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Welcome to Hong KongWorld Cities World Class University Network

International Profile of Hong Kong

Charles Ng

Associate Director-General of Investment Promotion

15th March 2011

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RIGHT PLACEHong Kong’s

Enduring Advantages

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Asia’s Leading City for International Business

3,638 regional headquarters and officesSource: 2010 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong, Census & Statistics Dept, HKSARG

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145

529

405

194162

120 10550 57 62

98

184

32 41 43

271

263041434752627299113

224

288

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US

Japa

n UK

ChinaGerm

any

France

Netherlan

dsSwitz

erland

Italy

Singapore

Taiwan

Sweden

Australia

Korea

Others

Regional HeadquartersRegional Offices

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One Country, Two Systems

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One Country, Two Systems (cont’d)

• World class arbitration & mediation centre

• Rule of laws, separate judiciary

• Value Transparency, corporate governance

• Freedom of expression, free movement of capital, goods & people

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One Country, Two System (cont’d)

• Hong Kong ranked 1st in the Globalization Index 2010– Openness to trade; capital movements; exchange of technology

and ideas; movement of labour and cultural integration(by Ernst & Young in cooperation with the Economist Intelligence Unit)

• Hong Kong ranked the freest economy for 17th consecutive year per 2011 Index of Economic Freedom(by Heritage Foundation and The Wall Street Journal)

• Hong Kong ranked 1st for the vote of Asia- Pacific’s best economies for investment– Rule of law; taxation, corruption, openness to international trade

and business; public sector quality and effectiveness and fiscaland monetary administration

(by Vriens & Partners)

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Heart of Asia and Gateway to China

• The world's 4th busiest international passenger airport

• One of the world’s busiest container ports

• 23 minutes from central business districts to Airport by express rail link

• Less than an hour from GPRD “factory of the world”

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Forbes Tax Misery Index 2009

•Only imposes 3 direct tax

•Profits, salaries and property

•NO VAT/GST or sales tax

•NO Capital gain tax

•NO withholding tax on dividends

and interest

•NO Estate duty

•NO Global taxation (offshore income

and only HK-sourced income is taxable)

•NO Wine Duty

Source: Forbes Tax Misery Index 2009, Inland Revenue

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World Class ICT - Connecting People

• Asia’s most innovative economy Global Innovative Index

• Mobile phone penetration rate 171%

• 8th most e-ready economy in the world EIU

• 3rd highest average broadband connection speedUS-based network provider Akamai Technologies

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Quality Education and Workforce• Home to Asia’s leading universities and business schools

– HKU 1st HKUST 2nd and CUHK 4th in Asia, all in the world’s Top 50Times Higher Education QS World University Rankings 2010

– World’s Top EMBA in 2010 (2 consecutive years)Kellogg - HKUST EMBA Programme

– EMBAs run by HKUST and CUHK ranked 1st and 2nd in AsiaGlobal EMBA Rankings by the Financial Times 2010

• Over 50 international schools serving students of more than 30 nationalities

• Dependents have automatic right to work• Permanent residency after 7 years

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Quality of Life

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Global Health/ Sustainability

• HSBC Offshore Offspring Survey 2010– Overall ranking: 4th out of 14– Childcare ranking: 3rd out of 14– Healthcare and Wellbeing ranking: 7th out of 14– Integration ranking: 4th out of 14Source: HSBC Offshore Offspring Survey 2010, commissioned by HSBC Bank International Expat Explorer

• Hong Kong comes 3rd in Asia, after Osaka and Tokyo in Global Liveability Ranking 2010– Based on stability, health care, culture and environment,

education and infrastructure, etcBy Economist Intelligent Unit

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HSBC Offshore Offspring Survey 2010-Rankings

13141414United Kingdom

8121313United States

1413512Qatar

991011UAE

1010710Singapore

31189China

5898Netherlands

122127Australia

63106Canada

11545Germany

4734Hong Kong

6423France

1162Spain

2611Belgium

IntegrationHealth & WellbeingChildcareOverallCountry

Source: HSBC Offshore Offspring Survey 2010, commissioned by HSBC Bank International Expat Explorer

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RIGHT TIMENew Opportunities& Unique Role of

Hong Kong

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China

Opportunities+ +Global

Opportunities

= Hong Kong Advantage

(Unique Position in the World)

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Hong Kong -Gateway to Asia, in particular China

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Hong Kong –

Gateway to the World

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Most Competitive Finance Centre in Asia

• China’s Global financial Capital• The platform for Offshore RMB Trade

Settlement• Asia’s leading asset Management hub• Home to 70 of the world’s 100 largest banks• Asia’s 3rd largest stock market and 7th in the

world• Total market capitalization as at end of 2010

- US$2.7 trillion • World’s 6th largest foreign exchange centre in

2010• International Capital Formation Centre

(1st globally in IPOs in 2010, US$57 billion raised)

Source: HKEx, HKTDC, World Federation of Exchanges, Time Magazine

Beijing, San Francisco

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Toronto11Shanghai10Shenzhen, Sydney9Geneva8Zurich7Chicago6Tokyo5Singapore4Hong Kong3London, New York1CityRanking

The Global Financial Centres Index (GFCI) 7, City of London Corporation, March 2010

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Increasing Visitor Arrivals

Source: HKTB

Million

8.5

22.477

13.53

0

5

10

15

20

25

30

35

40

2003 2010 (Provisional)

Rest of the World

Mainland China

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15%

27%

42%

57%

No. of companies Marketcapitalisation

20002010 (as of Dec)

• As at end 2009, 4,792 Mainland companies have MOFCOM approval to establish subsidiaries in HK with a total investment of US$29.3 bn

• 934 new investment projects approved in 2009, with an investment amount of US$8.5 bn (MOFCOM)

• RMB deposits in HK increased to RMB 314.9 billion as of Dec 2010

Mainland Companies in Hong Kong

Source: HKEx

% of Mainland companies listed in HK and their market capitalisation

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• Testing and Certification• Medical Services• Innovation and Technology• Cultural and Creative Industries• Environmental Industry (in

particular solar energy and R&D)• Educational services

Opportunities in 6 New Areas:

Other Opportunity:

• Wine

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Role of Hong Kong-for Multinationals, SMEs & Start-ups

• Global & regional headquarters (command & control centre)

• Global procurement & supply chain management

• Global treasury centre

• International capital formation centre

• Offshore Renminbi platform for trade & investment

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Hong Kong is the Best Platform for:

• Project financing• Product design & development with full Intellectual

Properties protection• Product adaptation for Mainland and international

markets• Development of prototype and samples• Production of niche high end value products• International marketing distribution and trade

development worldwide• Training in Asia• Customer service & customer relationship

management

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Investment in Infrastructure

Lok Ma Chaucrossing - 2007

Lok Ma Chau loop joint development – 2009 (studies)

Guangzhou – Shenzhen – Hong Kong Express Rail Link - 2014

New Cruise Terminal at Kai Tak - 2014/15

Tuen Mun – Chek Lap Kok Link - 2016

HK – Shenzhen Western Corridor Bridge - 2007

Sha Tin to Central Rail Link - 2015/19

West Kowloon Cultural District –completion of master planning in mid 2011

Hong Kong – Zhuhai – Macao Bridge overall length of 50km - 2015/16

South Island MTR Line - 2015

Project in progress

Project completed

Total public spending on infrastructure is HK$40 billion (US$5.1 billion) in 2009/10

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HK as a creative hub: West Kowloon Cultural District

City Park Foster+Partners

Cultural Connect: Key to Sustained Vitality

Rocco Design Architects Ltd

Project for a New Dimension

Office for Metropolitan Architecture

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– West Kowloon Cultural District (WKCD) - HK$21.6 billion project, 40 hectares of land, featuring a new modern art

museum, 15 theatres, concert halls and other

performance venues. 1st phase- to be completed 2015-2020.

– Police Married Quarters - HK$530 million conservation project, a new design hub with 130 studios for artists/designers to create, sell and display their works. Complete by 2014.

– Central Police Station Revitalisation Project – HK$1.8 billion project by renowned architects, Herzog & de Meuron, PMT, Rocco Design, a new contemporary arts centre providing new gallery, performance and exhibition space. Complete by 2014.

HK as a creative hub- new development

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HK as a creative hub: Former Police Married Quarters

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HK as a creative hub:Former Central Police Station

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Opportunities in Art

“In a very short time Hong Kong will be the most important art trade fair in the world. In fact -this

could be the Art Basel of Asia”

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About Invest Hong Kong What we do

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Strong Performance in Foreign Direct Investment

India, 6.6%

Others, 18.9% Hong Kong,36.9%

Singapore, 13.9%

Korea, 4.1% China, 19.2%

FDI Stock – South, East and South-East Asia, 2009

• Hong Kong is the world’s 4th

largest FDI recipient

• Highest FDI stock in Asia (nearly US$912.2 bn)

• Top of UNCTAD’s FDI Performance Index

• 3,638 overseas/ Mainland companies set up regional headquarters and offices (as at Dec 2010)

Source:2010 UNCTAD World Investment Report

48.4

5.8

108.3

59.6

40.4

10.9 8.416.8

34.6

95.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

China Hong Kong Singapore India Korea, Republicof

US$

billi

on

2008

2009

FDI Inflows

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Priority Areas Covered by Eight New Sector Teams

‧Professional Services‧Education Services‧Testing & Certification Services

Business and Professional Services(BPS)

‧Innovation & TechnologyInformation and Communications Technology (ICT)

‧Environmental Industries‧Medical Services‧Innovation & Technology

Innovation and Technology (I&T)

‧Financial ServicesFinancial Services (FS)

‧Tourism‧Wine IndustryTourism and Hospitality (T&H)

‧Trading & Logistics (logistics)Transport and Industrial (T&I)

‧Trading & Logistics (trading)Consumer Products (CP)

‧Culture & Creative IndustriesCreative Industries (CI)

Four Traditional Pillar Industries

Six New Growth Industries/ WineEight New Sector Teams

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Representation in 26 Cities Around the World

BogotaTel AvivDüsseldorf Gothenburg

IstanbulMilanParis

Moscow

TaipeiBangaloreKuala

LumpurMumbaiOsakaSeoul

Consultants

New YorkSan Francisco

Toronto

-BerlinBrusselsLondon

BeijingChengdu

GuangzhouShanghai

SydneyTokyo

Investment Promotion

Units (in ETOs)

North and South

Americas

Middle East

EuropeMainland and Taiwan

Asia Pacific

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Department for FDI - Supporting overseas, Mainland and Taiwanese businesses to set up and expand in Hong Kong

How InvestHK Helps Investors

Information to aid planning and evaluation

Facilitation of visa applications, schooling

PR and marketing support for launch/ expansion

Networking events, introduction to service providers

InvestHK

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Get in touch !

Charles Ng Associate Director-General of Investment PromotionTel: +852 3107 1002Email: cng@investhk.gov.hk