HISTORY & MAIN FEATURES OF HONG KONG

• Hong Kong is located at the mouth of the Pearl River Delta on the coast of southern China.

• Hong Kong was formed in the year 1842.

• The population of Hong Kong was 7.072 million in 2011 out of which 95% are Chinese & rest 5% percent are non-ethnic Chinese.

• Hong Kong acts as a supply chain connection between China & Rest of the World.

• Currency of Hong Kong is HK Dollar ($).

1 Hong Kong Dollar = 8.55 Indian Rupee

Denominations

Imports and ExportsTrade benefit:

• Hong Kong is major international financial center.• It features a free trade policy with low taxation.• Lesser intervention of government.• HK is full time member of WTO and Asia specific

Economic Cooperation Frim.• The government has singed free trade agreement with

china.• The corner of HK’s free trade approach is a strong and

credible multilateral trading system.

TAX SYSTEM

• Low rate optional flat tax of 16% on personal income.

• NO Pay-as-You-Earn in HK.

• Corporate income tax is at a flat rate of 17.5%.

• No payroll taxes in HK.

• Hk budget has a budget surplus and a very little government debt.

Trade Practices• Hong Kong follows the economic policies of free enterprise and free trade.

• The first of these factors relates to history. By 1950, Hong Kong, had accumulated a long history of free Trade after colonising it, the British adopted free trade policies in Hong Kong as early as 1840s. Free-trade status of these economies resulted in a large expansion of re-export trade

• There is no customs tariff on goods imported into or exported from Hong Kong.

• Hong Kong, China had a larger domestic market for manufactured goods than the majority of the developing countries.

• The second reason why free-trade policies could be sustained in these two economies during the past half-century is the absence significant agricultural activity there.

• Hong Kong is a founding member of the World Trade Organization (WTO) as well as a member of the Asia-Pacific Economic Cooperation (APEC).

• Most products do not need licences to enter or leave Hong Kong.

Standard Component 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr. 2nd Qtr. 3rd Qtr.Current Account -1333 -28419 34964 22648 -913 1515421 48444Credit 1377237 1536188 1602720 1596575 1422814 -1513421 1548256Debit -1378570 -1564607 -1567756 -1573926 -14723727 -74332 -1499812Goods -79266 -84958 -23970 -45499 -70853 942470 -463Credit 899394 973873 1069286 1084265 914192 -1016802 -1025737Debit -978660 -1058831 -1093256 -1129764 -985043 52028 51490Services 72096 52408 57085 53143 70006 192446 201553Credit 210827 192038 209179 210323 210302 -140418 -150063Debit -138731 -139630 -152094 -157180 -140396 29103 2765Primary Income 10690 8876 7047 19993 5590 378237 319106Credit 264878 368111 322016 299727 296068 -349134 -316341Debit -254188 -359235 -314969 -279733 -290478 -4799 -5348Secondary Income -4853 -4745 -5198 -4989 -5656 2268 2323Credit 2138 2166 2238 2260 2252 2268 -7671Debit -6991 -6911 -7436 -7249 -7909 -7067 -19769Capital and Current Acount 22424 8914 -57242 -47881 -27600 -28538 -78Capital Account -64 -160 -41 -483 -76 176 1Credit 0 0 0 2 1 254 -80Debit -64 -160 -41 -485 -76 -78 -19961Financial Account 22487 9074 -57200 -47398 -27534 -28714 51829Financial Non-Reserve Assets 54672 21296 10821 -20736 8763 47941 52692Direct Investment -156609 160624 -97454 7721 181512 560529 125751Assets -362351 -48373 -454328 -227451 -372715 99913 -145237Liabilities 205741 208998 356873 235173 554227 460616 -113126Portfolio Investment -38225 -45842 112439 -92756 -282841 -395163 -32111Assests -48800 -118493 -47620 -61230 -186421 -206773 11940Liabilities 10575 72650 160059 -31526 -96520 -188392 111012Financial Derivatives 26933 28441 14119 48866 53114 33548 -99072Assets 99635 116930 69139 163389 168443 133870 132164Liabilities -72702 -88489 -55020 -114522 -115329 -100322 329613Other Investments 222573 -121927 -18283 15432 56979 -150971 -197449Assets -333333 -448570 -14947 -128227 -34332 -288686 -7520Liabilities 555906 326643 -3335 143659 91311 137715 -28675

Reserve Assets -32185 -12221 -68021 -26662 -36288 -76655 -71520Net Errors and Ommissions -21091 19505 22278 25233 28530 26538 -28675

Overall Balance of Payments 32185 12221 68021 26662 36288 76655 71520

2014 2015

Balance of Paymentfigrures in HK$ Million

PEST ANALYSIS Political

• The most significant opportunity for McDonald is that Hong Kong is politically stable, so there would rarely be any political factors that will interrupt and slow down the company’s growth.

• Another significant opportunity is that there isn’t a well- established minimum wage policy in Hong Kong, which allows McDonald to hire workers at a lower wage to maximize their profit.

• There isn’t a goods and services tax in Hong Kong and this allows McDonald to have lower expenses.

Social/Culture

• Hong Konger’s lifestyle influenced by the Britain colonization gives McDonald a great advantage. Hong Kongers are used to western food, so McDonald has a large customer base.

• McDonald is a fast food restaurant company, so they can perform their services in a short period of time and this fits with the fast paced lifestyle in Hong Kong.

• Hong Kong people are more aware of healthy eating, so they stay away from high calories and high cholesterol food. McDonald tries to prevent the loss of customer by including healthier food in the menu, such as salads and sandwich.

Economic

• The economic collapse that was triggered by the Lehman Brothers has caused Hong Kong to enter the recession stage in the economic cycle. Therefore, the demands for low price food increases tremendously and this benefited McDonald, since the food are cheap and the quality is guarantied.

• In the long term, if the inflation continuously increase, it will create a threat to McDonald because the meal prices will be raised to a point that it will be too expensive and McDonald will lose it’s large customer base that is from the lower class.

Technological:-

• Hong Kong has a well developed transportation system, especially the airport that have airlines that connects to different part of the world. This is a significant advantage to McDonald because their food supplies can be delivered in a short period of time and at a low cost.

Presented By

Arpan Gosh (PGDM 2)

Shivam Shrivas (PGDM 2)

Sadhu Prudvi (PGDM 2)

Shrey soodh (PGDM 2)

Saurabh (PGDM 2)

Vamsi Krishna (PGDM 2)