China Invests In The World Via Hong Kong

Hong Kong is often hailed the "gateway to China" for foreign investors - but doors open both ways, says our HK expert.

Recently rated the freest economy in the world by the Index of Economic Freedom for the 17th consecutive year, Hong Kong is certainly one of East Asia's jewels. Among the world's leading international finance centres, it offers investors low taxation, free trade and minimum government interventions.

And it's not just foreign multinationals making the most of Hong Kong: there are almost 800 listed mainland enterprises on the Hong Kong Stock Exchange with a total market capital of US$1.76tn, and renminbi deposits in Hong Kong of 1,053bn. China, too, sees the gateway and is making the most of it.

Hong Kong is the prime jurisdiction for Chinese mainland businesses looking to expand into the international business community: around 60% of Chinese outbound investment was directed to or channelled through Hong Kong, says the Hong Kong Trade Development Council, adding that Hong Kong's world class services providers play a crucial role in enabling cross-border deals and partnerships for Chinese enterprises. (http://www.hktdc.com/mis/coi/en/s/overview.html)

The volume of Chinese outbound investment has been growing substantially for almost a decade; in its 12th five-year plan, issued in 2011, the Chinese government target is a 17% average annual growth in outbound investment, reaching US$150bn by 2015.

Sectors of interest have traditionally been in the energy and metals markets, with finance a distant third. Today, as...

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