Firms find perfect base for expansion

Hong Kong remains a strong base from which Beijing enterprises can launch their overseas expansion plans, according to Wing Chu, senior economist at Hong Kong Trade Development Council.

"It has clear advantages when it comes to professional services, and can act as the ideal springboard for ambitious companies," he said.

Its key expertise, he said, is in providing the proper due diligence needed for any international merger or acquisition deals.

"Partners' backgrounds need to be checked, like their financial or tax situation, long before any decision is made whether to make a move."

Rocky Tung, senior economist at Hong Kong General Chamber of Commerce, agreed.

"Strength of Hong Kong - including but not limited to, financial and services industries - places it among the top cities in the world as a destination of investments," Tung said.

"Particularly because of its ability to offer professional services to investors, Hong Kong will continue to facilitate mainland companies' internationalization through value-added services, like financial and marketing services."

Chu also highlighted that as more mainland enterprises seek to cooperate with overseas companies, particularly in technology ventures, their focus has shifted to making sure how acquired foreign know-how can be introduced into the domestic market competitively.

"Many HK firms have knowledge of international technologies and their standards. They have been able to use that to introduce and then promote technological collaboration between Beijing-based and foreign enterprises."

Officials in the Chinese capital city have vowed to further open up Beijing's services sector to firms from Hong Kong and increase two-way investment in an effort to strengthen ties with the Special Administrative Region.

Six areas of the services industry have been highlighted: Technology, Internet and information, culture and education, finance, business and tourism, and health and medical services.

Brian Ng, HKTDC's director for the Chinese mainland, said: "There is huge scope for more cooperation between Beijing and Hong Kong in those areas, as these are where the two cities have complementary advantages.

"Beijing has a lot of great museums, where apart from just admission fees, they have started creating real value from other areas too," said Ng, highlighting the cultural industry.

"Hong Kong, with an abundant talent pool, is especially strong in marketing expertise, which can help Beijing develop its cultural and creative resources even further."

Beijing's services sector has been growing fast in recent years. During the first half of 2015, it accounted for more than 80 percent of the city's total gross domestic product.

Hong Kong remains Beijing's biggest source of inbound investment. By the end of September, the SAR had invested $43.27 billion in the capital, 43.3 percent of its total outside investment.

(China Daily 11/28/2015 page7)