This paper will introduce the audience to the historical background of Hong Kong; business dos and don’ts comparing Hong Kong to the UK; financial, economic, political and social climate of Hong Kong. The aim is to provide fundamental data to assist a professional when conducting business in Hong Kong effectively but also respectfully. Hong Kong Background
Hong Kong can be found on China’s south coast region bordered by the Pearl River Delta and the South China Sea. Geographically, Hong Kong has a total area of 1,104 square kilometres which include 262 outlying islands (GovHK, 2012). The population is over 7 million, with the majority speaking Cantonese though English is still widely used. Hong Kong was acquired by the British Empire from the Qing Dynasty during the first opium war from 1839-1842 (Kan, 2010). After 150 years of British colonial rule, in 1997 China resumed sovereignty over Hong Kong (U.S. Department of State, 2012). Hong Kong is under Chinese rule and the Chinese government is responsible for Hong Kong’s security and foreign relations. Hong Kong, however, is recognized as Special Administration Region of the People’s Republic of China. This ensures that Hong Kong’s customs territory and economic entity are separate from the rest of China. This allows Hong Kong to enter into international agreements on its own behalf in commercial and economic matters (U.S. Department of State, 2012). Government/ Politics
The government of Hong Kong is noted to be economically liberal. Hong Kong is an autonomous special administrative region of the People’s Republic of China. The current government executed under Hong Kong’s basic law is secured in this autonomy for 50 years (GovHK, 2012). The governmental structure is directed by a chief executive and an executive council, accompanied with a two-tier system of a representative government and an independent judiciary. Economic & Financial Climate
Based on rule of law, limited government, regulator efficiency, and open markets ranked by the Heritage foundation with a score of 89.3, Hong Kong is ranked as the freest global economy in 2012 and has successively kept this title for the past 19 years (Heritage Foundation, 2012). Hong Kong “is a Freeport with no barriers to trade; has simple procedures for starting enterprises, free entry of foreign capital and repatriation of earnings, and transparency; and operates under the rule of law (Heritage Foundation, 2012).” Hong Kong switched from an industrialized manufacturing economy to a service based economy in the 1980s (economywatch.com). Hong Kong’s free market economy is built on the harbour, investments and trade (Sociology for Change, 2007). Hong Kong is dependent on international trade and finance. 92.3% to the GDP in 2009 which was contributed from the service sector (economywatch.com). The major industries in Hong Kong are textile/garment, banking/financial services and tourism. Hong Kong is the third largest distributer of garments in the world. In 2008 Hong Kong exported $40 billion US dollars’ worth of textiles and garments which is 11% of the territory’s total exports (economywatch.com). In the financial sector, Hong Kong has the world’s 10th largest security exchange, with a market cap of $2.7 trillion (GovHK, 2012). At the end of 2012 there were 1,533 companies listed as trading on the Hong Kong stock exchange (SEHK). In 2009, 2010 and 2011 Hong Kong was listed as the highest ranking market for IPO’s (GovHK, 2012). Looking at Hong Kong’s banking industry at the end of 2012, there were 154 licensed banks, 20 restricted licence banks and 25 deposit-taking companies. These banks come from 34 countries and include 69 out of the 100 world’s largest banks (GovHK, 2012).
Hong Kong vs. United Kingdom
This section will inform the reader on both Hong Kong and the United...