Foreign-owned regional operations in Hong Kong hit all-time
high
The number of regional operations by foreign-owned companies in Hong Kong has hit an all-time high, according to figures released today (November 6).
As at June 1, 2001, there were 3 237 regional operations, a 7.9% increase over 2000 and a record high since statistics on these operations were first gathered 11 years ago.
The number of regional headquarters rose from 855 in 2000 to 944 in 2001 - an increase of 10.4%, and the highest on record. The previous record was 903 regional headquarters in 1997.
The number of regional offices rose by 6.8% from 2 146 in 2000 to 2 293 in 2001 - another all-time high.
The figures were released today in the Census and Statistics Department's 2001 Annual Survey of Regional Offices Representing Overseas Companies in Hong Kong.
The Director-General of Investment Promotion at Invest Hong Kong, Mr Mike Rowse, said: "Since its inception 16 months ago, InvestHK has seen constant and rising international interest in Hong Kong as the site for regional headquarters.
"More and more multinational corporations (MNCs) are flocking to set up beachheads in Hong Kong, taking advantage of our competitive advantages over other Asian cities, in particular, as a gateway to China.
"The survey shows Hong Kong is again topping the charts as the preferred hub and living up to its role as Asia's world city.
"With China's accession to WTO, Hong Kong's status as the preferred location for regional headquarters for multinationals will be strengthened further."
Mr Rowse cautioned that despite the positive survey results, Hong Kong had to continue to work hard to retain its attractiveness as a place to do business.
The 2001 Survey is the second of this kind by the Census and Statistics Department. Previous surveys were conducted by the ex-Industry Department on an annual basis beginning in 1990.
In 2001, the United States topped the list of countries with the largest number of regional headquarters in Hong Kong with 221 companies. This was followed by Japan with 160 companies, and the United Kingdom with 90 companies.
The major lines of business of these regional headquarters were wholesale, retail and trade-related services and financial services. Other major lines of business included business and professional services and manufacturing of electronic goods.
Japan topped the list of countries with the largest number of regional offices with 533 companies. The United States was next, with 420 companies, followed by Mainland China, with 172 companies. Major lines of business for the regional offices were wholesale, retail and trade-related services as well as business and professional services.
As from 2001, the coverage of the survey was extended to include local offices in Hong Kong established by companies incorporated outside Hong Kong to better reflect the extent of business investment in Hong Kong.
The survey recorded a total of 1 230 local offices in Hong Kong as at June 1, 2001.
As in the regional office category, Japan topped the list with 220 companies, followed by the United States with 167 and Mainland China with160 respectively. Major lines of business for the local offices were wholesale, retail and trade-related services and financial services.
Companies considered Hong Kong's low and simple tax system as the most important factor in choosing the location for setting up regional representation. Other important factors included the free flow of information, political stability and security, corruption free government, and communication, transport and other infrastructure.
Most of these important factors turned out to be rated as favourable for Hong Kong as a location for regional representation. Low and simple tax system was chosen as favourable for Hong Kong by the highest proportion of companies (76%). This was followed by free flow of information (73%), absence of exchange controls (72%), communication, transport and other infrastructure (72%), and free port status (70%).
Factors viewed as less favourable for Hong Kong by relatively larger proportion of companies included cost and availability of residential accommodation (49%) and cost and availability of staff (34%).
About 65% of the companies considered that the overall business environment in Hong Kong was about the same or had improved compared with the previous year.
The survey was conducted to identify regional headquarters, regional offices and local offices in Hong Kong set up by companies incorporated outside Hong Kong. While the survey reference date was June 1, 2001, the survey fieldwork was mainly conducted within the two to three months thereafter.
More detailed results are set out in the 'Report on 2001 Annual Survey of Regional Offices Representing Overseas Companies in Hong Kong'. The report is available for HK$22 per copy at the Government Publications Centre, G/F, Low Block, Queensway Government Offices, 66 Queensway, Hong Kong, or at the Publications Unit of the Census and Statistics Department, 19/F, Wan Chai Tower, 12 Harbour Road, Wan Chai, Hong Kong. Internet users may order the report through the website of the Information Services Department (http://www.info.gov.hk/isd/book_e.htm), or through the 'Statistical Bookstore, Hong Kong' (http://www.statisticalbookstore.gov.hk).
Enquiries about the results of the survey may be directed to the Economic Surveys Development Section (3) of the Census and Statistics Department (Tel: 2882 4558).
Notes:
Regional Headquarters
A Regional Headquarters is an office that has control over the operation
of other offices or branches in the region, and manages the business in
the region without frequent referrals to its parent company outside Hong
Kong.
Regional Office
A Regional Office is an office that coordinates offices/operations elsewhere
in the region, in addition to the city in which it is located, and manages
the business but with frequent referrals to its parent company outside
Hong Kong or a regional headquarters.
Local Office
A Local Office is an office that solely takes charge of the business in
Hong Kong (but not elsewhere in the region) on behalf of its parent company
outside Hong Kong.
Foreign-owned Company
A Foreign-owned Company is a corporation incorporated outside Hong Kong.
Ends/Tuesday, November 6, 2001
