Business Focus

Young entrepreneurship & employment scheme in the GBA

By David Wong, Head of Greater Bay Area Business Development

The Hong Kong Government has all along been supportive of youth innovation and entrepreneurship and we hope our young people could aim high and explore opportunities beyond Hong Kong. The development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) will bring about opportunities for our young entrepreneurs.

Youth Employment Scheme

The youth employment scheme is one of the measures announced by the Chief Executive in the 2020 Policy Address. It aims to encourage and support young people to work and pursue their careers in the Mainland cities of the GBA, help them understand the latest developments of both Hong Kong and those cities and leverage the opportunities for career advancement in the GBA. Under the scheme, enterprises with operations in Hong Kong and GBA Mainland cities are welcome to join the scheme to offer job vacancies. Participating enterprises shall employ the eligible graduates locally under Hong Kong laws, and shall station the graduates in GBA Mainland cities to work and receive on-the-job training. The scheme provides 2 000 places, around 700 of which are designated for innovation and technology (I&T) posts.

The Hong Kong Government will grant a monthly allowance of HK$10,000 to enterprises for each graduate employed for up to 18 months. To join the scheme, eligible graduates should be Hong Kong residents lawfully employable in Hong Kong and hold bachelor’s degrees or above awarded locally or by institutions outside Hong Kong from 2019 to 2021. Under the scheme, the graduates employed will receive a monthly salary of no less than HK$18,000. For I&T posts, eligible graduates, besides meeting the above-mentioned criteria, should possess degrees related to science, technology, engineering or mathematics subjects. They should work in both Hong Kong and GBA Mainland cities, with each location taking up six to 12 months. For more details, please visit the scheme’s website: https://www1.jobs.gov.hk/0/en/

Young Entrepreneurship

There has been rapid development of youth entrepreneurial bases in the GBA in recent years, providing massive hardware and software support to innovative and entrepreneurial activities. Besides enjoying the concessionary policy initiatives introduced by various municipal governments in the GBA, Hong Kong young people who have successfully established a foothold can also benefit from the incubation and guidance services offered by the entrepreneurial bases in which they have established. These help reduce entrepreneurial risks. In view of this, the Hong Kong Government provides subsidy to NGOs in Hong Kong, so that the NGOs may play the role of a guide and provide entrepreneurial support and incubation services to Hong Kong young people who intend to start their business in the GBA, including helping them settle in relevant entrepreneurial bases. A list of these bases in the GBA can be found at: https://www.bayarea.gov.hk/filemanager/en/share/pdf/Entrepreneurship_ bases_contact_infomation.pdf.

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Eu-china agreement on investments promotes new business trends

By Lorenzo Riccardi, Managing Partner of RsA Asia

China promotes business relations with European Union with the new agreement on investment finalized at the end of 2020. The Comprehensive Agreement on Investments (CAI) will cover a geographical area that includes 30% of global GDP and contains 24% of global population.

Benefits for European companies

The CAI will grant the EU enhanced access into the Chinese market through the reduction of barriers to investment for EU companies. This is achieved by amending the requirements for joint ventures and other restrictions, and by providing now access into certain strategic sectors of the economy. The CAI enhances protection for EU investors which are competing with Chinese state-owned companies, through the inclusion of new rules against forced transfer of intellectual property and greater transparency into availability of subsidies. China has given commitments to implementing the International Labour Organization Conventions previously ratified and to implementing the Paris Agreement on Climate Change.

Other agreements

The CAI signifies a strong Asia strategy from Europe which has been strengthening relationships throughout the continent by signing multiple free trade agreements such as those signed with Vietnam (2020), Singapore (2019), South Korea (2015) and the ongoing negotiations with India and the ASEAN bloc. Similarly, Beijing is following a comparable economic strategy as signified by the signing of the Regional Comprehensive Economic Partnership (RCEP) and through the proposal to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Beijing is increasingly establishing itself as a global leader committed to increased trade and has sought to increase cooperation with Central and Eastern European countries (17+1 bloc). These new developments follow the previously established free trade agreements with Switzerland and Iceland, the network of tax agreements with 38 countries in Europe, the agreements for the exchange of financial data with Lichtenstein and San Marino and conventions for social security contributions with Denmark, Finland, Germany, Luxembourg, the Netherlands, Spain, and Switzerland.

Europe-China investment and trade

China’s investments into the EU are primarily in the sectors of automotive, consumer products, finance, and healthcare, whereas European investments into China are in the chemical, automotive, agricultural, energy and financial sectors. According to data issued by the PRC General Administration of Customs, between January and November 2020 the EU traded a total of $581 billion with China. The member countries with the largest trade share of the EU-China trade are Germany (USD 171 billion), the Netherlands (USD 82 billion), France (USD 59 billion) and Italy (USD 59 billion).

The role and benefits for Italy

Of the major European nations, Italy is considered to have the closest relations with China. Italy was a signatory to the Memorandum of Understanding (MOU) for the Belt and Road Initiative (BRI) in March 2019 becoming the first of the G7 nations to join the project. Italy has signed a new tax treaty with China, which may be ratified in 2021. This Double Taxation Treaty offers the most attractive rates in the EU for tax rates on income from investment and trade.

RsA asia is a leading tax and corporate advisory firm assisting companies, multinational groups and institutions in East Asia.

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A testimonial of the potential synergies in the GBA for a company working in the heavy machinery business

By Luca Morlotti , Managing Director, FICEP

FICEP S.p.A. is an Italian multinational company leader in the production of CNC Machines for steel fabrication and forging industry. To make this official definition more understandable to an audience not familiar with these technical terms, we can say that our machines are used to process heavy steel beams and plates for the production of big infrastructures such as bridges, skyscrapers, malls, stadiums etc….

In 2003 FICEP decided to consolidate its presence in Far East with the set up of the Subsidiary Company FICEP Hong Kong.

After the first few years that saw a steady growth of the market, it soon became clear that China needed a particular attention and a dedicated structure. Confident in the strong demand of the Chinese market in 2008 we opened our Representative Office in Guangzhou and in 2014 we expanded it into a Wholly Foreign Owned Enterprise.

At that time the project of the GBA was not yet conceived, as it was first mentioned in the China’s 13th Five-Year Plan in December 2016. However it was already evident that the southern part of the Guangdong Province was destined to become one of the largest industrial concentrations in the world.

The big scheme of the GBA Project is now bringing up a lot of new possible facilities and synergies among the cities involved and mostly also across the border between Hong Kong and Mainland China.

In particular for FICEP, the main activity of our two companies (FICEP Hong Kong and FICEP Guangzhou) is the provision of technical service and spare parts to our customers in the Far East. further future integration, with possibility to cross the border with faster procedures, will enable us to implement more integrated strategies, with a better use of the various skills of our technicians.

Furthermore the GBA is attracting a number of OEM manufacturers, especially in the fields of electronics and automation. This has a very important impact in our supply chain of spare parts, as the “brain” of our CNC machines relies on a large amount of electronic parts, that require prompt service and availability.

On a larger scale, as Chairman of the Industrial Committee of the ICC of Hong Kong and Macau, I could witness a large interest from all our members in some projects related to the GBA and funded by the Hong Kong Government. In particular some Companies already applied with successful outcome to subsidies such as the BUD (Branding Upgrading and Domestic Sale) fund.

Unfortunately COVID-19 hit particularly hard the mobility of people and put in a “suspended state” many of the activities related to the GBA and Hong Kong in particular. However there is no doubt that in the long term the Greater Bay Area will become the largest urban – industrial conglomerate in the world.

FICEP Hong Kong Ltd, set up in September 2003, is the subsidiary of FICEP SpA, multinational Italian Company, leader in the manufacturing of CNC Machines and Equipment for the Steel Fabrication and Forging industry. FICEP SpA is based in Italy, near Milan. It was founded in 1930 and it grew steadily from a small family owned workshop into the present multinational organization. In the year 2015 the total turnover of the group was in the range of 180 million Euro. Apart from the Mother company in Italy, the group is structured with many overseas companies to provide sales and after-sales service worldwide.

FICEP Hong Kong, as subsidiary of FICEP SpA, is in charge of providing Sales and aftersales service to the customers in the Far East region through its own structure plus the coordination of a network of agents. In 2014 FICEP Hong Kong set up a Subsidiary WFOE Company in Guangzhou China (Guangzhou FICEP Machinery Co. Ltd.) to support directly the growing presence in the Chinese market.