The question usually arrives as « which is better », which has no answer. It becomes answerable as « what am I trying to do first: contract, bank, hold stock, invoice a mainland customer, or hire? »
What Hong Kong is good at
- Contracting in a legal system European lawyers can read, in English.
- Banking and currency movement without mainland capital controls.
- Logistics and re-export, particularly around the Pearl River Delta.
- Being an hour from Shenzhen, which matters more than it sounds.
What only the mainland gives you
Invoicing a mainland customer in renminbi with a compliant tax invoice, holding domestic stock, hiring locally, and hosting a site inside the country. If your business model needs any of those, Hong Kong alone will not get you there.
A common and sensible sequence: contract and bank through Hong Kong while learning the market, then add a mainland entity when domestic invoicing or hiring becomes the constraint.