Post on 17-Dec-2015
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World SME Expo 2004
- On-Site Survey of Mainland Enterprises
Hong Kong Trade Development Council
November 2004
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Date of Survey : November 16, 2004
Target : 267 representatives from Chinese mainland enterprises
Format : Face-to-face interview at the Expo venue
Methodology
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Southern China57%
%Distribution of Enterprises by RegionDistribution of Enterprises by Region
57
27
16
482
7
854316
63115
Southern China
GuangdongHainanFujian*Others
Northeastern China & others
HunanShandongLiaoningChongqingJilinOthers
Eastern and Northern China
Shanghai ZhejiangBeijingJiangsuOthers
Eastern and Northern China
16%
Northeastern China and
Others27%
Visitor Profile (I)
Distribution of Enterprises by CityDistribution of Enterprises by City
Respondents: 267 visitors
Q2
*
* < 0.5%
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Respondents: 267 visitors
Others1%
Nature of EnterpriseNature of Enterprise
Private72%
Manufacturer49%
Nature of BusinessNature of Business
Importer / Exporter
15%Wholesaler
9%Property
Developer5%
Retailer4%
Visitor Profile (II)Q3, Q4
Others 3%
Joint stock14%
State-owned10%
Collectively-owned
3%
Legal Service4%
Investment & Finance3%
Social Service5%
Commission Agent3%
Majority in following Sectors- Electronics, Technology products & accessories- Ceramics and arts and crafts- Metal products & decorations
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18
10
23
19
26Less than Rmb 5 million
Rmb 5 million to less than Rmb 10 million
Rmb 10 million to less than Rmb 50 million
Rmb 50 million to less than Rmb 100 millon
Rmb 100 million or above
%
Q25
Business Turnover of Surveyed Mainland Enterprises in 2003
Respondents: 267 visitors
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Aware55%
NotAware45%
Q17
Awareness of Facilitation Measures for Mainland Enterprises to Invest in Hong Kong
Respondents: 267 visitors
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68
64
39
19
48
37
11
4
Expand overseas markets
Increase domestic sales and expand market shares
Increase product / service competitiveness
Strengthen internal management capability
%
Q6
Future Development Goals of Mainland Enterprises
First Priority Second Priority
20
27
28
15
Respondents: 267 visitors
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3
12
12
13
18
27
31
33
43Insufficient fund for development
Shortage of talents
Restricted access to market information
Restricted access to overseas market sales network and channels
Inadequate product development capability
Internal management failing to cope with business expansion
Insufficient corporate and product advertising and promotion
Ineffective communication with overseas clients or vendors
Logistics and transport services failing to cope with day-to-dayImport / export needs
%
Q8
Difficulties / Hurdles of Mainland Enterprises in Business Development Process
Respondents: 267 visitors
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63
55
22
21
2
32
34
10
12
Project Finance
Bank Loan
Listing in Mainland Stock Market
Listing Offshore
Bond Issuance
%
Q7
Mainland Enterprises’ Most Sought-after Funding Channels
Respondents: 267 visitors
First Priority Second Priority
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Usage of and Demand for Services Offered by Hong Kong / Hong Kong Companies in the Mainland
90
29
Used before Intend to use in future
%
%Loan or financing 36Marketing and promotion 30Personnel training 19Overseas market research 19 and analysisBusiness partner / agent 18Management consulting 17Legal issues and advisory 15 service
%Loan or financing 36Marketing and promotion 30Personnel training 19Overseas market research 19 and analysisBusiness partner / agent 18Management consulting 17Legal issues and advisory 15 service
Services demanded
Respondents: 267 visitors
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Anticipated Business Operation of Mainland Enterprises in Hong Kong
Without any business operation / presence
63%
With office / branch / agent /
business partner37%
Current Status of Mainland Enterprises’ Business Operations in Hong Kong Q13, Q14
Respondents: Representatives of 169 surveyed mainland enterprises which currently do not have any business operation/presence in Hong Kong
With plans to set up office / branch or seek agent / business partner in HK over the next 1-2
years62%
No plans to set up office or seek agent / business partner in HK in the short term
38%
Current Status of Mainland Enterprises’ Business Operations in Hong Kong
Current Status of Mainland Enterprises’ Business Operations in Hong Kong
Respondents: 267 visitors
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10
10
11
26
28
37
48Explore overseas markets and establish sales
network
Explore Hong Kong market
Seek offshore investment and business partners
Gather market information
Product R & D
Establish supplier network and product sourcing
Raise working capital or seek listing
%
Q14, Q15
Mainland Enterprises’ Expectations of the Functions of Hong Kong Branch / Partner
Respondents: Representatives of the 105 surveyed mainland enterprises with plans to set up office / branch or seek agent / business partner in Hong Kong
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9
14
15
21
30
44High operating costs in Hong Kong
Lack of understanding and information about setting up offices in Hong Kong
Restrictions imposed by Hong Kong on the entry, residence and work of mainlanders
Mainland authorities’ complex approval procedures for offshore investments
Lack of resources on the part of enterprises
Stringent foreign exchange control on mainland enterprises investing offshore
%
Q16
Biggest Hurdles Facing Mainland Enterprises Wishing to Invest and Set up Offices in Hong Kong
Respondents: 267 visitors
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17
26
27
34
49Business development support offered by Hong Kong to mainland enterprises in the areas of market development, capital and management, as well as information on relevant service providers
Legal protection for mainland enterprises investing in Hong Kong
Operating costs in Hong Kong, such as salary, rental and professional service fees
Procedures and capital requirement for mainland enterprises to set up companies in Hong Kong
Restrictions on the entry, residence and work of management and other staff of mainland enterprises in Hong Kong
%
Q19
Information/Assistance Most Needed by Mainland Enterprises Wishing to Set up in Hong Kong
Respondents: 267 visitors
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Mayincrease
13%
Willincrease
65%
Will notincrease
22%
Q18a, b
Factors encouraging mainland enterprises to invest or discouraging mainland enterprises from investing in Hong Kong
%Hong Kong’s high operating costs 55Mainland approval procedures 18Foreign exchange control 13Entry and residence issues 11Limited market demand 3
Respondents: Representatives of the 94 surveyed enterprises which may or may not set up office / business in Hong Kong
Mainland Enterprises’ Intention to Invest in Hong Kong Following the Simplification of Approval Procedures
Respondents: 267 visitors
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Characteristics of Guangdong Enterprises
Guangdong Enterprises
Higher awareness about the simplification of approval 63% > 47%procedures for mainland enterprises investing in Hong Kong
More interested in exploring overseas markets 75% > 65%
More enterprises have set up office / branch or 52% > 23%appointed agent / business partner
Non-Guangdong Enterprises
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Characteristics of Non-Guangdong Enterprises
Guangdong Enterprises
Higher average business turnover Rmb33.8 million < Rmb 46.86 million
Greater need for development capital- More enterprises consider capital shortage as a hurdle in 29% < 56% the process of business development
Interested in project finance as a means of funding 55% < 71%
Interested in making use of Hong Kong financing services 27% < 45%
More enterprises consider the lack of understanding and 21% < 38%information on setting up in Hong Kong a hurdle in investingin Hong Kong
Non-Guangdong Enterprises
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SummarySummary
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Summary - I
Development of Mainland Enterprises
70% of the mainland enterprises consider expansion into overseas market as their top priority development goal. Guangdong enterprises are especially keen in this respect compared to other parts of the country. Expanding sales and market share in the domestic market is also a major development target of mainland enterprises.
Mainland enterprises encounter various difficulties and hurdles in their business development process. Over 40% of them are faced with capital shortage. The situation of non-Guangdong enterprises is worse than that of their Guangdong counterparts. Other hurdles include the shortage of talents and limited access to market information.
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Summary – II
Over 60% of the surveyed mainland enterprises which do not have a business presence in Hong Kong indicate they intend to set up an office or appoint business agents in Hong Kong over the next one to two years. Most of them expect their Hong Kong business partners will help them establish sale networks in overseas and Hong Kong markets.
Usage of the services of Hong Kong companies by mainland enterprises will increase. Currently, less than 30% of the surveyed mainland enterprises have used Hong Kong services. However, the vast majority (90%) of them indicate that they would use the services offered by Hong Kong companies in the mainland in future. Services that are most sought after include financing, marketing and promotion.
Development of Mainland Enterprises in Hong Kong
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Summary – III
About two-thirds of the mainland enterprises indicate that they are more interested in investing in Hong Kong following the simplification of approval procedures. The relatively high operating costs continues to be the main reason for not setting up in Hong Kong.
Simplified Approval Procedures for Mainland Enterprises Investing in Hong Kong
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