Levels of economic integration

1. Free Trade Area: abolition of tarids and quotas among members
2. Customs Union: FTA + common tarrif and quota system
3. Common Markets: FTA + CU + abolition of restrictions on Factor Movements
4. Economic Union: FTA + CU + CM + harmonization and unification of economic policies and institutions

Which countries have an FTA with China?

• ASEAN, Pakistan, Chile, New Zeland, Singapore, Peru, Costa Rica, Iceland, Switzerland.
• Partnership arrangement: Macao and Hong Kong 
• (Mexico may be next)

Strategic Planning

(Process Dimensions)

1. Potential benefits for the company in short vs long run
2. Costs in terms of management time and process realignment
3. Presence of the necessary management resources to undertake the endeavor

Characteristics of a successful entrepreneur

1. Is real, creidble, honest
2. Has self confidence, but stays open
3. Listens actively, undersands audience
4. Is fluid, flexible, adaptable
5. Sets milestones and rewards himself after accomplishments

Trade Chain

Business Off-Shore:

Why in Hong Kong?

1. it is part of mainland china but with ≠ institutions and rule of law
2. has free trade, free access to info., freely convertible currency
3. low simple tax (HK income tax 15% , HK profits tax 16.5%)
4. beneficial timezone with key Asian business centers
5. world class education system
6. trilingual skilled people
7. springboard for mainland china companies to go global
8. 48M visitors spend $40bill USD per year in HK

Types of companies in HK

HK Company Requirements

Trading HK Company: Buying

Trading HK Company: Selling

Advantages about China's "1 country, 2 systems"

• China is a growing market for products and services
• HK is nextdoor to Pearl River Delta (richest chinese region and manufacturing heartland)
• HK is the gateway for Asia's 3.3 M High Net Worth Individuals (HNWI)