Presentation SanDiego Aug2006

HONG KONGLatest Developments & New Opportunities : 

HONG KONG Latest Developments & New Opportunities

Economic Outlook: 

Economic Outlook GDP grew 8.6% in 2004, 7.3% in 2005 Unemployment down to 4.9% Inflows of Foreign Direct Investment, up to US$36 billion, second in Asia. Named “Asia City of the Future”. World’s Freest Economy ranked by Heritage Foundation, Wall Street Journal and Cato Institute

HK as a Financial Center: 

HK as a Financial Center Second largest stock exchange in Asia Premier capital formation center for Mainland enterprises World’s 6th largest foreign exchange market Leading asset and fund management center in Asia

HK’s Strengths as a Financial Center: 

HK’s Strengths as a Financial Center Rule of law firmly upheld Free flow of capital Stable & freely convertible currency No investment restrictions Superb financial infrastructure in money transfer, securities, trading & clearance Low tax rate & simple tax regime Abolition of estate tax

HK as a Logistics Hub: 

HK as a Logistics Hub A prime location Reach half of world’s population within 5 hrs At the estuary of PRD, “Factory of the World” (handle 30% of mainland foreign trade) World’s busiest air cargo center 2nd busiest container port in world, 22.4 million TEUs in 2005 DHL’s example

HK as a Preferred Tourist Destination in Asia: 

HK as a Preferred Tourist Destination in Asia Visitors arrival at all time high – 23.4 million in 2005 (3.4 times of HK’s population) World’s 7th most visited destination Forecast 27 million visitors in 2006

New Attractions : 

New Attractions HK Disneyland HK Wetland Park Symphony of Lights Asia World Expo

Closer Economic Partnership Arrangement (CEPA): 

Closer Economic Partnership Arrangement (CEPA) First FTA between Mainland China & HK Trade in Goods; Trade in Services; Trade & Investment Facilitation Win-win-win arrangement for HK companies, Mainland enterprises and overseas businesses Jan 2004 Jan 2005 Jan 2006 Phrase I Phrase II Phrase III Jul 2006/Jan 2007 Supplement to Phrase III

Trade in Goods: 

Trade in Goods Zero Tariff for ALL HK Goods Goods must be “Made in Hong Kong” Products benefit most: High valued added content; short product cycle; high IP right; high mainland tariff rates; brand name products

Trade in Services: 

Trade in Services Covers 27 service sectors HK service suppliers enjoy earlier & wider market access to Mainland market Concessions beyond China’s WTO commitments Recognition of HK professional qualifications “A Fast Pass” to China market

Trade and Investment Facilitation:: 

Trade and Investment Facilitation: Enhance cooperation in seven areas: Trade and investment promotion Customs clearance facilitation Commodity inspection and quarantine, food safety and quality and standardization Electronic business Transparency in laws and regulations Cooperation of small and medium enterprises Cooperation in Chinese traditional medicine and medical products sector

Supplement to Phase III: 

Supplement to Phase III On Goods: 37 more HK products with zero tariff On Services: 15 liberalization measures in 10 sectors On Trade & Investment facilitation: Protection of intellectual property

How can Overseas Companies Benefit? : 

How can Overseas Companies Benefit? For service companies: Set up a company in HK, or Partner with, invest in, or buy into a CEPA-qualified firm in HK For manufacturers or traders of goods: Partner with, or outsource to a HK manufacturer More info - www.tid.gov.hk

Pan-PRD Cooperation & Development Forum: 

Pan-PRD Cooperation & Development Forum 9 provinces+ 2 SARs Cooperation in infrastructure, investment, commerce & trade, tourism, agriculture, labor, education & culture, IT, environmental protection, health & prevention of infectious disease

Objectives: 

Objectives Promote infrastructural development Reduce barriers to trade Open further to outside Broaden market access Establish stronger interaction with other regions (Yangtze River Delta, Bohai, SE Asia)

HK’s unique roles in Pan-PRD: 

HK’s unique roles in Pan-PRD Provide strong international financial infrastructure Raise capital Apply technologies to promote high value-added manufacturing businesses Upgrade traditional industries & R&D Commercialize research results Build and protect brand names

Planning for the Future: 

Planning for the Future Infrastructure for better connectivity with PRD Support for R&D Attracting talents & capital investment

New Infrastructure for Better Connectivity with PRD: 

New Infrastructure for Better Connectivity with PRD Shenzhen Western Corridor Guangdong-Shenzhen- Hong Kong Express Rail Link HK-Zhuhai-Macao Bridge

Support for Research & Development: 

Support for Research & Development Objective: develop HK into a regional technology service hub Innovation & Technology Fund ($650 million) Five new R&D Centers HK Science Park Cyberport

Attracting Talents & Capital Investment: 

Attracting Talents & Capital Investment Quality Migrant Admission Scheme Launched in June 2006. Aims to attract talented people from overseas and Mainland China to develop careers in HK Capital Investment Entrant Scheme Launched in October 2003. Aims to attract capital investment entrants, hence enhance HK’s financial & economic activities More info – www.immd.gov.hk

Major International Events coming to HK: 

Major International Events coming to HK ITU Telecom World (2006) Olympic Equestrian Events (2008) East Asian Games (2009)

Slide22: 

HK Economic & Trade Office in San Francisco 130 Montgomery Street San Francisco http://www.hketosf.gov.hk.