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Victor L.L. Chu, Chairman, First Eastern Investment Group Mr. Chu is Chairman of First Eastern Investment Group, a leading Hong Kong-based direct investment firm and a pioneer of private equity investments in China. He is also Chairman of First Eastern Investment Bank Limited in Dubai and Evolution Securities China Limited in London. Mr. Chu is a main board member of Zurich Insurance. Mr. Chu has served as Director and Council Member of the Hong Kong Stock Exchange, Member of the Hong Kong Takeovers and Mergers Panel, Advisory Committee Member of the Securities and Futures Commission, and part-time member of Hong Kong Government's Central Policy Unit. He is currently a Foundation Board Member of the World Economic Forum and co-chairs the Forum's International Business Council. He is also Chairman of the Paris-based ICC Commission on Financial Services and Insurance.
Professor K C Chan, Secretary for Financial Services and the Treasury Government of the Hong Kong SAR (HKSARG) Professor K C Chan is the Secretary for Financial Services and the Treasury, the Government of the Hong Kong Special Administrative Region. Before assuming the post, he was Dean of Business and Management of the Hong Kong University of Science and Technology (HKUST). Prior to joining the HKUST Business School in 1993, he spent nine years teaching at Ohio State University. He received his bachelor's degree in economics from Wesleyan University and both his M.B.A. and Ph.D. in finance from the University of Chicago. He specializes in assets pricing, evaluation of trading strategies and market efficiency and has published numerous articles on these topics.
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December 26 2010
HK to become world genomics research hub - Mainland gives huge talent advantage
By Fiona Tam
Hong Kong is poised to become an international gene sequencing and genomics research hub, thanks to Beijing's drive to turn the country into an international science powerhouse by 2020. Already it is housing some of the world's most powerful supercomputers and gene sequencers, the result of the mainland's dominant genomic company, BGI, using the city to host its key laboratory.
Working at the blinding speed of supercomputers, BGI Hong Kong will theoretically be able to sequence 1,300 human genomes every day. By comparison, the Human Genome Project took more than 10 years to unravel the human genome.
"To put that in perspective, [BGI] has about the same capacity as the three largest genome centres in the United States, including the Broad Institute, Washington University and Baylor College of Medicine combined," said Kevin Davies, editor-in-chief of the American magazine Bio-IT World. BGI was also much larger than Asia's other DNA sequencing centres, Davies said, referring to Macrogen in South Korea and NIG and Kazusa in Japan.
Gene sequencing is a research tool and the basis of biotechnology. For example, in medicine, it helps to identify genetic abnormalities and hereditary diseases, and to produce new drugs. In agriculture, the genes of crops are modified to enhance desirable features and eliminate undesirable ones. In biology, researchers study the evolution of organisms by pinpointing their genetic mutations, or changes in the genetic sequences that were passed on to the next generation by natural selection.
An old printing factory on Tai Po Industrial Estate now houses BGI Hong Kong's four-storey laboratory, which is engaged in an unparalleled DNA sequencing project that may grab global attention; earlier discoveries from its parent institute, BGI, have already been published in some of the world's leading scientific journals, such as Nature and Science.
Inside, Alex Wong Lap-chi, executive director of BGI Hong Kong, presides over the laboratory's 58 Illumina next-generation sequencers. Each costs about 3.4 million yuan (HK$4 million). Another 57 HiSeq 2000 advanced gene sequencers would be shipped from the US by the end of January, he said.
When all those genome analysers are running around the clock, electricity for the computer and cooling systems alone will cost 9 million yuan a year. The analysers will be supported by another 22 on the mainland, backed by 1,500 bioinformatics specialists working mainly in Shenzhen.
The world has already seen some of BGI's capabilities. In March, the cover pages of Nature reported on its sequencing of an ancient human genome, 4,000-year-old extinct Palaeo-Eskimo remains from Greenland. Last year, Nature featured BGI's draft sequencing of the genome of three-year-old female panda Jing Jing, one of the Beijing Olympics mascots.
At present, BGI is aiming to sequence the genomes of 1,000 plants and animals and 10,000 microbes to expand its own database of genomic information. It has launched an ambitious but controversial project to hunt for the genes responsible for human intelligence.
It is also undertaking sequencing projects for profit to pay back a 10 billion yuan bank loan. The institute has already scored one important client - the pharmaceutical company Merck, which announced a five-year deal with BGI two months ago. Other drug firms such as GlaxoSmithKline, Pfizer, Lilly and Novartis have also shown interest in the Hong Kong facility.
Genomics is among the physical sciences that Beijing wants to champion as an industrial policy goal, and BGI is at the forefront of genomic science on the mainland.
BGI started life as the Beijing Genomics Institute. The central government set it up in Beijing in 1999 when it decided to join the international Human Genome Project and sequenced 1 per cent of the total human genome. BGI relocated its headquarters to Shenzhen in 2007.
In April this year, the institute set up its Hong Kong sequencing centre, financed with part of a 10 billion yuan low-interest loan from the state-run China Development Bank. The Hong Kong centre is to handle most of the institute's international genomics business, taking advantage of the city's scientific research capability and easier customs facilities for importing biological specimens such as blood, tissue and urine.
BGI now has a staff of 3,000 at six research centres across the mainland, Hong Kong and centres in Boston and Copenhagen. About 100 bioinformatics specialists work at the Hong Kong facility and about 1,500 at BGI's Shenzhen headquarters to analyse and interpret the reams of DNA data churned out by the sequencers.
Those 1,600 specialists are a huge asset, says Sumio Sugano, bioscience professor at the University of Tokyo. "They are all under 30 and these young brains with world-top capability of sequencing and computing power could make BGI the future Apple, Microsoft or Google in the genomics field," Sugano said, and the influence could reach beyond medicine to agriculture and green energy.
No single institute in the US or Europe can afford 1,600 bioinformatics specialists, but the mainland's cheaper labour market makes it possible. Labour is usually about one-third of the cost of sequencing (reagents, computing and capital expenditure make up the rest).
BGI is hiring Chinese specialists in computer science, biology, mathematics, statistics and genetics at about one-fifth the price its US and European counterparts must pay.
BGI technology director Li Jingxiang said it was difficult to recruit bioinformatics specialists in Hong Kong because many fresh graduates with related backgrounds joined the financial sector. And because technicians in Hong Kong cost more than BGI is used to paying, the number of such specialists will be kept to a minimum in Tai Po, with most IT work done in Shenzhen.
Not everyone is impressed with BGI. Pseudo-science debunker Dr Fang Shimin , better known as Fang Zhouzi , said large-scale sequencing resembled a labour-intensive Henry Ford assembly line. While acknowledging that information generated from DNA sequencing is very useful for geneticists and biologists, he said sequencing simply was not an innovative activity.
"Basically, genome analysers will sequence automatically as long as you can afford these expensive machines," the Beijing-based biological chemist said. "BGI's work is more like a transcriber that simply copies down crude DNA data from organisms, but that doesn't mean BGI understands what it is writing about."
But biology professor Samuel Sun Sai-ming from the Chinese University of Hong Kong said he was confident BGI could make major contributions. It would not mean much to genomic science if BGI simply sequenced DNA alone, Sun said. "But BGI has thousands of bioinformatics specialists to manage, analyse and interpret the huge amount of DNA sequence data, making biological sense of the DNA sequences. It can mine the data and make discoveries in biological and medical sciences and for further applications."
Kelvin Lee, a professor of chemical engineering at the University of Delaware, said that because life-sciences research relied heavily on access to large amounts of high-quality sequencing data, BGI was capable of providing the foundation of knowledge needed for the study of genomics to move forward this century.
Last year, BGI launched a 400,000 hectare project with the government of Laos, exploring the possibility of turning genetically modified plants such as cassava, sugar cane, oil palm and castor oil into food, biological alcohol or diesel oil within five years.
Yin Ye , a BGI vice-president, said the institute's ambitions included cutting the cost of sequencing a human genome from less than US$10,000 this year to US$2,000 - and eventually to an affordable level for everyone. The Human Genome Project, which published its first rough sequence of mankind's genetic code in 2001, cost an estimated US$3 billion.
Jay Flatley, chief executive of the world's leading genome sequencing company, Illumina, based in California, predicts DNA sequencing will become so cheap that babies born from 2019 onwards will have their genetic code routinely mapped at birth.
Dennis Lo Yuk-ming, a professor of medicine at Chinese University, hopes the presence of such a large facility will raise Hong Kong's profile in the global genomics community.
"BGI's achievements show that with timely funding, Asian scientists can compete at the highest level on the world stage," he said.
December 22 2010
Viveca Chan founded the WE Marketing Group in 2005. Ranked among the top 10 international agencies on the Chinese mainland, with more than US$80 billion in annual billing, WE has over 200 employees in offices in Beijing, Shanghai, Nanjing and its headquarters in Hong Kong. As Chairman and CEO, Ms Chan says she’s on a mission to help build the Chinese mainland build global brands. In Six Questions, Ms Chan explains how she has done just that for Hong Kong’s Yip’s Chemical Holdings and its signature brand, Bauhinia Paints.
How did you start working with Yip’s Chemical and its Bauhinia Paint brand?
We’re called “WE” because our position is to combine East-meets-West. We all come from an international advertising agency background, and we work a lot with international brands, so we wish to bring that experience to help local brands
globalize and global brands to localize.
We see an opportunity in China, where there are a lot of ad agencies, but no China-based and owned firms that are also global. Our mission is to help these local brands
globalize, using our experience. This project came about at roughly the same time as we started four years ago. I was a speaker at an HKTDC branding conference, where I met the CEO of Yip’s Chemical. I ended up meeting later with the company’s Deputy General Manager Francis Ip, and I thought, “Wow, this is my dream client, because this is what we want to do; we want to help local brands
How do you approach a project like Bauhinia Paint?
The first thing is you’ve got to know your market and respect your competitors. So we spend time understanding the market. We study what all the competitors are doing, what they’re saying in the marketplace to find out where our opportunities and challenges are. Then we also have to understand a lot about Bauhinia – where they are now, where they were and where they want to be to map out what our communication objectives are.
We then define a three-point task: one is brand identity, another is brand awareness and the third, which I think is very important, is brand integrity. This is where Bauhinia’s core value and strength lie, and that is being from Hong Kong. Hong Kong is very international. At the same time, there is a lot of local and cultural understanding. Combining the two is very much a Hong Kong strength. The other thing Hong Kong is well-known for is its style and design. I think, in a business where it’s not just really about paint – it is about designing your home, about living, about upgrading your living style – Hong Kong style and that kind of a design image really enhances the brand.
What are some of the issues to consider as you develop a brand on the mainland?
I think that there are two big challenges. The first one is differentiation, because there is never a lack of brands and products. How do you differentiate yourself in this vast market? The second is sustainability. We see many brands that are an overnight success, but to be able to sustain beyond five years is very difficult. So very few have the sustaining power. What we’re trying to do is create the difference. I think what Bauhinia has is the brand basics of being very competitive in terms of quality pricing. And I mentioned the brand integrity being very important because we really need to provide the quality at the price. But secondly, it’s the sustainability, because it’s not just about doing a lot of advertising and creating awareness, if you cannot sustain it. So it has to come from very sound business models.
What should companies know about modern mainland consumers?
First, they are trading up, but at the same time they are also trading off, because money is not limitless. So we want to make sure we are the ones they are trading up to.
Second, Chinese consumers really believe in big brands, so bigger is better and more expensive to them means better quality. China’s consumers believe in big brands because it gives them more trust. They place a lot of importance on product safety, on health – much more so because of the prevalence of negative publicity on some of the not-so-good products. The other thing is that it is not easy to capture their loyalty. For example, their purchasing decisions will always take into account not just “me” but the whole family, and shopping is a family affair.
How is your approach reflected in Bauhinia’s “Paint Your Spring” advertising campaign?
If you look at the way that we’ve done the positioning, we summarized it into something the consumer can easily capture in their minds and hearts. We talked about trading up, about optimism and about health. How do we
summarize that in one line? So our communication theme is “Paint Your Spring,” and that means life to them is like spring. Spring is optimism; it’s very colourful – just like our paint. And if you think of spring, it’s fresh and healthy. So it is the implication of hope. What you see in the commercial is the whole family working on this new home together. It is like they are creating their new life, so it is a visual identity that we want to create and also a theme that we think is quite sustainable. It captures the hearts and minds of the consumers.
What edge does Hong Kong offer to mainland companies that choose to base here?
The advantages we capture are what we talked about, with brand trust, and I think Hong Kong companies have that advantage. We’re seen as very trustworthy because we deliver what is promised. And I think what we are doing now goes beyond that – the brand integrity is there as well. I think we’re building on the future as Hong Kong goes beyond just a manufacturing society. We’ve become a services society, now we’re becoming a value-driven society. So what we see is that we have good products that meet the needs and desires of the consumers.
December 22 2010
Hong Kong to host Asian TV, pop music awards - Two new events, the biggest of their type in region, to be held during Entertainment Expo
Hong Kong will have two new awards for television and pop music next year, both sponsored by the government and set to be the largest of their kind in Asia. The Asia Rainbow TV awards and the Hong Kong Asian Pop Music Festival will be the first big Asian showbiz events staged by Hong Kong.
The former, organised by the Hong Kong Television Association and China Radio and TV Academy, will cost more than HK$10 million and receive HK$5.3 million from CreateHK, a Commerce and Economic Development Bureau agency.
Awards will go to playwrights, producers, actors and actresses, as well as the best television drama, entertainment show, documentary and animation. "Rainbow is like a bridge, linking friendship between Asian nations. And it is like an expanded version of the three basic colours on TV, too," association president Tsui Siu-ming said.
The music festival, organised by the International Federation of the Phonographic Industry (Hong Kong Group), will receive HK$5.5 million of its HK$8.5 million cost from the agency. It will invite top-ranked pop stars from the mainland, Hong Kong, Taiwan, Malaysia, Singapore, Japan and South Korea.
An award will be presented to a rising star, who has only issued records in the previous three years. Others will go to the best vocal performance and the best stage performance. Two pop singers, one top-ranked and one new, from each place will perform at the event.
CreateHK head Jerry Liu Wing-leung said he hoped the awards would promote commercial exchanges between the nations.
He could not estimate the economic benefit Hong Kong would receive from the awards. "It's the first time we have held these kinds of events, so we don't have any reference for estimation," he said. "But it's like spreading seeds. We won't see the result immediately."
The events will be non-profit. If the organisers spend more than proposed, the government will not give more cash. But if they spend less, the money will return to the public purse.
The music event will be made into a television programme to be broadcast in Hong Kong and elsewhere in Asia. Liu estimated 10 million people would watch the programme.
But federation chairman Ng Yu said technical problems, such as contracts of some stars that forbade them from appearing on certain television channels, had yet to be worked out.
The events will be held on March 22 and 23 at the Convention and Exhibition Centre in Wan Chai during the Entertainment Expo. Liu said he hoped the expo would draw producers, buyers and sellers to the new awards.
The television awards will have capacity for an audience of 2,000, with priority for organisers, guests, stars and their assistants, and any surplus distributed to the public.
Ng said that for the music festival, "at least a few thousand free tickets" would be distributed to the public on a first-come-first-serve basis.
He said information on how to get tickets would be released later.
December 15 2010
Cross-Strait Trade: the Hong Kong Factor
Taiwan’s corporate investments have shifted from traditional -
labor-intensive manufacturing to technology-intensive industries
The month of June 2010, highly significant for trade relations between the Chinese mainland and Taiwan, looks promising for Hong Kong’s role in cross-strait ties as well, particularly where it comes to technology-driven industries, systems integration and enhanced logistics.
Taiwan and mainland authorities in June signed the Economic Co-operation Framework Agreement (ECFA) and an agreement on intellectual property rights protection, pacts that are expected to help boost economic activity, trade and investment.
The new arrangements are complementary. As the mainland’s technology industries grow rapidly, there’s constant demand for new materials, key parts and components, as well as related technology and production know-how. In short, the mainland is a destination for Taiwan investment, but also a huge market for Taiwan industries.
Taiwan investment flows to the mainland have surged. In the eight years to 2009, companies on the island invested a cumulative approved sum of US$82.7 billion on the mainland, accounting for 58.1 per cent of Taiwan’s total outward investment over the period.
Taiwan’s corporate investments have gradually shifted from traditional labour-intensive manufacturing to technology-intensive industries, particularly for manufacturing electronics parts and components, as well as computers, electronic and optical products.
Last year, Taiwan company investments in those two categories made up 30.6 per cent and 17.3 per cent respectively of the island’s total investment in mainland manufacturing, a marked increase from the early 1990s.
In the printed circuit board (PCB) industry, for example, the mainland is the world’s largest production base, but 40 per cent of the output value of the mainland’s PCB is generated by Taiwan companies.
Of the top exporting enterprises, most are in the electronics industry, among which Taiwan companies have been in leading positions for some time, with names like Quanta, Hon Hai, Compal, Inventec, Asus and Acer testimony to increasingly intertwined cross-strait ties.
Last February, Taiwan announced a further relaxation of restrictions on technology investment on the mainland, reclassifying the manufacturing of “polycrystalline silicon,” “other monolithic digital integrated circuits,” “other monolithic integrated circuits” and “other hybrid digital integrated circuits” and the integrated circuit design industry, from the prohibited to the general category.
At the same time, the scope of prohibition on the mainland has been reduced for investment in wafers and TFT-LCD panels. Following the signing of the ECFA, trade across the Taiwan Strait, as well as investment and industrial cooperation, is expected to move forward in tandem.
Taiwan companies can look to Hong Kong for various support services in their Chinese mainland business expansion
Despite closer cross-strait relations, supply chains and division of labor for technology products are becoming increasingly complicated. Taiwan players need different services to support business expansion.
Hong Kong has an edge in specialized services, including technology marketing and applications. Hong Kong services providers can also offer highly efficient logistics and a range of financial services to accommodate technology companies.
In a sense, Hong Kong is set to continue – but even more effectively – as a bridge for Taiwan and mainland firms linked by technology.
Taiwan companies are particularly able in front-end R&D and component manufacturing, especially industrial products. Hong Kong, with its competitive advantages in back-end applications and commercialisation, can be a perfect partner for Taiwanese firms.
In fact, numerous Taiwan companies have set up offices in Hong Kong to support their sales activities for industrial products in Hong Kong and on the mainland.
For example, Taiwan’s Macronix International Co Ltd, one of the world’s largest manufacturers of ROM products, has an office at the Hong Kong Science & Technology Parks, engaging in R&D work of non-volatile memory and related products to support the company’s regional technology business.
Other Taiwan technology companies, including Winbond, Elan Microelectronics Corp, Sunplus and Silicon Integrated Systems Corp, have set up Hong Kong offices to offer sales services to Hong Kong and mainland customers.
Many Taiwan companies work with Hong Kong companies through agent or distributor arrangements to market and send their products to the city and the mainland, providing solutions for product design and applications as well as engineering consultancies and after-sales technical services.
Hong Kong Financial Secretary John Tsang
(center) pays a landmark visit to Taiwan in August
Taiwan’s corporate investment on the mainland is largely related to the production of high-tech products, so it has an especially strong demand for efficient logistics services.
Some Taiwan logistics companies, such as Dimerco, have set up branches in Hong Kong to cater to their mainland-Hong Kong-Taiwan businesses.
At the same time, some Hong Kong services suppliers, including Kerry Logistics and IDS Logistics International, have set up offices in Taiwan in addition to establishing networks on the mainland. Given the technology industry’s demand for logistics services, there are plenty of opportunities for even closer ties between Taiwan and Hong Kong logistics players.
Hong Kong’s financial services play a crucial role in technological cooperation between the mainland and Taiwan. For instance, some Taiwan-funded banks have set up branches or offices in Hong Kong to provide services to Taiwan customers.
At the end of May 2010, there were 17 licensed banks in Hong Kong with Taiwan origins and two Taiwan-incorporated banks with representative offices in Hong Kong.
Listing on the Hong Kong stock exchange is another means for Taiwanese technology companies to obtain financing for their mainland businesses. At the end of April 2010, some 46 Taiwan-funded companies were listed, with an estimated total market
capitalization of HK$412 billion. A number of these listed companies are technology-related, such as Foxconn International Holdings (FIH), TPV Technology Ltd and Proview International Holdings Ltd.
Hong Kong is Asia’s largest management centre for venture capital and can readily offer the necessary funds required by Taiwanese technology companies for their mainland projects and investments.
Some venture capital funds have already set up offices or Asia-Pacific regional headquarters in Hong Kong, targeting Taiwan as a significant market. Among them are the Carlyle Group, Warburg Pincus Asia and AsiaTech.
Hong Kong’s position as an overseas renminbi center is growing, with authorised banks able to offer renminbi trade-settlement services to Hong Kong enterprises since July 2009.
The problem of managing and lowering trade risks brought about by exchange-rate movements has become an issue for Taiwan companies trading with the mainland, due to fluctuations in the foreign exchange market and such issues as the revaluation of the renminbi. These firms can consider pricing in renminbi and carry out trade settlements in the currency as a means of hedging against exchange-rate risks.
Taiwan-based technology firms are in the process of transferring more and higher technology to the mainland while increasing their investments there.
Conversely, mainland enterprises have increased their demand for Taiwan technology, especially related to the production and design of electronics products and the parts and components sectors in which Taiwan excels.
Technology transactions across the strait are becoming more frequent. Nevertheless, infringement of intellectual property rights (IPR) is the biggest headache for Taiwan technology companies. Hong Kong’s transparent, precedent-based legal system provides the necessary IPR protection to reassure Taiwan investors.
A number of Hong Kong IPR agencies and law firms can handle property rights registration, transfer or licensing transactions with the appropriate intellectual property offices in the Greater China region, and other markets, on behalf of technology companies and other customers. Their extensive experience allows them to offer a complete range of IPR management services to Taiwan companies for technology transactions, particularly those spanning different jurisdictions.
Many Taiwan companies have set up Hong Kong subsidiaries to hold specific IPR assets and handle related business. When a mainland company is licensed through a Hong Kong subsidiary, the withholding tax levied on the royalty payment made by a mainland vehicle to a Hong Kong company is reduced from the usual 10 per cent to seven per cent. This falls under the Arrangement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed between Hong Kong and the mainland.
Hong Kong’s reputation as a highly efficient services center and regional technology marketplace is a major draw for future business. Taiwan companies can leverage Hong Kong for expansion.
With increased trade and economic relations across the strait, Taiwan companies are set to increase their trade and investment activities on the mainland and step up their presence in that market. Hong Kong’s role as a services platform for cross-strait technology cooperation can only become more significant and provide a competitive edge for them.
December 8 2010
Luxury Unlimited - Hong Kong’s high-end retail areas continued to attract new brands.
Throughout 2010, as retailers worldwide were still struggling to recover, Hong Kong’s high-end retail areas continued to attract new brands. In June, American luxury men’s retailer Tom Ford opened a flagship store at Central’s ifc, one of the city’s most prestigious malls. The store occupies 1,700 square feet of space and offers a comprehensive range of products, including the brand’s made-to-measure service. Tom Ford is just the latest high-end brand to tap the lucrative Hong Kong market.
A newly released survey by market research firm Synovate has found that Hong Kong leads in the region in luxury spending even during the economic downturn. "It's going to take more than an economic dip for Hong Kong's luxury lovers to stop spending on their objects of desire," noted Steve Garton, Executive Director of Media at Synovate.
As the region's most comprehensive study of elite adults, Synovate PAX tracks media and digital consumption, prosperity and influence across 11 markets: Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand. Now in its 14th year, the survey is conducted year-round, with 1,674 affluent Hong Kong residents polled in the 2010 study.
Steve Garton, Executive Director of Media, Synovate
Among its findings, the survey revealed that Hong Kong’s high earners were the most likely to own jewellery items worth more than US$1,000 (32.5 per cent) and a luxury watch of the same value (28.8 per cent). They are also most likely to spend on designer clothes and leather goods worth US$1,000 or more (16.1 per cent) and to buy luxury accessories and footwear.
If anything, said Mr Garton, the downturn was a time for buying more. “For people with money, Hong Kong was actually a shopping paradise during the downturn. Prices were discounted and incentives offered, so shoppers with cash were able to make it go further. It was confirmation that affluent people want to enjoy the benefits of a high discretionary income.”
They shop here, Mr Garton said, because with so many brands on offer, Hong Kong “has the world on its doorstep” in terms of international choice. He described Hong Kong residents as “dedicated followers of fashion,” for whom keeping up with the latest trends is entrenched behaviour. “Hong Kong people love shopping – why would they ever stop?”
Hong Kong’s ability to attract high-end brands, in turn, draws luxury shoppers from the Chinese mainland. Since visa restrictions were eased in 2004, the flow of wealthy mainland tourists coming to Hong Kong to shop for luxury goods has increased year after year. They come for the wide range of international brands, the duty-free prices and the knowledge that brands sold in Hong Kong are genuine. In the year to date (January to September), Hong Kong welcomed nearly 16.5 million visitors from the mainland, up 23.7 per cent over 2009.
On Top of the World
Joe Lin, Senior Director of Retail Services, CB Richard Ellis
When it comes to luxury fashion, watches and jewellery, no city in the world offers more choice than Hong Kong. Research collated this year by global real estate firm CB Richard Ellis (CBRE) found that 91 per cent of luxury brands surveyed had a retail presence in Hong Kong. London, in second place, attracted 87 per cent of the luxury retailers, while Dubai came in third, with 85 per cent of luxury retailers present. According to the CBRE report, Hong Kong “benefits from being regarded as a premier retail destination from both Western and Eastern perspectives, attracting luxury retailers from across the world.”
But as Joe Lin, Senior Director of Retail Services at CBRE Hong Kong explained, it is Hong Kong’s edge as a catchment for wealthy mainland visitors that has the most pull for international brands. “They like to set up a shop window in Hong Kong as a stepping stone to the long-term Chinese market.”
This explains why so many brands set up early in Hong Kong in the key market sectors of watches, cosmetics and high-end audio-visual products. In recent years, top fashion brands have begun establishing flagship stores, keen to stake their claim in a market where others have been successful.
Christoph Wellendorff (centre) at the launch of his brand’s new boutique in ifc
Prime retail space in Hong Kong’s most exclusive high-street areas – Canton Road in Tsim Sha Tsui and Queen’s Road in Central – is among the most expensive in the world, not far behind the equivalent in New York or Tokyo. But Mr Lin said many brands believe the investment in Hong Kong is worth it. “Many of the top names are taking up big space in Hong Kong. They will have one flagship store in a prime area rather than seven stores in cheaper locations, because they can benefit from the exposure.”
Still They Come
Nicholas Paspaley, Paspaley's Executive Chairman, opens his pearl emporium on Canton Road
In November, renowned German jeweller Wellendorff also chose ifc mall to open its first stand-alone boutique in Asia. Explaining the location, Christoph Wellendorff, the fourth generation of the Wellendorff family to manage the company, said: “Being one of the most modern and luxurious cities in Asia, Hong Kong is at the same time respectful and true to its traditions and heritage. This represents the core values that are exactly what Wellendorff strives for.”
Burberry this year opened its 15th store in Hong Kong, a 450-square-metre, multi-level site for women’s and men’s ready-to-wear. The shop is located in Kowloon, at Elements, one of Hong Kong’s biggest shopping malls.
On Canton Road in Tsim Sha Tsui, Marc Jacobs launched a new flagship store – the brand’s third retail venture in the city – while Australian luxury pearl brand Paspaley opened its new Asian “pearl emporium,” joining brands such as Cartier, Tiffany, Van Cleef & Arpels, Rolex and Piaget to create Hong Kong’s newest luxury precinct.
Jerome Lambert, CEO of Jaeger-LeCoultre, at
Luxury Swiss watchmaker Jaeger-LeCoultre opened its second Hong Kong boutique in Tsim Sha Tsui’s Harbour City shopping mall, buoyed by the brand’s initial success at Pacific Place, the upscale mall in Admiralty.
Ho, Ho, Ho
To date, it has been a busy year for Hong Kong retailers, with sales seeing double-digit growth each month of 2010 so far. Going into the Christmas sales period – traditionally the highest yield-time of the year – they have every reason to smile.
December 1 2010
Better Living Expo to be Launched in July 2011 - New Fair to
Showcase Lifestyle Products and Services
HKTDC Deputy Executive
Director Benjamin Chau (left) and PCES Managing Director Eddie Leung (right)
today signed a memorandum of agreement to jointly launch a new trade fair,
“Better Living Expo,” in July 2011
HKTDC Deputy Executive Director
Benjamin Chau told a press conference today that the new fair would target
lifestyle products and services
PCES Managing Director Eddie Leung
expects that the trade fair partnership could help the development of Hong
Kong’s exhibition industry
A new trade show, “Better Living Expo,” will debut next July at AsiaWorld-Expo.
Organized by the Hong Kong Trade Development Council (HKTDC) and private fair
developer Paper Communication Exhibition Services (PCES), the 22-24 July show
will feature lifestyle products and services in such areas as beauty and
well-being, hobbies and learning, back-to-school products and value shopping.
The two organizations signed a memorandum of agreement today. “The new
lifestyle-focused event is our next marketing-style fair. It follows the
launching of the HKTDC Hong Kong International Wine & Spirits Fair in 2008 and
the Hong Kong International Tea Fair in 2009,” said HKTDC Deputy Executive
Director Benjamin Chau.
“Hong Kong is a regional trendsetter, with a cosmopolitan lifestyle that has an
extraordinary influence on the Chinese mainland and other parts of Asia,” said
Mr Chau. With such advantages, the new show could be an ideal platform for
exhibitors to promote their lifestyle products and services, according to Mr
“Most local SMEs are doing business related to our daily life. For these
companies, especially those newly established, the Better Living Expo can help
them launch new products and build their brand image,” he said.
Mainland China Target
“The new fair will target both local and mainland markets, and can help
exhibitors keen on expanding their business into the mainland,” Mr Chau added.
“We also expect local and mainland traders to look for well-received products
and services at the new expo, creating opportunities for future partnerships.”
Although essentially a trade fair, Better Living Expo will also open to the
public. Mr Chau said visitor reactions could provide a boost for the products
featured at the show, enhancing the overall promotional impact of the expo.
“Based on the principles of shared investment, shared operation and shared
responsibilities, we expect our cooperation with the HKTDC can help the
development of Hong Kong’s exhibition industry,” PCES Managing Director Eddie
Leung said. “In addition, we believe the new show can benefit exhibitors as well
as buyers and visitors.”
The HKTDC and the PCES will consider arranging transportation for buyers and
visitors in order to help them visit the show. Details will be available in due
Enhancing Hub Role
The HKTDC organises seven fairs with other organizers. They include the Hong
Kong International Stationery Fair, the Hong Kong International Printing and
Packaging Fair, the Hong Kong International Tea Fair and Eco Expo Asia.
“In addition to Better Living Expo, the HKTDC will continue to explore new
exhibition opportunities with other fair organisers to help maximize the use of
the AsiaWorld-Expo,” said Mr Chau. “We believe that such cooperation will
strengthen the city’s exhibition industry, enhancing Hong Kong’s role as a
regional exhibition hub.”
About the HKTDC
A statutory body established in 1966, the Hong Kong Trade Development Council (HKTDC)
is the international marketing arm for Hong Kong-based traders, manufacturers
and service providers. With more than 40 global offices, including 11 on the
Chinese mainland, the HKTDC promotes Hong Kong as a platform for doing business
with China and throughout Asia. The HKTDC also organises trade fairs and
business missions to connect companies with opportunities in Hong Kong and on
the mainland, while providing information via trade publications, research
reports and online. For more information, please visit:
Additional information, please contact: Johnson Choi at (415) 963-1541 or
691-6138 (San Francisco USA); (808) 524-5738 (Hawaii USA), (852) 8171-3118 (Hong
Kong SAR); Fax (808) 524-8063 or by email to firstname.lastname@example.org
November 23 2010
Hong Kong $10billion (US$1.29billion) university hub planned
for border loop - 24,000 students will study at up to four tertiary institutions
An uninhabited pocket of land polluted by toxic mud will be turned
into a hub for higher learning, according to the Planning Department.
Up to four new tertiary institutions may be built on the Lok Ma Chau Loop, a
swathe of land that will also feature research and development facilities and a
nature conservation area, it said. Officials yesterday disclosed details of the
plan for the 870,000-square-metre area, which belongs to Shenzhen but is managed
by the Hong Kong government. At least five local universities have expressed
interest in opening new campuses there.
"The site is ideal for training talent for the Pearl River Delta so that it can
compete with the Yangtze River Delta, which has a lot more tertiary
institutions," said deputy director of planning Ling Kar-kan.
The loop was carved from Shenzhen's territory during the straightening of the
Shenzhen River in the 1990s. Controversy has dogged the site. Developers wanted
full-scale building while environmentalists fought for its conservation after
cleaning up the toxic mud from industrial waste discharged into the river. The
new plan will disappoint both groups. The result of a joint study by the Hong
Kong and Shenzhen governments, it will be open for public consultation until
Ling said the loop could produce a floor area of 1.2 million square metres for
the new education hub. More than half the space, or 720,000 square meters, will
be reserved for educational facilities. That space should be enough for one to
four institutions to set up a new campus or faculty, or even a new university,
The facilities, to open no sooner than 2020, will accommodate 24,000 students,
half of whom will live in dormitories on the site. Building the infrastructure
is expected to cost about HK$10 billion. It will include new roads, sewage
treatment plants and possibly a light-rail system. Hong Kong will pay for most
of that but is in negotiation with Shenzhen over possibly sharing the cost.
A University of Hong Kong spokeswoman said it had already handed in a
development proposal for the site. "We are interested in setting up a school
zone in Lok Ma Chau," she said.
"We are waiting for the results of government research. [The proposal] could
help HKU further its development in teaching and research."
Chinese University said the site's geographical proximity to Shenzhen made it
ideal for its expansion plan. "We have always hoped to make use of this edge to
help cope with the demand for talents from Hong Kong, Shenzhen and the Pearl
River Delta," a university spokesman said.
The University of Science and Technology, Baptist University and the Polytechnic
University, along with several educational institutions based in Shenzhen, have
expressed interest. Ling hopes to attract interest from overseas universities,
The rest of the loop will go to hi-tech research and development, and creative
industries. Buildings on the loop will be restricted to 15 storeys or less. To
be a low-carbon area, only electric cars and bicycles will be allowed in. The
loop will be linked to the Lok Ma Chau boundary control point with a road or
light rail system, which will make it a 10-minute journey for commuters to
travel to the hub from the control point.
An ecological zone, intended to be a no-go area, will be created along the edge
of the loop to preserve the flight paths of migratory birds.
Areas adjoining the loop - covering 182 hectares of land that contain villagers,
hills and fish ponds - will see small-scale, commercial developments such as
restaurants, shops and guest houses. Across the border, a similar-sized site in
Shenzhen, including the Huangguang and Futian ports, will have offices, hotels,
exhibition venues and research facilities to support the education hub.
Public forums will be held in Hong Kong and Shenzhen to collect public views.
Hong Kong SAR November 17 2010
Signing of US trade agreement with the United States
Commercial Service - Bridge to New Opportunities for American Companies
HKTDC Executive Director Fred
Lam (left) and Assistant Secretary for Trade Promotion and Director General of
the USFCS Suresh Kumar seal the deal with a handshake, following the signing of
the statement of intent to cooperate on trade promotion
American companies looking to expand beyond their home market can turn to Hong
Kong for opportunities in booming Asia, thanks to the Pacific Bridge Initiative
(PBI), introduced by the Hong Kong Trade Development Council (HKTDC) and the
United States Foreign Commercial Service (USFCS) of the US Department of
The PBI responds to US President Barack Obama’s National Export Initiative (NEI),
which sets out to double American exports over the next five years, while
supporting employment in the US.
A statement of intent to cooperate on trade promotion was signed, 15 November,
by Suresh Kumar, Assistant Secretary for Trade Promotion and Director General of
the USFCS, and HKTDC Executive Director Fred Lam at a business luncheon hosted
by the American Chamber of Commerce in Hong Kong.
“Hong Kong is well-positioned to help US companies looking to increase exports
to this region,” Mr. Lam said. “Hong Kong companies can also benefit by using US
companies’ competitive advantages in various fields to explore more
opportunities in this vast regional market.”
This year’s Eco Expo Asia,
featuring the US as partner country, was the first HKTDC event to capitalize on
the PBI. It featured the US as partner country
According to the USFCS, less than one per cent of America’s 30 million companies
currently export. Of those companies that do, 58 per cent sell only to one
“To continue to move the US economy forward, US small businesses must innovate,
create jobs and expand their global reach to new markets,” Mr Kumar said. “Hong
Kong can be the gateway to some of these markets with its efficient networks,
comprehensive and well-endowed service sector, and superior IP protections,” he
The US is already one of Hong Kong’s most important trading partners –
second-largest in total trade and the city’s fifth-largest source of imports.
“Our history of collaborating with each other, our track record of export
success and our shared values make Hong Kong a key trading partner and a major
partner of our NEI strategy,” Mr Kumar said.
Eco Expo Asia, held earlier this month, was the first HKTDC event to capitalise
on the PBI. The region’s only major environmental fair featured the US as
partner country. Nearly 30 American companies exhibited at the US pavilion,
reaching key regional contacts, including representatives from mainland city
governments such as Foshan, Guangdong, Jiangmen, Kunming and Shenzhen. According
to Mr Kumar, the fair produced initial orders of more than US$700,000 for US
The HKTDC also arranged a trip to Shenzhen for US and Hong Kong companies to
study the city’s environmental markets and meet industry and government
In March, the Independent Film & Television Alliance will organize an American
pavilion at the Hong Kong International Film & TV Market (FILMART). The PBI will
subsidize the US pavilion – the first at FILMART.
HKTDC Deputy Executive Director
Margaret Fong says the PBI has targeted nine priority industries for
cooperation, including the renewable energy sector
Other business exchanges are in the pipeline to promote to American businesses
the benefits of working with Hong Kong to reach markets on the mainland and
across Asia. The agreement is expected to generate new business for both US and
Hong Kong companies. “Working with the USFCS, we will expand business missions
to help Hong Kong and US companies explore opportunities,” said HKTDC Deputy
Executive Director Margaret Fong, speaking at the American Chamber luncheon.
“Missions bringing US companies to the mainland through Hong Kong will also be
A dedicated website has also been launched to provide details on PBI activities.
It will also feature research and market information for US and Hong Kong
companies looking for partnership and business opportunities.
While all industries are covered by the agreement, the agreement targets key
industries, including: renewable energy, environmental, water resources;
healthcare, medical and biotechnology; value-added food products, including wine
and spirits; information and communication technology, and the creative and
(file photo - front
row far right) According to Richard Vuylsteke, President of the American
Chamber of Commerce in Hong Kong, green technology represents “significant
opportunities” with the ongoing construction boom and demand for clean energy in
Asia, particularly on the mainland. “There are huge opportunities for advanced
technology, for conservation of energy, for materials that are longer lasting,
more eco-friendly,” Mr. Vuylsteke said. “For both the US and China, which have
serious energy and pollution problems, this is a great area for specific
Mr. Kumar noted that Hong Kong is the first economy to help the US jump-start
its export sector. “It is the first formal signing of an understanding between
two institutions representing two different economies with one common goal.
There’s much learning in this,” he said. The Assistant Commerce Secretary said
that both sides will strive to go beyond the terms of the initiative, using it
as a showcase for future potential partners. “We’ll take this to other countries
as a model of engagement,” he said.
Hong Kong SAR November 16 2010
Signing of US trade agreement with the United States
Commercial Service 'may quadruple exports to Hong Kong'
HKTDC executive director Fred
Lam (left) and US Assistant Secretary for Trade Promotion Suresh Kumar sign the
Hong Kong held out a fig leaf to the United States yesterday as it became the
first and so far the only signatory to an agreement to co-operate on trade
promotion with the US Commercial Service since the launch of President Obama's
National Export Initiative in January.
The development does not hint at any change of attitude towards the initiative
Suresh Kumar, assistant secretary for trade promotion, said Hong Kong had
reached the understanding and it would be "a completely different issue" for the
"I would hope this is not a lip service agreement," Kumar said, adding that even
though US exports remained low, President Obama's plan was to double the
country's exports by 2015.
Independent economist Andy Xie said the deal bears more symbolic meaning than
But Kumar had high expectations of the agreement and forecast that exports to
Hong Kong could triple or even quadruple in the next five years.
Hong Kong is the largest export surplus market for the US, at about US$18
billion last year.
Exports to Hong Kong rose 29 per cent to US$19.4 billion for the first eight
months this year, according to the Hong Kong Trade Development Council (HKTDC).
The agreement signed yesterday, known as the Pacific Bridge Initiative, might
have its eye on the mainland's market, as most of the favoured industries are
prioritized in Beijing's 12th five-year plan, such as green energy, health care
and financial services.
"Hong Kong is just as much an `export-to' city as an `export-through' city,"
The agreement comes at a time when President Obama faces increasing political
pressure due to a slowdown in the US domestic economic recovery.
With individual consumers and companies not spending, America has only two
options, said Zhang Yansheng, an international trade researcher at the National
Development and Reform Commission. It can continue to carry out more
quantitative easing or it can boost exports, he said.
"The world's export amount is shrinking, but America, Japan and Europe all want
a larger share of the shrinking pie. This will inevitably lead to trade and
currency wars," he said.
China's trade surplus with the US rose about 21.3 per cent in the first nine
months of this year to US$201.23 billion compared to same period last year,
according to the CEIC database.
Rhetoric against China's trade surplus has grown hostile, but Xie said the
fundamental reason for the trade imbalance is that the United States does not
have a strong manufacturing industry.
November 15 2010
Asia now competes with America for top business students
Asian MBA programs have emerged as challengers to their more established United
States peers in global academic rankings, but their pulling power may still be
limited to students willing to put down roots in this region. Top students have
traditionally completed their Master of Business Administration degrees in the
US or Europe, where opportunities for high-level jobs are most abundant.
But global growth has since shifted to Asia and business schools in the region
have capitalized on the trend, drawing candidates from both home and abroad. The
rising profile of Asian MBA programs is expected to come at the expense of
overseas universities by taking a bite out of their application intakes. But so
far the face-off between East and West has been kept in check by a lack of
overlap between the two markets, said Richard Lyons, dean of the Haas School of
Business at the University of California, Berkeley.
"There is still such a strong segmentation that we don't see ourselves going
head-to-head against those schools very often," Lyons said. "People either
decide they want to do [the MBA] here or they want to do it over there."
He said only a "tiny" number of Haas's roughly 240 full-time MBA students in
last year's class had also been admitted to the Hong Kong University of Science
and Technology (HKUST) Business School. The head-to-head numbers between Haas
and Hong Kong-based business schools have generally been five or less, Lyons
That comes as no surprise to Hong Kong's leading business schools, which have
positioned themselves as distinct alternatives to the traditional western MBA
"There is no single school that we are battling it out with because we are
unique," said Steven DeKrey, a senior associate dean at HKUST.
"If people want a top school and want Asia, is there a better choice?"
The Chinese University of Hong Kong (CUHK) has also made efforts to
differentiate its MBA program from other overseas ones. The curriculum covers
themes unique to this region, including family business ownership, supply chain
management in the Pearl River Delta and corporate governance in the mainland.
"Asian business schools should start to have confidence in ourselves and not
copy from the US," said T.J. Wong, dean at the faculty of business
administration of CUHK.
Attending an Asian business school has become a more viable option in the past
few years after several MBA programs around the region have charted a rise up
global academic rankings.
HKUST was ranked ninth in the Financial Times Global MBA Rankings 2010, tied
with University of Chicago Booth School of Business. And CUHK was tied with Haas
at 28th overall.
In total, six schools from the region cracked the top 30, including France's
Insead, which has a full-time campus in Singapore. That is up from just two in
the 2007 rankings.
Academic rankings are usually taken with a grain of salt because of all the
variables involved in calculating them.
But they can still serve as a useful starting point for prospective students
when they are deciding where to apply, DeKrey said.
"[And then] the more sophisticated reader will analyse the criteria and match it
against what they care about," he said.
Many students seem to be zeroing in on the better job placement data from Asian
The FT survey showed that nine out of 10 students from both HKUST and CUHK had
secured work within three months after graduation, for example, compared with
just three in four students from University of Pennsylvania's Wharton School of
Data from the Graduate Management Admission Council, which offers the GMAT exam
required by most MBA programs, reflected this trend, reporting the percentage of
test scores sent to US-based business schools decreased from 83.9 per cent of
the world total to 78.4 per cent between 2005 and 2009.
The combined percentage of scores sent to India, Singapore, and Hong Kong more
than doubled to 5.3 per cent in that time.
That signals competition for students could increase over time between East and
West, even though top-tier US business schools have been relatively insulated so
"There will be some shake-up among US business schools," Lyons said.
"[In] that middle-tier of US business schools there is going to be a lot of
competition and increasingly the top 10 schools are [even] feeling it."
October 20 2010
Hong Kong Designs on Shanghai
The busiest shopping street in China this past week was ablaze with
billboards, banners and other bright signs spotlighting the Style Hong Kong Show
in Shanghai, which ended 19 October. The five-day show, on Nanjing Road East, a
pedestrian street streaming with shoppers, was the latest in a continuing series
of Hong Kong brand events organized by the Hong Kong Trade Development Council (HKTDC).
The Shanghai show, however, was a distinct departure from earlier Chinese
mainland product fairs, according to HKTDC Regional Director, East and Central
China, Jacky Chung.
“This was the first time we’ve located the show in an outdoor public area for
business,” said Mr Chung. “We also wanted to position this at the higher brand
end, which is why we limited the show to about 40 premium companies, excluded
food exhibitors and held a VIP gala dinner prior to the opening.” Any Hong
Kong-registered company, of course, can take advantage of our Style Hong Kong
shows on the mainland.”
A Hong Kong fashion show highlighted the gala dinner, which took place at The
Peninsula Shanghai and was attended by senior Shanghai government officials,
major buyers, the media and exhibitors. HKTDC Chairman Jack So was guest of
honour. HKTDC Executive Director Fred Lam also attended, along with event
ambassador and Hong Kong entertainer Leo Ku and celebrity model Kathy Chow.
Urban Oasis in Shanghai
www.Fashion.com.hk, a fashion accessories company, was among the 40
lifestyle exhibitors at Style Hong Kong Show in Shanghai
More than 120,000 people took in the show. Products on offer ranged from fashion
and fashion accessories to houseware, beauty products and other lifestyle
The show’s appealing, open-air setting alongside the busy pedestrian walkway
helped drive traffic. So, too, did the live entertainment, the massive screens
that flanked the show stage at the front of the venue and the airy design, with
its smart white-and-green color scheme and flowing use of space. “An urban
oasis,” was how Mr Chung described the setting.
Exhibitors responded enthusiastically to the concept. “I think the image and the
design are the best yet. I know the HKTDC has invested a lot in this show,” said
Michael Li, Deputy Director of Hong Kong jewellery company La Milky Way.
“It’s a very public venue, a bold move to hold the fair outdoors. So many
people, so much brand exposure for us,” said Blanc de Chine Chief Operating
Officer Davie Mok, who was dressed in his company’s signature zhong shan suit
and white shirt with mandarin collar.
Mr Mok said Blanc de Chine was at the show “because of the HKTDC network. They
have been promoting Hong Kong brands aggressively in China, and we want to
leverage on their network and their connections.”
Shanghai Expo 2010 Boost
Blanc de Chine Chief
Operating Officer Davie Mok says his company hopes to open a shop in Shanghai
within the year
Mr Mok said it was the right time to turn
to the mainland. “After the success of the Beijing Olympics, Chinese pride in
its culture is growing. Chinese people are turning to their cultural roots, and
our brand translates those roots into a modern sensibility.”
He is also counting on a boost from Expo 2010 Shanghai, “taking advantage of all
the tourists here and the mainlanders from other Chinese provinces.”
Mr Mok said the company hopes to have a shop in Shanghai in the coming year. “We
feel that eventually, inevitably, China will be our biggest market, so we are
here looking for business partners.”
During the show, the HKTDC arranged more than 100 business-matching meetings
between exhibitors and Shanghai distributors and department stores. “If I’m a
department store, I’m looking for more good tenants. And if I’m a Hong Kong
brand hoping to do business here, I need a base in Shanghai. We are working to
put the two together,” said Mr Chung.
China’s Top Tourist Street
"I’ve been to every Style Hong Kong
fair in China,” says CPJ Ltd Managing Director Matthew Chow, a producer and
retailer of leather handbags. “China is the future,” he says
CPJ Ltd Managing Director Matthew Chow said he had met with department stores
already, “exchanging ideas,” and that the show’s central location, “on the best
tourist street in China in terms of traffic and shop rentals,” was giving him
plenty of feedback. “We are getting to know what people here want, and at what
Mr Chow, whose second-generation leather business features five brands of
leather bags, was at the show promoting his Charming Pop label, one of the
company’s high-end brands.
“China is the future,” said Mr Chow, when asked why he had joined the Shanghai
show. “I’ve been to every Style Hong Kong fair in China, and I’ll be going to
Jinan next week,” he said. (Style Hong Kong Show in Jinan takes place, 22-26
October, at the Jinan Shungeng International Convention and Exhibition Center.)
“I’m following the HKTDC, and I’m learning a lot from these fairs,” added Mr
Other exhibitors voiced similar sentiments, with Silver Trading Company
Marketing Director Victor Chang saying he was learning about the Shanghai
market. “It’s very close to Hong Kong in that the Shanghai consumer prefers
global brands, but here they also look to Hong Kong brands like mine. Mr Chang
designs and manufactures watches in Hong Kong under the MA˚AM brand. “This
exhibition,” he said, “shows Shanghai people that our products are really about
design and high style.”
It also underlines the opportunities available for Hong Kong companies,
according to La Milky Way’s Mr Li. “The Shanghai department stores and retailers
are coming to the show to look for good brands. It’s the best way to test the
market and develop the brand in China.”
Hong Kong Community in Shanghai
Alongside the Style Hong Kong Show, the HKTDC and the Hong Kong Government put
together the first Hong Kong Community in Shanghai Joint Promotion Scheme. The
program is part of Hong Kong Week, an event showcasing Hong Kong creative
talent, 18-22 October. More than 100 Hong Kong companies representing over 600
shops and outlets in Shanghai are taking part, supporting the Style Hong Kong
show through a variety of in-shop promotions.
“You can see the promotions everywhere in Shanghai,” said the HKTDC’s Mr Chung.
The idea, he added, is to feature Hong Kong’s role in Shanghai life. “There are
many such elements in Shanghai. It’s all part of our efforts to help Hong Kong
companies brand-build their products and enhance their image – in Shanghai and
Sept 1 2010
Surveyed 450 Hong Kong Business Executives 65% plan to increase hiring in the
third quarter of 2010
A poll of nearly 450 executives across key business sectors in Hong Kong
found 65 per cent plan to increase hiring in the third quarter of 2010, compared
with 59 per cent in the second quarter, according to global recruitment and
talent management firm Hudson. It is the strongest burst of confidence ever
recorded in one survey period since 1998, when the firm began collecting such
data, published in The Hudson Report.
The latest survey, conducted in May, revealed expectations almost three times
higher than a year ago, with most businesses planning to increase headcount, and
many finding they must offer substantial salary increases to dissuade top talent
The study also found the city is attracting the region’s best talent. Employers
in Hong Kong were less likely to receive refusals when making job offers than in
the other markets surveyed in Asia.
James Carss, Executive General Manager, Hong Kong, Hudson, said the upward trend
was steady. “Even after several quarters of rapid growth, expectations continue
to rise and are now at the highest level ever recorded by The Hudson Report.
However, in a buoyant job market, employers must offer competitive salaries to
retain key talent.”
He said confidence had returned among blue chip companies and SMEs alike. “Hong
Kong has proven once again its resilience to tough times and ability to bounce
back after recession. Hong Kong is an excellent place to grow and develop
organisations, [as] the infrastructure and environment are extremely conducive
Hong Kong's Business Confidence
Across the Board
HSBC’s latest Small-Business Confidence Survey shows that confidence among SMEs
across Asia, including Hong Kong, has reached pre-financial crisis levels since
the rebound began in the fourth quarter of 2009. It showed the majority (64 per
cent) of Hong Kong SMEs hold a stable, positive outlook on the local economy.
The bank’s survey noted that 44 per cent of SMEs in Hong Kong are international
– a figure expected to rise to 48 per cent in the next two years. Almost
one-third (29 per cent) of Hong Kong SMEs have a renminbi trade account to
prepare for more transactions in the Chinese mainland currency, reflecting the
mainland’s growing influence on global trade. HSBC said this number will rise to
nearly half (48 per cent) in the next 12 months. It also found one in 10 SMEs
are recruiting, and almost one-third are planning to raise their capital
“Hong Kong’s GDP growth forecast for
2010 is 5.4 per cent,” said Lena Chan, HSBC Managing Director and Head of
Business Banking for Hong Kong. “We expect Hong Kong’s economy to stay resilient
for the rest of this year, mainly driven by domestic demand, although exports of
goods will also pick up.” She added that Hong Kong’s exports maintained strong
growth, rising more than 24 per cent on the year in May, thanks to growing
Hong Kong a ‘Significant Advantage’
Another survey, the UPS Asia Business Monitor 2010, noted that Hong Kong’s
convenient location for the mainland and the region, places Hong Kong SMEs at a
significant advantage. This year, 66 per cent of Hong Kong SMEs’ business is
conducted within the Asia Pacific region, as opposed to Europe at 19 per cent,
North America at 11 per cent and Latin America at two per cent. Among Hong Kong
SMEs polled by UPS, 41 per cent plan to expand further into Asia over the next
Derek Woodward, UPS Asia Pacific
President, said SMEs were on the “brink of new opportunities” in Asia and keen
to expand their businesses in the region. He added UPS itself was strengthening
its position in Hong Kong following an increase in cargo volumes. Starting this
month, the company would add a larger capacity freighter aircraft to its Hong
Kong-United States route.
Among Hong Kong SMEs in the UPS survey, most said their financial concerns have
“Concerns related to financing are yesterday's problem,” said KK Leung, Managing
Director of UPS Hong Kong and Macau. “The cash situation has improved vastly in
2010, with the number of SMEs seeing no financial issues, nearly doubling. More
than 60 per cent of Hong Kong SMEs reported that they have no difficulties in
financing their business, which is a significant improvement from the mere 33
per cent who shared the same view last year.”
As financial fears subside, SMEs are
refocusing on growing their headcount. The number of respondents who plan to
increase their workforce has more than tripled, from six percent in 2009 to 20
percent this year, according to the UPS research.
Collectively, these survey results are good news for business. Shaun Wallis,
Global Head of Business Management, Commercial Banking, HSBC, said SME
confidence is a good market barometer.
“SMEs are close to the heartbeat of the local economy and thus it is good to see
that Hong Kong businesses are showing steady signs of recovery,” he said. “SMEs
are, by nature, always running at essential staff levels. Unlike larger
organisations, they are unlikely to make big changes to staff numbers in good
times or bad. The fact that there are more SMEs that are planning to keep or
increase staff rather than decrease staff is a positive sign for this sector.”
Hong Kong SAR Passport holders have granted visa-free access or visa-on-arrival
by 140 Countries
Kong SAR Passport holders have granted visa-free access or visa-on-arrival by
140 Countries - The Government of the Hong Kong Special Administrative Region (HKSAR)
said Friday, with immediate effect, HKSAR passport holders visiting Myanmar
would be issued a tourist visa for a stay of up to 28 days on arrival at the
international airports in Yangon and Mandalay.
The announcement came after the government received formal notification from the
Consulate General of the Union of Myanmar in Hong Kong. "We welcome this
notification by the local Consulate General of the Union of Myanmar," a
government spokesman said. At present, 140 countries/territories have granted
visa-free access or visa-on-arrival to HKSAR passport holders.
May 27 2010
Hong Kong signs latest CEPA deals with China - CEPA boosts six pillar industries
- Doctors and architects among professionals to benefit in latest agreement Share
Financial Secretary John Tsang Chun-wah
(left) and the Vice-Minister of Commerce Jiang Zengwei (right), exchange
documents after signing the seventh supplement to the Closer Economic
Partnership Arrangement (CEPA) on Thursday.
The seventh supplement to the Closer Economic Partnership Arrangement (Cepa)
between Hong Kong and the mainland, was signed at the Central Government Offices
in Hong Kong on Thursday.
The supplement was signed by Financial Secretary John Tsang Chun-wah and China's
Vice-Minister of Commerce Jiang Zengwei, with Chief Executive Donald Tsang Yam-kuen
and other guests as witnesses.
Thirty five measures will come into effect next year to improve cross-border
trade. The new supplement also relaxes market access conditions in 14 service
sectors, such as medical services, tourism, banking and air transportation.
The supplement will enable Hong Kong service industries to develop in the
mainland market and allow professional exchanges between the two sides.
Financial Secretary John Tsang,
Chief Executive Donald Tsang Yam-kuen, Vice-Minister of Commerce Jiang Zengwei
and the deputy director of the Hong Kong and Macau Affairs Office, Zhou Bo, at
the signing ceremony.
Government efforts to foster six new
pillar industries will receive a major boost when an enhanced free-trade pact
between Hong Kong and the mainland kicks in next year.
A diverse range of professionals, including architects, doctors and book
sellers, will have easier access to the market across the border.
Highlighted in the seventh edition of the Closer Economic Partnership
Arrangement, or Cepa, are concessions allowing Hong Kong businesses and
professionals to establish wholly-owned hospitals in Shanghai, Chongqing,
Guangdong, Fujian and Hainan, as well as related facilities.
Registered health care professionals such as doctors, nurses and midwives,
currently numbering more than 76,000, will also be able to practise on the
mainland for up to three years at a time.
The new arrangement allows accredited companies in Hong Kong to test products
according to the China Compulsory Certification System. There are about 300
companies that can do product testing in Hong Kong and about half of them are
accredited by the government.
Medical services and product testing are two of the new economic pillars the
government hopes will help diversify the city's economy. The other sectors are
education, environmental industries, innovation and technology, cultural and
creative industries, and food safety.
The new arrangement was signed in Hong Kong yesterday by Financial Secretary
John Tsang Chun-wah and Vice-Minister of Commerce Jiang Zengwei. It will take
effect on January 1. It includes 35 measures aimed at fostering trade and
investment in 19 sectors. Of the measures, 27 focus on liberalising the mainland
market in 14 service sectors.
Permanent residents of Hong Kong will be able to set up shop on the mainland
offering wedding services and veterinary help. Other possibilities include
renting out comic books and video games.
And Hong Kong companies can sell locally published books that are cleared for
sale on the mainland.
Banks in Hong Kong that already have a profitable mainland presence can apply to
do yuan business and small-company financing while plans are under way to launch
open-end, index-tracking, exchange-traded funds based on Hong Kong-listed stocks
on the mainland.
It will also be easier for Hong Kong architects and structural engineers
qualified on the mainland to work and set up shop across the border.
Tourism benefits from the arrangement with a pilot scheme allowing Hong Kong
travel agents in Beijing and Shanghai to sell residents of the two mainland
cities group tours to Hong Kong and Macau.
Seven years ago, Hong Kong secured exclusive and early access to the mainland
market via Cepa. The free-trade pact came into effect on January 1, 2004, and
paved the way for zero import tariffs for Hong Kong products and preferential
treatment for many service sectors.
While many in the business community welcomed the latest measures, some want
more to be done to improve the implementation of Cepa to help reduce red tape
and other market restrictions. Some insiders in the Hong Kong General Chamber of
Commerce believe the free-trade pact may have run its course after seven years
as implementation remains a major challenge.
Private orthopaedic specialist Dr Ko Wing-man welcomed the measures but said
many in the hospital management business were now focused on local
"I am sure there will be investors interested in running hospitals on the
mainland but they may not hire Hong Kong doctors," Ko said.
Some of the new provisions
* Hong Kong architects and structural engineers registered on the mainland can
be partners in setting up construction and engineering offices
* Companies can set up wholly-owned hospitals in Shanghai, Chongqing, Guangdong,
Fujian and Hainan
* Product testing labs can offer services under the China Compulsory
* Companies can set up wholly-owned specialty design as well as audio and video
* Hong Kong companies can distribute authorized books published in Hong Kong
* Relaxed operation and profitability requirements for Hong Kong banks setting
up wholly-owned mainland branches
* Launch of exchange-traded funds based on Hong Kong-listed stocks
* Companies can operate wholly-owned welfare agencies for the elderly and
* Pilot scheme allowing Hong Kong travel agents in Beijing and Shanghai to offer
group tours to Hong Kong and Macau
More information on Cepa is available on the Trade and Industry Department’s
May 21 2010
Hong Kong overtakes United States as
top business-friendly economy
Hong Kong and Singapore are the world’s
most competitive economies, an annual survey said on Friday, demoting the United
States from the top spot for the first time since 1993.
The study lists 58 economies according to 328 criteria that measure how the
nations create and maintain conditions favorable to businesses – a formula that
had favored the US for 16 years.
“They are so close in the rankings, that it would be probably better to define
them as a leading trio,” said Stephane Garelli, professor at the Lausanne,
Switzerland-based IMD business school, publisher of the World Competitiveness
Despite high unemployment and debt, and continued market instability, the United
States was better placed than European nations and others to attract new
investments and help companies grow.
“The US has weathered the risk of the financial and economic crises thanks to
the sheer size of its economy, a stronger leadership in business and an
unmatched supremacy in technology,” Garelli said.
Switzerland and Australia rounded out the top five. Then came Sweden, Canada,
Taiwan, Norway and Malaysia.
Mainland continued its rise in the survey, reaching 18th and highlighting that
it is no longer dependent on foreign markets buying up its cheap exports. It led
fellow emerging economies India, 31; Brazil, 38; and Russia, 51.
Debt-laden Greece actually improved in the ranking this year, rising six places
Venezuela ranked last for the fifth year in a row, preceded by Ukraine, Romania,
Argentina and Croatia.
May 19 2010
US Secretary of Commerce Gary Locke
speaks at a business luncheon co-organized by the Hong Kong Trade Development
Green-energy solutions, according to US
Secretary of Commerce Gary Locke, are the “defining challenge of our time.” Mr
Locke kicked off the start of his clean-energy trade mission in Hong Kong last
week addressing a group of 500 business leaders at a luncheon organised by the
Hong Kong Trade Development Council and the American Chamber of Commerce in Hong
“I want to talk about how the development of the clean energy and
energy-efficiency technology that we need to curb greenhouse-gas emissions could
spur one of the greatest economic opportunities of the 21st century,” he said.
The decision to make Hong Kong the mission’s first stop highlights Hong Kong’s
role as a key partner for American companies looking to introduce their
technology to the Chinese mainland.
“There is no question that Hong Kong has worked hard to become a welcoming place
for investment and innovation,” Mr Locke said. “It has an efficient, transparent
legal system that offers rigorous intellectual property-rights protection and an
open government procurement process.
“When an American clean-energy company finds success here in Hong Kong and on
the mainland, it creates economic value throughout the supply chain here in Hong
Kong, on the mainland and in manufacturing towns across the US,” he said.
Mr Locke’s clean-energy mission to China is the first cabinet-level trade
mission of the Obama administration. From Hong Kong, the 10-day mission moves on
to Shanghai, Beijing and Jakarta, Indonesia. Twenty-four leading US firms with
“cutting-edge solutions,” including the Boeing Company, DuPont and General
Electric, are seeking export opportunities for their technology in clean energy,
energy efficiency, and electric energy storage, transmission and distribution.
Lam talks trade with the US
Commerce Secretary at a luncheon organised by the HKTDC and the American Chamber
of Commerce in Hong Kong
US Secretary of Commerce Gary Locke
checks out a MyCar during his Hong Kong visit
DuPont has already made inroads in the region by partnering with Hong Kong and
the mainland, basing its thin-film photovoltaic research centre at the Hong Kong
Science and Technology Park and a manufacturing centre in neighbouring Shenzhen.
“Many US companies look to take advantage of the strengths Hong Kong has to
offer as well as Hong Kong companies’ expertise and experience on the mainland,
to enter that dynamic market,” Mr Locke noted.
The Asian trade mission builds on US President Barack Obama’s economic
initiative to double American exports by 2015, and takes advantage of
opportunities in the Central Government’s policy of promoting clean energy in
industries. The Pearl River Delta region is a key market for clean-energy
technology, thanks to the Hong Kong and Guangdong Cleaner Production Partnership
Programme, which offers subsidies to upgrade industrial plants in the region. Mr
Locke said mission delegates have scheduled 75 one-on-one business meetings in
“You have come to the right place,” Hong Kong Secretary for the Environment
Edward Yau told the US delegation at a Clean Energy Forum held prior to the
luncheon. “Hong Kong has positioned herself as a green city that strives to work
with our neighbouring province, Guangdong, to build a Green Pearl River Delta
that will become the greenest part of our nation.”
Electric Car Deal
EuAuto Technology seals a deal with
US automaker GreenTech Automotive to take Hong Kong’s home-grown electric
vehicle mycar to the US market
Hong Kong’s first home-grown electric vehicle, mycar, meanwhile, is poised to
hit the US market after a deal was signed between Hong Kong company EuAuto
Technology Ltd and US automaker GreenTech Automotive during Mr Locke’s Hong Kong
visit. EuAuto Technology and Hong Kong Polytechnic University jointly developed
mycar, which launched in Hong Kong and in Europe last year. At last week’s
event, EuAuto also signed a deal with Denmark to supply rental electric cars for
tourists visiting the country’s Bornholm Island.
May 12 2010
CAFTA and Hong Kong
CAFTA has led to better economy of
scale between the Chinese mainland and ASEAN
Although Hong Kong’s trade with members of the Association of Southeast Asian
Nations (ASEAN) shrank last year, traders can count on good news in the
developing relationship between the trade bloc and the Chinese mainland under
the fully formed China-ASEAN Free Trade Area (CAFTA).
Hong Kong manufacturers on the mainland can benefit from CAFTA’s zero-tariff
treatment, and their costs of importing ASEAN products such as rubber and
plastics will also be lower.
The 2010 CAFTA deal is also expected to further promote China-ASEAN and
intra-Asia trade. Asia’s position as a more integrated production base for the
global supply chain will help attract foreign investment. Hong Kong could
benefit, as a popular choice for regional headquarters and as a service
Trade in Transition
Under CAFTA’s origin rules, consigned
products transhipped through a non-CAFTA territory such as Hong Kong, are
entitled to preferential tariff agreement
The more debatable aspect of CAFTA stems from the fact that Hong Kong is not a
member, and so could see a gradual shrinking of trade links as a third party.
But the fact is that over the past 20 years, China-ASEAN trade has changed
dramatically, with Chinese exports to ASEAN now including value items such as
electrical machinery and machinery, ships and boats, as well as minerals and
fuels, optical and medical instruments, iron and steel, textiles and footwear.
Those trade categories continue to grow wider and deeper.
By comparison, China’s imports from ASEAN are less diversified, mainly
consisting of electrical and other machinery, minerals and fuels, plastics, fats
and oils, rubber and organic chemicals. More than 60 per cent of China’s imports
in 2008 were electrical and other machinery, compared to a 26 per cent share in
To date, Hong Kong has generally benefited from the flourishing trade between
China and ASEAN, thanks to its strategic location, excellent transportation
network and business infrastructure. Although Hong Kong’s trade with ASEAN
shrank by 12 per cent year-on-year in 2009 – with exports and imports declining
by 17 per cent and 10 per cent, respectively, over the same period – there was
double-digit export growth over preceding years.
Although Hong Kong’s trade with
ASEAN shrank by 12 per cent year-on-year in 2009, there was double-digit growth
over preceding years
While CAFTA has led to better economies of scale between China and ASEAN – with
lower production costs, higher efficiency and economic growth – there are
concerns that Hong Kong could suffer from trade diversion. Though CAFTA members
are expected to benefit, logic dictates that trade with non-members could
decline due to CAFTA’s tendency toward member preference.
The mainland and ASEAN are Hong Kong’s largest and third-largest trading
partners respectively. About half of Hong Kong’s exports go to the mainland and
Hong Kong remains the mainland’s largest source of inward foreign direct
Since the bulk of Hong Kong manufacturing takes place on the mainland, CAFTA’s
import tariff cuts will be extended to Hong Kong manufacturers so long as they
comply with the required country-of-origin rules. The big question is the extent
to which trade diversion will take place where it comes to Hong Kong’s major
exports to CAFTA.
Given the CAFTA tariff cuts, most of the trade volume growth can be expected in
direct trade between China and ASEAN. That could well mean a shrinking share of
re-export trades via Hong Kong.
But the picture is not entirely cut-and-dried. If one compares the compound
annual growth rate (CAGR) differential between 2002 and 2005 and between 2006
and 2008 (when CAFTA tariff cuts were implemented), a different picture emerges.
The average annual growth of total China-ASEAN trade was 23 per cent from 2002
to 2005, and dropped to a CAGR of 20 per cent during the period 2006 to 2008.
This highlights the fact that China-ASEAN trade didn’t pick up significantly in
the first three years after CAFTA tariff cuts were implemented.
Nonetheless, Chinese exports to ASEAN rose between 2006 and 2008, with CAGR
surging from 20 per cent in the four years to 2005 to 27 per cent in the three
years to 2008.
Meanwhile, Hong Kong posted double-digit growth in both its trade with ASEAN or
re-exports of China-origin to ASEAN in the period 2002 through 2008. Broadly
stated, CAFTA tariff cuts introduced from July 2005 did not lead to any
substantial, adverse trade diversion during that period. (This analysis
purposely excludes 2009, because international trade was severely disrupted by
the global economic downturn.)
CAFTA Impact Minimal
Looking at electrical machinery, the CAGR differentials between 2002 and 2005
and between 2006 and 2008 were marginal. Hong Kong’s re-exports of electrical
machinery originating from the mainland grew from a CAGR of less than eight per
cent during the 1997-2005 years to 13 per cent during the three years to 2008.
Meanwhile, the CAGR for Hong Kong’s electrical machinery exports (of all
origins) to ASEAN stood at 11 per cent and 15 per cent, respectively, for the
periods 2002 to 2005 and 2006 to 2008, contrasting with CAGRs of 13 per cent for
the corresponding re-exports of China-originated items to ASEAN.
Using this yardstick, it appears that Hong Kong’s exports to ASEAN countries
registered double-digit growth, irrespective of the country-of-origin. The
strong performance of Hong Kong’s electrical machinery exports to ASEAN through
2002-2008, including mainland-originated items, was tied to the upswing in the
global semiconductor and electronics cycle since 2002.
The surge in sales of electronics, semiconductors and IT products owes much to
the World Trade Organization’s Information Technology Agreement (ITA), which
took effect in 1997. The ITA includes such items as telecom equipment, computer
software and electrical components.
Next comes the important question of the mode of transhipment and whether Hong
Kong can benefit. Under CAFTA’s origin rules, consigned products transhipped
rather than re-exported through a non-CAFTA territory like Hong Kong are
entitled to preferential tariff treatment.
Since airfreight covers relatively time-sensitive items, many of which are
electronics and telecom products and related parts that are subject to zero
import-tariffs, there is no need to convert re-exports of these products to
Predictably, airborne cargo, which features prominently in intra-Asia and Hong
Kong-ASEAN trade, should largely follow the trend of re-exports through the
period 2002 to 2008.
Sea cargo transhipment has been a key driver of Hong Kong’s recent sea-cargo
growth, accounting for roughly two-thirds of the sea cargo processed in Hong
Kong. It is worth noting that the CAGR for sea-cargo transhipment of
China-origin increased between the two periods, meaning that Hong Kong has not
lost out to mainland imports following the CAFTA cuts.
In fact, as CAFTA further strengthens Asia’s role as a production base for the
global supply chain, Hong Kong manufacturers should stand to be net
Tariff Cuts on Track
Under CAFTA’s Trade in Goods Agreement, both the Chinese mainland and ASEAN
started to reduce import tariffs from July 2005. As of January 2010, the
five-year tariff reduction schedule was entirely phased in, signifying the
completion of CAFTA, while creating the world’s largest free trade area by
population (1.9 billion), covering 11 Asian countries.
With a combined GDP of about US$6 trillion, CAFTA trails only the European Union
and the North American Free Trade Agreement in terms of GDP. The International
Monetary Fund estimates that more than half of the trade conducted by Asian
economies is intra-regional, with an even higher ratio for trade in components
and parts, and CAFTA is seen as an important step to expanding pluralistic trade
in the region.
With CAFTA, import tariffs on traded items on a “normal track” have been reduced
in four phases (2005, 2007, 2009 and 2010) for the six original members of
ASEAN. Known as the ASEAN-6, those nations are Brunei, Indonesia, Malaysia, the
Philippines, Singapore and Thailand.
Tariff reductions on selected “sensitive track” items are to be eliminated by
2018. In 2010, the average tariff on ASEAN-origin exports to China has been
lowered to 0.1 per cent, while the average tariff on China-origin exports to the
ASEAN-6 has been slashed to 0.6 per cent.
While about 7,000 items traded between China and ASEAN are currently zero-rated,
by 2015 the zero-tariff rate for 90 per cent of traded goods is expected to
apply between China and the four new ASEAN members – Cambodia, Laos, Myanmar and
China-ASEAN trade shrank by eight per cent year-on-year to hit US$212 billion in
2009 owing to the global financial downturn, but trade with ASEAN represented
close to one-tenth of China’s total trade for the same period. ASEAN is China’s
fourth-largest trade partner, while China is ASEAN’s third-largest trade
Prior to 2009, China-ASEAN trade rose quickly, with bilateral trade growing by
about 24 per cent annually from 2003-2008, to a total of US$231 billion in 2008,
nearly triple the 2003 level of US$78 billion.
April 27 2010
FCm Travel Solutions’ Executive General Manager, Greater China
Australian-listed travel company Flight Centre Ltd (FCL) has taken off in Asia
since setting up a Hong Kong regional base in 2002. Best known for its
distinctive Flight Centre retail brand, FCL is one of the world’s fastest
growing groups servicing business and leisure travellers. It has a network of
more than 2,000 stores and 13,000 staff worldwide, operating through 15 retail,
corporate and wholesale brands.
David Fraser was at the helm when FCL entered the market by acquiring a leading
Hong Kong travel management company with more than 40 years’ experience. FCL
rebranded the new business as FCm Travel Solutions Hong Kong.
The new company offered local businesses access to a broader range of
travel-management solutions in addition to worldwide reach, negotiating strength
and 24/7 emergency support. The business was now poised to take off on the
Mr Fraser, who is Executive General Manager, Greater China, says expansion into
Hong Kong had always been part of the company’s strategy to develop its
corporate travel business globally. “Hong Kong has long been recognised as a
growing market for our customers and their corporate travel needs,” he says.
Trade Fairs Mean Business
Kong base has played an integral role in developing the company’s Greater China
The business was set up to serve the corporate-travel segment, and Mr Fraser
says Hong Kong’s expertise at staging trade fairs was a major draw card.
“Hong Kong is a fantastic destination for trade fairs and exhibitions, and also
has great facilities and services for these events. This is something that many
sectors in the travel industry and the broader economy definitely benefit from.”
FCm Hong Kong has since played an integral role in developing the brand’s
Greater China business, which includes operations in Beijing, Shanghai and
Guangzhou. “Through this network we can service local companies with travel
needs throughout Greater China and the world,” he says.
In April 2009, FCm bolstered its position on the mainland by becoming one of the
first wholly owned foreign travel companies to establish an international
ticketing agency in Beijing.
Late in 2009, parent company FCL expanded its signature Flight Centre retail
brand to Greater China, targeting expatriate and returned overseas-Chinese
leisure travellers. “This gave our clients the added benefit of a specialist
leisure provider with an extensive breadth and depth of travel product at
globally competitive rates,” says Mr Fraser.
Early this year, FCm Hong Kong launched a specialist conference and incentive
brand, CiEvents, to offer local clients event-management services.
Platform to China
distinctive Flight Centre
“We have recognized Hong Kong as a strategic market for long-term expansion due
to the strong growth of the local corporate-travel market and the fact that it
is becoming more educated in strategic travel management. We see the growth of
our network and services as essential to meeting the needs of local businesses.”
Hong Kong, he adds, provides a good legal and regulatory framework for entry
into the mainland market and ownership there, while Hong Kong’s Closer Economic
Partnership Arrangement (CEPA) with the mainland enables Hong Kong travel agents
to own and operate agencies on the mainland. “We have found it easier to create
a Greater China regional office in Hong Kong for these reasons. Importantly, it
is also easier to recruit quality and experienced staff in Hong Kong, which is
essential to our service capabilities and standards.”
With record numbers of mainland Chinese travelling for business and leisure, Mr
Fraser sees sunny skies ahead for his company. He says Hong Kong “will continue
to be a key base for FCm’s long-term investment in mainland China.”
April 10 2010
Key role for Tung Chee Hwa as the go-between - Ex-chief executive's 'quiet
diplomacy' valued in Washington and Beijing Share
Tung Chee-hwa, the former
shipping tycoon who became Hong Kong's first chief executive, is back.
Five years after he resigned, citing poor health but following a turbulent reign
which culminated in a 500,000-strong mass protest, he has managed to forge an
intriguing role as an elder statesman involved in Sino-US and cross-strait
Tung last week hosted US Treasury Secretary Timothy Geithner and then former US
President George W. Bush during their flying visits to Hong Kong. Next month he
is almost certain to catch up with another American, Commerce Secretary Gary
Locke, who will pass through Hong Kong heading a trade delegation en route to
Tung was also visible during US
President Barack Obama's first state visit to Beijing last November.
The Beijing loyalist met Locke, the first Chinese-American state governor and
just the second appointed to a presidential cabinet, last year during one of his
regular forays to Washington and New York.
As well as chairing the Hong Kong-based China-United States Exchange Foundation
he created two years ago, he maintains links with Harvard University's Asia
Centre and close ties to the New York-based Committee of 100, an influential
grouping of Chinese Americans prominent in business, politics and the arts.
Closer to home, Tung became the chief director of the newly founded Hong Kong
Association for the Promotion of Peaceful Reunification of China, along with
other Beijing loyalists, which seeks to promote reconcilliation between Taiwan
and the mainland.
Chan Wing-kee, a Hong Kong delegate to the Chinese People's Political
Consultative Conference, said Tung's long-time personal connections allowed him
to be an unofficial bridge between China and the US.
"He is neither an official representative nor an ordinary person," Chan said.
"His special roles as a former chief executive of Hong Kong and a CPPCC
vice-chairman give him flexibility to build ties with political and business
sectors in the US. There are many channels for US-China communications. He is
certainly one of the channels."
Just like his father, Tung
Hao-yung, founder of the Orient Overseas Container Line, who forged ties with US
presidents Gerald Ford, Jimmy Carter and George H. W. Bush, Tung maintains both
Republican and Democrat connections as well expansive business relationships.
Elaine Chao, labour secretary in George W. Bush's cabinet, is considered a close
"As a networker, he is the consummate operator and still moves in the upper
stratosphere of both cities (Washington and Beijing)," said one person long
familiar with Tung's connections. "I'm not sure Hong Kong people really
appreciate it but he was at it long before he got the chief executive job and he
continued it after he left office ... he doesn't just rely on old connections,
but he keeps himself very current.
"He has consciously positioned
himself as a go-between between Beijing and Washington ... he is close to
Beijing but he cares deeply about the relationship and believes he can play a
role, straddling both cultures."
A diplomat familiar with Tung's efforts described his "old school, backroom
skills". "He is very courtly and quietly offers a useful perspective ... he is
clearly loyal to Beijing but he still speaks as an outsider and the Americans
and others still find that useful. He is also ultra discreet, too, and that is
However, his discretion when dealing with the US is in marked contrast to his
recent visit to Taiwan, which drew wide media coverage. Despite positioning the
trip as a private one, he allowed cameras to film him sightseeing and speaking
at a luncheon hosted by the Straits Exchange Foundation chairman Chiang Pin-kung
- the island's top negotiator with the mainland.
Unlike other mainland officials whose trips see the outbreak of pro-independence
group protests, a relaxed Tung fronted Taiwan's press, talking about his
favorite steamed dumpling (xiaolongbao) restaurant in Taipei and his
appreciation of the island's high-speed railway. These scenes would seem
unimaginable for those in Hong Kong who remember Tung as the chief executive who
either remained silent or spoke sternly on thorny public issues.
During his one-week visit, Tung
also met Lien Chan, Kuomintang honorary chairman and former vice-president of
Taiwan, whom he described as "an old friend".
"Mr Tung's family has extremely close ties with Taiwan. Just look at the plum
blossom flower in the logo of Orient Overseas Container Line - it is the
national flower of the Republic of China. You can tell how profound the
relationship is," Chan said.
Tung's go-between role has increased because, while US administrations have
dramatically expanded direct connections with various arms of the Communist
Party, government and military in recent years, there is still the need for
other perspectives, particularly during times of tension.
It is often forgotten in the
wake of his troubled tenure that his range of international connections was a
key factor that put Tung in the running to become Hong Kong's first
post-handover chief executive.
Discontent with Tung's stewardship began growing almost from the day he took
over on July 1, 1997. First came the Asian financial crisis and controversial
approvals for developments such as Disneyland.
And despite his appointment for a second term in 2002, the criticism continued
with the administration's controversial decision to push for introduction of the
Article 23 legislation - laws relating to national security that critics said
would cripple free speech in Hong Kong.
Disapproval of Tung's leadership intensified with the government's response to
the Sars epidemic in early 2003.
All this culminated with one of the biggest demonstrations in the city's
history, when at least 500,000 people took to the streets.
Tung outlined his vision of the Sino-US relationship - "the most important
international relationship today" - in a speech in Hawaii at the 50th
anniversary of the East-West Centre think tank in February.
He also outlined his cultural perspectives, speaking of his pride in being a
Shanghai-born Chinese but also his "great admiration" for the American people.
"In 1960, I arrived in the United States and for the next nine years, I made
this country my home," he said. "I was married in the United States, I worked in
the United States, and began building a family in the United States."
While attempting to explain and justify China's military build-up and Beijing's
policies on Taiwan and Tibet, he repeatedly stressed the importance of an
enduring strategic trust between Beijing and Washington.
"This may be the hardest nut to crack in the history of mankind," he said. "But
it is worth our while to try every means to crack it ... we cannot afford to
bear the consequences of China and the United States becoming enemies.
"For the sake of our next generation and the interests of the whole world, we
must try our best. This requires vision, wisdom and courage." Reviewing current
strains including US arms sales to Taiwan, Sino-US tensions over Google, Tibet
and the value of the yuan, he said: First, "steady hands and cool heads" must be
allowed to manage the issues. Second, decisions on such issues must not be based
on "political expediency". Instead, a long-term view must dominate if strategic
trust were to be forged.
Jackie Hung Ling-yu, a former convenor of the Civil Human Rights Front who led
at least 500,000 protesters against the Tung administration in 2003, said Tung
would always be remembered for his controversial leadership in Hong Kong.
"I have no expectations of him," Hung said. "He didn't even defend 'one country,
two systems' during his office. What can we expect from him after he stepped
"I am most furious about him
seeking to have the National People's Congress Standing Committee interpret the
Basic Law in 1999. He also pushed forward the legislation on Article 23 against
the public's will. These are all bad precedents for the SAR government.
"His vice-chairmanship of the CPPCC is just a reward for his selling out
March 17 2010
The Show Must Go On
Held last week at the HKCEC, the
HKTDC Hong Kong International Jewellery Show is Asia’s largest spring trade fair
Hong Kong’s exhibition industry appears to have escaped the worst of the global
economic downturn, according to an economic impact study commissioned by the
Hong Kong Exhibition and Convention Industry Association (HKECIA).
The industry contributed some HK$30 billion to the local economy in 2008 and
created the equivalent of 61,000 full-time jobs, the biennial study shows. It
also generated close to HK$1 billion in taxes.
“This report is a valuable reminder that Hong Kong’s exhibition industry has an
important role to play in Hong Kong’s prosperity,” observes HKECIA Chairman
Stanley Chu. The industry's contribution to the economy in 2008 was 14 per cent
higher than in 2006. Mr Chu describes this as “a remarkable accomplishment” in
such a challenging economic climate.
“The report’s findings are also a powerful reminder that we must keep
formulating new growth strategies for the long-term success of both the industry
and Hong Kong,” he says.
Sourcing Still Strong
The study, conducted by KPMG Transaction Advisory Services Ltd, indicates that
strong sourcing activities and consumer demand on the Chinese mainland and in
other Asian markets continue to fuel the growth of Hong Kong's exhibition
industry. As such, Hong Kong is expected to remain the region’s pre-eminent
There has been no noticeable impact of competition from the Chinese mainland or
other countries in the region, largely due to the different positions and
strategies used by those markets.
In addition to its role as a base for mainland exports, the report says, Hong
Kong should also develop as an import platform for the mainland market by
holding more exhibitions targeted at mainland buyers.
The study projects that business-to-consumer (B2C) shows targeting mainland
visitors will play an increasingly important role in future. In recent years,
B2C shows have attracted growing numbers of visitors from the mainland. These
numbers are expected to rise sharply when the Hong Kong-Zhuhai-Macau Bridge and
the Guangzhou-Shenzhen-Hong Kong Express Rail Link are completed.
It adds that sourcing activities on the mainland remain strong, particularly in
southern China, while the number of international companies seeking to introduce
their products to the mainland and Asia via Hong Kong continues to grow.
The report is good news for the city’s primary exhibition venues, the Hong Kong
Convention and Exhibition Centre (HKCEC) and AsiaWorld-Expo. Both posted strong
results and continued to grow through the downturn.
Venues a Draw Card
Sandy Angus, Chairman, Montgomery
The excellence of these two venues is a factor in London’s Montgomery Worldwide,
one of the world’s most respected organisers of trade exhibitions and specialist
business events, ramping up its work in Hong Kong. Montgomery Worldwide Chairman
Sandy Angus says the company had been involved in Asia before and felt “the
timing was right to return to this very exciting market.”
“Hong Kong is a major Asian hub with huge amounts of opportunity as a city in
its own right, as well as being the gateway to investment into China and East
Asia,” he says. “This, combined with high growth rates, state-of-the-art venues,
access to a very international audience and general ease of doing business,
makes this a very favourable city to run events in.”
Montgomery is a joint-venture partner in Asian Art Fairs, which runs ART HK –
the Hong Kong International Art Fair. The fledgling event has quickly
demonstrated the huge potential that Hong Kong offers in both a local and
international context, Mr Angus says.
“The fair has grown exponentially since its inception in 2008, and this May, it
will be over 7,000 square metres in size. In addition to the fair, we are also
consulting on the West Kowloon project, and we hope that both will help Hong
Kong further establish itself as the arts and cultural capital of Asia.”
He adds that Montgomery Worldwide will continue to expand in Hong Kong,
leveraging the city as a springboard to develop its mainland business.
HKCEC Managing Director Cliff Wallace
says the exhibition industry in Hong Kong suffered no major decline as a result
of the economic downturn.
“A clear indication of this is the business experienced by the HKCEC during the
last half of 2009, compared with the same period in 2008,” he says. “There was
an increase of 26.9 per cent in space rented in the HKCEC and an increase of
27.3 per cent in venue revenues attributable to exhibitions.”
Space for this additional business demand was provided, in part, by the HKCEC’s
second expansion, which opened in April 2009, bringing the centre’s total
rentable exhibition and meeting space to 91,500 square metres.
Mr Wallace says organisers were cautious, noting “some slight decreases in
attendance for some fairs during the period.” But the quality of exhibitions in
Hong Kong continued to draw the most active buyers and exhibitors, so that many
shows actually grew during the downturn, albeit at a slower rate.
“The fact that Hong Kong exhibitions continued to grow even during the recession
is a solid stamp of approval for the high quality of these events, as well as
the friendly business environment and reasonable cost of accommodation in the
city,” Mr Wallace says.
“The past six months of experience and the return to major growth rates of many
of the exhibitions in Hong Kong suggest that buying is increasing, and an
increase in manufacturing will follow. As GDP climbs, so will the industry. We
are projecting that the fiscal year ending 30 June and calendar year 2010 will
be record periods for the exhibition industry in Hong Kong as well as for the
HKCEC’s overall business.”
Meeting Today’s Needs
The biggest-ever China Sourcing
Fair, Electronics & Components, at AsiaWorld-Expo
In 2008, international trade fairs at AsiaWorld-Expo accounted for close to 30
per cent of Hong Kong’s trade exhibition market. In economic terms, it
contributed an estimated HK$9 billion to the local economy in 2008, an annual
increase of more than 10 per cent.
Allen Ha, CEO of AsiaWorld-Expo Management Ltd, says this confirms the valuable
role the venue plays in the success of Hong Kong’s exhibition industry. “By
creating a world-class venue that meets the needs of today’s most discerning
exhibitions and events, AsiaWorld-Expo is not only an international icon of
excellence, but also a dynamic engine for employment and economic growth.”
In the four years since it opened, AsiaWorld-Expo has hosted a wide variety of
new global MICE events and high-profile conventions. These include the popular
China Sourcing Fairs, which feature more than 14,000 exhibitors and 144,000
trade visitors each year, and the internationally acclaimed Conference on
Information and Knowledge Management 2009.
Mr Ha says Hong Kong is uniquely positioned to capitalise on the rapid economic
growth of the Pearl River Delta region.
“In fact, as regional and global economies continue to accelerate, this prime
region will emerge as a focal point for the world’s business and trading
March 10 2010
Fast-tracked Wine - Hong Kong
Portugal’s Sogrape Vinhos set up its Asian
base in Hong Kong about two years ago to distribute the company’s brands in the
region, including the fast-growing Chinese mainland market.
“We have no doubts that the potential [of the mainland market] is enormous,”
said Filipe Carvalho, Managing Director of Sogrape Group (IW Hong Kong Ltd).
“China is definitely a growth market for us, although there is a long way to go
in terms of distribution, consumption habits and wine education.”
Mr Carvalho said exporting wines to the mainland “has been quite demanding and
complex because, many times, customs requirements are not consistent and change
That will soon change under an agreement between Hong Kong and the mainland that
will make it easier for Hong Kong-based traders to export wine into the
Managing Director, Sogrape Vinhos (IW Hong Kong Ltd)
More wines from
Portugal’s Sogrape’s vineyards in Quinta do Seixo in Douro Valley are likely
bound for the Chinese mainland, thanks to the new customs facilitation scheme
for Hong Kong-based exporters
Traders to Benefit
“The measures to be put in place will help enhance transparency and certainty in
doing business, thus facilitating Hong Kong’s wine traders who wish to expand
their operations on the mainland,’” said Rita Lau, Hong Kong Secretary for
Commerce and Economic Development. The moves, she said, are part of efforts to
strengthen Hong Kong’s position as the regions’ wine trading and distribution
Hong Kong Commissioner
of Customs and Excise Richard Yuen (front row, left) and Vice Minister of the
General Administration of Customs Sun Yibiao sign a cooperation agreement on
customs facilitation measures, witnessed by Hong Kong and Chinese mainland
officials, including Hong Kong Financial Secretary John Tsang (centre) and Hong
Kong Secretary for Commerce and Economic Development Rita Lau (third from left)
The new measures, to be introduced in the second quarter of the year, are open
to registered traders. Companies that have been set up in Hong Kong for at least
six months and are engaged in wine-related businesses, including trading,
storage and logistics, are eligible to register.
Currently, it could take several weeks for wine shipments to clear mainland
customs and quarantine procedures. Under the plan, registered traders can ask
mainland customs to conduct a duty valuation 10 working days before the shipment
leaves Hong Kong. Mainland customs authorities would normally complete the
procedures within one working day of the shipment arriving at a mainland
For registered traders who choose not to use the pre-valuation service, mainland
customs, under the agreement, would strive to shorten the clearance time at the
boundary point. Wines that have been imported into the mainland before will
normally take no more than three working days to clear, with submission of the
necessary documents. Wines new to the mainland, meanwhile, would be processed
within seven working days. And if customs clearance is not completed within the
timeframe, the goods may still be released with a deposit, to allow the wines to
go on the market as soon as possible.
“This measure will definitely make the export process from Hong Kong to the
mainland more transparent,” said Mr Carvalho. “It will give more confidence to
our partners when importing from Hong Kong.”
Another Step in the Ladder
Canadian wine distributor Portfolio Wine and Spirits Inc, which is eyeing the
mainland market, also welcomed the move. Leo Baduria, who manages the company’s
Hong Kong-based retail shop Wines to Go, said the measures will help the
company’s expansion plans into the mainland.
“The government has provided another step in the ladder for the local wine
industry to develop,” said Gregory De’eb, Managing Director of Crown Wine
Cellars, Hong Kong’s first fine-wine storage facility. “It provides clarity of
the mainland system that’s desperately needed for small exporters unable to
establish a strong line.”
Hong Kong Business Leaders: Wine Specialist Gregory de'Eb
Mr De’eb believes that the move will mainly benefit rare and fine-wine
exporters. “It locks down the time lines and input process for fine wines to go
into China,” he noted.
A clear and transparent system, he said, would avoid delays that could put
shipments at risk. “If it’s sitting in improper conditions, you stand to lose
the whole shipment.
“It’s great not only for fine-wine exporters but for mainland consumers, because
it will raise the quality of wine available on the mainland market. And that,
for someone who’s as passionate about wine as me, is good news.”
Asia’s Wine Hub
The agreement, signed last month, is the latest effort to develop Hong Kong as a
regional wine hub following the abolition of wine duties in 2008. The value of
wine imports soared 80 per cent that year from 2007, and increased another 41
per cent year-on-year in 2009. The mainland’s wine imports are projected to grow
to as much as US$870 million by 2017, representing 58 per cent of the Asian
market, excluding Japan.
The government said it would continue exploring new measures to help the trade
make further inroads into the mainland market.
“We will also continue to discuss with the relevant mainland authorities in
mapping out possible facilitation measures on the quarantine side,” said
Assistant Secretary for Commerce and Economic Development Aubrey Fung.
Shenzhen will be the testing ground for the new customs facilitation scheme.
After a review of the measures six to nine months after its introduction, the
scheme may be extended in phases to other major mainland cities, including
Shanghai, Guangzhou and Beijing.
"Not only has Hong Kong consolidated its position as the regional hub for fine
and rare wines, it is continuing to claim its rightful place on the world wine
stage." - John Kapon, President, Acker Merrall & Condit
Fine Wine Centre
Hong Kong’s fine wine market continues to sizzle, based on results of several
key wine auctions held earlier this year. Sotheby’s first Hong Kong wine auction
of the year, in January, realised a total of US$6.7 million. Among the
highlights was a six-litre bottle of Chateau Lafite 1982, which fetched
US$46,700. The 10-hour sale of more than 800 lots saw strong bidding from buyers
throughout Greater China, Sotheby’s said.
Acker Merrall & Condit’s first auction of the year, held last month, achieved
even higher results, raking in US$7.6 million. Two cases of Chateau Petrus 1982
sold for US$88,041 each.
“The excellent result sends a very clear message,” said John Kapon, Acker
Merrall & Condit’s President and Auction Director. “The wine market in Hong Kong
is extremely robust. Not only has Hong Kong consolidated its position as the
regional hub for fine and rare wines, it is continuing to claim its rightful
place on the world wine stage.”
Last year, Hong Kong overtook London as the world’s second largest wine-auction
centre, after New York. But Mr Kapon believes the city will go on to take the
top spot. “We predict that in 2010, Hong Kong will go further and become the
world’s leading wine auction centre.”
Wine on the Run
It’s the start of the afternoon rush hour at the Mong Kok East Rail station in
Kowloon, where commuters catch the cross-border train to the Chinese mainland.
An eye-catching shop offering an array of wine prompts some to drop in and have
a look. Others take time to sample the wines on offer.
“Wines to Go was set up in a user-friendly fashion, to bring a fresh and
exciting selection of fine wines from around the world to Hong Kong,” says Leo
Baduria, the Canadian entrepreneur behind the concept.
Launched last December, Wines to Go is the first licensed shop to open at Hong
Kong’s Mass Transit Railway (MTR). According to Mr Baduria, the store’s open
layout is designed to be inviting, to encourage people to browse.
President of Wines to Go (left) and Pok Man Wong toast the recent opening of
their new retail wine shop
No Château Lafite Here
Wine is featured in a
user-friendly fashion, based on style and taste profiles
“Our goal is to open up the market to wines other than Bordeaux, and to let
consumers discover other quality wines at competitive prices,” he says. Bordeaux
wines are on offer, but you won’t find one well-regarded brand in China on the
“We get a lot of traffic from Chinese mainland travellers, who often ask if the
shop carries Château Lafite,” Mr Baduria said. The shop gets the question so
frequently that a sign now hangs in the shop telling customers: “We don’t carry
Château Lafite, but we have fine-quality Bordeaux.” Mr Baduria says he hopes the
retail concept will help change the Chinese mindset of wine as a luxury product,
that they will instead buy wine for the pure pleasure of it.
Wines to Go is designed to resemble a mini-showroom, with wine featured based on
their style and taste profiles. Prices range from HK$100 to HK$950.
There is a chilled-wine section for customers on their way to a party, or for
those who just want to pick up a bottle for dinner. A gift section, featuring
products to enhance wine appreciation, including wine cellars, is also on offer.
Wines to Go is the first licensed shop to open at Hong Kong’s mass transit rail
An MTR commuter stops
for a taste test at Wines to Go
Mr Baduria, a veteran wine importer and distributor in Toronto, likens the Hong
Kong market to Toronto’s 20 years ago. “It was young people who started setting
the standards by frequenting or setting up wine bars and restaurants,” he
recalls. “That’s the approach we want to take here. We want the young people to
be more adventurous.”
The Canadian entrepreneur says he had been looking into the Asian market for
seven years before deciding on Hong Kong. In 2006, Mr Baduria started to
actively explore opening the first Wines to Go for its parent company,
Toronto-based Portfolio Wine & Spirits, Inc, in Hong Kong. He came up with the
retail concept as “the best way to make wine more accessible.”
Mr Baduria says he would have loved to introduce his retail concept in his
hometown, but was put off by Canada’s restrictive laws to regulate the wine
business. Hong Kong, on the other hand, he says, offered the perfect setup:
“It’s a virgin market with a huge growth potential.”
Market to Explode
An MTR commuter stops for a taste test at Wines to Go
Wines to Go is the
first licensed shop to open at Hong Kong’s mass transit rail system
Mr Baduria says he has high hopes for the region overall. “The Asian market is
going to explode in 10 to 15 years’ time; there’s nowhere else where it’s
growing like it is here – certainly not North America, which is a mature
The company plans to open stores on Hong Kong Island later this year, and has
its sights on the mainland market. It has recruited Pok Man Wong, a long-time
wine professional, to introduce the retail concept there. Mr Wong, who has
worked at wineries in the United States, Australia and New Zealand, says he has
been in discussion with possible partners to open the first shop, possibly in
Guangzhou, in the next few months. “Our shop in Hong Kong can serve as a window
for the rest of China,” he says.
As the company continues to map out its expansion plans, Mr Baduria says Hong
Kong will remain its base.
“Hong Kong remains the best hub in Asia for the wine market because of its
highly efficient systems and zero wine duty. We will keep Hong Kong as our
regional headquarters as we grow, enabling us to manage our business operations
in other cities in Asia from our hub in Hong Kong.”
Vine and Wine China
The Organization Internationale de la Vigne et du Vin International, or
Organization of Vine and Wine (OIV), is an intergovernmental association of 43
member states with an interest in all aspects of wine production. Vine-growing,
grapes and any wine and spirits of viticultural origin are of interest to what
is often referred to as the “United Nations of Wine.”
Yves Bénard was elected as OIV President
last July, the first French national in the post since Baron Le Roy in 1962. A
qualified agricultural engineer and oenologist, Mr Bénard is a graduate of the
SupAgro International Centre for Advanced Studies in Agricultural Science and an
eminent personality of the wine and spirits sector.
Attending the HKTDC Hong Kong International Wine and Spirits Fair last November,
Mr Bénard talked about his impressions of the region’s rapidly growing wine
culture and his aspirations for the mainland to become a full-fledged member of
and Education Key for Hong Kong Wine Hub
What was your connection with Hong
Kong and the Chinese mainland before your election to the OIV?
I am also General Manager of the
Champagne and Wine Division at LVMH Moët Hennessy Louis Vuitton. Our regional
office for Asia is here in Hong Kong, where we cover markets across the region
and as far away as Australia. So we anticipate Hong Kong will be the key place
Tell us more about the role of the OIV.
OIV is an official international
organisation in terms of scientific and technical issues, gathering 43 countries
from around the world. It is a governmental organization that meets three times
a year. Experts from different countries work together on issues concerning
viniculture, and also on topics about wine consumption and education.
The mainland has been involved only as
an “observer” through Yantai, in Shandong Province, for the past 20 years. Why
are you now interested in the mainland becoming a full-fledged member?
China, of course, for us is a very
important country as a producer of wine and low-cost grapes – the OIV is also in
charge of work regarding cheaper grapes. So it is important not just as a
wine-consuming country, but also as a grape-growing country. So [that’s why] I
think China must be part of the OIV in the future. I also know that the Chinese
government is interested in hosting in maybe in two or three years’ time the
Annual Congress of the OIV. I have already made some contact with the Chinese
government about this [late last year] in Beijing.”
What promise does the wine industry on
the mainland, and throughout Asia, hold for France and other wine producers
around the world?
I’m French, but I’m here as the
president of all the countries belonging to the OIV. And I consider that China
will become a major wine market, again, not only for imported wines from around
the world, but also for producing wine – and, I would say, quality wine. The key
question today in China is [how] to help the Chinese people interested in the
wine industry produce quality wine. So China is definitely the key market for
In terms of developing the China
market and its industry, how important is education and such events as the Hong
Kong International Wine and Spirits Fair.
I think education is an absolutely
fundamental issue, and I think that an exhibition like this, with all the wine
tasting organized, is very important. First of all, educate the people who are
working in the wine industry – I mean the distributors, wholesalers, sommeliers.
All these people will then be able to educate the consumers. So it’s a long
process, but it is a key process in order to avoid situations where you see very
good wine mixed with soft drinks or something like that. I also think it’s very
important that the region learns how best to match Chinese food very well with
How can Hong Kong realize its plan to
become Asia’s wine hub?
First of all, Hong Kong has taken the
key decision to abolish wine tax, which means that in the coming year, I’m sure
Hong Kong will become the key place to import wine from all over the world. It
will then be the window, the place to resell in Asia. And I also know that in
Hong Kong, you have the right people to import, to manage the storage of wine in
good conditions, and to have these wine education programs. All of that means
that Hong Kong definitely is key for the future of wine in Asia.
March 6, 2010
Council (HKTDC) plans to spend
big money to lure major buyers to trade fairs in Hong Kong
Exhibit at the
2010 International Jewellery Show
The Trade Development Council will continue to help boost attendance at its
fairs this year by sponsoring the air tickets and hotel accommodation of some
new overseas buyers - a sign many companies are still struggling in the nascent
The council sponsored about 22,000 buyers last year, when HK$80 (US$10.38)
million was allocated to help attract more people to its trade fairs amid the
global crisis. This was more than twice the 10,000 buyers the council had
originally targeted under the programme, and was due to cheaper air fares and
hotel room rates last year.
At the Chuk Kam Jewellery Design Competition Award
Presentation held yesterday, the fascinating creations of winning designers were
paraded by models at Hall 3C Oasis. These wonderful designs are on display at
the Hall 1C Concourse Display Area for all to see and enjoy.
Hall of Fame and Hall of Jade Jewellery
Hall of Fame and Hall of Watch
Hall of Fame and Hall of
Italian Jewellery Parade
Hall of Fame and Hall of
Stylist Jewellery Parade
Hall of Fame and Hall of
Elegant Jewellery Parade
About 2,100 buyers were sponsored to attend this week's Hong Kong International
Jewellery Show March 5 - 9 2010.
Guest of honour,
Bi Lijun, Vice-Director of National Gems & Jewelry Technology Administrative
Center, the Hon. Starry Lee Wai-king, member of the Legislative Council Panel on
Commerce and Industry, Gaetano Cavalieri, President of World Jewellery
Confederation (CIBJO), Fred Lam, Executive Director of HKTDC, Lawrence Ma,
Chairman of Jewellery Advisory Committee and Fair Organising Committee, along
with VIP guests and industry officials celebrate the opening of the HKTDC Hong
Kong International Jewellery Show.
The sponsorship is targeted at new buyers or major buyers who have not been to
the council's fairs for a while, mainly from emerging markets such as the Middle
East, Russia, Eastern Europe and North Africa, in a bid to drum up more business
The sponsorship helped to boost the total number of buyers at the council's
fairs last year by 1 per cent from a year ago despite the tough economic times.
The number of exhibitors rose 2 per cent, Benjamin Chau, the council's deputy
executive director, said. Chau said that more money will be allocated to enable
the sponsorship to continue this year, but declined to reveal how much more
money will be needed until the council's governing body decides whether or not
to approve the funding on March 18.
Jewellery sales, especially in the US and EU, were hit hard by the global
downturn. The financial meltdown forced many consumers to cut back their
non-essential spending on items such as luxury goods and jewellery. With a
cautiously optimistic outlook on business this year, exhibitors are looking for
signs from buyers that consumers are again willing to spend their extra cash on
At this year's five-day jewellery show, the number of exhibitors rose to more
than 2,640, up 12 per cent from last year, while the size of the fair grew
one-fifth to more than 87,600 square metres.
The number of buyers at last year's show fell to 29,326, down 6.4 per cent from
31,333 buyers in 2008, as demand for jewels and precious stones dwindled. Many
exhibitors believe a clearer picture about the health of the jewellery industry
will emerge when the show ends on Tuesday at the Hong Kong Convention and
Exhibition Centre. A relatively poor showing could signal a long road to
March 3 2010
The Recovery Budget - Hong Kong
Hong Kong's economy is expected to
grow between four per cent and five per cent this year
In his 2010-2011 budget last week, Hong
Kong Financial Secretary John Tsang outlined the government’s priorities for the
upcoming fiscal year. “I will continue to invest in infrastructure, promote the
development of our industries and adopt various measures to achieve the
objectives of consolidating the recovery, developing our economy and building a
Mr Tsang said Hong Kong's economy expanded 2.6 per cent in the final quarter of
last year, rebounding from four consecutive quarterly contractions. Mr Tsang
said economic growth is expected to accelerate to between four per cent and five
per cent this year.
He stressed, however, that Hong Kong is still in its early stages of economic
recovery. “I am cautiously optimistic about Hong Kong’s economic prospects,” Mr
Tsang said. “The global economy has not yet regained its vigour. There remain a
number of uncertainties and potential pitfalls in the external environment,” he
said, noting that the European and United States economies may have undergone
fundamental changes in their economic structures that will affect Hong Kong’s
future export performance.
The China Factor
The government will earmark HK$20
million in the next two years to develop Hong Kong’s testing and certification
But with the Chinese mainland currently leading the global recovery, Hong Kong,
said the Financial Secretary, will continue to capitalise on its close links
with the mainland. Hong Kong will remain a partner to mainland enterprises
expanding overseas, providing expertise to bring mainland management and
technological standards closer to the international level. “With our rich
experience in international exchanges, we can assist the mainland in building
brand names and improving product image.”
Mr Tsang also pointed to the city’s close cooperation with neighbouring
Guangdong to develop the Pearl River Delta (PRD) region, including the latest
initiative to promote the development of services industries in Qianhai. “This
will allow us to tap the Greater PRD market, which has a population of 50
million, and in turn the Pan-PRD market, which has a population of more than 400
Hong Kong will also broaden cooperation with Taiwan, by setting up the Hong
Kong-Taiwan Economic and Cultural Cooperation and Promotion Council.
Big Market, Small Government
Hong Kong Financial Secretary
John Tsang says Hong Kong is still in an early stage of economic recovery
On the domestic front, Mr Tsang said the government will continue to support
market development under the principles of “Market Leads, Government
Facilitates” and “Big Market, Small Government.” This means maintaining the rule
of law and a simple and low tax regime, nurturing talent, investing in
infrastructure and helping enterprises tap markets outside Hong Kong.
One of the government’s key priorities is to foster the growth of six economic
areas identified last year: testing and certification, education, medical
services, environmental industries, innovation and technology, and the cultural
and creative industries. Mr Tsang pointed out that the private enterprises of
these six industries directly contributed eight per cent to Hong Kong’s GDP in
2008 and employed about 380,000 people, representing about 11 per cent of the
The government will earmark HK$20 million in the next two years to support the
work of the Hong Kong Council for Testing and Certification, set up last
September, to enhance the professional standards of the local testing and
certification services, as well as boost international recognition. Another
HK$21 million will be allocated in the next two years to the Hong Kong
Accreditation Service to strengthen services to the industry.
Hong Kong Science Park
About 4,000 new R&D-related jobs are
expected to be created as a result of the expansion of the Hong Kong Science and
Mr Tsang also announced that the HK$200 million "R&D Cash Rebate Scheme,” to
promote research and development (R&D) in Hong Kong, will launch in April. The
government will also proceed with the development of Phase three of the Hong
Kong Science and Technology Parks, to promote the development of innovation and
technology, boost the growth of green technology and attract more high-tech
companies to Hong Kong.
Hong Kong’s scientific research hub is home to more than 300 science and
technology companies from Hong Kong, the mainland and around the world.
Construction work is expected to start next year, with completion in phases
between 2013 and 2016. An additional 4,000 R&D-related jobs is expected to be
created as a result of the expansion.
Mr Tsang also unveiled plans to strengthen the competitiveness of Hong Kong’s
financial services. One measure is to extend the stamp duty concession for the
trading of exchange traded funds (ETFs), which have no more than 40 per cent of
their assets composed of Hong Kong stocks. The concessionary profits tax rate
will also be extended to cover qualifying debt instruments.
“Equipped with world-class hardware and software, including a strong asset
management foundation, and benefiting from a huge demand for wealth and asset
management services on the mainland, Hong Kong is well placed to become Asia's
premier asset management centre,” Mr Tsang said.
Welcoming the latest economic initiatives, the Hong Kong Trade Development
Council (HKTDC) said it has already devised a set of initiatives to promote the
six new pillar industries. “A number of economic development strategies made in
the budget are very targeted,” said HKTDC Executive Director Fred Lam. “I
believe that these will effectively facilitate Hong Kong towards steady
recovery. The HKTDC will continuously align its strategies with the government's
in the relevant areas."
The Financial Secretary said he will closely monitor the pace of Hong Kong’s
recovery before deciding when to begin pulling back on special measures
initiated during the global crisis. “While we have come through the most
difficult period of the financial tsunami, the external environment is still
fraught with uncertainties and the foundations of the recovery are not yet
firm,” Mr Tsang said. He noted that growing protectionism by some countries
could pose new challenges for the early stages of Hong Kong’s recovery.
March 2 2010
Educating Hong Kong
The Chinese University of Hong
Kong plans to build a campus in neighboring Shenzhen
Looking to diversify the Hong Kong economy, the government has targeted
education services, together with five other economic sectors, for promotion.
With education, however, the main objective is not to create business
opportunities and jobs. Rather, as Chief Executive Donald Tsang explained in his
October Policy Address, it is “to enhance Hong Kong’s status as a regional
education hub, boosting Hong Kong’s competitiveness and complementing the future
development of the mainland.”
The government’s policy is two pronged: internationalise Hong Kong’s student
population and diversify into more self-financing tertiary institutions.
Attracting Asia’s Brightest
On the internationalization front, says Amy Wong, Principal Assistant Secretary
for Education, the government’s focus is “to attract more quality non-local
students to come to Hong Kong to study, mainly in the higher education sector.”
In the past two years, the government has increased the non-local student quota
from 10 per cent to 20 per cent (the current figure is about 12 per cent); set
up a HK$1 billion scholarship fund for both local and non-local students; and
relaxed employment and immigration restrictions for non-local students.
Ms Wong says the increased non-local student quota doesn’t affect the number of
places for local students. She adds that having more non-local students on Hong
Kong campuses “will do our local students some good by exposing them to
different cultures and a different calibre of people, and just expand their
Grace Chow, Director of Admissions and
Financial Aid, Chinese University of Hong Kong, says training future leaders
requires international exposure
Grace Chow, Director of Admissions and Financial Aid at the Chinese University
of Hong Kong (CUHK), agrees. “We should be training leaders,” she says. “For
anybody who will eventually be in a responsible leadership position, this
exposure to international culture and ambience is indispensable.”
There are currently about 3,800 full-time, non-local students enrolled at CUHK,
including exchange students. “A lot of our graduate students are from outside
Hong Kong, and we have exchange programmes with over 200 universities in 28
countries and region. The university takes in about 1,000 non-local students for
one academic year or shorter exchange each year,” she says.
“If you look at it from a broader perspective, some 90 per cent of our teaching
staff have a degree from outside of Hong Kong, and we have a lot of research
cooperation with prestigious universities outside of Hong Kong. So when we are
talking about internationalisation, we are really talking about a lot of things
other than just admissions.”
Ms Chow, who has served as Deputy Commissioner of the Office of Administrative
Complaints (now Office of the Ombudsman), points to the many advantages Hong
Kong has in striving to become a regional education hub: “We are a metropolis
with a strong international flavour, and a very successful business and
financial centre. We enjoy political stability. We also have a safe – you’d be
surprised how important that is to a lot of parents – and relatively clean
living environment. We enjoy freedom of speech, we are genuinely a place where
east meets west, and we are right on the doorstep of China.”
The Education Bureau’s Ms Wong also notes that Hong Kong institutions enjoy high
positions in prestigious international university rankings.
Hong Kong is a natural destination for many Chinese mainland students, given
that the city is trilingual, biliterate and part of China. Hong Kong’s
universities can now directly recruit students from 25 cities and provinces
around the country, and the Education Bureau and mainland officials are
discussing the possibility of mainland senior secondary students studying in
Hong Kong. “We believe that if we can attract them earlier on, our universities
will be in a better position to attract them,” says Ms Wong.
This push has prompted some people to complain about “mainlandisation.” But Ms
Chow says CUHK attracts top-notch mainland students – “the cream of the cream.”
It accepts only 250 to 260 mainland students from some 10 million potential
candidates each year. “And I think that, as a part of China, it is not
inappropriate for us to help provide quality tertiary education to aspiring
Hong Kong university moves into the Pearl River Delta are already in the works.
For example, the University of Hong Kong plans to build an extension in
Shenzhen, and last month CUHK signed a memorandum of understanding with the
Shenzhen Municipal Government to establish a campus there.
Roderick Wong, Vice-President
(Development and External Relations), City University, says Hong Kong boasts
first-class scholars and research
Roderick Wong, Chair Professor of Mathematics and Vice-President (Development
and External Relations) at City University of Hong Kong, has long been a
proponent of internationalization and supports the initiative to develop Hong
Kong as an education hub.
“Hong Kong is really an international city, a world city, and we ought to keep
it that way.” He notes that Hong Kong boasts first-class scholars and research,
and says most of the Nobel laureates in the United States were not born there.
“The government has to help to make this a genuine education hub, and I think we
can do it.”
Professor Wong, who taught mathematics at the University of Manitoba for many
years, has been recruiting leading mainland students for some time. But, he
says, “I find, for example, we don’t have enough Indian students. My experience
in North America, at every campus I visit, I see lots of Indians.”
Indeed, India is one of several countries in the region being targeted by the
government for educational promotion.
There is no shortage of ideas on how to bolster Hong Kong’s reputation as a
regional education hub and world-class centre for university teaching and
One of the more intriguing proposals is City University of Hong Kong’s
application last year to the University Grants Council to establish a school of
CityU’s ambitious goal is to create the first veterinary school in Asia with the
coveted American Veterinary Medical Association accreditation. And CityU has
enlisted a heavyweight Ivy League school to help guide it through the process:
Cornell University, which operates the top-ranked school of veterinary medicine
in the US.
“It’s not simply for looking after pets, although that’s important,” says
Roderick Wong, CityU’s Vice-President for Development and External Relations.
“But we also want to look after food safety and disease control.”
He says the school would have diagnostic labs and could potentially use
Guangdong’s dairy, pig and poultry farms for studies.
“Seventy-five per cent of infectious diseases now come from animals,” says
Professor Wong, citing World Health Organization statistics. “If you do not stop
this at the roots, you cannot prevent widespread disease.
“I think to showcase our achievements in reaching to make Hong Kong an
educational hub, this would be a showcase.”
One of the big constraints on internationalization is lack of space for student
housing. CityU takes in about 700 exchange students a year. “We could have more,
but we don’t have places for them to stay,” says Professor Wong. “That puts a
very strong restriction on our enrolment.
“If government wants to push this, my strong recommendation is they must provide
us with enough accommodation for students, simply because Hong Kong is not like
North America,” he says. “We don’t have cheap housing around campuses,
especially in Kowloon Tong. If you find cheap housing places, they’re in a very
Money for Schools
In terms of diversification, the government sees self-financing institutions as
future big players in Hong Kong.
“Up until now, our higher education sector has had a quite publicly funded
focus,” notes Ms Wong. “We realise that we can’t continue on this route because
education takes up over 23 per cent of the government budget and, out of that, a
quarter is on higher education. Publicly funded higher education is expensive.
So in order to get more places, we would like to encourage the development of
the self-financing sector.”
The government has launched two initiatives since 2000 to further this goal: the
Land Grant Scheme, which provides land at a nominal premium for new campuses;
and the Start-up Loan Scheme, which provides loans for campus construction or
renovation, interest-free for the first 10 years. The government recently
committed an additional HK$2 billion to the loan scheme.
And, in his 2010-11 budget speech last week, Financial Secretary John Tsang
announced the allocation of HK$1 billion for a fifth round of the Matching Grant
Scheme to help tertiary institutions tap more funding sources.
“For the first time, this will cover all 12 degree-awarding institutions so as
to support the diversified development of higher education,” he said.
Back to Business
Banking giant HSBC has
found that Hong Kong SMEs are the most optimistic in Asia
Hong Kong’s small and medium-sized enterprises (SMEs) are leading a rebound in
business optimism in Asia, according to the latest HSBC Small Business
The survey – the largest to date – shows confidence among Hong Kong SMEs climbed
25 points in the fourth quarter last year, the strongest increase in Asia, as
the region bounces back from the financial crisis of late 2008.
Around the world, a growing number of small businesses are bullish about the
first half of this year. Many are signaling increasing capital investment and
recruitment for the first time since the financial crisis.
The sentiment expressed in the latest HSBC Small Business Confidence Monitor,
which captures the views of more than 6,000 SMEs across 20 markets in Asia, the
Middle East, Europe, North America and Latin America, is also confirmed in a new
report by the Economist Intelligence Unit. That report found Asia’s SMEs are
well placed for regional recovery. Times are tough, but Asian SMEs are even
tougher, said David Line, editor of the report. “SMEs are the entrepreneurial
lifeblood of the Asian economies, and those that have shown the toughness and
flexibility to survive the financial crisis may well be tomorrow’s corporate
The HSBC Small Business Confidence Monitor, conducted in October and November
2009 by research agency TNS for HSBC Commercial Banking, gauges the six-month
outlook of SMEs on local economic growth, capital investment plans and
On a High
Sandy Flockhart, HSBC Chairman
Personal and Commercial Banking, said the results show small business confidence
is back to pre-financial crisis levels. “Not only are SMEs confident that their
local economies will strengthen, they are ready to invest again in their own
operations and people.”
The Asia index rose from 107 in the second quarter of 2009 to 122 in the fourth
quarter. Hong Kong’s business confidence climbed 25 points from 83 to 108, the
biggest index rise among the Asia economies in the survey, placing it back in
positive territory. Vietnam remained at the top, with an index of 160, followed
by India (132), the Chinese mainland (124) and Singapore (117).
The SME indices tracked by HSBC globally show a positive outlook, with the
Middle East at 125, Latin America at 118, the United States and Canada at 107
and the United Kingdom at 101. France is just below neutral, at 94. But emerging
markets in Asia, the Middle East, Latin America and Eastern Europe are
significantly more optimistic than the developed markets of the US, Canada, the
UK and France, with an index of 121 versus 106.
In Hong Kong, 84 per cent of SMEs say their business prospects look stable or
better for the first half of 2010, with 73 per cent expecting local GDP to
remain stable in the next six months. Fifteen per cent expect GDP to increase,
and only 12 per cent expect growth to slow, a 33 per cent improvement over the
SME economic outlook in the second quarter of 2009.
Nearly one in three Hong Kong SMEs are preparing to invest in their own
businesses this year. Apart from increased capital expenditure, many are
starting to hire again.
Executive Director, British Chamber of Commerce in Hong Kong
Mr Flockhart said this sentiment underscores the remarkable resilience of Hong
Kong SMEs. “The sector has been through the Asian crisis, SARS and the recent
global financial crisis, proving its adaptability to challenging market
conditions. As a whole, he says, Asia weathered the financial crisis relatively
well. “Led by the Chinese mainland, Asia's economies have entered a sustained
growth cycle, and Hong Kong's business climate is positive as a result.”
The British Chamber of Commerce in Hong Kong has also seen a significant
improvement in business confidence. The results of its latest survey, carried
out by TNS, show member optimism for the coming year increasing from 40 per cent
at the end of 2008 to 78 per cent at the end of 2009.
The survey reflected a dramatic increase in the mid-term outlook, with 92 per
cent expressing confidence in the coming two years, 94 per cent optimistic about
the coming three years and 87 per cent showing confidence over five years.
Similarly, 95 per cent of respondents continue to be very satisfied or
satisfied with the Hong Kong business environment, according to Christopher
Hammerbeck, Executive Director of the British Chamber of Commerce.
“It seems to be the general ease of doing business in Hong Kong that continues
to make it such a dynamic centre for business activities with geographical
location, taxation, communications network, free port status, infrastructure and
public safety and security rating top of the list of areas that create highest
“There is also a perception that Hong Kong’s competitiveness in terms of the
costs of doing business has seen some improvement, with issues such as
inflation, executive and staff remuneration, availability of low cost labour,
commercial rents and residential rents seeing significant increases in
He described the emerging optimism as very encouraging after “an extraordinarily
difficult year for business.”
“Of course, there are still areas to be addressed, particularly in terms of
providing the right support to SMEs in today’s market, but overall, Hong Kong
continues to be seen as a unique business environment with much to recommend
Investing in Hong Kong
Simon Galpin, Director-General of
Investment Promotion at Invest HK, charts the growth of inward investors
choosing Hong Kong for business expansion
Despite recent economic challenges, 265 overseas, mainland and Taiwanese
companies set up or expanded their businesses in Hong Kong in 2009, with the
assistance of InvestHK. A record for the government’s investment promotion arm,
it signified investors’ strong vote of confidence in Hong Kong, despite the
global economic environment.
The Asia-Pacific, Europe and North America accounted for 43 per cent, 35 per
cent and 18 per cent, respectively, of those investing in Hong Kong, with the
mainland the single largest market. The top three performing sectors were
business and professional services, including education services and design;
technology, including renewable energy; and special projects, which includes
environmental technology and the wine sector.
Simon Galpin, Director-General of Investment Promotion at InvestHK, conceded
that it was a challenging year, but the positive results demonstrated that Hong
Kong remains a preferred base in Asia for business expansion.
“In these times of economic uncertainty, the enduring advantages of Hong Kong,
such as its rule of law, low and simple taxes, level playing field, free
economy, world-class communications and transportation infrastructure, and
available talent pool, have become increasingly important,” Mr Galpin said.
“They continue to enable the city to act as a stable and secure platform for
companies looking to do business in the region and beyond.”
He added that more would be done in 2010 to attract companies from such emerging
markets as India, Latin America, the Middle East and Russia. In addition,
InvestHK will strengthen its marketing promotion efforts on the mainland to
assist corporations looking to expand internationally by using Hong Kong as
their hub. It will also continue to organise joint promotion seminars with
mainland partners in key overseas cities to promote the combined advantages of
Hong Kong and the mainland, in particular the Pearl River Delta region.
Asia’s Green Capital - Hong Kong and the Chinese mainland are making concerted
efforts to clean up their environment
The winds of change have been building in
recent years, but the green movement gained momentum last year when the Hong
Kong Government identified environmental industries as one of the six new
pillars of economic growth. Chief Executive Donald Tsang pledged to make Hong
Kong a green city, calling on innovative environmental companies to bring their
solutions to Hong Kong.
Overseas businesses have been quick to respond. Phil Ingram, Senior Trade
Commissioner, Austrade, and Deputy Consul-General (Commercial) at the Australian
Consulate-General in Hong Kong, said the market is particularly ripe for
companies involved in water treatment and environmental remediation, both areas
of need on the Chinese mainland.
“Hong Kong is located at the mouth of the Pearl River Delta, the richest area in
China, accounting for one-third of its exports and 70 million people. They have
the money to spend on environmental technology, and they have the need,
especially for the supply of enough clean water.”
Martha Grossman, General Manager Asia,
One Australian company to take advantage of the opportunity in Hong Kong is
RepuTex, an Asian market-leader in corporate sustainability and carbon-risk
research. Martha Grossman, General Manager Asia at RepuTex (HK) Ltd, said that
the company first set foot on the mainland via a sustainability showcase it
organised in Shanghai in 2005 at the invitation of Fudan University. But it was
its appointment in 2009 to assess the environment, social and governance (ESG)
performance of more than 500 companies in Hong Kong and the mainland that moved
RepuTex to set up its new regional hub in Hong Kong.
“The Hang Seng project provides a wonderful opportunity for RepuTex, as it gives
us a stronger presence in Hong Kong, a dynamic market in its own right and a
solid platform to the region,” Ms Grossman said. With its status as an
international financial centre, Hong Kong “is important to the whole
In the long term, companies that neglect to disclose their ESG performance will
find it more difficult to obtain funds from institutional investors, according
to Ms Grossman. Several pension funds, for example, consider climate change a
key criterion and will exclude companies that cannot substantiate their
“Financial markets are the real force driving companies to behave in a more
sustainable manner. A performance listing on Hang Seng Index Company’s
soon-to-be-launched Sustainability Index Series will demonstrate to investors
the depth of their commitment to these issues.”
New Zealand’s Environmental Decontamination Ltd (EDL)
has been conducting trials in Hong Kong to further its soil clean-up work for
clients in the region.
Marcus Glucina, North Asia Regional Director, EDL Asia, said its Kowloon
laboratory has become a showcase, providing a practical and convenient operating
EDL’s Hong Kong laboratory tests soil samples from around the region - The
company, which also does business in Vietnam, Japan and the mainland, set up its
Hong Kong office three years ago.
Having the facility in Hong Kong, he said, “ensures protection of our
intellectual property. Operating in this manner enables EDL to bring soil to the
plant for trials and to demonstrate the technology without traveling all around
“To date, the laboratory has been used to treat contaminated samples from Hong
Kong, mainland [cities] and Manila, in front of local regulators and
consultants, and with full security.”
Merv Stark, Director, Environmental
EDL’s exploratory work on the mainland has been assisted by implementation of
the New Zealand-China Environment Cooperation Agreement, which came into effect
with their Free Trade Agreement, signed in September 2008.
Merv Stark, former Regional Director for the New Zealand Government’s Trade &
Enterprise agency for North Asia, and an EDL director, strongly supported the
location of Hong Kong as the Asian base for EDL. Mr Stark describes Hong Kong as
“a wonderful place to do business. The ease of travel to other countries in Asia
is a major advantage. Hong Kong people are very motivated, and will quickly do
whatever is needed. Being in the same time zone also helps.”
Canadian firms are answering the call, too, after Hong Kong Secretary for the
Environment Edward Yau visited Toronto last year to outline the government’s
“green game plan” for Hong Kong. “We are going to be greener, and the goal for
our region is to be the greenest,” Mr Yau told a gathering of 150 business
leaders, encouraging environmental protection companies in Canada to partner
with their counterparts in Hong Kong to enter the mainland market.
Carbon Footprint Audits
Bruce Hicks, Managing Director, TPIZ
Resources - Canadian Bruce Hicks, a self-styled “eco-preuneur,” who founded TPIZ
Resources in 2006, saw the commercial potential in providing green solutions for
businesses, perceiving that “sustainability is logical.”
Operating through two joint ventures – Green Building Services Ltd and Asia
Clean Capital Ltd – TPIZ Resources uses Hong Kong to develop, manage and finance
environmental and energy-efficiency projects and businesses in Hong Kong and the
Green Building Services is an advisory services company helping clients develop
and implement sustainability strategies, with a particular focus on green
buildings, indoor environmental quality, energy management, stakeholder
engagement and sustainability reporting. “We also do carbon footprint audits as
well as employee-training and organisational-change management around
sustainability,” said Mr Hicks.
Asia Clean Capital is an investment company using ground-source heat pump
technology to provide heating, cooling and hot water as an outsourced utility to
large buildings and developments on the mainland. Using natural energy from the
ground, Asia Clean Capital designs, invests in and operates energy-efficient
systems. The company says these can result in energy-cost savings of up to 50
“China is doing a huge amount of work to improve its environment, and Hong Kong
more recently has put a lot of focus on green activities. There is definitely a
lot happening in both markets,” Mr Hicks said.
“I believe I am in the right place, at the right time. Servicing these markets
out of Hong Kong is the best strategy for me.”
Jan 19, 2010
Follow your nose -
Asian buyers' competitive spirit has turned Hong Kong into a major wine hub much
faster than traders expected By Ben Sin
A former amateur racing driver, Carson
Chan Kai-shun enjoys cars. So when an opening came up at Bonhams' local
subsidiary 10 years ago, he seized the chance - the auction house was then
better known for its sales of vintage cars. But now, as managing director of
Bonhams in Hong Kong, Chan finds himself at the forefront of a regional wine
boom that has made Barolos and Chateau Rothschilds the focus of his attention
rather than Aston Martins and Rolls-Royces.
Traders expected a boost from the government's scrapping of wine tax in 2008,
and their hopes have since been fulfilled in impressive style with Hong Kong
quickly challenging London's place as the world's second biggest auction market
for fine wines after New York.
"I knew the auction scene was going to be big in Hong Kong as soon as the tax
was dropped," says Chan.
Still, it took nifty footwork to catch the wave. "We had a hunch months in
advance that the government was going to lower the wine tax because officials
had been talking to people in the wine industry," Chan says.
Once the tax abolition was announced, he and his team got together and made
swift plans. Within two months Bonhams held a wine auction - its first in Hong
Kong for over a decade - recording sales of more than HK$11 million.
Other auction houses soon followed, with Sotheby's announcing that Hong Kong has
become its most important centre for fine wines after notching up more than
HK$111 million from its three sales last year. Its auctions in New York took in
US$12.7 million while London booked £9.2 million (HK$116 million) from 10
"Last year will be remembered as the
year Asian collectors overtook the US in the purchase of fine wine at auctions,"
says Serena Sutcliffe, head of Sotheby's international wine department. Local
and mainland buyers accounted for 40 per cent of Sotheby's total wine sales.
John Kapon, president of international wine merchants Acker Merrall & Condit,
reinforces the view. "Asian buyers in general have been what's driving the
sales," he says. "Not just in Hong Kong [but also in New York]."
Still, Chan was surprised by how swiftly Hong Kong's auction market had grown
following the end of wine tax, attributing it partly to last year's financial
meltdown hitting the US harder than Asia as well as a growing thirst among
The surge was also in reaction to a lack of auctions earlier, says Jamie
Ritchie, senior vice president of Sotheby's wine department, who expects the
market to stabilize after the initial fervor.
Kapon, however, sees the recent boom as a natural phase in Asia's growing
interest in wine.
Bidding in Hong Kong tends to be more lively than in New York or London, Kapon
says, and there's a "friendly, competitive nature here that can't be found
Recalling an Acker Merrall & Condit auction where he wielded the gavel last
year, he says the event at a local hotel had to be moved from one hall to
another because bidding went on far longer than expected.
As in many businesses, much of the impetus for growth is coming from the
mainland, particularly from wealthy Chinese for whom premium wines have become a
status symbol as well as pleasurable pursuit.
Chan attributes the strong Chinese interest in wine auctions partly to cultural
mores. "Chinese people in general really care about face," he says. "If I invite
a friend to dinner and I open up an expensive bottle of wine, he'll feel the
need to top it by opening up a more expensive bottle of wine the next time he
invites me to dinner."
Jack Hui Wai-po, who founded the Hong Kong Fine Wine Auction website with a few
friends in November as a way for enthusiasts to make small trades, echoes the
"Chinese people, if they can afford it, really like to indulge and spend on the
biggest brand names and expensive items, and wine is no exception," says Hui,
who estimates up to 60 per cent of wine traded on his website ends up on the
The end of wine tax acted like rocket fuel.
"Many mainlanders buy and store their wine in Hong Kong until they need it due
to the high tax in China," says Kapon. "Hong Kong has become a portal for
mainland buyers who want to avoid duties."
Purchases by mainland wine buffs have opened new opportunities for wine traders
to provide storage services.
"We offer storage here at a small percentage fee," says Hui. "They place bids
online and, after the purchase, they have an option to store the winse with us
and pick them up in small batches each time they come to Hong Kong."
But to keep the wine scene growing, traders and enthusiasts agree novice buyers
have to be better educated. "You can't keep buying something you don't
understand," says wine lover Danny Wong King-wang.
A frequent participant at wine sales, Wong views the auction fever as a fad but
he hopes to turn it into sustained interest by helping novices learn more about
wines and collecting.
Which is why he opened Vintelligence, a club that provides a venue for members
to share experiences and knowledge about wine, as well as to trade.
"Some people look at wine as an investment and I hate that," Wong says. "It
should be something to be enjoyed."
Chan also reckons more knowledge is needed to keep up interest among the
swelling band of local wine buffs.
"The growth rates in Hong Kong don't just indicate rich buyers willing to spend,
but wine drinkers becoming more sophisticated. To sustain this, we've started
wine education courses to help spread the culture," he says.
To attract mainland buyers unable to attend its Hong Kong auction, Sotheby's
last year introduced live online bidding, where participants make offers via the
internet with video and audio feeds.
"Live bidding was most popular at the Hong Kong auctions, with most of the
bidding coming from mainland buyers," says Ritchie, who plans to further develop
With Asia becoming the prime hub of his international business, New York-based
Kapon also expects to spend more time in Hong Kong this year.
Acker Merrall & Condit sold more than HK$165 million worth of wine here last
year - the most among the auction houses - and Kapon expects an 80 per cent
increase in business this year.
Five auctions are being held, including a major sale next week that will feature
a "super-lot" group of premium Bordeaux valued at about HK$680,000.
"In all my years in the business, the value of wine has only gone up," Kapon
says. "So it's here to stay regardless of how the economy is."
Raymond Choy founded Hong Kong company
Toy2R, which has been instrumental in popularising the designer/art toy movement
through its key-chain collectible figure Qee.
Mr Choy is also a pioneer in the huge Chinese mainland market, successfully
developing major sales channels, including the opening of exclusive shops, along
with franchising, and crossovers with department stores and international
The designer’s efforts have earned him two awards this year alone. He won “Most
Promising Entrepreneur” in the Asia Pacific Entrepreneurship Awards and was
named one of the Ten Outstanding Designers by the Hong Kong Communication Art
Centre. In Six Questions, Mr Choy maps out his strategy for success on the
How does the mainland market see Hong Kong brands?
Hong Kong brands have an advantage and enjoy a privileged status on the
Chinese mainland. Mainland companies think that Hong Kong brands have a unique
philosophy and are more similar to the local culture than international brands.
Therefore, they are willing to invite industry insiders from Hong Kong to the
mainland to share their experience, which is a valuable opportunity for Hong
What is the best way to promote Hong Kong products on the mainland?
Collaborating with mainland magazines is very important. I recommend that
enterprises allocate resources for this, because it’s a kind of soft-promotion
strategy, which greatly helps brand development and marketing. Television
advertising on the mainland, on the other hand, is not a must because of the
high cost and broadcasting geographical constraints. But print advertising is a
better way to penetrate the market. Apart from conducting interviews with
magazines, you can also work with them to launch promotions, such as organising
activities or competitions, to achieve a win-win situation. The cost of magazine
publicity is also less expensive.
What is your marketing strategy?
No matter what kind of publicity, the key to success is focusing on merging
products with life. For example, I designed a product in 2001 – a keychain
figurine series called Qee. It’s a patented key chain and necklace collection
that has caught on with art toy collectors.
We realized that we cannot rely on a single product. Instead, we need to take a
concept and spin it off into other series. This creates a fresh and evergreen
image to users.
How do you create a connection with users to your product?
For designer toys like ours, the buyers’ sense of involvement is crucial. In
2003, I introduced the concept of DIY (do it yourself), teaching users via the
Internet how to draw their own Qee key ring designs. In some shops, there’s a
design corner, with art instructors on hand to help our customers create their
own personal characters. This "everyone can design" concept not only encourages
creativity and brings satisfaction, it also enhances their sense of belonging to
Apart from magazines, you have been successful in collaborating with shopping
malls and department stores.
This channel is more extensive and allows direct interaction with consumers.
We once held a redemption program at department stores over the Christmas
period, which resulted in a great response. In addition, we have cooperated with
middle-end fashion brands on the mainland to create special
During the launch of The Simpsons Movie in the United States in 2007, we also
worked with a partner in the US to organize a world-tour exhibition of Bart
Simpson Qee DIY. The tour’s last stop was the mainland.
You have since collaborated with several international brands through
cross-licensing agreements. How has that helped in licensing your brand and
We have been actively cooperating with well-known international brands,
including adidas, LeSportsac, SanDisk and FX Creations. But I don’t see this as
my ultimate goal. Every brand creator wants to develop his own licensing
products, so I also use my brand to design a variety of hats, bags, shirts,
mugs, phone lanyards and other products.
Qee and Toy2R’s other creations will be featured at the HKTDC Hong Kong
Licensing Show, 11-13 January 2010.
BVI Companies Allowed to List in Hong
Kong Stock Exchange
Companies incorporated in the British Virgin Islands (BVI) are now allowed to
list in the Hong Kong Stock Exchange.
The HKSE has agreed to accept applications from companies incorporated in the
British Virgin Islands.
Barry Mitchell, a partner at international law firm Maples and Calder heading
the firm’s Hong Kong-based BVI team was quoted by Hong Kong Legal News as
saying: “Private equity firms have incorporated companies in the BVI for the
purpose of investing into China and many of them are now looking for an exit.”
He added: “Foreign private equity investment is reaching a certain level of
maturity in China and with exits sometimes difficult to achieve, the ability to
list in a well regulated and cost effective jurisdiction such as Hong Kong
should provide BVI companies with an exit strategy which has not been hitherto
available without first undertaking a significant restructuring.”
“Given that a listing on other exchanges can be less attractive in terms of
costs and regulation,” Mitchell went on to say, “this is a welcome development
and an option that will be very attractive.”
The British Virgin Islands is known for tourism and financial services. The
territory is considered a tax haven with majority of government income coming
from license fees for offshore companies.
The folly of promoting
'private' universities - REGINA IP
Former senior civil servant Regina Ip
discusses the latest in-depth government issues and policy.
Can education services be "commercialized" and turned into a self-sustaining
money-spinner? Our chief executive and some of our city's top educators
apparently think so, or they would not have pushed education as one of the
six new "industries" slated to function as a new locomotive of growth.
The level of education attainment and skills is no doubt a decisive factor
determining a territory's economic future. That is why governments worldwide
feel duty-bound to provide education services, to various extents, at public
expense. But examples of really successful education services as unabashed,
unsubsidized commercial enterprises are few and far between. In Hong Kong, the
only such examples are the tutorial schools, which package their tutors like
rock stars and pin their business appeal wholly on exam scores.
In comparison, none of our universities qualify, as they are dependent on the
government for land and annual financial grants. As for their professional and
continuing-education arms, the extent of any hidden subsidies is not clear. Even
if they are entirely separate profit-and-cost centres, their business appeal
derives to a large extent from their being part of prestigious public
universities. Much of that will wear off if their parents are seen to be
spreading their brands too thin and striking too many deals. In the commercial
world, a brand risks degrading itself if it is seen by its supporters to be
overextending itself and letting standards slip. Such reckless, rent-seeking
expansion would be even more fatal in the world of higher education, where
standards are supposed to come first.
If the promoters of "private" universities as a viable commercial enterprise
persist in indulging in such fancy by pointing to prestigious private
universities overseas, they need to look at the figures in a much more
cool-headed manner. In the US, private universities receive massive federal
funding in support of their research. Stanford, for example, which stands on
more than 3,200 hectares of its own land, in 2009-10 derives only 17 per cent of
its revenue from tuition and fees, but 70 per cent from government, foundation
and corporate support for sponsored research. And that's a university which
charges a whopping US$50,000 annually for tuition and fees. Can our "private"
universities aspire to be a true commercial success if, shorn of recurrent
government subsidies, they charge market-level fees?
The US does offer a good example of a successful and truly "private" university
in the form of the San Francisco-based Academy of Art University, which owns its
own premises. It specializes in art and design, and has grown over 80 years.
Hong Kong could take a leaf from its book and establish private colleges
specializing in business, finance and related skills, but not kid itself by
claiming to be building world-class research universities. That would be much
more honest. But there remains a catch: if land and interest-free loans are to
be provided, as the Education Bureau is proposing, any such universities would
not be "private" in the true sense of the word. On the basis of the information
available, the government will be providing land worth potentially HK$3 billion,
and interest-free loans amounting to another HK$2 billion.
The immediate beneficiaries will probably be the faculty and new staff, whose
salaries would rise with the increase in demand. Certainly, it wouldn't be the
6,000-odd high-school students who qualify for university admission but are
denied places because of shortfalls in the public sector, if the fees are to be
set at commercial rates. Nor would it even be the mainland undergraduates who
our planners hope to target.
Tang Jie, a vice-mayor of Shenzhen, said recently that mainland students would
come if tuition fees were set at HK$100,000 per annum. Welcome to fools'
paradise if you believe that Hong Kong will strike gold by tapping into the
Regina Ip Lau Suk-yee is a legislator and chairwoman of the Savantas Policy
The World’s Consumer
The Chinese mainland will drive
global retail sales in the next three years, according to a
More than 380 business leaders from 23 countries took part in the 10th Hong Kong
Forum, 1-2 December, to gain insights into the fast-growing Asian market,
dominated primarily by the Chinese mainland. “As the top global consumer market,
definitely, it is China,” said Anthony Keung, CEO of Hong Kong’s Fenix Group
Holdings. “In fact, it has only just started.”
Among the speakers at this year’s event were such pioneering Hong Kong companies
as Hong Kong Beijing Air Catering, which signed the first Sino-foreign joint
venture in 1979.
“In China, you have to take a lot of risks, whether it’s financial or
political,” said Dr Annie Wu, the company’s Managing Director. Thirty years
later the gamble for the airline-food catering business has paid off for the
firm: “We trusted the Open Door policy and never looked back.” Dr Wu’s company
currently runs 12 joint venture businesses on the mainland.
Build and They Will Come
Another Hong Kong entrepreneur who saw huge opportunities early on was Sir
Gordon Wu. In the 1980s, the Chairman of Hopewell Holdings identified a future
demand for highways on the mainland at a time when, Sir Gordon said, “no one
could even afford bicycles.” His company went on to build, among other
infrastructure projects, the first highway from Shenzhen to Guangzhou in the
Pearl River Delta region.
Shui On Group Chairman Vincent Lo said
that Hong Kong has a unique role in continuing to open new business
opportunities for mainland companies and foreign businesses that want to break
into the mainland market.
Mr Lo’s first major project came during the mainland economic downturn in 1996,
when he was approached by Shanghai authorities to redevelop a dilapidated
“Even though the market was bad at the time, I was certain Shanghai would become
an international business centre in the 21st century.” Mr Lo was personally
involved in drafting the master plan for what is now Xintiandi, one of
Shanghai’s main tourist attractions. (See "Remaking Heaven and Earth" in Six
Mr Lo said the Shanghai project illustrates how Hong Kong can integrate the best
the world has to offer, and make it work on the mainland. “Hong Kong’s ability
to constantly transform itself, from a manufacturing to a services industry –
it’s what we do best,” Mr Lo said.
Sir Gordon said another of Hong Kong’s strength that should serve as a model for
other emerging markets. “Hong Kong has thrived because of the rule of law,” he
said, adding that no economy can prosper even with vast amounts of technology
and know-how, without “everyone knowing the ground rules.”
Hopewell Holdings Chairman Gordon Wu says
building a good brand is important to making it on the mainland - “The brand
market on the mainland is now a free-for-all,” Sir Gordon noted, which makes it
important to establish yourself as a good brand.
Hong Kong brands are helping expand the mainland middle-range consumer market.
Opportunities to cater to this growing segment are expected to grow as domestic
spending continues its upward trend.
Mr Keung of the Fenix Group has seen success on the mainland for his fashion
brand Anteprima. “There used to be only the very top-end brand and low
end-markets. The middle-range market was not there. But, in the last three
years, the middle market has been growing 30 to 40 per cent.”
According to a study carried out by PricewaterhouseCoopers (PWC) and the
Economic Intelligence Unit, Asia – with the Chinese mainland leading the way –
will drive retail sales in the next three years. Promising sectors in the
mainland consumer market, include food and beverage, apparel and private labels.
“Opportunities are plenty; there’s no question about that, said Carrie Yu, a
Partner at PWC. “But competition is intense, especially in the first-tier
markets. Third- and fourth- tier cities, though, are far from saturated.”
“Branding is very important,” said Shui On’s Mr Lo. “But it’s not easy building
a brand. You’re looking not at just one market, but hundreds of different
markets [on the mainland].
Business veterans of the mainland market say patience is key to making it. “It
won’t happen overnight,” Dr Wu said. “Relationships in China are built on
The Shui On Chairman, who’s been dubbed the “king of guanxi” [connections] for
being among the first successful foreign investors on the mainland, maintains
that “delivering on your promise is the best way to maintain good business
Remaking Heaven and
Hong Kong property developer Vincent Lo is best known for transforming a
crumbling housing development in Shanghai more than 10 years ago into a prime
tourist attraction. Xintiandi, which means “new heaven and earth,” has earned
praise for preserving the traditional shikumen, the stone-gate style of housing
unique to Shanghai, and turning it into a vibrant entertainment district.
Mr Lo’s building-materials and construction company is now involved in other
mainland redevelopment projects in Hangzhou, Wuhan, Foshan, Dalian and Chongqing,
where his company is redeveloping the municipality’s central business district.
Mr Lo is seen as one of the most consistently successful foreign investors on
the mainland. In Six Questions, he explains why the mainland market was always
going to be a good bet.
What was the Chinese mainland like when you first entered more than 20
The difference is like night and day. Twenty-five years ago, in Shanghai
for example, there was only one hotel – the Jin Jiang Hotel – that catered to
foreign visitors. But the Jin Jiang could not even guarantee your reservation.
So you used to arrive in Shanghai with a bit of trepidation, not knowing for
certain whether you would sleep on the streets that night.
Today, all the top hotels are in Shanghai. The streets are busy late into the
night, whereas in the past it would be empty by 8pm.
Why did you choose to focus your business on the mainland, and why
In the early 1980s, I decided that I wanted to stay in Hong Kong after
1997. Since we were going back to the mainland, I believed then that, as a
business, I needed to invest in China to get first-hand knowledge of what was
happening, because the economic reforms were just starting then. Most Hong Kong
people were not confident, but I felt there was a good chance because the market
is huge. And with the opening up of the economy, I felt there were plenty of
We visited three cities: Shanghai, Beijing and Guangzhou. On my Shanghai visit,
I was introduced to the city’s Communist Party Youth League, which wanted to
build a three-star hotel. I was impressed by them, and although we did not do
much market research, I decided to invest there first.
Your projects have been very successful at integrating the old with the
new. What is your overriding philosophy when redeveloping these places?
I believe that for a country like China, with its 5,000-year history,
every city has its own culture, history and customs. Old buildings are the best
reflection of the culture and history. I believe it’s not right to tear down all
old buildings and build everything brand new. If you go to a city where you see
high-rise buildings, they all look the same. There’s no character. Preserving
the old is important. For myself, when I go to any city, I always want to see
the old part of town because that tells me most about that place.
Xintiandi was successful because we combined preservation with modern living. We
transformed these traditional houses, which are unique to Shanghai, and made
them fit for the 21st century lifestyle.
Much has been made about the rivalry between Shanghai and Hong Kong. As a
resident with business stakes in both places, do you believe that Shanghai could
overtake Hong Kong as an international financial centre?
Shanghai is moving forward very rapidly, especially now that the Central
Government has designated it to become the country’s international business and
financial centre by 2020. Right now, Hong Kong still has several very strong
advantages, but these will gradually diminish unless we make sure it continues
to stay ahead of the game. There is room for both to thrive. But Hong Kong will
have to compete in the future with Shanghai.
As one of the early investors on the mainland, what is your advice for
companies interested in breaking into that market?
You must take a long-term view. It takes a lot of commitment and a lot
of conviction on what you plan to do. You must not just say, ‘This is how we’re
going to do it,’ from afar in your home base. You need to be there on the ground
and have your fingers on the pulse to know what is happening, what is changing,
and plan accordingly.
What role does Hong Kong play for businesses that want to break into the
The Xintiandi project is a perfect illustration of Hong Kong’s strength
as an integrator and packager. We brought the world’s best to put together that
project. There are similar opportunities on the mainland that Hong Kong and
overseas businesses can take advantage of using Hong Kong as the platform.
Hong Kong has all the human capital, the experience and knowledge of what is
required on the mainland. We have been the mainland’s biggest partner since the
opening up, and we must continue capitalizing on that.
Hong Kong's tertiary
institutions are winning worldwide kudos, reinforcing Hong Kong's goal to
develop education as one of its new growth engines
Kellogg-HKUST representatives celebrate
the number-one ranking of their EMBA program
The annual ratings period can be a testing time for universities, but Hong Kong
has excelled this year, emerging as Asia’s most important centre for executive
education. The outstanding achievements of Hong Kong's elite tertiary
institutions build a strong foundation for developing education as one of the
new economic pillars. Hong Kong Chief Executive Donald Tsang, in his October
policy speech, affirmed his commitment to enhancing Hong Kong's status as a
regional education hub.
Full marks go to the Hong Kong University of Science and Technology for its
world-beating Executive MBA (EMBA) program, run jointly with the United
States-based Kellogg School of Management at Northwestern University. The
Kellogg-HKUST Executive MBA has surpassed all leading institutions, once again
ranking number one in the world on the Financial Times 2009 EMBA global
The success of the part-time program is largely attributed to the superb career
track records of the 2006 graduating class and their geographical diversity in
terms of nationality and overseas working experience, according to Professor
Steven DeKrey, Senior Associate Dean and Founding Director.
“Our students come in as high-calibre executives working for major organizations
with distinguished achievements, but are still able to take their careers to a
new height upon graduation.” Their ability to climb further up the corporate
ladder after graduation was boosted significantly, as they were able to fetch an
average 81 per cent more in salary, he adds.
Talented students at Hong Kong
Polytechnic University, which is ranked second among hospitality and tourism
So highly regarded is the program that half of the current class members are
based outside Hong Kong, flying in from their offices in London, New Jersey, New
Delhi, Bangkok, Seoul, Helsinki, Moscow and a number of cities on the Chinese
mainland, to attend weekend classes.
This is the second time since 2007 that the Kellogg-HKUST EMBA program has
topped the international rankings. Professor Leonard Cheng, Dean of HKUST
Business School, credits the achievement to the Kellogg and HKUST partnership.
It is, he says, “in a unique position to bring the best of both worlds,
providing an executive education that caters to advanced economies as well as
Hong Kong Polytechnic University (PolyU) has strengthened its position of
excellence in a number of areas this year. In its latest achievement, PolyU’s
School of Hotel and Tourism Management (SHTM) has been ranked number two in the
world among academic institutions in hospitality and tourism. It is the only
non-US institution in the top five.
The ranking, based on total research output in 11 leading hospitality and
tourism journals over a 15-year period (1992 to 2006), will be published in the
November 2009 issue of the Journal of Hospitality & Tourism Research.
EMBA-Global Asia is launched by the
University of Hong Kong, Columbia University and London Business School
SHTM Director Professor Kaye Chon says the school is well known as a pioneer in
its field, graduating generations of talented students since 1979. “As a global
centre of excellence in hospitality and tourism education for the 21st century,
the school is well-poised to lead the world's hospitality and tourism education
in the years to come.”
PolyU is preparing to open its own hotel in 2010, which Professor Chon says will
further strengthen the international status of the school as a world-class
The University of Hong Kong (HKU) was honored by The Economist magazine in
October, when its MBA Programme was ranked 38th among the world’s top 100, up 20
places from last year.
Dr Chris Chan, Assistant Dean and Director of HKU's MBA program, says the
prestigious ranking, based on independent surveys, shows that critical strategic
and curriculum changes were paying off.
“The HKU MBA offers an excellent international student mix, well-established
connections within the business community, strong Asia-focused courses and
teaching, and world-class partnerships with Columbia and the London Business
School. It enables all full-time MBA students to spend up to four months at
these world-class schools as an integral component of their studies,” Dr Chan
“We are very proud that the HKU MBA has consistently been rated one of the best
programs in the region. Of course, we won't stop there. We will continue to
strive to be the best.”
HKU also ranked first in the 2009 edition of global career and education network
QS.com’s Asian University Rankings. Two more Hong Kong institutions, the Chinese
University of Hong Kong and the Hong Kong University of Science and Technology,
placed second and fourth respectively in the Asian rankings.
HK University - The Chinese
University of Hong Kong’s EMBA program consistently rates among the world’s best
The “home-grown” Executive MBA Program of the Chinese University of Hong Kong
scored highly in the Financial Times ranking, listed among the world’s top 20
EMBA programs for the ninth consecutive year (2001-2009).
Professor Andrew Chan, Director of the EMBA program, says the university
alumni’s salary is the fifth-highest in the world. Its graduates also achieved a
salary increase of 64 per cent this year, despite the volatile global market.
“We are the first EMBA program in Hong Kong, and a truly made-in-Hong Kong
product. The programme’s success is, therefore, Hong Kong’s success,” Professor
It is distinguished as a uniquely Hong Kong program and one of two programmes in
the top 20 in which the medium of teaching is bilingual, the other being IMD in
“As always, ranking is not our foremost pursuit,” Professor Chan says. “What is
important is maintaining our ability to nurture top-notch management talent to
meet the needs of Hong Kong, the mainland and the region.”
The High Life - Colin Kelly, Regional
Director, Rolls-Royce Motor Cars, says Hong Kong is a good market for the brand
Recent world economic woes notwithstanding, it seems that Asia’s appetite for
luxury brands continues unabated. The strength of luxury-product shoppers in
Asia is bringing “a glimmer of hope to a beleaguered industry,” according to
US-based consultancy Bain & Company, in its latest study on luxury-goods markets
Another new report by PricewaterhouseCoopers calls Asia the “standout success”
of the luxury sector, which is holding firm as other markets slump. It says Asia
has the brightest outlook for luxury brands, noting that, by 2015, the Chinese
mainland is forecast to become the world’s top buyer of luxury goods.
The latest Capgemini Merrill Lynch World Wealth Report found the Chinese
mainland’s population of high net-worth individuals surpassed that of the United
Kingdom, to rank as the world’s fourth-largest in 2008, and is poised to
overtake North America for the top spot by 2013.
With all the money there for the taking, Hong Kong, at the gateway, is feeling
the force. Brands are reporting robust sales across a range of luxury lifestyle
One example is luxury cars. The sector slumped 40 per cent globally during the
financial crisis, but, in September, when Rolls-Royce previewed its new
super-luxury Ghost in Hong Kong, the dealer was swamped with orders.
The Hong Kong launch was the first in the Asia-Pacific region, and came just two
days after the limousine’s global launch at the Frankfurt Motor Show.
Rolls-Royce said the fact that it came so soon after Frankfurt “underlines the
importance of the Greater China/Hong Kong market to us.”
At the launch, Colin Kelly, Regional Director, Rolls-Royce Motor Cars, said
people were showing renewed interest in the luxury sector and said Hong Kong is
a good market for the brand.
“We regard Hong Kong as a metropolis for luxury goods, and history has shown
that we have had a strong heritage here. It is no coincidence that Rolls-Royce
Motor Cars secured its single-largest order to date – of 14 bespoke
extended-wheelbase Phantoms – in 2006 from The Peninsula Hong Kong.”
He added that Rolls-Royce orders in Greater China have exceeded 100 cars in less
than two months. “We see a great future for Rolls-Royce in Greater China and the
Asia-Pacific region, both for Ghost and Phantom.”
Diamonds are Forever
Hong Kong has also sparkled for the De Beers Group, the world’s leading diamond
company, at a time when the jewellery industry has been hit hard by the
recession. The company launched its Forevermark brand in Hong Kong, Macau, the
mainland and Japan last December, and it has been so successful that the brand
is now available at about 250 outlets across Asia.
“We actually piloted the Forevermark brand in Hong Kong in 2004, because Hong
Kong is a highly dynamic, competitive and self-contained marketplace, with
sophisticated and discerning consumers,” said Nancy Liu, Managing Director for
China and Hong Kong. “Our thinking was that if Forevermark could succeed in Hong
Kong, then it could succeed elsewhere. There was such a positive reaction to the
pilot that it made absolute sense to launch it in Hong Kong.”
While De Beers believes Forevermark has the potential to be a successful global
brand, its focus is on making it a success in Asia first, where it will expand
the rollout to select authorized Forevermark jewellers.
Hong Kong will continue to be very important to the brand, Ms Liu said. “Hong
Kong has positioned itself as the aspirational shopping destination for mainland
visitors, who are increasingly interested in purchasing diamonds.”
Pretty in Pink - Vickie Sek, Director of
Jewellery, Christie’s Asia, says luxury buyers are back in force
The decision by auction house Christie’s to offer the rare Vivid Pink diamond at
its 1 December auction in Hong Kong is further evidence of the city’s importance
as a market for fine jewels.
“Hong Kong is exceedingly important to Christie’s. In fact, Hong Kong is our
third largest sales venue, behind New York and London, a position it has held
since 2004,” said Vickie Sek, Director of Jewellery, Christie’s Asia.
Christie’s Hong Kong sales across all categories have grown faster and declined
less than any other area of the business, Ms Sek noted. “The tremendous
excitement that has been such a feature of this region as the newly wealthy add
their weight to the market paused earlier this year, but is now back in force.”
Brands are positioning themselves for a new era of luxury in the wake of the
financial crisis, leading industry experts say. A global report commissioned by
the De Beers Group found consumers were tired of mass-marketed luxury products
and would leave “fast luxury” behind for fewer, better things.
Increased scrutiny of product quality and authenticity, a greater appreciation
of fine craftsmanship and renewed calls for exclusivity were noted by the 21
executives interviewed for the report, who represented such brands as Cartier,
Christie’s Europe, LVMH, Salvatore Ferragamo and Tiffany & Co. A heightened
awareness of social and environmental responsibility is also important to
today’s luxury consumers.
The report says that while the wealthy in emerging markets are still driven
primarily by status and prestige, they are increasingly influenced by their
western counterparts, and their purchasing patterns are transforming rapidly. It
notes that this has significant implications for the way luxury players will do
De Beers calls this “a marked shift from conspicuous to discerning consumption
in luxury,” adding that, in this new era of luxury, “the values of a brand have
never been so important.”
It says that as luxury players transform and new niche labels emerge to
capitalise on the opportunities, “competition for luxury spending will
For Christie’s jewellery sales, in particular, the strength of the Asian market
has been building for some time. “In fact, for the past several seasons our
jewellery sales in Hong Kong have been the most valuable at Christie's, bringing
in more than the historic top centres of New York and Geneva. So Christie's now
sees Hong Kong firmly alongside these two cities as a major international centre
for the sale of the world’s finest jewels.”
Bonhams - This 15-carat, brilliant-cut
diamond ring was featured at Bonhams’ fine jewellery auction in Hong Kong last
Bonhams has reserved some of its most exquisite pieces for its fine jewellery
and jadeite auction in Hong Kong, 28 November, citing growing demand. Edmond
Chan, Head of Bonhams Hong Kong jewellery department, said the jewellery
industry has witnessed a major shift of focus to Asia. “Particularly favourable
to the buyer are exceptional and rarely seen pieces that are trickling into the
Mr Chan believes the growing demand for diamonds is an indication that Asians
have already started buying stocks and properties in readiness for the next
recovery gain. “High-grade diamonds or superb gemstones are bought for security
and long-term investments. Perhaps high-risk and high-return products are seen
as less desirable now to consumers, while all kinds of tangible assets seem less
risky for investments.”
He added that Hong Kong, a financially secure city with its currency pegged to
the US dollar, would be a stepping stone for Bonhams as it prepares for entry
into the mainland market.
Bonhams will also hold Hong Kong’s first whisky auction, 27 November, offering a
prized collection of single-malt whiskies from a private American collector.
October 27 2009
Back to the Future
HSBC Group CEO Michael Geoghegan
will relocate to Hong Kong from London next February to be “faster on our feet,”
as Europe’s biggest bank builds its business in the region. The announcement is
seen as an endorsement of Asia’s resilience during the economic crisis, and the
strength of Hong Kong as an international financial centre.
Founded in Hong Kong and Shanghai in 1865, the HSBC Group moved its headquarters
to London in 1992, as a condition of its purchase of Midland Bank. Now, the bank
is re-focusing on the region that accounts for two-thirds of its profits: Asia
and the Middle East.
The banking giant has noted “a shift in gravity from west to east,” and says
China will be its key focus.
Mr Geoghegan has described Hong Kong as “the most logical place” to work on a
China strategy. As an HSBC spokesman added: “Hong Kong is the gateway to China
and a major financial centre in Asia. And HSBC already has a home here: HSBC is
the leading bank in Hong Kong and the leading international bank in China. It is
the ideal location for our Group CEO to drive the continued development of our
business in the region.”
HSBC Group CEO Michael Geoghegan’s
relocation endorses Hong Kong as a global financial centre and the gateway to
the Chinese mainland
Stephen Green, HSBC Group Chairman, describes the decision as “absolutely right
for HSBC and entirely consistent with the strategy we set out in 2006.”
The bank adds that it “makes sense to have the Group CEO here, where we see the
greatest opportunities for growth, in terms of trade, investment and wealth.”
From Hong Kong, HSBC will continue its strategy of organic growth, expanding its
network on the Chinese mainland and in Vietnam, Indonesia and India. “And, of
course, we remain open to investments when the fit is right, such as our
insurance joint venture on the mainland with National Trust, and the acquisition
of Bank Ekonomi in Indonesia.”
Observers see the HSBC move as a positive sign. In Hong Kong, Steven DeKrey,
Senior Associate Dean, Master’s Programs Director, at the Hong Kong University
of Science and Technology Business School, considers the HSBC relocation to be
“great news for Hong Kong and a fine investor-confidence builder.
“As a highly respected bank and the darling of Hong Kong investors, as evidenced
by the take-up percentage on the rights issue, HSBC’s corporate re-establishment
in Hong Kong is a clear and definite signal of the positive future of Asia's
growth potential and Hong Kong’s role in it,” he adds.
Professor Kathleen Slaughter, Dean
of Ivey Asia - Professor Kathleen Slaughter, Dean of Ivey Asia, sees it as a
clear signal of Asia’s global economic power.
“Asia continues to be the stronghold of the world’s economic growth, and Hong
Kong has consistently been a key player in the global financial markets. The
move is clear recognition that the world economy is moving east and HSBC is in a
strong position in this market.
“HSBC has been a source of people development, financial services expertise and
solid banking for decades in Hong Kong. The stability of the banking system in
Hong Kong is validated with the move to Hong Kong and the focus of the bank’s
strategy is reconfirmed.”
Professor Slaughter describes HSBC as “an iconic brand in Hong Kong” and says
people will feel it has moved back to where it belongs. “I doubt if there is any
place in the world where HSBC is more highly regarded than in Hong Kong. To Hong
Kong residents, it’s as welcome as the return of the prodigal son.”
In New York, Knight Vinke Asset Management LLC, which owns HSBC shares, was also
celebrating. “We welcome this move, as this is something we have been calling on
the group to do since the commencement of our public engagement in 2007,” says
Eric Knight, Founder and CEO.
Sir David Brewer, Chairman of the of the
China-Britain Business Council, says HSBC’s decision is part of a bigger trend
of companies moving to Hong Kong to do business with the Chinese mainland. “In
London, we see Hong Kong, the leading financial centre in Asia, as a strong
partner, and see the move by HSBC as a positive development,” says Sir David
Brewer, Chairman of the of the China Britain Business Council. “This sends out a
strong message and positions HSBC as a market leader and ready to take part in
the economic recovery.”
The former Lord Mayor of London added that HSBC’s decision is part of an even
bigger trend. “It’s not just large companies like HSBC; there are lots of
smaller firms keen to do business in the market. And if they’re looking to put
their toe in the water for the first time, Hong Kong is a good place to start.”
According to Brian Caplen, Editor of The Banker, the HSBC move is a “classic
post- crisis decision.”
“For HSBC, it is a kind of no-brainer, as its roots are in Hong Kong and China,”
Mr Caplen says. “The scope for expansion is huge, and there is the prospect of a
further acquisition in China. Hong Kong remains the obvious choice as a
location, given the bank's strong position and history there.”
According to some London media, the “shock move” by HSBC has sparked speculation
that other banks, including Standard Chartered, might also turn to Hong Kong as
the balance of economic power shifts to Asia in the wake of the financial
No doubt Donald Tsang, Hong Kong Chief Executive, would welcome any such moves.
He says HSBC's decision is “a clear and timely thumbs up for Hong Kong as a
stable, reliable and vibrant base for the banking industry.
HSBC operates in 86 countries and territories worldwide, with a global network
of more than 100 million customers.
October 1 2009
In home straight after an easy run
When Joseph Yam Chi-kwong clears his desk today after 16 years as head of the
Hong Kong Monetary Authority, many of the city's taxpayers will be left
wondering whether the world's highest paid central banker gave value for money.
Yam's pay packet of HK$11.93 million last year was fatter than those of the
chairman of the US Federal Reserve, the president of the European Central Bank,
the governor of the Bank of Japan and the governor of the Bank of England
combined. Yet his job was considerably less demanding.
Unlike Ben Bernanke, Jean-Claude Trichet, Masaaki Shirakawa or Mervyn King, Yam
never had to grapple with decisions about interest rates or the direction of
monetary policy. Under Hong Kong's linked-exchange-rate mechanism, interest rate
changes and foreign exchange interventions are triggered automatically by market
Yam did step in occasionally. In August 1998, during the East Asian financial
crisis, he led the HKMA's counter-attack against speculators who were selling
the Hong Kong dollar short and driving down the city's stock market. The battle
lasted two weeks before the speculators were forced to retire defeated.
Although the Hong Kong dollar's peg survived intact, the victory appeared hollow
to most of the city's residents. By the end of 1998 the economy had contracted 8
per cent compared with a year earlier, unemployment had tripled to more than 6
per cent and residential property prices had fallen to half their mid-1997 level
as persistent deflation set in. At the time, some economists suggested that Hong
Kong would have been better off if the HKMA had devalued the currency.
Since then Yam has made some minor adjustments to the peg, strengthening it
against speculative attack and introducing two-way convertibility to prevent the
Hong Kong dollar appreciating. But for the most part, the system has effectively
run itself for the last 10 years.
That left Yam with responsibility for banking supervision. Yet although Hong
Kong's banking sector came through last year's financial crisis relatively
unscathed, the city's much vaunted reputation for high-quality regulation was
severely damaged by the Lehman Brothers minibond scandal. The HKMA was
criticised for focusing on overall banking system stability to the exclusion of
customer protection. Yam's critics said he had been asleep at the wheel.
That's not to say Yam has been inactive. In 2002, he oversaw the introduction of
the HKMA's first banknote. Apart from being widely recognised as one of the
ugliest banknotes in circulation anywhere, the new HK$10 bill was worth just
half the value of the smallest denomination note then being issued: a telling
demonstration of deflation in action.
Then, in 2003, he snapped up 14 floors of the newly completed Two International
Finance Centre tower for the HKMA's headquarters, awarding himself an office on
the 88th floor with a commanding view of Hong Kong's financial centre at his
More recently, Yam has supervised the launch of yuan-denominated financial
services in Hong Kong, establishing the city as the first offshore centre where
the mainland currency can be openly transacted.
Yam retires as surely the only central banker in the world better known among
the general public for owning racehorses than for making monetary policy
It is notable that his successor, Norman
Chan Tak-lam, is to be paid 32 per cent less for doing the same job.
Instant fashion brand Ziti hits the ground running - Andy Lee's mainland stores
open 45 days after venture born
Most businesses take years in the planning. Andy Lee Chi-hung probably set a
world record when he and a group of 50 Hong Kong exporters took only days to
launch a mainland fashion chain. It was a speed born of necessity. With Hong
Kong exporters being hit hard by slumping overseas demand, they need to
diversify into the potentially lucrative mainland market to boost flagging
Lee and his partners cut the ribbon on their first shops in Wuhan and Nanjing on
August 28, a mere 45 days after coming up with the idea. They are hoping the
cache associated with the "Hong Kong" name on the mainland will help Ziti become
a showcase of the city's fashion brands.
It was a hectic time. Lee, also the sole proprietor of mainland teenage fashion
chain Cocolulu, picked brands, bargained with department stores over leasing
space and cut deals with renovators to get the Hong Kong-themed shopping zone
ready to receive its first shopper.
Lee and his partners are hoping their collective effort will fare better than
other retail ventures launched by Hongkongers on the mainland - many of which
The stakes are high for Lee and the exporters. As president of the newly formed
Hong Kong Brand for China Market Association, he is vying for a slice of the
country's huge yet very competitive consumer market.
Formed in May only two weeks after Lee met the Hong Kong exporters by chance at
a trade fair in Wuhan, the association has until now no office or phone number.
However, it has the support of eight fresh university graduates who work on a
"We are street fighters and dare to take risks to make our dreams come true,"
said Lee, who admits he cannot speak Putonghua. "It is the fruit of teamwork."
Hong Kong exporters, which largely built the Pearl River Delta's reputation as
the "world's factory", are now seeking to become trailblazers in the nation's
rapidly growing consumer market.
But although the distance from factory gate to a mainland department store may
be shorter than a Wal-Mart in the United States, it is strewn with stumbling
blocks and traps.
Some Hong Kong investors have become frustrated at the failure of mainland
landlords to follow the contract.
Some have complained that landlords request retailers to move to another shop
even before the contract expires, with some forced out of shopping centres in
the first few months of operations.
Lee expected 20 to 30 per cent of Ziti retailers would pull out in the first
three months of operation, calling that "normal" in the competitive mainland
"I assume some of them won't survive and have thought about possible
replacements," Lee said.
"Retailing in China is so uncertain that we have to have plan B once plan A
"The domestic market is too large for an exporter to cope with alone. The Ziti
venture works because the exporters are in the same boat."
Despite the economic slowdown, consumers still appear to be spending on the
Lee recently saw a parent giving a credit card to the teenage daughter to use at
a Cocolulu counter in a Nanjing department store. The youngster walked out with
an outfit worth more than 1,000 yuan (HK$1,135).
"The spending power of university students alone is incredible, given millions
of fresh graduates every year," Lee said.
Lee came to the business world in a roundabout way. Trained as a marine engineer
in the 1970s, he worked as a trainee at various dockyards in England and Sweden
before joining the marine fire service.
Refusing to accept what he calls the "shoe polishing" culture in the service, he
quit to become a volunteer of the Salvation Army and at a windsurfing and
sailing training centre in the 1980s.
It was not until the late 1980s that Lee earned his first fortune when he became
a supplier of accessories such as belts and earrings. He founded the Cocolulu
retail chain in 2004 and today there are about 40 outlets in department stores
on the mainland and one at the Megabox shopping centre in Hong Kong.
"I have come across many tricks and traps in the business during the past five
years," said Lee, whose favourite sport is sailing. "It is no different from
sailing in a competition, which requires endurance, strong will, a clear mind,
hard work, teamwork, tolerance and guts."
How did you manage to launch the Ziti venture so quickly?
When I met these exporters at a Hong Kong Trade Development Council fair in
Wuhan in May, I found many of them had a strong desire to explore the mainland
market yet had no idea and limited resources.
I saw an opportunity in bringing them together to enter the market, giving them
greater bargaining power and at the same time allowing us to draw on a group of
people with varying talent. Most of them are small and medium-sized enterprises,
which means more flexibility in making business decisions.
How does Ziti help exporters break into the domestic market?
Ziti is a collective brand for Hong Kong exporters and appears as a designated
shopping zone or floor in a department store offering young female fashion and
At the Ziti in Wuhan, I selected 26 brands that I believe will work for the
local market. On the same day of the Wuhan opening, Ziti opened in Nanjing with
about 20 brands. Some brands overlap and some do not.
Ziti will become a platform for exporters to test the waters. If they find it
viable, they are free to expand further in the same city or elsewhere.
From customers' perspective, we want shoppers to think of Hong Kong whenever
they come across the name Ziti.
Dalian, Ningbo, Beijing, Shanghai and Guangzhou will be the next destinations by
the end of the year.
In terms of products, we have started with young female fashion and accessories.
After gaining a solid foothold in this area, we will add other things such as
weddings, food and confectionery.
Why are you helping these exporters, who are strangers to you and also
competitors in your business?
Well, we have seen fruitful outcomes by joining forces. For example, we got a
very good deal with Sogo department store in Wuhan because we came to the market
as a group.
The department store charged about 20 per cent commission compared with the
market average of at least 30 per cent.
Our terms for Ziti in Nanjing such as commission rates were even better. The
mainland market is so huge that there is room for everyone.
What important lessons have you gained from taking Cocolulu to the mainland?
Cocolulu was originally a Japanese brand, but the owner was no longer investing
in it. I took over its mainland licence and started a fashion chain from
I learned to overcome the frustrations dealing with the complicated value-added
tax system and with landlords who ignored contracts.
If we talk about building brands, we have to choose department stores carefully.
Some department stores such as those greeting customers with big trolleys of
discounted brassieres and underwear at the entrance and flying many promotional
banners have to be avoided.
This signals poor traffic.
Keeping one's integrity and sticking with principles is important. I have four "nos"
in doing business - no wine, no meals, no entertainment and no red packets.
We have heard many stories about the difficulties and failures of Hong Kong
investors in the mainland retailing market. What are the key challenges to Hong
Kong exporters switching to retailing?
China is so large and is not a mono-cultural society. Exporters have to learn to
understand the culture, appetites, sense of values and the consumption power of
shoppers in each city.
Even weather varies from place to place. Last week, Wuhan's temperature dropped
10 degrees Celsius after an autumn rainfall, but Hong Kong was still in the
middle of a grilling summer. This caught Ziti retailers at Wuhan off guard, and
they rushed to replenish winter stocks.
In northern provincial cities, people are more fashion-conscious and bold in
styles. V-shaped T-shirts and skinny jeans are popular in the north, but they
are not people's cup of tea in the south.
Are your competitors hostile to Ziti and what are they doing about it?
Some Hong Kong investors, who spent a lot setting up retailing operations in
vain, were so bitter that they stormed into Wuhan Ziti and questioned its
viability. The way they looked at us was hostile. They were asking how we did
Spanish vineyards target China's wine
The Spanish Wine Market Observatory (OEMV) shows wines exported to Hong Kong
soared 80% in value to Euros300 million in the year to April 2009, rising 31% in
According to Robert Tinlot, Honorary
General Manager of Spain's International Organization of Vine and Wine (OIV),
China is set to eventually become the world's premier consumer market for wines
and is already the fastest growing globally. He sees Hong Kong as the strategic
gateway to unlocking that vast potential market, with the territory an
established centre for wines in its own right.
That was mainly down to Hong Kong's abolition of its 40% duty on wine in
February 2008, allowing global players to take advantage of the territory's
logistics, finance and infrastructure capabilities to set up wine trades.
However, Spanish vineyards and
distributors currently rank eighth as wine traders into Hong Kong, well behind
market leaders France and the UK. The Director General of OEMV, Rafael del Rey,
sees that position changing with Spanish companies more often holding
presentations, tastings and symposia to increase their commercial networks.
Spanish distributors are prioritising
their target markets as Hong Kong, Singapore and Chinese mainland coastal cities
in Asia, as these have more progressive lifestyles and consumers possess greater
discretionary purchasing power.
Wines from Spain could penetrate both the Chinese mainland quality and mass
markets. Spanish distributors also expect to build sales for re-distribution
from China to the rest of the region under different pricing approaches.
Spanish wines underperforming - The UK's Wine Intelligence research company
estimates that Spanish wines are consumed by 42 million drinkers in the US, the
UK, Germany, Belgium, Switzerland and the Netherlands - but that means that 100
million consumers have not tasted Spanish wines in these developed markets,
leaving a huge potential for growth.
At the same time, many consumers
globally are not aware of the diversity of Spanish wines nor have a studied view
as to their merits, since Spanish brands are less well developed.
That doesn't imply individual Spanish
wines have not entered the lexicon for excellent quality. When wine lovers
around the world talk about Spanish wine, the name Rioja invariably appears.
This protected denomination of origin (PDO) has received international
However, there's a wide range of wines
throughout the entire portfolio of Spanish vineyards that offer individual
qualities, such as Cava of Penedes and wines from Catalonia, the Ribeiro and
Albariños in Galicia.
Denominations of origin include brands such as Ribera del Duero, Toro or Rueda
in Castile; Valdepeñas in La Mancha; Jumilla in Murcia; Carinena in Aragon;
Utiel-Requena in the Valencian Community and the fine Andalucian wines such as
Montilla-Moriles and Jerez de la Frontera.
Luxury Emita wine at Euros1,245 per bottle.
Spanish sparkling wines, Cava, have particularly shown strong sales growth
despite being affected by the sales of French champagne at very high prices.
Sparkling Spanish wine exports grew 22% in 2007 and 143 million litres was
shipped, worth Euros435 million. Some experts consider this sector to appeal
particularly to Chinese mainland drinkers, due to the wine's celebratory aspect.
The US is considered to be where there are good shorter term opportunities for
Spanish wine's consumption growth, with the US an ever expanding market of 60
million consumers. Over 2% sales growth was reported in 2008, very similar to
2007, and mainly due to young people becoming interested in Spanish wines.
Italy, Portugal and France are seen as Spain's current bulk markets, as well as
China, South Korea and Japan in Asia. In Asia there was a noticeable increase in
sales of sparkling and table wines. Other European markets such as Belgium,
Germany and Ireland have evolved positively too.
One of the foremost Spanish wine distributors in Asia is Torres, founded in 1870
with headquarters in Vilafranca del Penedès (near Barcelona) with vineyards also
in other zones such as La Rioja, Toro, Jumilla or Ribera del Duero, as well as
in Chile and California, the US.
Other wines sold under the Torres brand are Viña Sol, Sangre de Toro, De Casta,
Coronas, Atrium and Viña Esmeralda.
Among brandies, the brands Torres 5,
Torres 10 and Torres 20 are well known and are considered among the best brands
worldwide. Torres wines are exported to over 140 countries.
Another coming export to Asia is Spanish sherry. Says Francisco Valencia,
President of Marco de Jerez wine cellars: "sherry is particularly relevant to
Chinese cuisine. It is very often preferred by Chinese chefs, since dry wines
are too acidic."
Living the Dream
Mainland consumers aspire to the Hong
Kong lifestyle (photo: Xinhua News Agency)
They read foreign
magazines and books, browse foreign websites and regularly shop online.
They’re self-confident, enjoy holidays abroad and indulge in lifestyle
pursuits, like going to the gym.
Consummate netizens, they
have the same middle-class aspirations as their Western counterparts.
Only they live chiefly in China’s bigger cities – and unanimously defer
to Hong Kong as leading the “next big thing” in lifestyle aspirations.
An HKTDC Research survey
in June took a closer look at the mainland’s middle class. The survey,
of 1,080 consumers with an average household monthly income of about
Rmb10,000 (US$1,464), found that respondents favoured the prospect of
better living standards, if not a better lifestyle. Some 73 per cent
said they wanted to reward themselves by having “a rich material life,”
while 64 per cent said it was worth paying more for a product or service
Of those polled, 61 per
cent said they liked to “try and own trendy things,” and 63 per cent
said they liked to share and discuss with friends their “trendy
activities and experiences.”
book/magazines/newspaper (including e-version) once a month or more
Browse foreign websites
once a month or more
Play online games once a
month or more
Shop or acquire services
Source: HKTDC survey
Hong Kong à la
Trendsetting Hong Kong:
mainlanders see Hong Kong
as a place that offers a broad international vision and
Mainlanders view Hong
Kong as an advanced international financial centre, believing Hong
Kongers have a broad global vision and know how to enjoy life.
A majority said Hong Kong
is ahead of the mainland in responding to the latest trends, and that
most of the world’s latest products and trends can be found in Hong
Of those surveyed, 73 per
cent agreed that Hong Kong’s products and services reflected the latest
trends, while 72 per cent said they would use Hong Kong as a window for
the latest global trends.
In the study, 68 per cent
expressed an interest in keeping in touch with Hong Kong trends and
culture, while 49 per cent indicated that their clothing, lifestyles and
tastes were influenced by Hong Kong.
Mainland Consumers: the Hong
I like to keep in touch
with Hong Kong’s trends and culture
My clothing, living
style and leisure activities are influenced by Hong Kong’s trends
Source: HKTDC survey
Hong Kong trends are more compatible and
accessible for mainland consumers than those
in the United States
Reflecting how attitudes
and perceptions pervade large cities such as Guangzhou and Shanghai is
not to understate the impressions of those in second-tier cities, who
have had fewer opportunities to visit Hong Kong.
Their lifestyles and
tastes seem to have been more subtly and indirectly influenced by Hong
Kong popular culture, including movies and television shows, magazines
In Touch with
Hong Kong Trends
Hong Kong Trends
Attractive to Mainland Middle Class
Hong Kong is viewed as a
city where “east meets west,” a culture that has “a broader vision” and
“international experience,” a place where there is “good quality control
Mainland consumers aspire
to the Hong Kong lifestyle. Indeed, Hong Kong trends are more compatible
and accessible than those in the United States or Europe, while Hong
Kong celebrities and professionals are universally admired.
The survey revealed that
56 per cent of those polled wanted to travel to Hong Kong for products
that can only be found there. Nearly 80 per cent said they hoped the
services or products available in Hong Kong would also be available on
particularly interested in clothing and fashion accessories, electronic
products, including mobile phones and cameras, and leisure and
entertainment. Food, restaurants, movies and concerts were all
associated with Hong Kong’s enviable lifestyle.
The mainland’s perception
of Hong Kong products and services is not, of course, a static one, and
perception does not always translate evenly into sales. Nevertheless, it
offers a compelling snapshot of how Hong Kong brands can be marketed in
these and other mainland consumer markets.
details, please see the forthcoming HKTDC Research report: "Middle Class
Consumers in China," which can be ordered at
September 2 2009
Getting Closer: Hong
Kong and Guangdong
Rex Chang, Director of the Hong Kong
Economic and Trade Affairs office in Guangdong, says businesses using Hong Kong
as a base can expect "huge opportunities" under the new agreement.
One of Asia's most vibrant alliances is taking another major step closer after
Hong Kong and the Chinese mainland province of Guangdong signed a series of
eight pacts, 19 August, to strengthen their cooperation. The agreements cover a
variety of sectors, including services, finance, health care, education and the
environment. The deals were finalised at the 12th plenary session of the Hong
Kong-Guangdong Co-operation Joint Conference in Hong Kong.
Officials from neighboring regions are now rushing to develop the pacts into
proposals. These would be presented to the mainland's Central Government in time
to be included among next year's national economic development initiatives.
"Hong Kong-Guangdong cooperation on development strategies has been moving on a
national level since January this year, when the Outline of the Plan for the
Reform and Development of the Pearl River Delta by the mainland's National
Development and Reform Commission was announced," says Rex Chang, Director of
the Hong Kong Economic and Trade Affairs Office in Guangdong.
The new framework agreement fills in details on that plan, adds Mr Chang. He
points out that the challenge will be to "transform the macro policies into
concrete measures" and incorporate the content into the national government's
12th Five-Year Plan.
"This will definitely create huge opportunities not only for Hong Kong
businesses, but also overseas and mainland enterprises. And another aspect of
the Guangdong pilot schemes is that, if they are successful, they can be
expanded. If this proves successful, we can liaise with the central authorities
on wider application of initiatives under the pilot schemes to other parts of
the Chinese mainland," says Mr Chang.
Greater Collaboration - Mr Tsang said that the agreements have the potential to
"promote further economic development" in Hong Kong and Guangdong Province "and
even the country." as a whole.
Mr Huang said he believed the measures will aid economic recovery in both areas.
He also predicted that better collaboration among Hong Kong, Guangdong and the
nearby Special Administrative Region of Macau could make the Pearl River Delta
(PRD) the most competitive area in the Asia-Pacific region.
Guangdong Province, particularly the PRD, has long been Hong Kong's economic
hinterland and closest business and trading partner. Home to the largest number
of Hong Kong companies operating outside Hong Kong, it is also the main
destination of Hong Kong's outward investment. Economically, the PRD and Hong
Kong have complemented each other's development. By some estimates, more than
100,000 Hong Kong-invested enterprises had established themselves in Guangdong
as of the end of 2008.
The eight agreements are described as part of a continuous effort by both
governments. They comprise specific actions in response to the recent PRD
Outline Plan and the six new growth industry sectors indentified by the Hong
Kong Special Administrative Region Government.
Do Your Homework - New
agreements strengthen ties in the Greater Pearl River Delta region, which
comprises Hong Kong, nine municipalities in the mainland's Guangdong Province,
Mr Chang advises small and medium-sized enterprises (SMEs) using Hong Kong as a
base to closely monitor developments in the agreements, and Hong Kong-Guangdong
cooperation overall, so that they can move when the time is right.
With the services sector likely to be the first to benefit from the evolving
deal, Mr Chang advises SMEs to study cities in the PRD to determine which are
strongest in their target industries. Government websites (see links below),
including one operated by Mr Chang's office in Guangdong, should prove to be
"When this takes off, it will be moving very fast. This is a huge opportunity
companies should be ready to seize," he says.
Environmental industries may also find opportunities, with the two governments
promising to build the pan-PRD region into a "green and quality living area."
Other proposals include the construction of cross-boundary infrastructure
facilities, a boundary control point at Liantang/Heung Yuen Wai and construction
of a Guangzhou-Shenzhen-Hong Kong Express Rail Link.
Details are also being worked out to establish Hong Kong bank sub-branches in
Guangdong and joint-venture securities-investment advisory companies by Hong
Kong securities firms. Studies are also being conducted on arrangements to
reduce pollution in the region, and to cooperate on education – including the
possibility of a Hong Kong curriculum being offered at private schools in
Regarding health-care services, the administrations will encourage cross-border
research on vaccines and medication. This month, officials will meet to review
accreditation for Hong Kong practitioners wishing to set up clinics in
Steady Steps - The Basic Agreement
Main points of the 19 August agreement between Hong Kong and Guangdong Province:
* Promote and develop modern service industries in Qianhai, just across the
boundary from Hong Kong
* Implement sixth Cepa supplementary agreement in October
* Form a task force on financial cooperation
* Liaise on a rail link between Hong Kong and Shenzhen airports, with a
checkpoint at Qianhai
* Cooperate on disease control and prevention, vaccine research and production
* Encourage local tertiary institutes to establish schools in Guangdong
* Improve regional air quality, promote recycling and clean production
* Enhance intellectual property protection
Officials working on the agreement say an initial focus will be on the
mainland's special economic zone in Shenzhen, north of Hong Kong, and in Qianhai,
a 10-square-kilometre zone in nearby Shekou. China's Central Government and
Guangdong authorities have targeted the two areas for developing modern producer
services in cooperation with Hong Kong.
Experts from Hong Kong and Shenzhen must also hammer out details of the
implementation plan for Qianhai, recognised as a strategic hub for sea, air and
rail transportation. Though the recently signed document does not outline
specific cooperation projects for now, the two sides say they will study ways to
promote service industries in Qianhai and encourage Hong Kong businesses to set
up operations there. It may also offer a means of implementing pilot measures
under the Closer Economic Partnership Arrangement (Cepa), which grants Hong Kong
service industries easier access to Guangdong's market.
In a further sign of closer cooperation between the two regions, the Guangzhou
government and the Hong Kong Trade Development Council (HKTDC) plan to sign a
cooperation agreement to bring in Hong Kong companies to help develop the
exhibition business in the province.
Among the trade events being considered are fairs showcasing mechanical,
biological, chemical and electronic communication technology products.
August 19 2009
Opportunity to Go at Food Fair
Tens of thousands of visitors packed Hong
Kong's annual trade food fest - First-time Food Expo exhibitor ProSource, from
the Philippines, said it was important to be in Hong Kong to tap the China
market. "We could have exhibited at Chinese mainland fairs, but it's easier here
because it's more international. English is widely spoken here," said Cel Barba,
Sales and Marketing Manager. Celebrating its 20th edition, this year's
Food Expo, 13-17 August, hosted more than 600 exhibitors from 24 countries and
regions, including companies from 10 countries participating for the first time.
Debuting at the fair was the Mexico
Pavilion, which featured products from 13 companies, showcasing such premium
products as abalone, oysters and the country's signature tequila.
"Our presence in the region is small at the moment," said Cesar Lopes, Trade
Commissioner of the Mexico Consul General in Hong Kong. "We know the potential
in this market is huge, and Food Expo is a good platform to start." Mr
Lopes said Mexican food companies are also eyeing the huge mainland market. "At
the moment, it's hard to do direct business on the mainland. Our strategy is to
meet Hong Kong distributors with mainland connections to help introduce our
premier products there."
Mexican oyster exporter, Sol Azul, has been exporting to Hong Kong for about a
year and, according to company executive Pedro Noriega, "we hope to find other
opportunities in the region by being here." "Our products are already well
known in Hong Kong," said Celina Garcia, Marketing Director of abalone exporter
Sociedad Cooperative de Produccion Pesquera. "But with Hong Kong close to the
mainland, we're trying to open new markets. We're looking for Hong Kong
distributors to help us do that." "Hong Kong is a good place to gauge the
taste of Chinese consumers," said Arita's Senior Managing Director Yonezou Arita.
"And through Hong Kong, we hope to introduce our product to mainland consumers."
Fresh produce from Japan's Miyazake
prefecture on display at this year's Food Expo - Indeed, Hong Kong has overtaken
the United States as a top importer of Japanese food. While the city in itself
is a prime market for high-quality Japanese produce, it is also a major
re-export point for Japanese products to elsewhere in Asia, particularly the
mainland. Iranian exhibitors, meanwhile, want to expand their exports of dried
fruit and nut products to other parts of Asia. "Hong Kong is an important market
for Iranian companies," said Ali Khaksar, Overseas Exhibitions Director of
Mashad International Exhibition Company, which organized the Iranian pavilion.
He noted that, while Iran has been doing limited business in Asia for the last
30 years, now is the time to expand business in Asia.
Amid the global economic downturn many exhibitors are looking to the mainland
market. "Hong Kong manufacturers and suppliers should take advantage of Food
Expo to seek global buyers and attract Chinese mainland consumers," said Raymond
Yip, HKTDC Assistant Executive Director.
For All the Tea in China
Simon Wong of Kampery Group is keeping
tradition alive - That Simon Wong is a bit of a traditionalist at heart is
revealed when you first enter the boardroom at his Kampery Group's trading
headquarters in Kowloon.
The walls that surround the main meeting table are adorned with antiques and
memorabilia, from the ancient camera in one corner, to the series of framed,
sepia-tinged shots of yesteryear stacked in another. And it's a fitting setting
as Mr Wong wastes no time in explaining that the business he's here to talk
about – the tea business – owes a lot to its traditions in Hong Kong and the
Mr Wong addressed the inaugural HKTDC Hong Kong International Tea Fair, 13-15
August, in his role as Chairman of the Association of Coffee and Tea of Hong
Kong, a group he started a year ago after a lifetime in the tea trade. "I
started when I was born,'' he explains. "My family started in the tea trade 80
years ago. But up until last year, there was no organization that was
representative of this industry – so I decided to start one. I wanted to tell
people we need our traditions but we need to look forward, too. "In many ways,
China has opened the door for expanding the tea business in Hong Kong. And while
the tea market in Hong Kong is very stable, the opportunity for growth on the
mainland is very large. This is something we all have to look at.''
MingCha Tea House holds regular
tastings in its Quarry Bay shop - Over the past 12 months, Mr Wong has been
charting the flow of tea both in and out of Hong Kong – from the markets of
China, Sri Lanka, India, Kenya, Indonesia – and says it now amounts to some
8,300 metric tons per year. About 2,500 tonnes of that tea travels through the
city, he says.
"That, for me, says that the quantity left here – around 5,800 tonnes – amounts
to about 900 million cups of milk tea. That's how much we love our tea,'' he
laughs. Mr Wong says he supports the notion that Hong Kong can be a hub in the
international tea trade. "This idea is a strong one,'' he says. "Because of our
position in Asia and in regards to China, we can distribute the tea not only
into the mainland, but into Japan, Korea – all these countries.
"We are also in a position here to educate, to explore such avenues as tea
tourism. Everyone who comes here wants to taste a cup of tea, Hong Kong style,
and even international fast-food outlets have started serving them in this way –
milky, strong, aromatic.'' Mr Wong believes the fact that this "Hong
Kong-style'' tea has made inroads into the mainland shows that a little
innovative thinking can reinvigorate a traditional market. "People are open to
new ideas,'' he says. "Sometimes you just have to take a chance.''
Tea with a Twist
MingCha founder Vivian - Mak's artistic
training gives tea-drinking a sophisticated edge
Taking traditional methods and giving them a modern twist is what has made a
success of Vivian Mak's MingCha brand. Ms Mak fell into the tea trade almost by
accident, but within two years of setting up shop in 2000, bags of MingCha were
being handed out as part of gift packs given to guests at the Academy Awards
ceremony in Hollywood.
Ms Mak originally studied to be an artist but after building a business
consultancy firm with her then-husband, one of their first clients by chance was
a young man who wanted some advice on how to market tea sets. "We started
researching, and the more we evaluated the history of tea, we actually found
that we liked our Chinese culture very much,'' she explains in her shop in Hong
Kong's Quarry Bay area.
"We were drawn to exploring different aspects, and tea just seemed to be
something we kept getting drawn back to. It is something we all drink every day.
But we found no one really cared, or that it had become such a daily thing, that
the history was forgotten. So we looked at taking another angle.''
Ms Mak looked specifically at Chinese tea – and how to make the ancient product
somehow appear "different.'' "Usually tea merchants come from generations and
generations, which is great, but we were nothing like that,'' she says. "We came
in from a different approach – looking at how to do things differently. But like
them, we have a passion for tea, for its history and its place in our culture.
"Everything in the beginning was hard, but we had studied the market. I don't
want to be boastful, but we had done our homework. We had looked at price, the
types of tea available and the packaging and presentation. We gave something
that looked very different, very modern.''
Multimillion Dollar Turnover
While keeping her business manageable – "very much in the family,'' she says –
Ms Mak is now able to turn over around HK$5 million per year. Not a massive
fortune, but almost exactly what she initially aimed for. She says the secret is
an attention to detail, again made manageable because she remains very much
"hands-on'' in her approach.
"Traveling through China, we found the farmers there were very traditional when
it came to making tea. And they are very proud of what they grow,'' says Ms Mak.
"This was good for us because we knew when we started we didn't just want to
build a brand, we wanted to build a community of people who appreciate tea. "If
the people don't work very hard to keep the quality – from the soil, to the
environment, to the production to the packaging – our business could never be
sustained. We are not a major player, but we are doing something we believe
MingCha now produces tea under six varieties – Teguanyin, Phoenix, White Teas,
Gungfu Red, Wuyi Teas and Puers – and holds regular tastings and tea education
sessions in the Quarry Bay shop. "Today, the market is very sophisticated,'' she
says. "People ask me why do we stick to Chinese tea and I tell them, ‘well, this
is the origin. This is where tea comes from.'
"In some markets, people seem scared of Chinese tea because of the ceremonies
they attach to it. So I say to them, ‘if you eat rice, do you need to be an
expert? No, you just enjoy it.' And sometimes we need to tell people it's the
same thing when it comes to Chinese tea – just enjoy it.''
Tuesday, July 07, 2009
Chinese Yuan trade deals take off
by Alfred Liu and Natallie Cai
Banks yesterday kicked off a long- awaited scheme allowing firms to settle
trading transactions with the yuan - a major step to Hong Kong becoming the
Chinese currency's offshore center.
At least 16 pairs of enterprises settled cross-border transactions in yuan
yesterday. Bank of Communications (3328) was the leading institution, processing
eight of the deals.
Bank of China (Hong Kong) (2388) was the second most active institution with
seven deals, while HSBC (0005) and Industrial and Commercial Bank of China
(Asia) (0349) also began cross- border yuan-denominated trade settlement
Fang Xinghai, director general of the Shanghai municipal government's financial
services office, said three firms in the city - Shanghai Electric, Shanghai Silk
and Shanghai Huanyu Import & Export - signed contracts worth 14 million yuan
(HK$15.87 million) with customers in Hong Kong and Indonesia.
"I do not expect the volume of yuan trade settlements to be strong at the
initial stage as only 400 mainland corporate customers are under the pilot
program," said Stephen Chan Man, deputy general manager of corporate banking and
financial institutions at BOCHK.
Sources said BoCom's eight deals included six in Shanghai and two in Shenzhen.
ICBC (Asia) said it completed one deal.
Ten companies have signed a clearing and settlement agreement with the BOCHK,
which is the sole clearing bank in Hong Kong for yuan trades.
Trade between Hong Kong and the mainland surged from HK$1.53 trillion in 2003 to
HK$2.78 trillion in 2008, with average annual growth of 12.7 percent, Chan said,
quoting data from the Census and Statistics Department.
The Hong Kong Monetary Authority yesterday issued a circular to banks
participating in the program reminding them to employ internal and risk
Meanwhile, Bank of China (3988) president Li Lihui said Hong Kong is ready to
become an offshore yuan center, Bloomberg reported.
And Wong Kai-man, a member of the Hong Kong Ideas Centre's yuan study group and
non-executive director of the Securities and Futures Commission, suggested the
mainland increase the number of pilot cities and enterprises with which Hong
Kong companies can do yuan business.
July 1 2009
Hong Kong and Macau Doctors Can Now Sit for Mainland Qualifying Exams
The Ministry of Health recently announced the Administrative Measures for
Medical Practitioners of the Hong Kong and Macau Special Administrative Regions
to Obtain Mainland Medical Practitioner Qualifications Through Accreditation and
the Administrative Measures for Medical Practitioners of Taiwan to Obtain
Mainland Medical Practitioner Qualifications Through Accreditation. Hong Kong,
Macau and Taiwan doctors may apply for qualifications as mainland medical
practitioners in accordance with these two documents and the qualifications
cover clinical practice, traditional Chinese medicine and oral medicine.
In the Administrative Measures for Medical Practitioners of the Hong Kong and
Macau Special Administrative Regions to Obtain Mainland Medical Practitioner
Qualifications Through Accreditation, medical practitioners of the Hong Kong and
Macau Special Administrative Regions refer to Chinese citizens who are permanent
residents of the Hong Kong and Macau Special Administrative Regions and are
legally qualified to practise medicine in these two places.
Chinese citizens who are permanent residents of the Hong Kong and Macau Special
Administrative Regions who possess the following qualifications concurrently and
meet the relevant requirements in the Law of the People's Republic of China on
Medical Practitioners may apply for qualifications of mainland medical
practitioners through accreditation: Permanent residents of the Hong Kong and
Macau Special Administrative Regions who have obtained the legal qualifications
to practise medicine for five full years before 31 December 2007, who possess
specialist certificate issued in the Hong Kong and Macau Special Administrative
Regions, and who are serving in medical institutions in the Hong Kong and Macau
Special Administrative Regions.
Applicants are required to submit the following materials: Application form for
the accreditation of medical practitioners of the Hong Kong and Macau Special
Administrative Regions as mainland medical practitioners; two two-inch
half-length photos taken within the past six months showing a full front view of
the face with no hat; proof of identity as permanent residents of the Hong Kong
or Macau Special Administrative Region; proof of medical qualifications relevant
to the category of medical practice applied for; medical licence or proof of
right to practise medicine issued in the Hong Kong or Macau Special
Administrative Region; specialist licence or proof of specialist qualifications
in the category applied for issued in the Hong Kong or Macau Special
Administrative Region; proof of employment in relevant medical institutions or
proof of registration of practice in the Hong Kong or Macau Special
Administrative Region; and proof of no unsatisfactory records during their
practice; and proof of no criminal records.
AQSIQ Reminds Chinese Enterprises to
Observe New EU Directive on Toy Safety
The European Parliament recently adopted the draft of a new directive on toy
safety. In other words, it was revising the existing legislation on toy safety
published by the European Parliament just a little more than a year ago on 25
January 2008. In this connection, China's quality supervision, inspection and
quarantine departments are reminding toy enterprises concerned to
conscientiously exercise control in designing, technological processes and
quality management in the light of the characteristics of their products, with
special attention to the following four areas:
1. Chemical safety
Chemical safety falls into the category of material safety. Since different toys
are made of different materials, their control methods also differ. Enterprises
must understand the nature of the materials used in the making of their
products, what testing and control are necessary for particular materials, and
which materials need registration. They must clearly specify their requirements
in agreements signed with suppliers, and keep records traceable.
2. Structural safety
The new rules put stricter requirements on small toys parts which may be
swallowed by children and lead to suffocation, or toys which may be put in the
mouth and cause children to choke. These problems have to do with the structural
design of products. European Toy Safety Standards have special requirements for
these toys (such as pre-school dolls and hemispheric toys).
3. Product labeling
The new rules put greater emphasis on warning label requirements. Enterprises
processing for brand-name products probably would not have any problems with
product labeling, but those processing for small importers should make an effort
to learn more about warning labels to protect their own rights and interests.
4. Product conformity assessment
Enterprises should strive to do a good job of product conformity assessment in
accordance with the requirements set out in the EU's toy safety directive. Under
the new rules, the EU will strengthen market monitoring in member states and
member states must ensure that their market supervision authorities conduct full
inspection within and outside the EU and that hazardous toys are immediately
June 16 2009 - Seeing the Light: A
strong Export Index – the highest in a year – shows confidence is returning
Hong Kong exporters felt the full brunt of the global economic downturn in the
first quarter of the year, prompting the Hong Kong Trade Development Council
(HKTDC) on 16 June to revise downwards its 2009 forecast for Hong Kong exports.
The HKTDC now predicts a decline of 10 per cent to 12 per cent in exports this
year rather than the previously estimated drop of six per cent.
The revised forecast, published in the latest HKTDC Trade Quarterly, was sparked
by worse-than-expected world trade. The new forecast predicts that Hong Kong
exports will perform at their lowest level since 1954.
"A drastic inventory drawdown by overseas buyers, amid falling consumer demand
and an appetite for low-priced products, has led to the increasing price
pressures observed since the global financial crisis emerged," said HKTDC Chief
Economist Edward Leung.
Confidence Rising - Still, there is cautious optimism that industries have seen
the worst, with the global economy expected to bottom out in the second half of
the year. Such optimism is being fuelled by renewed orders from overseas buyers
to replenish inventories, although orders remain conservative. The latest HKTDC
Export Index, which monitors export performance and prospects of Hong Kong
traders, rebounded strongly to 42.9 for the second quarter, up from 25.8 in the
Unlike previous economic downturns, the current recession has sparked a
lifestyle change among overseas consumers. There has been a significant shift
towards cheaper items and staying at home. As consumers trade down, sales of
competitively priced products that are stylish, safe and environmentally
friendly are sought after.
Discount retailers have particularly strong bargaining power, demanding more
from their suppliers in terms of quick response and flexible delivery to reduce
inventory while responding to changing market demand. This means that suppliers
are required to handle more orders of even smaller quantities but wider variety,
along with even shorter delivery lead times.
In light of further retail concentration in overseas markets, alongside
slackening consumer demand, exporters and manufacturers are under mounting
operational pressures. Bigger and leaner suppliers, able to adapt to the
changing trade environment, are surviving the global recession, while less
efficient producers have been wiped out. The Export Index, based on a quarterly
business confidence survey covering Hong Kong's major industries, may signal a
slower rate of contraction in exports.
The 17-point increase is the highest level in a year. Among the industries
leading the way is the electronics sector, at 45.1, suggesting that the export
contraction in electronics, one of the worst hit, may be less severe in the near
term. In terms of market sectors, the Chinese mainland rose further, almost
reaching the threshold for expansion.
"Although emerging economies have also suffered considerably from the crisis,
the Chinese mainland is expected to be the first major economy to recover," said
Mr Leung. He said the mainland's fiscal stimulus package and loosening bank
credits should drive the recovery. While far from being immune to the global
financial downturn, the mainland's consumer market is outperforming its overseas
counterparts. For the first quarter of this year, mainland consumer retail sales
grew by 15 per cent, while results in the United States dropped 10 per cent.
Mr Leung suggested that companies might find sales opportunities in the
mainland's inland provinces and second- or third-tier cities, which are less
reliant on exports than coastal areas.
A survey conducted by the HKTDC in March found that 33.4 per cent of 500 Hong
Kong companies with production, merchandising or marketing activities on the
mainland had already begun doing business there. Among those who haven't, more
than 30 per cent said they would enter, or would consider entering, the mainland
market within the next six months.
"Given that the whole consumption structure is set to move positively over a
medium- and long-term timeline, export-oriented manufacturers also have the
luxury of time to formulate strategies for entering what could well turn out to
be the greatest consumer market on earth," Mr Leung said.
Long-Term Outlook - Looking ahead, Mr Leung said sales would likely return to
normal growth once a global economic recovery takes hold. That, however, would
hinge on the normal functioning of the global banking and credit systems, a
bottoming out of the US housing market and a revival of business and consumer
confidence in developed economies.
The HKTDC Chief Economist said the global economy could bottom out in the second
half of the year – if various stimulus measures by world governments take
effect. But he said the greater medium-term challenge was to avoid a prolonged
global recession. That would involve rebalancing excessive savings in Asia
against overspending in the US and other rich countries. Intensified
protectionism and the outbreak of human swine flue may also threaten global
economic recovery, Mr Leung added.
June 11 2009
Following are the opening remarks made by the Secretary for Food and Health,
Dr York Chow, at a press conference on the First Cluster of Indigenous Human
Swine Influenza Cases today (June 11 2009):
As the Chief Executive announced earlier today, we have the confirmation of the
first cluster of indigenous cases of human swine influenza in Hong Kong. Twelve
secondary school students are infected. Dr Tsang will talk more about the cases
As there is no identifiable link to a place affected by Human Swine Influenza (HSI)
outside Hong Kong or an imported index patient with them, our Fight the Pandemic
campaign is now transiting from containment to mitigation phase in gradual
steps. We will gear up our medical services and beef up our health advice to the
public, particularly those people who are at risk.
This morning, the Steering Committee reviewed the preparatory plans and also
agreed on the implementation of a number of measures.
On school closure, the Secretary for Education has already ordered all primary
schools, kindergartens, kindergarten cum child care centres and special schools
to suspend classes for 14 days from tomorrow, and will review the need to
continue the class suspension thereafter.
Let me explain why we close schools. Cases in Mexico, US, Canada and Japan have
all shown that schools, particularly primary schools, are more vulnerable to flu
attacks and are the first place to get a flu cluster, with young school children
having a more than two-fold attack rate compared with older teenagers and
adults. We do not want to see the young kids coming down with HSI.
Furthermore, as past flu seasons have shown, young children especially those
under six with flu are more likely to get complications and hospitalised, and
also a higher mortality rate.
We believe that by closing primary schools, kindergarten and special school for
two weeks, we could substantially slow down community spread, protect the very
young and reduce the risk to the general public, thereby reducing the worries of
parents, families and teachers as well as burden on our hospital and clinics.
Let me take you through our other public health measures endorsed by the
* The Hospital Authority (HA) will open eight Designated Flu Clinics (DFCs) from
the coming Saturday for managing patients with influenza-like-illnesses (ILI),
to be expanded to 18 DFCs contingent on demand. The clinics will open from 9 am
to 5 pm. They shall cater for all patients with influenza-like symptoms
(self-referred or referred by other medical practitioners), and shall operate
similar to General Outpatient Departments, but without the need for prior
booking. Dr Leung will talk more about it later.
* Current port health measures at border control points for inbound travellers
will continue. These include health declaration, temperature screening, and
boarding of flights by port health officers when alerted by crew of sick
passengers. Port Health will post notices in all exit points and advise all
departure and transfer travellers not to travel if they are having fever or flu
* On the management of index patients and contacts, HA will isolate and treat
all index patients in HA hospitals during this early mitigation phase. They will
increase surge capacity when necessary to commensurate with disease incidence
* Department of Health will subject very close contacts, such as family members,
to the directly observed chemoprophylaxis (DOC) and medical surveillance, as
with the current practice. But if the number of local cases continues to
increase, the department will gradually phase out the DOC arrangement and close
the DOC clinics. The precise programme for phasing out DOC will depend on the
spread and speed of build-up in confirmed local cases.
* The Centre for Health Protection will no longer perform tracing of social
contacts, given that their risk approximates that of the general public since
the disease has taken root in the community by this time.
* On treatment, HA, in consultation with DH, will assess the treatment protocol
on a continuous basis, and may vary it as circumstances change. Specimens from
selected patients may be taken for his surveillance, based on clinical
assessment and contact history. Mild cases will be discharged home and only
severe cases will be admitted to hospitals.
* On the use of antiviral, as the number of local cases accumulates to a certain
point, DH will order post-exposure prophylaxis for close contacts to be
generally stopped, reserving antiviral medication for treating more serious
Let me turn to other community and public institutions.
* For elderly homes, existing measures for outbreak at elderly homes will
continue. Patients will be isolated and treated in HA hospitals. Others to stay
in institutions and wear masks and observe good personal hygiene.
* We advise people at workplaces to observe good personal hygiene and ensure
proper disinfection of public places. Those with influenza-like illness should
stay at home and wear masks if necessary only if they really need to go out.
* All conferences, exhibitions and public events may continue as usual.
Organisers must ensure all participants to observe good personal hygiene and
disinfect all public places of the relevant premises properly. Organisers must
advise those with influenza like illness not to participate, stay at home and
wear masks if necessary when going out.
* Public transport companies will have to step up vehicle cleansing and
disinfection, and advise staff and passengers to maintain good personal hygiene,
and wear masks if not feeling well.
* Public utilities companies will also have to step up cleansing and
disinfection, advise staff to maintain good personal hygiene, and initiate
pandemic preparedness plans to ensure no disruption to essential services.
As the Chief Executive has said this morning, the public has no need for panic.
For the four high-risk groups, I have the following advice.
* For healthcare workers, they should take proper infection control measures to
protect themselves and patients. Public sector workers have ample supplies of
protection gear and training in infection control. Guidelines on infection
control in clinics are available on CHP's website
* The private medical sector and elderly care sector are advised to follow these
guidelines closely to minimise their risk.
* For young children, parents should be watchful for fever and flu-like
symptoms, bring them see a doctor early if the child is sick. Sick children
should stay home. They should also avoid contact with other children who are
unwell, avoid playgroups, tutorial classes especially large groups, avoid
sharing toys, towels, eating utensils etc. with other children, and do not take
aspirin unless approved by doctors.
* For pregnant mothers and persons with chronic diseases (such as diabetes,
ashma, chronic lung diseases, renal disease, cardiovascular diseases, cancer
patients, patients with immuno-suppression therapy or on steroids), they should
maintain good personal hygiene, especially handwashing, avoid contact with
persons with flu-like symptoms, and overcrowded places. They should make sure
that there is good ventilation around and be mindful of fever and flu-like
symptoms, and seek medical attention early. They should inform doctors of their
medical condition when consulting for flu-like illnesses. I would also like to
take this opportunity to appeal to the public that do not smoke. And
particularly you have chronic illnesses, do not smoke.
* For elderly, the advice is the same as for persons with chronic illnesses.
Elderly homes should remain vigilant of infection control measures and report
influenza outbreaks to CHP.
I would also like to appeal to parents that during the school closure, they
should look after their children well, make sure that they observe good personal
hygiene, and that they are taken care of and stay at home when sick.
The Government will try its utmost to minimise the impact of human swine
influenza on Hong Kong. There is no need for panic and the last thing we want is
All our measures are taken to go an extra mile in our fight against the
pandemic. At the same time, life must go on, only with the necessary heightened
precautions and social distancing.
As the Chief Executive has said, we can only overcome crisis and win against the
pandemic when people and the Government unite together. It means the following:
* Look after oneself,
* Care for the others, especially family members, friends and neighbors,
* Care for the environment.
We have witnessed great community spirit, compassion, co-operation and
self-sacrifice from our citizens since the beginning of the pandemic since early
May. I am sure we can uphold this spirit, and are able to win this war against
the pandemic and keep our society together.
June 5 2009
Traders Toast Wine Pacts
Minister for Agriculture Tony Burke (centre, left) and Financial
Secretary John Tsang (centre, right) toast the success of the Hong
Kong-Australia trade agreement on wine
More Australian, Italian and Hungarian
wine may be destined for Asian tables following agreements brokered in Hong
Kong to provide easier access to Chinese mainland markets.
Separate Memorandums of Understanding
(MOUs) on wine-related businesses have been signed with Australia, Italy and
Hungary recently, as part of a bilateral cooperation on wine and food. They
are the latest initiatives in the promotion of wine-related investment and
tourism following the Hong Kong Government's scrapping of duty on wine
imports in February 2008.
The signings are also seen as another
step in positioning Hong Kong as Asia's wine trading and distribution hub.
Australia's Minister for Agriculture
Tony Burke, in Hong Kong to sign the MOU in April, said the agreement would
give wine producers simplified, improved access to the Hong Kong and
mainland markets, addressing such issues as certification and labeling. "In
a country the size of China, a single window to government will make it
easier for the Australian Wine and Brandy Corporation to help exporters ship
wine to this important market," he said.
Hong Kong Secretary for Commerce and
Economic Development Rita Lau said Hong Kong has all the ingredients
necessary to play an important part in tapping the mainland's growing
appetite for quality wine. "We have the infrastructure, the expertise and
the desire and determination to be Asia's wine trading and distribution
Business to Benefit
Australia's premier wine region, the Barossa Valley, is set for more
exposure in Greater China
A rare bottle
of vintage Krug set a world record for Champagne at a Hong Kong
auction in March
Australian wine traders welcomed the
latest initiative. Malaysian George Tham moved to Hong Kong earlier this
year to co-found Parade Artwine Ltd, a trading company specialising in South
"This is very good news for our
business – it will definitely help us," said Mr Tham. Parade Artwine was
established to introduce new Australian wines, primarily from the Barossa
Valley, to emerging markets in the region. Mr Tham and his South Australian
business partner chose Hong Kong as their launching pad because of its
geographical location. "There are plenty of opportunities for the wine
business in Asia, and now getting wine into Chinese markets will be so much
easier," he said.
US$4.82 million was sold at Acker Merrall & Condit's fine and rare wine
auction in Hong Kong last week
auction in Hong Kong last week by American fine wine trader
Acker Merrall & Condit showed the Hong Kong market remains
strong. Vintage wine worth US$4.82 million changed hands at the latest
Acker Merrall auction, its fourth in Hong Kong since its inaugural sale
in May 2008.
result is a testament to the strength of the wine market in Asia and
underlines Hong Kong's leading role as a regional hub of fine and rare
wines," said President and Auction Director John Kapon. "Such an
enthusiastic response from buyers indicates a renewed confidence in the
wine market and proves there is a continuing strong demand for fine
wines of superb quality and rarity. We are fully committed to further
developing our business in Hong Kong."
Among the items sold was
a lot of six bottles of rare 1985 Henri Jayer Richebourg, which went to
a Hong Kong collector for US$68,432, well above the pre-sale estimate.
The latest result follows
the company's "sizzling" March auction, during which 96 per cent of the
lots were sold, and a new world record set for a bottle of Champagne –
US$21,091 for a bottle of rare Krug Collection, vintage 1928.
Peter Chu, Cellar Director,
Cellarmaster Wines (HK) Ltd, said the MOU would give his business increased
exposure and further elevate Hong Kong as a platform for Australian wine. He
welcomed the opportunity to promote the various wine regions and different
characteristics of Australian wines to Asian consumers, who, with their
maturing palates, no longer think of wine in a generic way.
"My personal mission is to promote
mature Australian wines, not just the fresh, new varieties, as I believe
there would be a huge market for it," Mr Chu said.
Peter Riha, Managing Director of Solar
Max Ltd, which imports wine from South Australia, agreed that this latest
wine initiative is "another move in the right direction."
Spotlight on Italy
The agreement with Italy, signed last
month, will forge closer cooperation in a wide range of areas, including the
promotion of wine trading, investment and wine-related tourism, as well as
wine education and appreciation, Ms Lau said.
"Specifically, the two sides will work
closely to engender a good showing of Italian wines and canapes, wine
accessories, as well as wine-making technology and equipment in the annual
international wine fair organised by the Hong Kong Trade Development Council
Ms Lau said the Italians will
be encouraged to organise wine exhibitions in Hong Kong. Vinitaly, the
leading wine exhibition in Italy, is planning to stage its first wine
roadshow in Hong Kong as part of the HKTDC's annual wine fair in November.
The Hong Kong-Hungary wine MOU, signed
27 May in Hong Kong, is the first trade agreement of any kind between the
two economies. Under the agreement, the two sides will strengthen
cooperation in the promotion of wine-related trading, investment, tourism
and education. They will also fight against counterfeit wine.
"Hungary produces quality wine. Wine
exports from Hungary to Hong Kong increased by as much as 78 per cent by
value in 2008," said Hong Kong Permanent Secretary for Commerce and Economic
Development Yvonne Choi, during the MOU signing.
"We expect this trend to continue as
Hungarian wines become more widely known and enjoyed here," added Ms Choi.
"And, more significantly, Hong Kong provides easy access to the mainland
market, where the potential for growth is enormous."
May 13 2009
City of Hope
Hong Kong is the "action centre" for foreign businesses that want to enter the
huge Chinese mainland market, according to the Canadian Minister of
International Trade, Stockwell Day. Mr Day, who is also Minister for the
Asia-Pacific Gateway, headed a seven-day trade mission to China, where he
wrapped up his visit in Hong Kong last "Hong Kong is really the action centre in
so many ways," Mr Day said. "One of the messages that we want to send to
innovators, producers and researchers in Canada is: ‘Hong Kong is, of course,
the gateway into China, and what we can learn here - the platforms that are
developed here in Hong Kong - are absolutely essential, and need to be contacted
and worked with.'"
Mr Day said Hong Kong's strengths need to
be fully explored in order to take advantage of the huge opportunities offered
by the China market.
Leading an 11-member trade delegation, Mr
Day took in the four mainland cities of Beijing, Shanghai, Shenyang and Chengdu,
and came away impressed.
"I see more than glimmers of hope; I see
hope with a capital ‘H.' I see great opportunity," he continued. "It's one thing
to read briefing material about what's going on in Hong Kong, what's going on in
China and Asia. It's another thing to get over here and spend time. The
opportunities are huge and need to be followed."
Trade to Triple
with its strong economy, can be a key partner for China
The Canadian minister said that the
growing level of trade and foreign investment between the two countries over the
years has been "just scratching the surface." He is convinced that Canada's
bilateral trade with China will triple over the next decade.
"Before I got here I thought that was a
good goal, but a little optimistic. Now after a week here, I believe that it's
entirely realistic to see trade more than triple over the next 10 years."
Mr Day said that Canada has much to offer
China, not just in the way of natural resources, but also in advanced technology
that will help minimise the impact of growth on the environment. China, he said,
has "been very clear" that it wants sustainable development, so "the fit there
is natural and needs to be pursued."
The trade minister noted the shared links
between the two countries, pointing out that there are 1.4 million
Canadian-Chinese living in the country. Chinese, he said, is the third
most-spoken language in Canada. "These are natural components to a vibrant
relationship," he said.
The visit to China was an opportunity to
make further inroads into the mainland market. Several agreements were signed
during the trip, including seven construction contracts. Both sides also
announced joint science and technology initiatives to be funded by Canada, while
Toronto opened new trade offices in Chengdu and Shenzhen, with four more -
Nanjing, Qingdao, Shenyang and Wuhan - scheduled to open before year's end.
In his meetings with Chinese Minister of
Commerce Chen Deming and other mainland trade officials, Mr Day said he was
"very encouraged" that China is committed to "pushing back the wave of
protectionism" that has arisen amid the global economic downturn.
"We really want to go shoulder-to-shoulder
against the impulse to protectionism," he said. "They understand that if you
build a protectionist wall, economies will come down. So on the bilateral side
with China, with Hong Kong, we need to continue to stay aggressive. We can work
together at the World Trade Organization (WTO) as partners."
The minister, meanwhile, was confident
that Canada's new Consumer Safety Act, set to be introduced soon, will not be
used as a trade barrier. "We take a very rigorous approach to health and safety,
maintaining that it has to be science-based," he said. Mr Day said that the law
will be fair, adding that Chinese manufacturers and producers understand clearly
that "if a product is deemed to be unsafe after it hits the market, the impact
on the investors in that product is huge, [as is] the impact on the buying
As efforts continue to rebuild the world
economy, Mr Day said he's encouraged that analysts consider Canada one of the
strongest economies. Still, he said, it cannot afford to overlook the world's
fastest-growing economy. "China is on the move; China is focused. Its growth is
dramatic, and Canadians cannot sit back."
May 12 2009
Smartest export - Hong Kong has the potential to become a regional centre of
excellence in education by Anthony Cheung
To cope with the needs of economic restructuring and to rise to new challenges
resulting from the global financial and economic crisis, the government is
geared towards developing new economic pillars, including educational services.
As the Task Force on Economic Challenges puts it, developing the educational
services industry is a long-term investment in human resources. It points to
many developed countries that compete in "exporting education" and attracting
more non-local students.
There's no doubt that Hong Kong has a strong cluster of tertiary education
institutions. Making education in Hong Kong more widely available to students in
the region is one way to consolidate its position as an education hub. In
charting such a course, however, some fundamental issues have to be confronted.
First is the tension between meeting local needs and responding to the potential
outside market. Hong Kong has no problem attracting non-local students;
mainlanders make up 90 per cent of the total.
With the aid of generous entrance scholarships, local universities have been
attracting top-grade students, much to the envy of mainland universities.
However, there is growing concern among some local students that their
educational opportunities and benefits would be reduced if more non-local
students were admitted. Some legislators are making similar complaints.
While there is a visible side of education costs, the intangible benefits from
recruiting non-local students to our education system should not be overlooked.
If Hong Kong, as a regional hub, is able to attract some of the best minds to
study, teach and research here, it will create synergy, help lift standards, and
enrich the learning and research environment, something that money cannot buy.
Local students who have had the opportunity to go overseas on exchanges or
internships can attest to the immense benefit of studying and living on a
cosmopolitan and multicultural campus. The same applies to the
internationalisation of local campuses.
There is really no place for educational nationalism or localism. However, local
students' grievances should not be casually discarded. By 2012, given 12-year
subsidised education, more secondary-school students will reach pre-university
level and, if the current cap of 14,500 publicly funded "first-year
first-degree" places remains unchanged, many of them will be disappointed.
Hence, there must be a comprehensive and proactive private university policy to
support a viable private sector that can provide affordable, quality tertiary
education to these local aspirants. From the human resources development
perspective, local talent is as important as non-local.
Second, in the internationalisation discourse, educational services are often
described as an industry. Indeed, they earn huge revenue for countries such as
Britain and Australia. Because of its immense export-earning capacity as a
commodity, higher education provision has become a battleground in the
international education market.
If, however, education is primarily conceived as an industry, then quality may
be sacrificed for the sake of income. There is no lack of news about some
overseas universities recruiting non-local students indiscriminately with little
regard to their academic ability.
The commercialisation of education programmes has led to more foreign "diploma
mills" and low-quality providers internationally. Quality-assurance procedures
are often relaxed to help attract students from abroad or set up offshore
Finally, many academics have also pointed to the worrying trend of treating
quality assurance and accreditation as strategies for "international branding"
and market positioning rather than for academic improvement. The international
ranking "game" has become a preoccupation, with international standings based on
sometimes questionable and biased indicators.
Education is a "soft power". What ultimately attracts non-local talent to our
universities should not just be the award certificates, but the high standard of
scholarship, plus the significant features of Hong Kong that distinguish it from
Does Hong Kong possess a knowledge-rich environment, and a free-thinking,
inquisitive and creative ambience that should form the basis of a vibrant
Anthony Cheung Bing-leung is an executive councillor and president of the
Hong Kong Institute of Education
April 29 2009
|Wallem Group’s Sustainability Report
shows the responsible side of its shipping business
Hong Kong ship owners are on a mission to help clean up
the maritime industry.
Shipping is responsible for the transport of 90 per
cent of world trade, which has doubled in the past 25 years. This has led to an
inevitable consequence: rising carbon dioxide emissions from shipping, a factor
contributing to global warming.
The main culprit is fuel. It’s been estimated that
global shipping used 280 million tons of fuel in 2001, and could reach 400
million tons by 2020. Until now, much of this has been the dirtiest, cheapest
fuel – residual oil, a tar-like refinery product.
Last year, the International Maritime Organization
agreed to tighten emission caps by 2020 for sulphur oxides, nitrogen oxides and
other pollutants. But Hong Kong ship owners are pressing for earlier targets,
particularly for the Pearl River Delta (PRD). Arthur Bowring, Managing Director
of the Hong Kong Shipowners Association, which has 160 members, explained Hong
"Hong Kong’s shipping register is now in the top-10
registers in the world. Our members own or operate about 95 million deadweight
tons of ships, making Hong Kong the fourth-largest maritime centre. On the world
stage, we usually speak for Asia, which accounts for about 50 per cent of the
global cargo-carrying fleet, so we leverage our presence in ways that can make a
||Taking a stand: HKSOA Managing Director Arthur
Bowring says Hong Kong's shipping industry wants to be part of the
This has involved lots of "banging on tables" internationally.
"We trod the boards, we wrote articles, we did a lot of
lobbying," Mr Bowring said. "We work closely with the [Hong Kong think-tank]
Civic Exchange and the various universities to help them with their studies into
marine-related air pollution. We also work with our owners, at least those who
call in to Hong Kong, to find ways for them to reduce emissions without making
"We are taking this stand for two reasons. We live in
Hong Kong, and want to do something about air pollution; and second, we
recognize that the general public and politicians are very concerned about
maritime emissions. We want to be part of the solution."
Mr Bowring believes that the shipping community in Hong
Kong is "very responsible and very committed." He cited individual initiatives,
such as China Navigation’s decision to voluntarily use low-sulphur fuel on its
ships docking in Hong Kong. "It’s always nice to work with people who have the
best interests of what they’re doing at heart."
||China Navigation is voluntarily using low-sulphur
fuel on its ships docking in Hong Kong and the PRD
China Navigation Co Ltd is the deep-sea shipping arm of
John Swire & Sons Ltd. In March 2008, the company announced it would burn only
low-sulphur marine diesel fuel, which contains less than one per cent sulphur,
on its own vessels calling at Hong Kong and within the (PRD) region.
The move was significant, since deep-sea vessels
customarily burn heavy fuel oil, which contains up to 4.5 per cent sulphur,
while in ports and on entering and leaving harbor. Managing Director CR Kendall
said the move was in response to research showing marine-air emissions to be a
significant contributor to reduced air quality in Hong Kong.
"As a signatory of the Hong Kong General Chamber of
Commerce’s Clean Air Charter, we are making proactive commitments despite the
additional cost to us," Mr Kendall said.
"We hope this unilateral action and our other
supportive efforts, although minor in themselves, will provide additional
impetus within the industry to enhance the maritime sector’s contribution to
improved air quality for our communities here in Hong Kong and in the PRD."
Hong Kong’s Wallem Group is also speaking out on
sustainability for the shipping services industry by releasing its first
Sustainability Report this year.
Wallem Group Managing Director Rob Grool said it was
time that the shipping industry spoke out on how it is carrying out its business
in a responsible way – socially and environmentally.
"I think this is the first sustainability report
published by a shipping services company, and we’re prepared to take the risk
because it is time we all did something about shipping’s reputation," Mr Grool
"Shipping in general has a poor image and that is
mostly undeserved. The vast majority of goods are transported by sea in a very
safe, reliable and responsible way."
"Obviously, ships and shipping have an effect on the
environment, and the way we conduct our business has an effect on how we are
regarded in the neighborhood. In this report, we want to demonstrate how
seriously we take our social responsibility."
The Wallem Group Sustainability Report sets out the
Group’s activities and challenges in operating responsibly. The report addresses
three key issues: people, environment and business.
A sustainability report will be prepared annually to
track the efforts and progress of the Group and is available online at the
group’s web site.
March 11 2009
||Wayne Jacobs receives
|WA Jacobs' Light Pen Writer won the
Creativity and Design Innovation Award last month at the Nuremberg
Three Hong Kong companies have been recognised from
among thousands of toymakers worldwide for innovation at last month's Nuremberg
Toy Fair. WA Jacobs Toymaker (Asia) received a Creativity and Design Award for
its latest product, the Light Pen Writer. Amazing Toys Ltd and Silverlit
Electronics won nominations in the Toy Innovation Award's Electronics and
Technical Category for their Eco Power Station Series and Heli Mission
"I was shocked," said Wayne Jacobs, Managing Director
of WA Jacobs, who said he only signed up on a customer's suggestion. The Light
Pen Writer uses an LED light pen and a light-sensitive board to produce multiple
images, allowing the user's creativity to run free. Mr Jacobs hopes the
publicity gained from the award "will translate into sales."
A Crazy Mind Helps
The company, formed with the 2000 Sydney Olympics in
mind, is behind the creation of four children's characters, including Kiki Koala
and Sparkle Unicorn. WA Jacobs (Asia) opened in Hong Kong seven years ago
because "this is where the buyers and sellers are."
While manufacturing is done with partner factories in
Shenzhen, Nanjing and Qingdao in the Chinese mainland, concept designs are
carried out in Australia. For Mr Jacobs, the best part about the business is
coming up with new ideas that could be the next must-have toy.
Anything can spark an idea, he said. "There's no
structure to it. You have to have a crazy mind, I suppose," he said adding that
electronics, fashion – anything, but toys – can trigger a new idea. "You end up
with something between that crazy idea and what's practical," Mr Jacobs said.
No Batteries Required
|Amazing Toy's Samuel Sy shows his range
of green-power toys, the
"Customers are always looking for something new," said
Samuel Sy, General Manager of Amazing Toys. "But they don't have anything
specific in mind. You have to come up with the idea." Mr Sy, who spent 10 years
marketing other people's toys, set up his own company about two years ago.
The Greenex series has proved popular for its
educational slant and environmentally friendly theme. Debuting at the Hong Kong
Toys and Games Fair last year, the Eco Power Station series is driven by natural
energy, solar or wind, or through a crank generator. Children learn and gain an
appreciation for alternative forms of energy.
"Our customers loved it. But because we were the new
kids on the block, they first wanted to try the product," Mr Sy said. It seems
the customers are sold. Despite the economic downturn, he has seen more business
this year, as buyers become more familiar with the Greenex series. Europe and
Asia are the company's main markets.
||Silverlit Electronic's Heli Mission Pack
improved on an existing model, capturing the attention of Nuremberg's Toy
Innovation Award judges
Silverlit Electronics, meanwhile, improved on its
popular ultra-light indoor helicopters, unveiling a new model that comes with a
helicopter and truck operated through one remote control.
The Heli Mission and Amazing Toy's Greenex series were
two of only three products that clinched nominations in the Toy Innovation
Award's highly competitive Electronics and Technical Category.
The two companies were among the more than 160 Hong
Kong exhibitors that unveiled new products at the Nuremberg Fair's Innovation
Centre. As companies brace for a tough year ahead, the onus is on toymakers to
come up with bright ideas amid the economic slump.
Toymakers are cautious about the future, emphasising
the importance of cultivating ties and building brands. Mr Jacobs, who hopes to
open new markets in Asia, says he intends to put more time in trade fairs.
Still with an even more competitive market, the
temptation for many, according to Amazing Toy's Mr Sy, is to merely copy what's
popular, because it's safe. "Coming up with a new idea may be riskier, but it's
more creatively satisfying seeing your own ideas come to life."
March 4 2009
|Hong Kong Budget
||Financial Secretary John Tsang unveils
his fiscal bluepri
Tough times demand a multi-pronged approach to
combating the global financial crisis. Delivering his annual budget last week,
Hong Kong Financial Secretary John Tsang outlined measures to do just that,
while laying the foundation for an economic recovery.
As Hong Kong faces its first economic contraction since
the 1998 Asian financial crisis, Mr Tsang unveiled plans to boost public
spending in the next fiscal year to more than HK$300 billion (US$39 billion),
with HK$39 (US$5 billion) billion devoted to capital works projects. Mr Tsang
projected Hong Kong's GDP would fall this year by two to three per cent.
The new government spending follows earlier measures,
implemented late last year, to provide funding for small and medium-sized
The challenges brought on by the economic downturn have
also spurred the government to play an increasingly prominent role as a
"champion" for business, Mr Tsang said. "We will review pragmatically the future
directions for Hong Kong's economic development and provide a suitable platform
for sustainable economic growth where necessary."
This, he said, will be accomplished by promoting
regional economic development and continuing Hong Kong's economic integration
with the Chinese mainland, allowing Hong Kong enterprises to tap into new
|Boosting capital works spending is among
the new budget's measures to revive the economy
In addition to boosting government spending, Mr Tsang
also unveiled initiatives to further diversify the Hong Kong economy. "During an
economic downturn, it is vital that we are far-sighted in encouraging high
value-added economic activities that open up new sectors for sustainable
economic growth." The financial secretary identified three key areas:
technology, creative industries and green industries.
The government will continue working with neighboring
Shenzhen to encourage more overseas enterprises to conduct scientific research
in Hong Kong, similar to the recent collaboration with DuPont. The US company
set up its solar energy photovoltaic research base in Hong Kong, with
manufacturing located in Shenzhen.
The budget initiatives also include a new area of
research – biotechnology. Two laboratory buildings have been set aside at the
Hong Kong Science Park to support biotechnology research, which Mr Tsang said,
is already being conducted in Hong Kong by a number of overseas companies.
Mr Tsang, meanwhile, unveiled measures to develop Hong
Kong's design industry, including the setting up of a dedicated office to
coordinate the development of Hong Kong's creative economy. The government will
also set aside HK$300 million (US$39 million) for other creative industries over
the next three years. The industry already contributes more than HK$60 billion
annually to Hong Kong's GDP, with about 32,000 creative industry-related
businesses set up in the city.
Hong Kong is collaborating with Guangdong authorities
to transform the Pearl River Delta region into a green area. Under the plan,
Hong Kong and Guangdong will cooperate to turn the region into a cluster of
high-tech, low-pollution and low-energy consumption cities, by developing
regional high-tech recycling industries and encouraging enterprises to adopt
advanced technology for cleaner production, energy saving and emission
In Hong Kong, the government will promote the use of
electric vehicles to improve the environment and create new business
||Hong Kong's bond market is set to get a
boost with the issuance of government bonds
To reinforce Hong Kong's position as an international
financial centre, the government will set up a bond program, its first in five
years. Mr Tsang said the government's bond issue would promote the development
of Hong Kong's bond market and provide more choices to institutional and
individual investors. "In view of the current investment market conditions and
low interest rates, we believe that there is demand for quality bonds," he said.
Hong Kong's bid to become the regional Islamic finance
hub also remains on track. Tax law changes, set to go to the legislature, will
create a level playing field for Islamic financial products.
Promoting Hong Kong
The Hong Kong Trade Development Council (HKTDC) has
thrown its weight behind the government's initiatives. "The HKTDC has been
working toward the same goals as the government," said HKTDC Executive Director
Fred Lam. "We will continue to play our part in support of the Financial
Economic integration with the mainland and promoting
Hong Kong's role as Asia's international financial centre and a premium hub for
business support, professional services and logistics, are centerpieces of the
HKTDC's mission, Mr Lam noted.
"With its fast-growing domestic consumption, the
mainland is now a huge domestic market for Hong Kong products and services,
apart from being a production base for export. One of the Council's priorities
in the coming year is to help Hong Kong companies develop domestic sales in the
mainland, as well as to promote various service industries there."
"The current financial turmoil is undoubtedly a severe
test that poses challenges to individuals, families, enterprises, societies and
governments," the Financial Secretary said. He added that Hong Kong is up to the
challenge, citing its experience with the Asian financial crisis and SARS as
proof of the city's resilience. "The people of Hong Kong have weathered tough
times before and will weather them again."
February 11 2009
Accounting Adds Up
|Anthony Thompson, Michael
In an economic downturn, Hong Kong remains one of the markets
financial professionals would like to be working in.
So says Anthony Thompson, Managing Director, Hong Kong and Southern China, at
Michael Page International, explaining that Hong Kong's standing as a financial
services hub holds it in good stead, despite the current economic conditions.
Economies across Asia are still growing – albeit at a reduced pace – and Hong
Kong is the hub for that, Mr Thompson said. The city's strong links with the
Chinese mainland are particularly valued.
Mr Thompson said that while the picture now was "not as positive as a few months
ago, Hong Kong remains very strong" relative to the rest of the world.
"Hong Kong is also a proactive and dynamic economy. The market might fall
quickly, but tends to bounce back very fast," said Mr Thompson.
A survey of accounting and finance sector employers conducted by recruitment
firm Michael Page International and the Association of Chartered Certified
Accountants Hong Kong (ACCA) late last year, revealed that most did not expect
to be cutting back staff in the next 12 months.
The survey of more than 1,330 industry professionals conducted in Hong Kong and
the southern Chinese mainland, found that 54 per cent of responding employers
believed the demand for accounting and finance staff would remain the same, with
more than a quarter (29 per cent) expecting to recruit for new positions this
Strength in Numbers
||Hong Kong remains one of the world's most
attractive markets for
Meanwhile, major accounting firms KPMG, PricewaterhouseCoopers and Deloitte
Touche Tohmatsu plan to recruit at least 2,000 graduates each in the mainland
and Hong Kong this year. KPMG is also expected to recruit about 200
professionals for senior positions, as reported in the Financial Times."In time, the economy will come
back; in time, we will need to have more qualified accountants," Mr Harrison
said. "It is important we continue to recruit some of the great graduates that
the universities turn out, both in Hong Kong and the mainland, and develop those
people for the future."
John Harrison, KPMG Global Deputy Chairman, said the firm could not afford to
take a knee-jerk reaction to the global economic slowdown and stop recruiting
"new blood. Graduates are our future," he said in an interview with the
South China Morning Post.
Spotlight on Talent
|Kelly Chan, President,
ACCA Hong Kong
Kelly Chan, President of ACCA Hong Kong, agreed that demand for accounting
and finance professionals remained steady, despite the economic slowdown.
"Accounting professionals are equipped with a wide range of technical expertise,
and the supply of such professionals is still lagging behind demand. We expect
the market will have a higher demand for talent, with a focus on internal audit
and internal control, under the current market situation." Mr Thompson added
that, with almost half of survey respondents saying they had been actively
searching for a new job last year, now is the time for employers to focus on
retaining valued talent.
"Continuing professional development and training is crucial for accounting and
finance professionals, especially in a challenging economic and business
environment," he said.
He added that with career prospects topping the list of job-change decision
factors, employers should talk to their staff about training needs. They should
also consider whether training resources could be better allocated.
"While most of the responding employers said they provide cash subsidies for
courses and examinations to their employees, less than half of the responding
employees mention that they received such support."
February 4 2009
Hong Kong - World's Freest Economy - Topping the freedom scale
Hong Kong has once again been named the freest economy in the world. It's the
15th straight year the city has been ranked number one on the list published
annually by Washington-based think-tank the Heritage Foundation. "Hong Kong
continues to do the right thing," Heritage Foundation President Ed Feulner told
CNBC. The study, which has been conducted annually for 15 years, measured the
economic freedom of 179 economies by assessing 10 factors: business freedom,
trade freedom, fiscal freedom, government size, monetary freedom, investment
freedom, financial freedom, property rights, freedom from corruption and labor
Heritage Foundation President Edwin Feulner (right) presents Chief Executive
Donald Tsang with a copy of the 2009 Index of Economic Freedom
Open Economy -"Hong Kong is one of the most open economies in the world. That
openness gives it a flexibility with which to respond to events, and also
options to continue the growth path in many different kinds of ways," Terry
Miller, Director of the Heritage's Centre for International Trade and Economics,
and co-editor of the Index, told the South China Morning Post. "I think that
kind of flexibility will keep prosperity very high here in future." Mr Miller
added that Hong Kong is likely to maintain its leading position even in the
midst of the economic downturn. "I think what we'll see is that Hong Kong is
better positioned to withstand any turmoil in the international economy than
many countries," he said.
Extra Boost - Hong Kong even improved on last year's performance, scoring 90 in
the 2009 Index of Economic Freedom, up 0.3 points, and well above the world
average of 59.5. "Hong Kong did a little bit better because of the cuts in the
marginal rates for both individual and corporations last year," said Mr Feulner.
Hong Kong: China's Financial Hub - Hong Kong and Guangdong last month agreed to
set up a coordination team to work on ways to boost cooperation in four major
industries: finance, services, infrastructure and urban planning, and innovative
technology. This is in response to the January release of the "Framework for
Development and Reform Planning for the Pearl River Delta Region," from the
Central Government's National Development and Reform Commission. The report
reaffirms Hong Kong's status as an international financial centre. The report
supports expanded areas of cooperation among Hong Kong, Guangdong and Macau,
under the Central Government's guidance. It also supports the listing of Pearl
River Delta (PRD) enterprises on the Hong Kong stock market, underscoring the
city's role as an international financial centre.
For Hong Kong, strengthening cooperation with Guangdong will focus on three key
areas: developing its services industries in the PRD and Guangdong; working
closely with the region to ensure clear division of work and complementary
approaches in port development; continuing to play the role of an international
financial centre, as well as helping the financial services industry explore
opportunities in the Chinese mainland.
The government will also encourage the services industries to expand into other
parts of the mainland, based on experiences learned from pilot schemes launched
in Guangdong under CEPA – the Closer Economic Partnership Arrangement.
"It is already very high in virtually all 10 of our measures, but that
particular activity gave Hong Kong an extra boost over number two-ranked
Singapore." The city topped the list in the areas of trade, investment and
financial freedom. It also ranked in the top 10 in freedom related to business
and monetary and property rights. Hong Kong fared better than Singapore in
trade, fiscal, financial and investment freedom.
Banking Pays Off - The study noted that Hong Kong's institutional strengths have
allowed it to achieve high levels of prosperity, reinforced by vibrant
entrepreneurial activity. It considered the city's income and corporate tax
rates very competitive, and its overall taxation relatively small as a
percentage of GDP. It also noted that Hong Kong's business regulation was
straightforward and the labour market flexible.
Citing Hong Kong as one of the world's leading financial centres, the Heritage
Foundation noted that the city's banking and financial services regulatory
system was transparent and efficient. An independent and corruption-free
judiciary, it said, also ensured that property rights were well protected.
The Hong Kong Government pledged to continue its role as a facilitator. "We
provide a business-friendly environment, where all firms can compete on a
level-playing field and establish an appropriate regulatory regime to ensure the
integrity and smooth functioning of a free market," said Hong Kong Financial
Secretary John Tsang. "We are determined to uphold Hong Kong as the freest
economy in the world."
The latest ranking reinforces a similar accolade Hong Kong received last year.
The Fraser Institute also put Hong Kong number one in its Economic Freedom of
the World Index. Hong Kong has topped the Vancouver-based think tank's economic
freedom list every year since it began in 1970.
Looking for Angels
Industries with a China focus attract
angels, says Mingles Tsoi of the Chinese University of Hong Kong's Center for
Angel investors are high net-worth individuals who invest in companies before a
private placement or venture capital comes into play. They also may offer a more
prominent role in the management of a company as it evolves. Experts say
investors and owners of small and medium-sized enterprises (SMEs) who had hoped
to list their companies will have to wait 12-18 months for the market to revive.
There are some, however, who remain hopeful about the chances for SMEs to
attract angels investors to their firms.
One of those is Mingles Tsoi, Project Director for the Hong Kong Social
Enterprise Challenge and an executive at the Chinese University of Hong Kong's
Center for Entrepreneurship.
Mr Tsoi, who spoke at the recent World SME Expo in Hong Kong, said SMEs can
still attract angel investors if "they have been operating their business for a
period of time and it is not a new idea; if they're really in need of capital,
they can still find people."
Do Your Homework - Mr Tsoi said the problem with many Hong Kong SMEs is a lack
of preparation. "After my speech at the expo, I received quite a few contacts
from SMEs, and all of them just asked me to help them look for angels," Mr Tsoi
said. The problem, he added, was that they didn't prepare well.
"There were no projections, no market analysis, nothing like that. I told them
that if you just give people a catalogue, no one will invest."
Mr Tsoi said SMEs need to work on "how they present themselves" to potential
angels because of the old saying, "You never get a second chance to make a first
impression." Mr Tsoi said there are still people around "who have money and are
willing to invest, but they are waiting for better timing."
Angels are also driving hard bargains, Mr Tsoi said, but not any harder than
before. "I think most of the angels will stick to their own investment
philosophy," Mr Tsoi said. "Some want majority shareholdings, others will take a
minority shareholder. It's not a matter of timing. If they really want more
shares they will insist on that."
Industries still attractive to angels include any with a China focus, Mr Tsoi
said. Those that are only doing business in Hong Kong will most likely not
attract major funding. Dot-com companies are still attractive, he added, but
only if they have a global focus.
What Angels Want
Cash is king, says Robert Clarke,
7bridge Capital Partners Chairman
Angels are also looking to know management much more than in the past, perhaps,
said Mr Tsoi, because "you need to prove to the angels that you are reliable and
dedicated. SMEs need to be transparent so the angels can believe in them.
Knowing the people is the most important thing."
Among the problems facing SMEs in finding angel investors is a lack of organised
angel groups in Hong Kong. Mr Tsoi added that most angel investors work alone or
in loose clusters within a closed network. He also said some angels in Hong Kong
suffer from a lack of knowledge in valuing a business.
In general, it won't be easy to attract investors for the next six to 18 months,
and those that are interested will drive hard bargains, said Robert Clarke,
Chairman of 7bridge Capital Partners Ltd in Hong Kong.
"Things are extremely tough," Mr Clarke said. Even though investors "may like
the opportunity, they are loathe to make new commitments. Liquidity is poor, and
the appetite for risk is very poor. I do know some cases where people are trying
to put together cash pools to go bargain hunting, but it's very tough under the
Angel investors are different, Mr Clarke said, because they're usually high
net-worth individuals with relatively deep pockets. "If an SME can find one, it
may be the only viable alternative. In the current environment, cash is
The many middle- and senior-level managers who have been laid off and may be
looking to start their own companies is another aspect of angel investing,
according to Ganesha Leung, Managing Director of Intershores Fiduciary Services
"The financial turmoil may push them to start their own business, perhaps on a
part-time basis," she said, "because they have the connections and the ability
to run their own business."
Christian Rommel: Set Yourself Apart
ROX Asia Consultancy is a sourcing, printing and packaging consultancy based in
Hong Kong. Christian Rommel's firm was among three small and medium-sized
enterprises singled out to receive the inaugural Success Story Award from the
Federation of Hong Kong Business Association last October. The company's
impressive international clientele includes Audi, Merck, Zwilling and Deutsche
Bank. In "Six Questions," he tells us why the "future is bright."
How did you get into the packaging business?
I'm a printing and packaging engineer by profession. Everything sold on the
market needs reliable packaging. But our focus has always been on the design
element, with premium packaging for branded goods. Of course, the company didn't
start out packaging for high-end products. Our first project was quality control
for a Swiss chocolate tin box.
How has the economic downturn affected your business?
Whatever we do relates to the spending power of consumers. If our clients don't
sell, we don't sell. We had already seen a 25 per cent drop in business even
before the start of the financial tsunami, so it will continue. Meantime, we
have seen a tightening in payment terms from our mainland suppliers. They won't
start a project unless there's a deposit – in cash. But we don't complain.
Since setting up your business, you have seen your fair share of crises: SARS,
the Asian financial crisis, 9/11. What is your advice to SMEs during the current
Be prepared to work even harder, but also find a work-life balance. It is
important to believe in yourself and stay focused. If you can identify with your
work, clients will feel it, and that builds trust.
Has the green trend affected your business?
Not really. For daily consumption items, there certainly has been the trend
toward more economical, environmentally friendly products. But for branded
goods, environmental packaging is not an issue. For the value-added packaging
that ROX focuses on, we use a mix of materials designed to last and meant as a
Why Hong Kong?
The key here is to set yourself apart. People have said, 'why Hong Kong? It's
expensive.' But we're not competing with the thousands of mass-packaging
businesses on the Chinese mainland, where products are offered cheaply. The
clientele we aim for is not interested in ready-made packaging. What they want
are tailor-made, high-quality products to promote their brands. To deliver that,
you need to be based in a place that has the infrastructure, the creative
agencies and the variety of specialty shops with the materials to provide for
that. Hong Kong does all that. Another reason for being here is that I find the
city's entrepreneurial spirit very motivating.
What is your plan for riding out the current economic storm?
We will identify new areas of business by approaching clients directly. We will
also invest in sales staff who are knowledgeable about China and the region, and
who are able to market China as the best alternative to do their business. The
future is bright and we never look back.
January 14 2009
Hong Kong ranks world's freest economy
for 15th straight years
Hong Kong continued to take the top place in the ranking of the 2009 Index of
Economic Freedom for the 15th consecutive year, revealed the U.S. Heritage
Foundation here Tuesday. According to the ranking, Hong Kong scores 90 this
year, 0.3 point better than last year, well above the world average of 59.5.
Among the 10 individual areas assessed, Hong Kong ranks first in trade freedom,
investment freedom and financial freedom. Hong Kong also ranks in the top 10 in
another three areas, namely business freedom, monetary freedom and property
The Heritage Foundation noted that Hong Kong's institutional strengths had
allowed it to achieve high levels of prosperity reinforced by vibrant
entrepreneurial activity. The income and corporate tax rates in Hong Kong were
very competitive, and overall taxation was relatively small as a percentage of
gross domestic product (GDP), according to the Heritage Foundation.
The foundation also noted that Hong Kong's business regulation was
straightforward, and the labor market was flexible.
The foundation said Hong Kong was one of the world's leading financial centers,
and the regulation of banking and financial services was transparent and
efficient. The study noted that property rights were well protected by an
independent and corruption-free judiciary.
In the Heritage Foundation ranking, Singapore, Australia, Ireland, New Zealand,
the United States, Canada, Denmark, Switzerland and the United Kingdom took
another spots in the top 10 ranking.
Compared with Singapore, Hong Kong fares better in trade freedom, fiscal
freedom, investment freedom and financial freedom, while Singapore fares better
in business freedom, government size, monetary freedom, freedom from corruption
and labor freedom.
Welcoming the study, Financial Secretary of Hong Kong John Tsang said, "We are
determined to uphold Hong Kong as the freest economy in the world and we see the
role of the government as that of a facilitator."
Tsang noted that the Hong Kong government provides a business-friendly
environment where all firms can compete on a level playing field and establish
an appropriate regulatory regime to ensure the integrity and smooth functioning
of a free market.
The study measured the degree of economic freedom of 179 economies worldwide by
assessing 10 factors: business freedom, trade freedom, fiscal freedom,
government size, monetary freedom, investment freedom, financial freedom,
property rights, freedom from corruption and labor freedom.
December 12, 2008
|Hong Kong to host
world’s first Asian wine competition
Pairing Wine with Chinese food and Introducing "Best Wine from China"
|Executive Director of IWSC, Allen
Gibbons (left) and Assistant Executive Director of HKTDC, Raymond Yip
(right) sign the memorandum of understanding to incorporate the
inaugural Hong Kong Wine & Spirit Competition as a new initiative of
Hong Kong International Wine & Spirits Fair next year.
|(From left to right) Competition
Director Simon Tam, Allen Gibbons, Raymond Yip and Competition Director
and Asia's first Master of Wine*, Debra Meiburg toast together for the
success of both the competition and wine fair next year.
The Hong Kong Trade Development
Council (HKTDC), together with a panel of Asia's most respected wine experts
and the world's most prestigious wine and spirit competition organiser has
announced it will host the world's first truly Asian wine competition as
part of the 2009 HKTDC Hong Kong International Wine & Spirits Fair.
The HKTDC has been instrumental in
creating a favourable environment for the wine industry by initiating the
Hong Kong International Wine Fair which will be renamed as Hong Kong
International Wine & Spirits Fair in 2009.
Raymond Yip, Assistant Executive
Director of the HKTDC, says: "Following the Hong Kong SAR Government's
elimination of duties on wine in early 2008, the HKTDC responded by creating
the first Hong Kong International Wine Fair, which took place in August. The
event was immensely successful and, to further enhance fair experience for
both suppliers and visitors, we decided to incorporate the first Hong Kong
International Wine & Spirit Competition (HKIWSC) in 2009 as a new initiative
of our Wine Fair."
"We are delighted that the
International Wine and Spirit Competition (IWSC) has accepted HKTDC's
invitation to organise this 40-year old competition for the first time in
Asia, which we are confident will attract huge interest from both the trade
and media worldwide. It will be one of the key highlights of the 2009 fair,
and along with activities such as wine tasting, seminars, a conference and
voting for favourite wines, will add value and prestige to the event."
The 2008 fair attracted 240 exhibitors
from 25 countries and regions, and 8,758 trade visitors from 55 countries
and regions, and was attended by 10,096 public visitors on the final day.
The HKIWSC is being developed in
conjunction with the IWSC in London, the world's leading wine and spirit
competition, which has been at the forefront of recognizing and rewarding
quality in wines and spirits. Allen Gibbons, Executive Director of the IWSC
said: "We are very excited by the opportunity offered by the Asian market
and working with such fabulous partners will allow us to offer the
definitive guide to quality wines and spirits in Asia."
The competition will feature food and
wine pairing categories, where judges will identify the top wines to match
popular traditional Chinese dishes, including braised abalone, Peking duck,
Cantonese dim sum and Kung Pao Chicken.
The competition will also include the
"Best Wine from China" category, the first trophy of its kind anywhere in
the world to represent the authentic Asian flavour of the competition and in
view of China's bourgeoning wine production industry.
The HKIWSC will see a top class panel
of Asia's most esteemed wine judges from China, Japan, Korea, Singapore and
Taiwan - including the first International Guest Chairman of Judges, Dr Tony
Jordan as well as
the competition's Director, Debra Meiburg, who is Asia's first Master of
Wine*. Categories will be judged by country, region, variety and style, and
trophies awarded will reflect the unique sensibilities of the Asian palate.
The competition results will serve as
a definitive guide for contemporary Asian wine consumers. Additionally,
price point categories for the most popular styles of wines will offer wine
consumers a comprehensive directory of the world's best wines for all
occasions and situations.
Results of the judging process will be
announced during the opening night of the 2009 Hong Kong International Wine
& Spirits Fair, which will be held from 4 to 6 November, 2009 at the Hong
Kong Convention and Exhibition Centre.
Hong Kong International Wine &
Spirit Competition's website:
*Jeannie Cho Lee became the first
Asian to earn the Master of Wine qualification at the same time.
December 3, 2008
"Hong Kong Film: New Action" project
launched - Hong Kong Film Development Council:
The Hong Kong Film Development Council (FDC) launched today (December 3) a
large-scale project “Hong Kong Film: New Action” to promote the long-term
development of Hong Kong's film industry. The project aims to help local films
develop Mainland and Southeast Asian markets and introduce the new generation of
Hong Kong directors to these markets.
To mark the commencement of the project, the FDC held today a launch ceremony
cum Christmas reception. It was officiated by the Financial Secretary, Mr John C
Tsang; the Secretary for Commerce and Economic Development, Mrs Rita Lau; the
Chairman of the FDC, Mr Jack So; members of the film industry, and film
directors participating in the project.
Addressing the ceremony, Mr So said, “The project will be implemented in phases.
From this month to February next year, a delegation comprising members of the
FDC and the film industry, and the participating film directors, will pay visits
to the Mainland, Singapore, Malaysia and Taiwan. The delegation will introduce
Hong Kong films and the new generation of directors to the buyers, distributors
and producers of the four places.
“We hope that through direct exchange of ideas between Hong Kong film
practitioners and investors and distributors outside Hong Kong, we can help
foster mutual understanding and establish solid market networks, thereby
boosting the demand for local film productions and attracting foreign
Mr So said he was glad to note that the project was well-received with 33
directors joining it so far. The FDC has compiled a brochure showcasing the
participating directors for promotion outside Hong Kong.
“Our film industry has an abundance of talent. The participating directors
either have been nominees for film awards, or have won prizes in various film
festivals. We hope the project will help them open up more opportunities and new
markets, thus enabling the industry to nurture successors and enhance both the
quality and quantity of local film productions,” he said.
The FDC will also organise exchange forums and seminars under the banner of
“Hong Kong Film: New Action” during the “Hong Kong International Film & TV
Market” to be held in March next year. Luncheon gatherings and individual
promotional booths will be set up for the 33 directors to meet with buyers,
distributors and producers from the Mainland and Southeast Asia, and to foster
mutual understanding and pave the way for future co-operation (including
investments, sales and distribution).
As regards the latest position of the Film Development Fund (FDF), Mr So said
that since the launch of the Film Production Financing Scheme in October last
year, eight applications have been approved and another two are being processed,
involving a total approved funding of $21.84 million. The eight approved film
projects are of different genres, including animation, kung-fu, romance, ethical
and suspense films. These films engage six new directors for commercial films
and will be released starting from early 2009.
In addition to financing film productions, the FDF approved 20 film-related
projects at a total amount of $37.85 million. The approved items include
financing large-scale film events like the Entertainment Expo Hong Kong, the
Hong Kong – Asia Film Financing Forum, the Hong Kong Film Awards Presentation
Ceremony and the Asian Film Awards; film promotional seminars; participation of
local films in overseas film festivals or film financing forums; production of
the Safety Manual for Film Workers; introduction of film education in the senior
secondary school visual arts curriculum; and production of a short film for
promotion of Hong Kong films.
November 25, 2008
World urged: look to Hong Kong trade
model - Katherine Ng
Governments should follow Hong
Kong's example when extending trade credit insurance coverage to keep the wheels
of business turning, the International Chamber of Commerce said after a two-day
conference in Hong Kong. "Trade is the life blood of the global economy and
trade credit funded about 90 percent of business," Victor Fung Kwok- king,
chairman of the Paris-based ICC, said yesterday.
Fung, also chairman of the Li & Fung Group of companies and a member of Hong
Kong's Task Force on Economic Challenges, said the ICC had agreed that members
will urge their respective governments to work together to unlock liquidity and
get trade flowing again.
"The ICC has sent letters to six country leaders and the WTO, and will send to
more countries, urging them to use Hong Kong as a case study for extending their
trade credit insurance coverage," Fung said. On November 11 the Hong Kong
government set up a HK$10 billion loan scheme to provide 70 percent loan
guarantees. At the same time it doubled its liability to HK$30 billion for Hong
Kong Export Credit Insurance Corp credit insurance coverage.
Despite there being no sign yet that local banks are relaxing their SME lending
in line with the plan, Fung said he has had a personal assurance from the Hong
Kong Association of Banks that their member lenders will support it. "The plan
has only been launched a few weeks - it may take weeks not months for
implementation," Fung said.
Meanwhile, the ICC also warned against protectionism. "There have been no signs
yet of protectionism but when the financial crisis gets into the real economy it
becomes a threat," Fung said. The ICC has concluded two days of meetings in Hong
Kong, the first time outside of their Paris headquarters.
It has set an agenda which would next week set priorities for its 150 members to
follow during coming years.
The members will meet next Tuesday in Paris to set the organization's
November 8, 2008
Hong Kong - Where the world wants to be
Hong Kong remains the location of choice for overseas and Chinese mainland
firms. The latest InvestHK survey shows the city is home to a record 6,612
overseas and mainland firms representing parent companies outside Hong Kong, an
increase of 2.7 per cent over last year.
"In recent years, two emerging trends have strengthened Hong Kong's status as a
regional and international hub," said Mike Rowse, Director-General of Investment
Promotion. "More multinationals have upgraded their Hong Kong operation by
adding regional and even global responsibilities, while more and more mainland
companies have established local offices here to capture the business
opportunities Hong Kong has to offer."
Out of the more than 6,600 firms that have set up in Hong Kong as of June this
year, 1,298 companies established regional headquarters, 2,584 have set up
regional offices and 2,730 have opened local offices. Mr Rowse told the South
China Morning Post that an additional 250 companies are in the process of
setting up or expanding operations in Hong Kong this year, despite difficult
Companies from the United States topped the list of countries with regional
headquarters and regional offices in Hong Kong, followed by Japan and the United
Kingdom. The major lines of business of the regional headquarters and offices
include wholesale, retail and import-export trades, business services (excluding
information technology), and transport and related services, as well as finance
and banking. As for local offices in Hong Kong, mainland companies led the way,
followed by companies from the US and Japan.
Tax system lauded - The survey, conducted in June, found that key reasons for
companies choosing Hong Kong included the city's simple tax system and low tax
rate, the free flow of information and the absence of exchange controls.
Respondents also cited clean government and Hong Kong's communications and
transport infrastructure, as well as its free-port status, as other factors.
Mr Rowse noted that Hong Kong has maintained its status as Asia's leading
business hub, despite keen regional competition for investors, and the world
economic turmoil. "Given the recent global financial difficulties and uncertain
economic outlook, companies may delay overseas investments or even reduce the
size of their operations. We, therefore, have to work even harder to attract and
retain investors from all over the world," he said.
The new survey comes as the latest report by the United Nations Conference on
Trade and Development ranked Hong Kong the world's seventh-largest destination
for foreign direct investment (FDI). Hong Kong also retained the second spot in
Asia – after the mainland, which ranked first – in terms of FDI inflow last
year. The amount of FDI Hong Kong attracted last year was more than the combined
total of the next three highest FDI recipients in Asia: Singapore, India and
The World Investment Report 2008 also ranked Hong Kong first globally in its
Inward Foreign Direct Investment Performance Index, signifying that Hong Kong is
the world's best performing economy.
InvestHK is the award-winning department of the Hong Kong Government,
responsible for attracting and facilitating investment to the city. It provides
free services and support to help overseas and mainland companies establish or
expand their business presence in Hong Kong.
October 23, 2008
DHL logistics hub now
faster, leaner, stronger
Due to demand, DHL's Central Asia Hub expansion in Hong Kong has opened five
years ahead of schedule
DHL, the world's leading express and logistics company, is set to significantly
boost its operational capability in the region with the recent completion of its
Central Asia Hub (CAH) expansion in Hong Kong. Based at the Hong Kong
International Airport, the US$210 million facility, which officially opened last
month, is the first large-scale automated express hub in Asia-Pacific. DHL said
rising demand in the region prompted the decision to expand five years ahead of
"Currently, more than 60 per cent of express cargo processed by the Central Asia
Hub is intra-Asia-Pacific shipment, a figure we expect to continue growing
alongside rising intra-regional trade,” said Dan McHugh, CEO, DHL Express
Asia-Pacific. "Asia-Pacific continues to be a key growth driver. In the first
half of 2008, we grew 13 per cent year-on-year. The expansion of the CAH is
testament to the continued growth of intra-Asia trade and the Asia-Europe trade
The expansion doubles the capacity of the CAH to 35,000 square metres. Providing
the core backbone to further enhance DHL's services in the region, the upgraded
facility will handle 40 million shipments this year alone. With the expansion,
the automated facility will see a 114 per cent increase in throughput capacity,
and a decrease in throughput cycle time from 12 to seven minutes.
Strategic location - "Strategically located within a four-hour flight time to
major cities in Asia-Pacific, the CAH is complemented by a well-established Asia
Air network, which is served by more than 20 aircraft and about 500 commercial
daily flights. The expansion of the CAH brings with it heightened speed,
efficiency, accuracy, and significantly bolsters DHL's operational capacity in
Asia-Pacific,” said Jerry Hsu, President, Greater China Area, DHL Express.
The Hong Kong Government pledged to continue doing its part. "To support further
development of the express cargo industry and the aviation sector in the years
ahead, the government is dedicated to improving our airport's links to the
nearby markets,” said Hong Kong Secretary for Transport and Housing Eva Cheng.
Hong Kong, she added, plans to increase its airport capacity, by possibly
building a third runway.
"With CAH fully operational, we look forward to taking our network capability up
another notch when our North Asia Hub at Shanghai Pudong International Airport
is complete in 2010,” Mr McHugh said. The company said the North Asia Hub in
Pudong will complement its Hong Kong facility and will result in transit time
improvements across North Asia, benefiting especially customers in the Yangtze
"Currently, nearly 50 per cent of the shipments through the Central Asia Hub are
destined for China, Japan, Korea and Taiwan,” Mr Hsu noted. "With the expected
long-term projections in volume growth, a dedicated North Asia Hub will further
enhance operational efficiencies, and enable DHL to keep pace with growth.”
September 30, 2008
HKMA Takes Action
In the wake of the on-going international
credit crisis, the Hong Kong Monetary Authority (HKMA) on Tuesday unveiled five
temporary measures to boost the liquidity of licensed banks in Hong Kong.
It said the new measures would take effect from Thursday for a period of six
months until the end of March 2009. A HKMA spokesman said the measures were
taken in the light of the current crisis affecting world financial markets.
“Continuing stress in the financial systems of developed markets has caused some
concern among licensed banks in Hong Kong over the credit worthiness of each
other. “This concern, together with a wish to preserve liquidity to meet their
own contingent needs, has led to a general shortage of interbank liquidity and
difficulties on the part of individual licensed banks in obtaining funding in
the interbank market,” the spokesman explained. But he said Hong Kong’s banking
system remained “healthy”.
“The existing framework for maintaining banking stability – including the
prudential supervision of banks and the arrangements for providing liquidity
both at the systemic and institutional levels – have ensured the banking system
of Hong Kong is well prepared for turbulent conditions,” he said. The spokesman
advised ordinary investors to exercise caution. “The HKMA will continue to
monitor the situation carefully and will, as necessary, make use of the tools at
its disposal to maintain financial stability in Hong Kong.”
The five new measures are:
* Eligible securities, for access by individual licensed banks to liquidity
assistance through the discount window, will be expanded to include US dollar
assets of credit quality acceptable to the HKMA. (The discount window is a HKMA
location where banks borrow money at a discount rate).
* The duration of liquidity assistance provided to individual licensed banks
through the discount window will be extended. This at the request of individual
licensed banks and on a case-by-case basis, from overnight money only to
maturities of up to three months.
* The 50 per cent threshold for use of exchange fund paper as collateral for
borrowing through the discount window at the HKMA base rate will be raised to
100 per cent. (The bank base rate is the rate that the HKMA lends money).
“In other words, the 5 per cent premium [or penalty] over the base rate for the
use of exchange fund paper beyond the 50 per cent threshold, as collateral for
borrowing through the discount window, will be waived,” the spokesman explained.
(The exchange fund is the investment vehicle which backs the Hong Kong dollar).
* The HKMA will, in response to requests from individual licensed banks and when
it considers necessary, conduct foreign exchange swaps (between the US dollar
and the Hong Kong dollar) of various durations with licensed banks.
* The HKMA will, in response to requests from individual licensed banks and when
it considers necessary, lend term money of up to one month to individual
licensed banks against collateral of credit quality acceptable to the HKMA.
September 26, 2008
Services in the CEPA
John Tsang and Vice-Minister of Commerce Jiang Zengwei sign Supplement
V to the Hong Kong-Mainland Closer Economic Partnership Arrangement
||Andrew Brandler, Hong
Kong General Chamber of Commerce Chairman, welcomes the latest CEPA
for Hong Kong-based businesses in the services sector. The latest phase of
CEPA, the Closer Economic Partnership Arrangement between Hong Kong and
the Chinese mainland, will bring with it more opportunities.
additions to CEPA, signed in July, brings to 40 the number of services now
covered by the free trade agreement, introduced in 2003. CEPA created
36,000 jobs and attracted more than US$642 million of investment into Hong
Kong in its first three years. CEPA gives favorable trading and investment
treatment to a range of Hong Kong-incorporated manufacturers and services
through tariff exemptions and greater mainland access.
companies not based in Hong Kong can also take advantage of CEPA by
outsourcing to, or partnering with, CEPA-qualified manufacturers or
service providers in Hong Kong.
phase, Supplement V, covers sectors such as tourism, accounting, medical
and dental services, education, construction and related engineering. Two
new sectors have been added: services related to mining, for oil and gas
exploration; and associated scientific and technical consulting services
for the prospecting and surveying of iron, manganese and copper in the
mainland. Supplement V also introduces a mechanism for increased
cooperation on branding, trademarks and e-commerce.
phase puts special focus on strengthening economic and trade cooperation
between Hong Kong and the southern mainland province of Guangdong, making
it easier for Hong Kong services providers to open businesses in the
province. Among the new CEPA commitments, 25 will be initiated as pilot
projects in Guangdong, a testing ground for the rest of the mainland.
bodies have welcomed the latest signing. Hong Kong General Chamber of
Commerce (HKGCC) Chairman Andrew Brandler said the agreement would bring
tangible benefits to many Hong Kong companies and professionals as they
expand their operations in the mainland. It would also foster growth in
services, he said.
example, under the framework of Trade and Investment Facilitation, both
parties will promote cooperation in electronic commerce. Under Trademark,
they will set up a working team to encourage communication and cooperation
in trademark registration, management and protection," said Mr Brandler.
"In addition, Brand Cooperation between Hong Kong and the mainland is a
new sector under CEPA Trade and Investment Facilitation. The chamber has
been calling for these measures to be added to CEPA, so we are glad to see
they have been included in the latest supplement."
Chief Executive Officer Alex Fong said the services sectors covered were
relevant to business needs. Commenting on a CEPA working mission that the
chamber organized to Guangdong last year, Mr Fong said the cases observed
there "helped to generate proposals for our CEPA wish list." Mr Fong was
also pleased to see that the newly signed supplement contains 25
liberalization provisions between Guangdong and Hong Kong. "These should
allow more Hong Kong enterprises to operate businesses in the province. At
the same time, implementation of CEPA will be improved, which will help
Hong Kong companies make use of their competitive edge there."
Faster and easier
Kong Institute of Certified Public Accountants said the new agreement
would bring Hong Kong accountants more opportunities to practise on the
"For the accounting profession, it means that Hong Kong certified public
accountants (CPAs) need only pass the tax and law papers of the Chinese
Institute of Certified Public Accountants' exam to become CICPA members.
Mainland CPAs now only need to pass the taxation module and the final exam
of the Hong Kong Institute of CPAs qualification programme to become Hong
Kong Institute of CPAs members," said Winnie CW Cheung, Chief Executive
and Registrar of the Hong Kong Institute of CPAs.
exemptions make it faster and easier for accountants to qualify, or become
licensed, in each market. And it's going to bring the two professions
another step closer to full mutual recognition."
of the Federation of Hong Kong Industries Clement Chen said the agreement
on trademark cooperation could encourage more Hong Kong companies to
develop new products and build their own brands.
cooperation mechanism for intellectual property protection and branding
will help encourage Hong Kong enterprises to invest in developing new
products and branding. This will assist them in targeting the newly
emerged middle class consumer market in the mainland," Mr Chen said. "The
distribution sector will benefit from the liberalization measures of the
new CEPA package. By allowing Hong Kong enterprises to operate on a
wholly-owned basis in China, it will be easier for them to open up chain
stores in the targeted cities, and to gradually set foot in the massive
mainland domestic market."
Supplement V comes into effect 1 January 2009.
September 15, 2008
HK aims to set a standard for wine -
Initiative for storage would be world-first
Hong Kong is exploring the possibility of becoming the world's first city to
establish a standard for wine storage facilities as part of its push to become
Asia's wine hub. It recently signed Asia's first memorandum of understanding
with France on wine-related business, a move aimed at making the city the
region's centre for wine.
Sources said a collaboration between the Productivity Council and the Trade
Development Council would hopefully be implemented locally and then extended
overseas if it were successful. Boris de Vroomen, co-chairman of the Hong Kong
Wine and Spirits Industry Coalition, said that setting up the standard would
take time and it was important to ensure the certification could be measurable.
He said the industry had contributed its expertise to the initiative and he
expected more details to be announced soon. "This is a good initiative. Hong
Kong will be the only place to have such a standard."
Mr de Vroomen said London has great storage facilities ensuring the right
conditions and temperature, but no standard had been set. "Their expertise was
built over time," he said. "But we do it differently. We set up a standard as a
certificate and guarantee for consumers." The standard will be set up primarily
in Hong Kong, he said, but "if it works well, it can go international".
The Trade Development Council said the need for certification of storage
facilities emerged during talks with the industry. The council then passed the
request to a technical body, the Productivity Council, which is examining the
Mr de Vroomen said Hong Kong had a great demand for storage facilities,
especially when local wine consumers began to ship more of their collection back
to the city. He said most of the wines were stored in London. "In fact, 40 per
cent of the wines in London are owned by Hong Kong collectors," Mr de Vroomen
said. "These wines were only shipped to Hong Kong when they wanted to consume
them. But after the zero wine duty was implemented, more wines were shipped to
The government scrapped its tax on wines this year. He said Hong Kong had risen
to third in global wine trading, behind London and New York. The Productivity
Council declined comment.
How to keep your wine:
Temperature: around 13 degrees Celsius
Relative humidity: around 65 per cent
Light: Keep the wines away from the Sun and minimize their exposure to any light
source, as light affects the nature of wines just as much as temperature and
Vibrations: Store the wines in a stable environment; avoid any unnecessary
HK's creativity makes its architectural
sector top in Asia
Hong Kong Secretary for Commerce and Economic Development Rita Lau said that
Hong Kong people's creativity has driven the city's architectural sector to
become one of the foremost in Asia and one of its top creative industries, a
government press release said on Saturday.
According to the press release from the Information Services Department of Hong
Kong Special Administrative Region (HKSAR) government, Lau applauded the
creativity of Hong Kong exhibitors while opening the Hong Kong exhibition at the
11th Venice Biennale International Architecture Exhibition in Venice on Sept.
Praising Hong Kong architects' presentation of creative ideas to improve quality
of living, she said the pursuit of quality living has propelled people's
creativity to develop new ideas and designs.
To facilitate exchange and discussion between Hong Kong's creative talent and
their overseas counterparts, Lau hosted a gala dinner for guests including
representatives from overseas creative organizations, leading architects and
designers of participating countries of the Architecture Biennale.
The HKSAR government has allocated more than 1.8 million HK dollars (231,065
U.S. dollars) in sponsorship to support the Hong Kong exhibition in Venice as
well as a response exhibition.
The Hong Kong exhibition features the creativity of Hong Kong in six categories
including objects, buildings, landscapes, city, media and text. Nine groups of
local exhibitors, comprising architects, designers, photographers, performers,
and writers and critics, will showcase their interpretations of architecture at
this international platform.
August 15, 2008
Hong Kong is "perfectly located" as a
regional headquarters, says Vicente Trius, President and CEO of Wal-Mart Asia.
The world's largest retailer is using Hong Kong as an enabling centre for
analysing business opportunities.
Multinational coffee chains descend on Russia - There's plenty of coffee in
While major coffee house brands are closing down outlets in the US and Western
Europe amid the global downturn, Russia provides opportunities for opening
retail units. Recently, Australia's Gloria Jean's Coffees joined other
international names, expanding into Moscow's MEGA Shopping Mall, the largest
mall in Europe.
Starbucks also started in the same mall in Russia and has driven hard since then
to establish itself as a dominant player.
The Australian newcomer has ambitious plans to. It will launch a chain of 100
coffee shops all over Russia in the next decade. The rational is: the Russian
coffee shops market has been growing some 40% annually over past five years,
from a relatively low base.
However, Russia is far from being a virgin land for coffee drinkers. To mirror
that, serious players like Starbucks and Costa Coffee are raising their
Furthermore local operations, the Coffee House and Chokoladnitsa chains, have
set up shops not only all over Russia but throughout the former USSR, definitely
outnumbering both Starbucks and Costa Coffee by far in the region.
The Russian chains have a competitive edge by knowing Russian consumer
preferences for blinies with jam or honey for breakfast, ice cream coffee in the
summer and traditional Russian tea selections with cakes.
The local venues also feature cosmopolitan and modernistic interior and exterior
design, western-style management and, not least, cleanliness.
McDonald's, with its McCafe outlets, is another downmarket but serious rival to
all coffee houses. The chain is the largest fast-food operator in Russia with
outlets located in some places so remote that they are only accessible by plane
or by boat.
There's another particular factor to be taken into account with the new
Australian coffee shops' strategy. Gloria Jeans is the name of a very well-known
jeanswear brand in Russia, developed by a local clothing manufacturer.
The Russian chain's founder and principal shareholder, Vladimir Melnikov, has
already confirmed he won't be claiming royalties, as his trade mark is not
registered in the corresponding product category. But still, the possible
confusion over the name remains.
Coffee shops have become a distinctive feature of modern Russian urban life.
They are often equipped with Internet Wi-Fi access points which are offered to
patrons free of charge.
Targeted customers are between 16 and 45, many casually making appointments as
they drop in to the numerous outlets of Mocco Locco, Coffee House, Starbucks,
Chokoladnitsa, Coffee Bean, Coffeemania, Coffee Tune, Coffee Republic and McCafe
outlets that are strung out from St Petersburg to Vladivostok.
All chains face intense competition and go for all the marketing opportunities
they can, such as offering free or additional coffees, new brews, gifts and
These promotion techniques open up vast opportunities for interested suppliers
from Hong Kong and other Asian centres, particularly in the gifts, premium and
It might also be the right time for coffee catering chains from Hong Kong and
elsewhere in the Asia Pacific to be encouraged to make the most of the largest
consumer market in Europe.
July 13 2008
Wal-Mart chooses HK
as springboard for Asia
Executive Director Fred Lam greets Vicente Trius at a luncheon to
welcome Wal-Mart to Hong Kong
Trius, Executive Vice President, President and CEO of Wal-Mart Asia
heads the new regional office in Hong Kong
the world’s largest retailer, has opened a regional office in Hong Kong to
further develop its customer base in the booming Asian market. The company
announced plans to set up the office in May. The regional operation is
headed by Vicente Trius, Executive Vice President, President and CEO of
"Hong Kong is centrally located in the Asia region, and therefore makes a
good staging point for continuing to develop our businesses in the
hemisphere," Mr Trius said. "This is a concept we’ve applied with great
success for our Canadian and Latin American markets, which are overseen by
a regional office in Miami, Florida."
reviewing several cities in Asia, the retailing giant decided that Hong
Kong was the ideal location for its regional office. The company informed
Hong Kong Trade Development Council (HKTDC) representatives of its
decision during their visit to the company’s headquarters in Bentonville,
Arkansas, in February.
has been an important HKTDC customer over the years, attending several
trade fairs in Hong Kong last year. It has also been a regular visitor to
the Hong Kong Pavilion at the Chicago Houseware Show. HKTDC Executive
Director Fred Lam was pleased to be among the first to welcome Mr Trius to
Hong Kong at a luncheon organized by HKTDC in May.
has seen strong growth in its international business, posting a 17.5 per
cent year-on-year increase in the fiscal year ending in January. The US
retailer has been operating in the Chinese mainland since 1996, when it
opened its first store in the southern city of Shenzhen. It currently has
206 retail units, which includes a minority shareholding in the Trust-Mart
latest overseas expansion, Wal-Mart last year entered into a joint venture
with Bharti Enterprises in India. Bharti-Wal-Mart Private Limited plans to
open its first wholesale warehouse stores there next year. Unlike
Wal-Mart's mainland operation, which focuses on retail, the Indian
business will for now concentrate on developing supply chain and wholesale
cash-and-carry operations, setting up stores ranging from small
supermarkets to hypermarkets and wholesale outlets.
markets such as China and India, where organized retail is a fairly new
phenomenon, present potentially large business opportunities, no question
about it," Mr Trius pointed out. "But the common thread wherever we
operate stores around the world is to save people money so they can live
better, which is a theme that resonates with customers no matter where we
Key to success
also operates Seiyu in Japan, where it runs 392 units. It recently took
full control of the Japanese retail store, instituting changes such as
creating a more streamlined distribution system, and focusing on low
"Regardless of the market Wal-Mart operates in, we think globally, while
acting locally. This formula is the key to our success in the 13 markets
outside the US where we operate retail stores. It means tailoring formats,
merchandise and also brands to best meet the needs of local consumers," Mr
retail format of neighborhood markets, first launched in the US, has also
been introduced in several mainland cities. Wal-Mart said that the
small-format store concept is proving successful in both markets.
Trius said Wal-Mart continues to see other business opportunities across
Asia. "Part of the success of our international business is using our
global leverage to deploy best practices, share talent, technical
expertise and other resources to our markets around the world. We draw
from experience gathered from all our markets to find new ways to serve
customers around the world."
June 11 2008
Medium-Term Prospects for Hong Kong Exports: Diversifying from US
- Given the lingering impact of the US-led global
slowdown, Hong Kong exports are projected to grow by a modest 7% in 2008,
unchanged from our previous forecast.
- The US economy is expected to pick up slightly in
the latter half of 2008, on the back of fiscal stimulus, interest rate cuts
and special measures to support the financial system.
- Yet intra-Asia trade, with the mainland in
particular, will be the main engine for Hong Kong's export growth, while
demand from the EU should remain firm.
- Product-wise, continued popularity of digital
products should be conducive to electronics sales. But clothing exports will
likely be impeded by shrinking orders from the US.
- Meanwhile, certain risks and challenges exist,
notably a worse-than-expected US downturn, rising global inflation and a
difficult production environment.
Hong Kong's export performance in the first quarter of
2008 was better than expected, as growth of total exports, at 9% last year,
quickened to over 10% during the January-March period. This good showing, in
spite of the US-led global slowdown, has been prompted by the sizzling
intra-Asia trade, not least with the Chinese mainland. Yet exports to the
developed markets have been less encouraging, featured mainly by declining sales
to the US but firmer demand from the EU.
In the US, where the economy only showed marginal
growth in both the final quarter of 2007 and the first quarter of 2008, demand
has been particularly anaemic, reflecting continued corrections of the housing
market as well as the ensuing sub-prime fallout, credit turmoil and
deterioration of the labor market, in tandem with rising inflation due to high
oil and commodity prices. By contrast, exports to the EU have been in better
shape, thanks to its stronger economy and a firm euro.
Falling exports to the US but expanding sales to the EU
have helped bring a setback in direct shipments from the mainland, and in turn
served to lift Hong Kong's re-exports. For one thing, the impact of cargo
diversion is particularly noticeable in exports bound for the US. Quite a few
giant US buyers have set up warehouses in Shenzhen, and secured agreements with
ship-liners to load their merchandise in Shenzhen ports. EU buyers, for their
part, are more inclined to use Hong Kong as a consolidation centre. Separately,
the solid export performance of electronics, mainly involving air shipment
through Hong Kong, has likewise propped up Hong Kong's re-exports.
Firmer unit values of Hong Kong exports, spurred by
rising input costs, have further contributed to the inspiring sales performance.
Not surprisingly, given sustained demand from the EU and the strong euro, price
rises for exports to Europe are more prevalent. Price increases for exports to
the US, on the other hand, tend to be less significant amid the economic
headwinds faced by American consumers and a weakening US dollar against the RMB.
The depreciation of the US dollar has also galvanized Hong Kong exporters into
shunning the currency to settle non-US transactions to reduce exchange risk.
Going forward, the tempo of Hong Kong's export growth
is forecast to slow, as the contagious effect of the US economic downturn will
probably linger on for a while. But the US economy, on account of the US$168
billion fiscal stimulus, aggressive interest rate cuts and a slew of special
measures to support the financial system, is expected to pick up slightly in the
latter half of 2008, thereby easing its drag on the world economy. Meanwhile,
demand from the EU should remain fairly decent.
In any event, intra-regional trade, especially with the
mainland, will provide the main impetus to Hong Kong's export growth. Outside
emerging Asia, sales to other fledgling markets should remain relatively strong
too. While non-commodity exporting economies will be impeded by the US-led
global slowdown, commodity exporters, alongside countries with sustainable
domestic demand, should continue to perform well. Taken together, the expected
value growth of Hong Kong's total exports is maintained at 7% for the whole of
In terms of product, sustained popularity of digital
products should hold up Hong Kong's electronics exports. A still-healthy
appetite for non-traditional toys and a stable demand for value-for-money
timepieces should also facilitate sales. Clothing exports, in contrast, will
likely be dragged by falling orders from the US, while jewellery exports in
value terms will be inflated by stubbornly high prices of precious materials,
stones and diamonds, but volume sales should fare less well.
Apparently, the biggest threat to the global trade
environment comes from the still-unfolding adverse developments in the US. While
the US economy is expected to bottom out in the second half of 2008, it cannot
be ruled out that the prevailing downturn will be longer and deeper than
anticipated. The consequences will not only hinder US growth, but also dampen
the world economy, and Hong Kong exporters are unlikely to be left unhurt.
Rising overseas protectionism is another concern, especially in the run-up to
presidential election in the US.
Mirroring the price surge in commodities and, to a
lesser extent, manufactured products, risks associated with rising inflationary
pressures have also increased. In view of the global economic slowdown, rising
inflationary pressures pose a dilemma for policy makers worldwide, making it
difficult to take a loose monetary stance if necessary. The resulting negative
impact on global growth, along with rising raw material costs, will undoubtedly
have a detrimental effect on Hong Kong exporters.
Hong Kong companies will be further confronted with
immense cost pressures incited by soaring labor costs amid rapid wage increases,
rising social security benefits, as well as the introduction of the new Labor
Contract Law effective from January 2008, which also puts an extra
administrative burden on Hong Kong manufacturers on the mainland. To compound
problems, the sustained appreciation of the RMB, aggravated by higher safety
compliance costs, will translate into even higher production costs.
Recent Performance of Hong Kong Exports
Hong Kong's merchandise export performance in the first
quarter of 2008 was better than that which had been widely anticipated. On the
back of a 9% increase last year, Hong Kong's total exports rose by more than 10%
during the January-March period, driven principally by a solid 11% growth in
re-exports, notwithstanding a stagnation in domestic exports. Yet there has been
a trend of moderation. Hong Kong's total export growth stood at 16% in January,
followed by a scant 8% in both February and March.
The sturdy performance of Hong Kong exports during
January-March 2008, in the main, was buttressed by the burgeoning intra-Asia
trade. In particular, sales to the Chinese mainland, which constituted 48% of
Hong Kong exports, surged by 11% amid the mainland's hearty appetite for
machinery and semi-manufactures for export production, while sustained export
growth in the region has elicited greater demand for capital goods and
production inputs. By contrast, sales have been less encouraging in the
traditional markets, although exports to the EU have been in better shape,
thanks to its stronger economy, as well as a firm euro, which has appreciated
against the US dollar by 7% so far this year. Exports to the US, the centre of
the prevailing global economic slowdown, have been particularly dreary. Sales to
Japan have also remained weak, despite a 7% appreciation of the yen against the
Product-wise, electronics, which shared 51% of Hong
Kong exports, continued to shore up overall growth with a 12% leap, given the
sustained demand for digital products from overseas markets and parts and
components from the mainland. Despite recent product recalls overseas,
successive releases of electronics game consoles and the continued demand for
electronics toys have further bolstered toy exports. Stubbornly high prices of
precious materials, stones and diamonds, on the other hand, have magnified
jewellery exports in terms of dollar value, but volume sales have been in the
doldrums. Regarding watches and clocks, sales have been robust, against the
backdrop of a sturdy world demand for value-for-money timepieces. As for
clothing, sales have been hobbled by sluggish demand from the US, although
exports to the EU were stable in the wake of its removal of textile quotas
against the mainland.
Firmer unit values of Hong Kong exports, in the
meantime, have contributed to the inspiring sales performance, as the
juxtaposition of the mainland's processing trade policy changes, continued
revaluation of the RMB, rising labour costs, higher product safety compliance
costs, as well as skyrocketing prices of crude oil and certain other commodity
prices, have exerted immense upward pressures on production costs. Partly
reflecting the surging production costs, the unit value of Hong Kong's total
exports increased by 2.6% during January-March 2008, quickening from a 2.3% rise
for last year as a whole. Assuredly, the production environment has become
increasingly formidable, and tended to weed out less efficient manufacturers.
Yet this consolidation process has resulted in bigger orders for the surviving
players, which also have stronger bargaining power over prices.
To no one's surprise, given sustained demand from the
EU and the strong euro, price rises for exports to Europe are more prevalent.
Price increases for exports to the US, on the other hand, tend to be less
significant amid the economic hardships borne by American consumers and a
weakening US dollar against the RMB. The depreciation of the US dollar has also
prompted Hong Kong exporters to avoid using the currency to settle non-US
transactions to reduce exchange risk.
In addition, a setback in direct shipments from the
mainland, due in part to falling exports to the US but expanding sales to the
EU, has served to lift Hong Kong's re-exports. For one thing, the impact of
cargo diversion is particularly noticeable in exports bound for the US. Quite a
few giant US buyers, including Wal-Mart, Target and Toys"R"Us, have set up
warehouses in Shenzhen, and secured agreements with ship-liners to load their
merchandise in Shenzhen ports. EU buyers, for their part, are more inclined to
use Hong Kong as a consolidation centre. Indicative of the changing shipping
arrangement, growth of Hong Kong's cargo throughput accelerated to almost 8% in
the first quarter of 2008 from 2% last year, while Shenzhen's slowed to 9% from
14% in 2007.
In another development, the solid export performance of
electronics, making up the bulk of intra-Asia trade, has further propped up Hong
Kong's re-exports. For the most part, these were parts and components shipping
from neighbouring economies to the Chinese mainland for assembly. As they were
high in value, small in size and light in weight, transportation costs might be
of little concern to shippers compared with the risk of delay or loss. As such,
shipment by air through Hong Kong was preferred, given the efficiency of the
Hong Kong International Airport and its unrivalled connections with mainland
Global Economic Outlook
activity, which showed a decent 4.9% growth last year, is losing momentum
because of the uninspiring US economy, where the housing downturn has
reverberated to other sectors and, worse still, to other economies worldwide. In
this context, world growth is expected to decelerate to less than 4% in 2008,
and only quicken slightly in 2009. No wonder the US will register the poorest
showing in the developed world, as growth in the EU, though dragged by the US,
should fare better. As regards the emerging economies, growth should remain
relatively strong. While non-commodity exporting economies will be impeded by
the US-led global slowdown, commodity exporters, alongside countries with
sustainable domestic demand, should continue to fare well. But rising commodity
prices, especially oil and food prices, will boost inflation worldwide, serving
to further depress consumption and economic growth and limit the leeway for
fixing monetary policies.
In the US, where
the economy showed marginal growth in both the final quarter of 2007 and the
first quarter of 2008, a recession is likely to have eventuated. Continued
corrections of the housing market and the attendant sub-prime fallout have led
to a credit crisis and deterioration of the labour market, aggravated by rising
inflation due to high oil and commodity prices. Yet the economy is forecast to
pick up modestly in the latter half of 2008 and into next year. The US$168
billion fiscal stimulus, which will likely lift economic growth by 1.5
percentage points in the second half, coupled with aggressive interest rate cuts
and a slew of special measures to support the financial system, will inject the
much-needed vitality into the economy. Robust exports, sound corporate positions
and a relatively unscathed stock market are other positive developments. On
balance, however, the US will likely remain a less promising market over the
medium term, and even the higher-end segment is not immune.
Atlantic, the EU economy is expected to continue to moderate amid the lacklustre
US performance. But it should remain fairly decent, and could give some buffer
to Hong Kong exporters facing softer demand from the US. Country-wise, Germany
should benefit from sustained demand for capital goods from emerging markets,
whereas Italy will continue to suffer from intense competition from emerging
suppliers. In France, where structural reform will be the priority, consumption
should remain quite stable. For its part, the UK, under the twin bite of a
feeble housing market and credit crunch, consumer spending will likely become
less strong. On the whole, continued economic expansion in the EU should lead to
steady consumption and sustained demand for imports. A strong euro, which serves
to maintain the price competitiveness of Hong Kong exports, is another
Likewise in Japan,
economic growth should decelerate somewhat. While the exposure of Japan's
financial sector to the US sub-prime market is limited, its merchandise export
sector will likely be constrained by the US downturn, despite the growing
importance of the mainland market. On the domestic front, a tightening in
building standards, which has dampened residential investment and hence economic
growth in the early part of 2008, should ease its drag in the latter part of the
year. A sluggish job market and meagre wage increases, however, are not
conducive to consumption. Although a firm yen may uphold Japan's power of
absorbing consumer goods, this currency movement will not bode well for Japanese
exports, thus suppressing the imports of semi-manufactures, parts and
Given the modest
appetite in the traditional markets, Hong Kong exporters are advised to look to
the emerging markets around the globe for sales expansion. In particular,
developing Asia is expected to remain the most dynamic region on the world
economic scene, although its medium-term economic performance will inevitably be
constrained by the global slowdown. To some extent, sustained intra-regional
trade, primarily driven by continued demand from the Chinese mainland, should be
able to cushion some of the negative impact engendered by the slowing world
economy in general and a dwindling US demand in particular. Over the medium- to
long-term, the change in government in Taiwan should contribute further to
economic integration and regional growth. Hong Kong is poised to benefit from
growing trade between the mainland and Taiwan, despite a weakening of its
intermediary role in the near term.
In developing Asia,
the Chinese mainland will continue to be the axis of growth. In spite of the
temporary impact of natural disasters and policy curbs in response to signs of
overheating, the mainland's economic growth will remain solid over the medium
term. Consumption, now sought by the government as the driver of growth, will
stay strong. While mainland exports will moderate amid policy changes, currency
appreciation, rising production costs and cooling US demand, such impact will
unlikely be substantial, as sales to markets outside the US, not least other
emerging markets, are expected to be sturdy. If anything, the central government
may ease its policy curbs in view of any drastic fall in domestic and overseas
demand. The mainland's appetite for finished goods for local consumption and
capital goods for export production will therefore remain relatively healthy.
developing Asia, sound economic fundamentals should be largely in place too.
Within ASEAN, Vietnam, spurred by the continued positive impact of WTO
membership, is expected to lead the pack in economic growth, while Indonesia,
with sustained efforts to encourage investment, will likely maintain its robust
expansion. Being potential markets aside, Vietnam and Indonesia are also viable
alternative production bases for Hong Kong. Meanwhile, domestic demand should
remain the mainstay of growth in Malaysia, and a stabilising political outlook
will facilitate an improvement in business and consumer sentiment in Thailand.
Outside ASEAN, the economic prospects for India are again decent. Its services
sector, fuelled by buoyant IT outsourcing activity, should stay in good shape,
although slower exports are expected to dampen overall growth.
Asia will lead growth in the emerging world, the medium-term outlook for other
fledging economies is likely favourable. In Central and Eastern Europe, economic
growth, to a certain extent, will benefit from the continued expansion of
Western Europe, although Hungary will be hit by fiscal consolidation. Outside
the EU, Russia will once again take advantage of sustained oil and commodity
prices and, likewise in the Middle East, lofty crude prices will boost the
economic health of oil-exporting countries, notwithstanding a moderation in
growth among non-oil exporting economies. As regards Latin America, economic
activity should retain its momentum amid sustained commodity prices. Yet the
pace will ease, as mundane demand from the US will cap regional growth,
particularly affecting nations with closer links with the US, notably Mexico.
In all, Hong Kong
exports should continue to expand in the rest of 2008. Yet the rate of growth is
forecast to slow. The repercussion of the US-led global slowdown on Hong Kong
exports will probably linger on for a while, although the US is expected to
emerge, in the second half of 2008, from the recession in the first half,
thereby easing its drag on the world economy. Given the likely
stronger-than-expected sales performance in the first quarter, however, the
expected value growth of Hong Kong's total exports is maintained at 7% for the
whole of 2008. Looking further ahead, the growth of Hong Kong exports should
only be steady next year, as the world economy, albeit expected to pick up a
tad, will need some time to get rid of the residual impact of the US economic
woe. But while the medium-term prospects for the global trade environment will
likely be stable, Hong Kong exporters will find themselves no lack of risks and
Worse-than-Expected Downturn of the US Economy
biggest threat to the global economy stems from the still-unfolding adverse
developments in the US. While the US economy is expected to pick up in the
latter half of 2008, it cannot be ruled out that housing corrections and, more
importantly, the credit crisis will be longer and deeper than that which is
widely anticipated. The unfavourable consequences of housing and financial
turmoil will not only hamper US growth, but also dampen the world economy,
especially countries more vulnerable to housing and financial market turbulence,
such as the UK, as well as nations more dependent on the US market like Mexico.
In this context, there could be a serious effect on global trade, and Hong Kong
exporters are unlikely to emerge unscathed from such developments.
In particular, a
worse-than-expected downturn of the US economy may reverberate globally through
a sell-off in the financial markets worldwide. Under the worst-case scenario,
consumer confidence and business sentiment in the US will be badly hurt by a
prolonged recession. US financial markets will then be seriously undermined, and
plunges in US asset prices will have strong contagious effects worldwide,
compelling consumers and businesses to hold back consumption and investment
harshly. Indeed, recent vagaries of the US stock market, in spite of their
rather limited extent, serve as a reminder of the potential financial risks.
Even though the stock market has become more stable for now, it still trembles
over data showing troubles in US corporations and indications of any economic
weaknesses, especially signs that inflation might be out of control.
Global Inflationary Pressures
Risks related to
rising global inflationary pressures have evidently increased, despite the
moderating world economy. Surging commodity prices, driven by strong demand from
emerging economies, supply constraints and a weak US dollar, are the major
source of inflationary pressures. In particular, the global oil market remains
worryingly tight. Given limited production capacity, any supply disturbance or
rising geopolitical concern will likely push up crude prices to increase further
from the prevailing high levels. In the meantime, food prices, already bolstered
by unfavourable weather conditions, may continue to rise amid sustained demand
from emerging economies and increased biofuel production. To make matters worse,
the deflationary price pressures on manufactured products have waned,
exemplified by a 3.6% rise in prices of US imports from China in the first
quarter of 2008, reflecting the unabated rise in production costs on the
In view of the
global economic slowdown, rising inflationary pressures, while further hurting
consumption, pose a dilemma for policy makers worldwide. In the US, accelerating
inflation may make it difficult for the Federal Reserve to lower interest rates
further, while necessitating a hike if the economy stabilises. Other economies,
such as the EU, may also be unable to lower interest rates as an offset to
slackening US demand, or even need to raise interest rates to stem inflation.
Evidently, while higher commodity prices are a boon to commodity-exporting
economies, their negative impact on global growth and inflation is a concern for
policy makers, as well as Hong Kong exporters, who are increasingly faced with a
softer overseas demand and rising production costs.
medium-term export outlook is further overshadowed by the undercurrent of
protectionism in overseas markets. Especially in the US, Hong Kong exports will
be affected by trade relations between the US and the mainland, in particular in
the run-up to the presidential election. While the US administration is not
expected to deviate significantly from its general policy of co-operative
engagement with the mainland, calls for a tougher stance have increased, and the
US government has, for instance, initiated countervailing (CV) actions against a
number of products from China. In addition, given the expiry of its quotas
against mainland textile products by end-2008, the US will likely resort to a
variety of measures to restrict clothing imports from the mainland. Likewise,
Hong Kong exports will be affected by regulatory developments in the EU, which
is expected to take a tougher stance on trade issues with the mainland, although
the reform of its trade defence instruments will be postponed.
difficult production environment on the mainland will pose another big challenge
for Hong Kong exporters. Now that promoting the transformation and upgrade of
processing trade and restricting the development of high energy-consumption,
heavily polluting and resource-intensive industries are the mainland's long-term
development objectives, it will continue to make adjustments to the processing
trade policies. Such policy changes, covering VAT rebate adjustment, expansion
of the restricted/prohibited category and access threshold for processing trade
enterprises, could have a significant impact on Hong Kong manufacturers, perhaps
in terms of the mode of operations, use of technologies, sources of raw
materials, manufacturing localities as well as production costs.
Hong Kong companies
will be further confronted with immense cost pressures incited by soaring labour
costs, against the background of rapid wage increases, associated rising social
security benefits, as well as the introduction of the new Labour Contract Law
effective from January 2008, which also puts an extra administrative burden on
Hong Kong manufacturers on the mainland. Furthermore, the sustained appreciation
of the RMB, which has appreciated against the US dollar by over 4% so far this
year, will translate into even higher production costs. To compound problems,
the recent product recalls, dominated by toys, will also elevate safety
compliance costs, whereas soaring commodity prices will jack up input costs,
especially for precious metals and stones, as well as plastic raw materials due
to skyrocketing oil prices.
Household Electrical Appliances
After an 11% growth
in 2007, Hong Kong's exports of electronics products, which accounted for over
half of Hong Kong's total overseas sales in the first three months of 2008,
expanded by 12% during the period, aided by the continued popularity of digital
products in overseas markets, sustained demand for parts and components from the
mainland, as well as a weak US dollar. Yet sales of household electrical
appliances, in the wake of a 4% fall last year, declined further by 7% in the
first quarter of 2008, given intense competition in the global market.
For the rest of
2008 and 2009, electronics exports will moderate amid the US-led slowdown of the
world economy, notwithstanding a still-healthy appetite for digital products,
not least in the emerging markets. To be sure, exports will be constrained by
weaker consumer sentiment, particularly in the US, along with intensified price
competition sparked by the slower world economy. Meanwhile, sales of electrical
appliances will remain lacklustre over the medium term, dragged again by the
sluggish demand in the global market.
to the US and the EU will continue to benefit from the popularity of digital
products like DVD recorders, digital cameras, flash memory products (e.g. MP3
and MP4 players) and flat-panel TV sets. In particular, demand for digital TVs
and set-top boxes will boosted by the digitisation of TV broadcasting in the US,
which has set a timetable to require all commercial TV broadcasters to phase out
analogue TV broadcasting by early 2009. Exports of IT and telecom products, for
their part, will become soft in view of the sluggish economy, despite ongoing
computer replacement and a steady appetite for price-competitive and
user-friendly mobile phones.
medium-term prospects of the EU market look more promising than the US's, Hong
Kong exporters are required to acquaint themselves with the increasingly
stringent EU regulations relating to environmental protection. On the heels of
the WEEE Directive and RoHS Directive, the EU's new Directive on the Eco-design
of Energy-using Products (EuP) is now in place. The EuP Directive does not set
out substantive standards for product design, but rather sets up a framework
within which standards will be promoted for specific groups of products through
implementing measures, probably necessitating manufacturers to consider altering
their product design processes.
For the Chinese
mainland and ASEAN, sales of parts and components, which dominate Hong Kong's
electronics exports to the region, will be affected by slower production of
electronics and electrical products for exports to overseas markets. Regarding
exports to Japan, however, sales will benefit from sustained consumer preference
for value-for-money products, although exports of parts and components to the
market will become soft over the medium term.
After edging up by
2% last year, Hong Kong's clothing exports saw a 3% decline during January-March
2008, with sales to the US and the EU taking up more than 70% of Hong Kong's
total clothing exports. While sales to the EU rose by 5% in the first quarter,
those to the US fell by 11%. Amid continued worry of the slowdown of the US
economy and the resultant spillover across the globe, expenditure on clothing
during the rest of 2008 is expected to be unassuming, and so is the performance
of Hong Kong's total clothing exports.
In the US,
utilisation of safeguard quotas on Chinese textile and apparel articles has
increased at a very modest pace since the beginning of 2008, and no limit is
currently in any real danger of embargo. Evidently, the retrenchment in clothing
expenditure amid economic slowdown plays no small part in this subdued quota
utilisation, especially considering that these restraints will expire in a few
months' time. The relatively high utilisation of the 2007 limits on Chinese
apparel, the 14-17% increase in 2008 quota limits, and the fact that some of the
orders that used to be filled in China have migrated to other Asian locations,
most notably Vietnam, are other possible factors leading to the subdued quota
utilisation. In this context, it is likely that Hong Kong's total clothing
exports to the US will remain lacklustre in 2008.
quotas, on the other hand, expired by the end of 2007. Thenceforth, a joint
system with China has been established to monitor EU imports of Chinese textiles
and apparel. This system, which will operate for one year, covers eight out of
the 10 previously restricted categories. Following the expiry of EU's textile
quotas and introduction of the surveillance system, Hong Kong's clothing exports
to the EU have been able to sustain the growth trend prevailing in the past
years. Looking ahead, relatively decent economic performance in the EU and a
strong euro will help lure more EU buyers to Hong Kong and the mainland for
sourcing, and therefore lend support to Hong Kong's total clothing exports in
the rest of 2008 amid the slowdown in exports to the US.
As for 2009, the
outlook for Hong Kong's clothing exports will remain lacklustre, given the
tentative prospects of a global economic revival. In addition, the impending
elimination of US safeguard quotas on Chinese textiles and apparel is expected
to lead to calls for increased protection for US and regional manufacturers.
While US textile manufacturers are expected to seriously consider the
possibility of filing anti-dumping and/or countervailing duty actions against
Chinese products, the anti-dumping monitoring system in place on imports from
Vietnam could possibly be extended to cover China as well. These will certainly
pose challenges to Hong Kong's clothing exports, especially if the US economy
cannot regain growth momentum by the end of 2008 or on entering 2009.
Hong Kong's toy
exports expanded robustly by 20% in the first quarter of 2008 after the
tremendous growth of 23% in 2007, with non-traditional toys, such as video games
and electronic toys, being the main driver of the growth. In contrast,
traditional toys, such as dolls, construction sets and wheeled toys, have
experienced a period of stagnation. Among mature markets, sales to the EU, which
has benefited from a strong euro, have outperformed the US and Japan. Emerging
markets, such as the Chinese mainland and ASEAN, were also in good shape.
For the rest of
2008 and 2009, Hong Kong's toy exports should continue to expand, albeit at a
slower pace. Growth will still be underpinned by non-traditional toys, given the
sustained popularity of video games and electronic toys. However, the craze for
the latest generation of video game consoles like Wii and PS3 should start to
fade later this year, as they have been on the shelf for more than a year
already. The outlook for traditional toys is less promising amid keen
competition and a shift in consumer preference towards more sophisticated
With the global
economy expected to enter a period of adjustment triggered by the US subprime
loan crisis, demand from most developed economies should slow. But emerging
markets, particularly the Chinese mainland, will be less affected because of a
strong appetite for quality toys on the back of higher purchasing power.
Meanwhile, the coming Beijing Summer Olympic Games 2008, which is expected to
cheer up a buying spree for souvenirs, festive items and related goods, will
provide added opportunities for Hong Kong exporters.
safety awareness in overseas markets, on the other hand, will remain a major
challenge for Hong Kong exporters. As a result of the high-profile toy recalls
last year, Hong Kong's major toy exporting markets, especially the US and the
EU, have tightened up the enforcement of their existing product safety
regulations. While tougher regulatory regimes are in the pipeline, a number of
retailers, notably Wal-Mart and Toys 'R' Us, have already responded to consumer
demand for safer products by adopting more stringent sourcing requirements. In
any event, Hong Kong companies, which excel in production experience and quality
compliance, should be able to adjust to tighter testing and inspection imposed
by overseas buyers, as well as increasingly stringent safety standards.
On top of a 6%
increase in 2007, Hong Kong's watches and clocks exports grew by 16% during
January-March 2008. Sales to most major markets, including not only the EU, but
also the US and Japan, managed to record increases, whereas those to the Chinese
mainland exhibited even stronger expansion. In the medium term, however, exports
are expected to become slower against the background of a slackening global
demand for timepieces.
sales to the US will be affected by the sluggish consumer market. Given a
deteriorating economy and subdued sentiment, demand for timepieces is expected
to become uninspiring, especially for opening-price-point luxury watches,
although the top-end segment will likely remain promising. Yet in view of
growing consumer cautiousness, the appetite for competitively priced items will
remain stable. Hong Kong's exports of low-priced timepieces will continue to be
hampered by intensified competition from local Chinese companies, however.
The EU, for its
part, is a fairly mature market characterized by a penchant for watches with
fashionable designs for formal as well as casual occasions. In all likelihood,
there will still be potential in the middle- to high-end segment, focusing on
quality but value-for-money timepieces. In addition, the price competitiveness
of Hong Kong's timepieces will continue to be facilitated by stronger European
currencies. Spurred by the continued strength of the European currencies, sales
to the EU would remain steady over the medium term.
As regards the
Chinese mainland, sales of timepieces, apart from the positive effect of the
imminent Beijing Summer Olympic Games 2008, will be well supported by its
growing purchasing power. Now that mainland consumers are increasingly looking
for higher quality items amid the improvement in income levels, watches bearing
Hong Kong labels should enjoy a premium in the market. Regarding Japan, sales to
the country will only remain steady, as the market is already saturated,
although the stronger Japanese yen will enhance the price competitiveness of
Hong Kong timepieces.
On top of a 17%
rise last year, Hong Kong's exports of fine jewellery grew by 27% in value terms
in January-March 2008. However, the surging prices of precious materials for
jewellery fabrication, such as gold, silver and diamonds, have in fact hit
jewellery sales. In volume terms, for example, after dropping by 14% in 2007,
Hong Kong's exports of jewellery items of precious metals further declined by 6%
in the first three months of 2008. Marketwise, supported by the appreciation of
the euro, sales to the EU managed to register strong growth, while those to the
US and Japan dropped on their weaker demand.
For the rest of
2008 and 2009, the overall business sentiment will be clouded by softer global
demand brought by the US slowdown. In mature markets, notably the US, even
better-off consumers are tightening their budgets. Consumers, in general, will
tend to shift away from luxury jewellery articles towards lower-priced items,
although very affluent customers tend to be less price-sensitive. Emerging
markets, such as Russia and the Chinese mainland, should outpace the developed
ones because of their higher purchasing power due to their stronger currencies
or rising disposable incomes. Yet some of these exports may be semi-finished
products for further processing.
With high global
inflation and an expansionary monetary stance in most developed economies, the
prices of precious materials, stones and diamonds will likely remain at high
levels. Therefore, usage of karat gold and other metals, especially silver, is
expected to increase. The industry is also tackling the rising precious metal
costs through exploring new markets, developing innovative technologies,
adjusting product designs and providing better services.
May 30, 2008
Airport eyes Shenzhen and Zhuhai
A third runway is not merely an option,
said outgoing Airport Authority chairman Victor Fung Kwok-king - more are needed
if there is full-fledged cooperation with Shenzhen Airport. He told Sing Tao
Daily, sister publication of The Standard, the authority is currently developing
a 20-year plan that includes ways to improve "the efficiency of the airport, the
runways and airport capacity."
The key to maximizing efficiency at Hong Kong International Airport, he said, is
cooperation with Shenzhen and Zhuhai airports in which Hong Kong's role is that
of a "gateway for passengers coming from Shenzhen and Zhuhai" and they will
serve as a gateway to other mainland cities in return." "If HKIA cooperates with
Shenzhen, we would be needing fifth, sixth, and seventh runways," Fung said.
Fung is not worried about such cooperation opening up a pandora's box of
airlines preferring Shenzhen Airport.
"We are concerned more about capacity. Those passengers will still be HKIA
customers," he said. Fung acknowledged the challenge posed by the increasing
likelihood that there will be direct links across the Taiwan Strait amid a thaw
in relations. The key to seeing off that challenge, Fung said, is with Hong Kong
adopting an open-skies policy.
He said direct links may have an impact in the short term, but "it should not be
a big problem ... it will eventually increase opportunities," Fung said. On
budget carriers and the recent demise of Oasis Hong Kong Airlines, he said
cooperation with Shenzhen and Zhuhai airports will create openings for budget
airlines, as the flight time between these airports is less than an hour. "In
the future, there may be more Oases," he quipped.
Fung - who steps down tomorrow - had pushed for HKIA's listing but the move has
been postponed. He said: "When an enterprise reaches a certain maturity, it
should be given a chance to become listed."
May 11, 2008
443 mainland enterprises got listed in
A total of 443 mainland enterprises have got listed on the Main Board and GEM of
Hong Kong Stock Exchange by the end of April 2008, including 148 H shares, 93
red chips and 202 non-H-shares of the mainland private enterprises.
According to the latest statistics released from Hong Kong Stock Exchange, the
mainland stock shares account for 58.6% of the total market value and 74.2% of
the total market turnover of the Hong Kong stock market.
By the end of April, there were 1,244 listed companies with a total market value
of about 18 trillion Hong Kong dollars. Only one Hong Kong company got listed
during the first quarter this year. By the end of April, Hong Kong owned in
total 4,808 derivative warrants, 260 callable bull/bear contracts, 26 trust
funds, and 173 bonds.
April 11, 2008
wine traders cheer Hong Kong's duty-less regime
|Measures enhance prospects for French
When the Hong Kong government eliminated all duties
on wines and beer imports in February, winemakers and exporters across
France raised a glass of their finest vintage to celebrate.
"Next year will be a big, big market," says Yves
Lambert, owner of Domaine de Saint-Just and an agent for other
Asia, especially the Chinese mainland, was already
becoming a major market, and this can only strengthen the trend, says
Lambert. Alcohol sales to the Mainland in 2007 totaled Euros247 million,
sparked by a growing middle class, and France has had a large share of the
Sales of French wines to the Chinese mainland grew
145% last year, according to the Fédération des Exportateurs de Vins et
Spiritueux de France (FEVS). The trade association, which represents the
interests of 550 French wine and spirit producing and exporting companies,
says the Mainland was the 11th largest market by value for French wines and
spirits in 2007.
|Mainland is a developing
market for French wines.
Sales of French cognac and other spirits grew 162%
year-on-year by value, making the Chinese mainland the third largest market
for the products, behind the US and Singapore (which tranships to the
Mainland). Wine and liquor are France's second largest exports after
Rising incomes, a growing interest in Western
lifestyles and tastes, and better wine education, have driven the rise in
consumption on the Chinese mainland.
Drinking wine has a strong social status in China,
and French wines have that certain cachet. According to a recent
MasterCard survey, 80% of Chinese consumers prefer it.
|Bordeaux wines selling on the Chinese
So, French winemakers - both small and large - are
looking to Asia for new markets. France mainly sells Bordeaux, Champagne and
Vins de Pays (a regional wine, a step up from table wine).
French vineyards interested in Hong Kong
"We think the market [to Asia] will increase," says
André Barlier, deputy director of Viniflhor, a public body based in Paris.
Viniflhor promotes wine as well as gathering industry information, which it
distributes through publications and on the Internet (www.frenchwines.com).
|Body promotes wines and
information about them.
"A lot of French companies will be interested in
Hong Kong," Barlier says. "Five years ago, the trend was through Hong Kong
to [the Chinese mainland] but in the past two or three years, wine has been
exported directly to [the Mainland]. Now this will change and Hong Kong
traders will acquire a new position."
Wine producers and exporters say that French
companies have had problems finding a suitable business partner on the
Chinese mainland. "It is difficult for the French to get a good company to
work with," Barlier says. Hong Kong partners know how to sell to the
Mainland better than the French do, he believes.
Will Chinese mainland winegrowers cover the market,
or will the country import, he asks. "They are planting a lot of grapes, but
the imports are rapidly increasing."
Exporters say that if Hong Kong does realize its
aspirations to become the wine hub of Asia, storage should pose no problems.
Exports will be mainly bottles, delivered in containers, not bulk wine. The
only storage needed is space, such as a warehouse, with temperatures
controlled. As long as the wine is not left outside, and is kept cool, it
can be stored safely.
Label development in Asia
Barlier mentions an opportunity for importers to
create their own labels. They can buy wine in bulk and create a label in
Europe, Hong Kong or on the Chinese mainland.
One concern for French dealers is that the Mainland
may not respect trademark rules, he says, producing a bottle of cheap
Chinese wine with the Eiffel Tower on a faux French label. "But the customer
can tell it isn't authentic by the price."
|Barlier: problems with labels.
|Unreal quality: fake French label.
Another problem is that many people on the Chinese
mainland don't know about wine, or even how to open a bottle. "There is a
lot to learn and producers should teach consumers how to buy and consume
wine," says Barlier.
Yves Lambert, who represents an association of
vineyards from Bordeaux, Languedoc and Côtes de Provence, agrees. "Wine is
part of the social life; it is good for socialising and for health," he
says. "Consumers start by buying cheaper wine; when they have more money,
they buy more expensive wines," he says. "And rich people buy expensive wine
because it is good for face. So there are two markets, for cheaper and more
Wine experts say that when their incomes increase,
people prefer drinking wine rather than beer, and whenever taxes decrease,
wine consumption increases. They see a market for well-off Chinese
mainlanders interested in grand cru (the top growth of a region), but also
another market for very cheap wines.
More attractive trade environment
The new Hong Kong law will make exporting to the
territory more attractive, says Lambert, who is looking for a representative
importer in Hong Kong. "I can sell 300,000 bottles of my own wine and one or
two million other bottles," he says. "We have good wine and a good price,
and our wines are getting better and better."
|Lambert: looking for a
representative in Hong Kong.
His initial efforts on the Chinese mainland last
year were positive. "I sent a container to Shenzhen, and they have already
asked for another," he says. "The importer sold 12,000 bottles in a month."
In February, Lambert added Chinese to his French
and English web site (http://st-just.net/chine/index_chine.php).
The company also has a new project on the Chinese mainland, designing
special red and rose wines for weddings. "Young Chinese like this," he says.
The company sells a minimum per container, which is
12,000 bottles. "We sell 90% red wine," Lambert says. "White wine is only
popular along the coast, in fish and seafood restaurants."
Lambert also expresses a sentiment common among
French businessmen: it is easier to work in Hong Kong, as the law is not the
same as on the Chinese mainland. "British law is better for us," he says.
"For Europeans, it is easier to sell to Hong Kong, a major business centre,
and let Hong Kong importers sell to [the Chinese mainland]."
Hong Kong tax change reduces currency
A number of exporters point out that the Hong Kong
tax change will help offset the high Euro, as its recent increases against
the Chinese Yuan and the US dollar have hurt sales in two of the biggest
markets for French wines.
Geneviève Chavignon, export assistant of Les
Vins Jean-Pierre Teissèdre, says her company, which plans to sell to
Hong Kong and China, also welcomes the recent change.
So far, the demand from the Chinese mainland for
her company's wine has been for very low-priced wines, and for wine in bulk.
However, Chavignon believes that Hong Kong buyers will want more expensive
"We would certainly prefer to deal with Hong Kong
importers, as selling directly to [the Chinese mainland] is not easy," she
says, echoing comments from other exporters.
|Fu with Teissèdre:
handling wine business on the Mainland.
Managing director Jean-Pierre Teissèdre believes
his Rhone Valley wines, such as the Côtes du Rhône, and the
Vins de Pays from southern France will appeal to Chinese tastes, as
will Beaujolais Crus such as the Chénas or Morgon.
The company has hired Youxia Fu, a young woman from
Sichuan who has a master's diploma in business from Burgundy Business School
in Dijon, to handle its wine business in China.
Larger companies already exporting to the Chinese
mainland also anticipate an increase in sales. Étienne Godard, in charge of
overseas exports for Vins Skalli, says dropping the duties will be
good for premium wines bound for Hong Kong. The company, which sells 30
million bottles worth Euros85 million annually, also finds Hong Kong a
useful gateway into the Mainland.
"The recent tax change will definitely help us
develop our premium wines such as Domaine du Silène and Maison
Bouachon, and especially Côtes Rôties, Hermitage,
Gigondas and Châteauneuf du Pape," says Godard. "We are
convinced that the market will trade up."
|Hong Kong a window for
Thanks to this change, Hong Kong will remain a
great window for wine in Asia, especially for premium wines, he says.
Skalli exports to Hong Kong through the distributor Maxxium
and to the Chinese mainland through ASC. The company sells just 10% of its
production to Asia, but the region is its fastest growing market.
"The trend we have seen in recent years is for
consumers' taste for rounder, easier to drink and more fruity wines," Godard
says. "We have worked all our wines to meet consumers' expectations, with
very fruity wines and silky tannins."
However, he adds, the company considers it's
important to keep wines well-balanced. Fortant wine is now the
number 10 imported brand in the Chinese mainland market, and the third
largest French brand. "Once consumers are more educated, they go for more
complex wines and move to premium varietals or AOC wines (Appellation
d'Origine Contrôlée, the highest classification)," Godard explains.
Exporters in the more rarified market of spirits
sales also greeted the tax change with enthusiasm. Florence Castarède,
director of Armagnac Castarède, exporter of Armagnac (an
exclusive brandy) and a newcomer to the Asian market, says the Hong Kong
move to cut duties is great news. "Some new companies will be happy to be in
Hong Kong," says Castarède. Her company began exporting to Hong Kong last
|Castarède: new companies
happy to be in Hong Kong.
"It is an opportunity," she says. "[the Chinese
mainland] is the future for the wines and spirits market, the biggest in the
world by population."
However, she cautions that producers will have to
adapt to the taste of the market. "For each market, we have to adapt
packaging, taste and price."
Guillaume de Guitaut, director of public affairs
for Moët Hennessy, says the company, as part of the Hong Kong Wines
and Spirits Industry Coalition, pressured the government for the change, so
it came as no surprise.
He agrees that Hong Kong could become a wine hub
for Asia as there is a growing interest in wine. "It could be a place for
tasting, for auctions," he says. However, importers must concentrate on
"Volume is part of the equation, but value is more
important," de Guitaut explains. "You do not want to have a lake of the
worst wine in the world."
Hong Kong is not a market for cheap wine but for
quality, as wine is an elite drink, he says.
"I think wine marketing and auction houses will set
up in Hong Kong, and wine collectors will speculate," adds de Guitaut,
noting that many Asian customers now attend London wine auctions.
He also does not anticipate problems with storage
facilities in Hong Kong. "I think they will make the right investment in
order to store wine," de Guitaut says. "The key is not to leave a container
in the sun for a month, but rapidly put it in the right place."
Wine merchants, eagerly looking East, are certainly
heartened by Hong Kong's new tax regime and the opportunities it represents.
Florence Castarède, Director Tel: (33) 1-44-05-15-81
http://www.armagnac-castarede.fr ASC Fine Wines Tel:
Fax: (86) 20-3631-5005
Domaine de Saint-Just
Yves Lambert, Managing Director Tel: (33) 2-41-51-62-01, (33) 6-07-27-07-78
Fax: (33) 2-41-67-94-51
Fédération des Exportateurs de Vins et Spiritueux de
Tel: (33) 1-45-22-75-73
Fax: (33) 1-45-22-94-16
Les Vins Jean-Pierre Teissèdre SARL
Geneviève Chavignon, Managing Director
Tel: (33) 4-74-03-45-08
Fax: (33) 4-74-03-46-33
Chris Monteiro Tel: (1) 914-249-5826
Fax: (1) 914-249-4207
Maxxium Hong Kong Limited
Tel: (852) 2891-8086
Fax: (852) 2838-4664
Guillaume de Guitaut, Director of Public Affairs Tel: (32) 2-372-96-30
Fax: (32) 2-372-96-19
Étienne Godard, Directeur Grand Export/International Manager
Tel: (33) 4-90-83-58-59
André Barlier, Deputy Director Tel: (33) 1-42-86-32-00
March 27, 2008
Hong Kong Trains 1,000 People from
Jiangsu Each Year
Jiangsu's Personnel Department recently announced its decision to further expand
the Jiangsu-Hong Kong Personnel Training Cooperation Program after a successful
four-year run. In the six years between now and 2013, the province will be
sending over 1,000 professionals to Hong Kong each year for training. By 2013,
over 10,000 professionals from Jiangsu would have benefited from the most
advanced professional and technical expertise that top-notch universities and
training institutions in Hong Kong have to offer through the training program.
It is understood that the first batch of this year's trainees will leave for
Hong Kong on 8 April. During the four years since the implementation of this
training program, the biggest of its kind in the history of Jiangsu, 4,850
people have received training in Hong Kong in more than 70 professional fields,
including major service sectors such as accounting, finance, securities and
auditing. The trainees came from different trades and professions in Jiangsu.
The Jiangsu-Hong Kong Personnel Training Cooperation Program has been adopted by
the government of Jiangsu as one of its priorities this year. This year, the
scope of training has been extended from modern services to various sectors
relating to economic and social development. More than 10 new professional
fields have been added, including housing planning; airport operation,
management and control; hotel management; corporate financing and listing;
information services; construction engineering consultancy; and volunteer
community work. The program currently covers over 100 fields, and the trainees
range from personnel in the service sectors to specialized personnel of all
The New Media Olympics - Expectations High
for New Technology at Beijing Olympics
Nothing short of a media frenzy is expected to converge on Beijing during this
year’s Summer Olympic Games in the Chinese capital. Top-ranking Chinese media
executives discussed the possibilities for the country’s new media industry at
the 17 March FILMART (www.hkfilmart.com) International Forum on the Beijing
Olympics – Media Convergence and Cooperation. President of the Chinese
mainland’s Harun Media Group, Liu Yanming, said the international sporting event
was much more than a chance to promote social harmony and China’s market
prosperity. “It’s also a very important event for our media because, with this
opportunity, our media can show their might and establish a well-known brand for
themselves,” said Mr Liu.
Miracle Event - “With new technology, we will be able to keep improving in areas
such as digital telecasting and production values,” said Mr Liu. “The Beijing
Olympics is a miracle event for us. It’s a chance to apply the latest technology
and bring about multi-functional media for our creative industries, so that we
can develop a competitive edge over our rivals and make full use of digital
technology.” Yang Zhen Hua, CEO of the Shanghai New Culture Media Investment
Group, said that the Beijing Olympics was a rare opportunity to interact with
global media and exchange views, experience and technological know-how. “It will
be a convergence point for media all over the world, because they’re all
concerned about how Beijing is going to present these Olympics,” said Mr Yang.
“It is an unprecedented opportunity,” he added.
High Expectations - There is a lot of pressure, he said, because China will be
broadcasting to the rest of the world, and expectations are high. “We have to
keep raising our standards to satisfy their needs and aspirations. We’d like to
have good cooperation with our friends overseas, particularly in Hong Kong,
Taiwan and Southeast Asia, as well as Japan and Korea.” Mr Yang pointed out that
not many Chinese productions are being seen in the western world, and that the
globalization of economies doesn’t necessarily imply a globalization of culture.
“Our cultural programs will have to satisfy the needs of those outside China, so
as to arouse the interest of the western world,” he said. “We have produced a
lot of Chinese programs in recent years but not many of them can do us proud.”
Peter Lam, Vice President of the Hong Kong Televisioners Association, also
raised the question of how to produce attractive programming for an overseas
audience. Documentaries, he said, are an interesting and effective way to
promote the achievements of China’s many athletes. “An overseas audience could
be introduced to our training techniques and understand our athletes,” he said.
Chinese ESPN - Mr Lam pointed to the successful international career of
basketball star Yao Ming, as well as track star Liu Xiang. These and other
sports celebrities, he said, can be used to promote Chinese culture. “China has
these international stars,” he said. “We want the world to know about their
training and the spirit behind their hard work.” The proliferation of new media
distribution channels provides an opportunity to discuss how they can converge
with traditional media outlets, he added. “The Olympics has so many sporting
events and activities. How are we going to make use of the multi-level
broadcasting channels and media to provide immediate information for a
sports-hungry audience? Given the global nature of the Olympics, Mr Lam wondered
whether it might be time to promote a Chinese sports channel, “a Chinese ESPN
that could broadcast different sporting activities.” Wang Chang Tian, President
of mainland Enlight Media, cited a statistic about China’s cultural industries.
He said the total market was about RMB500 million. Based on the cultural
industries standard of developed countries, he said that “current market demand
in China could be RMB2 trillion, but we are now only satisfying a quarter of the
New Media Triumph - Mr Wang said that the mainland could not rely simply on
imported songs and TV programs. “We have to have our own productions. The games
will trigger this demand and release it. Somebody will have to light the
detonator so that the industry will explode.” He warned, however, that the
opportunity could create a crisis of sorts for such traditional media as
television. “They may well have the broadcasting rights, but they’ll be affected
by the convergence of the Internet and the fact that people will be able to read
about the Olympics on blog sites or on their mobile phones,” he said. “New media
will triumph over traditional media during these Olympics.”
March 22, 2008
International Accent Highlights 3rd
Hong Kong Music Fair Fair's Musical Doors Open to Industry Professionals and
The 3rd Hong Kong Music Fair opened
today and continues until 21 March. Officiating at the opening ceremony were
(left to right): Hong Kong performers Joey Yung, Charlene Choi and Justin Lo; Ng
Yu, Chairman, Working Committee, Hong Kong Music Fair; Fu Yanmei, Assistant
Ombudswoman, Department of Cultural Market, Ministry of Culture, PRC; Esther
Leung, Deputy Secretary for Home Affairs, HKSAR; Benjamin Chau, TDC Assistant
Executive Director; Hung Tik, Chairman of IFPI (HK Group) Ltd; performers Denise
Ho and Hins Cheung
The 3rd Hong Kong Music Fair opened today with about 70 exhibitors from Hong
Kong, the Chinese mainland, Germany, Korea and Singapore. Record companies, new
media content providers, music portals and mobile and hardware manufacturers,
along with music industry artists and other professionals, are taking part in
the three-day fair, which continues until 21 March at the Hong Kong Convention
and Exhibition Centre.
Jointly organised by the Hong Kong Trade Development Council (TDC) and the IFPI
(Hong Kong Group), the fair caters to business as well as public interests,
promoting music products and raising awareness of legal downloads.
"Thanks to the 10 German companies joining us for the first time, our fair is
more international than ever," said Benjamin Chau, TDC Assistant Executive
Director, speaking at the opening ceremony. "With the development of new media,
music's business model can no longer focus solely on the sales of CDs and other
traditional music products. That makes artist management, including concert
management and celebrity endorsements, an even more important aspect of the
industry," he added.
As such, a series of star seminars will be staged on 20 March, with artist
managers from all over Asia sharing their management secrets. Managers Virginia
Lok, Paco Wong and Mani Fok, along with such local artists as Law Ka Leung, Jade
Kwan and Eric Suen, are sure to shed new light on this hot topic.
For the first time, the IFPI Hong Kong Top Sales Award presentation ceremony and
the Hong Kong Music Fair will be held at the same venue. To promote the public's
awareness of intellectual property rights, visitors are free to download
segments of the presentation ceremony at the fair's Cyberport booth, 20 March to
21 March. Among the other new features this year is the Talent Showcase, giving
promising singers and composers from Hong Kong and the Chinese mainland a chance
to be discovered by industry professionals. The showcase is a new initiative
introduced by the IFPI (Hong Kong Group).
The music fair will open to public from 5pm to 9:30pm on 20 March, and from
10:30am to 9:30pm on 21 March. Exhibitor promotion sessions will be held on 21
March, with local singers Fiona Sit, Ivana Wong, Stephy Tang, Alex Fong, Kary
Ng, Kay Tse, Chet Lam and others performing at various times. Visitors who
purchase music products of at least HK$50 in value at the fair will be admitted
Also presiding at today's opening ceremony were: Esther Leung, Deputy Secretary
for Home Affairs, HKSAR; Fu Yanmei, Assistant Ombudswoman, the Department of
Cultural Market, Ministry of Culture, PRC; Ng Yu, Chairman, Working Committee,
Hong Kong Music Fair; Hung Tik, Chairman of IFPI (HK Group) Ltd; and performers
Joey Yung, Hins Cheung, Charlene Choi, Denise Ho and Justin Lo.
The Hong Kong Music Fair is one of the core events of Entertainment Expo Hong
Kong. Other Expo events include: the Hong Kong International Film and Television
Market; the Hong Kong International Film Festival; the Hong Kong Film Awards
Presentation Ceremony; the Asian Film Awards; the Hong Kong - Asia Film
Financing Forum; the IFPI Hong Kong Top Sales Music Award; the Digital
Entertainment Leadership Forum; and the Hong Kong Independent Short Film and
March 12, 2008
HK will lead billion-dollar boom in region's wine trade, survey finds - Dennis Eng
Hong Kong will dominate the region's booming trade in wine after scrapping the
40 per cent wine duty and reap valued-added economic benefits expected to top
HK$1 billion by 2012, a study has found. The economic benefits, including the
creation of thousands of jobs, were projected to reach almost HK$3 billion by
2017, said Edward Leung Hoi-kwok, the Trade Development Council's chief
The wine market in Asia was predicted to grow by between 10 per cent and 20 per
cent annually over the next five years, with the mainland alone expected to
import HK$7 billion worth of wine by 2017, the council's study said. The value
of wines consumed in the region, excluding Japan, would reach HK$130 billion in
2012 and HK$210 billion by 2017. Since the government announced two weeks ago
that wine duties would be abolished, excitement in the industry has been
considerable. Fine-wine auctions are planned and various wine-related businesses
intend to set up offices in Hong Kong.
"It's not going to give you the opportunity to become a world wine-trading
centre, truly, because of the location of Hong Kong, but you're going to run
Asia," said Gil Lempert-Schwarz, chairman of the Wine Institute of Las Vegas. On
May 31, New York-based Acker Merrall & Condit, the oldest wine merchant in the
US, will visit to auction fine wines worth more than US$6 million.
"This is going to be gigantic in terms of the wines that are involved and in
terms of this potentially being one of the top 10 sales of all time," Mr Lempert-Schwarz
said. "Somebody said that two or three of the big clients of Acker in Hong Kong,
who were going to bid on stuff in New York this last weekend, are now holding
back from that because they want to put all their effort into the sale here in
Mr Lempert-Schwarz, a consultant for Acker Merrall, said he expected 85 per cent
of the roughly 1,000 lots on sale to go to either local or mainland buyers, and
maybe some Taiwanese collectors. The company will hold another auction in the
city in November, with wines valued at US$4 million to US$5 million. According
to Mr Lempert-Schwarz's brother, who runs a wine hedge fund for Merrill Lynch
out of Japan, a number of major collectors in Japan are talking about storing
wine in Hong Kong to capitalize on the zero duties, provided storage facilities
Mr Lempert-Schwarz also said three of the top 10 wine collectors in the world
were in Hong Kong, one of whom was looking to relocate a significant portion of
his wines from London. It is estimated that at least 2 million cases of wine
stored in London are owned by Asian collectors.
To capitalize on the market potential, the council will hold the first Hong Kong
International Wine Expo from August 14 to 16.
March 8, 2008
Agreement reached on bridge link
funding - Hong Kong-Zhuhai-Macau Bridge.
The new bridge will dramatically speed up connections between Hong Kong,
Macau and Zhuhai Hong Kong, Zhuhai and Macau have reached a consensus on the
financing of the Hong Kong-Zhuhai-Macau Bridge linking the three places. Once
completed, the bridge is expected to be a major landmark which will enhance Hong
Kong's connections with other cities and port facilities in the Pearl River
Delta in southern China. The project would soon proceed to public tenders but
arrangements have been made to cover any shortfall between construction costs
and investment by the private developer that wins the bid to build the bridge.
Hong Kong would cover 50.2 per cent, Guangdong 35.1 per cent and Macau 14.7 per
Secretary for Transport & Housing Eva Cheng said: "The three sides agreed that
the three governments would be responsible for the construction and operation of
the boundary-crossing facilities and connecting roads to the bridge within their
own territory. We agreed to share the amount of the subsidy under the
cost-to-benefit ratio which takes into account the economic benefits to each
Improved cargo flows - Dr Billy Mak from the Department of Finance at Baptist
University told South China Morning Post (February 29) the bridge was likely to
lead to more cargo flow from western Guangdong and Guangxi region to Hong Kong
container terminals and the airport. The bridge would also stimulate the
development of North Lantau as a tourist zone.
The connecting roads are about 12.6km on the Hong Kong side and 13.9km on the
mainland side. The main body of the bridge measuring 29.6km is expected to run
from San Shek Wan in Lantau to Gongbei in Zhuhai and A Perola in Macau.
Travelling time between Hong Kong and Macau and Zhuhai will be shortened from an
hour to between 15 and 20 minutes.
The bridge was first proposed in 1982 by Hong Kong entrepreneur Gordon Wu whose
company Hopewell Holdings is expected to be one of the bidders for the project.
Foreign and Domestic Banks Actively
Build QDII Brands
Since the launch of the qualified domestic institutional investor (QDII)
program on the mainland in 2006, various large foreign and domestic banks have
rushed to build their own brands and launch different types of QDII financial
products to meet the increasing demand for wealth management from mainlanders.
As of the end of October 2007, a total of 154 QDII bank products had been
launched by 16 foreign and domestic banks and the sales volume amounted to
Rmb35.196 billion and US$1.012 billion. Of these 154 products, 64 were offered
by 11 domestic banks capturing Rmb29.349 billion and US$0.317 billion in sales,
while 90 were sold by five foreign banks raising Rmb5.848 billion and US$0.695
Many of these QDII bank products have established a name in the market and have
built a brand in wealth management. The Industrial and Commercial Bank of China
launched the first wealth management product making offshore investment on
behalf of clients on the mainland and built the "Pearl of the Orient" brand.
Among this series, "Pearl of the Orient I" is the first QDII product investing
in offshore stock markets following the liberalization policy and
record-breaking sales have been attained. Other well-known investment product
brands established by domestic banks include "Huideyin" and "Haiyin I" of the
China Construction Bank, and "Delibao" and "Huijutong" of the Bank of
Communications. Investment products offered by foreign banks include "Dynamic
Return Investment" of the Standard Chartered Bank and "Jihuibao" of the Bank of
According to Li Fuan, director of the business innovation and supervision
department under the China Banking Regulatory Commission (CBRC), banks offering
offshore wealth management services are characterized by having a steady client
base, good reputation, extensive operation network, flexible and diversified
product designs, and rich product variety. The many offshore wealth management
products offered by them can meet the various demands of clients.
However, these products also have room for improvement. For instance, the sales
channels and coverage are limited, the marketing effort is not strong enough,
the brand advantage has yet to be formed, manpower support and backup system are
inadequate, etc. Also, policy constraints such as restrictions on investment
types, proportion and minimum amount have stifled the growth of QDII products.
With respect to the demand for wealth management, the vigorous boom in the
capital market in the last two years has greatly boosted the demand of mainland
investors for wealth management. The wealth effect of the stock market has also
caused saving deposits to flow in its direction. According to the statistics of
the People's Bank of China, in October 2007 the level of savings of mainlanders
dropped Rmb506.2 billion, the greatest drop ever in a single month. At the same
time, the trend of mainlanders terminating their insurance policies and
diverting the money to the stock market was obvious. The number of people
investing in securities and fund has continued to rise.
To meet the increasing demand for wealth management, CBRC will continue to
strengthen its support for commercial banks in providing offshore wealth
management services. Efforts will be made to create the conditions for further
liberalizing the investment market, allowing investors to participate more in
the international capital market. CBRC is also planning to extend the scope of
offshore stock market beyond Hong Kong to include other mature stock markets so
as to achieve a rational global distribution of assets for diversification of
According to Li, CBRC will conduct studies on the QDII business of commercial
banks, collecting information on the banks' development strategies, product
designs and marketing plans in relation to their QDII business. Meanwhile, CBRC
will call on the commercial banks to strengthen their ability in risk and
investment management, and will also continue with its efforts in enhancing
investors' investment experience and risk awareness so as to safeguard their
It can be expected that the demand for offshore wealth management of
mainlanders and the support of the central government will bring enormous
business opportunities for Hong Kong's professional service sectors such as
financial services, financial accounting, legal services and marketing.
Amid the increasing demand of mainlanders for wealth management, foreign and
domestic banks engaged in QDII business on the mainland have offered a large
variety of financial products but none of them have emerged as the leading
brand. Hong Kong financial institutions, with their rich experience in designing
and marketing financial products, coupled with the fact that Hong Kong is the
first stop of the mainland's QDII offshore wealth management business, have
first-mover advantage in formulating relevant marketing strategies and
developing QDII brands.
QDII can also drive the development of Hong Kong's marketing, accounting and
legal services sectors which can provide professional services for QDII business
such as market consultation, financial and legal services.
As China's QDII business is going to extend to international capital markets
beyond Hong Kong, Hong Kong's financial and other professional services sectors
stand to benefit by assisting the mainland to "go global" via Hong Kong.
February 24, 2008
Hong Kong retains mantle as world's
Chief Executive Donald
Tsang receives his copy of the 2008 Index of Economic Freedom from Heritage
Foundation President Dr Edwin Feulner
Hong Kong claimed the top spot as the world's freest economy for the 14th
straight year in a study released by Washington-based think tank, the Heritage
The 2008 Index of Economic Freedom covered 157 economies worldwide after
assessing them on 10 economic freedom factors. Hong Kong scored top marks on
four factors: trade freedom, investment freedom, financial freedom and property
rights. The city also ranked among the top 10 in other areas such as freedom,
government size, monetary freedom and labour freedom.
Second and third place went to Singapore and Ireland respectively.
Financial Secretary John Tsang said the government was determined to uphold Hong
Kong's position as the freest economy in the world. "We see the role of the
government as that of a facilitator. We provide a business-friendly environment
where all the firms can compete on a level playing field and establish an
appropriate regulatory regime to ensure the integrity and smooth functioning of
a free market," he said.
The report also noted the city's simple business regulation and highly flexible
labour market. Investment in Hong Kong was strongly encouraged with virtually no
restrictions on foreign capital.
A separate report released recently showed that more Hong Kong people wanted to
start their own businesses amid the rosy economic outlook. The 2007
entrepreneurship study showed one out of 10 Hong Kong people had tried starting
their own businesses, up from 3 per cent in a 2004 similar study. It was also
the second highest rate among so called "high income countries", following
Iceland where the rate was 12.5 per cent. The United States came third with 9.6
The findings coincided with the latest Hong Kong Company Registry figures,
showing a record 22.9 per cent rise in newly registered companies in 2007.
The study was conducted by Global Entrepreneurship Monitor (GEM), a non-profit
research oganisation led by Boston's Babson College and the London Business
School. Last year's study was the fourth GEM Hong Kong report, in which 2,000
people were interviewed between May and October.
February 1, 2008
Hong Kong's World-class services a
platform for growth
(From right) HKTDC Executive
Director Fred Lam; HKSAR Chief Executive Donald Tsang; Ali M Thunayan Al-Ghanim,
Chairman of the Kuwait Chamber of Commerce & Industry and H.E.Sheikh Dr Salem
Jaber Al-Ahmad Al-Sabah, Adviser to the Kuwaiti Prime Minister.
Hong Kong is well placed to become a centre for Islamic finance in Asia, said
Chief Executive Donald Tsang at a business luncheon organized by the Hong Kong
Trade Development Council (HKTDC) and the Kuwait Chamber of Commerce. He invited
Kuwaiti banks and financial services companies to extend and diversify their
global reach through the city. Attended by more than 200 Kuwaiti business
people, the luncheon held in late January was the first stop in a week-long
business services sector trip to the Middle East which also covered Riyadh, the
Saudi Arabian capital, along with Abu Dhabi and Dubai in the United Arab
Mr Tsang said Hong Kong's sound financial services infrastructure and
well-established system make it an attractive location for investments. The
first Islamic retail fund launched recently in Hong Kong had attracted about
US$45 million worth of orders by December. Noting Hong Kong is already a market
of first choice for Middle Eastern companies, Mr Tsang said average annual
bilateral trade with Kuwait grew 20.5 per cent from 2002-2006. In 2006, it was
worth US$264 million.
Cepa good for business - "One way to further deepen the trading relationship is
for Kuwaiti companies to capitalize on Hong Kong's special status within China,"
said Mr Tsang, adding that the Closer Economic Partnership Agreement (Cepa) is
especially good for this purpose. "We welcome investments by sovereign wealth
funds, which are becoming more prominent in financial markets and are a positive
force for global markets."
Hong Kong Trade Development Council Executive Director Fred Lam added that Time
magazine in its January 2008 cover story had called Hong Kong "China's Wall
Street at the dawn of the Asian century", noting the city's world-class
financial services sector and bustling stock market.
"We believe we can also become the Middle East's Wall Street," said Mr Lam. He
added that there is much more to Hong Kong than finance. A delegation of more
than 20 of Hong Kong's most senior players including international bankers, top
property developers, architects, urban planners and interior designers as well
as heads of major legal services and media companies accompanied Mr Tsang and Mr
Lam for the Middle East mission to explore areas of cooperation with Middle East
Asian filmmaking hub scores starring
pictured with actress Michelle Yeoh, says no other country apart from America
has so many international stars
In 1991, Dutch-born Wouter Barendrecht founded Fortissimo Films with Hong Kong
film director and distributor Shu Kei due to his passion for Asian films.
Seventeen years later, with present business partner Michael J. Werner, he was
honoured at the annual CineAsia convention in Macau for his "significant
achievements in the development, financing, co-production, promotion and
distribution of award-winning films globally".
Fortissimo is responsible for bringing to the world Hong Kong cinema classics
such as director Wong Kar Wai's Chungking Express and In the Mood for Love. The
latter film won Best Actor award for Hong Kong actor Tony Leung Chiu Wai at the
2000 Cannes Film Festival. But their presence is felt all around Asia. For
example, they helped bring Thailand's booming film industry into the
international limelight with hits like The Eye trilogy and The Iron Ladies.
"I have always loved Asian films," said Fortissimo's Co-Chairman. Mr Barendrecht
had previously worked as a programmer for the Rotterdam Film Festival and as a
press officer for the Berlin Film Festival.
"I think Asian films have more to offer than either European or American films.
The film industry in Europe is subsidised and there is no business element.
Sometimes, it is just art for art's sake. There is nothing wrong with that but
Asian filmmaking is more interesting as there is more variety in the genre and
overall, there are more auteur aspects," he said. "Asian films have
entertainment and art. It proves that both elements can co-exist at the same
Quantum leap - Asian films have come a long way, according to Mr Barendrecht.
"Back then when we were selling Asian films, people referred to it as Oriental
films, which smacks of neo-colonialism. Now, everybody can differentiate between
Japanese, Korean or Thai films."
He started Fortissimo Films as a hobby, with just a "fax machine in my bedroom
in Amsterdam", while his partner Shu Kei was in Hong Kong doing film
distribution. "We went to Cannes in 1991 and pitched ourselves as a new company
involved with Asian films. At the beginning, we focused on Japanese and Korean
films. We had no money then, only our passion and integrity and a firm belief
that Asian films are artistic and exciting."
The turning point came with Hong Kong director Clara Law's Autumn Moon, which
won the Golden Leopard award at Locarno Film Festival in 1992. Fortissimo
distributed the film and things progressed from there and he moved to Hong Kong.
"Hong Kong is my home now and it is good operating from here. There are now
about 10 other companies in Hong Kong doing what we do but we are the only
company distributing foreign films as well as Asian films." Fortissimo is also
distributing a documentary on The Rolling Stones called Shine a Light which is
scheduled to open in Hong Kong around March/April.
He said he couldn't find a better place in the world for his kind of business.
"Hong Kong is really the heart of Asian filmmaking. With the exception of
America, there is really no other place which has exported such talents as
international stars Michelle Yeoh, Maggie Cheung, Tony Leung Chiu Wai, Andy Lau,
Jackie Chan, Chow Yun Fat and directors like John Woo, Wong Kar Wai and Johnnie
Promising future - Mr Barendrecht said Hong Kong's film industry is doing well
these days. In the past, the Chinese mainland regarded Hong Kong films as
foreign films. But the good news is that Hong Kong filmmakers have discovered
co-production which helps to spread the risks financially. "The film industry is
a risky business so it is good to spread the risks around with all parties. It
also guarantees that we can distribute the film to a wider audience. Best of
all, depending on how we structure our films on a co-production basis, we can
distribute to the huge mainland market." Any film over US$5 million has to be
co-produced, he said, as the Hong Kong market is too small.
He cited the successful co-production example of Lust, Caution, produced by Hong
Kong's Bill Kong, directed by Taiwan's Ang Lee (he won an Oscar for Brokeback
Mountain), starred Hong Kong's Tony Leung Chiu Wai and Chinese mainland actress
Tang Wei. The film won the Golden Lion for Best Film for Ang Lee at the recent
Venice Film Festival and the Golden Horse Best Actor award for Tony Leung Chiu
Wai at the Taiwan Golden Horse. "This film has everything - star power, an
auteur script based on a famous novel and beautiful production. But can we
repeat the success? There are no guarantees in the film making business."
Mr Barendrecht is also actively involved with Hong Kong Asian Film Financing
Forum (HAF) which he founded in 2000 together with the Hong Kong Directors
Guild. "It was a particularly trying time as Hong Kong and the rest of the Asia
Pacific region were just coming out of the Asian financial crisis. A year later
we were hit by Sars: nobody was going to the cinema, and China was not opening
its market to Hong Kong films. We looked at the European business model, reached
out to other countries, discovered co-production in Asia and we are now all
working on a pan-Asian level. This is the model that the Asian film industry in
Korea, Hong Kong, Thailand, Japan, China and Singapore are working on now."
Entertainment Expo shines - Mr Barendrecht had been lobbying, along with the
entire Hong Kong film industry, for HAF and Filmart to come under one umbrella –
Entertainment Expo – for some time and is very glad that it has taken off.
"People want to do business efficiently and the timing for the Entertainment
Expo is great as it is held six weeks before the Cannes Film Festival.
Entertainment Expo is a very compact event – everything takes place under one
roof and it is an important event for buyers around the world. I meet a lot of
people at the event and all my clients love to come to Hong Kong because of its
great food and shopping…but of course, business is the most important, and they
feel that they get a lot done here."
With five staff in its Hong Kong office and almost 20 in Amsterdam, Fortissimo
handles around 20 films a year – two to three productions, five to six
co-productions and the rest are acquisitions. Besides Hong Kong, Fortissimo
Films has offices in Amsterdam, London, New York, Sydney and Paris and agents in
the US, Europe, Tokyo, Beijing and the Middle East.
Footwear Design Competition Winners
Announced Dazzling Footwear and Bags on Display at Awards Show
A dazzling array of footwear and
bags were showcased at today's 8th Footwear Design Competition Hong Kong - Belle
International and Lam Wing Yee were the big winners at today's 8th Footwear
Design Competition Hong Kong awards show, held at the Hong Kong Convention and
Ms Lam picked up the
Staccato Award for Grand Champion, the Millie's Award for the Most Promising New
Talent 2008, and the Ladies' Boots award for her Amphitrite design theme. Belle
International swept all three corporate prizes, including the Shoemaster Award
for Best Corporate Design and the Texon Award for Corporate Creativity,
impressing the judges with her Flying Belle design theme. The company also
received the Licheng Award for the Best Commercial Prospect.
swept all three corporate prizes, including the Shoemaster Award for Best
Corporate Design and the Texon Award for Corporate Creativity
More than 1,100 entries were submitted, and Tang Yiu, Chairman of the Federation
of Hong Kong Footwear Ltd, was impressed with the high design quality. "The
competition is meant to develop young design talent and to enhance creativity
and quality in the Hong Kong footwear industry. All these are vital to the
growth of the industry," said Mr Tang, who chaired the organising committee for
this year's Footwear Design Competition.
Ladies' Shoes and Bags was this year's new category, joining six others:
Children; Sports; Men's Shoes; Ladies' Boots; Ladies' Sandals; and Ladies'
Shoes. Judging was based on creativity, fashion aesthetics and ease of design
Prizes were awarded in each category. In addition, a number of special awards
were presented: the Joy & Peace Award for Creativity; Fiorucci Award for Most
Eye-catching Design; le saunda Award for Modern Chic; Amann Award for
Intelligent Design; Y-NOT KiDS Award for the Most Smart Kid's Shoes; Classical
Award for the Best Charismatic; APLF Global Market Award; and China Shoes for
Best Fashion Sense Award.
The winning designs will be featured in Hong Kong Footwear, published by the
Hong Kong Trade Development Council (TDC). They will also be displayed at
several major fairs, including Style Hong Kong and Fashion Access.
Hong Kong footwear exports amounted to US$5.4 billion (HK$42.1 billion) in the
first 11 months of 2007, with the United States, Japan and the Chinese mainland
the top three markets. Exports to the Chinese mainland, Italy and Germany grew
substantially over the same period last year, up 15 per cent, 16 per cent and 12
per cent respectively.
The competition was organized by the Federation of Hong Kong Footwear and the
TDC (Hong Kong Trade Development Council).
January 30, 2008
Olympic torch relay set for May 2
Olympic spirit: Secretary for Home
Affairs Tsang Tak-sing (third left) announces the Olympic torch relay will take
place on May 2 in Hong Kong.
The Olympic flame will arrive in Hong Kong April 30 and the Olympic Torch Relay
will be held May 2. The flame will be carried by 120 torchbearers across Hong
Kong and the torch relay will last eight hours. Secretary for Home Affairs Tsang
Tak-sing today said Hong Kong will be the first stop on Chinese soil after the
Olympic flame is carried through 19 cities around the world.
A launch ceremony for the torch relay will be held at its starting point in the
Cultural Centre Piazza in Tsim Sha Tsui. It will finish at Golden Bauhinia
Square in Wan Chai followed by a closing celebration at Sha Tin Racecourse.
Torchbearers will pass Tsing Ma Bridge, the Shing Mun River, the Olympic
Equestrian Venue in Sha Tin, Sha Tin Racecourse, the Avenue of Stars, Victoria
Harbour, the Legislative Council Building, Olympic Square in Hong Kong Park and
the Convention & Exhibition Centre.
Students and residents' associations will be invited to cheer the torchbearers
along the relay route, and people can witness the historical moment live on
television. Roving exhibitions will be held in the 18 districts from March to
After Hong Kong the Olympic flame will head to Macau and major Mainland cities
before arriving in Beijing on August 8 for the opening ceremony of the Beijing
2008 Olympic Games.
January 22, 2008
Hong Kong's Jewellery sparkles in
upbeat Malaysia - Developing the Hong Kong brand.
Hong Kong's Chow Tai Fook, which has 750
retail outlets in the territory, Macau, Taiwan and on the Chinese mainland, has
opened its first store in Kuala Lumpur. It's a move to take advantage of
Malaysia's growing prosperity and higher-income consumers - and forge ahead of
other foreign designers who may not take account of Malaysian tastes and
The new store was established in November 2007 in prestigious The Gardens in Mid
Valley City, and is presenting a dragon-themed line of jewellery inspired by
ancient Chinese craftsmanship. The work is aimed at modern-minded women who
appreciate the richness of Chinese designs.
The Kuala Lumpur store is the first step by Chow Tai Fook into South East Asia,
and the pieces are guided by design guru Yip Kam Tim. The firm says it chose the
Malaysian capital as an opening to the region because Malaysian retail offers
modern, dynamic appeal to an emerging consumer pool.
With a growing demographic for youthful, affluent shoppers, Kuala Lumpur offers
plenty of potential for mid-priced and well-designed jewellery.
In fact, Hong Kong brands have an established reputation for stylish offerings,
thanks to the popularity of the territory's movie stars, films, TV programmes
and singers. Hong Kong's cachet is particularly strong among Chinese Malaysians.
The Malaysian jewellery sector has been opening to a wider range of jewellery
and methods of retail in recent months. Jeweller Poh Kong Holdings Bhd recently
opened franchise operations in Kelantan, Terengganu, Sabah, and Sarawak, aiming
to draw on sales from greater prosperity in the provinces.
January 17, 2008
Lampposts to house Wi-Fi facilities
Wi-Fi facilities will be installed into 669 lampposts across Hong Kong.
Secretary for Commerce & Economic Development Frederick Ma told legislators
today the Office of the Telecommunications Authority supports the move and has
provided detailed lamppost data to Wi-Fi service operators.
Three operators have applied for Wi-Fi installation on lampposts. One has
already presented its technical proposal to the Highways Department.
The Housing Department has made 1,000 estate lobbies available to operators for
Wi-Fi services. The Housing Authority also plans to reserve ducts between
lampposts in new estates for the installation of Wi-Fi or other electronic
January 14, 2008
Hong Kong ranks world's freest economy
again for 14 consecutive years by Heritage Foundation
Hong Kong has been ranked as the world's freest economy for the 14th consecutive
year by the Heritage Foundation in the foundation's 2008 Index of Economic
Freedom study released on Tuesday, a press release from the Hong Kong Special
Administrative Region (HKSAR) government said.
According to the study report, Hong Kong scores exceptionally well in almost all
areas of economic freedom.
Among the 10 individual areas assessed, Hong Kong ranks first in trade freedom,
investment freedom, financial freedom and property rights. Hong Kong also ranks
in the top 10 in another four areas - fiscal freedom, government size, monetary
freedom and labor freedom.
The report noted that Hong Kong's income and corporate tax rates were very
competitive, and overall taxation was relatively small as a percentage of gross
domestic product (GDP).
It also said that Hong Kong's business regulation was simple, the labor market
was highly flexible, and investment in Hong Kong was strongly encouraged with
virtually no restrictions on foreign capital.
The foundation also complimented Hong Kong as one of the world's leading
financial centers, with its regulation of banking and financial services both
non-intrusive and transparent. The study noted that property rights were
protected by an independent and virtually corruption-free judiciary.
Compared to Singapore, Hong Kong fares better in regard to trade freedom, fiscal
freedom, investment freedom and financial freedom, while Singapore fares better
in business freedom, government size, monetary freedom, freedom from corruption
and labor freedom. Both Hong Kong and Singapore are ranked first in property
"We are determined to uphold Hong Kong's position as the freest economy in the
world," Hong Kong Financial Secretary John C Tsang said while welcoming the
"We see the role of the HKSAR government as that of a facilitator. We provide a
business-friendly environment where all firms can compete on a level-playing
field and establish an appropriate regulatory regime to ensure the integrity and
smooth functioning of a free market," Tsang said.
The study measured the degree of economic freedom of 157 economies worldwide by
assessing 10 factors: business freedom, trade freedom, fiscal freedom,
government size, monetary freedom, investment freedom, financial freedom,
property rights, freedom from corruption, labor freedom. Hong Kong retained its
position as the freest economy in the world, followed by Singapore and Ireland.
Make HK top source of talent, urges new
AmCham HK chief
Developing Hong Kong into a regional hub
for top talent is key to maintaining its stature as an international business
centre, according to Steven DeKrey, the new chairman of the American Chamber of
Commerce. Dr DeKrey, an associate dean and director of MBA programs at the Hong
Kong University of Science and Technology, said yesterday he was aware of the
region's growing need for talent.
In his first speech in his new role - "Face to Face with AmCham: 40 Years in
Asia's Business Capital" - made at an AmCham luncheon at the Ritz-Carlton Hotel,
Dr DeKrey urged the government to put more effort into becoming a source of
talent for Asia.
"Much progress has been made on educational fronts and visa policies, but more
can be done," said the new chairman, who succeeds Gary Clinton.
He said the chamber would continue to pursue the provision of quality education
for expatriate children - especially the availability of school places, which
had become a significant concern for its members.
"It has made it difficult for many incoming executives to find school places for
their children, which affects the ability of companies to bring their top talent
to the city," Dr DeKrey said.
Another top priority would be to work closely with the other seven AmChams in
Greater China, including those in Macau, Taiwan, Beijing and Shanghai.
Referring to a survey conducted by the chamber, he said he was optimistic about
this year's economic outlook. "Firms are very satisfied being in Hong Kong.
Regional headquarters are also staying," he said.
Dr DeKrey said he believed the mortgage crisis in the US was not over.
"It is still not clear for the future, and its impact has not been fully
reflected in the market," he said.
January 13, 2008
Invesco chief economist John Greenwood, also dubbed the `architect of the dollar
peg,' says local currency appreciation is not an effective measure to alleviate
inflationary pressure in the long run. "Let's say the dollar peg appreciated
from 7.8 to 7.6, inflation will temporarily decline but the inflation rate will
resume to its previous course later," Greenwood told The Standard, warning that
currency appreciation would have more of a downside as it would invite more
speculation activity. Under the currency peg, the Hong Kong dollar is fixed at
7.8 to the US dollar, though the widening of the trading band in May 2005
allowed it to be traded between 7.75 and 7.85. On January 2, the China
Securities Journal published a report suggesting the Hong Kong dollar should
appreciate from its current 7.8 to 7.5, to help ease inflationary pressure and
avoid an asset bubble. Greenwood, who has been on the Hong Kong Monetary
Authority's currency board committee since 1988, said he does not see an asset
bubble in the local economy, stressing that the HKMA has an effective mechanism
to maintain stocks of the Hong Kong dollar. A strong advocate of the currency
peg since the 1980s, Greenwood also insists the current peg system is the best
for Hong Kong. "Hong Kong's business cycle is determined by the global business
cycle, not that of China. When you talk about the global economy, the United
States is still the most influential." Greenwood said the Hong Kong dollar
cannot be pegged to the Chinese yuan as it is not freely convertible. "It will
take more than 15 years for the yuan to become fully convertible. "If the yuan
is freely convertible then the Chinese government will lose control over it. Do
you think the Chinese government will abandon its control?"
January 11, 2008
Delicate Balance of Creativity and
Functionality - Hong Kong Product Shines in China Red Star Award
Yip states with Hong Kong celebrating the
10th anniversary of the reunification with its mother country, local product
designers have to re-position themselves accordingly.
Yip Chi Wing was awarded the China Red
Star Award with his "Li Ning Power-pack" camping backpack (top) and "Life-power
LP6500" massage chair (bottom).
"China Red Star Design Award" is one of the most distinguished awards in the
Chinese Mainland's design industry. The Award aims to promote the development of
Chinese design industry, and enhance international competitiveness of Chinese
products by encouraging Mainland enterprises to carry on independent innovation
and brand building. Among over 1,500 entries for this year, the renowned Hong
Kong product designer Alan Yip Chi Wing snatched highest awards with his "Li
Ning Power-pack" camping backpack and "Life-power LP6500" massage chair. This
reiterates the prominent presence and reputation of Hong Kong product designers
in the international design world.
Broadening Horizons through Expos and Competitions
Alan Yip has been a product designer for over 20 years. He graduated from Dept
of Industrial Design of Hong Kong Polytechnic University in 1987. After winning
a working scholarship in 1986, he worked as an intern for Frog Design Inc. in
California, USA. Upon his graduation he was hired at the Philips Eindhoven, the
Netherlands. Yip returned to Hong Kong in 1990 and founded his own Yip Design
Ltd. He comments, "For a relatively small market like Hong Kong, it is paramount
for product designers to participate in different kinds of expositions and
competitions, so as to strive for room for better development and opportunities.
For instance, I have been participating promotional activities organized by Hong
Kong Trade Development Council (HKTDC) continuously; that is not for awards or
benefits but the experiences I gain. Joining expos and competitions offers a
great opportunity for me to appreciate the excellent works from designers around
the world, helping me cultivate an international perspective about design. In
additional, meeting Mainland and overseas industry players is also crucial for
business development in the long run. "
Leverage on Hong Kong's Competitive Advantages
Alan Yip's awarded products are for him merited by their bold embrace of
creativity. He explains, "Li Ning Power pack is quite a breakthrough
design-wise. Apart from its swift flowing outer shell, it is made of hi-tech
plastic materials. The strength of cushioning is also ergonomically fine-tuned
befitting different parts of the wearer's body. It could be said an innovation
of its kind in the leisure product market in China. Life-power LP6500, on the
other hand, resembles first class in-flight seating in its design. It offers a
luxuriant comfort and comes in a vibrant, spray-painted outlook. As of
purchasing a car, the buyers can also select their favourite colour of paints
when they place their order for the chair. Such customized service proves
successful in appealing to the younger market, generating 'talking points' as
well as sales."
Yip furthers that with Hong Kong celebrating the 10th anniversary of the
reunification with its mother country, local product designers have to
re-position themselves accordingly. He adds, "As Hong Kong product designers,
our competitive advantages are highlighted: there is much room for creativity in
Hong Kong and we are backed by the huge Mainland market. It is high time we
moved forward with a globalized point of view, and leveraged our unique position
to explore new business opportunities for our design industry."
January 10, 2008
Hong Kong and Macau Doctors Allowed to
Open Private Clinics on Mainland
The Ministry of Health has recently issued a circular on the implementation of
Supplement IV to the Mainland-Hong Kong and Mainland-Macau Closer Economic
Partnership Arrangement (CEPA) with regard to medical services. According to
this circular, qualified Hong Kong and Macau service providers who are holders
of the mainland Certificate of Practicing Physician (for clinical treatment,
traditional Chinese medicine and oral care) may apply to open private clinics in
mainland cities after 1 January 2008.
The applicants must be licensed to practice medicine in Hong Kong and Macau and
must have a medical license for over five years in either Hong Kong or Macau,
have practiced continuously in both Hong Kong and Macau for a total of five
years, or have served in clinical posts in the same field on the mainland for
over five years.
Each Hong Kong or Macau service provider may only open one private clinic. He or
she must be the sole proprietor and responsible person of the clinic.
In principle, a private clinic may not employ other physicians. However, if
circumstances so require, the Hong Kong or Macau service provider may employ one
to two practicing physicians (mainland residents) in the same area of practice
to meet the needs for medical services. A suitable number of mainland registered
nurses may also be employed based on medical service needs.