Feasibility of Establishing B-Health in Hong-Kong and New Zealand

This report conducts a research on macro environment of two countries New Zealand and Hong Kong in order to identify the feasibility of the ease of establishing business. It examines social, political, economic, and market potential of the Hong-Kong and New Zealand. The report also discusses the challenges and strengths, political system, trade relationship, business ease, and market potential of both countries.

GLOBAL BUSINESS
ASSIGNMENT

Contents
Introduction...........................................................................................................................................2
Socio-economic environment................................................................................................................2
Economic overview...............................................................................................................................2
Real GDP of Hong-Kong......................................................................................................................3
Real GDP of New Zealand....................................................................................................................3
Challenges and strengths.......................................................................................................................4
Political system and trade relationship with Australia...........................................................................5
Business ease.........................................................................................................................................5
Potential of market................................................................................................................................6
Recommendation for the country..........................................................................................................7
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8

Introduction
B-Health is an Australian based company, which has specialisation in baby food. This report
conducts a research on macro environment of two countries New Zealand and Hong Kong in
order to identify the feasibility of the ease of establishing business. This report examines
social, political, economic, and market potential of the Hong-Kong and New Zealand (Tsui,
2017).
Socio-economic environment
Social factors of Hong-Kong has the understanding of various customer segment with the
help of income distribution, rural segmentation, and the urban segmentation. Hong-Kong is a
centre of healthcare, educational, and affluence in the nation. Hong-Kong has the estimated
population of nearly 7.367 million in 2016 and it is expected to reach to 7.72 million in 2022.
Hong-Kong`s culture is mainly based on principle of traditional Chinese (Chiang, Tao, &
Wong, 2015). This country`s culture means that people would be more hard working with
new degree of challenges and great adaptability can help the B-health to achieve success due
to ease of conducting business (Tsui, 2017).
Economic overview
Change in the demand of other products can affect the economic situations of the New
Zealand. The economy of the country has lower rate of inflation, which further contributes to
low rate of interest and increased purchasing power (Chiang, Tao, & Wong, 2015).

Real GDP of Hong-Kong
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
(Source: CEIC, 2018)
On the other hand, it can be seen that the GDP in Hong-Kong has been fluctuating such as it
is estimated at 2.9 percent in 2020, 3.01 percent in 2021, and 3.01 percent in 2022 but it is
estimated to decrease to 2.96 again in 2023 and finally 2.99 percentage in 2024. It has been
noticed that the major baby food, which has been exported to this country, is from China.
This country is quite famous for its cost costing production (CEIC, 2018).
Real GDP of New Zealand
2.0
2.5
3.0
3.5
4.0
4.5
% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
(Source: CEIC, 2018)

From the above graph, it can be seen that the GDP of the New Zealand has the expectancy to
decrease from estimated 2.9 percent in 2020, 2.84 percent in 2021, 2.5 percent in 2022, 2.4
percent in 2023, and the 2.5 percent in 2024. This shows if Australia who has the GDP of
generally 6-7 percent. This increase in GDP is due to increase in the inflation rate so it would
cost less if B-health establishes in the country. As the country is the largest exporter of
cereals, dairy products as well as the hi-tech machinery, which shows that there is huge scope
for, baby food and B-health (CEIC, 2018).
Challenges and strengths
The economy of New Zealand is very much dependent on trade with other countries. The
country spends less on the research and development, which results in the external
dependency on the new technology (Barro, 2016).
Limiting the strength of the New Zealand`s market, it is seen that new Zealand faces high
level of poverty and the gap distance between rich and poor is too high such as 17 to 1
percent. Further, its economy is affected by unemployment rate, job security, and the high
cost of living. Apart from the gap between the rich and poor people, it is seen that financial
crisis, unemployment rate, cost of living, inflation remained at the hardship of 3 percent
(Tang, Wong, & Shu, 2018).
The country suffers from short term economic and fiscal pressures, which prevent great
attention that has been given to the need so that it can achieve long-term success (Tang,
Wong, & Shu, 2018).
On the other hand, New Zealand operates in the mixed economy where it comprised of
manufacturing and other service sector that has been complementing the highly effective
agricultural sector that says that it would support B-health’s productivity as these goods
remain the one-third part of the total real GDP expenditure (Tang, Wong, & Shu, 2018).

On the part of the other country, Hong-Kong, it is said that Hong-Kong have liberal trade
policies, attraction centre for tax regime, liberalised immigration policy, strong legal
environment, productive and educated workforce, and rousting infrastructure. Operating
business can be an effective way as the proprietorship is quite easy to hold. Whereas, a
business has to sought out with the dealing with the higher construction permits, electricity
issues, paying taxes, business across the border and the enforcing the contractions will hinder
the business introduction to the Hong-Kong (Tang, Wong, & Shu, 2018).
Political system and trade relationship with Australia
Political conditions of New Zealand has well known policies and assistance from the
government that encourages free trade. On the other hand, it offer various investment
opportunities in regards to the green technologies and fuel-efficient automobiles (Shu, Li, &
Chan, 2015). The nation`s supporting business climate and also the political stability that has
promoted the FDI inflows in the country.
Hong-Kong encourages stable business situations, increased incorporation in many sectors
and finally leading to enhance the organisational opportunities with low amount of risks (Shu,
Li, & Chan, 2015). The trade relationships of Australia with the Zealand was never the same
as some of the senior politicians have raised issues from both the sides. It is seen that
corruption is the highest level while measuring the level of government and the inequality has
been increasing rapidly. On the other hand, it is seen that political instability of New Zealand
suffers from 43 percent, 40 percent in governmental, politics, human rights and housing
issues.
Some of the wrong deeds happened with is the issue of deportation, regional security and the
human rights (Ungor, & Verevis, 2019). In 2018, It is said that Australia has been detaining,
deporting and cuffing with many new Zealanders as it critics in true story that says that it
would either do no support the business or will lead to huge failure (Shu, Li, & Chan, 2015).

Business ease
In case of Hong-Kong, foreigners are the main sole director and the shareholder of the
company established in Hong-Kong. However, it suffers from no local demand of the
requirements. THE WBIFC has ranked 10th in the whole world as it has been marked as
protection of the investors. Business are often attracted to the New Zealand because of their
fiscal incentives and effective monetary policies. (Trading economies, 2018). It has been
linked to sound corporate worlds that have strong trade links. The taxation system is very
easy to operate because of overemphasizing taxation rates on the headline rates. It is
important to know so that it can comfort the economy, as there are no-pay rolls, no other
security tax, and no capital gain. It is seen that there are free agreements in regards to free
trade and other pro-competitive regulations, which has made various regulations for
expansion in Asia (Trading economies, 2018).
Potential of market
As per the above analysis, it can be said that the company can enter the Hong-Kong`s market
in order to maximise the use of increasing liberal migration, have the certainty to place as
sole proprietor or director and the free entry of the trade in the country (Jaforullah, 2015).
Hong-Kong`s freedom for the economic concern is nearly around 90.2 which shows it is
sustaining and well-known as freest economy in the index of 2019 and on the other hand,
New Zealand economic index of 84.4, this indicates that Hong-Kong`s market is more liberal
as compared to New Zealand (2019 index of economic freedom, 2019). In 2019, the Hong-
Kong`s indicators has been changed as in the increase in the trade freedom, government
integration leads to decline in judicial effectiveness (Freris, 2018). Hong –Kong is on the first
rank among all the 43 countries, which is well known for its overall score in terms of
regional, and averages in the world. Moreover, its looser fiscal policy has motivated the
economic growth in 2018 but at the same time it can suffer from the negative repercussions
US and the China friction can disturb the significance of competitiveness of business hub

(2019 index of economic freedom, 2019). Open regulatory frameworks and the effective
protection of the rights can directly support the rule of law for the high quality legal
frameworks (TMF group, 2019).
Recommendation for the country
To be very truthful, it can be easily said that New Zealand as well as Hong-Kong are not very
much appropriate while setting up the business of B-health. However, Singapore is a good
option for B-health so that it can generate higher profits (Washington, & Twomey, 2016).
Nevertheless, if it is necessary to decide or give a country in which the company can operate
significantly well is Hong-Kong. New Zealand has to enhance its frameworks so that
companies can think of creating an effective and transparent efficiency of regulations (TMF
group, 2019).
Variable Weighting New Zealand Hong-Kong
Score Adjusted Score Score Adjusted Score
Total
population
22.5% 7 1.7 7 1.3
Unemployment
rate
10.5% 6 0.79 7 1.3
Trade relations 28% 7 1.3 7 1.89
Market
potential
39% 7 1.7 8 2.7
Total 100 5.49 7.19
New Zealand can lead to improvement of the implementation of the stable policies, which
will improve the long-term outcomes. New Zealand can be capable enough of the resilient
population, which works to remain retained. It is in the disadvantageous point where

multicultural society should be given more importance (TMF group, 2019). New Zealand can
be benefited for the business establishment if it benefits economically, and socially at the fast
pace. The country has to gain a competitive edge by shifting the operations to a low carbon. It
has to capital recurred as the public sector skills can be developed so that it can deliver.
Success for the exporters. The economy should perform high in terms of innovation system
as it grows high valued international businesses (2019 index of economic freedom, 2019).
Conclusion
From the above discussion, it can be concluded that New Zealand has to improve its way of
conducting the frameworks for the international business. As Hong-kong is considered as
feasible for conducting the B-health in its country due to positive economic indicators and
free trade policies.

References
2019 index of economic freedom, (2019). Hong Kong. Retrieved from:
https://www.heritage.org/index/country/hongkong
Barro, R. J. (2016). Economic growth and convergence, applied to China. China & World
Economy, 24(5), 5-19.
CEIC, (2018). GDP of Hong-Kong. Retrieved from:
https://www.ceicdata.com/en/indicator/hong-kong/forecast-real-gdp-growth
Chiang, Y. H., Tao, L., & Wong, F. K. (2015). Causal relationship between construction
activities, employment and GDP: The case of Hong Kong. Habitat international, 46,
1-12.
Freris, A. F. (2018). The financial markets of Hong Kong. Routledge.
Jaforullah, M. (2015). International tourism and economic growth in New Zealand. Tourism
Analysis, 20(4), 413-418.
Shu, Z. R., Li, Q. S., & Chan, P. W. (2015). Statistical analysis of wind characteristics and
wind energy potential in Hong Kong. Energy Conversion and Management, 101, 644-
657.
Tang, J. A. W., Wong, E. M., & Shu, W. (2018). Caesarean scar ectopic pregnancy: imaging
findings of this rare but potentially life-threatening condition. Hong Kong Medical
Journal, 636, e1.
TMF group, (2019). New business insights. Retrieved from:
https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-new-
zealand/

Trading economies, (2018). New Zealand`s inflation. Retrieved from:
https://tradingeconomics.com/new-zealand/inflation-cpi
Tsui, K. W. H. (2017). Does a low-cost carrier lead the domestic tourism demand and growth
of New Zealand?. Tourism Management, 60, 390-403.
Ungor, M., & Verevis, S. (2019). What Has New Zealand Gained From The FTA With
China?: Two Counterfactual Analyses.
Washington, H., & Twomey, P. (Eds.). (2016). A future beyond growth: Towards a steady
state economy. Routledge.