Hong Kong sees China's planned 20 percent sales tax on luxury watches as an opportunity, as Chinese consumers switch from buying expensive foreign timepieces to similar cheaper Hong Kong brands.
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Hong Kong is known for its fashion, digital and sports watches in the medium price segment.
A trade agreement with the Chinese mainland already exempts Hong Kong from a 23 percent import tax, making its watches more competitive relative to other foreign timepieces, but that advantage will grow with any new "luxury tax".
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"(The luxury tax) makes watches more expensive, but fortunately, because we have this agreement, it will make Hong Kong watches even more attractive in the mainland," Yip said.
"Twenty percent is a lot of money, so people will start (buying) similar products made in Hong Kong," he said.
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Hong Kong is also set to gain from increased tourism as wealthy Chinese consumers travel and buy their high-ticket items in Hong Kong to avoid China's luxury tax. Yip said 12.5 million Chinese tourists visited Hong Kong last year.
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Source : CRI English

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Hong Kong Stock Market Replaces Canada as World's Sixth Biggest

April 21 (Bloomberg) -- Hong Kong's stock market has replaced Canada's as the world's sixth biggest, as more Chinese companies such as China Construction Bank Corp. carried out initial public offerings in the city.
Hong Kong's market after yesterday's trading was worth $1.472 trillion, more than the $1.467 trillion value of Canadian stocks, according to Bloomberg data. Gains by Chinese stocks listed in Hong Kong have helped the city overtake Canada. The Hang Seng China Enterprises Index has climbed 36 percent this year, more than the benchmark Hang Seng Index's 14 percent.
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The U.S. stock market is the world's largest at $16.6 trillion. Japan, the world's No. 2 market and Asia's biggest, is worth $5.2 trillion. The U.K., France and Germany are the next three largest.
Hong Kong companies raised a record HK$165.7 billion ($21.4 billion) through initial share sales last year, with Chinese enterprises accounting for 91 percent of that total, according to the city's exchange. The HK$150.8 billion raised by mainland businesses was almost double 2004's total.

Source : Bloomberg