Hong Kong's standing as a regional business partner to Germany and the pivotal role it plays in the country's Far East trade strategy seem stronger than ever, judging from trade figures. The country also sees a stronger consumer market in the making in China, with the mainland's imminent entry to the World Trade Organisation (WTO). Hong Kong exports to Germany last year were up 13.7 per cent, and Germany's exports to Hong Kong went up 12.5 per cent. 'Generally, looking back at last year we are very upbeat,' said Dr Jurgen Morhard, deputy consul-general here. Electronics, cars, special machinery and telecommunications equipment are Germany's main exports to Hong Kong. Textiles and garments, electronic machinery and office machines are Hong Kong's most important domestic exports to Germany. 'Our market share in Hong Kong is around 3 per cent - on the same level as Britain's,' Dr Morhard said. 'Germany and Britain are Hong Kong's most important trading partners in the European Union. Hong Kong has traditionally been stronger in relation to Britain, but it has been diversifying,' he said. Germany is now the SAR's fourth most important market for domestic exports, following the United States, mainland China and Britain. 'Germany is also the largest economy in Europe. It's also the largest trading partner in all the other areas of the world,' Dr Morhard said. With Hong Kong's transition to a service-oriented economy, the nature of German businesses in the territory has also changed. Twenty-nine per cent of German businesses here are now linked to the service industries. 'Electronics and electrical equipment come next, with 12 per cent. Textiles are also roughly 12 per cent. Chemical and machinery industries both account for about 11 per cent. 'What is important is that German representation of business has changed completely with the transformation of Hong Kong as a centre of service industries,' Dr Morhard said. Apart from its importance as a trading partner in its own right, Hong Kong also serves as an important platform for German companies doing business in the region. 'Seventy-two per cent of German companies located in Hong Kong are also doing business in the mainland,' Dr Morhard said. Despite all the talk about Singapore and Shanghai posing a challenge to Hong Kong, German companies continue to have considerable faith in the SAR, Dr Morhard said. In addition to its legal and tax systems, Hong Kong has a host of other advantages, including a well-developed infrastructure and the government's non-interventionist approach to business. Another key attraction is the SAR's proximity to the important markets of North Asia, which is what gives Hong Kong an edge over Singapore. 'From the German point of view, Hong Kong might be changing, but its role as a regional headquarters has been consistent,' Mr Morhard said. 'Based on a survey by the German Chamber of Commerce, more than 90 of the German companies with regional headquarters here had no plans to change that role in the coming years.' What is also important is Hong Kong's growing integration with the hinterland. 'With the WTO, there are prospects that China will open up and become an even stronger consumer market. No one can ignore that the Pearl River Delta is an economic powerhouse in China,' Dr Morhard said, adding that Hong Kong's importance for doing business with China can only grow after the country's entry into the WTO. But Hong Kong will continue to be an important market in its own right. Dr Morhard pointed to energy, health care, IT and environmental protection as areas that German companies would be interested in exploring. 'There are lots of opportunities here for new companies. Many new economy companies have come to Hong Kong over the last year and started operations,' he said.