The city’s international business community proposes recommendations to create opportunities and drive growth across sectors
Hong Kong’s ability to harness its strengths as an international finance, trade and transportation centre will be key to realising the full potential of the Greater Bay Area (GBA), finds a new joint report by KPMG China and the Australian Chamber of Commerce in Hong Kong (AustCham).
The report, titled Connecting opportunities in the Greater Bay Area, presents views from Hong Kong’s international business community on how to leverage the city’s strengths and competitive advantages, and maximise business opportunities to deliver mutually beneficial growth across the GBA. It aims to deliver a strong commercial contribution to discussions and plans on the way forward for the GBA, which has thus far been driven primarily by governmental and public authorities.
The views reflect a wide variety of recommendations – including from the AustCham Greater Bay Area Committee – across a range of industries and services, including financial services, tax, technology and innovation, data management, construction and infrastructure and arbitration.
A key focus of the GBA is the transformation of the region into an innovation and technology hub. Given the development of large-scale public sector innovation, technology and science parks, the international business community highlights the need for seamless co-ordination and collaboration between the various entities. The report proposes the establishment of a “GBA Innovation Commercial Planning Office” in Hong Kong – within the existing framework of the Hong Kong Government – to assist businesses based in the city with innovation-related opportunities in the GBA, and to ensure a coordinated approach to the development and operation of technology and science parks within the region.
“For the last 40 years Southern China has been a pilot for China’s economic transition and integration into global markets. The Greater Bay Area will enable China to deepen this integration, with Hong Kong playing an important role in bringing the international markets to the GBA and vis a versa,” AustCham Chairman Andrew Macintosh.
“A large majority of Hong Kong companies are quickly developing strategic plans for the Greater Bay initiative. Australian companies doing business with China or wanting to start business with China should be doing the same. So far, we are only seeing a few Australian companies that have any plans at all for the GBA.”
The continued growth of the GBA is expected to increase demand for financial services, and is likely to lead to a further relaxation of restrictions on capital flows between mainland China, Hong Kong and Macau. One key recommendation to drive business efficiency and facilitate the free movement of capital across the GBA is to address the challenging issue of managing bank accounts. Adopting one common set of rules governing the opening and operating of bank accounts within the GBA would immediately be a core driver of integrated business throughout the region, according to the international business community.
The free movement of people is also a key factor for the success of the GBA, with greater mobility within the region helping businesses to address skill shortages by attracting talent. The key challenge is to enable people to travel and work freely within the GBA without facing an increased tax burden or compliance costs from working across borders in the region. To address this challenge, business leaders interviewed for this report propose a mutual tax exemption for academics and researchers, and the implementation of a mutual tax exemption for frontier workers. “
The harmonisation of tax rules and regulations where feasible to reduce the extent of the differences between the respective taxing jurisdictions is also essential to encouraging greater integration and promoting business within the GBA, and for the region to realise its potential. The international business community looks forward to greater clarity from regulatory and government authorities in order to turn their business opportunities into reality,” says Darren Bowdern, Tax Partner, KPMG China.
The international business community also proposes the introduction of a GBA Business Card regime, administered by the respective governments, to facilitate business travel within the region. A GBA Business Card might be an easy first step along the way to greater opening up, and could be modelled on the successful APEC Business Travel Card which gives business travellers pre-cleared, visa-free, facilitated short-term entry within selected markets. This aligns with recent announcements of a ‘smart card’ for Hong Kong residents to work in the GBA, the report notes.
Some other key themes discussed in the report include how rules and regulations might be reframed to allow for greater efficiency and collaboration in the GBA, the barriers for Hong Kong and international companies seeking to do business in the region, and the ways in which the GBA can serve as a springboard for China’s ongoing internationalisation.
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KPMG China operates in 19 cities across China, with around 12,000 partners and staff in Beijing, Beijing Zhongguancun, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Wuhan, Xiamen, Xi’an, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies.
The Australian Chamber of Commerce in Hong Kong is the largest international Australian Chamber and among the largest and most influential international business organisations in Hong Kong. Established more than 30 years ago, the chamber represents approximately 500 companies and 1400 members. While many of our members are Australian companies or individuals with business interests in the region, an increasing number of our members are Hong Kong corporates with business interests in Australia. Our diverse membership is a cross-section of start-ups, SMEs, NGOs and large corporates across all industries and expertise.
WHERE BUSINESS, PEOPLE AND IDEAS CONNECT
AustCham Hong Kong works closely with Hong Kong Government on a variety of issues on behalf of our diverse membership base and continues to make a constructive contribution to the territory’s social and economic prosperity. In Australia, we engage with Federal and State Governments and business leaders to provide a voice for international Australians and advance Australia’s engagement with Asia.
Independent of government, the Chamber is an active member of Support Australia Group which exists under the auspices of the Australian Consulate-General in Hong Kong and aligns the interests of over 100,000 associates.
AustCham Hong Kong provides members with access to senior industry executives, thought leaders and decision makers in Hong Kong, Greater China and Australia. In a rapidly changing environment, we provide members with insight on emerging business trends and major developments that are shaping the future. Through programs such as our Emerging Tech series, our CEO Forums and our highly-sought after Mentor Program, AustCham Hong Kong continues to deliver programs which are highly relevant, informative and provide critical tools in today’s business environment.
Although an independent Chamber, AustCham Hong Kong works closely with Australian Chambers in Beijing, Macau, Shanghai and Southern China as well as the Asia and global network of international Australian business organisations.
Director, External Communications, KPMG China
Direct: +852 2140 2824
Mobile: +852 9724 6092
Public Affairs and Policy Manager, Australian Chamber of Commerce Hong Kong
Direct: +852 2115 3305