2. HISTORY & MAIN FEATURES OF HONG KONG
• Hong Kong is located at the mouth of the Pearl River
Delta on the coast of southern China.
• Hong Kong was formed in the year 1842.
• The population of Hong Kong was 7.072 million in 2011
out of which 95% are Chinese & rest 5% percent are non-
ethnic Chinese.
• Hong Kong acts as a supply chain connection between
China & Rest of the World.
• Currency of Hong Kong is HK Dollar ($).
1 Hong Kong Dollar = 8.55 Indian Rupee
4. Imports and Exports
Trade benefit:
• Hong Kong is major international financial center.
• It features a free trade policy with low taxation.
• Lesser intervention of government.
• HK is full time member of WTO and Asia specific
Economic Cooperation Frim.
• The government has singed free trade agreement with
china.
• The corner of HK’s free trade approach is a strong and
credible multilateral trading system.
5.
6. TAX SYSTEM
• Low rate optional flat tax of 16% on personal income.
• NO Pay-as-You-Earn in HK.
• Corporate income tax is at a flat rate of 17.5%.
• No payroll taxes in HK.
• Hk budget has a budget surplus and a very little
government debt.
7. Trade Practices
• Hong Kong follows the economic policies of free enterprise and
free trade.
• The first of these factors relates to history. By 1950, Hong Kong,
had accumulated a long history of free Trade after colonising it, the
British adopted free trade policies in Hong Kong as early as 1840s.
Free-trade status of these economies resulted in a large expansion of
re-export trade
• There is no customs tariff on goods imported into or exported from
Hong Kong.
• Hong Kong, China had a larger domestic market for manufactured
goods than the majority of the developing countries.
8. • The second reason why free-trade policies could be sustained
in these two economies during the past half-century is the
absence significant agricultural activity there.
• Hong Kong is a founding member of the World Trade
Organization (WTO) as well as a member of the Asia-Pacific
Economic Cooperation (APEC).
• Most products do not need licences to enter or leave Hong
Kong.
10. PEST ANALYSIS
Political
• The most significant opportunity for McDonald is that Hong Kong is
politically stable, so there would rarely be any political factors that
will interrupt and slow down the company’s growth.
• Another significant opportunity is that there isn’t a well- established
minimum wage policy in Hong Kong, which allows McDonald to hire
workers at a lower wage to maximize their profit.
• There isn’t a goods and services tax in Hong Kong and this allows
McDonald to have lower expenses.
11. Social/Culture
• Hong Konger’s lifestyle influenced by the Britain colonization gives
McDonald a great advantage. Hong Kongers are used to western food, so
McDonald has a large customer base.
• McDonald is a fast food restaurant company, so they can perform their
services in a short period of time and this fits with the fast paced lifestyle
in Hong Kong.
• Hong Kong people are more aware of healthy eating, so they stay away
from high calories and high cholesterol food. McDonald tries to prevent
the loss of customer by including healthier food in the menu, such as
salads and sandwich.
12. Economic
• The economic collapse that was triggered by the Lehman
Brothers has caused Hong Kong to enter the recession stage in
the economic cycle. Therefore, the demands for low price food
increases tremendously and this benefited McDonald, since the
food are cheap and the quality is guarantied.
• In the long term, if the inflation continuously increase, it will
create a threat to McDonald because the meal prices will be
raised to a point that it will be too expensive and McDonald
will lose it’s large customer base that is from the lower class.
13. Technological:-
• Hong Kong has a well developed transportation system,
especially the airport that have airlines that connects to different
part of the world. This is a significant advantage to McDonald
because their food supplies can be delivered in a short period of
time and at a low cost.