Study on China Mainland's strategic environment for Hong Kong real estate developer based on SWOT analysis

Abstract

With China's accession to WTO in 2001 and implementation of "Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)" between mainland China and Hong Kong in 2003, China is further opening its real estate market to overseas businesses especially the Hong Kong-invested enterprises. In line with this development, there are an increasing number of Hong Kong-invested real estate developers (HKRED) entering Into the market Using SWOT (Strengths, weaknesses, opportunities, and threats) analysis method, this paper identifies the development opportunities as well as vulnerabilities to internal and external environmental changes for HKRED in mainland China real estate market. Notable strengths for HKRED include their higher management level, excellent financial capability and advanced technology innovations. Weaknesses include lack of local networks, higher management cost and scale disadvantages. The new emerging opportunities which incorporate fixed investment flow brought by urbanization and more favorable terms due to the accession to WTO as well as the validation of "CEPA" have gained the HKREDs even more trouble-free businesses. Meanwhile, the most foreseeable threat is the risks generated by the immature laws and regulations of mainland real estate market Further analysis which includes SO, WO, ST and WT strategies is conducted on the basis to help HKRED improve their competitiveness in the market These findings provide reference as well as guidelines for Hong Kong real estate developers who are Interested in developing business in the Chinese real estate market.