- 72% of finance SMEs businesses are confident of business growth within Asia
- 23% and 13% respectively have considered China and Hong Kong as opportunities for global growth
- The finance sector is the one most likely to say that the Brexit debate has made the prospect of trading with Hong Kong or China much more attractive at 32%
- Only 21% of finance businesses consider red tape and regulation a challenge of launching in China
Research for Hong Kong Trade Development Council (HKTDC) in advance of its flagship “Think Asia, Think Hong Kong” event returning to London on 21 September 2017, found that almost half of respondents from the finance sector, which includes banking, finance and insurance (46%) see Hong Kong as the gateway into the Chinese mainland and other Asian countries. 72%of UK finance SMEs are confident for business growth in Asia, 63% in Europe, while 58% state that the Brexit debate has made the prospect of trading with Hong Kong or China more attractive.
27% of finance SMEs believe that it is easy to set up as a foreign business in Hong Kong and 21% are attracted to its low tax rates. Additional assets identified include Hong Kong’s good levels of English (46%), the long standing political relationship between Hong Kong and the UK (32%) and its proximity to China (40%). The biggest opportunities that businesses recognise for launching into the Chinese mainland is its huge consumer base (39%), its growing middle class (35%) and ability to be early adopters of technology (35%), whilst the challenges include the language barrier (60%), the rule of law (42%) and perceived red tape and regulation (21%).
The research suggests that finance SMEs are underestimating what a well-established route launching into Hong Kong is. When asked how many UK companies currently operate in Hong Kong, 14% could not identify any, while 21% opted for between 250 and 500, when the actual answer is around 1,000. Not surprisingly the big global names of HSBC and Barclays were the most recognised at 46% and 47% respectively.
William Chui, Regional Director, Europe of the HKTDC comments: “It’s great to see that UK finance 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 finance SMEs are failing to realise however, is how many UK businesses of their size are making a real success of launching into Hong Kong.”
19% of finance businesses surveyed have traded with Hong Kong or China in the past year, but a further 28% have been considering it over that time frame.