19 July 2017
Canada’s Trade Connector
With 40 years of history in Hong Kong, the Canadian Chamber of Commerce has been a key partner supporting Canadian business interests in Hong Kong and the greater Asia-Pacific region. Under the leadership of Derrick Lee, the Canadian Chamber of Commerce in Hong Kong is working to strengthen the “Canada brand” in the city and use Hong Kong to facilitate trade and investment flows between Canada and the Chinese mainland.
How big is the Canadian business community in Hong Kong currently?
We like to say that we have the largest diaspora of Canadian community outside of Canada, and it’s all based in Hong Kong. We estimate about 200 companies are set up in the city and the consulate quotes about 300,000 Canadian passport-holders in Hong Kong. Hong Kong’s strategic location in Asia, combined with the growth of China, creates many opportunities and makes Hong Kong a very attractive place for Canadians to do business.
Which sector has the largest representation?
Mainly financial services, but information and communication technology (ICT) and sustainable technology are also a big part of the Canadian footprint in Hong Kong. Additionally, we also have a presence in the transportation, professional services, and food and agriculture sectors. There is a lot of export trade from Canada to Hong Kong, mostly food, such as frozen beef, seafood and fish.
What are the Canadian Chamber’s business development goals in Hong Kong and Asia?
The focus for the Canadian chamber will be to continue to build our advocacy arm, to be the collective voice of businesses, SMEs and multinationals, both in Hong Kong, and in Canada, in order to help the private sector in their business dealings. We’re also trying to “internationalise” the chamber a bit more, to be the connector for non-Canadian businesses that want to invest or trade in Canada. We can be a strong partner by helping to facilitate investment flows back to Canada. We’re also trying to capitalise on the political synergies between Canada and China right now. They have a strong bilateral relationship, even to the point where they’re discussing the possibility of having a free trade agreement between Canada and China.
What advantages does Hong Kong offer for Canadian businesses?
Hong Kong in general is a very mature, trading and service-oriented economy. It has a central role in regional financing and is a trade and investment hub. Hong Kong offers Canadian business key advantages such as a low and simple tax regime, the rule of law, world-class infrastructure, government support, a strategic location in Asia and easy access to international talent. With Hong Kong’s laissez-faire economy, Canadian companies do not have to worry about trade restrictions while developing their business in Hong Kong. Of course, a critical advantage is Hong Kong’s proximity to both the Chinese mainland market and ASEAN countries.
How does Hong Kong serve as a gateway to China and other Asian markets for Canada?
Canadian companies definitely find it more comfortable to come to Hong Kong first as it is under the One Country, Two Systems model and because Hong Kong has common law. The rule of law and the laissez-faire economy give Canadian companies peace of mind coming to Hong Kong. They find that it’s very easy to set up a company, network and do business as it is an international city and things are very transparent. They feel more comfortable because it is easy to find international talent and potential partners who are already doing business in the region as a first step, until they really consider if they should set up a separate entity, directly in China or other ASEAN countries.
How can Canada tap opportunities arising from China’s Belt and Road Initiative?
I think there’s definitely opportunity. I know Canada geographically is not part of the Belt and Road map. However, like Hong Kong, Canada has a lot of great companies in logistics technologies, education, cultural exchange and professional services, including consultancy, training and accounting firms. So we feel Canadian companies will participate in those sectors and industries to support the growth of the Belt and Road Initiative. Our Chamber has positioned itself to help Canadian companies take advantage of these great opportunities from the Initiative.
In terms of Chinese mainland investment to Canada, which sectors/industries are mainland firms particularly interested in?
There is a strong trend of Chinese investment into Canada. In 2015, China was the sixth-largest foreign direct investor in Canada with about C$20.6 billion dollars. Natural resources and real estate are the two growing markets for mainland and Hong Kong investors. Also, for many companies that want to tap the North American market, Canada is often preferred as a location to go through before expanding into the United States or Mexico. Canada is a good entry point for doing business in North America.
How does Hong Kong support and facilitate these “going out” activities from mainland companies to Canada?
Hong Kong is an international platform, so when we talk to mainland firms it’s kind of a reverse psychology situation. For many mainland companies thinking of going international, the first step they’ll think about is coming to Hong Kong. It gives them a flavour of what an international market is like. As there’s more awareness of Canada as a destination to consider for mainland investment, we want to capture those interests. We can provide links to different counterparts back in Canada or help potential investors to understand what the Canadian market is. So we find Hong Kong well-positioned to help our Chamber to bridge those interests.
The Canadian Chamber of Commerce in Hong Kong