Shigeru Kimura, director-general of the Japan External Trade Organisation (Hong Kong), says Hong Kong will continue to attract Japanese investment

The Pearl River Delta (PRD) offers the ideal base for assembling and manufacturing operations, and Hong Kong will remain the regional operations centre for Japanese firms, according to director-general of the Japan External Trade Organisation (Hong Kong) Shigeru Kimura.

Mr Kimura said that the number of Japanese companies with assembling and manufacturing operations in Guangdong had increased almost 15 per cent year-on-year to around 3000, and he expects more to move there.

"South China, combined with Hong Kong, is a very effective tool for SMEs," Mr Kimura said. "Hong Kong provides the best visible and invisible infrastructural support to manufacturers in southern China and it is easier to ship the goods to overseas markets from here."

"It is much easier to start small-scale businesses in southern China because the PRD is a good source of cheap raw materials, parts and components and the wages are lower and much more abundant than in the Yangtze River Delta (YRD) area." Labour costs in Guangdong are only five per cent of those in Japan, he added.

Mr Kimura said that Guangdong's proximity to Hong Kong is a major factor in attracting Japanese investment. Companies can benefit from easy setting up of a compact supply chain management (SCM), logistics services, transport, material and cheap labour, but still have the advantages of keeping their head office in the international financial centre of Hong Kong.

"Hong Kong plays the role of brain or head of Japanese companies in south China," he said. "In the next decade, Japanese SMEs must explore the China market to take advantage of the benefits there."

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Related link:
Japan External Trade Organisation  www.jetro.go.jp