South China is also developing as a service centre. Attracted by the area's cost-efficiency and improved infrastructure, more and more Hong Kong-based service-sector enterprises are following the lead of manufacturers in establishing outward-processing operations across the border.
Last year, Citibank's Regional Headquarters in Hong Kong transferred some of its EDP support services for wholesale banking to China, creating a "back room" in Shenzhen, the Special Economic Zone which lies directly across the border from Hong Kong.
But South China's appeal to the service sector is not limited to financial operations. My Bank, for example, recently helped put together a software development joint venture for IBM, also in Shenzhen. Today, the venture already has more than 200 employees with post-graduate qualifications.
The Bank of East Asia's own strategy has been to build the infrastructure necessary to support our clients' expansion in China. We have established an extensive operational network - including branches in Shenzhen, Shanghai and Xiamen; a representative office and an associate leasing company Guangzhou; and joint-venture merchant banks in Shenzhen Shanghai.
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We are also planning to expand into both Zhuhai in the south and Dalian in the north. These investments give us the capacity to do complex financing and to help clients take advantage of what China has to offer.
As I said, location is the key to financial success. Hong Kong and China are but two of the three partners who are building what is certain to be one of the major economic powerhouses of the 21st Century. Taiwan completes what many are now calling the "Greater China Economic Productivity Triangle".
These three economies complement each other well. To this partnership, China brings its ample supply of low-cost labour, land and natural resources. Taiwan contributes its advanced technology, engineering talent and huge foreign exchange reserves. Hong Kong adds its marketing and sourcing skills, its managerial and financial expertise, as well as its international links as a major world trade, business and financial centre.
Smith New Court plc Conference
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