A business survey commissioned by Hongkong & Shanghai Banking Corporation (HSBC) has revealed that more medium-sized enterprises are paying attention to developing their international business, with a focus on business potential on the mainland.

The survey interviewed 3,600 medium-sized companies worldwide. The report revealed that in the past several years, more medium-sized companies are placing their bets on international business.

"Hong Kong is spearheading the international business expansion as 87 percent of the local medium-sized companies are doing business internationally, the third highest across the globe after the UAE and Brazil, John Coverdale, HSBC Group general manager and global co-head of Commercial Banking, told the media on Monday.

According to the survey, China is ranked second only to the US as a top location for business expansion, demonstrating to some degree how much this rapidly expanding economy weighs on the international stage.

"China is playing an increasing part in (the) international economy nowadays," Coverdale said, "while the US is looking at the East more than before."

Among the companies surveyed in Hong Kong, 78 percent of them report having established a presence in the mainland market, with the US and Taiwan being another two favorite regions in which to expand business.

The survey also revealed that the Hong Kong economy is dominated by services industries, reflecting the city's substantial "soft" infrastructure sector in financial services, professional services and communications, whereas the mainland has played a decade-old world-leading role in export. Commenting on this divergent business structure, Coverdale said, "The past 30 years has witnessed the shift of Hong Kong's business sector from being manufacturing-oriented to being service-oriented."

Hong Kong has the most companies, 35 percent of all those surveyed, reported to have earned the majority of their revenues from international business activities - a proportion that is above the global average of 25 percent.Eighty-four percent of the surveyed medium-sized corporations in Hong Kong said that they will push ahead with their international business expansion in the next two years.

Coverdale mentioned that it is the new growth opportunities and business diversification potential that are propelling the surveyed medium-sized firms to conduct international expansion.

"Low-cost is no longer the factor that encourages medium-sized firms to launch international business expansion. Rather, it is the new growth opportunities and business diversification that have lured companies worldwide into adopting a more global perspective," he added.

China Daily

(HK Edition 06/29/2010 page3)