Being at the crossroads creates payment challenges for Hong Kong businesses
Hong Kong is a unique and dynamic place to operate if you’re a mid-sized business, and local finance leaders remain optimistic about growing their companies from here.
Summary :
Hong Kong companies see their location as a distinct business advantage
Doing international trade from Hong Kong requires a robust payment solution that operates efficiently in multiple currencies
Hong Kong’s unique position requires companies to be adaptive to new technologies.
Our Roadmap to 2020 Future-Proofing Survey, published in 2016, interviewed finance decision makers at mid-sized companies and found they had a positive outlook, expressing their confidence in new hiring in the coming 2-3 years. Being located in Hong Kong was seen as a specific and distinct advantage, and 90% of them saw clear opportunities for growth here. An overwhelming 84% said they are currently doing business with Mainland China, emphasising the importance of working on ways to improve efficiency in that exchange.
When asked where they would move their business to if forced, 34% said only Hong Kong would serve their needs, while 34% said they could move to Mainland China. Our key competition is clearly from the mainland.
The advantages of the Hong Kong business environment also bring their own unique challenges. Being the gateway to Mainland China today means more than just an open trading port for ships and merchants. It means having the infrastructure, technology and efficiency to channel billions of RMB in business between Mainland China and the rest of the world.
The survey found that the most important aspects of access to Mainland China were sales and procurement, which means that international payments presented a big challenge for finance decision makers.
Never more so than today, at a time of uncertainty in interest rates and key foreign exchange rates. The Hong Kong Dollar peg to the US Dollar could serve us well in the near future, as many Hong Kong corporates collect revenues in US Dollar, while paying their bills in Mainland China with RMB.
However, in order to capitalise on that currency situation a company needs an efficient payment solution with the data capabilities to meet today’s increased regulatory and compliance requirements.
The policies stemming from Mainland China’s reform agenda will prioritise innovative science and technology for the next few years. Smaller scale mid-sized businesses are in a good position as they are quick to adapt. Hong Kong companies must embrace that mindset in order to retain their market leadership.
Additional Resources
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