Businesses and associations are experiencing an increased focus on globalization, particularly in strong developing markets such as China and India. For association executives working in international environments, it is critical to understand the background of the countries where you consider marketing services, opening offices or introducing chapters. Alfons Westgeest, Executive VP, Kellen Company and specialist in global matters, explains the unique setup of the relationship between Hong Kong and the People’s Republic of China.

“One Country, Two Systems.” That’s how the relationship between Hong Kong and the People’s Republic of China is described. Why? Because when the British handed Hong Kong over to China in 1997, the 1,100 square kilometers of land became a Special Administrative Region (SAR). That means that the centuries-old port allows its citizens rights and freedoms that are virtually absent in any other province of China. Those rights include independent judicial systems and freedom of association and media, which are all key for businesses.

Thus, Hong Kong has acted a bridge between China and the rest of the world. It’s the place where protests officially can take place; on July 1, its 15th anniversary, almost half a million Hong Kong residents took to the streets in protest against various matters. These ranged from the rising inequality between rich and poor, to housing prices and a fear of lesser acceptance of dissent ahead of the first direct election of Hong Kong’s Governor scheduled for 2017.

In recent years, there have been noticeable signs of a policy shift in Hong Kong. This has caused many a debate. Commentators speak of a gradual but noticeable dynamic in interpretation. Some wonder if and how Hong Kong can preserve its special position (SAR).

Others note that what happens in Hong Kong might be a foreboding of what may happen in the mainland Peoples Republic. Though Hong Kong itself is only 7 million people out of China’s 1.3 billion, it may represent important shifts in China.

What does this mean for international businesses and associations? I would advise them to analyze the trends in their industry or profession and also gauge how important the maintenance of government relations is for Greater China.

1. Setting up a foothold in Hong Kong might be a wise move, when toeing into the Chinese waters.
2. Hong Kong is perceived neutral and easy to set up shop when your focus is either overall Asia Pacific, or distinct region – as what one association I work with calls “North Asia.”
3. Perfect logistics, excellent flight connections, top class meeting venues and services.

However, there are many opportunities arising in mainland China which might make other cities better suited for your association. I’ll detail those other opportunities in my next global focused post.

I spent two weeks in Hong Kong – in diversity. First I experienced the city life, high commercial activity as well as ferries and outer islands. I enjoyed multiple sights and facilities. Next was Sha-Tin in the University and residential area 10 km out. Its Heritage Museum held a Picasso Exhibit. Finally we spent family vacation in Sai Kung National Park. Whilst known to residents, this area sees not many visitors. Its nature and quiet is the perfect antidote to the hectic Hong Kong we all know.

I am tempted to add climate and splendid nature as advantages of Hong Kong. It ranked #1 at Economist Intelligence Unit “Spatially Adjusted Liveability Index top 70,” just published. Well, weather is tricky everywhere nowadays. The record level-10 Typhoon Vincente came by and caused my outbound flight to Beijing a delay of 10-hours. More about Beijing next ….

Alfons Westgeest
Executive Vice President
Kellen Company