India and Hong Kong Governments together to create more business opportunities

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~HK focusing on drawing SMEs to set up offices in Hong Kong~

~HK will work as the middleman between India and the Chinese mainland – has the advantage of language, a fully convertible currency~

~Mr. Pranab Mukherjee and Mr. Donald Tsang discuss avoidance of double taxation and increasing flights~

~Push to increase HK tourism to impact trade significantly~

India, 30 October 2010: Head of the Hong Kong Special Administrative Region Government, Mr. Donald Tsang successfully completes his four day visit to India - two days in the capital city of New Delhi and two days in the commercial hub of Mumbai. During his first official trip to India, Mr. Tsang, met senior government officials and notable members of the Indian business community to promote the advantages of Hong Kong as a regional base and a fund-raising platform for Indian firms, and highlight new opportunities arising from the growth of Renminbi** business in Hong Kong.

The latest global financial crisis has transformed the international economic landscape. The centre of economic gravity has shifted from traditional markets in the West towards Asia – and particularly toward India and China. Now the two nations are widely predicted to provide a twin-engine for global economic growth in the next decade. Speaking on this at a function Mr. Tsang said, “You don’t have to be Albert Einstein to understand how closer links between us will give both of our economies a turbo boost. Hong Kong not only enjoys a reputation as an international business and financial centre, our city is also China’s most important centre for global finance. Under the principle of “One Country, Two Systems” Hong Kong nurtures all the key ingredients for a successful banking and financial hub.”

Hong Kong has a free flow of information, ideas and capital as well as a highly transparent regulatory regime. There low and simple tax systems mean that companies pay no more than 16.5 per cent profits tax and salaries tax is just 15 per cent. There is no VAT, no GST, no capital gains tax and no death duties in Hong Kong; all of this provides the most favorable environment to the Indian companies wishing to set up operations in the region.

During Mr. Donald Tsang meeting with the Mr. Pranab Mukhejee, Indian finance minister, Mr. Tsang remarked that the government is keen to explore opportunities that will help ‘business move forward’. Key topics under discussion included suggestions towards increasing the frequencies of flights between the two places, a comprehensive Avoidance of Double taxation agreement, visa free treatment for Hong Kong visitors and Indian recognition of Hong Kong’s arbitral awards. “We are working towards creating a conducive environment for greater bilateral trade. This partnership with India will help bring mainland investors into this important market, added Mr. Tsang.”

In an another conference, Mr Tsang encouraged Indian businesses to join the 1,500 Indian companies already operating in Hong Kong, and highlighted Hong Kong's strong appeal to growing numbers of international companies as a platform to reach Guangdong, the rest of the Mainland and the Asia-Pacific region.

Mr Tsang said, “India and Hong Kong have always shared very promising bilateral relations; both have benefited each other immensely in trade and other areas. The total trade between Hong Kong and India in the first eight months of 2010 amounted to HK$94 billion (approx. US$12 billion), an increase of 43% over the same period last year. We welcome the opportunity to partner with Indian enterprises to expand their presence in Hong Kong and the Mainland Chinese markets, riding on Hong Kong’s sound legal, economic and communications infrastructure.”

What sets Hong Kong apart in the region is its ability to converge the unique “China advantages” and “global advantages” and generate an ever changing range of new products and services that has benefited not only Hong Kong and the Mainland of China, but also the rest of the world. This reinforces Hong Kong’s status as the preferred platform to carry out both China-related activities in the global financial arena, and also global operations in the Greater China market.

Mr. Tsang said, “The two nations, India and China, are the world’s most populous nations and home to about 40 per cent of the human race. Most economists predict that the economies will provide a twin-engine for global economic growth in the 21st Century. At the same time, Hong Kong cherishes its business relationship here in India. Fuelled by a nation of youthful consumers, India is now among the world’s largest destinations for retail investment. Hong Kong is also eyeing India’s middle class that is expanding rapidly, which brings about strong demand for new and exciting products”.

The Chief Executive has led a business delegation comprising some 30 leaders of Hong Kong’s biggest businesses, banks and financial institutions. Delegates provided the latest intelligence on business opportunities in Hong Kong and the rest of China. They are also shared the insight on what makes Hong Kong the world’s freest economy and one of the most business-friendly cities on earth.

Key Facts about Hong Kong:

HK No. 1 investor in Mainland China – the top investor in every province in China – has the widest business network in China

HK boasts of the largest IPO in the world - US$31 billion in 2009, even higher than New York and London
360,000 Indian visitors from HK last year

HK India bilateral trade worth $16 billion, even more than India-Japan trade which comes to around $10 billion
Main differentiator is HK market having huge liquidity – around 4 trillion HK dollars floating around in the market

A lot of Indian banks coming in, maximum Indian banks present in HK after India

A prime capital raising centre in the Asian time zones. Asian firms would find it easier and faster trading in the HK stock exchange

27, 000 Indians living in HK

69 flights every week, looking to increase and encourage competition from Air India, Kingfisher and Jet Airways – growth of affluence in India resulting in more people wanting to travel

In Hong Kong universities, the percentage of foreign students allowed has been increased to 20% at the same fee structure

Good for young Indian travelers – fun city, 2 major theme parks – Disneyland and Ocean Park, one of the safest cities in the world, and very welcoming towards visitors

**The Renminbi (RMB) is the official currency of the People's Republic of China (PRC), whose principal unit is the Yuan.

The Chief Executive

The Chief Executive is the head of the Hong Kong Special Administrative Region of the People’s Republic of China. He is elected in accordance with the Basic Law and appointed by the Central People's Government. The Chief Executive is responsible for implementing the Basic Law, signing bills and budgets, promulgating laws, making decisions on government policies and issuing Executive Orders. Mr Donald Tsang has been the Chief Executive of the Hong Kong Special Administrative Region of the People's Republic of China since 21 June 2005. He was re-elected in 2007 as the third-term Chief Executive. His new term of office runs from 1 July 2007 to 30 June 2012. For more information on the Chief Executive Donald TSANG, please visit http://www.ceo.gov.hk/

The Basic Law

Under the Basic Law, the Hong Kong Special Administrative Region enjoys high degree of autonomy in all areas of public policies and economic relations, except in defence and foreign affairs. The Basic Law is Hong Kong’s constitutional document that designates a system of governance led by a Chief Executive and an Executive Council, with a two-tiered system of representative government and an independent judiciary. For more information on the Basic Law, please visit: http://www.basiclaw.gov.hk/en/index/