Hong Kong
Re-Emergent Business Center
A number of years ago, many in Hong Kong and elsewhere wondered whether this center of Asia-Pacific business communications, deal-making, and finance had any future at all. In 1984, the governments of the People's Republic of China and Great Britain signed a Joint Declaration for the return of Hong Kong to China on July 1, 1997. The "handover" occurred on that day amid great fanfare. Hong Kong, together with Kowloon Peninsula and the New Territories, became a Special Administrative Region within China with a high degree of autonomy except in foreign affairs and defense. It will continue in that status for fifty years, at which time it will come under the direct administration of China. The Joint Declaration precipitated a capital- and brain-drain in Hong Kong, many fearing that China would dismantle the former British colony's capitalist institutions. Some well-to-do Hong Kongese relocated themselves and their businesses to North America and other parts of the world. Many talented business people left to seek their fortunes elsewhere.
Despite these concerns, confidence in the commercial future of Hong Kong grew enormously. One reason was that China's own economy was growing by leaps and bounds since the Joint Declaration, tilting strongly in the free market and private sector directions. (See the China Country Guide on this website.) A second reason was that China signaled in various ways its intention to permit Hong Kong to continue its commercial activities — China approved the construction of a new $6 billion airport and agreed to other infrastructure improvements. A third and more telling reason was the importance of Hong Kong to China as an international trading and finance center. About 18 percent of China's trade now goes through Hong Kong, and Hong Kong functions as a point of entry for a significant portion of China's new foreign investment. There is little chance that China will permit this substantial link in its expanding economy to deteriorate.
So Hong Kong, considered by many to be one of the world's foremost international business centers, continues to do well. There remain concerns over China's willingness to tolerate Hong Kong's democratic poliitical processes and capitalistic institutions, but all this takes a back seat to business. Business is in the air: throughout Hong Kong people are buying, selling, trading, planning, and plotting.
[Tip — Business Style: Be prepared for fast action in your dealings with Hong Kong businesses. Respond to their communications promptly, or you will find your project placed on a back burner.]
A kinetic business pace is characteristic of Hong Kong. An old Hong Kong proverb goes: "Register a business in the morning. Open in the afternoon. Have a profit by nightfall." — and traditionally Hong Kong is a city of small businesses. It does have its huge conglomerates, like Jardine Matheson and Hutchinson Whampoa, as well as the regional offices of some of the world's largest multinational corporations. However, the vast majority of economic activities in Hong Kong are carried out by businesses with less then twenty-five employees. In keeping with collectivist culture, these businesses are invariably family-owned and family-run. But Hong Kong is also highly entrepreneurial. Sons and daughters and siblings and cousins in family-owned businesses — and many others — are continually striking out on their own to start a new business and "have a profit by nightfall." Opportunities are seldom overlooked, and competition is keen.
[Tip — Family Relationships: Be alert for family relationships in the organizations you deal with in Hong Kong, and anticipate that the more senior family members will hold the greatest authority.]
The commercial history of Hong Kong is surprisingly modern, and it started with a bang — the Anglo-Chinese War of 1839-42, referred to sometimes as the Opium Wars. The Chinese, concerned with the expanding opium trade in the region, drove British and other foreign traders out of Guangzhou in 1839. The British took refuge at the port of Hong Kong. A period of posturing and limited military engagements followed, ending with the British establishing Hong Kong as a Crown Colony in 1841 and the Chinese ceding Hong Kong Island and the Kowloon Peninsula to the British in 1842.
International commerce became active in Hong Kong from that time. Commercial interests thrived, and the British in 1898, to protect these interests, negotiated a 99-year lease from China of the New Territories, a large area immediately to the north of Hong Kong and Kowloon Peninsula. It is the expiration of the lease of the New Territories that led the governments of the People's Republic of China and Great Britain to negotiate and sign the Joint Declaration for the return of Hong Kong to China in 1997. When Hong Kong was returned to China in 1997, it had been under continuous British rule for over 150 years except for four years of occupation by the Japanese during World War II.
Hong Kong's population of about seven million people is largely Chinese — mostly from China's adjacent Guangdong Province — but it includes a large expatriate business community. This energetic multitude is crammed onto about 412 square miles of land area consisting of Hong Kong Island, Kowloon Peninsula, the New Territories, and a cluster of small islands on the southeast coast of China.
[Tip — Good Luck: With the superstitious Hong Kong Chinese, heed their suggestions that a product be introduced, a meeting held, or a contract signed on a certain day or in a certain manner.]
An important characteristic of Hong Kong Chinese is that they tend to be superstitious people. There are lucky and unlucky days, places, colors, and events. One of the most interesting beliefs (held too by many across China and beyond) is that the design of homes and offices, their color schemes, and the placement of doors, windows, and furniture, can have a profound effect on the inhabitants' well-being and fortune. This is the philosophy of feng shui, (pronounced "fung shway," literally "wind and water" in Chinese), an intricate blend of pragmatism, aesthetics, and superstition that has its origins in the Yellow River Valley region of China thousands of years ago. Stories abound of cases in which a company's or household's ill fortune persisted until changes were made on the advice of a feng shui diviner, or "geomancer." In these stories, good fortune returns after furniture blocking doorways is moved to encourage the approach of opportunities, clutter is removed to promote a feeling of order and control, outside noise is reduced to minimize alien influences, or desks are moved to give a wide view of an entrance in order to provide a sense of security.
[Tip — Harmony: A basic concept of feng shui, that order and harmony in one's life affects one's fortunes, is especially applicable to business communications and relationships in Asia. Orchestrate and design your communications with a consistent approach. For example, have a clear message, follow up on a routine basis, and use uncomplicated language.]
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