Chinese Firms Use Hong Kong As Stepping Stone To Global Market Place

by Mary Swire, Tax-News.com, Hong Kong

10 May 2005

A recently published survey by the Hong Kong Trade and Development Council has shown that the majority of Chinese enterprises intend to use the improved links with Hong Kong as a means to access the global market place.

According to the results of the survey, which was conducted between December and February, almost 60% of the 334 responding enterprises in East China's Jiangsu and Shandong provinces indicated that they intend to set up offices or agents in Hong Kong over the next two years. At present, around 15% of companies have established a presence in Hong Kong.

In addition, the poll found that 20% of the respondents have used Hong Kong's consulting services, while 84% of the mainland firms said they are willing to take advantage of Hong Kong's marketing, business partnership and financing services.

“Mainland enterprises are eager to expand into Hong Kong, as the territory is often regarded as a stepping-stone to the rest of the world,” TDC Chief Economist Edward Leung told a media briefing.

“Hong Kong is the key centre for Chinese firms to obtain their needs,” he added.

The survey found that insufficient funds, an inadequate overseas sales network and a shortage of certain skills are the biggest obstacles for private Chinese companies to develop their businesses locally.

However, the TDC reported that 30% of firms are planning to list on a domestic or international market at some point in the future, whilst 67% are aiming to improve their overseas sales reach by using Hong Kong as a conduit to the global market place.

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