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What are the opportunities and potentials for HK businesses in the mainland? The economic growth in China • Continuous growth in real GDP • Also, there is an obvious growth in GDP per capita Increasing in purchasing power • Enlarging the potential market in China China’s Average Annual Real GDP Growth Rate Year GDP growth rate 2004 10.1% 2005 9.9% 2006 9.5% 2007(forecast) About 9.25% China - GDP per capita ($) 8000 6000 4000 2000 0 3800 3600 1999 2000 4600 5000 2002 2003 7198 7600 2005 2006 5600 2004 Globalization • becoming a single-world society • Stages of production finished in different countries • Customers are no longer concern about the origin of products (low regional preference) Minimizing the possible risks Reinforcing global development The development of e-commerce • General use of computer and internet • People do business through internet (e.g. e-mail, e-conference ) • Easy to manage business and operations oversea • Cross broad business become possible The development of e-commerce (continued) • E-commerce is well-developed in HK Possess the necessary skills and talents A potential to enlarging the business in China Information Technology (Example) • one of the focus for HK firms - Telecom market; - e-commerce; - and software industries What are the strengths and weaknesses of HK businesses vis-a-vis mainland firms and multinationals? Strengths • • • • • • • Developed a good image in China High quality products and services Good infrastructure and business system Adequate talents and business experience Similar culture and language with China Market sensitive CEPA—zero tariff Weaknesses • • • • Less innovative ideas Not enough famous and local brands High costs Lack high-tech professionals