17 December 2018
China may provide the 'hardware' for startups, but Hong Kong can offer a key software element -- global connections.
China may provide the 'hardware' for startups, but Hong Kong can offer a key software element -- global connections.

What do mainland startups want from Hong Kong?

With mainland startups showing increasing interest in building up Hong Kong connections, we need to ponder over this question: what are they really after?

It can’t be just money, given that the startups have access to a huge pool of venture capital back home.

Well, according to a Hong Kong Trade Development Council (HKTDC) report, Chinese tech startups are interested in seeking equity investors who can also offer technological and commercial support.

Passive investors who limit their involvement to money are not deemed to be ideal partners in the eyes of many new firms.

This is why Hong Kong is coming increasingly into focus.

Like in the area of information technology systems and big data applications, Hong Kong has developed a cluster of players — of local as well as foreign origin — that are well-versed in international practices and latest developments.

These firms can add value by helping Chinese startups integrate with global tech standards.

A Hong Kong partner can also assist Chinese startups in tapping overseas markets as they expand the business.

“Investors that can provide the necessary commercial and technology connections are most welcome,” the HKTDC report pointed out.

Hong Kong is also relatively strong in systems integration and applications, business development and marketing. Inherent infrastructure advantages, including the free flow of information and availability of a full range of professional services further boosts our city’s appeal.

Cyberport has already set up an office in Shanghai, where a private firm — Shui On Land — runs a Knowledge and Innovation Community park in the city’s Yangpu district, not too far from renowned universities such as Fudan and Tongji.

Startup activity is all the rage in China, with entrepreneurs taking encouragement from tax breaks, simplified commercial registration and other favorable policies.

Though mainland startups have surged in number, the overall quality and level of innovativeness still leaves a lot to be desired.

Hence, cross-border collaboration is a good way to speed up the development.

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EJ Insight writer

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