Hong Kong’s future lies in helping Chinese firms go global, official investment adviser says
InvestHK associate director general Charles Ng says being the stepping stone to overseas key to city’s development
Hong Kong’s economic future increasingly lies in being the springboard propelling mainland Chinese companies into the global arena, the associate director general of the government’s investment promotion body has said.
With China’s “belt and road” global trade initiative and plans to link up the cities of Guangdong plus Hong Kong and Macau into a “Greater Bay Area”, the city will no longer only be a stepping stone for overseas companies to ride the Chinese boom, but more a base to help mainland firms go global, Charles Ng said.
Ng, associate director general of InvestHK, envisaged that mainland companies would in turn increasingly move to capitalise on Hong Kong’s advantages as an international financial, capital-raising and service centre to expand their horizons and tap overseas markets.
The organisation is the government’s investment promotion agency responsible for helping firms set up operations in the city.
“This will be an inevitable trend with mainland firms going hi-tech and aggressive. They want to conquer new markets,” he said.
Ng painted a rosy picture of Hong Kong’s work so far in this area, pointing to figures showing that the mainland had in the past three years overtaken the United States as the city’s top source of new companies setting up.
Last year InvestHK helped 391 overseas and mainland companies set up or expand in Hong Kong, an all-time high and a 4.3 per cent increase on 375 firms in 2015.
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The companies came from 40 economies around the world, with mainland China taking the lead on 82 firms, followed by the US with 59, Britain with 40, France at 23 and Japan contributing 20.
In 2014 and 2015, mainland China was the biggest source market with 75 and 78 companies set up.
Tourism and hospitality, transport and industrial, and innovation and technology were ranked the three most popular sectors over the past three years, with 167, 163 and 152 firms respectively receiving help to set up in these industries.
Ng said Hong Kong should look for opportunities under the Greater Bay Area plan, the Chinese government’s vision for an interconnected Pearl River Delta region in southern China linking Hong Kong, Macau and nine other cities in Guangdong province into an integrated economic and business hub. Hong Kong could also greatly benefit from Shenzhen’s development as an innovation technology base, he said.
“With economic exchanges within the Greater Bay Area, Hong Kong can create many opportunities for innovative technology, such as in financial technology and artificial intelligence,” Ng said.
He said inquiries from companies based in the Middle East had spiked on the back of the Belt and Road Initiative, China’s ambitious plan to revive international trade with more than 60 countries along the ancient Silk Road.
The investment adviser said Hong Kong’s low-tax regime, thriving capital market, intellectual property protection platforms and professional services were the main factors luring mainland businesses to the city.
Jennifer Lai, managing partner and head of North Asia at Henley and Partners, a residency and citizenship advisory firm, said rich mainlanders were being drawn to Hong Kong but also Europe as global mobility became an important factor for many of the wealthy when choosing where to base themselves.
“Some markets such as Malta or Cyprus will become a popular choice for wealthy mainland clients when they consider acquiring permanent residency or citizenship through investment. Instead of eyeing US citizenship – the top choice for mainland clients in the past – many of them now have had a change in mentality and prefer to consider Malta, Cyprus or other European countries,” she said.
Tighter and longer immigration procedures for the US had turned off some investors while easy residency requirements offered by some smaller countries in Europe had turned heads.
“For example, in Malta, there will be no language barrier as its official language is English. With an investment of €250,000 (US$295,000) you can easily acquire permanent residency which allows you to travel visa-free to 26 European countries,” she said. “This global mobility is more attractive than the benefits brought by one single citizenship.”