Government opens route to China for small firms

18 March 2004
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18 March 2004 | David Arminas

The British government and the Hong Kong Trade Development Council are to set up a joint programme to advise small and medium-sized enterprises (SMEs) wanting to tap into the mainland China market.

SMEs are the kind of businesses that Hong Kong wants to attract to the former colony, which was handed back to China in 1996, according to Stephen Bradley, consul-general at the British consulate-general in Hong Kong.

Bradley, speaking at a UK Hong Kong trade forum in London, said that as China opens up, Hong Kong faces strong competition from cities in mainland China but SMEs should not overlook the benefits of partnerships with Hong Kong companies.

"It may be that Hong Kong is not the only gateway to the country, but it remains a familiar place to do business in a culture markedly different form the UK," he said.

"Hong Kong also has an independent judiciary and a familiar legal system for drawing up contracts."

Bradley told SM that details of the one-stop shop programme are likely to be released at a major China trade exhibition in London in June.

Peter Fellowes, export manager at logistics company WT Sea-Air, said that some SMEs that have gone into China without a Hong Kong partner had come to them looking to sort out their problems. "The big issue is that both sides may have a different understanding of the contracts signed, giving rise to problems over payment schedules and details," he said.

Ian Radford, a partner at law firm Masons who recently spent six years in Hong Kong, said working in mainland China through Hong Kong firms could help with quality control issues.

On construction projects, for example, Hong Kong firms are more familiar with western quality needs and can monitor them more successfully than the UK partner can do directly, he said.

But Peter German, a fashion buyer who has worked in Hong Kong and China for about 25 years, said Hong Kong's days of pre-eminence in the Chinese market are numbered.

"SMEs should go through Hong Kong intermediaries," he said. "But Hong Kong's strength as the middle man is also its Achilles heel, because it will bring together Chinese and UK businesses until they understand each other better and won't need the middle agent."



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