Media365
Hong Kong can serve as a key treasury centre for mainland Chinese companies going global, helping them hedge foreign exchange risks and lower financing costs by leveraging the city’s unique advantages, according to Deloitte China.
The assessment comes as the administration of Chief Executive John Lee Ka-chiu rolls out measures to tap into the growing trend of Chinese companies expanding their businesses and supply chains overseas amid intensifying competition and economic headwinds at home.
Around 80 per cent of mainland enterprises used Hong Kong as their global launch pad, Deloitte said.
“Many policies in Hong Kong can help mainland firms effectively tap into international markets,” said Patrick Tsang Shun-fuk, senior partner and former CEO of Deloitte China.
With no capital controls, Hong Kong allowed Chinese firms to set up holding companies in the city and to use profits or investment income from overseas subsidiaries directly for new investments, the firm noted.
Establishing a treasury centre in Hong Kong could also reduce tax costs for mainland enterprises because the city had signed tax treaties with more than 50 jurisdictions, Deloitte said.
This supported the diversification of China’s outward investment over recent years, with Southeast Asia, Latin America and economies linked to the Belt and Road Initiative emerging as key destinations.
