LCQ5: Work on attracting enterprises and investments
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Question:
There are views that the fruitful results of Invest Hong Kong (InvestHK) in attracting enterprises and investments last year demonstrate that overseas and Mainland enterprises have full confidence in Hong Kong. In this connection, will the Government inform this Council:
(1) as InvestHK indicated last year that it would first focus on attracting medium-sized Mainland enterprises that had needs to go global to invest in Hong Kong, and it has been reported that the number of micro, small and medium-enterprises on the Mainland exceeds 52 million, of the authorities' deployment for the aforesaid work;
(2) as it has been reported that some enterprises face problems in aspects such as talents, supporting resources and financing in Hong Kong when establishing presence in Hong Kong, and the Secretary for Innovation, Technology and Industry has pointed out the need for the entire Government to be involved in resolving such problems, whether the authorities have conducted an in-depth study on the problems and difficulties encountered by Mainland enterprises when establishing presence in Hong Kong; if so, of the details; if not, the reasons for that;
(3) as the 2024 Policy Address proposes that InvestHK and the Hong Kong Trade Development Council will set up a mechanism to provide one-stop, diversified professional advisory services for enterprises in Hong Kong looking to go global, whether the authorities have conducted a comparative analysis of the effectiveness of Mainland enterprises venturing overseas markets directly vis-a-vis doing so through Hong Kong, so as to grasp Hong Kong's advantages; and
(4) whether it will consider identifying the problems faced by Mainland enterprises venturing overseas markets when establishing presence in Hong Kong, and strengthening cross-departmental collaboration among various policy bureaux and government departments having regard to the needs of enterprises in terms of products, production, talents, as well as financial, legal, dispute resolution and other professional services relating to venturing overseas markets, so as to formulate targeted relief policies and helping measures, such as providing more targeted talent and fund matching services; if so, of the details; if not, the reasons for that?
Reply:
President,
According to the latest annual survey jointly conducted by Invest Hong Kong (InvestHK) and the Census and Statistics Department, the number of companies in Hong Kong with overseas or Mainland parent companies rose to 9 960 in 2024, reaching a record high. The number of start-ups in Hong Kong also increased to a record high of almost 4 700 in the same year.
In 2024, InvestHK assisted 539 Mainland or overseas enterprises in establishing and expanding their businesses in Hong Kong, representing an increase of over 40 per cent as compared with the full year figure of 2023. On a pro-rata basis, the figure well exceeded the performance indicator as set out in the 2022 Policy Address by the Chief Executive. Among those 539 companies, 273 of them were from the Mainland.
The above fruitful investment promotion results fully demonstrate InvestHK's work achievements and that Mainland and overseas enterprises continue to have full confidence in Hong Kong despite geopolitical impact. Those enterprises have selected Hong Kong as their base to expand regional businesses in Asia so as to leverage the commercial values that Hong Kong could offer as a "super connector" and a "super value-adder" when assisting their global business expansion.
In response to the Hon Sunny Tan's question, our reply is as follows:
The global trade landscape and geopolitics are rapidly changing, with parts of the supply chains shifting to the Global South and Belt and Road countries, while Mainland enterprises are also proactively establishing their presence abroad. According to statistics, there are currently more than 50 000 medium-sized manufacturing enterprises in the Pearl River Delta and the Yangtze River Delta alone, many of which involve overseas operations and have the need to go global with some of their manufacturing processes. Hong Kong's rich experience in international trade and world-class professional services will be of assistance to such enterprises in seizing business opportunities when they plan to cope with the aforesaid changes.
It was announced in the 2024-25 Budget that the Government's goal was to develop Hong Kong into a multinational supply chain management centre. In his 2024 Policy Address, the Chief Executive further requested InvestHK and the Hong Kong Trade Development Council (HKTDC) to set up a high value-added supply chain services mechanism for attracting Mainland enterprises to establish international or regional headquarters in Hong Kong for managing offshore trading and supply chain, and providing one-stop professional advisory services for enterprises in Hong Kong looking to go global. In December 2024, InvestHK and the HKTDC established the above mechanism. The two agencies are also proactively collaborating with relevant "Team Hong Kong" organisations, including the Hong Kong Export Credit Insurance Corporation (ECIC), the Hong Kong Productivity Council, etc., to jointly support those Mainland enterprises in Hong Kong to go global.
Despite that those Mainland enterprises would need to react to the United States' tariffs imposed on different regions by re-constructing their supply chain networks, Hong Kong's rich experience in international trade and world-class professional services allow it to become the destination for international or regional headquarters of those enterprises to manage offshore trading and supply chain. The enterprises could also leverage Hong Kong as a springboard for their multinational business development. On the one hand, through its Dedicated Teams for Attracting Businesses and Talents based in the Mainland Offices, InvestHK is proactively organising activities under the theme of multinational supply chain, so as to actively reach out to more Mainland enterprises for investment promotion work. As at end-February 2025, InvestHK had organised and co-organised around 20 relevant investment promotion activities in various Mainland cities, including Hangzhou, Nanjing and Xiamen, etc. within around one year's time. InvestHK will identify Mainland enterprises wishing to go global through various activities and attract them to use Hong Kong as a platform for them to develop overseas businesses and establish supply chain.
On the other hand, the HKTDC is providing one-stop professional advisory services for enterprises in Hong Kong. Towards enterprises with plans of going global, the HKTDC will, through its overseas offices, render on-site support services. These include assisting enterprises in establishing connections with overseas markets and understanding overseas laws and regulations; providing market research covering various emerging markets such as the Middle East, Central Asia and Latin America; as well as providing information on various areas including environmental, social and governance (ESG), testing and certification and export credit risk management. Furthermore, in view that Hong Kong's business sector possesses rich knowledge and profound experience in compliance, labour protection and environmental protection of overseas markets, the HKTDC facilitates collaboration between enterprises and different organisations and industry stakeholders to provide ESG training, etc. for Mainland enterprises seeking to expand their reach to overseas markets. This will help them build goodwill with business partners and expand their markets.
Besides, the ECIC will provide credit insurance for export services relating to multinational supply chain so as to render more comprehensive support for enterprises seeking to go global. To assist Hong Kong exporters in expanding into Mainland and emerging markets, the ECIC has also increased the number of free buyer credit checks from 12 to 20.
In fact, Hong Kong's advantages for assisting Mainland enterprises to go global are very obvious and important. Apart from possessing quality talents who have rich experience in offshore trading and supply chain management and the relevant network, Hong Kong has the distinctive advantages of enjoying strong support of the motherland and being closely connected to the world, as well as plays the important roles as a "super connector" and a "super value-adder", under "one country, two systems". All these make Hong Kong a two-way springboard for Mainland enterprises to go global and for attracting overseas enterprises. Hong Kong's institutional fundamentals, including the exercise of the common law system, independent Judiciary, a favourable business environment with efficient and transparent markets, a regulatory regime in line with international rules, a simple and low tax system, world-class professional services, and free flow of goods and factors of production including talents, capital and information, as well as key national strategies, including the National 14th Five-Year Plan, the Guangdong-Hong Kong-Macao Greater Bay Area development and the Belt and Road Initiative, provide Hong Kong with unlimited opportunities and make it the only economy in the world where the global advantage and the China advantage come together.
In addition, Hong Kong's advantages and experiences especially meet the needs of small and medium enterprises from the Mainland (Mainland SMEs). Mainland SMEs' demand for high value-added supply chain services is also consistent with InvestHK's observations. During the past year, the Department noted at various investment promotion events that many Mainland SMEs had, upon understanding the aforementioned advantages of Hong Kong and the professional services it could offer, concurred that it would be far more effective and convenient for them to go global via Hong Kong instead of venturing overseas markets direct by themselves. They also expressed interest in establishing headquarters in Hong Kong for managing their offshore trading and supply chain. InvestHK and the HKTDC will provide these enterprises with one-stop supply chain advisory services and other relevant assistance through the high value-added supply chain services mechanism.
To further step up co-ordination between bureaux and departments, with the support of the Financial Secretary, InvestHK set up an inter-departmental/agency referral mechanism led by the Director-General of Investment Promotion last year. By proactively collecting Mainland and overseas enterprises' concerns and pain points when they plan to establish presence in Hong Kong, InvestHK reflects them to relevant bureaux, departments or agencies accordingly for exploring suitable solutions as appropriate. Since the establishment of the mechanism more than half a year ago, various issues have been successfully addressed to meet the needs of the trade, including opening of bank accounts, application and work arrangements for imported workers, application for use of vacant land, thereby facilitating Mainland and overseas enterprises to set up and expand their businesses in Hong Kong.
Looking ahead, InvestHK will ride on the good momentum of 2024 and make every effort in attracting more Mainland and overseas enterprises to invest in Hong Kong, so as to continue to implement the performance indicator as set out in the 2022 Policy Address. At the same time, the Department will continue to work with relevant "Team Hong Kong" organisations to further enhance the high value-added supply chain services mechanism in order to attract and assist more Mainland enterprises looking to go global to come to Hong Kong and make good use of the city as a springboard to develop their multinational businesses. This will be conducive to Hong Kong's economic development on the one hand, and facilitate the deepening of its international exchanges and co-operation on the other hand, thus responding to meet Premier Li Qiang's expectations for Hong Kong, as set out in his work report this year, integrating into the overall national development while making contribution to the country.
Ends/Wednesday, April 16, 2025
Issued at HKT 15:10
Issued at HKT 15:10
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