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thru hong kong to china

Monday 25 July, 2011

The Hong Kong Trade Development Council put on another even bigger event  china” href=”http://edm.tdctrade.com/intimate/viewMessage/content_path/messageId_131028644/logEnabled_true/ctEnabled_false/trackerType_3″>HONG KONG: YOUR PARTNER FOR SUCCESS IN CHINA to promote approaching China through this SAR Special Administrative Area. Mary Roberts of the Illinois Trade & Investment office said Illinois exports through Hong Kong were up 23% in 2010. Rita Athas of World Business Chicago made a trip with then mayor Daley & 30 business leaders to Hong Kong in March. 30 big name Chicago companies already have operations in Hong Kong while there are at least 30 Hong Kong companies in Chicago.

Dr. John Chai, Managing Director of Fook Tin Technologies, Ltd. Gave the keynote address. He returned from the US to Hong Kong 10 years ago & found the city had totally changed. ½ of the world’s population is within 5 hours of Hong Kong. In China, there are now 50K companies which employ 10M people. They have not been prepared for inflation, so their goal is to cap it in the single digits. Hong Kong has 13 universities, 68 colleges, & 6 science parks. It’s Chinese neighbor Shenzen has a population of 15M, 11 universities, & 6 science parks, & is the most affluent province in China. The Hong Kong Shenzen Innovation Circle is a self sufficient subsidiary. 1.9% of 5048 companies spent $5.5B on some form of R&D in Hong Kong in 2009. 13% of companies spent HK$14B on some form of design activity. The government has commissioned 5 R&D centers to be created to become a testing & certification center. Onlyh ½ of R&D takes place in science & technology parks: 344 companies are in incubators. In 2000, only 34 foreign MNC’s were doing R&D in Hong Kong. That has risen to 750 by 2005. By 2007. 1/3 of respondents were setting up in China. 60% consider the business location ideal.

Panel 1: Hong Kong was H2O+’s 1st partner in Asia 20 years ago & are now in 22 countries in 2010. They are launching Korea, Vietnam, & Russia in 2011.

Calumet Industries has 28 factory locations in 5 countries, ½ of which are in Hong Kong/China. They use Taiwan, Hong Kong, & Shenzen as a staging platform for the region.

Panel Q&A:

  • Hong Kong trade shows are the best way to meet potential customers & local partners.
  • Globalization is having severe impacts on prices.
  • Calumet sourced in China much earlier than other companies & their competition followed & is coming directly to the market.
  • It’s important to be consistent around the world. Although sizes of products might differ, trends are shortening.
  • Regardless, it’s still important to tailor products geographically based on what the competition is doing.
  • Hong Kong can be a great springboard to other markets.
  • A physical presence is required: visiting partners/customers once every 6 weeks is not enough to build the proper relationships.

Open Q&A

  • Chinese consumers look @ trends in Hong Kong.
  • Launching in Hong Kong can allow you to be the 1st to seed the market.
  • Hong Kong nationals are more westernized than the Chinese, so communication is easier in HK.
  • It’s best not to compete head-to-head on price with Chinese companies. Focus on quality & on specialties rather than mass markets.

Louis Ho of the HKTDC talked about the Pacific Bridge Initiative, for which a Memorandum of Understanding was signed in Nov., 2010.

Panel II

70% of health care companies have some kind of branch or office in Hong Kong, which plays a role of health care reformer. They’ve adopted & harmonized with international standards & legal systems. The HK$ is more stable than the renminbi. Hong Kong is home to 4 of the top 100 universities in the world, which contribute more intellectual property and the top 100 in China. Hong Kong offers easier certifications of medical devices. Adapting for the Hong Kong market is still important. “Clinically proven in the USA” helps. Legally, patents are not extra-territorial, so it’s important to secure intellectual property rights in Hong Kong. There are no international patents, so they effectively stop @ the border. Register in Hong Kong with a Hong Kong attorney (http://ipd.gov.hk) , but be sure to pay attention to tight deadlines. Use non-disclosure agreements & don’t publicly disclose patent applications. Do your intellectual property due diligence to avoid infringement problems.

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