Friday, 28 August 2015

HK keen to help SMEs prosper

Secretary for Commerce & Economic Development Gregory So

We have experienced a phenomenal growth in our start-up ecosystem over the past couple of years. For example, the number of co-working spaces and accelerator programmes has increased from three to well over 40, and there are start-up-related events in our city almost every single day.

 

Also, quite a number of our start-ups have made remarkable achievements - some have secured substantial investments, some have been acquired by large corporations, while others have carved their niches in the global marketplace. These trends demonstrate the rising participation of entrepreneurs, mentors and investors in our vibrant ecosystem.

 

You may ask what makes Hong Kong stand out as a start-up hub. First, Hong Kong is a free and competitive economy. We follow the common law legal system and adopt internationally recognised codes of practices in business and commerce. We have a low and simple tax system with no goods and services tax or value-added tax.

 

We have a clean and efficient government and a level playing field for all companies. Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained the top spot in the Heritage Foundation's Index of Economic Freedom for 21 years in a row. This status reflects real advantages for starting businesses in Hong Kong.

 

Resource rich

Then, the resources. We know that start-ups and tech enterprises need many things: seed funding, office space, work visa facilitation, communities network, business development support, design support, promotion platforms, market access and serial investment, et cetera.

 

And so we offer an excellent network to address such needs. We have different types of public and private initiatives especially designed to nurture start-ups and attract talents, including incubation programmes, government funding schemes, networking communities and co-working spaces, et cetera.

 

We are also blessed with the geographical advantage. Our location has enabled us to become the key platform between Mainland China and the world in technological collaboration and trading. We are strategically located at the heart of Asia and at the doorstep of Mainland China. Half of the world's population can be reached within five hours' flight time from Hong Kong.

 

For start-ups and tech enterprises looking to tap into Asia's huge market potential, we are the most convenient base, providing world-class transport, and unrivalled logistics and information and communications technology infrastructure.

 

Safeguarding creativity

What else have we done? In line with our policy to promote innovation and technology, Hong Kong has a comprehensive intellectual property protection regime to effectively protect the fruits of innovation and creativity.

 

With overseas IP owners eagerly eyeing the Asian and the Mainland market, Hong Kong is poised to develop into a regional marketplace providing professional services in licensing, franchising and IP registration. Our intermediaries can help manage and add value in the IP trading and management processes.

 

Start-up is indeed an area with huge potential for growth in Hong Kong. I am sure you would be interested to hear what are the potential growth areas where Hong Kong has a unique advantage. Allow me to highlight a few.

 

Potential growth areas

First, FinTech. As a global financial centre and a hub for retailers and brands from around the world, Hong Kong offers an ideal platform for FinTech start-ups and enterprises to facilitate functions such as payment, clearing and settlement systems, big data analytics, cloud computing, information and risk management and network security. Our city may enhance operational efficiency and help open new modes of development for the financial and e-commerce sectors.

 

Second, the Internet of Things (IoT). We are now living in a world full of devices and systems which talk to each other. IoT is indeed a disruptive and transformational technology, and its impact will certainly be felt across all industries and all areas of society. These IoT devices need to be physically manufactured, and this is where Hong Kong comes in.

 

Hong Kong has deep and broad expertise in design and software development. More importantly, we are strategically located next door to Shenzhen, the hardware capital of the world. We have easy access to the Pearl River Delta and its sophisticated supply chain and logistics platform. We have all the ingredients for start-ups and tech enterprises to develop their prototypes, validate their products and develop large-scale manufacturing to bring them to market in the fastest time.

 

Towards smarter cities

The third area is smart city technologies. Multinational corporations such as Schneider Electric are using Hong Kong as the base for developing and testing total solutions and devices. Other major players like Siemens, Hitachi, NEC and Panasonic are also closely watching the market opportunities in this area.

 

With the new phase three development of the Hong Kong Science Park, the expansion plans at the Hong Kong International Airport, and planned developments in the densely populated urban areas of Hong Kong, our city offers unique opportunities for start-ups and large corporations involved in smart city technologies to launch their solutions for Asia from here.

 

Our Government is committed to helping transform Hong Kong into a leading destination and hub for innovation and entrepreneurship. I encourage you all to consider using Hong Kong as your lab, showcase and global launch pad.

 

Hong Kong offers opportunities for technology firms like yours to get a foothold in the massive, yet complex, China market as well as markets across Asia. Apart from business-friendly policies, Hong Kong also has a great location, sophisticated infrastructure and a robust IP protection regime to help innovative companies take off in Asia.

 

Secretary for Commerce & Economic Development Gregory So gave these remarks at the National Institute of the Entrepreneur in Mexico City.


Regards,
Otmane El Rhazi
Department of Commerce
Economic Development
Text/Mobile, +44 7414 782 320

Tuesday, 25 August 2015

HK connections open up new markets

Secretary for Commerce & Economic Development Gregory So

Chile has long and strong ties in our part of the world. Your country was the first South American nation to establish an office in our neighbouring Guangdong Province in 1845. Back then, Hong Kong was nothing more than a fishing village.

 

Today, our region is at the heart of global trade and Hong Kong is right in the thick of the action. More than 7,500 overseas and Mainland Chinese companies maintain offices here. About half of them use Hong Kong as regional headquarters or offices.

 

Hong Kong is also a prominent source and destination for foreign direct investment (FDI). According to a recent report of the United Nations Conference on Trade and Development, Hong Kong ranked number two in global FDI inflows, second only to Mainland China. We were also the world's second largest outward investing economy, second only to the United States. In particular, we have a very significant volume of trade and investment flows with Mainland China.

 

We are a dynamic global city thanks to a number of enduring advantages. These include the rule of law supported by an independent judiciary, a low and simple tax system, and an open and business-friendly environment.

 

We embrace the internationally recognised codes of practice in business and commerce. And we guarantee a level playing field for all companies, and free flows of capital, information and talent. Add it all up, and you can understand why the Washington-based Heritage Foundation has named Hong Kong the world's freest economy for the past 21 years.

 

We welcome more companies from Chile to take full advantage of Hong Kong's strengths to connect with new markets in Asia and Mainland China in particular.

 

Enhanced connectivity

Speaking of new markets in Mainland China, I would like to share with you the latest vision from our Central Government, the Belt & Road initiatives. The Belt & Road is a development strategy designed to enhance connectivity and co-operation, and integrate China more fully into the world economy.

 

The "Belt" refers to the New Silk Road Economic Belt, which will link China with Europe through Central and Western Asia. The "Road" is the 21st Century Maritime Silk Road. It will connect China with Southeast Asian countries, as well as Africa and Europe.

 

The Belt & Road initiatives seek to link up different regions in Asia, Europe and Africa, and promote policy co-ordination, infrastructural facilities connectivity, unimpeded trade and investment, deeper financial integration and stronger people-to-people bonding among countries along the routes.

 

The Belt & Road will generate demands and increase the volume and intensity of international trade and investment flow among countries on the routes, as well as the two-way traffic in and out of China.

 

Super-connector role

Hong Kong is well placed to serve as the super-connector for all these exciting developments. For example, being an important financial, commercial and maritime centre in the world, Hong Kong will provide a wide range of professional services for the Mainland enterprises to go global in pursuit of the Belt & Road opportunities.

 

Foreign investors, including those beyond the Belt & Road region, will definitely benefit from these initiatives by establishing a foothold in Hong Kong to seize the business opportunities.

 

Chile is Hong Kong's second-largest trading partner in South America. Chile has extensive free trade agreements with trade partners, including China and Hong Kong. All these come together nicely when we explore commercially valuable co-operation opportunities between Hong Kong and Chile in the context of the Belt & Road. We encourage Chilean businesses to make use of Hong Kong as an investment springboard or a logistics hub when they venture into the markets of the Belt & Road countries.

 

Free trade commitment

Hong Kong has accumulated a lot of experience in opening up new markets and establishing strong links with partners around the world. For more than three decades, our city's commitment to free and open trade has contributed to the opening up and reform policies in Mainland China.

 

Hong Kong has always been the "super-connector" connecting Mainland China with the rest of the world. We are happy to share our experience and business connections, as we believe in making the pie bigger rather than getting a bigger share of a small pie.

 

Hong Kong has open borders and, more importantly, our people - including our business people - are very versatile and have open minds. We welcome partners from different parts of the world, and that of course includes Chile.

 

I encourage Chilean companies to take advantage of our Trade Development Council's close contacts with Mainland businesses. The TDC has a great deal of expertise in matching overseas companies with the right partners in the Mainland. I know the TDC's representatives here today will be happy to share their insights with you.

 

Tariff-free access

I also encourage Chilean companies to take advantage of the Free Trade Agreement (FTA) between Hong Kong and Chile. Under this FTA, all Chile-origin products enjoy the certainty of tariff-free access to Hong Kong. Chilean services providers also benefit from the enhanced legal certainty of market access in Hong Kong for a wide range of sectors.

 

Beyond that, Chilean companies may also take advantage of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), which provides preferential treatment for Hong Kong service suppliers as well as tariff-free treatment for products of Hong Kong origin. CEPA is nationality-neutral. With CEPA, Latin American companies set up in Hong Kong can gain greater and easier access to the Mainland market through Hong Kong.

 

Chile and Hong Kong may be separated by almost 20,000 kilometres of the Pacific Ocean, but we have all the right connections to work together closely. We treasure our partnership with Chile. Not only are we both strong advocates and practitioners of free and open trade and investment, we have also been working side-by-side in numerous fora, including the World Trade Organisation and Asia-Pacific Economic Cooperation (APEC).

 

I look forward to exploring new ways to further strengthen our partnership during this trip. Together, Chile and Hong Kong can enjoy the fruits of stronger bilateral trade. We can also shine a light on the opportunities that free markets bring to our economies, our APEC region and to the rest of the world.

 

Secretary for Commerce & Economic Development Gregory So gave these remarks at a luncheon organised by the Asia Pacific Chamber of Commerce, HSBC and the Chile Pacific Foundation in Santiago, Chile.


Regards,
Otmane El Rhazi
Department of Commerce
Economic Development
Text/Mobile, +44 7414 782 320

HK, Chile serve as mutual gateways

Secretary for Commerce & Economic Development Gregory So

Chile is our important trading partner, not only because you are our second largest trader partner in South America, but also because we see Chile's great potential as an emerging market and our gateway to the Latin American markets.

 

That Chile is our first free trade agreement (FTA) partner in Latin America clearly manifests our strong determination to strengthen our bilateral relationship.

 

While Chile and Hong Kong might be half the globe apart, the physical distance has not hindered bilateral trade. Our bilateral merchandise trade has grown at an average of 7% per annum since 2010. And I am glad that many high-quality Chilean goods such as wine, fruits and seafood have found favour with discerning consumers in Hong Kong.

 

The FTA between Hong Kong and Chile, which signifies a major milestone of our trade relations, is approaching its anniversary since its implementation last October.

 

Under the FTA, all Chile-origin products enjoy the certainty of tariff-free access to Hong Kong. Chilean services providers also benefit from enhanced legal certainty of market access in Hong Kong for a wide range of sectors.

 

With the FTA in place, I am sure business sectors of both sides, including those present here today, will factor this into their business plans and make the best use of the valuable new market opportunities.

 

To enhance investment flows between the two economies, Hong Kong and Chile are currently negotiating a more comprehensive agreement on investment promotion and protection under the FTA. I look forward to an early and successful conclusion of the agreement, which would certainly add further impetus to our bilateral investments.

 

Solid investment conduit

Speaking of investment, Hong Kong is both a prominent source and destination for foreign direct investment, or FDI. According to a recent report of the United Nations Conference on Trade & Development, Hong Kong ranked number two in global FDI inflows, second only to Mainland China.

 

We were also the world's second largest outward investing economy, second only to the United States. In particular, we have a very significant volume of trade and investment flows with Mainland China.

 

With the Central People's Government's policy of helping enterprises in Mainland China and Hong Kong to go global together, we are confident that Hong Kong would remain the most important investment conduit for businesses in the Mainland.

 

Chinese companies nowadays are very eager for opportunities to invest and establish a presence overseas. The potential investment from Mainland China to Chile through Hong Kong could be enormous.

 

Besides the role of an investment conduit, Hong Kong also serves as an excellent base for foreign businesses with an eye on the markets of Asia and the Mainland. 

 

Level playing field

Hong Kong is strategically located at the heart of Asia - at the doorstep of Mainland China and the Association of Southeast Asian Nations region. We have an open and business-friendly environment with low and simple taxes. We practice the rule of law, underpinned by judicial independence. We embrace the internationally recognised codes of practice in business and commerce. And we guarantee a level playing field for all companies, and free flows of capital, information and talent.

 

In a nutshell, Hong Kong provides a familiar financial, legal and cultural environment for Chilean companies to access a wide audience in our part of the world. Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained top spot in the Heritage Foundation's Index of Economic Freedom for 21 years in a row. This status reflects real advantages for doing businesses with Hong Kong and in Hong Kong.

 

What's more, Hong Kong is also an ideal showcase for Chilean firms to promote their high-quality goods to consumers across Asia. On its own, Hong Kong is a relatively small city with a population of just 7 million. But when you consider that we received about 61 million visitors last year, including more than 47 million from the Mainland, Hong Kong is an ideal platform for premium Chilean products, such as food and wine, to reach a wide audience in our part of the world.

 

It is no secret that visitors from Mainland China recognise brands and products they see in Hong Kong as something reliable and of premium quality.

 

Partners in wine

Speaking of wine, Hong Kong, being a successful regional wine hub, is Chile's ideal partner. Our success can be attributed to, among others, the removal of all our wine duties in 2008. Since then, Hong Kong's wine imports have thrived with a twofold increase to around US$1.1 billion in 2014.

 

I am proud to let you know that Hong Kong has been the world's number one wine auction centre for the last five years, and the outlook of our wine business remains very positive.

 

Hong Kong and Chile have long been close partners in wine trade. Chile is Hong Kong’s 5th largest wine importing origin by value, and 4th largest by volume. Our close partnership was exemplified in the wine memorandum of understanding signed between the two sides in 2010.

 

Hong Kong has a sizeable group of wine connoisseurs who appreciate good wine and fine cuisines from around the world. And we love Chilean wines. A vivid example is the establishment of the Wines of Chile Academy in Hong Kong earlier this year. Chilean wines like Chardonnay from Casablanca and Cabernet Sauvignon from the Central Valley have quite a following in Hong Kong.

 

Super-connector role

Hong Kong is more than being a major market, but also the gateway to the growing wine market in Mainland China. Our wine re-exports to the Mainland grew 3.5 times since we removed our wine duty in 2008.

 

Our wine hub role becomes even more relevant to Chile, since the Mainland's tariff for Chilean wines was eliminated earlier this year under the Chile-China Free Trade Agreement.

 

Since the FTA was signed in 2006, the Mainland's demand for Chilean wines has leaped. So has re-exports through Hong Kong, which has increased over 10 times to US$5.6 million in 2014. There is much room for further expanding our wine trade given the growing demand for wine from the Mainland.

 

Hong Kong has always been the super-connector connecting Mainland China with the rest of the world. As your friend and business partner in Asia, Hong Kong is ready to facilitate your ventures and help grow your businesses.

 

I invite and encourage you all to make greater use of Hong Kong's unique advantage in terms of our physical proximity with the Mainland, as well as our first class infrastructure and our highly competitive business and professional services.

 

Secretary for Commerce & Economic Development Gregory So gave these remarks at a networking luncheon with the Chilean business community organised by the Hong Kong Trade Development Council in Santiago.


Regards,
Otmane El Rhazi
Department of Commerce
Economic Development
Text/Mobile, +44 7414 782 320