A new survey has found around a third of respondents from the professional services sector – including accountancy, legal and HR (30 per cent) – see Hong Kong as the gateway into the Chinese mainland and other Asian countries. Research for Hong Kong Trade Development Council (HKTDC) in advance of its flagship “Think Asia, Think Hong Kong” event in London on 21 September 2017 said that although confidence for business growth in Europe and Asia are broadly similar (56 per cent and 57 per cent respectively) 46 per cent of UK professional services businesses state that the Brexit debate has made the prospect of trading with Hong Kong or China more attractive.
A huge 60 per cent of professional services firms believe that it is easy to set up as a foreign business in Hong Kong and 40 per cent are attracted to its low tax rates. Additional assets identified include Hong Kong’s good levels of English (57 per cent), the long standing political relationship between Hong Kong and the UK (22 per cent) and its proximity to China (39 per cent). The biggest opportunities that businesses recognise for launching into the Chinese mainland is its huge consumer base (35 per cent), its growing middle class (25 per cent) and ability to be early adopters of technology (20 per cent), whilst the challenges include the language barrier (44 per cent), the rule of law (46 per cent) and perceived red tape and regulation (41 per cent).
The research suggests that professional services SMEs are underestimating what a well-established route launching into Hong Kong is.
When asked how many UK companies currently operate in Hong Kong, 38 per cent could not identify any, when the actual answer is around 1,000. Not surprisingly the big global names of HSBC and Barclays were the most recognised at 44 per cent and 33 per cent respectively.
William Chui, regional director, Europe of the HKTDC comments: “It’s great to see that UK professional services businesses are identifying the benefits of launching into Hong Kong as part of their global growth strategy at this time of European uncertainty. And also, that they are valuing Hong Kong as a hugely well positioned launch pad for businesses wanting to ‘crack’ the lucrative but notoriously challenging to penetrate Chinese mainland market. What I think a lot of UK professional services SMEs are failing to realise however, is how many UK businesses of their size are making a real success of launching into Hong Kong.”
17 per cent of professional services businesses surveyed have traded with Hong Kong or China in the past year, but a further 43 per cent have been considering it over that time frame.