Báo cáo nghiên cứu và đánh giá thị trường hong kong của ngân hàng TMCP ngoại thương việt nam (vietcombank) e

Báo cáo nghiên cứu đánh giá thị trường Hong Kong Ngân hàng TMCP Ngoại Thương Việt Nam (Vietcombank) Research reports and Hong Kong market assessment of the Bank for Foreign Trade of Vietnam (Vietcombank) in determining the investment objective to expand the network of the Bank in this market I Executive summary I am working for Joint stock commercial Bank for Foreign Trade of Vietnam ( Vietcombank) The report has been written because the General Director of ACB wants to expand business by opening new branches abroad, therefore, he asked me to provide a report to advise him to invest in one particular country After taking both the target of company and its capital ability to set up new branches outside Vietnam into consideration, it is recommended that Hong Kong would be the most suitable place II Introduction Purpose The purpose of this report is to analyse the main economic features of Hong Kong, particularly in banking sector Scope This report has considered about two main parts: The first part will cover the overview of Hong Kong economy, as well as the future prospect The second part of this report will point out attraction as well as advantages of opening new bank branches in Hong Kong Methods The report, which has been done, based on a number of the theories such as: International Trade Policy, Economic Integration and Foreign Direct Investment III Findings Basic country data Location: Eastern Asia, bordering the South China Sea and China Land: 1,104 sq km Population: 7,089,705 (6/2010) Official language: Chinese and English Currency: Hong Kong dollar (HK$) Hong Kong economy overview and future prospect Introduction Asian Markets have been attracting the attention of many investors over the last decade Since 2002, The Asian/Pacific Region’s Economic Margins and Growth have far exceeded the world, especially Hong Kong (seeking alpha, 2009) Hong Kong is one of two special administrative regions (SARs) of the People’s Republic of China According to a report of APEC, “Hong Kong- China has been a small and open trade port for more than 200 years It is externally oriented and it fully open to foreign capital and technology for its growth and development” Although the recent global recession had negative impacts on Hong Kong, but its increasing integration with China helped it recover from the downturn more quickly than many observers anticipated offer tremendous opportunities for businesses looking to explore the Asia Pacific region The outlook for Hong Kong economy As other economies in the world, the Hong Kong economy has been affected badly by the global economic crisis since 2008, but clear signs of improvements have been observed due to its increasing integration with China helped it recover from the downturn more quickly (Consulate Genaral of Switzerland in Hong Kong, 2010) For 2009 as a whole, GDP fell by only 2.7% The corruption index is always very high over years, means the transparency in government (Hong Kong is ranked 13 th in the world) (HKSAR Government, 2010) Table 1: Main Economic data 2009 GDP-Real growth rate (annual -2.7 2008 2007 2.5 6.4 %) GDP- per capita (US$) 29,900 30,800 29,900 Corruption perception index 8.2 8.1 8.3 Unemployment rate (%) 5.2 3.5 4.0 Source: HKSAR Government, IMF Chart 1: Hong Kong dollar exchange rate against USD Source: CIA World Facebook Hong Kong dollar has become stronger (compared with USD) since 2005 It is a good sign for domestic consumers but it could be a changeling for export In 2007, we see a slightly depreciation of HKD because of the trade-weighted index down by 0.5% Chart 2: Hong Kong inflation rate Source: tradingeconomic.com As we can see in the chart, Hong Kong experienced a deflation in 2009 due to the recession recently During a recession, competition among businesses for customers becomes more intense, and so retailers are no longer able to pass on higher prices to their customers One other possible reason was the increasing export cheap products from Mainland China As the economy recover, Hong Kong inflation rate increased 2.6 in the third quarter of 2010 The structure of economy Chart 3: Contribution to GDP by sectors in 2009 Source: CIA World Factbook Agriculture plays a very small part in the economy of Hong Kong, it makes only a miniscule contribution to GDP (0.1% in 2009) due to the scarcity of arable Therefore, Hong Kong heavily depends on agricultural imports Industry is a significant sector, but Hong Kong mainly re-exports goods produced in China This sector is small, accounting for 8% of GDP in 2009 “Hong Kong has a small utility industry such as: water, gas and electricity, a relatively significant construction industry, and a more important export-oriented manufacturing sector As a small territory with limited land and a very large population, Hong Kong cannot support heavy industries, which are land- intensive by nature Nor can it have large labour-intensive industries” (Encyclopedia of the Nations, nd) Being the largest and dominant sector (contribute 91.9% to GDP), the service has always been driving force of Hong Kong’s economic Financial services, trading and logistics, tourism, and producer and professional services are the Four Key Industries in the Hong Kong economy Banking is the heart of Hong Kong’s financial services International and regional economic agreements Table 2: Organisations which Hong Kong belongs to Organisations Year became a member The Asia-Pacific Economic Cooperation 1991 (APEC) The Pacific Economic Cooperation Council 1991 (PECC) The Trade Committee of the Organization for 1994 Economic Cooperation and Development (OECD) World Trade Organisation (WTO) 1995 The World Customs Organization (WCO) 2005 Hong Kong has so far concluded two free trade agreements with Mainland China (the Closer Economic Partnership Arrangement CEPA) and New Zealand At present, Hong Kong is negotiating with the EFTA States (including Switzerland) for a free trade agreement Closer Economic Partnership Arrangement (CEPA) Under the CEPA, all product of Hong Kong (goods and services) origin can be imported into the mainland China tariff free CEPA has been an important mechanism that Hong Kong government have employed to enhance financial cooperation CPEA offers a good platform and lower the thresholds for Hong Kong products and services to have an effective access to China Framework Agreement on Hong Kong and Guangdong Co-operation Under this Agreement, both sides will facilitate the flow of key factors such as people, goods, information and capital across the boundary Overall trade balance According to the HKTDC, Hong Kong is the world’s 13 th largest trading economy Because of the recent global crisis, the merchandise export fell 12.6% in value term from 2008 Moving to the second half of 2009, export of services likewise weakened because of falling offshore trading activity and transportation services For 2009 as a whole, export of service fell by 6.6% Imports of goods and services also declined 11% and 6.1% respectively Taken together, there was an overall trade surplus of 7.2% of GDP in 2009, in comparison with a surplus off 10.2% of GDP in 2008 Chart 4: Overall trade balance and export growth (in nominal term) Source: Census & Statistics Department Chart 5: Hong Kong current account Source: tradingeconomic.com Current account is the difference between a nation's total exports of goods, services and transfers, and its total imports of them Hong Kong has recorded a current account surplus from 2006-2010, it means that Hong Kong economy has been very strong However, it has been decreased nearly 400% from 2009 to 2010 mainly due to an increase in the visible trade deficit and decrease in the net inflow of external factor income Regulations: Hong Kong is a free port and there is no tariff on general imports except duty on strong liquors, tobacco, hydrocarbon oil and methyl alcohol In Hong Kong, there is neither restriction on inward and outward investments nor nationality restrictions on corporate or sectorial ownership Hong Kong future prospect Hong Kong has a very strong economic base, which has helped it get over periods of economic hardship Its economic strength enabled it to survive the recent financial crisis with minor damage, in comparison with other economies in the world This strong economic base will help Hong Kong to recover and expand its economy to achieve a stronger position in global market Hong Kong‘s access to China has opened a very promising economic opportunities for Hong Kong and will enhance its international status China’s abundance of land and raw materials and its low cost of labour have addressed the major limitations of Hong Kong manufacturing sector as well as agricultural sector Mainland China has also offered its huge and strong market for investment and exports and it put Hong Kong economy well ahead of many other developed economies which have been trying to gain extensive access to China Hong Kong economy will surely expand, but the service sector will remain the largest and most dominant sector This is partly because of the strength and the phenomenal size of that sector It is also because of its important role in the re-export of goods produced in China, including their packaging, shipping, handling, and marketing, as well as financing their production The advantages of doing business in Hong Kong Overview of Banking System Hong Kong does not have a central bank, but the Hong Kong Monetary Authority (HKMA) assumes some of the functions of a central bank The banking system in Hong Kong is characterized by its 3-tier system, which is formed by types of banking institutions, namely licensed banks, restricted licensed banks and deposittaking companies Only licensed banks and restricted licensed banks can be called banks The attraction of location Hong Kong is one of the most favourite places for business because of several factors Firstly, Hong Kong is located halfway between Japan and Singapore, which are very developed economy in Asia and are potential investment and export market Secondly, it lies astride the main shipping and air routes of the Western Pacific Thirdly, it can access to China, a huge and potential market Finally, its favourable time zone location enables foreign exchange dealing to continue 24 hours a day around the world Hong Kong’s services sector is among the most developed in East Asia The government’s perspective: The HKSAR adopts a pro-market economic policy in accordance with the principle of “Big market, small government” in order to create a business-friendly environment; build Hong Kong as an international financial centre Wonderful Business Environment  Hong Kong has a high degree of liquidity of financial market and operates under effective and transparent regulations as well as government, which meet international standards  Its policy of low and simple taxation (The tax rate on corporate profits stands at 16.5%, no capital gain tax, no tax on offshore derived income)  There are no barriers of access to the market by foreign business means accessing the Hong Kong market is simple  There are no restrictions on capital on capital flows into and out of Hong Kong and no exchange controls  Hong Kong is a top-ten securities market globally and the second largest in Asia after Tokyo  English as the business language Because of the policy of simple regulation, no barrier and transparency government, I suppose it could be no problem for our bank to operate a new branch in Hong Kong The corporate tax in Hong Kong is much lower than in Vietnam (the corporate tax in Vietnam is 28%), therefore we could earn much money on reducing taxation in order to reinvest elsewhere and it allows maximum room for business initiatives and innovation The policy of no restriction on capital inflow and outflow Hong Kong enable our bank to transfer capital unlimitedly Potential markets Hong Kong is international trade centre and its access to China provides Hong Kong a large and potential investment and export market Hong Kong is one of the most densely populated in the world With a population of million people and GDP per capita is 29,900USD (in 2009) (Hong Kong people are becoming richer), Hong Kong itself provides a large number of potential customers High- skilled labour With the flexible and high-skilled labour market, our bank can employ workers without training them; therefore, we can reduce the initial expense Besides, workforce is highly motivated, which has been stimulated an innovative, prosperous economy Employees in Hong Kong can work under pressure for longer time than in Vietnam Close distance from Vietnam to Hong Kong Due to the close distance from Vietnam to Hong Kong, we can travel easily and quickly between these two places Therefore, I suppose, the director or managers can take care both places, in Vietnam and Hong Kong Limitations Foreign banks could only set up maximum branches in Hong Kong High competition, 71 of the world’s 100 largest banks have a presence there IV Conclusion In summary, Hong Kong banking sector appears highly favourable In the domestic side, Hong Kong has number of unique qualifications Firstly, Hong Kong has a policy of low and simple tax and a world class regulatory as well as a wellestablished, deep and liquid market, enable it become one of the most an interesting and healthy business environments in the world Secondly, its favourite time location and physical location is advantages for bank companies which enable banks to deal with customers around the world 24 hours per day On the external side, Hong Kong’s close economic ties with the Mainland are highly beneficial for Hong Kong It offers an opportunity for foreign companies like our company can reach an enormous number of customers not only in Hong Kong, but also in the Mainland In addition, Hong Kong has strong potential to develop further as an international trade, business, and financial centre For all these reasons, Hong Kong appears to be well positioned to mature further as a services-based economy with development of trading and financial links both to the rest of China and to the rest of the world Therefore, it is highly recommended that Hong Kong would be the most suitable place for our company to open a new branch abroad  ... work under pressure for longer time than in Vietnam Close distance from Vietnam to Hong Kong Due to the close distance from Vietnam to Hong Kong, we can travel easily and quickly between these two... workers without training them; therefore, we can reduce the initial expense Besides, workforce is highly motivated, which has been stimulated an innovative, prosperous economy Employees in Hong Kong. .. However, it has been decreased nearly 400% from 2009 to 2010 mainly due to an increase in the visible trade deficit and decrease in the net inflow of external factor income Regulations: Hong Kong