Hong Kong SMEs expect growth, government help, rising labour costs

EXPRESS delivery giant UPS' Asia Business Monitor (ABM) 2010 survey reveals 36 per cent of Hong Kong's small and medium enterprises (SMEs) expect business to grow this year and more than 60 per cent - against last year's 33 per cent - face no trouble getting credit.

But this won't improve competitiveness, say the SMEs that employ fewer than 250. The HKSAR government was "not doing enough to address their needs" and additional help such as discounts or subsidies are, say 61 per cent of respondents.

Soaring labour costs and innovation were listed as other major impediments to competitiveness by 55 per cent.

Said UPS Hong Kong and Macau managing director, KK Leung: "SMEs make up the majority of the business landscape in Hong Kong. With a greater focus on innovation and close management of labour costs, Hong Kong could become a regional hub for innovation and technology."

The survey discovered that 66 per cent of Hong Kong SMEs did business in the Asia Pacific region, 19 per cent in Europe, 11 per cent North America and two per cent in Latin America. However, looking for overseas opportunities outside Asia-Pacific and beyond the traditional markets of the US and Europe, some 19 per cent Hong Kong SMEs plan to enter the Middle East and 14 per cent will look to Latin American markets in the next three years.

"Although business confidence has improved, SMEs, like the larger corporations, look ahead for opportunities and support to grow their businesses and become more competitive. Hong Kong has a small domestic market, so SMEs need to look overseas and identify markets where they can be highly competitive," Mr Leung said.

An advantage Hong Kong SMEs boast of is their proximity to mainland China and other countries in the region, the report said. Recognising this and to reach out to these SMEs, UPS has shifted its Asia Pacific hub from Clark Field in the Philippines to Shenzhen airport.

"This strategic location of the US$180 million hub will enable shorter transit times between burgeoning Asian trade lanes, while offering a new level of service to the manufacturing region located just north of Shenzhen, where many Hong Kong SMEs are located," Mr. Leung said.

The UPS ABM 2010, a yearly survey being published for six years tracked 1,351 SMEs, which include Hong Kong's 100 SMEs in Australia, China, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam between March 11, 2010 and April 20, 2010.

Those surveyed were from automotive, garment and textile, healthcare, pharmaceutical, toy, sporting goods, electronics and electrical, gifts, housewares, timepieces, jewellery and optical sectors.
(Source:www.schednet.com)