Hong Kong Week: Territory looks to the future

HONG Kong might have historic links with the UK but the former colony can still provide huge opportunities for UK firms according to those based there.

A round table discussion hosted by international law firm DLA Piper at its Hong Kong office and chaired by David Parkin of TheBusinessDesk.com, focused on whether Hong Kong can provide real advantages to British companies ambitious to enter the Chinese
market.

Brett Stewien, mergers and acquisitions partner with DLA Piper, said: “Hong Kong remains a big, important stepping stone for businesses looking to trade with China.

“Hong Kong is a very simple system. It has the largest number of lawyers and venture capitalists in Asia. Interest rates are still incredibly low, less than US rates which are in a market that is in recession whereas Hong Kong is a market that is booming.”

The round table participants agreed with Mr Stewien that while many Western countries are still suffering the affects of recession, Hong Kong has moved forward and has seen a number of major groups, including western luxury brands such a Samsonite, Prada, L’Occitane, float on the Hong Kong stock market.

The opportunities in China are sharply brought into focus when you see some of the figures. The biggest flotation on the Hang Seng stock exchange in Hong Kong last year was the Agricultural Bank of China. The bank floated with a market capitalisation of more than $20bn and has a staggering 320m retail customers in China, 2.7m corporate clients and almost 24,000 branches.

Raymond Yip, assistant executive director of the Hong Kong Trade Development Council, said that the region provides a “level playing field, it is similar to British business”.

As an example of Hong Kong’s laissez faire approach, Mr Yip pointed to the government’s decision to drop duties on all alcholic drinks in 2008.

The duty on wine had been 40%, having been cut from 80% the year before. The move was aimed at making Hong Kong the wine trading hub of Asia.

“Wine-related businesses, such as auction and storage houses, have been attracted to Hong Kong because there is no duty on wine at all,” said Mr Yip.

Louise Oram, of Hong Kong-based public relations firm ImpactAsia, works with many major travel brands such as the Fairmont, Sofitel and Mandarin Oriental hotel groups as well as Macau-based luxury car importer Top Marques and tourism body Welcome to Yorkshire.

The firm also works with the Hong Kong International Art Fair which brings dealers and buyers to the region from across the world.

“Like wine, art offers a new investment opportunity in Hong Kong,” said Ms Oram.

Hong Kong is the number one market for Swiss watches in the world and it is the biggest market per capita for Rolls-Royce.

However there are challenges for many luxury brands, particularly counterfeiting of goods in China.

Former Leeds-based lawyer Ed Chatterton moved out to DLA Piper’s Hong Kong office last year and the intellectual property expert has been busy advising clients, including many luxury brands, on how to protect their interests in Asia.

Mark Fenoughty held senior finance roles with Sheffield United and Leicester City before joining DLA Piper in Sheffield.

He recently moved out to become finance director of the law firm’s Asia Pacific region.

“It’s easy to do business and live in Hong Kong. Living and working in mainland China can be a culture shock to the ex-pat on their first tour of Asia although that is changing a little, particularly in Shanghai.

“In contrast Hong Kong is a very easy place in which to settle for many reasons but particularly due to large number of ex-pats who are here and who have been through the process.

“Hong Kong used to be very English but that has changed with far more Europeans, Americans and Australians as well as many people from across Asia. I think the word is fusion? This makes for an energetic and exciting place to live with English being the dominant business language and a legal system that is far more western than eastern.

“The lack of currency controls is also a benefit compared to the mainland and so with all these attractions it is not surprising that firms consider a base here from which to strike out for China,” added Mr Fenoughty.

Firms interested in doing business in Hong Kong and the wider Chinese market can attend Think Asia Think Hong Kong events being held in London on September 13 and Leeds on September 14. Mr Wong will be speaking at the Leeds event, which is taking place at the Hilton Hotel.

For more information go to: www.thinkasiathinkhk.com

TheBusinessDesk.com’s Hong Kong Week is in association with international law firm DLA Piper.