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Opportunities in the post-WTO era
Opportunities only exist in the north?
No
MANY opportunities in HK too
• Non-discriminating
- MFN
- National treatment
• Free competition
• Transparency
• Valid protection
• Trade = goods, services, IP, investments
Main Principles of WTO
• Open trade gateway / market
- Custom duties
- Quota, permit, etc.
• Freedom of investments
- Capital source
- Business operations
• Open services sectors
- Financial services
- Telecom
- Accounting, consultancy, etc.
Some Commitments of China on entry to WTO
Impact of WTO entry on China markets
• Globalisation
• More business, more competition
• Less protection on local businesses
• More complex business and operating environment
• Changes in China laws and regulations
Opportunities & Risks for Foreign Entities
• Enormous market
• Less trade/entry barrier
• Expansion opportunities
• Inadequate legal protection
• Lack of reliable market information
• Lack of experiences
Opportunities for Hong Kong
Great market potential Proximity of China market
Relaxed investment requirements
Centre for China entities’ financing activities
Base for foreign investments
Strategic investments
What these mean to Hong Kong?
Probably with a smaller share of a
bigger pie, Hong Kong will overall be better
off with China’s entry to the WTO.
What should accountants do?
Identify the needs of different parties
• What China entities needs?
• What HK entities need?
• What foreign entities need?
China Entities’ Needs
• Financing knowledge & capital needs
• Understanding of foreign markets
• Risk management
• Changes in laws and regulations
• Overseas/International accounting and financial reporting requirements
• Foreign investment opportunities
• Internal control and corporate governance
HK/Foreign Entities’ Needs
• Knowledge about China markets
• Understanding of the operation mechanisms in China (e.g. banking, financing and various filing/registration procedures)
• Identification of entry/expansion risks
• China laws and regulations
• China accounting and financial reporting requirements
• Investment opportunities and requirements
Opportunities for HK-based Accountants in Practice
• Relaxed rules to practise in China
• Big market for consulting and advisory services to HK, China and foreign entities
Opportunities for HK-based Accountants
Financing advises to China entities
• Explore more financing opportunities
• Identify the optimal financing mode outside China
• Advisors for IPO/debt financing activities
Financing advises to foreign entities
• Help understand the existing banking/financing system in China
• Provide advises on the operation of foreign currency exchanges and other related mechanism in China
Opportunities for HK-based Accountants
Understand foreign/China markets• Trade disputes
• Explore market information availability
• Market analyses – which market and when to go? How to go?
Opportunities for HK-based Accountants
Risk management• Advise and guide the client to identify risks, e.g.
business, regulatory risks
• Arouse clients’ attention to seek other professional advises when needed, e.g. IT, internal control/operation procedures, knowledge management
• Help identify risk management measurements
Opportunities for HK-based Accountants
Laws and regulations
• Explore the information of changes in laws and regulations owing to the China’s entry of WTO
• Impact of changes to business
• Tax planning for foreign investments
Opportunities for HK-based Accountants
Accounting advices to China entities
• Bridge the knowledge gap between PRC GAAP and internationally recognised accounting standards
• Provide training to staff regarding internationally recognised accounting standards
Accounting advices to foreign entities
• Help understand PRC GAAP
• Help interpret the PRC GAAP financial statements
Opportunities for HK-based Accountants
Foreign investment opportunities
• Explore investment opportunities
• Understand overseas investment & financial instruments
China investment opportunities
• Help understand investment requirements
• Explore information available
• Help determine the best way to invest in China
Opportunities for HK-based Accountants
Internal control and corporate governance
• Help introduce these concepts to China entities
• Provide advises on design and implementation of plans
Opportunities for HK-based Accountants in Commercial Sector
• Help the entity focus on business development opportunities
• SWOT analysis for the entity
• Introduce/reinforce risk management procedures in the due course of expansion
• Market positioning
• Legal protection
• Strategy of the entity
• Knowledge and experience
• Network
• Personal factors
Based in Hong Kong or stationed in China?
What should HK accountants do now?
• Keep abreast of international and China development
• Familiar with China laws and regulations, and the schedule of liberalisation of different sectors
• Familiar with international and PRC accounting requirements
• Maintain high ethical standards and professionalism
• Improve linguistic and soft skills
• Master new skills and technology