Science Park
• Provides 20 state-of-the-art buildings with offices, fully-equipped
laboratories and engineering services
• Currently home to over 390 technology companies developed in five
clusters: information technology and telecommunications, electronics,
biotechnology, precision engineering, green technology (renewal energy
and environmental technology)
• Nurtures technology start-ups through incubation program
• Phase 3 development is underway to provide space for up to 150 more
technology companies
20
New growth areas: innovation and technology
Cyberport
• Provides state-of-the-art ICT facilities
• Currently home to over 100 ICT and digital content companies
• Specific program to provide enterprises with technology,
training opportunities, business matching and networking
support
• Flexible program for companies to rent readily-built office at
highly competitive all-inclusive monthly rate
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New growth areas: innovation and technology
Information and communication technology (ICT)
• Broadband networks cover nearly all commercial and
residential buildings. Household broadband penetration
rate of 85% (May 2013), among the highest in the world.
• Mobile penetration rate at 231% (May 2013).
Smartphone penetration rate of 63% (Q1, 2013), among
the second highest in the world.
• Telecommunication charges are among the lowest in the
world.
• Average peak internet connection speed (63.6 Mbps), the
fastest worldwide and the average internet connection
speed (10.9 Mbps), is among the fastest in the world.
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New growth areas: innovation and technology
Information and communication technology (ICT)
• Strong pool of ICT professionals engaged in various areas including
software design and development
• Active IT outsourcing policy by the government, adoption of cloud-based
services
• Good test-bed for new solutions and a solid base for ICT companies to
service Mainland
• Advantages under CEPA: Hong Kong suppliers can set up wholly-owned
companies in the Mainland to provide software implementation and data
processing services, can establish joint ventures with not more than 50% in
shareholding to operate six types of value-added telecommunications
services
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New growth areas: innovation and technology
Hong Kong as the prime location for data centres
• Robust telecommunications infrastructure
• Reliable power supply and comparatively low tariff
• Proximity to Mainland China
• Effective protection of data privacy and information security
• More land for data centres: a one-hectare site open for tender
until 4 October 2013
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New growth areas: intellectual property
trading
IP creators
IP intermediaries
Universities
R&D labs
Products
development
(in-house)
Inventors
IP brokers/agents
IP publications
Exhibitions
Online platforms
Trading centres
IP users
Any company
Professional IP support services
IP valuation, accounting, intelligence, consulting, risk management,
financing, training, enforcement and litigation
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New growth areas: intellectual property trading
• Hong Kong has long been a regional marketplace for IP
activities like copyright trading, licensing and franchising,
design services and technology transfer, IP modification
• Hong Kong exported US$1 billion in technology to China in
2010 – 6th in the world in taking technology to China
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New growth areas: environmental industry
• Vision: use less and waste less
• Strategy: develop a comprehensive waste management
plan & promote a new social contract with the community
to conserve resource & reduce waste
• Overall Target: reduce the municipal solid waste disposal rate by 40% on
a per capita basis by 2022
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New growth areas: environmental industry
Target for sustainable use of resources
• Per Capita Municipal Solid Waste Disposal Rate down 40% by 2022
• To reduce from 1.27 kg per day (2011 level) to 0.8kg per day by 2022.
• By 2022: recovery rate (55%); landfill (22%); and incineration (23%)
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New growth areas: environmental industry
Landfill Extensions
Organic Waste Treatment Facilities (OWTF)
Sludge Treatment Facility (STF)
Integrated Waste Management Facilities (IWMF)
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New growth areas: environmental industry
• Increasing opportunities in Mainland China
– Energy conservation
– Waste air/water treatment
– Automation of production plant (green manufacturing)
– Product design/development for higher value-added (green) products
– Testing and certification, e.g. for food & product safety
• Demand for financial services; funding of such projects
• Demand for technology/equipment from domestic enterprises/oversea
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New growth areas: environmental industry
CEPA Advantages:
• “Hong Kong companies” may set up wholly-owned enterprises
on the mainland to provide architectural design services and
engineering services (including environmental protection design
and engineering services)
• “Hong Kong companies” may set up wholly-owned enterprises
on the mainland to provide various environmental protection
services:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Sewage services;
Solid waste disposal services;
Waste gas clear-up services;
Noise abatement services;
Nature and landscape protection services;
Other environmental protection services;
Sanitation services
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New growth areas: environmental industry
Examples of Canadian cleantech in Hong Kong
•
•
•
•
•
•
•
•
•
•
•
Water and wastewater leakage detection
UV disinfection for water & wastewater
Odour control systems
Wind engineering services
Indoor air quality products
Low VOC wood coating products
Food waste recycling machine
Environmental and bioremediation consultancy
Laboratory analytical services
Waterproofing technologies/products for buildings
Architectural services
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New Growth areas:
life science and medical devices
• Hong Kong: a world-class healthcare system with
rising demand for advanced technologies and medical
devices due to aging population
• Continuous increase in healthcare spending by the
government
• Heavy reliance on imports of medical equipment and
supplies
• Gateway to Mainland China for distribution of medical
devices
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New growth areas: education
• Quality education: ranked 3rd in the Global Index of Cognitive
Skills and Educational Attainment
• Three universities in Hong Kong among the top 50 world
universities (2013 QS World University Rankings)
• Platform for academic exchanges, recruitment of overseas
students, program development etc.
• Growing footprint of prestigious international teaching programs
• Presence of Canadian universities in Hong Kong: University of
Waterloo, University of Toronto, Western University of Ontario,
University of British Columbia, Royal Roads University, etc.
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New growth areas: culture and creativity
West Kowloon Cultural District (total site area of 40 hectares)
• One of the largest arts and cultural infrastructure projects in the world
• To house 13 core arts and cultural venues and over 30 000 square meters of space for
arts education
• Ample green space, open areas and two kilometers of harbor-front promenade
• To be commissioned in phases from 2018
35
New growth areas: culture and creativity
• Support for film industry through:
– Film Development Fund to provide financial support for small-
to-medium budget film productions and other film-related
projects
– Other support for film production through the Film Services
Office
• MOU between Canada and Hong Kong to facilitate film and
television co-production
• Hong Kong-Canada co-production of Chinese language
films may enter into Mainland China on a quota-free basis
under CEPA
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New growth areas: wine industry
• Removal of all duty on wine since 2008
• World’s largest wine auction centre and major wine trading and distribution
centre for Asia
• Market trend: growing popularity of New World Wine with increasing
market shares
• Advantages for export to Mainland China
– Wines manufactured in HK enjoy zero tariff in entering the Mainland
– Customs facilitate measures: pre-valuation of wine duty in HK and
shorter customs clearance time at designated Mainland ports
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Hong Kong’s fundamental strengths
• Rule of law and independent judiciary
• Clean government
• Freest economy
• Free flow of capital and information
• Free port and efficient customs
• Simple and low tax regime [profit tax: 16.5%, income tax: 15%]
• Level playing field
• Simple and transparent regulatory regime
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Hong Kong: an excellent place for business
•
Ranked 1st as the world’s freest economy by the Heritage Foundation since 1995 and the
Fraser Institute since 1970
•
Ranked 1st in the World Economic Forum’s Financial Development Index 2012
•
Ranked 1st in Asia in the 2013 Global Innovation Index
•
Ranked 1st in the Globalization Index 2012 by Ernst & Young and the Economist
Intelligence Unit
•
Ranked 1st in Asia (3rd in the world) as the most competitive economy by the IMD World
Competitiveness Yearbook 2013
•
Ranked 2nd in Asia in the 2013 Global Competitiveness Index of the World Economic Forum
•
Ranked 2nd as the easiest place to do business in the world in the 2012 World Bank’s Doing
Business Report
•
Ranked 3rd global financial centre by the Global Financial Centres Index 14 (2013)
•
Ranked 1st as the most competitive city in China 2013 (The Chinese Academy of Social
Sciences)
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Hong Kong: ideal platform for business and
investment
• 3rd in the world for foreign direct investment (USD 75 billion
in 2012), after the US and Mainland China
• 4th in the world for outflow of investment (USD 328 billion in
2012), after the US, Japan, and Mainland China
• 7,250 overseas companies operating in Hong Kong, 3,883
being regional headquarters and regional offices
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InvestHK is ready to help
• Planning: information and advice on regulation, cost of business model,
procedures, etc.
• Setting up: connection with relevant government departments and other
service providers in HK
• Launching: generation of publicity
• Expansion: ongoing support for business matching, information on grants
and government schemes
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Thank you
Hong Kong Economic and
Trade Office (Toronto)
September, 2013
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