CHINA'S TRAINING NEEDS

	Reshape industry structure		Serious staff turnover
	Upgrade workforce to stay competitive		Hunt for foreign talent
	Shortage of talent		Training as an alternative

The demand for training services in China has been growing rapidly. In its latest direction, China would like to reshape its industry structure and build a knowledge-based economy, with quality human resources being the key to future success.

Firms operating on the mainland have to upgrade their workforce to stay competitive amidst the very rapidly changing business landscape. One of the biggest challenges is the shortage of talent and skilled labour. While many companies operating in China have been competing for foreign talent to fill the gap, more companies are starting to realise the value of training their own people.

CHINA'S TRAINING MARKET

OPPORTUNITIES & CHALLENGES FOR HONG KONG TRAINING COMPANIES

An Overwhelming Majority See Promising Prospects

Seventy-eight percent of Hong Kong training companies currently export their training services to the Chinese mainland, according to a TDC survey. An overwhelming majority (96% of the respondents) see promising prospects for their mainland training business over the next 1-3 years.

The Best Targets

At present, Hong Kong and other foreign companies on the mainland are the major clients of Hong Kong training companies. Nevertheless, 87% of the Hong Kong training companies see mainland enterprises as the best business targets over the next 1-3 years. Among mainland enterprises, business prospects for serving large private enterprises are more outstanding.

Targets by Industry Sector

	Manufacturing companies		Financial services companies
	Trading companies		Government

Users on the mainland have strong perceptions that Asian trainers have industry experience that is more relevant to operations on the mainland. However, Hong Kong trainers are perceived to be relatively weak in relevant manufacturing industry experience compared to Taiwanese trainers. Nevertheless, many Hong Kong training companies are well connected with well-known trainers globally. They serve the mainland market with not just "Hong Kong trainers", but also "foreign trainers".

Users believe Hong Kong training companies have a strong edge in offering training in financial, telecommunications and logistics services with a pool of trainers rich in experience and international exposure.

Hot Offers

Users on the mainland have strong preferences for foreign training consultants given their perception that local training companies still lack international exposure/vision.

Target Locations

According to the TDC's survey, Shenzhen, Guangzhou and Shanghai are the most popular places to which Hong Kong companies export their training services. Shanghai and Beijing are seen as having better prospects over the next 1-3 years.

Nevertheless, competitors are also clustered in major cities. For instance, industry participants estimate that there are about 3,000-4,000 training companies in Shanghai, though many are "one-person", independent training consultants.

Moreover, users in the PRD have much greater awareness of Hong Kong training companies. This implies that much greater marketing efforts are required outside the PRD region.

Go-Overseas Training

More and more mainland companies and institutions, including government departments, hospitals, and companies in various services sectors, realise that Hong Kong is a good place for them to gain international exposure.

Major reasons

• Language barrier: Most mainland people are not proficient in English. Hong Kong trainers' grasp of Putonghua has improved a lot.
• Relevant industry experience and business culture: In many cases, mainland companies have found it more difficult to apply Western business experience on the mainland.

PRIVILEGED MARKET ACCESS UNDER CEPA

Foreign companies provide training courses to users on the mainland mostly in the form of customised programmes for individual companies via setting up management consultancy companies on the mainland. Foreign companies are not yet allowed to set up wholly-owned consultancy companies on the mainland. However, CEPA enables Hong Kong companies to set up wholly owned consultancy companies on the mainland.

Personnel intermediary agencies may offer open class training courses. However, only minority foreign joint venture personnel intermediary agencies are allowed. In contrast, CEPA enables Hong Kong companies to set up majority-owned joint venture personnel intermediaries.

This new report is available at TDC's Retail Outlets. It can also be purchased through the TDC Bookshop section in the TDC's trade portal: info.hktdc.com.

For the Press Release, please go to TDC News & Speeches.