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FY 1999: Hong Kong |
CHAPTER VIII. TRADE AND PROJECT FINANCINGA. Description of the Banking System
Hong Kong has an open financial system, with no controls on currency movement. A more complete description is contained in VII (I) above.
B. Foreign Exchange Controls Affecting Trading
The local currency, the Hong Kong Dollar (HK$), is freely convertible and there are no foreign exchange controls.
C. General Availability of Financing
Commercial trade financing is available in Hong Kong for qualified customers. All licensed banks are authorized to provide loans to residents and non-residents in the currency of their choice. Letters of credit and other financial instruments are widely used to protect participants in trade arrangements. All banks maintain close working relationships with correspondent banking institutions. The financial system is highly developed and efficient.
D. How to Finance Exports/Methods of Payment
The preferred method of quoting is "CIF" or "C and F" in HK$. The U.S. dollar and other freely convertible currencies may be accepted for bids and pro forma invoicing. Terms of payment depend on the relative negotiating strength of the buyers and sellers. U.S. suppliers should seek to obtain letters of credit or sight draft terms when dealing with buyers who are not well known to them. Asking for a letter of credit is a standard business practice, and your potential customer will not generally interpret this as a sign of mistrust.
The importance of trade finance to Hong Kong has resulted in a high level of bank efficiency in providing import payment services. Letters of Credit, document collection and international remittance are widely available. All licensed banks are authorized to provide loans to residents and nonresidents. The risk of financing receiv- ables can be readily evaluated via locally available credit information. Prospective exporters should make use of banking relationships to determine credit risk.
E. Types of Available Export Financing and Insurance
The U.S. ExIm Bank offers both trade financing and insurance for U.S. exports. Commercial vendors are also readily available.
F. Availability of Project Financing, Including OPIC and Eximbank Project Finance, and Lending from Multilateral Institutions
Hong Kong and Macau are not recipients of official development assistance. Projects are financed on commercial terms. U.S. Trade and Development Agency programs are available for Hong Kong and Macau. Hong Kong is also a major center for commercial pro- ject financing for China.
G. List of Banks with Correspondent U.S. Banking Arrangements
The list of Hong Kong based banks with correspondent U.S. banking arrangements is too large to include here. Appendix E(f) provides a list of U.S. banks licensed in Hong Kong. Hong Kong's five largest local banks are indicated in Section VII (I), above.
H. The Asian Development Bank
The Asian Development Bank, headquartered in Manila, is an inter- national financial development institution owned by 56-member countries of which the United States and Japan are the largest shareholders. Its prime mission is to alleviate poverty through sustainable economic growth and it currently finances projects in 32 developing Asian countries. The bank lent a record high amount of $9.5 billion in 1997 due to the Asian financial crisis, as compared to the 1996 level of $5.8 billion. The social infra- structure sector received the largest share of lending, followed by agriculture and natural resources, transport and communications, energy, and the financial sector. The bank also gives priorities to the improvement of women's status, human development and environmental protection. Going into the next century, the Bank has also assumed the role as a catalyst for development. In implementing this policy, the Bank leverages its own financial resources through co-financing and other modalities to attract additional private capital in funding the development needs of its member countries.
Several U.S. government offices provide assistance for American companies on Asian Development Bank projects and guidance in the Bank's contracting process. These include the Office of Multi- lateral Development Bank Operations at the U.S. Department of Commerce in Washington, D.C., the U.S. Commercial Liaison Office in Manila, and the U.S. & Foreign Commercial Service offices throughout the Asia/Pacific Region. The U.S. Commercial Liaison Office can offer business counseling and detailed information on ADB procurement opportunities.
Since 1967, the U.S. has won $3 billion in overall procurement. In the period 1996-97, the United States ranked first in ADB procurement among donor countries. The U.S. has also consistently ranked number one in consulting services awards, capturing $62 million in awards last year.
Interested parties should contact Denny Barnes, U.S. Liaison to The Asian Development Bank, Tel: (632) 890-9364; 895-3020, Fax: (632) 890-9713, E-Mail: dbarnes3@doc.gov. The Asian Development Bank Internet web site address is http://www.asiandevbank.org
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