In this blog by The Airport Economist Tim looks at Hong Kong, this unique city which serves as both Asia’s financial centre and a gateway to the massive Chinese market. Hong Kong is a fascinating metropolis where East truly meets West and is a perfect place for the business traveller looking for a regional and global view of world markets.
In some ways, Hong Kong is a city made for international trade. But it hasn’t always been. It’s amazing to think as you look at its massive sparkling skyscrapers all so densely packed together on a tiny island that it was once a sleepy Chinese fishing village. In fact, Hong Kong’s history has been shaped by both British and Chinese influences. It became contested territory during the Opium wars and then the British used Hong Kong as the central point to its commercial empire in what the British called “The Far East” (maybe Australians prefer to say “the Near North”). And after the declaration of the People’s Republic of China in 1949, embargoes placed on Mao’s new state meant that all business to and from the mainland went through Hong Kong, many mainlanders moved their business to Hong Kong, and foreign business relocated to the island from Shanghai. As a result Hong Kong thrived under managed capitalism and was able to build up world class infrastructure in trade, finance and technology.
But Hong Kong got a second lucky break. In lead up to the hand back of Hong Kong to China in 1997, China had itself discovered the economic efficiency of the market, as Deng Xiaoping, the father of modern China had developed the Pearl River Delta, the area between Guangzhou and Shenzhen, home to 120 million people, as the special economic zone to display China’s manufacturing prowess. So Hong Kong, after decades playing a central role to global capitalism, British Empire style, found itself on the doorstep of China’s modern economic miracle. It truly managed to find itself having the best of both worlds.
Nowadays, Hong Kong truly does see itself as a world financial centre and as a Gateway to China picking up both strands of its history as being central to the British empire of the past and the modern China of the future. As a global hub it does have its advantages. As an airport economist would know, half of the world’s population can be reached in a five hour flight from Hong Kong airport. Its deep natural harbour makes it an ideal global trading hub, and it has the world’s busiest air cargo centre and the world’s third busiest container port. Seventy of the world’s largest banks have their offices in Hong Kong and its home to the world’s sixth biggest stock market. And this is all for a tiny island housing 7 million people!
And then there’s the Gateway to China part. The growth of the Pearl River Delta has been a boon to Hong Kong with the massive industrial cities of Guangzhou and Shenzhen on its door step. Massive numbers of mainland Chinese come to Hong Kong to shop and global retailers use Hong Kong as a bit of test bed for what the mainland Chinese will buy. The links between the mainland and Hong Kong are becoming more seamless and they will be further boosted by the new rail link that will enable the journey of some 142 kilometres between Hong Kong and Guangzhou to be taken in just 48 minutes.
But for a global hub, Hong Kong is regarded as a relatively easy place to do business. As Greg Keith, CEO for Grant Thornton Australia says: “The advantage of Hong Kong is that it’s actually not that big. The key players know each other and they trust each other. People will soon connect you with the right people if you have one key person to kick you off.”
Hong Kong’s institutions are also very familiar to foreign businesses especially those from the west as they are also based on English common law, with similar legal and accounting processes to doing business in Australia, the UK, Canada or the USA. And as Greg Keith notes, this is combined with “excellent cultural and regional knowledge” from the top international staff that you get in Hong Kong ensuring that you really do have the best from both the East and West in business practice.
When travelling around the world it is important to be aware of business and social etiquette. The Airport Economist show produces Tim’s Tips at the end of each episode at the airport as Tim flies off to his next international business destination.
Here are Tim’s Tips for Hong Kong:
- Be culturally respectful, but be yourself. Know how to present business cards and learn about the local customs.
- You don’t have to learn Chinese to succeed in business here.
- Get help from Invest Hong Kong, government bodies & the chambers of commerce to get started.
- Mix east and west – get to know locals as well as expats
- Treat Hong Kong as a significant economy in its own right – as well as a gateway to china
More articles for you:
- How to do business in China
- The Numbers Game: Where the Bolly Hell are you? Looking at India
- Japan: 60 second business etiquette tip
The Airport Economist TV show on how to do business in Qantas destinations in Asia and around the world is currently being shown on Qantas Domestic and International flights.
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