Hong Kong is a mature financial market and a global financial center. Hong Kong is also known for its efficient and flexible services. Uniquely positioned in South China, Hong Kong has been one of the important players in risk management and fund raising for investments into China. With the impact of the financial crisis in 2008, Hong Kong has diversified its role as a fund manager for Chinese investors to manage their overseas investments.
Being the largest equity center in Asia, Hong Kong provides both local and regional start-up companies with a readily available source of equity financing that originated from overseas. Hong Kong accounts for 29 percent of all equity raised in Asia.
Since the financial crisis in 2008, China has become a major source of global investment. This is reflected by the quota of US$56.6 billion Qualified Domestic Institutional Investors (QDII) program, a scheme approved by the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) in April 2006 that allows qualified commercial banks to raise RMB funds from individuals and institutions to invest in overseas financial instruments.
The mature and well regulated Hong Kong stock market has provided a quick and easy exit for venture investments. The Hong Kong stock exchange is the host for a major share of sales from Chinese investor in private-equity-backed IPOs.
While a significant share of regional funds are based in Hong Kong, the highly export-oriented nature of the Hong Kong economy helps put capital into companies in the Asia Pacific Region including Australia, Korea, Japan, India, Taiwan, China, etc.
The vibrant and dynamic Chinese market has become the focus of venture capital investment in the region, and American private equity firms with their recognized expertise could benefit from this opportunity. In addition, Hong Kong’s Mandatory Provident Fund (MPF) scheme provides an ample supply of funds to the industry. Insurance companies and pension funds play vital roles in directing MPF funds to various investments.
Sectors such as natural resources and raw materials, Internet and telecommunication, and environment protection (e.g. air quality, water treatment and energy efficiency) are among the best prospects to attract possible investment.