(February 15, 2008) The California Chamber of Commerce yesterday hosted Margaret Fong, Hong Kong Commissioner, at an international luncheon forum.

Commissioner Fong described Hong Kong as the “window of China and door to the world,” and specifically addressed Hong Kong’s strong economic ties with California.

Among the more than 80 guests who greeted Commissioner Fong were California government officials and businesspeople from California and Hong Kong, including representatives of finance, agriculture, transportation, manufacturing and technology.

Hong Kong: A Vibrant Economy

Compared to California, Hong Kong is small, with a population of 7 million, whereas California’s population is more than 38 million people. To better illustrate her point, Commissioner Fong explained that Hong Kong is only 400 square miles, easily fitting into the border of any California county. As a result, the commissioner said, “From day one, we knew we would have to reach out to the rest of the world.”

Commissioner Fong identified a set of core values that has allowed the Hong Kong economy to flourish: “Hong Kong is very proud to be an open market and free trade supporter,” she said. “The best way to make the rest of the world feel welcome is to have no trade barriers, quotas or tariffs, so that when businesses come, they will feel very welcome and become a part of Hong Kong.”

Hong Kong's values system offers a level playing field for all businesses, practicing common law, offers an educated workforce fluent in several languages, as well as an entrepreneurial flair, the commissioner said.

Hong Kong is a special administrative region (SAR) of the People’s Republic of China, Commissioner Fong explained.

On July 1, 1997, Hong Kong ceased to be a colony after more than 150 years of British rule, becoming a part of the People’s Republic of China. Hong Kong is able to continue to operate because Hong Kong is a “very special part of Mainland China,” Commissioner Fong said.

Hong Kong practices the belief of “one country, two systems,” and still retains full and separate membership with the World Trade Organization and Asia-Pacific Economic Cooperation.

Margaret Fong, Hong Kong commissioner and CalChamber President Allan Zaremberg.

California-Hong Kong Relationship

California and Hong Kong’s financial stability is strongly interconnected. Commissioner Fong called Hong Kong and California “natural partners.”

Hong Kong has a very stable and convertible Hong Kong dollar, which is pegged to the U.S. dollar, Commissioner Fong said.

“When the U.S. dollar goes up, the Hong Kong dollar goes up. In fact, where the U.S. dollar is right now, you are in for a bargain. One U.S. dollar is 7.8 Hong Kong dollars, so whatever you can spend here, you can be eight times more efficient in Hong Kong,” she said.

“You must be thinking about visiting us tomorrow,” the Commissioner teased.

Hong Kong continues to be California’s eighth largest export market. California accounts for more than 27 percent of all U.S. exports to Hong Kong. California’s exports to Hong Kong are driven by computers and electronic products, which account for 65 percent of all California exports to Hong Kong. Key exports to Hong Kong showing growth in 2006 include chemicals and crop production.

In 2006, California’s exports to Hong Kong totaled more than $4.8 billion.

Hong Kong is the second largest recipient for foreign direct investment (FDI) in Asia after Mainland China, and is seventh largest recipient of FDI in the world.

Commissioner Fong reeled off these statistics: On a per capita basis, Hong Kong imports twice as much as Mexico, three times as much as Australia, four times as much as South Korea, five times as much as Japan and six times as much as the European Union. Commissioner Fong highly recommended that businesses wishing to sell goods in Hong Kong do so because “we are small, but we love to consume, just like Americans.”

Trading Partner Portal

Yesterday the CalChamber launched a web portal for information about Hong Kong. The portal is one of a new series of online international portals featuring California’s top trading partners.

The new Hong Kong portal links to key country contacts, including business resources and cultural and educational references. Also available for easy reference are trade statistics and information on foreign direct investment in California.

The trading partner portal for Hong Kong is in the international section of the CalChamber website www.calchamber.com/international.

Staff Contact: Susanne Stirling

Additional Materials

International Trade

Hong Kong Trade Portal