Historical Timeline

A critical way to show respect for another person's culture is to have knowledge of their country's history and current affairs. Table 6.1 on page 100 outlines a few key events related to Hong Kong, together with concurrent world events.⁵

Full Country Name and Location

The Hong Kong Special Administrative Region of the People's Republic of China is a little less than half the size of Luxembourg and a quarter of the size of the State of Rhode Island in the U.S. Bordering the South China Sea, it shares its only land border with China's southern coast. Hong Kong includes the New Territories (part of the mainland), the Kowloon Peninsula, Hong Kong Island, Lantau Island, Lamma Island, and more than 200 smaller islands.

Government/Political Structure

As a special administrative region of China since 1997, Hong Kong has a limited democracy that guarantees autonomy except in defense and foreign affairs. Its constitution, the Basic Law, was drafted in 1990 by the Chinese government and put into effect in 1997 when China regained administrative control over Hong Kong. The head of state is the president of China, and a Hong Kong resident is elected as the head of government, or chief executive. There is a single Legislative Council of 70 members. National elections were held March 25th, 2012; the next elections are scheduled for March of 2017.

Population and Economic Centers

The Hong Kong government reported the population to be 7.07 million in a 2011 census.⁶ The CIA World Factbook (July 2014) estimates the population of Hong Kong to be approximately 7.11 million. Hong Kong is an urban nation with 100 percent of the population living in urban areas.⁷

The main ethnic group is Chinese (94 percent), followed by Filipino (2 percent), and Indonesian (2 percent).⁸

The major business centers are shown in Table 6.2 on page 102.

^*Hong Kong's 2011 Population Census does not provide a breakdown for cities and towns, only main districts. See the Hong Kong Census and Statistics Department website for more information.

Economy

Hong Kong⁹ is ranked 3rd out of 189 economies in terms of ease of doing business, according to the World Bank Group's Doing Business 2015 report.¹⁰ Its 2013 GDP was ranked 39th by the World Bank.¹¹ The composition of GDP by sector is services (93 percent), industry (6.9 percent), and agriculture (0 percent).¹²

Corruption Perceptions Index

Hong Kong ranked 15th least corrupt out of 177 countries and territories with a score of 75 out of 100.¹³ This annual index, compiled by Transparency International, measures perceived levels of public sector corruption.

The Independent Commission Against Corruption is the anticorruption agency that conducts investigations in Hong Kong.

Human Development Index

Hong Kong ranked 15th out of 187 countries and territories.¹⁴ The HDI, compiled by the United Nations Development Programme, is a composite index of life expectancy, education and income statistics.

Global Gender Gap Index

Hong Kong was not included in the Global Gender Gap Index.

Climate

Hong Kong's climate is tropical with seasonal monsoons (May–November) and four seasons: Spring (March–May) has rising temperatures with cool evenings; summer (June–August) is hot, humid, sunny, and rainy; fall (September–November) is the most pleasant with warm temperatures and sunshine; winter (December–February) is cool, dry, and cloudy.

Languages

The official languages are Cantonese (89.5 percent) and English (3.5 percent). Mandarin (1.4 percent) and other Chinese dialects (4 percent) are also spoken.¹⁵ Hong Kong uses classical Chinese characters in writing, unlike the simplified characters used in China. English is the lingua franca for business. Mandarin is becoming more prevalent.

Belief Systems, Philosophies, and Religions

The country breakdown is as follows: mix of Buddhism, Taoism, Confucianism, Animism, and other local religions (90 percent) and Christianity (10 percent).¹⁶ The Hong Kong government also reports small numbers of Islams, Hindus, Jews, and Sikhs.¹⁷

For an overview of belief systems, philosophies, and religions, please refer to Chapter 4, pages 64–65.

Time Zones/Daylight Savings

Hong Kong has a single time zone, Hong Kong Time (HKT). Hong Kong is eight hours ahead of GMT (Greenwich Mean Time)/UTC (Coordinated Universal Time). It does not operate under Daylight Savings.

It is 13 hours ahead of U.S. Eastern Standard Time (12 hours ahead in Daylight Savings Time). See www.timeanddate.com/worldclock/.

To calculate Hong Kong time, add eight hours to UTC/GMT.

Telephone Country Code and Internet Suffix

The Hong Kong telephone country code is 852 and its Internet suffix is .hk.

Currency

Hong Kong currency is the Hong Kong dollar (HKD). One dollar is divided into 100 cents.

Fiscal Year

The Hong Kong fiscal year is April 1 to March 31. Dates are written as day, month, year; April 1, 2020 is written 01/04/2020.

Working Week

The structure of the Hong Kong working week is outlined in Table 6.3.

Holidays and Festivals

Some Hong Kong holidays are determined by the lunar calendar and change from year to year. On specific holidays, an office may remain open with limited staff. Check with your embassy or trade office before planning business travel.

October through November and March through May are the best times to visit Hong Kong for business trips. Avoid making appointments during the Chinese New Year, Christmas, and Easter. Table 6.4 on page 106 contains a list of major holidays. Floating holidays are designated in Table 6.4 with an asterisk.

Business Dress/Appearance

Hong Kong has long been known as one of the world's leading destination centers for tailor-made suits, dresses, and high fashion. Business attire depends on the industry and includes tailor-made garments, luxury and designer labels, and quality leather. Men wear ties and suits in dark colors for business meetings and dinner. Ladies wear designer and tailor-made suits, dresses, and skirts. Business casual dress includes collared shirts and trousers. White and blue are funeral colors.¹⁸

News Sources

• South China Morning Post: www.scmp.com/frontpage/international
• The Standard: www.thestandard.com.hk

Business Cards

Business card exchanges are de rigeur. Print English on one side and Cantonese classical characters on the reverse. Rank and status matter, so include your title and any additional information including degrees and certifications.

Technology

According to Akamai Technology's State of the Internet Report, Hong Kong has the fourth fastest average Internet connection speed in the world and the fastest average peak connection speed.¹⁹ Latest figures rank Hong Kong 47th worldwide for the number of Internet users²⁰ and number 48 globally for the number of Internet hosts.²¹

Gifts

Business gift ideas for those in the private sector include high-quality pen sets, desk accessories, gifts from your home region, and domestic coffee table books. Gifts are presented from “our company” to “your company” at meetings or banquets. It is illegal to give gifts or cash to government officials.

Children's gifts from your home country may include jerseys of athletes from Hong Kong, popular sports teams, and prestigious universities. Certain gifts in Hong Kong are associated with unpleasantness: clocks (bad luck), swords, scissors, knives, sharp objects (severing of ties), white carnations or flowers (mourning), and items with red printing (mourning). Ideal wrapping paper colors are green, red (for good luck), or gold (for wealth). Avoid white and black (they represent death and tragedy).²²

Introductions, Greetings, Personal Space, and Eye Contact

When greeting a colleague, slightly nodding your head or bowing while shaking hands is common. High-status people and elders are introduced first, and women are introduced before men. The historic honorific Madame is a diplomatic legacy. Most introductions include name, employer, and job description. Use the full name, which is the family name and given name or family name and title. Many Hong Kongers adopt Western names; wait for an invitation to use this name.

Physical contact other than a handshake is inappropriate, along with touching the opposite gender in public. Hong Kongers stand an arm's length close to one another and tend to make little eye contact when talking.²³

Useful Phrases

Table 6.5 contains phrases that are helpful to know when you travel to Hong Kong.

Names

Hong Kong names are printed in order of the surname (family) name first, plus given (first) name. Use last name and courtesy titles including Mr., Mrs., Miss, and Ms. When in doubt, wait to be invited before using a first name with a colleague. Some Hong Kongers have western names. In electronic communication use the salutation Dear plus the courtesy or professional title, not a first name.

Meetings and Negotiations

It is best to plan meetings well in advance and arrange for an introduction to your fellow attendees before you arrive. Punctuality is important; plan to be on time, taking the heavy traffic into consideration. Although business is conducted in English, it may be helpful to send your business proposal in advance translated into Cantonese.

When communicating, Hong Kongers tend to be implicit. Note that the response “okay” means “I understand,” not “I agree.” The answer “yes” simply means “I have heard you” unless it's followed by a positive statement to indicate a real “yes.” Oftentimes, “no” means “I have to wait” or “This may be very difficult.” Avoid using jargon, slang, and figures of speech.

Presentation Styles, Conversational Topics, and Humor

Hong Kongers talk about money and business. General topics of interest are travel, family, food, sports, hobbies, and Hong Kong's natural beauty. Inappropriate topics include failure, human rights, relations with China, and Chinese politics. Be prepared for personal questions about family or salary. Contextual humor is welcomed; but not inappropriate jokes about religion, politics or minorities. For business proposals, use the good-luck numbers three (life), eight (prosperity), or nine (eternity).

Gestures

• Point with an open hand facing upward and at waist height.
• Beckon by curling four fingers under with the palm facing down.²⁴

Notable Foods and Dishes

Hong Kong cuisine is known for freshness and natural flavors. Rice is a staple, along with a variety of boiled or fried noodles. Food is often parboiled, steamed, and quick-fried. Common seasonings are ginger, garlic, scallions, spring onions, soy sauce, and oyster sauce.²⁵

For further insight into cross-cultural aspects of food and dining, enjoy Chapter One, ‘Eating Hong Kong,’ in the book Reading Hong Kong, Reading Ourselves.²⁶

Specialty Dishes

Some popular specialty dishes in Hong Kong include

• Dim Sum: Cantonese bite-sized assortments (dumplings, rice rolls) served on carts
• Ku lao ju: Sweet-and-sour pork
• Sui ngoh: Roast goose with pickled plums
• Chin ha luk: Fried prawns in tomato sauce
• Si yau kai: Steamed chicken in peanut oil with ginger
• Jiao zi: Ravioli stuffed with meat and served steamed or fried
• Basal: A dessert of toffee-covered apples
• Dau fu fa: Soybean custard

Dining Etiquette

A mix of Asian and Western dining customs are common in Hong Kong (refer to Chapter 3 and Chapter 5 for important U.S. and Chinese dining etiquette tips). If you are on a business visit, expect to be invited to a banquet or entertained in a restaurant, on a boat, or in a club. You may be presented with chopsticks or silverware according to the meal. Note that noises such as slurping and lip-smacking are often considered acceptable and even complimentary.²⁷

Drinking and Toasting

Cocktails are often served before dinner. Beer and brandy are drunk during meals and to celebrate occasions. Hong Kong women do not consume alcohol in public.

Tipping and Bill-Paying

Tipping is expected. Restaurant bills include a 10-percent service charge. A 15-percent additional tip is standard. Tip small change for taxi drivers, restroom attendants, coat attendants, and valets.

Smoking

Smoking is acceptable in public, and people may smoke between courses of a meal. It is polite to offer a cigarette to others nearby before lighting your own.²⁸

Taboos

The following are taboo in Hong Kong:

• Displaying physical affection publicly
• Being overly loud in public
• Chewing gum or blowing your nose in public
• Colors blue and white (mourning)
• The number four (a homonym for death in Chinese)
• Winking, fidgeting, touching the top of someone's head
• Gesturing with fist up in the air²⁹

Heroes and Sports

Knowing about another country's heroes and sports offers opportunities to incorporate culture-specific references into your conversations and presentations.

1. How Do the Hong Kongers Prefer to Act: Individually or as a Group?

“Hong Kong has created one of the most successful societies on earth.”

—Prince Charles

According to Jay Tang, General Manager for the Asia Pacific Region of Readen Holding Corporation, the answer to this question lies somewhere between ‘I’ and ‘we,’ adding that although company hierarchy is important, final decisions tend to be made or approved by senior management. Having said that, there is always discussion and room for an individual's thoughts to play a part:

In Hong Kong, we emphasize team work and collaborative thinking, whereas in China, the discussion is relatively narrow, usually following the direction or plan proposed by the highest management. Management there is looking for execution by the others more than they are looking for discussion.

In order to be successful doing business in Hong Kong, Mr. Tang emphasizes the importance of listening with patience to partners' and colleagues' thoughts and ideas. You should ensure individual Hong Kongers feel recognized and respected, even during times when you think their contributions are lacking in some way. “Recognition is important to Chinese and also Hong Kongers. Even when you already have an excellent, irrefutable idea, try to bring in the alternative suggestion by discussing the possibility and asking for further comments. We hear U.S. businesspeople say, ‘This is the best way you can do it.’ But it is far better to reach the ‘yes’ together with your partners and colleagues, and let them feel they are part of the team that constructed the idea. In this way, the Western businessperson will have an easier time getting his or her idea or plan accepted and executed with the assistance of his/her Hong Kong colleagues,” says Mr. Tang.

2. How Are Power and Authority Viewed in Hong Kong?

Jordan Kostelac, Project Manager for MovePlan Group, Asia Pacific, made one blunder directly related to the topics of power and authority while working on his first project at his current job: “I joined this challenging project nine months in after replacing the Chinese project manager who had resigned. Understandably, our client was ambivalent about ‘the new guy’ and this was compounded by the fact that I was a laowai or ‘outsider.’ My mistake was a sin of omission when the in-house team asked my background. I thought it wise to be modest and say that I had just finished school. It wasn't until a week or so before the project was completed, five months later, that we found out the client's team thought this meant that I had just graduated and was about 22 years old with little to no business experience. When my managing director explained to them that what I'd meant was that I'd just finished a MBA an M.B.A. program and was actually 30 years old with over 10 years' experience, one of the client's team gave a frank response: ‘If we had known that, we would have listened to him more.’”

The next project that Mr. Kostelac undertook with the same client involved some of the same people that he had worked with previously. He says, “The level of deference with which I was treated was so much higher. It felt like I'd been instantly promoted from errand boy to subject-matter expert. There may have been other factors that influenced this, such as changes within the team and there being far less pressure at the beginning of the new project, but I sincerely believe that most of it came down to them having a clear understanding of my credentials.”

3. How Do the Hong Kongers Compare Rules and Relationships?

We emphasize efficiency and like to have contracts finalized and signed as soon as possible.

—Jay Tang, General Manager, Asia Pacific Region, Readen Holding Corp.

Hong Kongers operate in a developed, internationally oriented country where the rules of business are taken as seriously as they are in the West. As Jay Tang of Readen Holdings pointed out, “In Hong Kong, we respect the spirit of contracts and are used to spending time negotiating terms and having them clearly outlined in written form. We emphasize efficiency and like to have contracts finalized and signed as soon as possible.”

What facilitates all of this, however, are the kinds of deeper, trusting relationships that Mr. Tang says help not only to break the ice and establish credibility, but also engender confidence that a Western partner will be as result-oriented as Hong Kongers are. All of which, as Mr. Tang describes it, will “get to the Chinese heart.”

In his experience, Western businesspeople—particularly those from the U.S.—could build better relationships and create a better foundation for moving forward if they avoided the temptation to oversell or slightly exaggerate their services and expected outcomes.

Mr. Tang points out two examples—one when his company engaged a number of marketing companies to help promote their products and services globally, and another when Readen worked with several groups of accountants and financial analysts. “In the first experience, which we had with three different U.S. marketing companies, we received proposals from each that promised us very attractive market exposure. We agreed upon the comprehensive list of duties that would be performed by these companies, entered into the requisite contracts, and paid their fees. In each case, it soon became clear that they were unable to execute on all they had promised, performing only part of the services on the agreed list. No proactive remediation was carried out in any of these cases and the results were entirely unsatisfactory.

“The same thing happened when we worked with the financial people from the States. Again, over the years, we were presented with many attractive financial deals and projects, and initially the proposals were always attractive to us. But when we tried to do more than scratch the surface and asked them to go deeper by engaging in feasibility studies, we typically had great difficulty getting them to provide all the supporting forecasting and other financials that we needed in order to feel secure enough to invest.”

Despite the considerable time Mr. Tang's company spent in discussions and preparations, eventually, he said, they had to give up on most of the deals. What was promised was not what was delivered.

With respect to contractual and other business affairs, Mr. Tang suggests that Westerners tone down the “overselling” he frequently encounters. But he also underscored the importance that “heart” plays in developing the relationships that facilitate business dealings in Hong Kong. One way he uses to build relationships in Hong Kong is to invite both husband and wife to social events, bringing with him small token gifts for the whole family. These might include footballs or soccer shoes for their children and perfume for the wife.

“Don't just focus on the person you are talking business with,” advises Mr. Tang. “Pay attention to the people that are important to him. This is as crucial in Hong Kong as it is in China where both cultures are family-oriented. It's no different than when someone from Europe buys something to give to a member of my family—I consider the gift much more important than whatever they might buy for me. This is how you become part of my circle. In Hong Kong, we expect Westerners who work with us to be as efficient and results-oriented as we are. What kicks off this stage and eases our journey forward, however, is showing us your heart.” This shows you have a heart and can remember what was inquired about and said during the early stages of the relationship-building.

4. How Do Hong Kongers Regard Time?

The pace of Hong Kong business is high, and will never be slower than in the U.S. Time is money here as well.

—Jay Tang, General Manager, Asia Pacific Region, Readen Holding Corporation

In Hong Kong, the pace is fast and punctuality is important. Appointments are made well in advance and, surprisingly, traffic is not accepted as an excuse for being late in Hong Kong, so timeliness is expected. Jay Tang explains that time is money and a valuable resource. Schedules are always tight, with meetings running continuously, so don't arrive too early for an appointment either. A previous meeting may still be in progress. Hong Kongers move fast, and still hold traditional Chinese values. They are highly motivated to be efficient, work hard, and cope well with change on an island where change is constant.

Part of the busy modern pace of Hong Kong that has differed from China is the unique position Hong Kong has held as a SAR (Special Administrative Region) of China. Hong Kong's British and international influence is layered over the core Chinese values. Hong Kong has historically played a special role as the business center of China.

Sharon's experience in Hong Kong reflects Jay's insight and she stresses that appointments are made in advance and kept. Even today, in 2015, traffic is not an excuse, and timeliness is expected.

5. How Direct Is Communication in Hong Kong?

“No” is a word which we can use, but you have to use it after listening and discussion, not right at the beginning. Otherwise you will be perceived as a dictator.

—Jay Tang, General Manager for the Asia Pacific Region, Readen Holding Corporation

Given the close cultural ties between Hong Kong and China, it's easy to assume that each mirrors the other with respect to communication. But there are a number of significant differences—the first of which involves the word no. As you will have no doubt gleaned from Chapter 5, the Chinese operate indirectly when something isn't possible, rather than just coming out and saying “no.” As Jay Tang's preceding quote highlights, saying “no” is quite acceptable in Hong Kong—as long as it's not the first word spoken. Similarly, Mr. Tang and other Hong Kong colleagues say they like it when someone uses direct eye contact when communicating because they perceive this as a form of respect and seriousness.

Perhaps not surprisingly on an island known as the Wall Street of Asia, Hong Kongers prefer that you get directly to the point in discussion because time is money and efficiency is important to them.

In Mr. Tang's experience, communicating ideas and suggestions occurs much more freely in Hong Kong than China. Here, the relatively highly educated working population is encouraged to say what they think or feel and offer dissenting comments where relevant. You will also find that lower levels of management have the freedom to present their thoughts directly to senior management rather than only communicating with the next layer above them.

Adds Mr. Tang: “In China, for the most part, only the superiors give instructions and direction; it is not really an open discussion. Management makes the decision and expects those under them to execute. In bigger companies especially, this authority level is very clear: the manager, the assistant, and then it goes step by step, every layer.” In Hong Kong, however, communication occurs much more frequently between colleagues and managers at all levels within the hierarchy.

6. How Formal or Informal Do Businesspeople In Hong Kong Tend to Be?

“When I went to Hong Kong, I knew at once I wanted to write a story set there.”

—Paul Theroux

Mr. Jay Tang offers this simple tip for using a formality that most Westerners would never think of, but that can have immeasurable effects in terms of demonstrating respect and building deep relationships.

Says Mr. Tang: “The first time you meet someone, it's important to call them Mr. or Ms., but after that, use the word “boss” in front of their surnames, especially with those people whose circle of influence you are looking to penetrate. Even if someone is not the “boss” but a lower-level manager, when his or her boss is not present, refer to them as Boss Lee or Boss Chen, for example. This is the way we do it, even between ourselves. When people meet with me, they will ask “How are you, Boss Tang?” Then, when someone superior to me comes into the room, they revert to calling me Mr. Tang.

“What does this small formality do? For a start, it makes me feel really good because when I'm with you, and in front of my subordinates, you call me Boss Tang (or Boss Jay if we are already on first-name terms), which shows you already respect me and have given me face at the beginning. It's a sign of respect. When people in Hong Kong feel that you are paying attention to them, are giving respect to them, this will gradually melt the Chinese heart.”

7. How Aligned Are Hong Kong Social and Business Lives?

Hong Kong is one of the top five most densely populated places in the world. So it wasn't surprising when Jordan Kostelac pointed out that he constantly runs into people he works with, or for, on the island.

Sharon found this a useful distinction to know during her visits to Hong Kong, where the lines blur between her personal and professional lives more than is the case in the U.S. While visiting Hong Kong Sharon would remain in professional attire during evening socializing, given the likelihood that she would run into business contacts.

The size of Hong Kong has another bearing on the way people socialize. Mr. Kostelac went on to say that because apartments are relatively small compared to those in Europe or the U.S.: “We don't invite our business partners to our houses. The Chinese are also relatively conservative, so some contacts may not want to bring business connections to their homes because of privacy reasons. We will have dinner or grab a drink with our business partners where we will share experiences.”

8. How Is the Concept of Women in Business Handled in Hong Kong?

In Hong Kong I don't think there is any hindrance because of being a female; here we focus on competency.

—Jay Tang, General Manager for the Asia Pacific Region, Readen Holding Corporation

The Women's Commission surveyed more than 3,000 Hong Kong residents in 2012 and published their results in a report called “What Do Women and Men in Hong Kong Think about the Status of Women at Work?³² Their findings provide insight into the current thinking and what to expect in terms of the way women's participation at work is perceived:

• More than 80 percent of respondents agreed that having a job was the best way for women to become independent.
• More than 65 percent (72 percent female; 59 percent male) agreed that “an increase in the number of successful women was a positive social phenomenon.”
• Nevertheless, women were commonly stereotyped as family caregivers, with just over half of respondents saying that women should focus more on family than working outside of the home.
• Eighty percent acknowledged that a homemaker's contribution is as important as that of the breadwinner.
• Slightly more than a third of respondents thought employees preferred not to be supervised by female managers.

The good news is that the younger the age and the higher the educational attainment, the greater the shift there is against traditional gender concepts in Hong Kong. One key finding of this survey was that women who worked were happier than their nonworking peers, possibly because of increased economic independence. In another finding in The GLOBE Study of 62 Societies, Hong Kong's scores on gender egalitarianism ranked higher than China's, and the U.S. for that matter.³³

According to Jay Tang, different rules apply to Western businesswomen than to their Hong Kong counterparts, which includes after-hours drinking as a key part of relationship-building: “Hong Kongers are conservative for themselves and their wives, but not for international or expat businesswomen as they understand that Americans and Europeans live in more open societies.”

Mr. Tang advises women to focus on professionalism and competency in order to be seen as equals. One example is Hong Kong powerhouse businesswoman Solina Chau, a longtime confidante of Asia's richest man and billionaire, the Honorable Sir Ka-shing Li. She directs the $8.2 billion Li Ka Shing Foundation as well as high-profile deals including BitPay, the payment system for Bitcoin.

Smooth a path in Hong Kong by establishing your credentials well in advance of your arrival:

• Research and cultivate local business connections and contacts.
• Ask an intermediary to forward your business qualifications prior to introduction.
• Understand Hong Kong business culture, as the female business leader or top negotiator; request male team members enter after you to communicate your senior rank.
• Wear name-brand business suits and modest accessories.
• Learn a few Cantonese greetings; the effort will be appreciated and help to break the ice.