Since the UK government handover to China in 1997, Hong Kong has become a Special Administrative Region (SAR) of China and includes Hong Kong Island, the New Territories and over 200 smaller islands. It has a population of 7.01 million (2009) crammed into a space of around 429 square miles.
Why Export to Hong Kong?
There are few, if any, better business markets for UK exporters, who want a presence in the Far East, than Hong Kong. Hong Kong is already number 15 on the list of the UK’s top trading partners (Exports General Trade) with an export value of £1,181 (millions) in the 3rd quarter of 2010. It is currently ranked the world’s 12th largest trading economy and 7th in the world in terms of GDP (per capita).
Hong Kong – the World’s Freest Economy
UK Trade and Investment (UKTI) also remind potential exporters to Hong Kong that it has been,"Ranked as the world’s freest economy in the Wall Street Journal and Heritage Index of Economic Freedom for 15 consecutive years.”
Already in place is the wide-ranging Economic Stimulus Package announced by Hong Kong Chief Executive Donald Tsang in December 2008. The stimulus package, designed to counter the world economic downturn, offered HK$100 billion in loan guarantees for enterprise. The incentive allowed huge infrastructure projects to be undertaken, including work on the giant West Kowloon Cultural District, a new cruise terminal and a number of tourism related developments. These projects, and others, offer UK companies which export to Hong Kong a golden opportunity to expand their business.
The Closer Economic Partnership Agreement (CEPA)
Although some of the CEPA regulations are relatively complex, the agreement essentially offers the manufacturers of all Hong Kong made goods, providing they comply with CEPA rules of origin, tariff-free entry into the Chinese mainland markets and consequently has an indirect benefit to UK exporters. It’s also worth noting that much of Hong Kong’s manufacturing has been relocated to the Pearl River Delta (PRD) region in the southern part of mainland China.
With its long association with the UK, open economy, proximity to the Chinese mainland markets and the wider Asia-Pacific markets, Hong Kong offers UK business the opportunity to access a number of key market sectors including:
- Aerospace
- Construction
- Education
- Environment
- ICT
The Hong Kong Special Administrative Region of China has a certain amount of autonomy from the Chinese government. The Joint Declaration, an agreement signed by the United Kingdom and China in 1997, guaranteed that Hong Kong’s way of life would not change until at least 2047. In essence this allows Hong Kong to keep its independent judiciary, convertible currency linked to the U.S. dollar and its status as an “economic entity” with full membership of the World Trade Organisation.
Investment in Hong Kong
Perhaps a final word from UK Trade and Investment, which says that Hong Kong is, “One of the easiest places in the world to do business, Hong Kong generally presents less challenges for UK companies than many overseas markets…”
- Increased Market Share for UK Exports to Vietnam
- UK Trade and Investment Support for UK Exporters to South Korea
- UK Trade and Investment Targets India
- UK Trade and Investment Targets Asian Markets
Sources:
HM Revenue and Customs, Overseas Trade Statistics, 3rd Quarter 2010, site accessed 2 February 2011-02-02
UK Trade and Investment, Hong Kong, site accessed 2 February 2011-02-02
UK Trade and Investment, Doing Business in Hong Kong, site accessed 20 February 2011
Hong Kong Economic and Trade Office, Brussels, Hong Kong e News – 10 December 2008 – issue 11, site accessed 2 February 2011
Hong Kong Trade Development Council, Closer Economic Partnership Arrangement (CEPA), site accessed 2 February 2011
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