“Based on information from four large Japanese banks operating in Hong Kong, I can safely say that more than 400 Japanese companies have opened accounts with them during last year. There is also an increased number of Japanese living in Hong Kong, from 23,000 in 2000 to 26,000 in 2002. Given the fact that Hong Kong’s main attraction for Japanese manufacturing firms is contract processing, it is hoped that this form of production is maintained well into the future.

“A lot of Japanese SMEs are interested to invest in the mainland to benefit from the low labour cost. Also, Japanese companies have started to build a distribution network within China so as to be in a good position to serve the China market. There may be business opportunities for Hong Kong companies there. Recently, mainland companies have started to show interest in investing in Japan. There also may lie business opportunities for Hong Kong companies with a wealth of experience in dealing with Japanese businesses.”

Speaking at the Japan Society of Hong Kong Luncheon, 17 March 2003