relative file path for layout
Skip to main content  Skip to search  Skip to main menu
Trade and Industry Department The Government of the Hong Kong Special Administrative Region
Brand Hong Kong - Asia world city
MY COLOUR

Press Releases

trategic business planning is a key to success for local business, says DGTI Friday, November 23, 2001

Mr Joshua Law, Director-General of Trade and Industry, today (November 23) said that with China's accession to the World Trade Organization (WTO), Hong Kong was expected to play a more active role in the continuous growth of the Mainland, but local enterprises had to well-equip themselves to grasp the vast opportunities.

Speaking at the luncheon meeting of the Indian Chamber of Commerce of Hong Kong today (November 23), Mr Law said: "The anticipated surge in the Mainland's trade and investment flows will help boost Hong Kong's external trade and intermediary services."

"We will remain an important gateway to the Mainland after its accession to the WTO. Compared with their Mainland counterparts, Hong Kong companies have far more extensive experience of business networking with the rest of the world. Compared with foreign businessmen, Hong Kong people have much closer cultural and language ties with Mainland people, and better knowledge of the Mainland environment."

He added: "Over the past years, we have accumulated extensive experience on business dealings with the Mainland. These hard earned advantages, together with our sound legal system, our advanced telecommunications and other infrastructure facilities, our small and efficient government, and our strength as an international financial centre with a freely convertible currency, should enable Hong Kong companies to secure a significant share of the liberalised trade following China's WTO accession."

"Reduced tariffs and improved trading environment will cut down on the importing costs of equipment and raw materials. Hong Kong companies using the Mainland as a manufacturing base will become more competitive in the export market. At the same time, current restrictions on domestic sales will be relaxed progressively thus enabling our manufacturers to sell their products in a huge domestic market with 1.3 billion people." he said.

According to a preliminary estimate by our Government Economist, by 2010, Hong Kong's exports involving the Mainland will be raised by 15% (averaging at 1.3% per annum), and our GDP by 5.5% (averaging at 0.5% per annum).

Mr Law said Hong Kong has developed an effective hub-hinterland relationship with the Mainland. With China's accession to the WTO, more overseas companies will set up branches and representative offices in the Mainland. The business activities of these offices often need support from Hong Kong. In fact, over 3,000 of these companies have already set up regional headquarters or offices in Hong Kong.

For the nearly 300,000 small and medium enterprises (SMEs) in Hong Kong, Mr Law said that they could capitalise on their well-established business network, flexibility and versatility, to help facilitate foreign investment in Hong Kong and into the Mainland. In particular, they can partner with overseas companies keen to enter the China market, as well as with Mainland companies targeting international markets.

Apart from ample opportunities, Mr Law pointed out that there were also challenges ahead. As the Mainland markets become directly accessible to international investors, Hong Kong's unique gateway role faces challenges.

He said: "The key to success is to upkeep the excellent quality of our services and products, and to seek new areas that can contribute to the development of the Mainland economy. All these call for clear vision, strong drive and fierce determination."

"Maintaining competitiveness requires strategic planning and swift response to market changes. To tap into the Mainland market, our businessmen, especially the SMEs, should develop an up-to-date understanding of this fast-evolving market. Local businesses must identify specific opportunities and challenges for their own business, and keep abreast of changes in the market rules."

"In particular, our SMEs have to take a long-term view in their business strategy. Although our manufacturers have been very successful in processing trade, we see more of them moving towards ODM (Original Design Manufacturing) and OBM (Original Brand Manufacturing). They recognise the need to upgrade their products, develop their brand names and eventually increase the value added to goods to meet the ever-changing demands of consumers," Mr Law said.

He added: "To take advantage of the large domestic market in the Mainland, our companies should improve management of their distribution channels, and get ready to sell direct to distributors and end customers in the Mainland. They should identify strategic partnerships and alliances with service providers that have the potential to broaden and deepen their business activities in the Mainland."

Mr Law finally emphasised that the Trade and Industry Department would continue to implement a number of measures to assist the business community to understand the new opportunities. For instance, a new pamphlet and a newsletter on China's accession to the WTO have been published earlier this month (November). On December 11, 2001, TID will join hands with the Trade Development Council to organize a seminar "China's WTO Accession: Challenges and Opportunities for SMEs" to help local businessmen and professionals understand more about the new challenges ahead.

He also promised that Trade and Industry Department would keep the trade abreast of the latest developments, including rules and regulations affecting the Hong Kong businesses through the department's homepage (http://www.gov.hk/tid) and the Commercial Information Circulars.