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PARIS, France: Chief Executive Donald Tsang has urged French investors to use Hong Kong as the starting point of their investment quest in the region, including Guangdong Province.

"Hong Kong... offers a transparent and familiar business environment, and a legal system that is independent and impartial," Tsang told those attending the Hong Kong and Guangdong Business Conference in Paris 2006 over the weekend.

"But perhaps most importantly, Hong Kong is a starting point full of companies that have the know-how, contacts and experience to give you a headstart in China," he said.

Invest HK Director General Mike Rowse said that such was Hong Kong's strategic geographical location that people could travel to other Asian business centres from the city within hours.

The conference, organized by the governments of Hong Kong and Guangdong, was aimed at updating European investors on the latest business opportunities and prospects in the region.

Explaining the future prospects, Tsang said a big part of Hong Kong's growth strategy was leveraging its closer relationship with the mainland and servicing its economic liberalization.

The conference, staged at Le Palais des Congres de Paris, drew more than 2,000 senior executives from across 1,500 French companies.

The overwhelming response to the conference bodes well for the future of Europe and China, especially Hong Kong and Guangdong, president of the Ile-de-France region Mayors' Association, Claude Pernes, said.

Hong Kong's role as the gateway between booming China and the rest of the world, and vice versa, is the top reason for multinationals to set up shop in the city. But it definitely is not the only reason they should do so. This is the gist of the message of the business seminar organized in Paris.

The Hong Kong Business Seminar in Paris was organized by Invest HK, the Hong Kong Economic and Trade Office in Brussels and the Hong Kong Trade Development Council. It was held on the sidelines of the Hong Kong-Guangdong Business Conference, attended by Tsang and Guangdong Governor Huang Huahua as well as more than 2,300 delegates and businessmen.

Explaining Hong Kong's advantages, Rowse said: "If you take three-and-a-half hours' flying time as a reasonable radius and put your compass in Hong Kong... you'll capture every major business city in Asia Tokyo, Osaka, Seoul, Beijing, Shanghai, Taipei, Bangkok, Kuala Lumpur, Singapore, Manila. All of them within three-and-a-half hours' flight from Hong Kong."

This is especially meaningful for small- and medium-sized enterprises, which usually start small by sending only one or two staff overseas, Rowse said.

As of June 1, 2006, a total of 3,845 companies incorporated outside Hong Kong had their regional offices, including 1,228 regional headquarters, in Hong Kong.

While an office in Hong Kong can be used as a platform to enter the mainland and as a coordination centre for South China, Hong Kong itself offers a lucrative consumer market of 7 million people.

Add to that the 23 million visitors, many of them mainland shoppers, Hong Kong attracts every year for being a duty-free haven and you have more than enough reason to set up flagship stores for luxury brands, Rowse said.

Though higher property and manpower costs were the main complaints against Hong Kong, French mobile phone technology firm Realeyes3D's vice-president Stephane Daudier said costs had been increasing on the mainland too and "the difference (today) is not that much great."

Co-founder of Wavecome Michel Alard said his telecom company had once considered moving to Shanghai. But Hong Kong's stable workforce forced it to change its decision. Though salaries for engineers are lower in Shanghai, they are prone to quitting and joining your competitors "after you train them", he said.

It's not a question of whether a company should invest in Hong Kong or the mainland, Rowse said because "the secret is to do what is done best in Hong Kong and to do what is done best on the mainland."