Hong Kong: Your business platform in Asia Miss Gloria Lo Director Hong Kong Economic and Trade Office 5 September Hong Kong Economic and Trade Office (Toronto)

Hong Kong: economic highlights Real GDP growth: 1.1% in Q2 2012, 1-2% for 2012 (forecast) Inflation: 4.2% in July 2012 Unemployment rate: 3.2% for May-July 2012 Fiscal reserves: HKD 648 billion as at 31 July

Hong Kong: international trading centre 10 th largest trading entity in merchandise trade in 2011 (ranked 6 th with EU as a single trading entity) 14 th largest trading entity in commercial services (ranked 8 th with EU as a single trading entity) 10 th largest trading entity in merchandise trade and commercial services 3

Hong Kong: bilateral trade with Canada Total trade in 2011: USD 5 billion (7.2% increase over 2010) 10 th largest export market of Canada (3 rd largest for beef and 4 th largest for fish and seafood) 8.8% (USD 4.2 billion) of trade between Canada and Mainland China through Hong Kong 2 nd largest destination in Asia for Canadian Foreign Direct Investment (FDI) 4

Hong Kong: strategies for economic development Four traditional pillar industries: Financial services Trading and Logistics Professional services Tourism 5

Hong Kong: strategies for economic development Six new growth industries and wine trading: Innovation and technology Culture and Creativity industries Environmental industries Education services Medical services Testing and Certification services Wine trading and distribution 6

Hong Kong: platform for business in Mainland China and South East Asia Premier gateway to Mainland China Close proximity to the Mainland  Strategically located to tap into the fast growing Pearl River Delta Region  Close economic cooperation with neighboring Guangdong province Closer Economic Partnership Arrangements  Bilateral free trade agreement with the Mainland  Zero tariff on goods and products of Hong Kong origin  Preferential treatment for Hong Kong companies in 48 service sectors in Mainland market Renminbi offshore business centre  Mainland’s external trade settlement in RMB through Hong Kong amounted to RMB 2,081 billion in 2011 (more than 90% of the total)  More than 160 RMB bonds issued in Hong Kong  Effective platform for RMB trade settlement and financing 7

Hong Kong: platform for business in Mainland China and South East Asia Cross-boundary Infrastructure Guangzhou-Shenzhen-Hong Kong Express Rail Link  26 km high-speed railway linking Hong Kong and major Mainland cities, Hong Kong section to complete in 2015  More efficient transportation between Hong Kong and the Mainland (e.g. 48 minutes from Hong Kong to Guangzhou) Hong Kong-Zhuhai-Macao Bridge  29.6 km dual 3-lane carriageway linking Hong Kong, Zhuhai and Macao  Operational in 2016, cities in West Pearl River Delta Region within 3-hour commuting radius of Hong Kong 8

Hong Kong: platform for business in Mainland China and South East Asia Development trend following the 12 th National Five-Year Plan Upgrading and restructuring of operations in moving up the value chain Growing importance of the service sector Expansion of domestic market/internal consumption Development of strategic sectors such as environmental protection, information technology, bio-technology, advanced manufacturing, new energy and materials 9

Hong Kong: platform for business in Mainland China and South East Asia Opportunities arising from the 12 th National Five-Year Plan Closer cooperation between Hong Kong and Guangdong Framework Agreement on Hong Kong/Guangdong Cooperation in April 2010 Cooperation in various areas such as cross-boundary infrastructure, finance, modern service industries, manufacturing and hi-tech innovation, education, medical services, etc. 10

Hong Kong: platform for business in Mainland China and South East Asia Opportunities arising from the 12 th National Five-Year Plan Further development of the Pearl River Delta Region Fastest growing region covering nine southern provinces in the Mainland Rapid upgrading and restructuring of the industrial sector Relocation of the labor intensive industries to less-developed regions Progressing up the high-technology and high-value chain 11

Hong Kong: platform for business in Mainland China and South East Asia Opportunities arising from the 12 th National Five-Year Plan Funding support for Hong Kong enterprises Dedicated fund set up in June 2012: assist Hong Kong companies in exploring and developing the Mainland market through developing brands, upgrading and restructuring operations, promoting domestic sales in the Mainland Enterprise support program: for all non-listed companies registered in Hong Kong with substantive business operations in the city Organization support program: for non-profit distributing bodies such as industrial and trade bodies, professional and research institutions 12

Hong Kong: platform for business in Mainland China and South East Asia Platform for business with other parts of Asia: ASEAN: Hong Kong’s 2 nd largest trading partner in 2011 ASEAN’s bilateral trade with Hong Kong: increased by 10% in 2011 ASEAN’s bilateral trade with Mainland China: 12.2% of total routed through Hong Kong in

Hong Kong: an excellent place for business and investment Strategically located: within five-hour flight from half of the world’s population Sound legal system: common law, independent judiciary, protection of intellectual property rights Freest economy in the world: free flow of capital, unfettered flow of news and information, etc. Simple and low tax rates: profits tax at 16.5%, salary tax capped at 15% Level playing field for all businesses: local and foreign owned companies compete on equal footing Hardware and software for business efficiency: superb infrastructure and communication system, strong professional services 14

Hong Kong: an excellent place for business and investment 15

Hong Kong: an excellent place for business and investment Home to 6,948 overseas companies (55.5% up on 2001)  1,340 regional headquarters  2,412 regional offices  3,196 local offices Inflow of foreign direct investment to Hong Kong: grew by 17.2% year-on-year to reach USD 83.2 billion in 2011 Latest trend: more multinational companies moving their global headquarters to Hong Kong (e.g. General Electrics, Nissan’s Infiniti) 16

Hong Kong: an excellent place for business and investment Strong social links and trade relations with Canada Safe and easy to do business Fundamental strengths and advantages to leverage upon for business success in Asia 17

Think Hong Kong for your overseas venture ! 18

Thank you 19