The Differences Between Hong Kong and Mainland China
People in mainland China think of Hong Kong as part of China, while people in Hong Kong are often resentful of the Chinese government and think of themselves as a separate entity.
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I travel to China frequently. I often fly to Hong Kong and then cross the border into mainland China and the megalopolis cities of Shenzhen, Dongguan and Guangzhou. People sometimes ask me about the differences between Hong Kong and China, especially now as we are coming up on the 20-year Hong Kong anniversary of the transfer of sovereignty from the United Kingdom to China.
The UK had a 99-year lease on Hong Kong, Kowloon and the New Territories after the treaty of 1898 and an interesting history of trading goods and the Opium Wars between the nations. In 1997, China officially regained control and designated Hong Kong as a Special Administrative Region or SAR. The Chinese refer to this as “One Country, Two Systems.” Even after the hand-over, there has been little change in the very different ways each operates. So what are the differences?
- Government: China is a Communist nation ruled by a central government and a President. Hong Kong is a limited democracy and although Hong Kong recognizes the President of China as head of state, Hong Kong is managed by a Chief Executive. People in mainland China think of Hong Kong as part of China, while people in Hong Kong are often resentful of the Chinese government and think of themselves as a separate entity.
- Taxes: Hong Kong has a flat corporate tax rate of 16.5% In addition, many goods are imported into Hong Kong duty-free or at low tariff rates. On the other hand, Chinese corporate tax rates are about 30% and import duty rates can be as much as 50%. Importing into China can also be complicated.
- Laws: Hong Kong has its own legal and judicial system which is based on the British Common Law system of justice. Hong Kong also has its own police force. The Chinese system of law is based on Civil Law.
- Driving: People drive on the left side in Hong Kong, a system inherited from Britain. In China, people drive on the right. But please don’t try to drive in China, where the rules are very different, always evolving, and the driving is chaotic.
- Money: The currency of Hong Kong is Hong Kong Dollars (HKD), while the Renminbi (RMB) or Yuan (CNY) is the currency of China. HKD is pegged to the US Dollar, while RMB is not. People who frequently cross the border between the countries often carry two wallets with the two currencies separated.
- Travel: For Americans traveling to Hong Kong, no special visa is required for entrance into the region. For mainland China, a visa is required for entry.
- Language: In Hong Kong people primarily speak English and Cantonese. In the Pearl River region of southern China, the native language is also Cantonese, however Mandarin is the official language of China and this is what is taught in schools. Almost everywhere in China these days, you can find people who speak at least a little English.
- Internet: Hong Kong has one of the fastest internet infrastructures in the world. It is also uncensored. But mainland China censors its internet access causing slowing of services. In addition, common sites such as Google, Facebook, Twitter, and YouTube are blocked in China. If you have access to your company’s VPN or if you buy this service, you can generally get around the blocking.
But be prepared for very slow response. Skype seems to work just fine for me in both Hong Kong and in China.
So these are some of the differences between Hong Kong and mainland China. Of course there are many more differences as well as similarities. No matter where you travel in the world, always remember to be respectful of the culture, be polite and cooperative. Try to learn a bit about where you are going before you go and at the very least learn how to say hello, please and thank-you.
About the AuthorRosemary Coates Ms. Coates is the Executive Director of the Reshoring Institute and the President of Blue Silk Consulting, a Global Supply Chain consulting firm. She is a best-selling author of: 42 Rules for Sourcing and Manufacturing in China and Legal Blacksmith - How to Avoid and Defend Supply Chain Disputes. Ms. Coates lives in Silicon Valley and has worked with over 80 clients worldwide. She is also an Expert Witness for legal cases involving global supply chain matters. She is passionate about Reshoring.
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