Use HK as launchpad into China, firms urged

SINGAPORE — Companies here should consider using Hong Kong as a launchpad to break into the China market instead of bypassing it completely, an official with the territory’s trade development council urged yesterday.

“Hong Kong has always had a good network with the Western world and also China … Singapore companies can consider Hong Kong as a platform, as a risk manager to do business with China,” said Mr Benjamin Chau, deputy executive director of the Hong Kong Trade Development Council (HKTDC).

Speaking at a media luncheon, Mr Chau noted how trade links between Singapore and Hong Kong continue to be strong.

However, the take-up rate among Singapore companies for HKTDC’s trade events has been lukewarm, compared to those of other regional countries. The council said that in the financial year between April last year and March this year, only 73 Singaporean companies of a total of 36,000 firms worldwide had participated in trade exhibitions organised by HKTDC, the trade development arm of Hong Kong.

Mr Chau said that more than 900 companies were from members of the Association of Southeast Asian Nations, including almost 400 firms from Thailand alone.

“Although we see an increase in (participating) Singapore companies from 64 in 2013 to 73 last year, Singapore is slightly behind — it should catch up. Trade shows are a good vehicle for firm to consider sourcing for market intelligence and (establishing a) network to (reach out to) the international and China audience,” said Mr Chau.

“We hope more businessmen can make more use of the Hong Kong trade platform to promote and export their products, source for merchandise or collect market information.”

Mr Chau said that during his visit here, he would be meeting representatives of a few trade associations in Singapore to discuss business opportunities in Hong Kong and the participation of Singapore companies in the council’s trade shows.

Speaking to TODAY, business associations here agreed that more Singapore firms ought to use Hong Kong as a platform to venture into China.

Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said: “Hong Kong has deeper business agreements with China and has structural advantages for businesses to trade through it. (It) is also a base where businesses can ... get a lower tax rate through the use of Hong Kong companies to deal or negotiate with companies in China.”

Mr Lawrence Leow, honorary treasurer of the Singapore Business Federation, noted that the business community in Hong Kong is more familiar with business practices in China, and lawyers there would be able to provide clear advice on doing business in China.

“In terms of proximity, Hong Kong is closer to China, so there are a lot of companies penetrating into China through Hong Kong. Advantages through infrastructural, financing and government policies reduce red tape. Singapore companies may have to settle with lower profit because of the increased (middleman) fees. But if it provides higher accessibility and gets the job done, why not?” said Mr Leow.