Business operations in HK could slow down

Foreign companies doing business in Hong Kong could be curbed if the world economy worsens.

It sounded this warning despite data showing that the number of businesses in Hong Kong with parent companies overseas and in Mainland China reached an all-time high of 7,250, up 4.3% from a year ago.

The annual survey released by Invest Hong Kong and the Census & Statistics Department today also revealed that the number of people these companies employ increased by about 20,000 compared to a year ago, or up 5.7%.

Director-General of Investment Promotion Simon Galpin welcomed the findings but was cautious because of gloomy global economic trends and their likely impact on Hong Kong.

"We have to recognize that a difficult global environment and the slowdown in Mainland China's economy may have a negative impact on the number of foreign companies setting up in Hong Kong in the short term," he said.

"We are confident, though, that in the long run, Hong Kong will continue to attract investors who plan to start or strengthen their operations in the region."

Of the total 7,250 companies that responded to the survey, 1,367 operated as regional headquarters; 2,516 as regional offices and 3,367 as local offices compared to 1,340, 2,412 and 3,196, respectively, a year ago.

The companies employed about 388,000 people compared to 368,000 last year. Most companies were small and medium sized, with 4,843 companies employing fewer than 20 people and 1,193 companies employing 20 to 49 people.

The top three lines of business were import/export trade, wholesale and retail; professional, business and education services; and financing and banking. There was an 8.8% rise in the number of companies engaged in financing and banking, which reflects the increasing appeal of Hong Kong as an international financial centre and its role as the Mainland’s official offshore renminbi centre.

Analysed by the country where the parent company was located, the US topped the list followed by Japan and Mainland China.