Peter Leung


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Peter Leung

  1. 1. External-oriented Development of Hong Kong and the Pearl River Delta Mr Peter Leung Director, Hong Kong Economic and Trade Affairs, Guangdong
  2. 2. Introduction of GDETO Director <ul><li>Investment Promotion Div. </li></ul><ul><li>Duties : Attract Mainland enterprises to invest in HK </li></ul><ul><li>Admin. and Public Relations Div. </li></ul><ul><li>Duties : Assist HK businessmen to invest in Guangdong </li></ul><ul><li>Trade Promotion Div. </li></ul><ul><li>Duties : Support HK businessmen with investments and operations in Guangdong </li></ul>
  3. 3. Guangdong Province (1) <ul><li>Area: 180,000 sq. km. </li></ul><ul><li>Permanent population: 80 million (over 100 million if including the non-permanent population) </li></ul><ul><li>GDP: RMB 1,362.6 billion </li></ul><ul><ul><li>Primary industry: 109.4 billion (8% of total) </li></ul></ul><ul><ul><li>Secondary industry : 730.7 billion (54% of total) </li></ul></ul><ul><ul><li>Tertiary industry : 522.5 billion (38% of total) </li></ul></ul>(The above were statistics of 2003)
  4. 4. Guangdong Province (2) <ul><li>21 cities at prefectural level or above in the whole Province </li></ul><ul><ul><li>Capital city: Guangzhou </li></ul></ul><ul><ul><li>Special Economic Zones: Shenzhen, Zhuhai, Shantou </li></ul></ul><ul><li>Guangdong is not a single market; large differences in the development among various cities </li></ul><ul><ul><li>Guangzhou’s GDP: 346.7 billion </li></ul></ul><ul><ul><li>Heyuan’s GDP: 13.7 billion </li></ul></ul>(The above were statistics of 2003)
  5. 5. Comparison of Major Cities in PRD (1) (The above were statistics of 2003) 4 : 57 : 39 47.7 82 1,653 Zhuhai 5 : 63 : 32 50.1 138 1,800 Zhongshan 3 : 54 : 43 94.8 156 2,465 Dongguan 1 : 59 : 40 286.1 557 1,953 Shenzhen 3 : 43 : 54 346.7 >1,000 7,434 Guangzhou Ratio of the three industries GDP (billion) Permanent population (10,000 persons) Area (sq. km.)
  6. 6. Comparison of Major Cities in PRD (2) Pillar Industries : hi-tech; finance; modern logistics Focus : hi-tech (transforming from processing and assembling to self-R&D, design and manufacture); port logistics; services (logistics, finance, conference & exhibition, tourism, intermediary, international business & information services) Shenzhen Pillar industries: automobiles; electronic information manufacturing; petrochemicals; fine chemicals; iron and steel; machinery and equipment manufacturing; pharmaceuticals Focus: conference & exhibition; modern logistics; hi-tech; integrated services Guangzhou Major Industries
  7. 7. Comparison of Major Cities in PRD (3) Pillar industries : electronics and communication equipment manufacturing; electrical machinery & equipment manufacturing; biology; pharmaceutical & medical equipment manufacturing Focus : computer software; petrochemical; business travel; conference & exhibition; services Zhuhai Pillar industries : electronic information; biochemical; electrical machinery; textiles & clothing (Shaxi: casual wear); packaging & printing Focus : home appliances; metals (Xiaolan); lamp & lighting (Guzhen) Zhongshan Pillar industries : export processing (Humen: clothing; Dalang:knitwear; Houjie: furniture) Focus : modern logistics; petrochemicals & gases; conference & exhibition; commerce & trade; real estates; tourism Dongguan Major Industries
  8. 8. Comparison of Cities Outside the PRD (The above were statistics of 2003) 19 : 47 : 34 26.8 315 18,400 Shaoguan 21 : 43 : 36 52.1 624 12,471 Zhanjiang 8 : 51 : 41 52.6 480 2,064 Shantou Ratio of the three industries GDP (billion) Permanent population (10,000 persons) Area (sq. km.)
  9. 9. Guangdong’s Advantages (1) <ul><li>Advantage 1: Cost </li></ul><ul><ul><li>Comparison of labour compensation in 2003 (US$/hour): </li></ul></ul>9.99 Korea 30.60 21.86 20.68 1.96 1.12 0.80 Germany US Japan Thailand India China
  10. 10. Guangdong’s Advantages (2) <ul><li>Advantage 2: Industry Chain </li></ul><ul><ul><li>Complete up-stream and down-stream industry chain </li></ul></ul><ul><ul><li>Example: Humen in Dongguan </li></ul></ul><ul><ul><ul><li>Clothing industry </li></ul></ul></ul><ul><ul><ul><li>All necessary materials and accessories can be procured within half an hour </li></ul></ul></ul><ul><ul><ul><li>   Production time shortened, overall competitiveness increased </li></ul></ul></ul>
  11. 11. Guangdong’s Advantages (3) <ul><li>Advantage 3: Quality of semi-skilled workers on the rise </li></ul><ul><ul><li>Experience accumulated since the opening up of the Mainland market more than 20 years ago </li></ul></ul><ul><ul><li>20 million well-trained workers in the Province </li></ul></ul><ul><ul><li>Strengthen training in hi-tech areas to meet the needs of industry upgrade </li></ul></ul>
  12. 12. Guangdong’s Advantages (4) <ul><li>The largest advantage of Guangdong: </li></ul><ul><li>Close to Hong Kong </li></ul>
  13. 13. Hong Kong’s Advantages (1) <ul><li>Credibility </li></ul><ul><ul><li>Rule of law, respect for contract </li></ul></ul><ul><li>Institutionalisation </li></ul><ul><ul><li>Well-established legal and professional systems, procedures and rules </li></ul></ul><ul><li>Market-oriented </li></ul><ul><ul><li>Market economy </li></ul></ul><ul><ul><li>Government does not participate in or interfere with market operations </li></ul></ul>
  14. 14. Hong Kong’s Advantages (2) <ul><li>International Financial Centre </li></ul><ul><ul><li>Comprehensive financial system </li></ul></ul><ul><ul><li>Freedom in foreign exchange </li></ul></ul><ul><ul><li>Own currency </li></ul></ul><ul><li>International Logistics Centre </li></ul><ul><ul><li>Advanced logistics facilities </li></ul></ul><ul><ul><li>Robust growth in air and sea transport </li></ul></ul>
  15. 15. Hong Kong’s Advantages (3) <ul><li>Information Centre </li></ul><ul><ul><li>Free flow of information </li></ul></ul><ul><ul><li>Internet hub  one of the most Internet-savvy cities in the world </li></ul></ul><ul><li>Trade Networks </li></ul><ul><ul><li>More than half a decade’s experience in trade </li></ul></ul><ul><ul><li>Free trade </li></ul></ul>
  16. 16. Complementary Advantages of Hong Kong and Guangdong <ul><li>GDP per capita in PRD: ~US$ 5,000 </li></ul><ul><li>Services sector developing in Guangdong </li></ul><ul><li>   Heading towards the comprehensive “well-to-do” ( 全面小康 ) stage </li></ul><ul><li>Strong complementarity between HK’s services sector and Guangdong’s manufacturing sector </li></ul><ul><li>   Complementary advantages bring mutual benefits to each other </li></ul>
  17. 17. Major Markets of Guangdong & Hong Kong (1) Europe Africa Middle East Asia Oceania America
  18. 18. Major Markets of Guangdong & Hong Kong (2) <ul><li>Around 70% of Guangdong’s products are exported to other places through Hong Kong </li></ul><ul><li> Guangdong & HK: External-oriented economy </li></ul><ul><li> Much similarity and room for cooperation </li></ul>Mainland China, US, EU, Japan, ASEAN HK Hong Kong, US, EU, Japan, ASEAN Guangdong Major export markets (2003)
  19. 19. Major Problems Faced by Hong Kong Businessmen (1) <ul><li>Problem 1 : Do Hong Kong businessmen know well about the situation in the Mainland? </li></ul><ul><ul><li>Status-quo and advantages of various places of Guangdong </li></ul></ul><ul><ul><li>Partners for cooperation in the Mainland </li></ul></ul><ul><ul><li>Modes of cooperation in the Mainland </li></ul></ul>
  20. 20. Major Problems Faced by Hong Kong Businessmen (2) <ul><li>HK businessmen have extensive international market networks, with clients spreading over Europe, US, Canada, South-east Asia, etc. </li></ul><ul><li>Problem 2 : How to make better use of these networks and fully cooperate with Guangdong’s enterprises to increase the market shares together? </li></ul>
  21. 21. Major Problems Faced by Hong Kong Businessmen (3) <ul><li>Guangdong’s services sector has been growing rapidly in recent years </li></ul><ul><li>HK’s services sector is also actively extending their businesses to the Mainland </li></ul><ul><li>Problem 3 : How can HK’s services sector help their counterparts in the Mainland to develop? </li></ul><ul><ul><li>Do they understand their target customers in the Mainland? </li></ul></ul><ul><ul><li>How to reduce the worries of their counterparts and to avoid causing barriers to cooperation? </li></ul></ul>
  22. 22. Organised by the Trade Development Council (TDC), World SME Expo is a SME-focused exposition which serves as a one-stop platform for SMEs to access a full range of trade services, market knowledge and business advice provided by the TDC, the private as well as the public sectors. Date: 16 - 18 / 11 / 2004 (Tue - Thu) Venue: HK Convention and Exhibition Centre
  23. 23. <ul><li>Objectives: </li></ul><ul><li>To create a platform for companies and organisations to exhibit products and services to support the development of SMEs. </li></ul><ul><li>To provide a one-stop shop where SMEs can access a full range of useful services, attend informative seminars, participate in forums, and obtain market advice which addresses their unique business and marketing needs. </li></ul><ul><li>To establish a marketplace where SMEs can explore a bonanza of business opportunity and enter into co-operation with appropriate partners. </li></ul><ul><li>To develop World SME Expo into a trade platform for SMEs all over the world. </li></ul><ul><li>Attendance: </li></ul><ul><li>SMEs from different product and service sectors in Hong Kong and the region are expected to attend World SME Expo. They will include owners, directors, senior executives, marketing managers, financial controllers, entrepreneurs and new business start-up executives. In addition, local enterprises from mainland China and SMEs from around the world will also visit World SME Expo and conduct business discussions with Hong Kong SMEs. </li></ul>
  24. 24. <ul><li>Exposition: </li></ul><ul><li>The Exposition will feature a wide array of products and services targetting at SMEs, provided by all relevant trade and service sectors of the Hong Kong economy, including banks and finance companies, accounting firms, lawyers, professional services and training consultants, IT companies, industry and trade support organisations, government departments, associations, and many more. Mainland trade promotion organisations, mainland enterprises which provide support services for developing the China market, consulates, trade commissions, international chambers of commerce in Hong Kong, various Asian trade promotion organisations, world trade organisations and worldwide SME associations will also showcase their services that may facilitate partnership between SMEs in Hong Kong and their home countries. </li></ul><ul><li>Ten Thematic Pavilions : (i) China Opportunity; (ii) Global Business Connections; (iii) Industry Support; (iv) IT and E-Commerce; (v) Management and Marketing; (vi) SME Financing; (vii) Professional Services; (viii) Trade Services; (ix) Training and Information; (x) World Market Access </li></ul>
  25. 25. <ul><li>Cooperation Opportunities for Auto Parts Industry  </li></ul><ul><li>Global Marketing Strategy of Ceramic Industry   </li></ul><ul><li>Business Opportunity of Service Trade and Development of Private Enterprises in Yangtze River Delta Region  </li></ul><ul><li>Business Opportunities in Changchun Municipal  </li></ul><ul><li>Design - A Key to Business Success in Today's Competitive Marketplace </li></ul><ul><li>HK Forum: HK -Your Best Platform for Selling, Sourcing & Manufacturing in China </li></ul><ul><li>Hot Issues in Trade: Anti-dumping and Hi-Tech & Strategic Product Trade   </li></ul><ul><li>Financing Support for Developing New Markets   </li></ul><ul><li>Q-Mark Expert Series: Enhancing Quality Management and Customer Service through Quality Certification </li></ul><ul><li>HK Forum: Experience Sharing on How Hong Kong Can Facilitate Overseas Companies to Enter the Chinese Market   </li></ul><ul><li>Path to Indian Market  </li></ul><ul><li>The Growing Middle East Market   </li></ul><ul><li>Opportunities for SMEs in Central and Western China   </li></ul><ul><li>CEPA II Opportunities for SMEs  </li></ul><ul><li>China's Latest Policy on Customs and Electronic Declaration   </li></ul><ul><li>Latest Policy of China Taxation - Profit Tax, Value Added Tax and Personal Income Tax   </li></ul><ul><li>Recent Market Trend in China : Beijing Olympics & Environmental Protection  </li></ul><ul><li>Start-ups of Private Business in Mainland   </li></ul><ul><li>Hong Kong - Trade Platform for Mainland Enterprises to Go International   </li></ul>16 November 2004 (Tuesday) Industry-specific Networking Seminars SME Growth and Development Global Markets China Trade &quot;Sustaining SME Competitiveness in the Global Context&quot; International SME Conference and Seminars
  26. 26. <ul><li>Path to Enter the Cosmetics Retailing Market in China  </li></ul><ul><li>Cooperation Opportunities for Pan-PRD Environmental Protection Industry   </li></ul><ul><li>Logistics Industry Networking Seminar   </li></ul><ul><li>Cooperation Opportunities for Chinese Medicine Industry   </li></ul><ul><li>Business Opportunities in Hunan Province  </li></ul><ul><li>SME Convention: Clustering and Growth  </li></ul><ul><li>Textile & Garment Industry Networking Seminar - Impact of Quota Free After 2005 </li></ul><ul><li>Cooperation Between SMEs in Hong Kong and Chinese Mainland   </li></ul><ul><li>SME Convention: Business Creation and Innovation   </li></ul><ul><li>Development Projects Financed by International Aid Agencies - Current Trends and Opportunities for Goods and Service Providers  </li></ul><ul><li>Growing Opportunities in Russia and North Europe   </li></ul><ul><li>Business Opportunities in Guangdong Hinterland   </li></ul><ul><li>A Tale of Two Cities - Exploring European Market via UK & France   </li></ul><ul><li>Market Environment in South Europe & North Africa  </li></ul><ul><li>Best Practice in Doing Business in the US   </li></ul><ul><li>Success of Mainland Private Enterprises in Hong Kong  </li></ul><ul><li>Financing & Credit Risk Management in Mainland   </li></ul><ul><li>How to Effectively Protect Intellectual Property Rights </li></ul><ul><li>SMEs Grasp New CEPA Opportunities in Pan-PRD Region  </li></ul>17 November 2004 (Wednesday) Industry-specific Networking Seminars SME Growth and Development Global Markets China Trade &quot;Sustaining SME Competitiveness in the Global Context&quot; International SME Conference and Seminars
  27. 27. <ul><li>Business Opportunities in Liaoning Province  </li></ul><ul><li>Exploring the Retail Market in Pearl River Delta Region  </li></ul><ul><li>Cooperation Opportunities of Food Industry in a New Era  </li></ul><ul><li>SME Convention: Growth in Globalized Market   </li></ul><ul><li>Ethical Sourcing for Production in China & Corporate Social Responsibility   </li></ul><ul><li>Mediation: The Effective Tool for SME Management </li></ul><ul><li>Market Opportunities in South East Asia  </li></ul><ul><li>Fast Growing Market in Bohai Bay & Shandong Region   </li></ul><ul><li>Latest Trend of American Market </li></ul><ul><li>The Evolving Central and Eastern European Market   </li></ul><ul><li>Exploring European Market from Belgium - Opportunities of New Tax Treaty with HK </li></ul><ul><li>New Opportunities in Ireland   </li></ul><ul><li>Challenges in Japanese Market  </li></ul><ul><li>Effective Brand Building Strategy in China   </li></ul><ul><li>China's Recent Liberation of Retail and Distribution Channels for Foreign Enterprises   </li></ul><ul><li>Quality Control of Production in China - 3C Certification   </li></ul><ul><li>Marketing Strategy in China's Changing Consumer Market   </li></ul>18 November 2004 (Thursday) Industry-specific Networking Seminars SME Growth and Development Global Markets China Trade &quot;Sustaining SME Competitiveness in the Global Context&quot; International SME Conference and Seminars
  28. 28. Major Problems Faced by Hong Kong Businessmen (4) <ul><li>An official of the National Development and Reform Commission once said: </li></ul><ul><li>In the eyes of foreign enterprises, </li></ul><ul><li>HK is a city of China; </li></ul><ul><li>In the eyes of Mainland enterprises, </li></ul><ul><li>HK is an international city; </li></ul><ul><li>In the eyes of HK people, </li></ul><ul><li>what kind of a city is HK? </li></ul>
  29. 29. Business Opportunities through CEPA <ul><li>Legal services: </li></ul><ul><ul><li>Mainland law firms can employ HK lawyers </li></ul></ul><ul><ul><li>(15) qualified HK lawyers to practise in the Mainland </li></ul></ul><ul><ul><li>HK residents can take legal qualification examinations in the Mainland </li></ul></ul><ul><ul><li>HK firms can set up representative offices and have joint operation (not partnership) with Mainland firms </li></ul></ul><ul><ul><li>Relax the minimum stay requirements (no restrictions in Guangzhou and Shenzhen) </li></ul></ul>
  30. 30. Other Potential Opportunities <ul><li>Clients: </li></ul><ul><ul><li>Foreign firms </li></ul></ul><ul><ul><ul><li>There are 76,000 HK firms in Guangdong </li></ul></ul></ul><ul><ul><ul><li>There are some 20,000 Taiwanese firms in Guangdong </li></ul></ul></ul><ul><ul><ul><li>There are some 10,000 foreign firms in Guangdong </li></ul></ul></ul><ul><ul><ul><li>Many foreign firms from Europe want to set up firms in HK for entering China </li></ul></ul></ul>
  31. 31. Other Potential Opportunities <ul><ul><li>Private local firms </li></ul></ul><ul><ul><ul><li>The GDP of private enterprises is about 40% of the total GDP in the Province. </li></ul></ul></ul><ul><ul><ul><li>Many of them want to set up firms in HK. </li></ul></ul></ul><ul><ul><ul><li>There are already over 280 firms listed in the HK Stock Exchange. </li></ul></ul></ul><ul><ul><ul><li>Many are queuing up for their turn. </li></ul></ul></ul><ul><ul><li>Foreign trade </li></ul></ul><ul><ul><ul><li>Guangdong is the largest export and import centre for the Mainland, accounting for one-third of the total national foreign trade (about US$250 billion in 2003) </li></ul></ul></ul>
  32. 32. IP Professional Services <ul><li>This is a growing sector by itself but is only at the very early stage. </li></ul><ul><li>The concept of Intellectual Property Rights is growing but violation to it is widespread. </li></ul><ul><li>We need to put efforts to cultivate our market. </li></ul>
  33. 33. Method of Cultivation (1) <ul><li>Contacts/Promotion </li></ul><ul><li>Diversify our business into related legal field, e.g.: </li></ul><ul><ul><li>Legal service for commercial contracts (foreign trade, merge & acquisition, trademarks registration, patent registration, etc.) </li></ul></ul><ul><ul><li>Arbitration – Use HK’s advantage as the arbitration centre between Mainland companies and their foreign counterparts </li></ul></ul>
  34. 34. Method of Cultivation (2) <ul><li>Joint efforts with other professionals, e.g.: </li></ul><ul><ul><li>With bankers/accountants for listing </li></ul></ul><ul><ul><li>With HK designers – IP vs Design </li></ul></ul><ul><ul><li>With building services for infrastructural projects </li></ul></ul><ul><ul><li>With exhibition & conference organisers for product and trade promotion </li></ul></ul><ul><ul><li>Other examples as in the SME Exposition </li></ul></ul>
  35. 35. We need to <ul><li>Understand the needs of our clients </li></ul><ul><li>Let our clients know the benefits of our services to them </li></ul><ul><li>Coordinate with other services to provide more “one stop” services </li></ul><ul><li>Understand the global market and our own niches in the market </li></ul><ul><li>Build up stronger links with foreign partners to gear up our preparation for the international market </li></ul>
  36. 36. <ul><li>Thank You! </li></ul>