Hong Kong offers Uganda traders more than just fairs
By Devapriyo Das 2009-12-10 16:26:50
Hong Kong, one of the world’s leading financial centres, means business. The island territory off China's southern coast is the third-largest financial centre after New York and London.
It enjoys a GDP per capita of $30,000, engages in bilateral trade worth US$750 billion with the rest of the world, and makes a daily turnover of US$2 billion, half of which consists of exports.
Now Ugandan businesses stand to get a piece of the action, thanks to a series of trade fairs scheduled to run in Hong Kong throughout 2010, with the Hong Kong Trade Development Council (HKTDC) offering a $10.3 million buyer sponsorship package to African and other emerging markets. The package is on offer until April 2010.
LEVEL PLAYING FIELD
“Hong Kong is a level playing field,” Raymond Yip, the Hong Kong Trade Development Council's Assistant Executive Director, told The Observer.
“Everyone competes equally and we are willing to pay for good quality.”
Currently, the HKTDC organises over 30 fairs per year, for products ranging from toys, wine and electronics, to food, construction, jewelry and tea. On an exclusive African tour to showcase the fairs as an ideal trading platform for African businesses, Yip made HKTDC's first visit to Uganda, last week.
Bilateral trade between Hong Kong and Uganda currently stands at $18 million per year (a 43% increase since 2008), according to HKTDC. Uganda exports some $11 million worth of frozen fish, hides and leather goods, coffee and tea to Hong Kong, and imports mainly telecommunications equipment and textiles.
“Your tea and coffee are very good quality and this is a way you can articulate yourself,” he comments on Uganda's potential at the fair. “Hong Kong is the largest consumer of tea in Asia”, Yip continues, saying it is “a matter of trying to magnify your advantages and communicate that message consistently to the market: that’s why you need to be physically present in Hong Kong.”
BIG RETURNS
The returns for Uganda could be huge, because China, of which Hong Kong is a territory, offers a market of 1.3 billion people. Currently, Ugandan tea producers regularly exhibit at the Mombasa tea auctions (one of the world's largest and oldest) where they tend to face stiff competition from Kenyan manufacturers.
However, Hong Kong could offer a more neutral venue, and correspondingly fewer prejudices as there are more buyers from new markets, which could help Ugandan tea fetch higher prices, and develop strong, international branding.
However, Yip cautions that Ugandan businesses should take nothing for granted: “You need to compete on quality. What are you good at? And how different are those products from other suppliers in the world?”
Still, it will help Ugandan producers that Hong Kong is a tax and duty free zone, and that international businesses do not pay sales tax or import duty unless occupying office space on the island. Moreover, Ugandan citizens do not need visas to visit Hong Kong (a reciprocal arrangement).
The HKTDC's sponsorship package additionally offers subsidised air tickets and hotel stays to fair buyers. Yip hopes these advantages will encourage Ugandan businesses to showcase their products in Hong Kong, while sourcing quality products, gleaning market intelligence on East Asia, concluding trade deals and attracting investment into Uganda. He says Hong Kong provided $60 billion in Foreign Direct Investment to non-Asian countries in 2008, and envisions Uganda tapping this rich seam of capital.
AFRICA-CHINA
“Hong Kong is interested in infrastructure,” Yip says, referring to the territory's growing economic relationship with Africa. He gives the example of a Hong Kong company investing $21million in the Dar-es-Salaam port.
In return, it seeks “resources like precious stones, because Hong Kong is the third largest jewelry manufacturing centre in the world [after Italy and China]. We need a lot of gold, diamonds, the precious metals which Uganda produces, for jewelry.” Longer-term investments will target manufacturing of products intended for African and European markets.
The fairs will come as a tonic to both African economies and Hong Kong, as they struggle to shake-off the global recession. However, Yip says that Hong Kong is already riding the Chinese dragon to recovery.
“Hong Kong is the gateway to China”, he remarks, “[and] China continues to grow by 8% this year. We benefit from the economic strength of China.” He adds that this has helped the HKTDC fairs witness “only a very mild drop in visitors, maybe 1% for 2009, compared with other trade fair centres like Germany or America. They are experiencing almost 20-30% drop in buyers.”
China has invested a staggering 4% of its GDP in a stimulus package to shield its export-oriented economy, while India has sustained over 7% economic growth in 2009. Astride strategic trade routes between these giants, tiny Hong Kong has continued to benefit.
DON’T BELIEVE IN INCENTIVES
Reunified with China in 1997 after 150 years of British colonial rule, Hong Kong maintains complete financial autonomy, enjoys many political and administrative freedoms, and remains a free port, unlike China.
In 2003-04, Hong Kong implemented a unique free trade agreement with China under World Trade Organisation rules despite being a territory of the same country. “Under this agreement, all Hong Kong products can enter China duty free,” Yip explains. “And about 50 types of services are liberalised for China.”
Today, nearly half of Hong Kong's US$750 billion annual turnover is via business with China. Miraculous as it all sounds, Yip offers this by way of advice to the Uganda Government in its quest for investors: “In Hong Kong, we don’t believe in incentives. The best incentive the government can do is to provide a stable, business friendly, low-tax environment in which business may flourish,” says Yip.
It enjoys a GDP per capita of $30,000, engages in bilateral trade worth US$750 billion with the rest of the world, and makes a daily turnover of US$2 billion, half of which consists of exports.
Now Ugandan businesses stand to get a piece of the action, thanks to a series of trade fairs scheduled to run in Hong Kong throughout 2010, with the Hong Kong Trade Development Council (HKTDC) offering a $10.3 million buyer sponsorship package to African and other emerging markets. The package is on offer until April 2010.
LEVEL PLAYING FIELD
“Hong Kong is a level playing field,” Raymond Yip, the Hong Kong Trade Development Council's Assistant Executive Director, told The Observer.
“Everyone competes equally and we are willing to pay for good quality.”
Currently, the HKTDC organises over 30 fairs per year, for products ranging from toys, wine and electronics, to food, construction, jewelry and tea. On an exclusive African tour to showcase the fairs as an ideal trading platform for African businesses, Yip made HKTDC's first visit to Uganda, last week.
Bilateral trade between Hong Kong and Uganda currently stands at $18 million per year (a 43% increase since 2008), according to HKTDC. Uganda exports some $11 million worth of frozen fish, hides and leather goods, coffee and tea to Hong Kong, and imports mainly telecommunications equipment and textiles.
“Your tea and coffee are very good quality and this is a way you can articulate yourself,” he comments on Uganda's potential at the fair. “Hong Kong is the largest consumer of tea in Asia”, Yip continues, saying it is “a matter of trying to magnify your advantages and communicate that message consistently to the market: that’s why you need to be physically present in Hong Kong.”
BIG RETURNS
The returns for Uganda could be huge, because China, of which Hong Kong is a territory, offers a market of 1.3 billion people. Currently, Ugandan tea producers regularly exhibit at the Mombasa tea auctions (one of the world's largest and oldest) where they tend to face stiff competition from Kenyan manufacturers.
However, Hong Kong could offer a more neutral venue, and correspondingly fewer prejudices as there are more buyers from new markets, which could help Ugandan tea fetch higher prices, and develop strong, international branding.
However, Yip cautions that Ugandan businesses should take nothing for granted: “You need to compete on quality. What are you good at? And how different are those products from other suppliers in the world?”
Still, it will help Ugandan producers that Hong Kong is a tax and duty free zone, and that international businesses do not pay sales tax or import duty unless occupying office space on the island. Moreover, Ugandan citizens do not need visas to visit Hong Kong (a reciprocal arrangement).
The HKTDC's sponsorship package additionally offers subsidised air tickets and hotel stays to fair buyers. Yip hopes these advantages will encourage Ugandan businesses to showcase their products in Hong Kong, while sourcing quality products, gleaning market intelligence on East Asia, concluding trade deals and attracting investment into Uganda. He says Hong Kong provided $60 billion in Foreign Direct Investment to non-Asian countries in 2008, and envisions Uganda tapping this rich seam of capital.
AFRICA-CHINA
“Hong Kong is interested in infrastructure,” Yip says, referring to the territory's growing economic relationship with Africa. He gives the example of a Hong Kong company investing $21million in the Dar-es-Salaam port.
In return, it seeks “resources like precious stones, because Hong Kong is the third largest jewelry manufacturing centre in the world [after Italy and China]. We need a lot of gold, diamonds, the precious metals which Uganda produces, for jewelry.” Longer-term investments will target manufacturing of products intended for African and European markets.
The fairs will come as a tonic to both African economies and Hong Kong, as they struggle to shake-off the global recession. However, Yip says that Hong Kong is already riding the Chinese dragon to recovery.
“Hong Kong is the gateway to China”, he remarks, “[and] China continues to grow by 8% this year. We benefit from the economic strength of China.” He adds that this has helped the HKTDC fairs witness “only a very mild drop in visitors, maybe 1% for 2009, compared with other trade fair centres like Germany or America. They are experiencing almost 20-30% drop in buyers.”
China has invested a staggering 4% of its GDP in a stimulus package to shield its export-oriented economy, while India has sustained over 7% economic growth in 2009. Astride strategic trade routes between these giants, tiny Hong Kong has continued to benefit.
DON’T BELIEVE IN INCENTIVES
Reunified with China in 1997 after 150 years of British colonial rule, Hong Kong maintains complete financial autonomy, enjoys many political and administrative freedoms, and remains a free port, unlike China.
In 2003-04, Hong Kong implemented a unique free trade agreement with China under World Trade Organisation rules despite being a territory of the same country. “Under this agreement, all Hong Kong products can enter China duty free,” Yip explains. “And about 50 types of services are liberalised for China.”
Today, nearly half of Hong Kong's US$750 billion annual turnover is via business with China. Miraculous as it all sounds, Yip offers this by way of advice to the Uganda Government in its quest for investors: “In Hong Kong, we don’t believe in incentives. The best incentive the government can do is to provide a stable, business friendly, low-tax environment in which business may flourish,” says Yip.
From www.observer.ug