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Regional offices in HK soar 53pc

THE number of foreign firms opening regional bases, including regional headquarters facilities in Hongkong, leapt 53 per cent last year, a private survey of government industry department figures shows.

The survey reveals that the number of general regional offices in the territory is on average doubling by country.

But there is a trend towards a decline in the number of regional headquarters being established in the territory.

For regional headquarters, the number identified in the survey fell slightly to 588 from 602.

But the number of regional offices rose dramatically, to 757 from 278, up 172 per cent.

The survey was carried out by the political and economic section of a consulate general in Hongkong, which wanted to remain anonymous.

All survey material was taken from Hongkong government sources.

''Regional business representation in Hongkong consisting of regional headquarters and regional offices was up sharply in 1992 over 1991, rising 53 per cent, from 880 to 1,345,'' said a survey statement.

New representative offices by companies from the United States rose 20 per cent, to 384 from 320.

While total numbers show increases in representative offices, the number of regional headquarters fell 20 per cent to 206.

''In sharp contrast, the number of reported United States regional offices almost tripled to 178 in 1992 from 62 in 1991,'' said the report.

British regional offices grew 50 per cent to 152, but the number of regional headquarters fell by two to 73.

Regional offices tripled to 79.

By far the biggest growth was seen in Japanese regional offices, with the number of representative offices rising 150 per cent to 267.

The trend towards Japanese companies setting up regional headquarters is expanding, with the number in 1991 doubling over 1990 and the figure for 1992 again doubling over 1991 to 74.

Regional offices increased from 61 to 193 last year.

''One possible explanation [for the rise of regional offices against the decline in regional headquarters in Hongkong] is a shift towards a more localised business strategy that emphasises closeness to individual country markets,'' said the survey.

''The relatively stable regional headquarters offices in the face of impressive growth in the number of regional offices could represent a phenomenon more related to corporate reorganisation than actual presence or lack of it in Hongkong,'' the survey said.

Predominant regional headquarters in Hongkong were for trade and financial services.

There was a major increase in real estate-linked representative offices, from three in 1991 to 18 last year.

In Hongkong's favour relative to other centres in the region was its transportation and communication network, along with low taxes and the availability of banking and financial services.

The survey found that the cost of office rents and the shortage of managerial and professionally skilled staff went against the territory.

In relative terms the survey data showed problems linked to high staff turnover, high rental costs and shortage of qualified staff had actually declined slightly last year, while problems linked to high staff costs increased.