The latest global financial crisis has transformed the international economic landscape. The centre of economic gravity has shifted from traditional markets in the West towards Asia – and particularly toward India and China. Now the two nations are widely predicted to provide a twin-engine for global economic growth in the next decade. Speaking on this at a function Mr. Tsang said, “You don’t have to be Albert Einstein to understand how closer links between us will give both of our economies a turbo boost. Hong Kong not only enjoys a reputation as an international business and financial centre, our city is also China’s most important centre for global finance. Under the principle of “One Country, Two Systems” Hong Kong nurtures all the key ingredients for a successful banking and financial hub.”
Hong Kong has a free flow of information, ideas and capital as well as a highly transparent regulatory regime. There low and simple tax systems mean that companies pay no more than 16.5 per cent profits tax and salaries tax is just 15 per cent. There is no VAT, no GST, no capital gains tax and no death duties in Hong Kong; all of this provides the most favorable environment to the Indian companies wishing to set up operations in the region.
During Mr. Donald Tsang meeting with the Mr. Pranab Mukhejee, Indian finance minister, Mr. Tsang remarked that the government is keen to explore opportunities that will help ‘business move forward’. Key topics under discussion included suggestions towards increasing the frequencies of flights between the two places, a comprehensive Avoidance of Double taxation agreement, visa free treatment for Hong Kong visitors and Indian recognition of Hong Kong’s arbitral awards. “We are working towards creating a conducive environment for greater bilateral trade. This partnership with India will help bring mainland investors into this important market, added Mr. Tsang.”
In an another conference, Mr Tsang encouraged Indian businesses to join the 1,500 Indian companies already operating in Hong Kong, and highlighted Hong Kong's strong appeal to growing numbers of international companies as a platform to reach Guangdong, the rest of the Mainland and the Asia-Pacific region.
Mr Tsang said, “India and Hong Kong have always shared very promising bilateral relations; both have benefited each other immensely in trade and other areas. The total trade between Hong Kong and India in the first eight months of 2010 amounted to HK$94 billion (approx. US$12 billion), an increase of 43% over the same period last year. We welcome the opportunity to partner with Indian enterprises to expand their presence in Hong Kong and the Mainland Chinese markets, riding on Hong Kong’s sound legal, economic and communications infrastructure.”
What sets Hong Kong apart in the region is its ability to converge the unique “China advantages” and “global advantages” and generate an ever changing range of new products and services that has benefited not only Hong Kong and the Mainland of China, but also the rest of the world. This reinforces Hong Kong’s status as the preferred platform to carry out both China-related activities in the global financial arena, and also global operations in the Greater China market.
Mr. Tsang said, “The two nations, India and China, are the world’s most populous nations and home to about 40 per cent of the human race. Most economists predict that the economies will provide a twin-engine for global economic growth in the 21st Century. At the same time, Hong Kong cherishes its business relationship here in India. Fuelled by a nation of youthful consumers, India is now among the world’s largest destinations for retail investment. Hong Kong is also eyeing India’s middle class that is expanding rapidly, which brings about strong demand for new and exciting products”.
The Chief Executive has led a business delegation comprising some 30 leaders of Hong Kong’s biggest businesses, banks and financial institutions. Delegates provided the latest intelligence on business opportunities in Hong Kong and the rest of China. They are also shared the insight on what makes Hong Kong the world’s freest economy and one of the most business-friendly cities on earth.
Key Facts about Hong Kong:
•HK No. 1 investor in Mainland China – the top investor in every province in China – has the widest business network in China
•HK boasts of the largest IPO in the world - US$31 billion in 2009, even higher than New York and London
•360,000 Indian visitors from HK last year
•HK India bilateral trade worth $16 billion, even more than India-Japan trade which comes to around $10 billion
•Main differentiator is HK market having huge liquidity – around 4 trillion HK dollars floating around in the market
•A lot of Indian banks coming in, maximum Indian banks present in HK after India
•A prime capital raising centre in the Asian time zones. Asian firms would find it easier and faster trading in the HK stock exchange
•27, 000 Indians living in HK
•69 flights every week, looking to increase and encourage competition from Air India, Kingfisher and Jet Airways – growth of affluence in India resulting in more people wanting to travel
•In Hong Kong universities, the percentage of foreign students allowed has been increased to 20% at the same fee structure
•Good for young Indian travelers – fun city, 2 major theme parks – Disneyland and Ocean Park, one of the safest cities in the world, and very welcoming towards visitors
