The figures speak for themselves. Between 2006 and 2007 there was a 63 percent rise in the amount of Macau business investment in neighbouring Zhuhai.
Moreover, that figure surged a further 39 percent in the first half of this year. Up to June 2009, a total of 1,901 Macau enterprises invested US$2.1 billion in Zhuhai, and the overall number of investment projects has reached 5,100 in such areas as manufacturing, service provision, high-tech, bio-pharmaceuticals, and logistics.
Such has been the push just north, that from January to June this year, 43 new enterprises from Macau were established, meaning the territory now accounts for nearly a third of the total investment in Zhuhai, just short of Hong Kong’s total.

Long history
Macau has a long history of doing business in Zhuhai. In 1978, the Macao Textile Co Ltd set up the mainland city’s first textile processing plant – marking an historic first for offshore investment in the mainland.
But one of the oldest and best known Macau brands to enter Zhuhai is the food souvenir purveyor Hong Kee.
After running a factory there for 20 years, Hong Kee was the first enterprise in Zhuhai to be certified by the ChinaQualityCertificationCenter and HACCP (Hazard Analysis and Critical Control Points).
Such was his confidence in Zhuhai in 2000, one of Hong Kee’s founders, Yang Seng, opened three stores in Aomen Street in Wai Chai and the Gongbei underground plaza, selling specialty food souvenirs.
And he was right to be upbeat. Turnover from his Zhuhai stores now accounts for nearly half the company’s total earnings.
Yang Seng Jr told Macau Business that he not only inherited his father’s business, he improved on it. He says the older generation paid more attention to the taste and authenticity of the products, while he has added to this with improved packaging to boost the brand’s
image.
Yang Jr also sold the original factory and set up a new 3,000 square-foot production plant in Zhuhai’s Dongkeng district, and says the move to Zhuhai was a business and geographical no-brainer.

Rules of the game
However, doing business in Zhuhai is a very different beast from that in Macau. While Macau’s business environment is steeped in the process of law, the mainland is much more opaque and less rule-bound.
Yang says the trick is human relationships and mastering the system.
Macau investors in the mainland have to adapt to the local economic and cultural features as well as the rhythm of the market, he says.

CEPA benefits
The implementation of the “Mainland and Macau Closer Economic Partnership Arrangement” (CEPA) in 2004, allowed Macau residents to run self-employed businesses in the mainland.
Back then, shoe manufacturer Yao Yi Pin noticed the low rental costs and wages in Zhuhai and decided to cash in.
After a period of consultation and making applications, his operation was ready to go very quickly.
Surprisingly, he found himself as the first Macau businessman operating an individually-owned business in Zhuhai.
Yao and his partner created the “Bishengma” footwear brand more than 10 years ago, which has since become very popular.He and his mainland relatives built on the self-run operation by establishing a joint venture production plant in FujianProvince. His dream was to operate a franchised store to keep abreast of market demand and get consumer feedback.

Under CEPA Yao’s vision was realised in Zhuhai.
In January 2004, the HaitianCity shopping mall opened in Zhuhai and Yao was the first to move in. His novel style and low prices were well received by locals and tourists alike. The business went from strength-to-strength and he rented department stores in Xiangzhou shopping mall and Gongbei underground plaza.

Spiritual leaders
Macau Zhuhai merchant Yau Chao Hong has gained the label of “spiritual leader” and his fame and fortune are rooted in his retail business in Gongbei.
In the early nineties, the Gongbei border area played a leading role in supporting the development of individual and private enterprises. In 1993 Yao had his eye on the area’s first integrated shopping mall selling mainly clothing and gifts – Hong Heng Hong Fai Shopping Centre.
As more and more businesses sprung up in Lianhua Road, a famous pedestrian street close to the Gongbei border, Yao made his move with a large-scale investment in Hong Heng Hong Fai Shopping Centre
in 1998.
By subleasing stores to hundreds of tenants, he accounted for half of the retail stores on Lianhua Road.
In 2002, Yao turned his attention to the Gongbei port underground plaza which had been open for two years. Yao saw its potential and rented the 4,000 square-metre mall, then leased the stores with 38-percent rent reduction to attract customers.
More than 200 merchants signed contracts in just 28 days, and quickly renovated to kick off business.
Since the mall opened in September 2002, business has boomed. Yao has kept rent increases reasonable, raising the confidence of tenants and creating a good business environment.

Diversified kingdom
Today, Yao’s retail “kingdom” has diversified. Yao’s Hong Heng operates hotels in Zhuhai and has developed recreation and entertainment businesses.
In October 2004, a CEPA Supplementary Agreement was signed in Macau, providing Macau enterprises more freedom to trade goods and services in the mainland.
Since January 1st 2005, there have been no geographic restrictions on Macau citizens to run sole businesses, and industrial areas have expanded to retail, catering and service industries.
The statistics show that more than 1,200 Macau and Hong Kong people have consulted Zhuhai’s industrial and commercial departments over the past three years.
Zhuhai’s Industrial and Commercial Bureau has also set up a “CEPA green channel” at registration spots. If Macau and Hong Kong people meet the relevant conditions, their application for business licenses can be processed in one day. All these arrangements have laid the foundations for Macau enterprises to enter the Zhuhai market.

Tops for tea
Cheng Chung Fai, the director of Macau’s Hoi Cheng Sun Herbal Tea House, believes that Zhuhai customers want different packaging, promotions and decoration.
Founded in 1950, the business runs in Cheng Chung Fai’s family. His father peddled herbal tea on the street with a barrow for more than half of the century.
Taking over the family business in 1997, Cheng replaced the traditional model and introduced automatic production lines. He boosted hygiene conditions and expanded the variety of teas
on offer.
In the second year after the implementation of CEPA in 2005, Cheng targeted passengers flowing in and out the Gongbei Customs, and opened his first branch store in the Gongbei port underground plaza, taking his first step into the mainland market. He then opened three branches in the Xiawan, Jida and Nanping districts as his business boomed.

Huge market
Cheng puts his success down to the huge consumer market, a low-cost labor force and the implementation of CEPA, but also points out the differences between running a business in Zhuhai and Macau.
He has also diversified into desserts and snacks, and earned popularity among local customers for his well-decorated and trendy
outlets.
Cheng believes Hoi Cheng Sun can become a trendy hang-out for the young to gather and chat. To this end, “Hoi Cheng Sun Herbal Tea” has been simplified into three characters – “Hoi Cheng Sun” -it’s easier to remember, he says.

Macau in Zhuhai:
The numbers
Total number of enterprise: 1,901
Total investment: US$2.1 billion
Number of investment projects: around 5,100
Registered capital: US$1.6 billion
Industries:
Manufacturing, service provision, high-tech, bio-pharmaceuticals, port logistics, retail and food

by Grace Geng in Zhuhai