1. Hong Kong: the premier gateway for business in Mainland China and Asia Miss Gloria Lo Director Hong Kong Economic and Trade Office 29 August 2012 1 Hong Kong Economic and Trade Office (Toronto)

2. 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 659 billion as at 30 June 2012 2

3. 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 the world in terms of total trade in merchandise and commercial services 3

4. 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

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

6. 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

7. Hong Kong: international logistics centre Hong Kong port: 3 rd busiest container port in the world, handled 24.4 million TEU of containers in 2011 International shipping centre: 2,158 ships registered with total gross tonnage of 77.9 million (4 th largest shipping register) Hong Kong air transport: the busiest air cargo airport in the world Vision: to further develop as an international maritime centre, high-value goods inventory management centre and regional distribution centre 7

8. Hong Kong: strategies to facilitate the logistics industry Plan for the construction of the 3 rd runway in the Hong Kong International Airport Explore the development of new container terminal Identify land for logistics service for handling high- value goods Ongoing infrastructure development:  New cruise terminal in Kai Tak Area (first berth operational in mid 2013)  Guangzhou-Shenzhen-Hong Kong Express Rail Link (Hong Kong section for completion in 2015)  Hong Kong-Zhuhai-Macao Bridge (for completion in 2016) 8

9. Hong Kong: strategies to facilitate the logistics industry Guangzhou-Shenzhen-Hong Kong Express Rail Link 26-km high-speed railway linking Hong Kong with major Mainland cities Hong Kong section of the Express Rail Link to complete in 2015 More efficient transportation between Hong and the Mainland in future (e.g. 48 minutes from Hong Kong to Guangzhou) Terminus adjacent to West Kowloon Cultural District 9

10. Hong Kong: strategies to facilitate the logistics industry Hong Kong Zhuhai-Macao Bridge 29.6 km dual 3-lane carriageway linking Hong Kong, Zhuhai and Macao Operational in 2016 to facilitate passenger and freight land transport Cities in West Pearl River Dealt Region within 3-hour commuting radius of Hong Kong 10

11. 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 11

12. 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) 12

13. 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  Closer 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 13

14. 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 Hong Kong’s bilateral trade with ASEAN: increased by 10% in 2011 Trade between Mainland China and ASEAN: 12.2% of total routed through Hong Kong in 2011 14

15. Hong Kong: platform for business in Mainland China and South East Asia 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 15

16. Hong Kong: platform for business in Mainland China and South East Asia 16

17. Hong Kong: platform for business in Mainland China and South East Asia Think Hong Kong for your overseas venture ! 17

18. Thank you 18