World City Guide

Business

Business Profile
The mainstays of Hong Kong’s economy are trading, light manufacturing, shipping, media, financial services and tourism, as well as the property sector, which is of huge interest to locals but little to outsiders. Although transport routes to the newly opened-up ports across coastal China are challenging Hong Kong’s pre-eminence, the city’s great trading houses remain important. These major international conglomerates, such as Swire, Jebsen and Jardine Matheson, have widely diversified interests. Li Ka-shing and his Hutchinson Whampoa is the quintessence of how Hong Kong’s economic power, founded on trade, has spread octopus-like from the Pearl River Delta into vastly diverse locales and commercial holdings, ranging from ports to telecommunications. Property, through eminent houses such as Sun Hung Kai Properties and Kerry Properties, provides much of the investment funding to support Hong Kong’s broader economy, although the sector itself has been in crisis since the late 1990s. Tourism might yet be Hong Kong’s salvation, with the 2005 opening of Disneyland Hong Kong on Lantau island, increased international promotion and huge interest in travelling to Hong Kong from the new middle class of China’s most affluent cities.

Government statistics for November 2004 declare Hong Kong’s labour force at 3.54 million. Gross Domestic Product (GDP) for the city stood at HK$158 billion in 2003, which rose in real terms by 8.7% in the first three-quarters of 2004. Growth, however, was expected to slow in the final quarter to an estimated annual growth of 7.5%. The headline unemployment rate in Hong Kong was 6.7%, which dropped steadily during 2004 as the green shoots of economic recovery began to take root.

Hong Kong has developed into a major international financial centre since the incorporation of its stock exchange in 1980 – currently the 10th largest in the world, as ranked by capitalisation. Banking, insurance and other financial services are provided to local and mainland firms, as well as the many international conglomerates with offices there. The Hong Kong and Shanghai Banking Corporation (HSBC) is the strongest bank to originate locally and develop an international presence. The Bank of East Asia is another notable body. Investment banking houses, such as Goldman Sachs and BNP Prime Peregrine, are also highly active locally. A large number of financial brokerage houses, many of them now going online, serve the insatiable appetite of the Hong Kong punter for short-term speculative investing. They also offer a broader range of investment services that use this money to gamble on a bigger scale with venture capital initiatives of various kinds.

Manufacturing is concentrated in textiles, consumer electronics and other consumer goods – Hong Kong is the world’s largest producer of children’s toys. Increasingly, manufacturing operations are headquartered in Hong Kong but use infinitely cheaper labour across the border. The shipping and logistics industries are assisted by Hong Kong’s natural deep-water harbour, probably the best in the region. Maritime entrepôt trade remains very significant, although somewhat diminished by competition from Shanghai and other ports in Shenzhen and South East Asia.

Hong Kong also has a strong media and telecommunications sector, churning out Cantopop, kung fu and rom-com movies and television and music programmes for the Greater China public. Companies like Golden Harvest and the Emperor Entertainment Group dominate the local industry. Internet and telecommunications companies, such as Richard Li’s Pacific Century CyberWorks, have risen on the backs of established telcos like Cable and Wireless HongKong Telecom. Hong Kong’s efforts to reposition itself as a wired city of the new millennium have faded as a dominant policy theme, although the quality of the telecoms infrastructure remains excellent. Investment into China has replaced this strategy as the main current entrepreneurial driver.

The main financial district of Hong Kong is the International Finance Centre (IFC), where the Hong Kong Stock Exchange is housed, although this is more like a mall or walkway complex than Wall Street. Most corporate headquarters are housed around Central, Admiralty and Nathan Road, on Kowloon Side.

Business Etiquette
Suits are advisable for business – Hong Kong can be surprisingly formal in its outward business standards, in contrast to the casual bucaneering enterpreneurialism of its business practice. Hong Kongers are also not casual about business punctuality – appointments should be fixed in advance and kept. The culture of business cards is prevalent and, if possible, cards should be printed up with Chinese translations on the reverse. Almost all top hotels provide business centres for visiting businesspeople, with typing, photocopying, translation and other services. Normal office hours are 0900-1300 and 1400-1800 Monday to Friday and 0900-1300 Saturday, with some offices staying open later on Saturday and almost every Hong Kong office full of late-night workers long after sunset.

Although business lunches (especially dim sum) and after-hours drinking are a prevalent part of the Hong Kong business scene, there is not the same emphasis on drinking parties and bonding evenings as there is in China and Japan. Hong Kongers are too busy focusing on the bottom line to worry about company camaraderie and many have far lower tolerance for alcohol than their hardened mainland compatriots. Ex-pat workers drink together hugely but this is not a formal part of local business culture – just an unavoidable one.