Hong Kong was a British colony until relatively recently—something that helped shape its current economic and political state of affairs. In 1997, Hong Kong signed a 50-year agreement with China to become one country with two distinct political and economic systems. Until 2047, Hong Kong will maintain a completely independent legal and economic system from the People’s Republic of China.
However, the ongoing protests in Hong Kong are in response to China tightening its grip around the country’s economic, social, and political freedoms. Protests impact many aspects of day-to-day business, transportation, safety, and life in general. Because of the large-scale disruption associated with the protests, both citizens and business owners question the stability and protection of the city-state, as well as financial and trading hubs.
Hong Kong’s current sense of unrest is causing many companies to delay investments into their Hong Kong offices, re-evaluate strategic plans for the area, or exit the market altogether.
Global Expansion Candidate #1: Singapore
One of Singapore’s many benefits is its governance and position as a financial hub in the region. The country’s ethnic Chinese population easily interacts with Chinese partners, and because of this, Singapore is a launching point to expand further into Southeast Asia. Tech firms in particular already look to Singapore, as its tax rates are similar to Hong Kong’s low corporate and personal tax rates. Further, Singapore is among the top markets for tech firms taking their operations global based on:
- Availability of skills
- Understanding of the regulatory landscape
- Quality of infrastructure and connectivity
- GPD growth
Global Expansion Candidate #2: Shenzhen
Located right across the Hong Kong-China border, Shenzhen is both a strong manufacturing and technology hub for the region. It allows businesses to enjoy a special economic zone created by the Chinese government, and the larger volume of free market policies that come with it. China’s state-run media released few specifics about the Shenzhen Special Economic Zone (SEZ), stating that it is a premier location for “economic strength and development quality.” However, SEZ is already a major shipping and logistics, technology, and financial services hub, and the Chinese government is keen on attracting more global businesses.
However, there is a notable downside to Shenzhen. It currently sits behind a “great firewall” that limits not only information-sharing that Western firms are accustomed to, but access to news outlets as well. Global businesses need access to global market news to stay current on competition, legislative updates, and to make informed strategic decisions. Limited information-sharing impacts how effectively teams communicate and operate in-country and internationally, and should be considered before a Shenzhen expansion.
Global Expansion Candidate #3: Bangkok
Bangkok is an incredibly large city that continues to grow, and expanding businesses around the world recognize this. It provides businesses access to a very young, dynamic workforce, and is also closer to the rest of Southeast Asia than Hong Kong.
In Bangkok, businesses benefit from the Thailand 4.0 initiatives, an economic model created to address shortcomings related to inequality and income imbalance in previous business models. These initiatives are designed to help businesses overcome a series of economic traps by:
- Generating economic prosperity through innovation
- Building social security through the equitable distribution of income
- Fostering sustainability through environmentally-friendly development
However, a major drawback to Bangkok is its historical, economic, and political isolation from other major markets. This means that, while it is a terrific opportunity for global expansion, it may not be the “stepping stone” that some businesses seek.
Global Expansion Candidate #4: Taipei
Taipei has its own independent government and economic system—two qualities that attracted so many businesses to Hong Kong in the first place. It is also home to many large manufacturers like Foxconn, and important locations in the world as the Internet of Things (IoT) industry takes shape. The Taiwanese government’s $11.3 billion allocation to IoT technologies and internet infrastructure underscores this commitment.
Additionally, the Taipei government strongly supports the technology scene, making it a prime candidate for Asian expansion for tech firms.
Strategize Your Next Market Entry with a Dedicated Expert
Expanding businesses have many revenue growth opportunities in Asia. However, choosing the right market for your industry-specific global expansion goals is not always easy, and each market has its benefits and challenges. The good news is that you don’t have to make this decision alone. Partner with experts in these Asian markets to help you choose the best option to reach your global expansion goals.
Whether your business chooses to take on the Hong Kong market or expand elsewhere, Velocity Global’s International Professional Employer Organization (PEO) solution can help you establish your presence in that market faster than ever before. With global expansion capabilities in 185 countries and counting, virtually no market is off the table.