Where Business Goes to Grow Simon Galpin Director-General of Investment Promotion 30 June 2014
Heart of Asia 2
3 4hours Most of Asia s key markets within four hours flight time Proximity to China 5hours From half the world s population
Greater Pearl River Delta 4 Population 64 mn Exports US$527 bn GDP US$962 bn Land Area 56,000 km 2 > UK, Italy, South Africa > UK, Italy > Indonesia, Netherlands, Turkey < Ireland, Latvia, Panama, West Virginia (US)
Regional Connectivity 5 Guangzhou Baiyuan International Airport Guangzhou East Station Guangzhou South Railway Station Zhuhai Gaolan Port Guangzhou Nansha Beijing-Zhuhai Expressway Zhuhai Nansha Ferry Terminal Shenzhen Bao an International Airport HZMB Hengqin Macao Zhuhai Jinwan Airport Guangzhou-Shenzhen-Hong Kong Express Rail Link Nansha Terminal Mawan Port Macao International Airport Shekou Port Guangzhou-Shenzhen Railway Qianhai HK-SZ Western Corridor Shenzhen Hong Kong Hong Kong International Airport Within the PRD region and Guangdong province High-speed railways to Nanning, Guiyang, Xiamen, and Maoming Intercity Railways linking cities and major towns Metros or Urban Transits in Guangzhou, Shenzhen, and Dongguan Cross-boundary links in the GPRD region Guangzhou-Shenzhen-Hong Kong Express Rail Link Hong Kong-Shenzhen Western Express Line Hong Kong-Zhuhai-Macao Bridge (HZMB) International and external connectivity Three further runways at Guangzhou Baiyun International Airport Third runway at Hong Kong International Airport Third runway at Shenzhen Bao an International Airport Phase three of Nansha Port in Guangzhou Expansion of Yantian Port and phase two of Dachanwan Port in Shenzhen Source: CBRE, SCMP
Combined Container Throughput 6 49.4 million TEU Yangtze River Delta 60.8 million TEU Greater Pearl River Delta
One Country Two Systems 7
Low and Simple Tax System 8 Shanghai* 25 45 37 11 17 Singapore 17 20 16 20 7 Hong Kong 16.5 15 5 5 0 Percentage Corporate Income Personal Income Employer Social Security Employee Social Security VAT * There is no standard rate across the Mainland China. Shanghai is used as an example NO VAT/GST/Sales tax Capital Gains Tax Withholding tax on investments Estate duty Global taxation Wine duty
World Class ICT Infrastructure 9 7th in the Global Innovation Index Report (INSEAD 2013) 2nd in Asia ICT Development Index (ITU Oct 2013) 2nd in Asia Networked Readiness Index (The Global Information Technology Report 2014, World Economic Forum) The world s fastest speed for Internet access (Akamai Technologies, 2014) The safest place in Asia for setting up data centres (Data Centre Risk Index, Cushman & Wakefield, 2013) Mobile phone penetration rate >238% (OFCA, Feb 2014)
Human Capital - Quality Education 10 x2 Two universities in the world s top 100 (Times Higher Education World University Rankings 2013/14) HKUST MBA 1st in Asia and 8th in the world (Financial Times Global MBA Ranking 2013) World s Top EMBA 2013: Kellogg HKUST EMBA Programme (Financial Times 2013) x49 49 International schools Hong Kong students ranked first in reading literacy globally (Progress on International Reading Literacy Study 2011)
Business-to-Consumer 11 Gateway to 4.3 million HNWIs in Asia-Pacific with wealth totalling US$14 tn Wealth growth the strongest in Asia-Pacific at 18% Hong Kong 124,000 HNWIs (+9.4%) Asia-Pacific expected to lead robust global HNWI wealth growth. HNWI wealth expected to reach US$18.8 tn by 2016 Source: Capgemini World Wealth Report 2014 Asia-Pacific accounted for 50% of the growth in global wealth since 2010 By 2020, est. no. of millionaires in Mainland China & Hong Kong will reach 3.7 million, an accumulated wealth of US$14 trillion Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2011
+12% +16% +4% 54.3 million visitors Spending US$44.1 billion US$1,044 per capita Million 60 50 Number of visitor arrivals 13.7 13.6 40 30 20 10 0 13.8 13.5 40.7 34.9 11.6 12.7 11.7 28.1 10.8 22.5 9.3 7 18.0 15.5 12.5 13.6 8.5 3.8 2000 2003 2005 2006 2007 2009 2010 2011 2012 2013 Mainland China Rest of the World Source: Hong Kong Tourism Board
Business-to-Business 13 57% 49% 2000 2013 18% 27% % of mainland companies % of mainland capitalisation 797 listed Mainland enterprises on the HKEx; total market cap US$1.76 tn (as of Dec 2013) (Source: HKEX) 2,264 new investment projects approved;investment amount US$43.7 bn (as of 2013) (Source: MOFCOM) RMB deposits in Hong Kong of RMB1,053 bn (~US$173 bn) (as of Dec 2013) (Source: HKMA)
Prime Conduit for FDI 14 7,449 companies of which 3,835 are RHQs and ROs in 2013 (Source: 2013 Annual survey, HKSAR Government s Census & Statistics Department) Rank FDI Inflows (2013) US$ bn FDI Outflows (2013) US$ bn 1 USA 188 USA 338 2 China 124 Japan 136 3 Russia 79 China 101 4 Hong Kong 77 Russia 95 5 Brazil 64 Hong Kong 92 6 Singapore 64 Switzerland 60 7 Canada 62 Germany 58 8 Australia 50 Canada 43 9 Spain 39 Netherlands 37 10 Mexico 38 Sweden 33 Source: World Investment Report 2014, UNCTAD
Global Operations in Hong Kong 15 John Rice Vice Chairman (Global operations) Jean-Pascal Tricoire Global CEO Johan de Nysschen President (Global headquarters) Jeff Urwin Global Head of Investment Banking Christophe Roussel Int l Sourcing Director Markus Kramer President, Dispersions and Pigments Division (Global headquarters) Karen Fifer Global Managing Partner, Consumer Markets Practice
SuperEntrepreneurs 16 2.8 1.8 1.3 per million citizens per million citizens per million citizens Hong Kong Israel US (Source: Telegraph, 28 April 2014)
Startup Ecosystem in Hong Kong 17 600-800 in their 30s About startups including incubatees located in 80% of startup founders are non-local Establishment <2 Years Full-time staff 5 Business Sectors Enterprise solutions & consumer internet, fintech, energy & environment, medical and education, etc
Burgeoning Co-work Spaces Number of co-work spaces in HK >1,600 spaces 2014 30 startup commune 2010 3
A Vibrant Community 19 and Empowering Young Entrepreneurs Programme and Accelerator Support Programme Open Data Hong Kong HK$500 million Social Innovation and Entrepreneurship Development Fund (launched in 2013)
Startups We ve Supported 20 77% Startups supported by InvestHK since 2010
StartmeupHK Venture Programme 2014 21 Category 1 Category 2 Special Awards Early to growth stage ventures with revenue and/or significant users/customers Startups at the concept and prototype stage with no revenue 9 winners 3 winners Fin Tech and Smart City 3 Grand Award Winners Target sectors ICT; Medical and healthcare; Retail technology; Supply chain and logistics; Creative industries; Hardware and electronics; Education
Benefits Grand Award Winners will receive benefits worth over US$500,000 Sponsored trip to Hong Kong Free work / retail space Media exposure Present to potential angel investors, business partners and startup community stakeholders Mentorship from prominent business leaders Professional services from leading accounting, legal, design, brand strategy and managed hosting firms in Hong Kong Partnership matching
Key Dates Applications open NOW! http://www.startmeup.hk Closing date for applications 31 Jul (12:00p.m. HK Time) Interviews with semi-finalists 1 st week of Sep StartmeupHK Venture Forum 11 Nov
How We can Help Networking events, introduction to service providers Facilitation of visa applications, schooling PR and marketing support for launch/expansion Information to aid planning and evaluation
Startmeup.HK 25
Get in Touch: www.investhk.gov.hk 26 Tel: (852) 3107 1000 sgalpin@investhk.gov.hk InvestHK www.linkedin.com/company/ invest-hong-kong www.youtube.com/user/investhk www.flickr.com/photos/investhk 25/F, Fairmont House, 8 Cotton Tree Drive, Central, Hong Kong