Why Hong Kong is still a desirable business destination

The US business community is still highly interested in Hong Kong and the opportunities it offers, including the role it plays in the Guangdong-Hong Kong-Macau Greater Bay Area, which will be the biggest economic zone in the Chinese mainland, a HK business official said.

"The investors are looking into a much bigger economic cluster and they can take advantage of HK in terms of its international outlook and very close and strong link with the cities in mainland. It's like the dual role we are playing," said Candy Nip, director of the Hong Kong Economic and Trade Office (HKETO) in New York, in a recent virtual interview with China Daily.

Hong Kong is international but a relatively small city, she said. "But the mainland market is much bigger, and the Greater Bay Area with much bigger population and more GDP to be generated is definitely significant to any investors."

The Greater Bay Area is a city cluster that comprises the Special Administrative Regions of Hong Kong and Macao, as well as nine cities in neighboring Guangdong province. Collectively, they represent an economic force of over 72 million people, with a GDP of more than $1.6 trillion in 2019, official data show.

"Different cities have different roles to play in the Greater Bay Area," said the business official, stressing that Hong Kong is a window to the world while other cities have their strengths such as land and human resources.

"For example, Hong Kong is collaborating with Shenzhen and other cities in green technology to achieve (its) carbon-neutrality target, and in the financial market, which is our traditional strength," Nip said.

Since the nation's strategy to develop the Greater Bay Area was conceived in 2017, a variety of favorable policies have been introduced within the city cluster, especially in terms of enhancing talent flow and entrepreneurship and lowering trade costs.

So far, some 13 entrepreneurship and innovation bases for Hong Kong and Macao youth have been established in the Greater Bay Area. Twelve of them are operating, and 765 startups from Hong Kong and Macao are under incubation, the local Nanfang Daily reported.

The existing Mainland and Hong Kong Closer Economic Partnership Arrangement offers tariff-free treatment to Hong Kong imported into the mainland. Also, Hong Kong investors will enjoy investment protection and facilitation in the mainland.

Another advantage Hong Kong offers foreign investors is its close ties with ASEAN countries, as the city has a free trade agreement and a frequent flight schedule with those countries, said Nip.

That makes it easier for businesses to consider locating in Hong Kong, which is a natural midpoint to ASEAN countries, she said.

ASEAN became Hong Kong's second-largest trading partner in 2019, following the Chinese mainland. In 2017, the two economies signed an investment agreement and a free trade agreement, saying ASEAN countries would eliminate or gradually reduce their customs duties on goods originating from Hong Kong, helping enterprises lower operating costs.

Therefore, overseas investors can tap into the ASEAN market by building partnerships with Hong Kong companies, said Nip. Hong Kong's official data suggest that the city was ASEAN's fourth-largest source of foreign direct investment in 2019, following the US, Japan and Singapore.

As to the possible impact of US sanctions on Hong Kong after the National Security Law was adopted last year, Nip said the sanctions wouldn't serve the interests of either side, particularly the people and business.

"The relationship between the two places economically, socially and culturally is so strong and deep-rooted and cannot be given up despite a lot of political issues," she said.

Nip said that many businesspeople in the US are eager to visit Hong Kong, adding that since the COVID-19 pandemic, the majority of inquiries her office has received is about Hong Kong's visiting requirements, COVID-19 testing and quarantines.

"In the past one and a half years, what they saw and heard about Hong Kong is all from the US and international media generally, which is pretty biased," she said. "Many people in the business sector we spoke to would like to see for themselves what Hong Kong is like now."

To maintain a profile in the US during the pandemic, HKETO launched an online platform called The Hong Kong Arts and Cultural Experience last year, where American audiences can watch a weekly variety of cultural and music performances of major arts groups from Hong Kong, including the Hong Kong Ballet, Hong Kong Chinese Orchestra and other artists.

That can give the US audience a break, especially during the pandemic, and to stay in touch with Hong Kong, Nip said.