Known as one of the four Asian Tigers in the world economy, Hong Kong has fast developed into a strong economy. With no substantial natural resources and favorable agricultural conditions, the country imports its consumer goods. The economy of Hong Kong is largely dependent on the service sector that generates around 93% of the country’s GDP.
Asia’s World City
The Hong Kong business market has been highly adaptable to globalization, rising competition, and technological advancements in the last two decades, allowing it to overcome the dynamic challenges faced by the world economy.
With the handover and Mainland China’s rising, the question of Hong Kong’s relevance in a flat global economy may be raised.
Global Financial Center
Over the years, Hong Kong has emerged as the international financial center for the Asian markets. Hong Kong Dollar is the eight highest traded currencies in the world. The financing and insurance sector accounts for the major portion of the country’s Gross Domestic Product. The financial market of Hong Kong is highly diverse and holds special expertise in IPO’s and Fund Management.
With a population of approximately 7 million in 2012, Hong Kong has a small populace with a high standard of living. The Hong Kong Stock Exchange ranks as the seventh largest in the world, which raised 22% of total world’s initial public offerings (IPOs) in 2009. Hong Kong has one of the strongest stock markets and banking sectors in the world.
Other major service industries that play a vital role in the economy of the country include insurance, real estate, food services, and business services. The country is the ninth most expensive city to live for expatriates and is host to a large number of millionaire households, ranking as the fourth country with the highest number of them.
Opportunities in Hong Kong
One factor that makes Hong Kong a preferable business market for most of the foreign investors is the ease of regulations and business policies, and the high protection of rights that the country offers. Hong Kong has been consecutively ranking second in the Ease of Doing Business Index for the past four years. The country is also ranked as the freest world economy according to the Index of Economic Freedom since 1995.
The financial services industry remains one of the largest industries in Hong Kong. Business services and tourism industry also shows substantial growth in the recent years. The country is further making efforts to expand into industries that compliment its current core industries. The industries that are indicated to grow include education services, environmental industries, innovation and technology, medical services, testing and certification services, and cultural industries.
Real Estate is also a major industry and a source of investment from global and Mainland Chinese investors. The scarce space makes Hong Kong one of the most expensive places in the world to live and own property.
Gateway to China
Another major attraction that lures businesses to Hong Kong is the prospect of gaining entry into the world’s largest market by population, China. Since Hong Kong is a Special Administrative Region of People’s Republic of China, their business practices are often integrated. Hong Kong works as a gateway for most companies to expand their business to mainland China. The FDI inflow of the country is constantly on the rise in the past few years.
Hong Kong is not only a gateway to the Chinese markets, but it also lies in the heart of the major Asian markets, located almost within a distance of a four-hour flight from them.
Importantly, Hong Kong is the gateway to China because of its rule of law, stability and transparent way of doing business.
Hong Kong is a major culture center and has strong influence from Cantonese, Chinese and British cultures. HK boasts growing film, theater and entertainment industries. It has major theme parks such as Hong Kong Disney.
Ease of Doing Business
Starting a business or establishing branch offices is relatively easier in Hong Kong in other markets. The World Bank rates Hong Kong as #2 in the world in Ease of Doing Business. As a financial capital with robust infrastructure, transactions and investment are world class in Hong Kong.
About Market Research in Hong Kong
SIS International Research provides leading Market Research and Strategy Consulting solutions in Hong Kong. We have over 30 years’ experience in conducting research and strategy in Hong Kong and China. Our key services include:
- Focus Groups
- Consumer and B2B Interviews
- Online Digital Communities
- Industrial Market Research
- New Product Concept Testing
- Marketing Consulting
- Competitive Analysis
- China Market Research