Ventures Dialogue

This is the third in a series of stories about prominent Canadians in Hong Kong and their reflections on current and potential opportunities between Hong Kong and China, and Canada.  Parts 1 and 2 discussed some of the reasons for the vast connections between Hong Kong and Canada, history and education.

With the mutual fondness between Hong Kong and Canada as the foundation, Hong Kong provides fertile ground for Canadian business ventures.   

Business owner Bruce Hicks, a resident in Hong Kong since 1984, says the suggestion that Canadian companies use Hong Kong as their gateway into Asia, “makes absolute sense”.  Building on the strong affinity between Canada and Hong Kong, Hicks explains that it’s possible to get work done in Hong Kong quickly.  The labour force offers a key advantage.  Hicks is the managing director of a green technology company called TPIZ Resources but has had experience in other sectors as well.  Finding trained workers who speak English is much easier in Hong Kong than in Beijing where there is an intense demand on people with technical skills who speak English.   

Hicks also praises the service attitude in Hong Kong explaining that, “there’s still pride in doing a good job in Hong Kong.”   

In the environmental sector in particular, Hicks believes there is a great deal of opportunity for Canadian firms.  Read more about that in the next story in this series.

Canada’s Trade Commissioner in Hong Kong, John Zimmerman, agrees that setting up in Hong Kong can help Canadian firms accelerate the process of breaking into the market in mainland China.  “It’s not the only entry into China but it’s an easy one,” says Zimmerman. 

In fact, according to Invest HK’s Simon Galpin, it takes just over a week to set up a business in Hong Kong.  Business start up is very straight forward with few companies requiring licenses.  Add to that low taxes, (many sources of income are tax free like capital gains, investment and sales) and duty free entry of products like wine and beer, and Hong Kong provides a low risk option.  Invest HK offers unparalleled support and advice which will be the topic of a later article on Ventures.

Hong Kong is a lucrative market with seven million residents as well as 29.5 million visitors each year, mostly from mainland China.  It’s a test market for many other Asian markets and is in fact, the largest Asian market for Canadian beef and pork. 

Zimmerman says that the Hong Kong Airport handles the highest volume of cargo of any airport in the world and provides duty free entry to China.  He points out that if a Canadian company wants to ship fruit into China, Hong Kong is the way to go since logistical challenges including customs clearance and integration to mainland China, are reduced to zero. 

Even more important perhaps is that many decisions made in Hong Kong affect business in China, according to Zimmerman.  Beijing is supportive of the Hong Kong economy.  Companies in Hong Kong have a great influence on decisions made in Beijing.  The Hong Kong MTR subway has for instance, been contracted to run the subway on the mainland.  There is a good chance that they’ll take their own subcontractors with them including Ontario engineering firms that have been involved in Hong Kong.  

Dr. William Yip is perhaps the most direct in his advice about using Hong Kong as a stepping stone into China.  It has often been said on Ventures that a Hong Kong partner who understands the business culture is a huge asset.  But Dr. Yip adds another layer of complexity by explaining that business operations in China must have the support of senior party officials.  A partner who can liaise with senior officials is essential.  “In Western culture, all roads can lead to the room,” adds Yip, “but in China, there are lots of dead end roads but they tell you all roads lead to the room.”

All agree on one thing:  the fondness between Canada and Hong Kong and China as well, means that half the battle is won for Canadians wishing to do business in Hong Kong and China.  It’s up to Canadians to wage the rest of the battle and just get started.

Learn about the opportunities for Canadian firms in green technology in the next story in this series.