By the end of 2020, the GDP in Hong Kong is expected to reach 275 USD Billion. In 2021, the Hong Kong GDP is projected to trend around 320 USD Billion and 365 USD Billion in 2022.
As a major innovation and technology hub and the entry point into the China and Southeast Asian markets, Hong Kong is the most prominent international financial market in Asia. While the Outline Development Plan for the Guangdong- Hong Kong-Macao Greater Bay Area of the 13th Five-Year Plan for the National Economic and Social Development by the central government of China has positioned Hong Kong as a key financial, sharing and trading center, the Belt and Road Initiative (BRI) should play a major role in supporting innovative startups founded by people from diverse cultural backgrounds.
What can startups leverage the Hong Kong advantages in the Belt and Road Initiative? Here we will show you why choosing Hong Kong as your startup’s next destination will be the best choice to expand footprints in the Asia Pacific region; and 5 tips to get the most out of the city’s startup opportunities.
Get out of Hong Kong, from Hong Kong
The Belt and Road covers projects in 65 countries with a population of 4.4 billion people, or 63% of the world’s population and 40% of its GDP.
While the GBA has major potential to serve as China’s technological gateway to the BRI, Hong Kong, holding the proximity to Mainland China with the world’s no.1 offshore renminbi bond market, will take the most advantages to open up its market.
Hong Kong also has an ideal geographical location which allows opportunities for startups to explore opportunities globally. Within a 4-hour flight, you can reach most of the major Asian cities, and a 5-hour flight from half the world’s population . There are also 100+ airlines that offer easy and efficient travel to 220 locations from Hong Kong.
Expanding to Hong Kong will not only benefit your regional expansion, but open up opportunities for exposure in the global arena.
Get the best talents at the place where east meet west
With more than 80 universities and colleges across the GBA, Shenzhen-Hong Kong ranks second among the world’s “technology innovators cluster” according to the Global Innovation Index (GII) 2018, just behind the Tokyo-Yokohama strip.
Guangdong-Hong Kong-Macao maintains a high-level of attractiveness for talent from the rest of China and overseas. Hong Kong ranked 1st among Eastern Asian economies in talent competitiveness and availability of a skilled global workforce.
The development of the BRI also helps companies sourcing well-developed tech talents by allowing the freer movement of labour and greater access to skills. Expanding your business footprints in Hong Kong will definitely leverage the availability of the rich international human capital.
Explore the new innovation and tech hub
One of the objectives of BRI is to transform the GBA region into an innovation and technology hub. Key areas include high-value manufacturing, biotechnology, fintech, artificial intelligence and robotics and smart cities.
Hong Kong has already had a mature and stable R&D and startup culture. Bringing the two innovative cities of Hong Kong and Shenzhen together, the Hong Kong-Shenzhen Innovation and Technology Park (HSITP) in the Lok Ma Chau Loop is the perfect demonstration of how the GBA tech hub will be.
On one hand, Hong Kong companies can embrace a large space to set up their business and access the Pearl River Delta supply chain, on the other hand, the wider GBA area can enjoy the proximity of Hong Kong’s financial infrastructure.
The 3 innovation zones of Shenzhen Qianhai, Guangzhou Nansha, Zhuhai Hengqin also make Hong Kong startups more available to the China market. The Qianhai government provides one third of their space to startups from Hong Kong. Supporting facilities include E Hub, Shenzhen-HK innovation center, Shenzhen-HK Funding Town and Shenzhen-HK Culture Innovation Town. Among which, E Hub has absorbed more than 356 startups in the past 4 years, including 176 from Hong Kong, Macau and Taiwan, and has more than 15 billion RMB in investments.
Open up the digital Belt and Road
Other than the infrastructural development of the Belt and Road Initiative that the whole project focuses on, the digital side of it also holds indispensable importance, especially when it comes to this digital age of technology startup ecosystem.
China is at the forefront of many technologies, among which e-commerce and payment technology flourishes the most. With an increasing number of companies exploring commercial opportunities in these markets, many BRI countries have had reduced barriers to entry in these markets. Hong Kong has been the best location to enter the BRI markets.
Big data is another notable area – with its large population and attitude towards information and data, China is an ideal country for generating and harnessing big data. The creation of value through the integration of technologies is also a major global trend that makes data even more available. This integration includes the traditional enablement of technology, and new methods including APIs and other ways of making data more easily accessible to other companies or parties.
With more BRI countries following China’s model, Hong Kong positions as a gate to open up the digital Belt and Road.
Guarantee the greatest consumer markets and investment opportunities
By 2030, two-thirds of the global middle class will be living in Asia. Millennial consumers are now also a critical contributing demographic for manufacturers, retailers and supply chains. It is important to understand the preferences and buying behaviours of the Asian middle class as their influence grows, since whether your business targets this majority group will be the decision-making factor of BRI investors.
Startups with the aspirations to engage this largest part of the consumer markets will be winners of the future. As Asia’s 2nd-largest private equity centre, Hong Kong owns about US$160 billion total capital under management. Hong Kong is also Mainland China’s no.1 source of foreign direct investment and the world’s 7th-largest source of foreign direct investment.
Want more tips to leverage Hong Kong’s geographical and financial advantages?
Techlinker Asia works with growing startups and technology companies to expand or set up their business in Singapore or Hong Kong. We fuel our clients with the right talents to accelerate seamless cross-border expansion.