Background To Business in Hong Kong

Hong Kong shows several business faces – depending on which Hong Kong is being dealt with.

On the surface is the Hong Kong peopled by large multi-nationals sprung from the area’s colonial past, with massive corporations such as Jardine Matheson, the Swire Group and the Hong Kong and Shanghai Bank dominating the region. This Hong Kong certainly does exist and exerts a tremendous influence over the business life of the region.

However, balancing out these massive, managerial style organisations are the tens of thousands of small businesses run along very paternalistic lines and epitomising the entrepreneurial spirit of Chinese traders. There are in fact more than 470,000 small to medium-sized businesses operating in Hong Kong – compared with a population of around only 7 million people. This figure alone proves the health, vitality and hunger of the mainly ethnic Chinese business community.

Thus, almost more than in any other business environment, it is vital to know exactly which type of organisation you will be dealing with – because attitudes to such things as management style, decision-making and attitudes to long-term relationship-building could vary enormously.

Having pointed out the anomalies to be found when doing business in Hong Kong, it is also necessary to point out that certain endemic Chinese cultural traits will permeate virtually all Hong Kong business life. Issues surrounding loss of face, communication styles and attitude to family ties will remain constant regardless of company type or even, to a large extent, educational background. (See later sections.)

Relationships (Guanxi) are very important in the Hong Kong Chinese business world, but possibly play a less prominent role than on the mainland or in Taiwan.
Hong Kong has played a significant role in the global economy in such areas as electrical goods, telecoms equipment and clothing.

A brief overview of some key concepts to consider when doing business in Hong Kong

Written and Produced by Keith Warburton

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Overview

Hong Kong is seen by many people as the gateway to mainland China – a stepping stone to the riches promised by the potential of the People’s Republic. Combine this view with Hong Kong’s inherent historical strength as an international trading hotspot and you can start to understand why Hong Kong punches well above its weight.

Hong Kong is a bustling cosmopolitan city state where East meets West and expats from all over the world mingle with locals and visitors from mainland China. Hong Kong island is home to the regional headquarters of hundreds of global companies who see Hong Kong’s unique geographical and economic position as an ideal hub from which to control their Asian operations.

Any company looking at expanding its Asia footprint is likely to find itself evaluating the benefits of starting a permanent establishment in the territory but Hong Kong should be seen as more than just a hub destination – Hong Kong also represents an attractive market in itself. With an affluent, well-educated population of savvy consumers you should also consider doing business in Hong Kong as an opportunity to sell your products and services.

However, this dynamic bustling market presents certain challenges for business people who are looking to do business in the country and top of these challenges is gaining an understanding of the complex local business culture. Are you dealing with a local Hong Kong partner, a Western expat or someone from the People’s Republic of China? If you are dealing with a local Hong Kong contact were they educated in Hong Kong or abroad – (this might affect the way they do business)? It is definitely worth taking some time out to explore some of the key business culture issues you might encounter on the island.

This country profile provides an overview of some of the key aspects of Hong Kong business culture in a concise, easy to follow-format. The document includes information on:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips