Raymond Lee, CEO of Lee & Man Paper Manufacturing Ltd, says Hong Kong offers companies a competitive edge

Hong Kong and China form an unbeatable business partnership, according to Raymond Lee, one of Asia's largest producers of paper and packaging.

Mr Lee, founder and CEO of Hong Kong-listed Lee & Man Paper Manufacturing Ltd, says the combined strengths that both bring to the table give any companies dealing with the mainland a sharp competitive edge.

"Hong Kong is not only the gateway to China, but a strong partner," Mr Lee said. "The two are truly integrated business-wise, and I can't see how they could be split up."

Mr Lee founded his company in 1994, at the age of 23. Today, Lee & Man is China's second largest container board company, with three mills in China, one in the US, offices in Hong Kong, Los Angeles and Hamburg, and 3,000 employees. The company recently opened one of the world's largest paper mills in the Pearl River Delta city of Dongguan. Its annual turnover is HK$4 billion (US$514 million) and the company recently announced a 60 per cent profit increase for the first half of 2005.

Unrivalled advantages

Mr Lee says having a Hong Kong base is critical to his business success. "There are certain things that China does well - such as low cost manufacturing," he said. "Hong Kong, as an international business hub, has many advantages."

Top of his list is Hong Kong's pool of professional talent. Of all his offices worldwide, Mr Lee finds his Hong Kong employees to be the most professional, hardworking and efficient. All of his key managers are based in Hong Kong, he says.

As a financial hub, Hong Kong also excels. Moving money in and out of China can be quite difficult, unless you go through Hong Kong, Mr Lee said. Lee & Man bases its financial operations in Hong Kong, as do many of its customers.

"Hong Kong banks are very efficient, and money flows easily," he said. The ability to raise funds through Hong Kong's equity or bond markets is another advantage. "We've done a couple of fundraising operations over the past two years and it just happens so quickly and easily in Hong Kong.

"The IT infrastructure in Hong Kong gives us another edge. We have offices in Europe and the US, and information passes in and out through Hong Kong easily and conveniently. If not for the IT infrastructure in Hong Kong, how could I control all the companies I have? I see this as one of the key advantages Hong Kong has, and that's why we are still headquartered in Hong Kong."

World's best accounting

Hong Kong's open, honest and transparent accounting practices are essential for the company's global operations, Mr Lee said. "Hong Kong accountants follow international rules. It is important that one's accounting system reflects the standards of the company."

Mr Lee does not believe he could have achieved such success anywhere else but Hong Kong.

"We have been able to take advantage of the expanding China market, and being in Hong Kong, we are literally right there. Over the past 10 years China has become the manufacturing hub of the world, but Hong Kong plays a key role. If it weren't for Hong Kong, I am sure we would not have been able to capilitise on opportunities as they arise."

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Lee & Man Paper Manufacturing Ltd