Hong Kong has distinct advantages as a place for multinational firms to access the strength of the Pearl River Delta, China, and the Asia-Pacific region in general. As one of the present authors has written, 'No other city in the world can help overseas investors manage the risks inherent in entering Chinese Mainland markets as well as Hong Kong. This is an important part of the reason why overseas firms prefer Hong Kong for the highest-value activities that they perform in the Asia-Pacific.'¹ Hong Kong's importance as a location for doing business with the Pearl River Delta region is even greater given the proximity and the close historical relationship between the two areas.

Given their vast experience in working within the Pearl River Delta region, Hong Kong-based companies are ideal partners for multinationals looking to profit from a Hong Kong-Pearl River Delta strategy. These partners provide considerable value, including capital, resources, and long-standing relationships on the Chinese Mainland. Extensive research on multinational companies will find it attractive to perform high-value services activities in Hong Kong while placing their manufacturing facilities and some sales operations in the Pearl River Delta region. Although the authors found several companies benefiting from the 'Hong Kong-Pearl River Delta Combination,' many others that could profit were not doing so. Many of these companies did not know or understand the dynamism of the region. In many cases, they considered the Yangtze River Delta or Bohai region as leaders of the Chinese economy - failing to realise that, for more than two decades, the Pearl River Delta has been the most dynamic regional economy in China by a significant margin.

This is an extract from "The Greater Pearl River Delta" report commissioned by InvestHK and written by Michael J Enright, Edith E Scott and Enright, Scott & Associates. You may download the entire book from the "Related Links" below.

¹ E. E. Scott, First Choice Hong Kong - Your Asia Pacific Platform, Invest Hong Kong and the Hong Kong Trade Development Council, 2001.