Shenzhen showcase puts HK in picture
The Shenzhen municipal government and several local trade groups are helping Hong Kong exporters break into the robust mainland consumer market by renting out exhibition space at cheap rates.
Hong Kong businesses are being offered incentives to showcase and distribute their products at a newly established trade hub called 'PRD Hong Kong Products Sales Centre' at China South City mega distribution complex in Shenzhen.
Federation of Hong Kong Industries chairman Cliff Sun Kai-lit said the offer was 'a low-cost and low-risk option' to enter the market.
Spurring domestic consumption and raising consumer spending power are top priorities for the central government, according to the mainland's 12th five-year plan from 2011 through 2015. The state policy also encourages Hong Kong exporters to upgrade to higher-value products and develop their own brands.
China South City Holdings co-chairman Ricky Cheng Chung-hing said about 40,000 square metres, or about 1 per cent of the total floor area, at the China South City complex was earmarked for leases to Hong Kong exporters under special terms.
Exporters are being offered a five-year rental contract, with the first two years rent free, except for a 15 yuan (HK$17.91) per square metre monthly management fee.
For the remaining three years, the rent will be charged at 38 yuan per square metre.
In contrast, Cheng said, the average rent per square metre in other exhibition areas within the complex was 100 yuan.
So far, about 20 Hong Kong exporters have rented a total of 3,500 square metres of floor area.
'It is a trade show that never has its curtains lowered,' Cheng added.
Hong Kong Small and Medium Enterprises Association chairman Danny Lau Tat-pong said about 20 members of the association would visit the Shenzhen complex to examine the offer.
'It is a low-risk alternative to test the waters,' Lau added.