Ventures Dialogue

This is the third of three posts outlining the key advantages of Hong Kong, described by Mike Rowse during the luncheon, Establishing Business in Asia, hosted by the Hong Kong Economic Trade Office and the Ontario Chamber of Commerce. Rowse began his talk by pointing out that Hong Kong has both a strong domestic market (resident and tourist) and is also a vital pathway into Asia. He then went on to discuss the Closer Economic Partnership Arrangement (CEPA). This agreement can reduce the costs of operating in Mainland China by essentially putting you on an equal footing with domestic companies.

Finally, Rowse pointed to the services provided by Invest HK as the third advantage offered by Hong Kong and third key to success for any foreign enterprise designing an Asia strategy. The services at Invest HK are free of charge, not unlike the trade advisors at the Ontario Ministry of Economic Development and Trade (MEDT), Small Business and Consumer Services (SBCS), or the Canadian federal government’s Foreign Affairs and International Trade Canada (DFAIT). For companies looking into Hong Kong or any export market, due diligence is a necessity – these organizations can help with the exchange of information.

Invest HK is a “full service” organization that can assist you with detailed market research (e.g. which target area is best for your product), preparing an entry strategy, determining if you are prepared (e.g. visas and required documents), and making the right connections. Chuckling, Rowse also described some of the more unusual requests received by Invest HK – like finding an international school for the child of an executive, and a kennel for the child’s pet dog.

Invest HK began in 2000 and has assisted over 1,500 overseas and Mainland Chinese companies to expand into Hong Kong. Visit www.hketo.ca or www.investhk.gov.hk more information.

This is part II of a three part series about the advantages offered by Hong Kong and how to build a profitable business in Asia, using Hong Kong as a base.

Director General of Invest HK, Mike Rowse, outlined three of these advantages at a luncheon hosted by theHong Kong Economic Trade Office and the Ontario Chamber of Commerce.  The first advantage offered by Hong Kong, as described in yesterday’s post, is the size of the domestic market and easy access to all of Asia, not just to Mainland China.

The second advantaged enjoyed by companies using Hong Kong as a base, according to Rowse, is the Closer Economic Partnership Arrangement (CEPA).  Essentially, CEPA is a free trade arrangement that allows easier access to Mainland China’s market for Hong Kong-made products and Hong Kong-based service companies. Companies that are 100% foreign owned can have the same advantages as a domestic company, however usually after three years in operation.  

CEPA is unusual in several ways.  First of all, it is a free trade agreement between two parts of the same country.  Secondly, it is a growing document.  CEPA is constantly being revised and broadened to be more inclusive of other sectors and products.  Since its inception in 2004, there have been 4 updates (supplements) with the most recent implemented in January 2008, known as CEPA V.  From the most current CEPA consultations, 29 liberalization measures have been agreed to in 17 service sectors (15 current CEPA service sectors and two new sectors).  This session expanded the services sectors covered under CEPA to 40. It was also agreed that e-commerce, trademark and branding, and recognition of professional qualifications would be further enhanced.    

Rowse made sure to note that all industries are open to foreign trade and investment in Hong Kong - once again, pointing out that they’re open for business.

For more info on CEPA please read the previous VENTURES post CEPA-Opening the Doors to Hong Kong-China trade.    

Tomorrow’s post will conclude this series with Mike Rowe’s third key factor to success in Hong Kong, what Invest HK can do for you.

Mike Rowse, Director-General of Invest HK speaking about getting Canadians excited about in Hong Kong

What does a former English tutor have to do with growing and sustaining your business in these turbulent economic times? Well quite a lot, if that person is Mike Rowse, Director-General of Investment Promotion in Hong Kong – Invest HK. Speaking at an event called, Establishing Business in Asia, a luncheon hosted by the Hong Kong Economic Trade Office and the Ontario Chamber of Commerce, Rowse discussed what businesses must do when looking towards Hong Kong as a market for expansion. He kicked off the discussion by saying that anyone can do business in Hong Kong and Mainland China. To make your business into a profitable one takes a bit more effort and involves a well thought out process. Rowse outlined three main keys to achieving this goal.

Today, in the first of a three part series, we’ll look at the first key to success.

First, Hong Kong has its own domestic market that mustn’t be overlooked. It’s not just the seven million people who live there that must be considered, but also the 28 million tourists that visit Hong Kong every year – many of whom visit Hong Kong to shop. It should also be seen as a conduit into the Asian market. With no value added tax (VAT), GST, and an excellent intellectual property rights enforcement regime, it’s not just cheaper, but also easier to protect your goods and services in Hong Kong than in Mainland China. This is why the world’s biggest luxury brands like Louis Vuitton and Armani have set up shop in Hong Kong.

Hong Kong is also a perfect coordination centre, not just for South China and China as a whole, but also all of Asia. Its legal system, English as an official language, low crime, low taxes, and its strategic location make it a prime spot for accessing the region. In other words, Hong Kong wants you to do business with them and it’s up to you to take advantage of what they have to offer.

Tomorrow on VENTURES, we’ll have Rowse’s second key to success in the Hong Kong Market.

Hong Kong is again ranked the world’s freest economy by Vancouver’s Fraser Institute, scoring 8.94 out of 10 points.  The report compares the level of economic freedom in 141 economies.

The economies ranked 2nd to 10th are: Singapore (8.57), New Zealand (8.28), Switzerland (8.2), UK (8.07), Chile (8.06), Canada (8.05), Australia (8.04), USA (8.04) and Ireland (7.92).  

Among the top ten, the scores of most of the economies have dropped, except for Hong Kong and Chile.  Japan ranks 27th, South Korea 20th, and Mainland China 93rd (86th in 2007).
Forty-two variables are used to construct a summary index and measure the economic freedom in five broad areas.  Amongst these five major areas of assessment, compared with last year, Hong Kong improves its scores on “size of government” (9.08 to 9.13); “legal system and security of property rights” (8.02 to 8.19), “freedom to trade internationally” (9.41 to 9.5); whilst the scores have dropped in respect of “access to sound money” (9.48 and 9.36) and “regulation of credit, labour and business” (8.62 to 8.54).
Relative to Singapore, Hong Kong fares better in regard to “size of government”, “access to sound money”, “freedom to trade internationally” and “regulation of credit, labour and business”, while Singapore receives more favourable rating in “legal structure and security of property rights”.

The Hong Kong SAR Government welcome Fraser Institute’s assessment.  The latest report has once again affirmed Hong Kong’s steadfast achievement as the freest economy in the world.  Read more.

There’s a great story in the Financial Post today about Avalon Ventures Ltd., a Toronto-based junior mineral exploration business listed on the TSX Venture Exchange. Read the rest here:

China’s almost complete dominance of the rare-earths and metals industry does not deter Don Babur, chief executive of a Canadian company that is trying to crack the market for producing the raw materials used in everything from iPods to hybrid cars.

The fact China supplies more than 90% of the global demand is a huge opportunity — buyers want more supply-side diversity, says the soft-spoken geologist who heads Avalon Ventures Ltd., a Toronto-based junior mineral exploration business listed on the TSX Venture Exchange.