By Dr. Kevin Lau
In the ever-shifting currents of global commerce, the imperative for enterprises from Chinese mainland to venture abroad has become a matter of survival. The deepening of reform and opening-up, a cornerstone of China's national policy, has propelled the nation from the "world's factory" in the late 20th century to a leader in high-tech innovation. Yet, today's landscape is fraught with challenges: escalating geopolitical tensions and tightening global trade relations have transformed globalization into a complex and uncertain voyage. For mainland enterprises, "going global" is no longer a choice but a necessity—a stark reality encapsulated in the adage, "Go global or go under." Hong Kong, as China's gateway to the world, stands poised to ride this tide, transforming challenges into a golden opportunity to solidify its global stature.
The drive for mainland enterprises to expand overseas is undeniable, yet the journey is far from smooth sailing. Navigating uncharted markets is akin to traversing a foreign land without a guide—fraught with obstacles and risks. Over the past decade, Hong Kong has cemented its role as the nation's international portal, leveraging its advanced financial infrastructure, robust legal arbitration expertise, multilingual talent fluent in English, Cantonese, and Mandarin, and its strategic proximity to the mainland. These strengths position Hong Kong as the ideal "springboard" for mainland firms venturing abroad, offering a trusted guide to mitigate the perils of global expansion.
The external environment for mainland enterprises has grown increasingly formidable. Many firms, traditionally reliant on Western markets like Europe and the U.S., now face heightened scrutiny and restrictive trade policies targeting Chinese investments. According to the [China Outward Direct Investment Statistical Bulletin], China's total outward direct investment in 2023 reached $147.85 billion, a significant figure but only three-quarters of its 2016 peak, reflecting the challenges of navigating Western markets. For some enterprises, this marks their first foray into global markets; for others, it necessitates finding new investment destinations beyond traditional strongholds. In both cases, Hong Kong's role as a gateway, bridge, and value-adder is not just appealing—it is indispensable.
Hong Kong's financial ecosystem is a beacon of opportunity. Its simple, low-tax regime—with a maximum profits tax of 16.5% and no capital gains or inheritance taxes—creates a haven for global capital. The city's unrestricted foreign exchange policies enable seamless cross-border transactions, connecting investors to opportunities like Stock Connect and global IPOs. In 2023, Hong Kong raised over HK$300 billion through IPOs, ranking among the world's top three, a testament to its magnetic appeal [Hong Kong Stock Exchange]. This robust infrastructure supports mainland enterprises, whether they are startups seeking new markets or established firms diversifying their portfolios.
The Greater Bay Area (GBA) amplifies Hong Kong's strategic value. As mainland firms target regions like ASEAN and Belt and Road countries, Hong Kong serves as a vital conduit, offering expertise in finance, legal arbitration, and market navigation. The Belt and Road Initiative, spanning Europe, Africa, and South America, relies on Hong Kong's connectivity to facilitate trade and investment. By acting as a trusted guide, Hong Kong reduces risks for mainland enterprises, ensuring their global ventures are not reckless leaps but calculated strides toward success.
This moment is a clarion call for Hong Kong to seize the opportunity. By supporting mainland enterprises, we not only bolster our economy but also reinforce our role as a "super-connector" and "super value-adder." The influx of firms will stimulate sectors like finance, legal services, and logistics, creating jobs and driving growth. Moreover, Hong Kong's engagement with global markets enhances its soft power, fostering cultural and economic ties that resonate worldwide.
In conclusion, the tide of mainland enterprises' global expansion is a transformative force, and Hong Kong stands ready to harness its momentum. By leveraging our financial prowess, legal expertise, and strategic position, we can guide these firms to new horizons, ensuring their success and our own. As the world navigates a sea of uncertainty, let us seize this golden opportunity to solidify Hong Kong's stature as a global hub, weaving a future where our city shines as a beacon of connectivity and prosperity.
The author is a specialist in radiology, Master of Public Health of the University of Hong Kong, Founding Convenor of the Hong Kong Global Youth Professional Advocacy Action, and an adviser of the Our Hong Kong Foundation.
The views do not necessarily reflect those of DotDotNews.
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