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Hong Kong - China's Global Financial Center
Sundeep Bhandari, Managing Director, Regional Head, Global Markets North East Asia and Co-Head Wholesale Banking, Standard Chartered Bank.
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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.
Hong Kong Budget 2011 Hong Kong Financial Secretary John Tsang will dish out nearly HK$44 billion (US$5.6 billion) to taxpayers
Hong Kong Business Name Search
The Hong Kong Government Cyber Search Centre of the Integrated Companies Registry Information System
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Kong Company Registery - HKSAR Government HK Trademark Registration HK Trademark Online Search
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Honolulu Chinatown - Year of the Snake Feb 10 2013 Lion
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President Obama's Lunar New Year Message - Year of
the Dragon http://www.youtube.com/watch?v=C6gfkYAo5gE
Under the Hawaii State Law "Asian Lunar New Year Commemoration Week" The
one week period following the day of the Chinese New Year shall be known and
designated as the "Asian Lunar New Year Week of Commemoration in
Hawaii". This week is not and shall not be construed as a state holiday. [L
2007, c 48, §2] click for more details
4/3/2012 "The Why & How of Leveraging Your Business into Hong Kong"
Youtube http://www.youtube.com/watch?v=OMTB2IQYgY8 Podcast www.hkchcc.org/KGUAM-ThinkTechHawaiiTheWhyandHowofLeveragingYourBusinessintoHongKongJohnsonChoi04032012.mp3 Facebook http://www.facebook.com/note.php?saved&¬e_id=10150787843895619
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The Hong Kong Advantages under One Country Two
Systems - when most of the world want to do business with
China, there is only one place that China gives 100% backing - that is Hong
Kong. Quoting the former Chief Executive of Hong Kong SAR Honorable Tung Chee-hwa
"背靠祖國 - 面向世界" "backed by China and engaged globally". Whether you are an international business wanting to do business
with China, or just wanting to get connected with Asia and the rest of the world -
Asia's World City: Hong Kong is the right and smart choice.
TED: Martin Jacques
Understanding The Rise of China 马丁·雅克：了解中国的崛起
Hong Kong Education Bureau (click on the links for details) 德育及國民教育指引
Moral and National Education Guidelines
Ferries Accident on October 1 2012 - Day
of condolence for Hong Kong vessel tragedy 全港哀悼撞船事故罹難者
China is doing the right things dealing with the challenges according the World Bank President Jim Yong Kim at this WSJ Interview
Businesses Achieves before 2008
2009 - 2010 2011 2012
China and Hong Kong Closer Economic Partnership Arrangement
(CEPA) 內地與香港關於建立更緊密經貿關係的安排 http://www.tid.gov.hk/english/cepa/
For information about the Hong Kong Chief Executive Policy
Address, please visit www.policyaddress.gov.hk
The website contains all the documents and official video clips (including the recording of CE's presentation at the Legislative Council, press conference and TV forum, etc.).
*December 17 2012
Tech Transfer through Hong Kong
Universities in the United States, collectively, produce about 3,000 US patents annually, which are licensed to outside firms or start-up companies for
commercialization. The Association of University Technology Managers (AUTM) was set up in 1974 to support and advance academic technology transfers globally. The Chicago-based group is made up of members from more than 350 universities, research institutions, teaching hospitals and government agencies, as well as hundreds of companies involved in managing and licensing innovations.
AUTM Executive Vicki Loise was a panel speaker at the BIP Asia Forum held in Hong Kong earlier this month, during which a cooperation agreement was signed between AUTM and event
organizer, the Hong Kong Trade Development Council (HKTDC). In Six Questions, Ms Loise explains why Hong Kong is the best place to find new partners in Asia.
What does your association do?
AUTM is an organization of academic technology transfer professionals from around the world. Most of our members are working in university settings, research institutes, or hospitals. And as technology managers, they are working with the faculty at the institutions to help them get discoveries patented and licensed so that they could be developed in technology.
As an organization, we’ve been in existence for almost 40 years in the United States. There was no place to get education or a degree for technology transfer. A lot of people who are working on it today are coming either from business, law or science. And even today, there isn’t such a degree for it. So there is a need for education, continuing education, not just one you come into as a profession, but throughout your career path. AUTM was formed to support this profession.
There is also a tremendous need for networking. Technology-transfer professionals need to have an extremely strong network to be successful. They need to know who in the company are looking for what kind of technology. So the technology manager is establishing a relationship between the university, the faculty and company side.
Do you offer education degrees for technology-transfer professionals?
We do not provide degrees, but we do have a broad range of education, including certifications such as the Registered Technology Transfer Professional (RTTP), as well as a couple of other classes to become a RTTP, either by collecting enough credits through continuing education, or by writing a case study or by demonstrating significant years of experience in the profession.
In fact, in the last few years, we have started to customise our standard offering to many countries. We had an unbelievable number of requests coming from countries looking to start or expand their technology-transfer effort and they need people to be trained. So one of my big roles is to visit people in these countries to find out what their need is, what is their culture, how the technology landscape is already established, so that we know how to customise the education that we deliver to them.
How does the association promote IP trading?
One of the things we launched in March this year is our global technology portal. Any AUTM member can establish a profile on the portal, which will automatically pull from the member database, technology that is available for licensing. It updates in real time, every night, so that the information you see on the portal is 100 per cent up to date. You don’t have to be a member to search the portal for free. Right now, there are more than 24,000 types of technology available for licensing listed on our portal, which makes it the largest in the US. We have institutions from around the world that have technology available on our portal, including seven members from Hong Kong. We created it to better facilitate the transfer and commercialisation of technology.
How has the growth of IP been like in the US lately?
Even though there have been some difficult economic times in recent years, technology commercialisation has grown. We’ve seen an increase in products as result of technology transferring. We’ve seen stability and growth in creating start-up companies out of university IPs. We’ve seen that the royalties that universities are receiving are steadily growing, depending on what year you are looking at.
What’s interesting in the US right now is that there is a laser-focus on entrepreneurship, which is a very different tack for us to take. That focus is coming from the US government because it is seeing more entrepreneurship coming out from the universities as opportunities in creating companies and jobs.
What role can Hong Kong play in boosting IP trading globally?
This being my first time here, it’s becoming very clear to me that Hong Kong is a very business-friendly area and takes the protection of IP pretty seriously. The culture around IP trading in Hong Kong is very different from that of mainland China. Hong Kong needs to work on raising that awareness and I think Hong Kong itself needs to make people be aware of the fact that things are different here than in mainland China. You do prosecute IP infringers – that’s the message that needs to get out to the rest of the world, which may not understand or know about the IP efforts that have been going on in this region.
I definitely think technology transfer is going to take off in this part of the world. We see the technology commercialisation here is young; it looks very similar to how it looked in the US 25 years ago, so it’s a very similar progression in the activities it takes. Partnership like the one we’ve established with the HKTDC certainly also shows that they are very focused and committed to be that hub in Asia for technology commercialisation.
Are you looking to forge ties with Hong Kong research and academic institutions?
We would definitely encourage them to become AUTM members because our job is to connect universities with each other. So current members from universities around the world would benefit from connecting with the folks from Hong Kong universities. We would certainly encourage them to take a look at what we would offer and consider becoming a member. There is everything represented, but no doubt the life and science are predominant, as are the researches are in the US. One of the features in the portal allows every institution to list in their profile their research abilities. So if a company in Hong Kong is interested in a particular field of studies or if there is a particular product they are interested, they could search the research capability of institutions and find the right partner and create the right collaboration.
*December 12 2012
Hong Kong - Asia's Data Central
Officials at the stone-laying ceremony for China Mobile’s new Global Network
Center in Hong Kong
Hong Kong has the potential to develop into Asia's leading data centre, as the city enjoys many competitive edges, according to a report by Cushman & Wakefield, an international property consultant company.
Hong Kong tops the Asia-Pacific region in terms of housing data centers for global IT giants. The city’s world-class infrastructural development and business-friendly environment, the study found, are among the strengths drawing some of the world’s biggest multinationals, including Google, China Mobile, and reportedly, Apple, to Hong Kong.
Google, in a statement on its website, noted that Hong Kong “offers an ideal combination of reliable energy infrastructure, a skilled workforce and a location right in the
center of Asia, which has made it a trading powerhouse and a great place to provide services to our users around the region and globe.”
Dr Tiger Lin, Chairman, China Mobile International
China Mobile International Ltd, a wholly owned subsidiary of China Mobile Ltd, the world's leading mobile telecommunications company, hosted the stone-laying ceremony for its new global network
center at the Tseung Kwan O Industrial Estate site in August. The center offers a spectrum of international services for telecommunications firms, connecting its network with the world via existing and new submarine cable systems in Hong Kong.
"We see great potential with the Hong Kong market,” said Dr Tiger Lin, Chairman of China Mobile International. “Hong Kong is equipped with the best infrastructure and expertise as a hub between China and the rest of the world. It will become a natural platform for China Mobile International to further expand."
Google says Hong Kong offers an “ideal combination” for its data-centre operations
The 2012 Data Center Risk Index was compiled by Cushman & Wakefield in conjunction with Hurleypalmerflatt, a leading engineering consulting company. The survey covers 30 countries and regions, ranking each on a comprehensive risk evaluation of factors affecting the operation of data
centers. These include energy costs, Internet bandwidth, ease of operation, corporate tax rates, labour costs, political stability, sustainability, natural hazards, GDP, inflation and water resources. Hong Kong ranked seventh globally, the highest ranking in the Asia-Pacific region. Singapore, its closest rival, ranked 17th, down six spots from last year. The United States and the United Kingdom occupied the top two places.
The conclusion, said John Siu, Executive Director, Cushman & Wakefield Hong Kong, is that Hong Kong is the most ideal location for data
centers in the Asia-Pacific region. He said this goes hand-in-hand with Hong Kong’s role as a regional headquarters.
“Hong Kong serves as a springboard for institutions and multinationals entering the mainland Chinese market,” said Mr Siu. “For safety reasons, multinational financial institutions usually locate their data centres and regional headquarters in the same city. This explains why demand for data
centers in Hong Kong is continually increasing.”
Hong Kong, Asia's leading data center, is attracting some of the world’s biggest companies
The Chinese-language Hong Kong Economic Times recently reported that Apple is eyeing the Tsueng Kwan O Industrial Estate as a possible site for a major data
center to better serve its fast-growing Chinese market. The US IT giant is tipped to begin work on the Hong Kong site – its first outside the US – in the first quarter of 2013, with plans to open the facility in 2015. “Telecom network connection with the rest of the world is of paramount importance to a global data
center hub like Hong Kong,” Mr Siu said. “In today’s business world, information flow must be fast and reliable. Hong Kong’s connectivity to major regional and global telecom fibre networks makes it more convenient and cost-effective to set up data
center facilities here to meet local, regional and global data-storage requirements.”
It is also advantageous to set up data centers in locations that are highly accessible from different parts of the world, via all means of transportation, Mr Siu said. In this, Hong Kong has a competitive advantage, as its airport, one of the world’s busiest, has direct flights throughout the region and beyond, while Hong Kong also boasts a world-class logistics hub at Kwai Chung Container Terminals.
John Siu, Executive Director, Cushman & Wakefield Hong Kong
Mr Siu cited other advantages, including the city’s business-friendly environment, its simple corporate tax structure and low business tax rate, as well as its
well-developed legal system and skilled workforce. “Hong Kong has no censorship and restrictions on information flow via the Internet. It is easy to set up business in Hong Kong, with no special licensing application required for data-centre operation. The city’s two franchised power supply companies provide highly reliable power supply at relatively low cost to data-centre operations. Further, Hong Kong is considered one of the most politically stable locations in the world.”
Why Hong Kong?
Hong Kong’s advantages for data center operations are many, according to the Cushman & Wakefield study:
1. Fewer natural hazards, distant from earthquake and volcanic zones
2. Stable power supply: connectivity, at 99.999 per cent, is among the highest globally
3. Low utility rates: one of the lowest in the Asia-Pacific region
4. Advanced telecom network: nine submarine communication cable systems and 17 land cable systems join Hong Kong's network with the world seamlessly
5. Friendly business environment: ranks among the top two in the Asia-Pacific
6. Developed transportation network: most data centers are located within 25-30 kilometres of companies' regional head offices
Mr Siu predicts more high-tier, data-center facilities will be built in Hong Kong to meet increasing demand. This will be a natural progression as more corporations shift their business focus from Europe and the US to the Asia-Pacific region, he added. “Hong Kong will benefit from this shift. More multinational and regional corporations have been actively looking to consolidate their local data-center facilities into regional hubs for better management and operation efficiency, higher security and reliability levels, and lower costs.”
For corporations looking at the business potential of the mainland’s huge markets, Hong Kong offers the benefits of free information flow, which is not available on the mainland.
The biggest challenge facing Hong Kong is a shortage of land to build dedicated new data centres, Mr Siu said. Some companies, including Fujitsu, have converted former industrial buildings into data
centers. But Mr Siu said more sites need to be identified to meet future demand.
*December 11 2012
Hong Kong Growth Model: Former US Treasury chief Lawrence Summers "Hong Kong is one of the great global success stories, who says the city is a model of what post-industrial prosperity can look like."
The Asian Financial Forum welcomes Dr Lawrence Summers, Professor, Harvard University Kennedy School of Government, to Hong Kong next month. Ahead of the 14-15 January event, the economist and former US Treasury Secretary, talks about the global economic recovery he believes is underway.
Are improvements in the US economy a harbinger of a global economic revival?
I think there’s a global economic recovery underway, and I think the US economy has been and continues to be in a recovery phase. The question really is what the pace of that recovery is, and will that recovery be sufficient to grow the economies. I think the answer to that question is yes. Will it be sufficient to close the substantial gap that exists with potential production in the United States, with potential production in the industrialised world? There, I think, the answer is less clear. Growth is likely to continue, assuming there are no foolish errors made with respect to the fiscal cliff. But how rapid that growth is going to be remains to be seen.
We have still got some substantial debt imbalances to be worked off, particularly in the household sector and, depending on the decisions that are made about fiscal policy, you could get excessive fiscal contraction that would pose a threat to the possibility of the recovery accelerating.
There have been three phases of quantitative easing in the US, along with a low interest-rate regime. Do you think they have been justified, given problems that they cause in other countries, particularly in Asia?
By long-standing treasury secretary habit, I don’t predict or prescribe for the Federal Reserve. I do understand the concerns in other countries. On the other hand, I think the virtue of a floating exchange-rate system, like the one we have between most of the major economies, is that each country gets to pursue a monetary policy based on its own interests. And I think it’s appropriate for the United States to pursue a monetary policy that’s directed at promoting non-inflationary growth in the United States. And I think, when one considers the size and the scale of the US market, and in ways they might not fully appreciate, other countries have very substantial stakes in the United States getting its economy growing more rapidly again.
Turning to Europe, do you see a regeneration of the Eurozone, perhaps based on the fact that federalisation may be moving ahead?
I think the European process has always been one that moves forward, but in rather jerky ways. Some steps forward, some steps backwards, and I suspect that would be the process that continues. I think that a nearly irrevocable decision having been made in favour of a single currency, it will inevitably drive greater economic integration and federalism in a variety of respects. And I suspect banking supervision will be one of them. Just what the mechanism will be, how rapidly it will come, how retroactive it will be – as distinct from – forward-looking, with respect to issues that will arise in the future, that remains very much to be seen.
Mainland China doesn’t appear to be heading for a hard landing, but what about the mid-term. What do you see is the mainland’s policy direction?
China has had a remarkable three decades, and one has to be very cautious when making negative predictions about what will happen in China. On the other hand, I think one has to also recognise that a growth model that has been fueled not just by high investment but by rising investment share, is a growth model that has a variety of problems and challenges in terms of its sustainability.
So I would have considerable concerns that there will be some kind of discontinuity at some point in the next few years in China. If you look at some experience of the other Asian rapid-growth countries, at a certain point, there was a major interruption to growth. And I think the challenges – financial, the economic challenges, in terms of the necessary reallocations from investment to consumption, the political challenges, given an increasingly restive and better-informed population, the challenges, governmentally, around the questions of corruption, questions of accountability – I think all of these questions will loom large for China in the years ahead.
Do you see a distinct anti-China approach in Washington, particularly when it comes to China companies buying up assets in the United States?
I think that issues involving China are becoming increasingly tension-filled in the United States. That’s probably inevitable given China’s rapid emergence as an economic power. And given distressing signs in a number of respects, of Chinese firms behaving in ways that perhaps are not maximally constructive – from the point of view of respect for intellectual property rights, or from the view of standing up for an open, global system – I think we are going to see more of those tensions ahead. That doesn’t mean there can’t be an economic relationship that greatly benefits both countries. That doesn’t mean that the United States doesn’t have a stake in China’s economic success.
Do you agree with the opinion that Hong Kong’s model of an open market may have to change given the city’s changing demographics?
I think Hong Kong is one of the great success stories of the last quarter of the 20th century and the first part of the 21st century. It’s a place of remarkable dynamism and energy. It has people who have an enormously productive spirit. It is, in many ways, an important demonstration of what post-industrial prosperity can look like.
So I have very positive feelings about Hong Kong, and I think its basic model –predicated on strong, free markets, great respect for property rights, and a government framework that protects property rights, that respects openness to trade, makes fundamental investment in educating its citizenry – I think that model that Hong Kong has followed is a very powerful one.
*December 9 2012
Bidding battle for four school campuses By Dennis Chong
Tendering process for international school sites creates global interest, with buildings in Stanley set to attract more than 40 offers - Hong Kong International School is "interested" in the allocation exercise.
The latest tender exercise for four international school sites has attracted interest from across the globe, with one site in Stanley appealing to dozens of operators from the city and overseas.
Today is the deadline for bidders to submit their proposals to the Education Bureau, following site visits organised recently.
The tussle for the sites involved lobbying foreign business chambers and consulates, and could mean that some schools face eviction if the results, expected in the first quarter next year, go against them.
Critics have warned that a failure to meet the growing demand for places at international schools could deter highly skilled workers from coming to the city.
A spokeswoman for Hong Kong International School, which is "interested" in the allocation exercise, said: "We realise the critical need for more school spaces and we would like the opportunity to further contribute to Hong Kong's international school landscape, particularly at the primary school level."
British education provider Nord Anglia, which runs three schools on the mainland as well as others in Europe, the Middle East and elsewhere in Asia, has also confirmed it will place a bid.
Over the past few weeks, the Education Bureau organised visits for potential bidders to the premises in Lam Tin, Ping Shek, Shau Kei Wan and Stanley, to evaluate renovation costs.
An executive of a Middle East-based school who joined the site visit said that the Stanley site attracted more than 40 bidders.
"We know that the Stanley campus is a great location, even if it requires [renovation] work. However, there are 40 parties bidding for it," ESOL regional director Bassam Abushakra said. His organisation dropped its bid because a "majority [of bidders] have better local connections", he said.
"The government should serve local schools first," Harbour School principal Jadis Blurton said, adding the school had received support from the diplomatic community as well as foreign business leaders.
An acute lack of space in the urban area has led to a "location crisis" for the 175-student primary school, she said, with its classes run separately in three office buildings in Kennedy Town.
The current allocation exercise, which could provide more than 1,000 places, is unlikely to solve the shortage of international school places.
Secretary for Education Eddie Ng Hak-kim said recently that the shortage of international primary school places could reach 4,200 in the next few years.
Ma Hang Estate phase III, Stanley
Site area 4,730 square metres
Age of building 11 years
Status immediately available
460 Shau Kei Wan Road, Shau Kei Wan
Site area 3,380 square metres
Age of building 56 years
Status vacant from August 2014
11 On Tin Street, Lam Tin
Site area 4,554 square metres
Age of building 41 years
Status subject to completion of site surrender procedure
Ping Shek Estate, Kwun Tong
Site area 1,679 square metres
Age of building 43 years
Status vacant from September 2013
*December 9 2012
International dimension makes Hong Kong Arts Festival a red-hot ticket right now
By Sam Olluver
A wealth of international stars will blow into town for the Hong Kong Arts Festival but is there enough investment in local talent, asks Sam Olluver - The Reef', a film with live musical score by the Australian Chamber Orchestra. The American Ballet Theatre's interpretation of Prokofiev's 'Romeo and Juliet'.
The 41st Hong Kong Arts Festival is gearing up for its traditional takeover of the cultural scene in February and March, bearing an Aladdin's cave of performances in music, dance and theatre - most of which will be staged by artists from the international circuit.
Counter sales opened yesterday and it's unwise to procrastinate since many shows will be a sell-out: 96 per cent of tickets were snapped up during the 2012 festival.
This year, 49 acts involving about 1,500 performers are mounting 145 paid performances over 40 days, with a sub-industry of satellite events comprising talks and workshops in the Festival Plus programme and educational specials under the Young Friends Scheme. More than 120,000 tickets are going on sale to the public.
One reason for the event's robust position on the Hong Kong arts calendar is that it was established long before many of the city's other arts organisations were founded. What was originally a citizens' private enterprise, however, now depends on government funding for its multimillion-dollar aspirations.
For the 2013 festival, that subvention is just more than HK$33 million, with the balance of the total estimated budget of HK$105 million to be recouped from HK$40 million in ticket sales and HK$31 million from sponsorships and donations, including a contribution of about HK$11 million from the Hong Kong Jockey Club Charities Trust.
Such a comprehensive festival could never carry a single theme connecting all the spokes, which makes it tricky to paint a succinct overview of what's on offer.
"There are strands running through it, however," explains Tisa Ho, the festival's executive director. "This year, for instance, there's a sort of essay on the United States."
She cites the Chicago Symphony Orchestra's two programmes directed by Riccardo Muti that feature staple works by Beethoven, Mendelssohn and Brahms; also the American Ballet Theatre's classic production of Romeo and Juliet that pairs choreography by Sir Kenneth MacMillan with Prokofiev's celebrated score.
"This exemplifies how they've taken basically European traditions as an immigrant nation and made them their own," says Ho, before turning to Chinglish, a romantic comedy by David Henry Hwang that centres on how much can get lost in translation between two foreign tongues. "It's an American play that looks at American engagement in China."
Mission Drift, a contemporary music theatre piece from New York's The TEAM (Theatre of the Emerging American Moment), gives a historical perspective on the American Dream, following a young Dutch couple from Amsterdam who journey to the US. "It's America looking at itself and capitalism, from early immigration to New York through to Las Vegas," says Ho.
Then there's Einstein on the Beach, the recently revived opera from the artistically explosive period of 1970s New York, with music by Philip Glass and staging by Robert Wilson. At four and a half hours without an interval, the experience will definitely be a one-off.
However, Verdi's La Traviata from the San Carlo Theatre in Naples will be more a case of déja vu in the light of Opera Hong Kong's production of the same work in October.
Was that a deliberate decision? "Yes," Ho says. "I think we're a big enough town to have two Traviata in a big Verdi anniversary." The year 2013 marks the bicentennial of the composer's birth.
From opera to jazz to world cultures, music again dominates the festival line-up. Many programmes come straight down the line: period music from Marc Minkowski and his French baroque specialists, Les Musiciens du Louvre Grenoble; Esperanza Spalding's expo of modern jazz; and a riot of gypsy sounds from Goran Bregovic's Wedding and Funeral Orchestra.
Others, however, step into crossover territory. The Australian Chamber Orchestra splices music and nature together in The Reef, a cinematic exploration of Western Australia's surf and turf with an eclectic selection of music as a live backing track.
The Animals and Children Took to the Streets is a production from the London-based theatre company 1927 that fuses animation and live music in a cinematic fairy tale; Pictures at an Exhibition from pianist Mikhail Rudy melds a live performance of Modest Mussorgsky's work of the same title with his own film based on animations of artist Wassily Kandinsky's designs for a 1928 staging of the score.
Directing a festival on this scale carries logistic nightmares and financial concerns in addition to the artistic challenges. Ho's experience in the business dates back to the 1980s, when she was part of the administrative team for the Singapore Arts Festival. Both there and in Macau, says Ho, the annual jamborees receive 100 per cent financial support from the government - a level that can carry its own dangers, she acknowledges.
But Ho suggests that the recent increase in the government funding to 30 per cent of the festival's total expenditure is still puny in comparison with the percentages received by the major local arts groups.
Maybe this is a case of apples and oranges.
Last year's subsidy for the Hong Kong Philharmonic, for example, came to 58 per cent of total expenditure (down from 68 per cent in 2004) but it maintains a workforce of about 125 musicians and support staff who nurture from start to finish every performance that the orchestra presents. Much of the grant is ploughed back into the local economy.
In contrast, the Arts Festival employs only 30 staff and generally buys ready-to-go acts, the outlay for which feeds the tax regimes and consumer outlets of other countries.
Local artists may lack international cachet, but it's generally held that they should be involved to an appropriate degree in the city's high-profile festivals, partly to help oil the software for when the cavernous West Kowloon Cultural Development Project is up and running. In 2010, the government granted the festival an additional subvention of HK$70 million, spread over five years, as part of that forward planning.
Charles Lee Yeh-kwong, the festival's chairman at the time, announced that the government "wants us as an institution to build audiences". Ho reports that the festival has this year committed part of that money to mount a certain number of performances in the New Territories.
Lee also indicated at the time of the increase that "the extra HK$14 million [per year] will help us to put together programmes of local artists", but it takes a bit of hunting to pinpoint that investment. This year, for example, the festival has undertaken to commission, produce and curate six new works from local choreographers for the Hong Kong Jockey Club Contemporary Dance Series - but these are all underwritten financially by the Jockey Club.
"It's not an extra subsidy for a spelt-out purpose," says Ho. "It's an extra subsidy for the entire festival."
So, that's that sorted … sort of.
The festival's other local commissions this year comprise composer Chan Hing-yan's chamber opera Heart of Coral, set to a libretto by Yan Yu; Smear, a study in the consequences of arts criticism by actress and playwright Wong Wing-sze; and Blast, a humorous observation of the domestic friction engendered by cramped urban housing from Wang Haoran, the Hunan-born playwright.
The festival officially launches with the American Ballet Theatre's programme on February 22 - by which time, however, the Chicago Symphony Orchestra will already have been and gone following their performances on January 28 and 29, while One Man, Two Guvnors from the National Theatre of Britain will be near the end of its run, having opened on February 15.
With three such distinguished companies forming the overture for the 2013 festival, is it going to be the biggest and the best yet?
"It's always the biggest and the best," Ho says.
*November 9 2012
The following is
translated using Google Translate http://translate.google.com/
Peng Qinghua: China's 18th CPC National Congress drawn a much broader expanded blueprint for Hong Kong to participate in China's economic expansion and development
Peng Qinghua, said China's 18th CPC National Congress has drawn the grand blueprint for the country's future development, also will bring a broader space for development to Hong Kong
Hong Kong's Wen Wei Po Newspaper hearing the Hong Kong community highly concerned about being held in Beijing, the Eighteenth National People's Congress of the Communist Party of China, Director of the Liaison Office Peng Qinghua in Beijing yesterday to accept the Hong Kong China News Agency reporter access, The Hu Jintao report fully and accurately implement the "one country, two systems" , "Hong Kong people ruling Hong Kong", the high degree of autonomy to handle three basic relationship profoundly expounded, and reaffirms its strong support of the Chief Executive and the Government administration according to law. "Hong Kong, Hong Kong, the development of the country's development needs are inseparable from the motherland", the eighteen major emphasis on the country will unswervingly push forward reform and opening up, which will bring a broader space for development, more development opportunities, stronger development of power, but you want to play and make good use of this advantage to rely on our own positive efforts and united struggle. "The blueprint has been drawn, lies in the implementation of the Hong Kong community to grasp the trend of the times, to seize a golden opportunity for sustained and healthy development of the national economy, face the challenge to accelerate its development and make new contributions to the national development."
A major event in the life of the party and the country's political
"Eighteen exposition of "one country, two systems", Hong Kong and Macao comprehensive and profound, many new judge new summary of new thinking, has greatly enriched the theory and practice of" one country, two systems ", has an important role in guiding the future development of Hong Kong."
Newswire November 9, 48 Congress of the CPC, the Central Government Liaison Office director Peng Qinghua, told reporters in Beijing on the 9th, said eighteen major portrays the grand blueprint for China's future development, a series of running the country governance policies, indicates that China will take a more firm confidence to usher in a new development, but also will bring a broader space for development, more development opportunities, a stronger driving force for development.
Enrich the theory and practice of "one country, two systems"
Peng Qinghua, said the the Eighteenth National People's Congress of the Communist Party of China, is in our country into the decisive stage of building a moderately prosperous society and the deepening of reform and opening up, accelerate the transformation of economic development crucial period held a very important meeting. China's total economic output has been ranked second in the world, significantly enhance the comprehensive national strength and international influence. At the same time, development opportunities and prominent contradictions coexist, reform and development is faced with many deep-seated contradictions and problems. The next step is how to go in China, is very concerned about the problem of the whole Party and people very concerned about the issue, but also the international community. Eighteen Great held at such a critical moment, reiterated will unswervingly follow the road of socialism with Chinese characteristics, unswervingly, do not slack off, do not toss and clearly put forward the eight basic requirements to win the victory of socialism with Chinese characteristics, namely must adhere to the dominant position of the people, we must insist on the liberation and development of the social productive forces, must adhere to promote the reform and opening up, we must adhere to maintain social fairness and justice, we must adhere to the road to common prosperity, we must uphold and promote social harmony, must adhere to peaceful development, must adhere to the party's leadership . The eight must adhere to the "sum up the experience of our party, to explore the laws of the major achievements for the whole Party and nation to establish a common belief, to indicate the direction of China's future development.
Peng Qinghua, stressed that a significant contribution to the party congress, further establishing the historical status of the scientific concept of development, the scientific concept of development with Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thinking of the "Three Represents" one identified as the guiding ideology of the Party must uphold for a long time. This is our party's theoretical system is richer, the significant development of the Party's guiding ideology. Eighteen large there is a prominent bright spot, mentioned ecological civilization is even more important, a more prominent position, further defined the economic construction, political construction, cultural construction, social development and ecological civilization, one of the five socialist modernization The overall layout. This is a country that has adhered to the strategy of sustainable development and the summary of the results achieved, and also the achievements of civilization inheritance and development of human understanding between man and nature, and open a new vision of socialist modernization development. The eighteen major exposition of "one country, two systems", Hong Kong and Macao comprehensive and profound, there are a lot of new judge is new thinking new summarization, greatly enriched the theory and practice of "one country, two systems", has an important role in guiding the future development of Hong Kong.
The victory of this conference was held to further unify their thinking, and the combination of people, a clear direction, a trend of the times, in line with the will of the people of the General Assembly. 48 large made a series of important achievements, the Chinese Communist Party to unite and lead the people of all nationalities throughout the country, building a moderately prosperous society and achieve the great rejuvenation of the Chinese nation, has a very important significance, will get people of all nationalities, including Hong Kong compatriots. support and advocacy.
Bring major new development opportunities
"Hong Kong's largest development opportunities in that country will unswervingly push forward reform and opening up, to maintain the sustained and healthy development of the economy, will, under the" one country, two systems ", Hong Kong has brought a broad space for development."
Peng Qinghua, stressed that the development of Hong Kong and is closely related to the development of the country. Over the years, Hong Kong has been the mainland's largest source of foreign direct investment in land and offshore listing and financing the first choice, has played an irreplaceable role in the country's reform, opening up and modernization. Meanwhile, the central authorities have issued a series of policies and measures to support Hong Kong's economic development, improving people's livelihood, the mainland is increasingly becoming cope with various risks and challenges, to maintain stable development of strong backing. History has shown that, in the overall situation of national development, Hong Kong is not a spectator, but an active participant in the development of the country requires the development of Hong Kong, Hong Kong can not be separated from the motherland.
Contribution to nation building by the development of power
Peng Qinghua, this conference the past and the future, accurately grasp the changes in the domestic and international situation, to further clarify the future direction, and proposed a series of new managing state affairs strategy indicates that China will take a more firm confidence to usher in a new development. The largest development opportunities in Hong Kong is that the country will unswervingly push forward reform and opening up, to maintain the sustained and healthy development of the economy will, under the "one country, two systems", Hong Kong has brought a broad space for development.
The eighteen large fully affirmed the successful practice of the Hong Kong and the Mainland, mutual benefit and win-win. As General Secretary Hu Jintao pointed out, since the handover of Hong Kong, Macau, embarked on a wide road with the mainland complementary advantages and common development, the practice of "one country, two systems" made universally acknowledged success. Hong Kong, with its platform status of an international financial, trade and shipping center, give full play to the complete market system, a sound legal system and professional services, the business environment, the rapid dissemination of information advantage for the establishment of the mainland of reform and opening up and the socialist market economic system The perfecting provide an important reference. With the constant improvement of China's all-round opening pattern, with the depth of the world economic integration, to further promote trade liberalization and investment facilitation, Hong Kong will continue to play the Mainland as our hinterland, the world's unique advantages, further act as Mainland enterprises to go global window and platform. Hong Kong will also benefit from the development of the country at the same time continue to contribute to the country's reform and opening up and modernization, development opportunities and a strong development momentum.
Profoundly expounded the relationship of the one country, two systems
Peng Qinghua, said eighteen report to the full and accurate implementation of the "one country, two systems", "Hong Kong people governing Hong Kong" and a high degree of autonomy made profoundly expounded, especially proposed to handle the three basic relationship: First, adhere to the principle of one country, and respect differences in the relationship between the system, and the second is to maintain the relationship between the central authority and the protection of the Special Administrative Region of high degree of autonomy, is to play the strong backing of the mainland and improve our own competitive relationship. The two complement each other, must combine any time can not be neglected.
"One country" is the premise and basis of the "two systems"
Peng Qinghua, said that "one country, two systems" is a complete concept of "one country" is to safeguard the central powers enjoyed by law, to safeguard national sovereignty, security and development interests; "two systems" is to protect the high degree of autonomy enjoyed by the Hong Kong Special Administrative Region in accordance with the law support the Chief Executive and the SAR government administration according to law. "One country" is the premise that there is no "one country" and "two systems" will lose its foundation. Hong Kong's reunification with the motherland, while countries in the socialist system in the main to the constitutional way given the high degree of autonomy of Hong Kong, Hong Kong to keep its existing social and economic systems in the same way of life, laws basically unchanged. This institutional arrangements, and reflects the tremendous vitality of socialism with Chinese characteristics and inclusiveness. The implementation of "one country, two systems" in Hong Kong, backed by a vibrant, increasingly powerful motherland, is its greatest advantage. But to play and make good use of this advantage, in the final analysis have to rely on our own positive efforts and work hard in unity. Only actively adapt to the return to the motherland this historic changes to speed up exchanges and cooperation in various fields with the mainland, and constantly improve their competitiveness in the increasingly fierce international competition to be invincible.
Controversial to adhere to the major principles in the process
Peng Qinghua, also said that the great cause of "one country, two systems" is an unprecedented, it is normal to some controversy and differences in the course of practice, but it must be clear on the large issues of principle. Fragmentation can not be one country with two systems, opposites, only two aspects combine and implement them in order to give full play to the superiority of the "One Country, Two Systems", in order to contribute to the development and progress of the country, to the Hong Kong compatriots tangible benefits.
Three basic relationship
First, adhere to the principles and respect of one country, two systems, differences in the relationship
Second, the maintenance of the relationship between the central power and the high degree of autonomy as a Special Administrative Region of protection
Third, play the strong backing of the mainland role and improve our own competitive relationship
The central display of determination confidence in maintaining the prosperity and stability of Hong Kong
"Whatever is conducive to Hong Kong's prosperity and stability, is conducive to the long-term development of Hong Kong's things, things conducive to the well-being of the people of Hong Kong, the central government will unswervingly promote to implement."
Peng Qinghua, pointed out that in eighteen major report, President Hu Jintao reiterated the fundamental purpose of the implementation of the principles and policies of the Central Government of the Hong Kong and Macao, is to safeguard national sovereignty, security and development interests, to maintain the long-term prosperity and stability of Hong Kong and Macao. This assertion, brilliantly expounded in the core requirements and the basic objectives of the practice of "one country, two systems" in Hong Kong, Macau, strategic thinking contains a profound summary of the history of China since 1840, and into the middle of this century to achieve the great rejuvenation of the Chinese nation, profoundly reveals the organic unity of the State and the nation the fundamental interests of the long-term interests of Hong Kong and Macao compatriots.
Eighteen of the report stressed that the central government will be in strict accordance with the Basic Law, and improve the systems and mechanisms to implement the Basic Law. Peng Qinghua, the return of Hong Kong in 15 years, on the whole maintained prosperity and stability, the most fundamental is to get the protection of the Basic Law. The full implementation of the Basic Law is a long process. The full implementation of the Basic Law, the central government bounden also need the active efforts of the Hong Kong community. It is the common responsibility of the central government, the SAR Government and the Hong Kong society, but also to maintain the fundamental guarantee for the long-term prosperity and stability in Hong Kong.
To seize the country the opportunity to accelerate their own development
Hu Jintao, general secretary at the 18th Party Congress reiterated that the central government will firmly support the Chief Executive and the Government of the Special Administrative Region of administration according to law, to support the SAR government to lead Hong Kong, Macao people from all walks of life to focus on economic development, effectively improve people's livelihood, the gradual promotion of democracy, inclusiveness Masonic promote harmony, and deepen economic and trade relations between the Mainland and Hong Kong, Macao, and promote exchanges and cooperation in various fields and promote the compatriots in Hong Kong, and Macao compatriots in patriotic, patriotic love Australia under the banner of unity, the prevention and containment of the external forces to intervene in the Hong Kong and Macao Affairs. Believe compatriots in Hong Kong and Macao compatriots not only wise, ability, Special Administrative Region of management, construction, must also play an active role in national affairs, a shared to do with people of all nationalities, the dignity and glory of the Chinese people. This series of important expositions focused clearly presented to show the Chinese Communist Party to implement the principle of "one country, two systems" strong determination to maintain the prosperity and stability of Hong Kong and Macao, but also reflects a high degree of confidence of the majority of Hong Kong and Macao compatriots in Congress political report . It shows that whatever is conducive to the prosperity and stability of Hong Kong, there are things conducive to the long-term development of Hong Kong, there are things conducive to the well-being of the people of Hong Kong, the central government will unswervingly promote to implement.
Finally, Peng Qinghua, said that the blueprint has been drawn, the key is to implement. I hope the Hong Kong community to grasp the trend of the times, to seize a golden opportunity for sustained and healthy development of the national economy, face the challenge to accelerate its development and make new contributions to the national development.
*November 6 2012
Hong Kong on Show
The Hong Kong Convention and Exhibition Center, on the Wan Chai waterfront
Despite global uncertainties, Hong Kong’s exhibition industry is thriving, according to the Hong Kong Exhibition and Convention Industry Association (HKECIA).
The latest research by the key industry body found that the number of companies coming to Hong Kong to exhibit, the amount of exhibition space they occupied and the number of overseas visitors arriving for exhibition-based activities all grew from 2010 to 2011, in some cases posting double-digit growth. The association’s data reveals that “trade” and “trade and consumer” exhibitions rose 19.4 per cent, “indicating the unflagging popularity of exhibitions as a business tool.”
The rise in visitor numbers was matched by growth in the number of exhibiting companies coming to Hong Kong in 2011. According to the survey, some 60,817 companies showcased their goods and services at one of the major exhibitions surveyed, up 7.2 per cent over the same period in 2010. Of these, there was particularly strong participation from overseas companies, “which clearly saw Hong Kong as an important business option in an uncertain global environment,” the report found.
Attracting the World
More and more overseas companies are exhibiting in Hong Kong
Companies coming from outside Hong Kong rose 9.4 per cent, with “international” companies (those not based in the Asia Pacific region or the Chinese mainland) up by 17.9 per cent. “This is a clear indication that Hong Kong remains one of the most important business platforms for overseas companies wishing to promote their products and services to customers in mainland China,” according to the report.
“It’s always good to see positive figures indicating robust growth, but their significance is heightened when we take into account the global economic environment in 2011,” said HKECIA Chairman Daniel Cheung. “It seems clear that, in times of economic turmoil, Hong Kong’s role as a stable, reliable business platform and networking base for buyers and sellers from around the world is reinforced. This bodes very well for our continued development,” he said.
Monica Lee-Müller, Managing Director of the Hong Kong Convention and Exhibition
Center (Management) Ltd (HML), said companies see value in investing in Hong Kong exhibitions because of the volume of serious buyers the city attracts, the quality of its services and the favourable trade environment.
Lady Gaga (left) who performed at AsiaWorld-Expo this year, with Allen Ha, CEO, AsiaWorld-Expo Management Ltd
The Hong Kong Convention and Exhibition Centre (HKCEC), located on the Wan Chai waterfront, staged 1,224 events during the 2011-2012 fiscal year, including 116 exhibitions by 52 different organisers. Of these, 28 were from outside Hong Kong: 17 were international companies with local representative offices, 10 were overseas organisers and one was from the Chinese mainland. Of these, nine were first-time events at the HKCEC.
The business performance of the AsiaWorld-Expo (AWE) – Hong Kong’s second exhibition venue, which opened in 2005 – also continues to enjoy healthy growth. The number of large-scale events hosted at the venue grew by 26 per cent during the 2011-2012 financial year, while the space occupied by events rose 24 per cent. As a relatively new venue, AWE’s expo business growth has significantly surpassed new venues at other cities in the region, including Macau and Singapore.
“Hong Kong is a prime sourcing hub for the Asia-Pacific region, attracting millions of exhibitors and buyers from across the globe every year. Lying at the heart of Asia and on the doorstep of China, Hong Kong enjoys superb accessibility and connects the mainland with the rest of the world,” Ms Lee-Müller said.
She noted the convenience: more than 95 airlines operate about 900 scheduled passenger and all-cargo flights each day between Hong Kong and some 160 destinations worldwide, including 45 mainland cities. The city is within a five-hour flight of half of the world’s population. “Boasting one of the world’s lowest tax regimes and freest economies, Hong Kong guarantees organisers, exhibitors and buyers a favourable and highly efficient trading platform.”
Monica Lee-Müller, Managing Director of Hong Kong Convention and Exhibition
Center (Management) Ltd
The HKCEC alone is home to four of the world’s biggest and seven of Asia’s biggest trade fairs, Ms Lee-Müller added. “This sustains Hong Kong’s leading position as the trade fair capital of Asia.”
Noting the strong buying momentum prevailing in Asia, Ms Lee-Müller believes this will encourage trade and businesses in the region.
”Hong Kong provides excellent business opportunities for those who want to tap into the Asia-Pacific market, especially the China market,” she said. “With the back-up of the manufacturing bases in the Pearl River Delta, exhibitions of consumer goods have favourable factors to grow further. At the same time, exhibitions of niche topics such as arts, antiques, high-end life style-related products, information technology and the like, will continue to show increased potential.”
Allen Ha, CEO, AsiaWorld-Expo Management Ltd, agrees. “With its world-class infrastructure, business-friendly environment, superb connectivity with major cities in the world and state-of-the-art facilities, Hong Kong will continue to be a leading regional hub for conventions, exhibitions and mega-events in the years to come.”
*November 1 2012
Hong Kong again takes world top spot in financial rankings By Lulu Chen
World Economic Forum says city's finance system still the best on the planet, while China slips to 23rd out of 62 countries. The World Economic Forum has given Hong Kong the best marks in its Financial Development Index for a second year running.
Hong Kong has been named the world's top financial center for the second year running by the World Economic Forum.
The independent organization gave the city top spot again because of its solid business infrastructure, abundant human capital and low-tax environment.
The ranking was based on performance in a range of categories, including legal environment and financial stability.
The mainland fell to 23rd place from 19th last year as its score dropped 0.12 points to 4, on a scale of 1 to 7. This is the first time the mainland has slid in its overall score since the forum started its Financial Development Index in 2008.
"The biggest drop China posted was in financial access," forum associate director Isabella Reuttner said.
The mainland's foreign direct investment, capital market liberalization, access to credit, as well as equity financing all weakened, Reuttner said, adding that instability in its banking system also grew.
But the mainland scored high in non-banking financial services, with especially robust initial public offering and merger and acquisition activity. Business environment - which includes factors such as human capital, tax, infrastructure and cost of doing business - remains the biggest problem.
Hong Kong took the No1 spot in a list of 62 countries, scoring 5.31, up 0.15 percentage points from last year.
Last year, Hong Kong leapfrogged the United States and Britain to top the forum's Financial Development Index for the first time, after coming fourth in 2010.
Analysts said then that Hong Kong's explosive listing volume, low tax rates and status as the top offshore yuan trading centre had boosted its ranking.
The city's status as a financial hub would help attract more fund-raising activity and financial talent, they predicted.
"The fact that Hong Kong has maintained its status shows critical qualities such as free flow of capital and information, rule of law and financial infrastructure are still in place," Raymond Yeung, an economist at ANZ Bank, said.
Yeung added that Hong Kong's leading position as an international yuan centre also helped boost its ranking as a financial centre.
Of the seven categories in the forum's assessment, Hong Kong topped the charts in banking financial services, came second in business environment and fourth in financial markets and financial access.
The other parameters were institutional environment, financial stability and non-banking financial services.
The US ranked second this year, Britain third and Singapore fourth.
*October 31 2012
Love China or lump it, Lu Ping tells would-be secessionists By Gary Cheung and Stuart Lau
"Those who do not recognize they are Chinese should look at what is written on their passports or they should renounce their Chinese nationality."
So says Lu Ping, former director of the State Council's Hong Kong and Macau Affairs Office. "Our country, which has a population of 1.3 billion, would not be bothered losing this handful of people," Lu stated in an exchange of email with the South China Morning Post.
Lu made the comments when attacking people in the city who do not want to acknowledge their nationality.
Under the Nationality Law of the People's Republic of China, people can apply to renounce their nationality if they are a close relative of a foreign national, are settled abroad, or for other legitimate reasons.
Lu told the Post he noted some people had waved the British flag and held up posters calling for "Hong Kong independence" at a recent protest in the city. "They claim the only way out for Hong Kong is to become an independent nation," he said.
It was the second time Lu has commented on calls for Hong Kong independence. In a letter to the Post on October 12 he said "these guys who advocate for Hong Kong independence are sheer morons". "Deprived of support from the mainland, Hong Kong would be a dead city." Lu said it was good his remarks had triggered controversy.
Last week, Lu's former deputy, Chen Zuoer, said "the rise of a pro-independence force in Hong Kong is spreading like a virus" and should be dealt with firmly.
Yesterday, an editorial in the state-run Global Times described the notion of an independent Hong Kong as a "false proposition". It said a minority of Hongkongers had stirred up anti-mainland sentiment because they were losing their sense of superiority over mainlanders.
Dickson Cheung - the spokesman of a group that has set up a Facebook page called "We are Hongkongers, not Chinese" - had this to say in response to Lu's latest attack on those who did not want to acknowledge their Chinese nationality: "We do not even want an SAR [Special Administrative Region] passport. But what can we do?"
Executive Council convenor Lam Woon-kwong said he did not see the emergence of a movement for independence, even though some people had waved the British flag during protests.
*October 29 2012
Hotels buck weak global economy By Hu Yuanyuan
Average daily room rate still growing across major locations - The average daily room rate - an index to gauge the prosperity of hotels - in Beijing, Hong Kong and Macao continued to grow despite the weak global economy, international real estate service provider Knight Frank said in its latest report. The Oriental Plaza in Wangfujing, in downtown Beijing. Robust economic development and growing numbers of tourists in China make it an attractive hotel market in need of more rooms.
Hong Kong experienced the largest year-on-year growth among the five cities in the first half of 2012, with ADR gaining 12 percent, followed by Beijing with a growth of 11.4 percent, according to the report.
"We believe China's tourism market will continue to grow rapidly in the next few years despite the gloomy global economic outlook," said Thomas Lam, head of Research at Knight Frank Greater China.
Around 425 million people visited tourist sites around the country during the Golden Week holiday starting on Sept 30, up 40.9 percent over the same period last year. Revenue from tourism hit 210.5 billion yuan ($33 billion), an increase of 44.4 percent year-on-year, figures from the National Tourism Administration showed.
Robust economic development and growing numbers of tourists in China make it an attractive hotel market in need of more hotel rooms. International hotel operators have shown strong confidence in China's market and are pursuing aggressive expansion plans.
For example, Accor's upmarket brand Pullman is planning to open 25 hotels in the country by 2015, on top of its 14 existing hotels. Club Mediterranee plans to open five new resorts on the mainland by 2015, which will make China its second largest market in the world.
Starwood Hotels & Resorts has opened 40 hotels in China over the last five years, with an additional 90 in the works. InterContinental, which now operates 162 hotels in China, has an additional 143 under development.
"Sentiment in the Greater China hotel market is set to remain strong, with demand for hotel rooms being driven up by the increasing numbers of both local and international visitors," said Lam.
"In our judgment, the hotel market in all the five major cities - Beijing, Shanghai, Guangzhou, Hong Kong and Macao - will benefit from increasing demand from tourists and business travelers, including those coming from the MICE (meetings, incentives, conferences and exhibitions) and corporate segments," Lam added.
In the first half of 2012, hotel operators continued to expand in the Greater China region. Among the five major cities covered by this report, Guangzhou was the most active market in the first half of 2012, with more than 300 rooms added in the city.
The bi-annual Canton Fair is the largest trade fair in China and attracts more than 400,000 visitors every year. Given its position as a major Asian business and exhibition center, Guangzhou should continue to generate a steady stream of business visitors.
Shanghai's hotel market, in particular, is expected to benefit from the completion of major tourism projects, such as Shanghai Disneyland in 2015.
Meanwhile, Shanghai is to be developed into a regional transportation hub for the Yangtze River Delta region with infrastructure projects in the pipeline such as Hongqiao Transportation Interchange linking the Huning Intercity High-Speed Railway with air and municipal public transport lines.
A number of large convention and exhibition centers in Pudong, including Shanghai New International Expo Centre and Pudong Expo and Shanghai International Convention Center, will be holding many major international exhibitions in the coming years.
The hotel markets in Hong Kong and Beijing, according to the Knight Frank report, are expected to grow steadily.
Although already well developed, they offer unique competitive advantages that cannot be easily substituted. Also, both cities have a number of tourism projects in the pipeline that should further boost hotel demand. Beijing would benefit from the expansion of the MICE industry in the country and the central government's plans to develop the tourism industry into one of the pillars of the Chinese economy.
New hotel supply is expected to be limited in Beijing in 2012 and the ADR and occupancy rate should increase steadily and rebound to pre-2008 levels, according to the report.
Demand for hotel rooms in Hong Kong is expected to grow further, with a number of tourism-related projects in the pipeline, such as the expansion of Ocean Park and Hong Kong Disneyland as well as a new cruise terminal in Kai
*October 17 2012
Boosting Hong Kong’s Economy
Public expectations are high for the new Hong Kong administration that took office in July. More than 100 days into the new administration, Executive Councillor Barry Cheung discusses how the government may tackle some of the city’s most pressing issues.
In the 15 years since Hong Kong’s return to China, closer trade and economic links have been forged between the two jurisdictions. Do you see such policies as the Closer Economic Partnership Arrangement (CEPA), as a way Hong Kong has gained special economic advantages?
I don’t think that Hong Kong has been given “preferential treatment” compared to mainland cities. The “preferential policies” granted by the Central Government since Hong Kong’s handover are, in fact, enjoyed by mainland cities.
It is true that when compared to cities outside the mainland, Hong Kong enjoys special treatment. However, Hong Kong has long been fully open to mainland cities. The “preferential policies” that we now enjoy are only a reciprocal arrangement. These so-called gifts are neutral initiatives that help the mainland open its economy gradually. Where better to turn to than Hong Kong?
The “preferential policies” granted by the Central Government to Hong Kong benefit the whole nation, and the two sides should adopt an attitude of equality in pursuing these matters. One example is the renminbi. The implementation of renminbi offshore policy initiatives in Hong Kong is highly beneficial to the trial internationalisation of the currency.
Looking at comparative figures, Hong Kong’s average annual economic growth is only 3.7 per cent, compared to the 5.6 per cent achieved by Singapore. What do you think are the reasons for this?
I think there are many reasons why Hong Kong’s GDP growth lags behind Singapore. First, in the 15 years since its return to the mainland, Hong Kong’s economic pace has slowed down. It takes a long time to push forward policies, build infrastructure, or pursue economic development projects. For example, the delays in developing the old Kai Tak Airport site and West Kowloon Cultural District have taken their toll on the pace of Hong Kong’s economic development.
Second, insufficient land supply has led to high rentals and prices for housing, offices and shopping malls. This has affected the desire to invest, causing some companies to leave Hong Kong altogether, and others to relocate to lower-cost cities and leave only part of their operations in Hong Kong. This has in turn impacted adversely on Hong Kong’s economic growth.
In addition, the degree of economic structuring in Hong Kong is different to that in Singapore. Hong Kong has turned from an industrial to a service economy. The absence of manufacturing and related technology could have affected our productivity growth.
Should Hong Kong speed up projects to facilitate economic development? We must be decisive and take action once decisions are made. Spending time on endless arguments only adds to the cost of development. We must also boost land supply for housing, commercial buildings, shopping malls and office space. Hong Kong should also revitalise its industries. I am not referring to traditional labour-intensive industries such as toys, plastic flowers and wigs, but industries that are high in value-added, quality and technology and do not require too much land or low-cost labour.
To attract this type of industry, policy must be coordinated with land supply. For example, both policy support and land supply are necessary in building factories capable of accommodating 500 to 1,000 workers. There must also be safeguards to ensure that the land made available is used properly and not abused or occupied for the wrong purposes.
Would you agree that Hong Kong’s development model is very different from that of Singapore’s, which also has many geographical advantages?
Hong Kong used to have a ship-building and repair industry, but it has gone into decline. Who can say for sure that the total economic benefits of continuing with this industry would be less than those of selling the land to developers? Even if the government chose to sell the land, it could have helped the shipyards relocate and given them some form of support and assistance.
There are many examples in the world that support my belief that the less the government intervenes the better. However, Hong Kong is very different from the United States. The US is a huge country and businesses can purchase private land freely for development projects. In Hong Kong, land issues cannot be resolved without government participation. It would not be an answer to leave land use to market forces, or to sell land to the highest bidder, or to develop all the land into residential buildings. The government has a role to play in allocating land among competing users and in deciding on the direction the Hong Kong economy should go.
In providing land for tender, could the government not indicate its planning and development intentions and lay down rules and conditions? Private enterprises can be invited to participate and developers can be allowed to submit tenders.
But the government will still have to decide which industries should be allowed to participate. You cannot allow all industries to participate in tenders and put up buildings randomly. Hong Kong is well-equipped for industrial development, which has a balancing effect on the overall economy, and the government should play a role in the process.
The election manifesto of Chief Executive CY Leung has pointed out that it is important to accelerate the pace of economic development, as this helps build Hong Kong’s reserves and resources for other projects, such as improving medical services, alleviating poverty and caring for the elderly.
Can the government re-zone industrial land or provide more land for commercial use as a way of tackling soaring land prices? What other policies are needed to supplement the land policy?
Land is a basic factor required by the services industries, and it must be available at reasonable prices. Apart from this, the government should keep pace with the times in helping the services industries to ensure that the appropriate infrastructure, policies, rights, rules and regulations are in place. If we take the financial industry as an example, the government should examine the taxation and legal systems to make sure that they are compatible with industry needs.
Together with the services industries, the government should explore future opportunities, capitalise on existing strengths, introduce changes where appropriate, and make good use of our good relations with other countries to strengthen our position. Some people think that the government should give full play to market forces and not intervene in land policy. In fact, as land supply in Hong Kong is controlled by the government, non-intervention is already a form of intervention. If the government does not release sufficient land, economic development will be hindered. The government has an important role to play in cooperating with industries on land matters. The Hong Kong Government needs to be purposeful, proactive and efficient in providing a business-friendly environment.
*October 9 2012
Online Treasure Trove - get a piece of action through Hong Kong
Consumers, especially in second- and third-tier mainland cities, rely on online sales sites to buy products found in other cities
Chinese mainland shoppers have quickly grasped the advantages of shopping on the Internet – and their cyber ranks are growing daily as the mainland market deepens and expands.
At the end of last year, the mainland Internet population exceeded 510 million, a penetration rate of 38 per cent, with some 190 million of them online shoppers.
Chinese mainland consumers are bringing a new dimension to online shopping. A study by Pricewaterhouse Coopers shows the online shopping frequency of mainland consumers is three times that of their peers in continental Europe and twice that of their United States and United Kingdom counterparts.
This is probably because the vast mainland territory allows only a relatively small number of major enterprises and international brands to set up nationwide sales networks. Consumers have to rely on online sales platforms to purchase products found in other cities. This is certainly the case with consumers in second- and third-tier mainland cities, who can shop for products only available at sales outlets in first-tier cities.
An e-commerce target set by the 12th Five-Year Programme projected that the transactional value of online shopping would reach nine per cent of total retail sales, or about Rmb3 trillion, by 2015. Online sales will stimulate domestic demand and expand consumption. Last year’s transactional value from online shopping was 4.1 per cent of total retail sales.
Rise of e-Shoppers
Most search engines require businesses to have their own websites (Photo: EyePress) Mainland online shoppers are largely young, 18 to 30. (In the Pricewaterhouse Coopers survey, they represented 61 per cent of all respondents.) Their incomes may be relatively low, but they have a higher ratio of disposable income and purchasing power, unburdened by family responsibilities.
Online shoppers with a monthly income of more than Rmb5,000 have increased from 9.7 per cent in 2010 to 13.7 per cent in 2011, providing Hong Kong companies with additional room for exploring the online market.
Business-to-consumer (B2C) online shopping sites are growing in number and selling an increasingly varied selection of products on the mainland. Among them, general shopping websites are the most popular, probably because consumers can buy everything on one website, as they can in a shopping mall.
In 2011, the top three sites with the highest B2C online retail transaction values and user traffic were all general shopping websites. Hong Kong companies interested in entering the mainland market through online sales will find it’s easier to attract and build customer traffic through general shopping websites, rather than independent sites. Appropriate marketing and promotional efforts, however, are still indispensable.
As the Internet becomes increasingly popular, mainland online advertising has grown rapidly. In the five years to 2011, online advertising grew at an average annual rate of 48.2 per cent. Compared with traditional media, the cost of online advertising is lower and its audience coverage more extensive. Through online advertising, enterprises can build direct relationships with consumers, understanding their needs in a more interactive environment.
Amazon China’s logistics centre in Kunshan, eastern China
A survey by the China Internet Network Information Center revealed that the three most popular promotional channels used in mainland online marketing are e-commerce sites (67.8 per cent), search engine marketing (SEM) (62.3 per cent), and instant messaging (57.2 per cent). Mainland consumers like shopping on third-party shopping sites such as taobao.com and 360buy.com, an e-commerce channel commonly used by small- and medium sized enterprises (SMEs) to sell and advertise.
Promotional and advertising methods include disseminating product information on the website, keyword bidding and buying advertising space. It’s certainly a channel that’s inexpensive and easy to use, suitable for companies starting online marketing.
Services providers offer varying promotional packages, including advertising space, display ads and keyword bidding. In contrast, SEM includes search engine optimisation (SEO) and keyword advertising, with 62.3 per cent of mainland SMEs engaged in online marketing having used this method to promote their products.
SEO makes use of search rules to raise the ranking of enterprise websites in such search engines as Google, Baidu and Yahoo!China. Search engine-optimised websites allow for more prominent online positions, thereby increasing the chance of successful transactions. Hong Kong companies, however, need to be aware that most search engines require enterprises to have independent websites, while the search engine itself may also have certain requirements regarding sales levels.
Instant Message Away
Some 57 per cent of mainland SMEs use instant messaging to set up or join a group under a theme, or cooperate with a group administrator to promote their products or services among a group. Take QQ for example. There are more than 50 million QQ groups, with more than 600 million registered users. This huge QQ group network is a great help to enterprises carrying out online promotion.
For instance, if an enterprise sells mobile phone accessories, it can first join a mobile phone group (by searching among QQ groups), then take advantage of its identity as a user to exchange experiences and information with other QQ users. The company can upload photos of its products to increase its exposure, set up a QQ group and invite other users to join – target customers, for sure.
As third-party shopping sites develop rapidly on the mainland, some large, integrated shopping malls are providing support services, including warehousing, logistics, delivery and e-payments. Compared to building an independent website and making arrangements for warehousing, delivery, trading and security services, opening an online shop on third-party shopping sites could be particularly suitable for Hong Kong firms new to online marketing. Whatever the approach, the mainland market’s multiple online sales channels make it a potential treasure trove for Hong Kong sales.
*Sept 20 2012
Wal-Mart Scales Back Deal With Li & Fung By Kathy Chu
The company logo of Li & Fung is displayed at Li Fung Tower in Hong Kong. A Wal-Mart Supercenter in Fuzhou, China.
Wal-Mart Stores Inc. has canceled much of a deal in which Hong Kong's Li & Fung Ltd. would supply goods for the U.S.-based retailer's overseas stores, according to people close to the companies, as Wal-Mart moves to buy more of its products directly from factories.
The move dealt another blow to Li & Fung, which serves as a buying agent for a variety of goods, including toys and clothes, for retailers such as Wal-Mart and Target Corp. Li & Fung's core operating profit fell 22% in the first half, prompting analysts to cut their ratings on the company's stock.
A sluggish global economy and price competition are putting pressure on the world's middlemen. Li & Fung clients, including baby-clothes maker Carter's Inc. and Gymboree Corp., also have said they plan to buy more products directly from factories.
In a Thursday filing with the Hong Kong Stock Exchange, Li & Fung said Wal-Mart had terminated its option to buy Direct Sourcing Group, a unit the middleman set up two years ago solely to serve the world's largest retailer. Li & Fung said it would continue to supply products for Wal-Mart's Sam's Club operations and for certain categories of Wal-Mart's domestic and international operations. The Hong Kong company said Wal-Mart no longer needed the option to buy Direct Sourcing because of the companies' "strong" partnership.
But Li & Fung told employees last month that it was losing the sourcing business for much of Wal-Mart's international stores, according to people who read an internal memo.
Wal-Mart spokesman Anthony Rose said Thursday that the retailer maintains a "good relationship" with Li & Fung. Wal-Mart U.S. President Bill Simon said at an analysts' conference in New York this month that the Bentonville, Ark., retailer used Li & Fung to "do things that are complicated for us but less complicated for them."
Li & Fung declined to comment on the loss of Wal-Mart's international business but said "the substantive terms" and "nature" of the partnership "remains essentially unchanged." Li & Fung said it would now be able to offer design, development and distribution services for Wal-Mart goods in Latin America, services the Hong Kong company said it couldn't provide before as Wal-Mart's buying agent.
Li & Fung's shares closed at 12.52 Hong Kong dollars (US$1.61), down 22 cents, or 1.7%, in Hong Kong on Thursday. Wal-Mart's shares rose 38 cents to $74.75 in 4 p.m. composite trading on the New York Stock Exchange.
Li & Fung Chief Executive Bruce Rockowitz said in August that even when retailers work directly with factories, they need an intermediary to manage factory logistics, communications and quality checks—services that Li & Fung is eager to provide beyond supplying goods.
Li & Fung hasn't disclosed how much sourcing it does for Wal-Mart's international operations or the revenue earned from such operations.
But UBS analyst Spencer Leung wrote last year that under the 2010 agreement between the two companies, Li & Fung likely was sourcing goods for stores in Wal-Mart's international operations, in places such as South America and Japan. Wal-Mart, meanwhile, was using its own staff to procure more than 70% of the company's product volume in countries such as the U.S., Canada and the U.K., he estimated.
Li & Fung's deal with Wal-Mart was seen by some analysts as a catalyst for the Hong Kong company's growth. Goldman Sachs in January 2010 called it a "transformational" agreement that could double Li & Fung's business. "We think this partnership offers the strongest proof to date that even at L&F's current scale, growth does not need to slow down," Goldman Sachs said.
Other analysts questioned how profitable Li & Fung could be under the agreement, given Wal-Mart's reputation for cutting costs in its supply chain.
To handle sourcing for Wal-Mart's U.S. and international operations, Li & Fung set up a separate company, Direct Sourcing Group, and said the unit would employ hundreds of people. The development was seen as part of Wal-Mart's move toward direct sourcing, since the company had an option to acquire Direct Sourcing and take over its supplier relationships in 2016. Wal-Mart at the time said it hoped eventually to use its own staff to source 80% of private-label goods, such as Faded Glory clothing, cutting costs 5% to 15% within five years.
Li & Fung had estimated that the deal would generate $2 billion in revenue in the first 12 months. But Direct Sourcing fell short of this goal, generating $1.7 billion in revenue and recording an operating loss last year.
HSBC analyst Chris Zee this week upgraded Li & Fung's stock to "overweight," writing that U.S. monetary policy would provide "impetus for a significant revival in earnings at Li &
*Sept 7 2012
Style and substance - The Langham Hong Kong By Andrea Deng
Langham as a brand stands out literally and figuratively with its design and attention to immaculate service. Andrea Deng reports.
Walking into The Langham, Hong Kong, leave your hefty luggage with the porter, relax after finally arriving from hours of flight and be immediately surrounded by the posh and poised European elegance of the edifice.
When you're washed by the coolth in the hotel after the sweltering subtropical heat outside, the experience is reminiscent of the song, The Girl from Ipanema. The air conditioning is not overwhelming. The smell of ginger lily permeates. Chandeliers and marble floor in the lobby present a classic European style, while well-positioned art pieces such as statues and drawings add subtle taste to the atmosphere. Guests can savor dainty cakes, while chilling and chatting in the Palm Court, an outlet for the classic English afternoon tea, with light jazz playing in the background.
The hotel is like a haven situated in the hustle and bustle of a tourist area, where the number of leisure travelers, already high, is increasing every year.
"(Hong Kong) is a big playing field, but I think the customers always have their choices," says Mr Duncan Palmer, Managing Director of The Langham, Hong Kong.
Apart from The Langham, there are two other hotel brands under the Langham Hospitality Group in Hong Kong, the Langham Place and Eaton Hotels. Both The Langham and the Langham Place belong to the luxury hotel line, but they're slightly different.
Langham Place, located next to a 12-floor shopping mall that attracts thousands of young locals daily, has an edgier style of design. It is "slightly more engaging, more risk-taking with a high energy type of atmosphere," as Mr Palmer puts it.
The Langham, Hong Kong has an atmosphere of calm and class. That exudes from the language, the eye contact and the mannerism adopted by the concierge, or from nice English tea in the Palm Court, which takes after the original Palm Court at Langham's flagship hotel in London dating back to 1865.
The service is sophisticated. Try to talk to the "service stylists" in the lobby, whose uniform are signified by a touch of pink, you may end up learning from a well-informed, knowledgeable Hongkonger, who gives suggestions on where you could find the antique shop that has blue and white china, and that you could have a nice cup of coffee on the way up the hillside street.
At five past seven every evening, a 'pink lady' cocktail is served in each outlet of the hotel to signify "a change of the day", which is emblematic of the hotel's tradition since 1865.
Female guests are received with a fresh and lovely pink rose upon arrival at the hotel. The color, which reminds one of Audrey Hepburn, is one of the signatures of The Langham, Hong Kong stylised from the wallpaper of the original Langham in London in 1865.
T'ang Court, a Michelin-starred restaurant renowned for Cantonese fine dining, is another high point of the hotel that attracts the city's upper class and has received accolades. The food and service in the restaurant is of a superior kind. Customers come here to enjoy a special occasion with their loved ones, or to entertain important business partners.
The Langham Club is a stylish, well-appointed club facility that lets customers have breakfast in the morning away from the main crowd of the hotel. Besides breakfast, it is an exclusive area of the hotel where guests can relax to enjoy the afternoon tea and the early evening cocktail.
Such luxury and enchanting service will soon reach some other important cities around Asia, according to Mr Palmer. The head office for the Langham Hospitality Group is based in Hong Kong, the strategic center of gravity in the region.
"(The Langham Hospitality Group) see Asia as a predominant area for hospitality. Asia very often is read about and perceived worldwide as offering some of the best service hospitality," says Mr Palmer.
A total of 15 hotels under the Langham group will open in mainland China in the coming years. New destinations include Shanghai, which already has The Langham in Xintiandi, and The Langham Shenzhen, a 360-room property, to open shortly. A Langham Place will also be built in Dalian, Liaoning province, in the northern China.
Two hotels have been built in New Zealand and Australia respectively and four hotels are coming up in India, and three others in Thailand.
"Langham within the luxury market in the world platform, has arrived," says Mr Palmer, adding that it has been an advantage for the hospitality group to own and not just manage the hotel properties.
But then quality service eventually comes down to the people. While the company sticks to its service culture of the "Five Ms" - Myself, My Colleagues, My guests, My Langham and My Brand - which are the mantra for every old and new members of the hotel, there is something more.
"We don't try to put people into straitjackets. We'd like to think there are lots of personalities. We want them to exude with their personalities in some way, and go out of their way to make impactful interactions with the customers. Because those memories will make the guests come back," says Mr Palmer.
*Sept 5 2012
The Great Hotel Room Boom in Hong Kong
Daniel Voellm, Managing Director, HVS Global Hospitality Services
Never before has there been such a demand for beds in Hong Kong. In 2011, the city received a record 42 million international visitors, an increase of 16.4 per cent over 2010, according to the Hong Kong Tourism Board (HKTB).
Hotel occupancy, in turn, averaged 89 per cent in 2011 – an increase of two per cent, and a figure described as “remarkable” by industry analyst Daniel Voellm. “Any hotel market in the world right now would be happier than you can imagine with that result. It is exceptional,” said Mr Vollem, Managing Director, HVS. And with tourism arrivals tipped to reach 57 million by 2020, hotel operators are rushing to build or redevelop properties.
At least 10 new hotels are opening in Hong Kong in 2012, with more to follow in 2013. HVS, quoting HKTB data that includes new hotels and conversions from existing buildings, says 29 additional hotels, providing 5,854 rooms, will be added this year alone. HVS noted in its latest report that “the outlook for occupancy levels remains positive, given the healthy demand from China.”
James Lu, Executive Director, Hong Kong Hotels Association
“The hotel industry in Hong Kong expects the strong performance of its hotels to continue into the near future as demand for rooms by our visitors, which is growing at an annual rate of 15 per cent, is projected to continue for some years,” said James Lu, Executive Director, Hong Kong Hotels Association.
“There will, however, be many more new hotels opening for business in the next 12 months, and the years after, to ease our high occupancy situation. The orderly supply of new hotel rooms and increasing visitor demand will ensure a gradual easing of supply tightness, without causing a more noticeable and immediate room glut.”
Crowne Plaza Hong Kong Kowloon East
HVS’s Mr Voellm pointed out that the high-end sector, the global benchmark of hotel investment, is faring particularly well in Hong Kong. His data shows a record performance by luxury hotels for eight out of 12 months in 2011, driven by strong demand from the Chinese mainland.
Research by Hotels.com also highlights Hong Kong as a bright spot in Asia, being the only city in the region to record growth in 2011, on top of consistent year-on-year growth. According to Hotels.com Hotel Price Index 2011, the average room rate in Hong Kong rose from HK$872 in 2010 to HK$1,270 last year, a jump of 46 per cent. The price hike was attributed to “healthy corporate travel demand” and luxury hotel development. “Many regional business visitors participate in MICE activities in Hong Kong every year,” noted Zoe Chan, Senior PR Manager,
www.Hotels.com Asia Pacific.
Dominique Berhouet, General Manager, Crowne Plaza Hong Kong Kowloon East and Holiday Inn Express Hong Kong Kowloon East
InterContinental Hotels Group (IHG), the world’s largest hotel company by rooms, is opening four new hotels in Hong Kong this year, in a market it describes as “extremely robust.” The 359-room Crowne Plaza and 300-room Holiday Inn Express hotel, both in Kowloon East, are opening this month and next month respectively, followed by Hotel Indigo Hong Kong Island, in December, and Holiday Inn Express Hong Kong Soho, in mid-September.
Dominique Berhouet, General Manager, Crowne Plaza Hong Kong Kowloon East and Holiday Inn Express Hong Kong Kowloon East, was brought back to Hong Kong to open the two hotels after managing IHG projects on the mainland. Returning to Hong Kong after a 12-year absence, he found the sector booming. “Both occupancy and room-rate growth are very strong; the whole city is doing well. This is a great time to be in Hong Kong,” he said.
Holiday Inn Express Hong Kong Kowloon East
Mr Berhouet said Hong Kong has long had a reputation for having the world’s best hotels. As the gateway to China and Asia’s world city, “everything is going well for Hong Kong right now,” he said. The two new hotels under his management will benefit from the rapid development of Kowloon East as the new central business district of Hong Kong, Mr Berhouet said.
“We are expecting a very good corporate business base to benefit from frequent travellers from the mainland, and we are in a position to generate great MICE business, having, at Crowne Plaza, one of the largest ballrooms in Hong Kong,” Mr Berhouet said. The city’s booming tourist market will also draw visitors to East Kowloon, where they are close to the historic fishing village of Sai Kung, yet at the heart of new retail and restaurant developments.
All Price Sectors
Ibis Hong Kong Central and Sheung Wan Hotel
Hong Kong’s new hotels span the gamut from budget to high-end. Apart from the four IHG properties, they include: Best Western Hotel Harbour View Hong Kong, in Sheung Wan; Ibis Hong Kong Central and Sheung Wan Hotel, the largest of the AccorHotels’ budget brand in the Asia-Pacific; Butterfly on Victoria, in Causeway Bay; Ovolo 286 Queen's Road Central in Central; and Dorset Regency, in Kwun Tong.
Thailand’s Onyx Hospitality group has also chosen Hong Kong to launch Ozo, its new hotel brand. The brand’s first Ozo property, offering 251 rooms and suites in Wan Chai, will open in the first quarter of next year.
*Sept 1 2012
Hong Kong can be top draw for academic talent
By Joan Stringer
Joan Stringer charts the rising demand for an international education and says Asia, especially Hong Kong, should build on its strengths to be an even bigger draw for academic talent.
As the labour force grows more global, studying abroad to acquire a more rounded international education is becoming a prominent trend. Universities in Britain and the US are popular as they have been leaders in modern university education. Now, the contrasts in economic conditions between the East and West are reshaping the international tertiary education landscape, creating new challenges and opportunities.
In Europe and the US, difficult economic conditions are constraining public investment in higher education. In Britain, in particular, tighter immigration controls are posing challenges to overseas student recruitment. By contrast, rapidly rising Asian countries such as China and India are the fastest growing markets for tertiary education. They now offer more opportunities for educated talent and are more willing to employ highly skilled foreigners.
It is the optimum time for tertiary education in Asia to grow. Due to the push factors in Europe and the US and the pull factors in Asia, many institutions from the West are extending their education services to Asia. Transnational higher education is playing an increasingly important role globally and Asia is becoming the new centre of its development.
With its long history of being an "East meets West" node in Asia and its internationally lauded infrastructure, Hong Kong is ideally situated to take the lead in the development of international tertiary education. The city has also demonstrated a high level of openness in employing skilled foreign talent. International students and their parents also realise the opportunities afforded by the higher education system in Hong Kong. Hong Kong universities have seen increases of around 40-50per cent in the number of foreign applications for the 2012-2013 academic year. The number of mainland Chinese applications is also rising. Local demand for both University Grants Committee and self-financed places is growing as the city develops a knowledge-based economy.
The government is also aware of the opportunity and stated long ago its intention to develop the city into a regional education hub. This vision is being carried forward as part of Chief Executive Leung Chun-ying's agenda.
In spite of the favourable environment and the government's ambition, Hong Kong still has a rather small number of non-Chinese international students, fewer than Taiwan, for example. Why does Hong Kong underperform in being an international education hub? One of the problems is that its tertiary education lacks unique selling points. There are existing areas such as in business studies where it holds its own internationally but perhaps does not stand out from the crowd sufficiently.
There are others, particularly in medical sciences, in which Hong Kong has excelled and made significant breakthroughs, but it lacks overseas promotion of that education potential and expertise. There are still other emerging areas of research where it has an opportunity to take the lead and create a distinct profile.
Hong Kong is also not as active as others in the region in pursuing large-scale collaborations with international tertiary institutions, such as that between the Singapore University of Technology and Design and the Massachusetts Institute of Technology.
Hong Kong needs to develop areas in education in which it will be a recognised leader, to become a regional education hub. Environmental, energy and life sciences, nursing, health care and creative industries are potential areas that should be explored.
With the growing awareness of environmental protection, renewable and alternative energy, tighter environmental impact controls and Asia's pressing need for advancements in waste management, environmental and energy sciences are areas with huge potential for development in Asia. Also, Hong Kong's health service is among the top in Asia. Given an ageing population and the government's vision of turning Hong Kong into a regional medical services hub, nursing and health care warrants further development. The development of the West Kowloon Cultural District also provides opportunities to weave arts and culture into the growth and social fabric of Hong Kong.
These areas can become the unique selling points of Hong Kong's education offering while also meeting regional needs.
Another important step will be to enhance collaboration with tertiary institutions overseas. By bringing the experience of these institutions to complement the local education system, internationally employable talent may be nurtured. Existing networks between overseas institutions and business can also provide valuable local and international internship and graduate placement opportunities that will help students secure and sustain a career in the global job market. Overseas institutions can help promote Hong Kong in their home country and provide well-structured exchange programmes to students in Hong Kong.
Tertiary education can too often be regarded as a cost, not an investment. Its expansion is a challenge for many governments due to the considerable financial commitment required. Opening up the sector to private providers is another means of ensuring its development; they could help meet the international demand for education in Hong Kong without competing for the resources that support local students. Private institutions can and do deliver high quality education, from which Hong Kong and its businesses would greatly benefit.
The recent changes in the global education landscape provide a golden opportunity to bring new international dimensions to Hong Kong's tertiary education. The education sectors in Hong Kong and the West should seize the day and work together to nurture a new generation of global citizens.
Professor Dame Joan Stringer, DBE, is the principal and vice-chancellor of Edinburgh Napier University
*Aug 19 2012
The Norman conquests - From humble beginnings to sitting on top of the banking world, low-key Monetary Authority chief is highly regarded for his operational skills By Enoch Yiu
Norman Chan has a bird's-eye view of Hong Kong from his office on the top floor of Two IFC, from where he rules the roost at the HKMA.
As a boy, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam wasn't given many toys. But he had a plentiful supply of pencils and stationery awarded to him by his teachers for his outstanding academic work.
The 58-year-old is now among the world's highest-paid central bankers, with a pay package of more than HK$8 million last year. Chan, of course, can afford all the toys he wants now, but the low-profile banker still appreciates those simple gifts of yesteryear.
Situated on the top floor of Two IFC, with a spectacular view over Victoria
Harbor, Chan's office has no fancy furniture or decorations but the walls are lined with books on banking and finance.
Chan, who wears a plain black suit and glasses, talks about his memories over a cup of Chinese tea served in white ceramic cups.
"I was born in Hong Kong when it was still a small city. I remember there was only one telephone for several families who lived together in the same apartment," he says.
"That was a time when most Hong Kong people could only afford a simple and basic lifestyle. I never felt poor as everybody grew up in a similar way."
The young Chan never dreamt of being a banker. "I only wanted to study well and then get a good job so my parents could have a better life," he recalls.
When he graduated from Chinese University with a social science degree, he wanted to be an academic. "I really like study but I lost out to another classmate who got the only spot in a sponsored
program for further study in England. I gave up further study to find a job."
He joined the Hong Kong government as an administrative officer in 1976.
After working in various departments, in 1991 he became deputy director of the Office of the Exchange Fund, which manages the local reserve. Joseph Yam Chi-kwong was director.
Chan assisted Yam in setting up the Hong Kong Monetary Authority by combining the Office of the Exchange Fund and the Banking Commissioner's office in 1993. Chan became Yam's right-hand man as deputy chief executive for 12 years until taking sabbatical leave in 2005.
After a brief stint as vice-chairman for Asia of Standard Chartered Bank, Chan became then-chief executive Donald Tsang Yam-kuen's office director until going back to the HKMA to take the top job in October 2009 when Yam retired.
It is inevitable that people will compare the two central bankers. Yam is more high-profile and outspoken. Chan is more low-key but is praised by bankers for his operational skills.
"Joseph Yam was the mastermind on many financial projects but it is Norman Chan who brought these ideas to reality. Chan knows how to establish something from scratch and he attends to the details of a complicated financial system," said a local banker who did not want to be named.
Anthony Wu, chairman of the Bauhinia Foundation Research Center, describes Chan as "very sharp and someone with a long-term vision".
The projects that Chan has been involved with at the HKMA include the discount window mechanism to handle the banking system's liquidity management, the real-time settlement system among banks; and the introduction of the Exchange Fund bills and notes
program to expand the bond market.
He also helped the HKMA host the World Bank annual conference in 1997 - a chance for the new central bank to make its name.
Since 2004, Chan, who is well connected to mainland officials, has helped the local banking sector develop the yuan business and establish Hong Kong as a offshore yuan trading centre.
In recent years he has toured London, Sydney and Tokyo to promote yuan trading and relaxed rules to encourage companies to issue dim sum bonds in Hong Kong.
Two weeks ago the ban on allowing non-residents to open yuan bank accounts in the city was lifted.
Chan is proud of his role in stabilizing Hong Kong's financial system. He said the lack of a central bank led to several bank runs in the late 1980s and prompted the city to set up the HKMA to bring the city up to international regulatory standards.
The authority's power is considerable - it has a mandate to use the local reserve Exchange Fund, which now stands at HK$2.5 trillion, and is able to defend the local currency and maintain the stability of Hong Kong's financial markets.
At the height of the Asian financial crisis in 1998, Chan and other officials decided to spend HK$118 billion from the Exchange Fund to buy blue chips to back the stock market and fend off speculators trying to attack the dollar and stock market.
"It was not an easy decision, but we decided we had to do so when the market became distorted by speculators," he said. "At that time we were criticised by many overseas central bankers. Now, after the latest global financial crisis, many Western governments also have seen the need to bail out their banks. It proved what we did in 1998 was right."
Chan says that after 1998, he and other officials lobbied the authorities to tighten control on over-the-counter derivatives. It was only after the 2008 global financial crisis that other central banks agreed there should be more regulation in this area.
"As a central banker, one can not only look at what is happening now but also take a longer-term view," Chan said. "If we regulate the banks only when a financial crisis arrives, that is too late. We have to identify potential risks and introduce proper regulation years ahead to stop them taking too-high a risk, so as to prevent a disaster."
Besides work, Chan likes reading and playing sport.
"I not only read about finance but also history books such as those about the Qing dynasty," he said. "I also like sport. I play basketball with my colleagues and my friends."
*Aug 14 2012 Share
China Trade Benefits United States Substantially - Representatives' protectionist rhetoric vs. districts' export reality
By Wall Street Journal
The U.S.-China Business Council, an association of large American companies doing business in China, has published an analysis of how America's individual congressional districts gain from trans-Pacific trade. The results show a striking dissonance between anti-China rhetoric on Capitol Hill and the boost to business on Main Street.
Republicans such as Frank Wolf of Virginia, John Shimkus of Illinois and Joseph Pitts of Pennsylvania have all signed onto the latest legislative effort to punish Beijing for its alleged currency manipulation.
But their districts' goods exports to China have increased by 536%, 686% and 640%,
respectively, over the past decade—much faster than exports to the rest of the world. On the Democratic side, Jim McDermott of Washington, Nancy Pelosi of California and Louise Slaughter of New York also have co-sponsored currency legislation despite their districts' booming China exports. Voters can check their own districts' reality on the Council website and compare it to stump-speech rhetoric.
Then there is the state-level analysis. New York and South Carolina, homes of Senators Chuck Schumer and Lindsey Graham of China-is-a-currency-manipulator fame, have seen export booms in the years since China joined the World Trade Organization: 472% for the Empire State and 2,261% for the Palmetto State. That counts only the trade in goods; the latest data for services aren't out, but historically the U.S. has run a trade surplus with China in services.
Of particular interest to Presidential candidates, swing states Pennsylvania, Ohio and Michigan all make the list of top-15 state exporters to China in dollar terms, with export growth of 1,177%, 838% and 1,169% respectively over the past decade. Yet this hasn't kept President Obama from touting his trade "enforcement" policy that relies heavily on protectionist measures. Mitt Romney is also threatening to sanction China for currency manipulation if he wins.
Railing against imported Chinese goods is especially shortsighted given that so many of America's own exports are components to the products the U.S. eventually imports again. And don't forget all the transportation, retailing, marketing and other jobs dependent on those Chinese goods. Roughly 55 cents of every dollar Americans spend on "Made in China" products goes to the Americans who design, ship and market those products, according to a study last year by economists at the San Francisco Federal Reserve. This is in addition to the boost to standards of living as import competition checks price increases for consumer goods.
Such statistics are reminders that free trade is a bedrock of American prosperity, and should be a bipartisan priority. There is plenty of room for American leaders after the campaign to press their Chinese counterparts to continue opening the Chinese economy to trade, not least for the benefit of the Chinese. For now, candidates shouldn't be shy about reminding voters that trade works for everyone.
*Aug 12 2012 Share
Designing their Future through Hong Kong
Ross Milne, Managing Partner, 10 Design
In October 2010, a group of international architects and designers, who had collaborated on projects for 20 years, launched its own firm, 10 Design, in Hong Kong. The partners’ combined experience, contacts and innovative approach took the design world by storm: within 18 months, the firm’s numbers had swelled 10-fold. It bagged a prestigious international design award, upgraded from a serviced office to a 10,000 square-foot space in Wan Chai, and opened two more offices overseas. And that is only the beginning.
Managing Partner Ross Milne says the vision was always ambitious. Hong Kong offered the ingredients for success, according to Mr Milne.
“The majority of partners were based in Hong Kong and, as Asia is the hottest market for rapid urbanisation across the globe, it made sense to make Hong Kong our base,” Mr Milne says. Aside from Hong Kong, the partners hail from the Chinese mainland, Scotland and the United States.
City that Works
The 10 Design Hong Kong team
Having a network of existing contacts put the firm “a step ahead of most start-ups.” Still, being in Hong Kong boosted their prospects, he says. Asked to sum up the city’s advantages, Mr Milne says simply: “it works.”
“Hong Kong is an easy place to do business. Everything is can-do. You can get started in a couple of weeks, and there is a ready pool of talent to choose from.” Hong Kong also has the reputation as an international city, which he says enhances the firm’s standing when pitching for projects globally.
Most of the partners have young families, and Hong Kong offered them a desirable lifestyle, he adds. And with the Chinese mainland, the firm’s biggest market, already accounting for 80 per cent of its business, it was logical to set up in Hong Kong, the gateway to China, Mr Milne says.
The firm’s Hong Kong headquarters employs more than 100 staff
The company specializes in designing large-scale master planning, mixed-use development, civic and public buildings, tourism and hospitality, corporate offices, education, and high-end residential development. It is also developing a series of research projects to improve the quality of the built environment.
The firm’s most successful ideas are developed in concert with artists, manufacturers, and universities; these, along with its environmental research, are incorporated directly into projects. Such innovation quickly gained recognition. In its first year of operation, in 2011, 10 Design broke into the World Architecture Top 100. The firm was featured in Wallpaper UK, and earned further international kudos when it received an American Institute of Architects Hong Kong Chapter Merit Award in 2011. The latter prize was for an international competition to design the Dalian Public Library on the mainland, competing with such globally renowned architecture firms as Zaha Hadid, Kengo Kuma, Hopkins and AC.
Asian Expansion Plans
The award-winning design of the Dalian Public Library on the Chinese mainland
With work pouring from across the region and beyond, and its reputation soaring, 10 Design is looking to open more offices. Singapore and Korea are next in line to complement existing satellites in Shanghai and Edinburgh.
Hong Kong, its largest office, employs 100 of the 126 designers and architects in the company, and will continue to be the firm’s headquarters. “Hong Kong has played a huge role in our speedy growth over the past year,” says Mr Milne. “Being on the doorstep to China is perfect for us, because that is where the work is.”
Aug 6 2012 Share
Hungry for More
Mexican food and tequila bar Agave stocks 180 premium tequilas
Brickhouse is a non-signposted restaurant at the end of a dimly lit alleyway in Hong Kong’s Lan Kwai Fong entertainment district. But rather than being overlooked, it has become the latest talking point. Run by chef Austin Fry, who left Texas for Asia, Brickhouse is unique for its authentic Mexican street food.
Latin American food is being hailed in the city as the next big food trend. Chicha, a Peruvian restaurant that opened soon after the Brickhouse, is another hot ticket.
But diners can be fickle. “We see a lot of fads, and some fizzle out fast,” says Fergus Fung, co-founder of the WOM (Word Of Mouth) Guide. In recent years, he says, diners have nibbled on such faddish items as Japanese cheesecake, and upscale ramen noodle outlets are the latest craze. An enduring trend for frozen yogurt, new pizza-by-the-slice franchises and specialty popcorn ventures are also expanding the snack food segment.
Agave, a Mexican food and tequila bar that stocks 180 premium tequilas, opened its first outlet in 2000, followed by a second one in 2005. The restaurant’s General Manager, Gary Caldwell, says that sourcing and importing tequila have become steadily easier. About 80 per cent of his visitors are Western, many of them visiting American sailors who are premium tequila drinkers. The remaining 20 per cent are Chinese. Local customers are increasing as they become more familiar with Mexican cuisine, according to Mr Caldwell, who notes that the local clientele tend to first sample the food before embarking on tequila.
Fergus Fung, co-founder of local food guide Word Of Mouth
Like any culinary capital, Hong Kong is always hungry for something new. “Hong Kong is trend-ready not just in its dining scene but in all aspects, because the audience is receptive and ready to try and adopt new influences. However, like any other foodie cities, local diners are discerning diners,” says Jonay Armas, the Spanish head chef at The Principal, a restaurant serving modern European cuisine, with a dash of Asia.
Like The Principal’s menu, Hong Kong’s food scene is a cultural melting pot, where Asian cuisines converge with Western-style food that leaves diners spoiled for choice. But another emerging trend shows a desire to honour those origins.
“Celebrating the root of the cuisine has also become a priority. Whether it is in the combination of ingredients or the cooking methods used, preserving the roots and the integrity of different regional flavours has become a fundamental aspect for diners,” Mr Armas says. “The idea of responsible dining will also become more prevalent. More and more, diners are demanding increased transparency in terms of what ingredients are used and where they are sourced from,” he says.
Jonay Armas, Spanish head chef at The Principal
A growing number of restaurants are choosing to show country or place of origin on menus or highlight their use of sustainable produce. And more are choosing to source items locally, moving the “made-in-Hong Kong” label away from its usual manufacturing connotation. A handful of companies even delivers locally grown crops door-to-door.
The move to sustainable and traceable goods has been led by customer demand at the Four Seasons Hong Kong, where Gregoire Michaud is pastry chef. He says the hotel has been forging links with local growers for a few years, and now uses locally farmed foods more regularly in its Michelin-star kitchens. Last summer, the hotel worked with Zen Organic Farm in the New Territories to plant 300 fig trees, with some of the resulting figs intended for use at the hotel.
Mr Michaud has high hopes that initiatives celebrating Hong Kong produce will motivate farmers. “Hong Kong needs to be prouder of what it has,” says Mr Michaud. “In Japan, the countryside farmers are very proud of what they do. They are famous for what they do. I dream that, one day, the New Territories will be full of farmers as passionate as that.”
This new generation of discerning consumers also has a sweet tooth. For years, the Chinese have been accused of ignoring dessert. Traditional menus can skimp on sweeter options, and local fruit commonly follows a main course. But in the last few years, more Western bakeries and cake shops have opened and are jostling for attention.
“Compared to the older generation, the younger generation is definitely gaining a sweet tooth,” says Francis Lo, Chairman of the Hong Kong Young Chef’s Club. He says that an obsession with amateur food photography sees younger consumers using smartphones to circulate food photos on social media platforms. Eye-catching pastries and desserts attract attention. In addition, more pastry chefs are winning competitions that propel them into the limelight. “A few have gone from working as pastry chefs into their own business,” says Mr Lo.
Those opening patisserie ventures include a celebrity model and a socialite restaurateur. Both have helped to create a buzz around cakes.
Harlan’s Cake Shop which recently opened at The One shopping mall in the Tsim Sha Tsui tourist district is part of the JC Group list of Asian and Western restaurants. It says that many regular clients requested such an enterprise. It expects to appeal to mostly female consumers in the under 30-age bracket that frequents the mall, but says the cake shop also follows from an established brunch trend that prevails in Hong Kong. “People can spend a nice afternoon with family and friends,” says Leung Tung Shing, a pastry chef with 20 years’ experience, whose creations for the shop include a white truffle mousse cake and a foie gras chocolate tart – confections as extravagant as any main course.
Aug 1 2012 Share
A Taste of Australia Beef - current largest market is USA, but the greatest potential market, however, is in
OBE Group Chairman David Brook (far right), and Deputy GM Dalene Wray (far left), with members of their family
The OBE Group was formed in the early 1990s by a group of Australian pastoral families, who maintain century-old farming traditions. OBE’s Deputy General Manager, Darlene Wray whose family has farmed in the outback for four generations, puts the scale of its operation into context. “Our family has 25,000 square kilometres of cattle and beef farms in the Outback, said Ms Wray. “The whole of Hong Kong island has just 18 square kilometres.”
OBE farms are located in Central Australia’s fertile “channel country," using farming methods that focus on maintaining soil and balanced ecosystems. The cattle are allowed to roam free, eating the diet of their choice – factors that Ms Wray says improve the flavour and texture of the meat.
Her father, Group Chairman David Brook, said the goal of OBE Organic is to manage the land in a more sustainable manner for the benefit of future generations. “Our cattle are raised by families for families,” he said.
Poised for China
OBE’s beef is exclusively grass-fed and certified organic
Ms Wray, who moved to Hong Kong from Birdsville in outback Queensland in August 2011 to head the Asian operation, said the US currently represents the biggest market for the company’s organic products. The greatest potential market, however, is in China.
“We decided to set up a branch office last year because we could see opportunity in the Chinese mainland, but knew it would happen in a few years’ time,” Ms Wray said.
Going directly into the mainland was not a viable option, because of the difficulty of setting up a foreign business there. While promising, the market is also not yet sophisticated enough for OBE’s products. However, that is changing, and having a Hong Kong base puts the company on ahead of competitors.
The company has had a retail presence in Hong Kong for seven years, selling through supermarkets including Park N Shop and Great, as well as selected restaurants and clubs. Since opening a local office one year ago, the business has grown substantially: retail sales figures are up 8.5 per cent, and from Hong Kong, OBE has recently launched projects in the Middle East.
Ms Wray, who frequently travels around the region marketing OBE products as “the taste of the Australian outback” with a certified organic label, says Hong Kong is a convenient hub, being within four hours’ flying time of all major markets. Even Australia, which she travels to several times a year, is only an eight-hour flight.
Hong Kong Advantages
Cattle roam free in OBE’s organic farms in Australia - Ms Wray and her husband spent six months living in Beijing before deciding Hong Kong offered the most advantageous location for their business.
“China is a very different place,” she said. “It is much easier to set up a company in Hong Kong, and also to communicate. Also, China is not ready for our product right now. We have established ourselves in Hong Kong in anticipation of the good things to come on the mainland.”
OBE’s beef is exclusively grass-fed and certified organic to United States Department of Agriculture standards – the global benchmark for organic certification.
Ms Wray believes that as concerns over food safety heighten, especially in places such as China, more weight will be given to the argument for eating organic.
And as that market develops, Australian farmers, represented in Hong Kong by OBE Organic, will be ready.
July 17 2012 Share
Airlines Take Off in Hong Kong
New joint-venture airline Jetstar Hong Kong will serve Asian markets from 2013
New research confirms that the best opportunities for airline business growth exist in the expanding economies of the Asia-Pacific. According to the International Air Transport Association (IATA), carriers based in the Asia-Pacific are expected to make a collective profit of US$2.1 billion in 2012. The figure accounts for 60 per cent of the total profit projections for airlines globally, according to Abacus International.
Taiwan’s Far Eastern Air Transport is another regional airline launching in Hong Kong this year
To accelerate its expansion in Asia, Australia’s Qantas Airways Ltd is tapping Hong Kong, a key regional travel hub serving 60 million passengers a year, through a new airline to be operated by Jetstar, its low-cost carrier. Jetstar Hong Kong, part of a joint venture with Chinese mainland carrier China Eastern Airlines, will start operations next year. The move is part of a long-term strategy for Jetstar to gain access to routes on the mainland, the world’s largest, fastest-growing and most profitable aviation market.
Alan Joyce, Qantas Group CEO
Jetstar Hong Kong will begin by serving short-haul routes on the mainland, Japan and South Korea. The airline plans to expand its fleet from three Airbus A320s initially, to 18 aircraft by 2015. Qantas and China Eastern will each invest nearly US$100 million in the venture over the next three years.
“We see tremendous potential for the Qantas Group in Asia, and we’re looking forward to working more closely with China Eastern Airlines to deliver on it,” said Qantas Group CEO Alan Joyce.
Mr Joyce noted that Hong Kong is one of Asia-Pacific’s major travel hubs, with about 40 million passengers a year and a seven million population base. Greater China’s travel market totals almost 300 million passengers a year, and it’s forecast to grow to 450 million by 2015.
“This is a unique opportunity for Jetstar to capitalise on the enormous potential of the Greater Chinese market, where the penetration rate of low-cost carriers is less than five per cent, using a model that we know delivers for customers and shareholders,” Mr Joyce said.
Benefits of Partnership
Bruce Buchanan, CEO, Jetstar Group
Jetstar Group CEO Bruce Buchanan believes that a combination of the partners’ local knowledge, networks and successful low-cost carrier model should underpin the success. He said that Jetstar Hong Kong’s fare structure, set at “50 per cent less than existing full service carriers,” was targeting new travel demand across Asia.
“Jetstar’s vision is to make travel more affordable for millions of people across Asia, and the demographics of China, with its booming middle class, are a key part of that plan,” Mr Buchanan said.
“We believe there are huge opportunities for the Jetstar low fares model throughout Asia, including Greater China, and are excited to be the first major Chinese carrier to bring this travel option to the region,” said Liu Shaoyong, Chairman of China Eastern Airlines.
The airline has a 20-year relationship with the Qantas Group, according to Mr Liu, who said the new venture is a key step in China Eastern's international expansion strategy and an “excellent opportunity” to develop its low-cost carrier operations.
“Jetstar Hong Kong's low-fare model will enable people to fly more often for less and will help to stimulate the Hong Kong tourism industry and the broader economy," Mr Liu said.
Tourism Markets Thrive
Visitor arrivals from short-haul markets are breaking Hong Kong tourism records
The latest tourism data confirms a continuing upward trend of regional passengers arriving at, or transiting through, Hong Kong. Hong Kong Tourism Board figures show that, of 3.6 million visitor arrivals in May 2012 (12.7 per cent up over the same month in 2011), growth was most robust from short-haul markets, notably the mainland, which jumped 19.4 per cent.
Apart from the Qantas-China Eastern tie-up, other airlines are expanding into Hong Kong this year to meet increasing demand. The Hong Kong International Airport reports that Taiwan’s Far Eastern Air Transport began passenger services between Hong Kong and Makung, in Taiwan’s offshore Penghu Island, in May.
Mongolian Airlines has recently brought its business to Hong Kong
The Mongolian Airlines Group began services between Hong Kong and Ulan Bator in June, while Peach Aviation, a low-cost carrier from Japan, started a Hong Kong-Osaka service in July.
“We would like to make the sky over Asia more interesting by offering reasonable fares all year, while doing our utmost to ensure a high level of safety,” said Peach Aviation President Shinichi Inoue.
Right Place for Expansion
MIAT Mongolian Airlines General Manager Namsraijav Enkhsaikhan said that Hong Kong’s unique advantage is its international connectivity. He added that it “is the right place for us to expand regionally, as we consider it a main gateway to the Pearl River Delta, Southeast Asia and the Pacific region."
July 16 2012 Share
Life-saver for Hong Kong liver patients By Lo Wei
Pioneering US medical company wants to make city's organ failure sufferers first in the world to be treated with new system to clean blood without a transplant.
Daniel Miller, chief executive of Excorp Medical, with a cartridge used in the liver support system which is set to help patients in Hong Kong.
Hong Kong's hospitals could be the first in the world to use a system able to save the lives of patients with liver failure by cleaning their blood with pigs' liver cells without the need for a transplant.
The US-based inventor of the out-of-body, bio-artificial device will move to the city and join local universities and hospitals to offer the treatment to patients in Asia.
After more than a decade of development work, it is now ready for the final phase of clinical trials and is expected to be on the market in 18 months, Dr Daniel Miller said.
Miller, chief executive of system developer Excorp Medical, expects the treatment to cost HK$200,000 to HK$500,000 for a patient, a tenth of the cost of a liver transplant.
The system is designed to remove potentially fatal toxins from the blood while giving the liver time to repair itself.
"The bio-artificial liver will stabilise a patient by protecting the heart, lung, brain and kidneys from the effects of the toxins circulating in the blood that the dysfunctional liver is not able to handle adequately," Miller said.
Five patients in the US have used the system in clinical trials with the University of Pittsburgh since 2000. One was a patient who had the autoimmune disease systemic lupus erythematosus, who had suffered acute liver failure due to an overdose of painkillers.
She awoke from a coma after two 12-hour treatment sessions in three days and could sit up and talk to family on the fourth day.
"The bio-artificial liver system postponed the need for a transplant," Miller said, adding that it was not certain whether such patients would need transplants later in life.
The other four patients reacted similarly to the treatment.
Work on the project started in 1996. The first two phases of clinical trials, which began in 2000, confirmed that severely ill patients could be treated with the system without destabilising their condition or interfering with the other treatments, Miller said.
Excorp is about to start the final clinical trial to prove statistically that the system can benefit the patient safely and consistently and that the manufacturer can provide the product to the hospitals in a reliable manner. It hopes to work with the University of Hong Kong's Clinical Trials Centre on the clinical programme, but the university says plans are yet to be confirmed.
The biomedical company hopes to move its headquarters and set up a research and manufacturing facility of around 7,500 sq ft at the Hong Kong Science and Technology Park this year. The park has accepted its application for a site.
Excorp has also reached an agreement with Chinese University for its Laboratory Animal Services Centre to supply the specially bred pigs from which liver cells for the system will be harvested.
The centre's director. Dr Antony James, said: "Their research papers show that they have got good science on the clinical side. The university was satisfied with the ethics behind it and their study design is strong."
Since 2005, Excorp has been looking for partners in China, as the major group of patients will be Asians.
Miller plans to launch the product first in Hong Kong, then in mainland China and India.
It already has an investor from Hong Kong - Mike Rowse, the former director general of InvestHK who recently became director of the company's Hong Kong subsidiary.
Miller believes US biomedical companies relocating to Asia will become a trend.
"The appetite for cutting-edge technology in Asia is bigger than in local US. But many don't have a clear idea on how to go about bringing the technology to Asia."
July 13 2012 Share
Leadership Hong Kong can trust
Joseph Wong - formerly secretary for the civil service says despite public disenchantment with a scandal-hit Leung and some of his team members, there are still principled voices in the government who can guide Hong Kong towards needed change.
In my past public service, I witnessed the inauguration of three governors and two chief executives. But I have seen nothing like the first two weeks of the fourth term of the SAR government, when there is so much public resentment caused by the alleged misconduct of new chief executive Leung Chun-ying and some of his team members.
Henry Tang Ying-yen lost the last chief executive election to Leung mainly because he denied the presence of an illegal basement in his house - a devastating integrity issue which made Leung the least worst of two undesirable candidates. The public were rightly outraged when a newspaper which supported Leung during the campaign revealed a number of illegal structures at his Peak mansion shortly before his inauguration. As a result, hundreds of thousands of Hong Kong people joined the July 1 protest calling for his resignation.
Thus far, Leung has continued to dodge the crucial question of whether he lied when he once said he had arranged for a thorough inspection of his house, confirming that there were no illegal structures. Also, an aerial picture taken by the Lands Department showed that at least one illegal structure was erected after Leung moved into the house.
When Leung attends the Legislative Council meeting on Monday to explain his policy agenda, the media will focus on his answers regarding the illegal structures. The outcome will determine to what extent he can still be trusted as Hong Kong's leader.
While public resentment over Leung's illegal structures is understandable, the public statements made by his most senior ministers since they took office have been most intriguing. When asked about the chief executive's case, Chief Secretary Carrie Lam Cheng Yuet-ngor urged reporters not to come to the conclusion of dishonesty until they had heard the whole story. She said she would persuade her boss to make a full disclosure as early as possible. She added that if it did eventually involve a matter of integrity, she would act in accordance with her conscience.
This reminded me of the first chief secretary after the handover, Anson Chan Fang On-sang, who was dubbed "Hong Kong's conscience" for her outspoken and sometimes defiant remarks as Tung Chee-hwa's deputy. She eventually resigned in protest against the introduction of the accountability system by Tung.
While Lam declined to vouch for Leung's trustworthiness, she expressed full confidence in the integrity of the newly appointed secretary for development, Mak Chai-kwong, who allegedly abused his rental allowance in a cross-leasing arrangement when he was a civil servant some 20 years ago.
Mak eventually tendered his resignation after the Independent Commission Against Corruption stepped in to investigate the allegation.
In a similar act of independence, Financial Secretary John Tsang Chun-wah said in a radio interview that he regarded the chief executive's restructuring proposal as "not a bad thing", which is hardly an expression of support. As if he wanted to make his point clear, he added that the widely reported candidate for deputy financial secretary, Paul Chan Mo-po, had not been chosen by him.
Secretary for Justice Rimsky Yuen kwok-keung's first words in public were to assure the public that legislating Article 23 was not on his agenda. He went further by saying that even if the chief executive asked him to do it, he would advise him not to proceed.
What messages does the behaviour of the three secretaries convey? First, that they are careful not to be perceived as Leung's faithful supporters, like Fanny Law Fan Chiu-fun, for example. More importantly, they want to demonstrate publicly, at the earliest opportunity, that they have their own principles and values. This is significant because these three top officials wield tremendous power and influence in the administration.
Take Lam. As the most popular official in town, she is almost indispensable in delivering the chief executive's election promises, particularly in social services. Given his tarnished image, Leung will have to rely on her to win public support for, or minimise any adverse reaction to, new policies.
So it was Lam, not Leung, who announced the decision to put the government's restructuring proposal at the bottom of the agenda, thus giving up any hope of passing it during this Legco session.
I have no doubt that Tsang will help the chief executive deliver his economic agenda, including the promotion of financial services. He will work co-operatively with whoever is chosen by Leung to be deputy financial secretary. I also believe Tsang will guard steadfastly Hong Kong's time-tested tradition of financial prudence and discipline. This would mean that he would not hesitate to advise against any unwarranted use of financial reserves or any hasty decision on direct investments or setting up a sovereign fund.
Given Leung's long history of close ties with the central government and the allegation made by Tang during the election debate that Leung had proposed taking strong action against protesters and putting pressure on Commercial Radio, many people do not have faith in Leung's declared resolve to safeguard Hong Kong's core values.
Yuen has also been regarded by some as less committed than his predecessor Wong Yan-lung to upholding Hong Kong's rule of law and judicial independence. Yuen's remarks on Article 23 will help to assure the public and remind the chief executive that the freedoms and judicial protection enjoyed by Hongkongers must not be eroded during his term of office.
If Leung is honest with himself, he has to admit that, two weeks after assuming office, he is not trusted by most people, that his ability to lead and unite Hong Kong is being questioned, and that his senior ministers do not hesitate to give him sound advice publicly.
This is not good for the image of the chief executive.
But it is not a bad thing for Hong Kong if the public and its ministers can somehow work in unison to ensure Leung's vision of change, while maintaining stability, remains subject to reality checks.
Joseph Wong Wing-ping, formerly secretary for the civil service, is a visiting professor at City University of Hong Kong
July 12 2012 Share
Appreciate Hong Kong's natural riches - Christine Loh says Hong Kong's top spot in a new global ranking of liveable cities should make us appreciate our unique natural assets
How did Hong Kong top a global liveability ranking associated with the Economist Intelligence Unit (EIU)? Just as Hong Kong people can't believe their city came first, cities such as Melbourne, Vancouver and others, who usually do well in the research organisation's annual surveys of liveability, may wonder why they fell behind.
The answer lies in how the ranking was done. The new list was the result of a contest jointly organised by the EIU and a data-sharing company. It uses the EIU's own indicators for liveability, as well as a newly devised "spatially adjusted" index for 25 per cent of the score.
The revised index was designed to assess factors such as a city's green space, sprawl, natural and cultural assets, and connectivity, while the EIU's indicators covered infrastructure, social stability, health care, education, culture and the environment.
In 2011, Melbourne came first, Vienna was second, with Vancouver third in the EIU survey. Hong Kong was 31st, of 140 cities. In the revised list, Hong Kong's final score edged out those for Amsterdam and Osaka, with Paris, Sydney and Stockholm next, followed by Berlin, Toronto, Munich and Tokyo.
The EIU surveys of cities' liveability are designed to help multinational companies "reliably" calculate expatriate relocation packages, benchmark perceptions of development across different cities, and enable someone who wishes to relocate to consider the "lifestyle" in different cities.
What this survey is really saying is Hong Kong is a very good place for multinational companies to operate in and from. There are other surveys that make it clear that the cost of living in Hong Kong is not cheap, but this latest ranking shows that Hong Kong is politically and socially stable, has good infrastructure and local transport, and provides quality private health care and education services - if you pay for them.
Hong Kong scores well on green spaces because of our magnificent country parks that are not only highly accessible by public transport, but are also rich natural assets. We are surrounded by water - another natural asset.
Hong Kong's cultural life has grown, and will continue to grow with the development of the West Kowloon Cultural District, as well as mega art exhibitions and auctions.
As for pollution, Hong Kong is known for its poor air quality. While this has deterred international talent from staying or relocating here, the city's overall score in other areas was high enough to catapult it to the top position.
The message for us is straightforward - Hong Kong is a good place for international business. We know that already. But we have failed to appreciate some of the city's unique natural assets, which we must continue to improve. We can extend our marine parks, for example, create lush urban green spaces and improve the city's walking experience.
Our biggest negative is air pollution. The government is duty-bound to clean up our dirty air for the sake of everyone who lives here. To start with, our new administration should not be afraid to tighten the air quality standards even further.
Christine Loh Kung-wai is chief executive of the think tank Civic Exchange.
July 7 2012 Share
'Bridge doctor' keeps Hong Kong city's structural marvels in shape By Adrian Wan
Engineer Xu Youlin's check-up systems help ensure that bridges and skyscrapers remain "healthy" - Xu Youlin, from Polytechnic University, has devised sensor-based monitoring systems for structures.
The Tsing Ma Bridge, with its long span, lofty towers and imposing cables, may look like an unshakeable engineering marvel standing proudly in Hong Kong.
But it does move: it swings several metres when typhoons hit and lengthens in summer by up to two metres. For safety reasons, its every move is recorded by an engineering professor, known as the bridge's "doctor".
"Bridges are like human beings. Like you, like me," said Xu Youlin, the 59-year-old head of Polytechnic University's civil and structural engineering department.
"You may not need to go to hospital now, but when you're about my age, you will have to visit it someday. Bridges are the same. They have to see doctors," he said.
Since the 1.4 kilometre bridge opened in 1997, Xu's structural-health monitoring system, which uses powerful sensors, has been used to conduct safety checks. The system comprises more than 350 sensors fitted across the bridge, which measure everything from tarmac temperature and strains in structural parts to wind speed. These factors determine whether a bridge can withstand frequent typhoons as well as wear and tear.
"Some people work too hard, and so do bridges - we call it fatigue as well," Xu explained.
For his "outstanding contributions to the theory and practice of the aerodynamics and health monitoring of long-span cable supported bridges", Xu was last week given the 2012 Robert H. Scanlan Medal, a prestigious award given out by the American Society of Civil Engineers.
The medal is presented annually to "a person who has made significant contributions in the field of engineering mechanics", and Xu is the second Chinese scholar to receive it in its 10-year history.
Xu and his team devised the safety system for the Stonecutters Bridge connecting Tsing Yi and Stonecutters Island - which is now part of Kowloon due to reclamation.
The sensor-based inspection system is also used to monitor the health of several skyscrapers in Hong Kong and on the mainland.
"It is my team's effort. It is impossible to do it on my own," Xu said. "We started with Tsing Ma, and as our department grew, we undertook some projects in China, like the Canton Tower and the yet-to-be-finished Shanghai Tower."
Canton Tower, standing 612 metres tall, was briefly the world's tallest skyscraper before being eclipsed by the 634-metre-tall Tokyo Skytree last year.
The Shanghai Tower, meanwhile, is slated to be the tallest building in China and the second-tallest in the world when construction is completed in 2014.
Much like bridges, skyscrapers can sway like trees under the force of horizontal winds. Sturdy design can prevent the building's occupants from feeling these swings.
"Before, people just built the tall buildings and bridges [then] used them without taking care of them," Xu said. "Without knowing an old bridge's health, how do you know if it is still safe to use? How do you know to what extent, for instance, damage is done?"
For the Tsing Ma Bridge, which connects Tsing Yi and Ma Wan islands, the sensors also measure any movement of the bridge decks and towers, along with the deflection and rotation of the kilometres-long suspension cables, which carry the weight of the deck on which cars and trains pass.
The sensors serve as an early-warning system, alerting experts about any threat to the bridge's structural integrity. The sensors provide essential data that makes it easier for the Highways Department to monitor safety from a government building in Tsing Yi, and alert it if repairs are needed.
The deck weighs around 49,000 tonnes and its two main cables each carry a load of 53,000 tonnes. "We monitor many, many things. It's like human beings who have fever. If you overstress it, then the material will break," Xu said.
"Some deformations [such as dents, bends or cracks] cannot be too large. If they are too large, vehicles and trains cannot go across the bridge."
While the bridge can swing when the wind is strong, "we can't feel it because when the wind is that strong, the bridge will be closed", Xu said. "[Authorities] cannot let people take the risk."
His team is now working to develop software that can simulate the impact of extreme events on the Stonecutters Bridge.
The programme will virtually stress-test the bridge against hurricane-force winds, ground motion akin to earthquakes, a ship colliding with bridge pylons, and the combined force of heavy traffic and fluctuating winds.
The results will be released next year and will help improve maintenance plans.
The next step will be merging the structural-health monitoring and vibration-control systems to create one that, Xu dreams, can operate and conduct repairs on its own.
July 4 2012 Share
Hong Kong is the best city to live in, new ranking system finds By Lo Wei
Hong Kong is the world's best city to live in, edging out Amsterdam and Osaka, according to a new ranking method that has won a competition among systems for measuring liveability.
The Best City Contest, organized by the Economist Intelligence Unit and the BuzzData software firm, drew 27 entries that expanded on the unit's own liveability index for cities.
The winning entry, by Italian architect Filippo Lovato, relied heavily on the internet - Google Earth and the OpenStreetMap site - to measure the "spatial characteristics" of cities using seven indicators.
"I was a little surprised to see Hong Kong reach first place, given that it achieves only rank 13 in the United Nations Development Program's Human Development Index," said Lovato. He calls his system the spatial adjusted liveability index.
"Hong Kong is a very compact city that has managed to maintain its natural heritage, create a dense network of green spaces and enjoy extensive links to the rest of the world. It responded very well to the addition of spatial characteristics to the liveability index."
Architect Bernard Lim Wan-fung, president of the Institute of Urban Design, said Lovato used important indicators but his approach may have overlooked hidden problems.
"He couldn't have seen divided flats and cage houses from Google Earth," Lim said. "Hong Kong has its advantages as a spatially compact city, but it also suffers from high intensity problems."
Despite scoring relatively poorly for pollution and cultural assets, Hong Kong scored strongly in the density, green space and natural assets categories. Lovato ranked it first out of 70 cities. It was not immediately clear whether Lovato has visited Hong Kong.
Lovato measured urban sprawl by using Google Earth and the OpenStreetMap website, weighing the balance of population and settlement density in various districts. He used the two sources to evaluate the city's public green spaces.
He assessed the city's natural assets - such as protected parklands, lakes and mountains - using a United Nations database. Lovato also measured cultural assets, flight connections, isolation from other large cities, and pollution.
Lovato's system gave Hong Kong a score of 87.8 out of 100, just ahead of Amsterdam and Osaka at 87.4 each. The only other Asian city in the top 10, Tokyo, finished 10th at 84.3.
Hong Kong ranked 70th out of 221 cities in the quality of living index released last year by human resource consultancy Mercer, behind Asian cities including Singapore, Tokyo, Kobe and Yokohama.
Hong Kong's springboard role 'unshaken' - Shanghai and Shenzhen still need another 20 years or so to become global financial hubs, ex-regulator says By Anita Lam
Liu Mingkang, former chief of the China Banking Regulatory Commission, says Hong Kong is well placed to link China with the world.
Hong Kong is more important now than ever as a conduit for mainland corporations to go global as it may take up to two decades for Shenzhen and Shanghai to become international financial hubs, former mainland banking regulator Liu Mingkang says.
A number of heavyweights in the financial and trade sectors from around the world echoed Liu's views, presented at a conference on Hong Kong's competitiveness 15 years after its return to Chinese sovereignty.
They said Hong Kong was in fact gaining in importance, rather than marginalized, as a financial centre as China opened up its currency.
"It would at least take 20 years [for Shanghai and Shenzhen] to become financial centres," Liu said yesterday. "I hope they will develop along the lines of Hong Kong, but they are still far from being international.
"Hong Kong is still the springboard for mainland companies looking to go West and multinationals looking to come to China."
The former China Banking Regulatory Commission chief said Shanghai and Shenzhen were more in need of co-operation than competition with Hong Kong, especially in improving corporate governance and transparency of financial institutions in time to
fulfill tougher international capital requirements coming into place next year in the form of Basel III.
Veteran local entrepreneur Victor Fung said the opening up of China had strengthened instead of blunted Hong Kong's edge as the region's financial centre, especially at a time when economies in Europe and the United States were slowing down.
"With China opening up, more multinational companies are using Hong Kong as their global headquarters - not just Asian headquarters."
Fung, chairman of global trading group Li and Fung, said mainland Chinese banks would eventually replace European banks as the world's major financing source for trade.
For multinational companies that wanted to do business in China, he said, it was a must to co-operate with Hong Kong enterprises, many of which had already developed a retail and distribution network on the mainland since 2004, when the cross-border Closer Economic Partnership Arrangement came into effect.
Joy Yang, chief economist of Greater China at Mirae Asset Securities, said the new Hong Kong government should tackle two main problems that kept talent away - high housing costs and insufficient school seats. She urged the administration to introduce more labour benefits as well, such as increasing maternity leave in order to encourage more women to work.
Hong Kong, with its geographical location and services infrastructure, makes an ideal risk-service center
Piracy on the high seas has become a modern-day problem for the global maritime industry. According to the International Maritime Bureau of the International Chamber of Commerce, some 15 vessels and more than 250 crew members of various nationalities, and another 49 crew on land, are being held by armed sea bandits. Hundreds more ships have been attacked, with untold millions paid out in ransom. As a major seafaring centre, Hong Kong had 27 ships attacked by pirates in 2011.
They can’t stop piracy in Somalia and West African countries, according to Timothy Lee, Marine Underwriter at Catlin Hong Kong, which offers property, construction, general liability, marine hull, cargo and terrorism insurance. The pirates, he says, “see it as a good business model that everybody is trying to replicate. It’s low cost, relatively low risk. I don’t see that it will stop haunting shipowners here.”
Some 40 per cent of ships on the oceans now carry armed guards, compared with fewer than 20 percent just a year ago. “Right now, everyone is looking for armed guards. But it brings up a lot of questions: whether they’re licensed, whether they can carry weapons, whether they’re trained. We don’t want to start a war, we want to prevent piracy, scare the pirates away. There is footage on YouTube where American armed guards took over 200 shots at a skiff. That is not the proper way.”
Besides sea piracy, businesspeople face other security threats in the region, including terrorism and kidnapping. For many of Asia’s rich, Hong Kong is the preferred place to sign kidnap-and-ransom insurance because of the city’s standards for safeguarding personal security and secrecy.
As a result, industry experts believe Hong Kong is ideally positioned as a risk-service hub modeled on the city’s successful arbitration centre. Established in 1985 as a non-profit body for dispute resolution in Asia, the Hong Kong International Arbitration Centre is headed by a council of business and professional people. They offer diverse skills and experience to help contending parties resolve disputes.
The threat of piracy is a major concern for maritime industry companies, many of which have ties to Hong Kong
Security expert Steve Vickers believes Hong Kong’s risk mitigation hub would extend beyond marine piracy. The former Hong Kong police officer set up risk consultancy Steve Vickers & Associates, which provides security advice and other business intelligence to corporations, financial institutions, insurance companies and high-net-worth individuals. Mr Vickers points out that security threats, including terrorism, remain a problem in many parts of Asia. But most risk services are still handled in London, which is thousands of kilometres and hours away from where a rapid, informed, intelligent response is needed, he says.
Timothy Lee, Marine Underwriter, Catlin Hong Kong Ltd
“Maritime kidnapping and unlawful detention, product extortion and product contamination are increasing menaces,” he says. “They also represent a clear opportunity for Hong Kong Inc.”
Mr Vickers envisions businesspeople, insurance companies, law firms, public relations companies and related fields coming up with an integrated approach to risk and crisis response.
“Between Hong Kong and China, we are the major shipowners in the world,” says Catlin’s Mr Lee. “Our combined tonnage is the biggest tonnage in the world and, of course, most of the crews are Chinese; officers and masters are Indians and Koreans. They are all Asians, and they are all looking for Asian armed guards,” he says. “They call to people in China to see if they can set up a security company, but I don’t think they are up to international standards. Most of the armed guard companies are originally from the UK, which knows about licensing and training.”
Aside from training for seamen and guards, shipowners have to be given the means to upgrade security aboard vessels, according to Mr Vickers. This includes building impenetrable “sanctuaries” to which crewmen can retreat until help arrives. And, in the event of a hostage situation, coordinated measures have to be taken – to assemble ransom payment and deal with legal means for delivery.
Hong Kong Advantages
Steve Vickers, founder, Steve Vickers & Associates
Hong Kong, Mr Vickers says, is ideally situated geographically: on the Chinese mainland’s doorstep and strategically positioned within a few hours’ flight of all major Asian capitals. Its attributes include a well-trained, extensive, international legal system, a freely convertible currency and excellent communications. Unlike many Asian cities, which suffer from corruption and even the involvement of government officials in kidnapping, extortion and piracy, Hong Kong is characterised by the rule of law and a strong law enforcement system.
Mr Vickers believes that stakeholders, including insurance companies, risk assessment and mitigation companies and law firms, should lobby the Hong Kong Government to develop the city as a risk-services hub similar to the status it now enjoys as a regional arbitration hub.
“We are a centre of excellence,” he says. “It is all being done out of London today; problems in the Philippines and other areas of Asia are still being handled out of London. Hong Kong is safe. We have the capability, and we should be positioning ourselves.”
July 2 2012 Share
Economic envoy sells US on Hong Kong as business hub
By Tan Yingzi in Washington and Chen Jia in San Francisco
Donald Tong, head of the Hong Kong Economic and Trade Office in the US, considers China's "one country, two systems" policy the "cornerstone" of continued prosperity in the region.
July 1 is the 15th anniversary of the return of Hong Kong to China from British rule. Since 1997, the vibrant city has continued to prosper while maintaining significant political and economic autonomy through the Chinese government's "one country, two systems" policy. Hong Kong's stature as a global financial center has been recognized by the banking industry. China Daily USA talks to some renowned US-based bankers as well as the special administrative region's top representative in Washington for their take on what makes Hong Kong tick.
In the 15 years since Hong Kong was returned to China, the region has forged closer economic relations with the United States, says the region's representative on this side of the Pacific.
"The trade relationship benefits significantly from the 'one country, two systems' principle," Donald Tong, head of the Hong Kong Economic and Trade Office, told China Daily in Washington.
Tong's official title is Hong Kong commissioner for economic and trade affairs to the United States, making him the region's most senior official in North America. He directs his government's promotion of bilateral trade and investment and oversees three offices - in Washington, where he works; New York; and San Francisco.
"One country, two systems," developed by Chinese leader Deng Xiaoping in the 1980s, is the policy whereby the People's Republic of China grants Hong Kong the ability to continue its highly autonomous political and economic structures for at least 50 years after reunification, which took place in 1997.
Tong calls the policy "the cornerstone of Hong Kong's achievements" over the past decade and a half.
The city, now a special administrative region under Chinese law, retains most of what was established during British colonial rule, including distinct immigration, customs, currency, legal and taxation systems.
Hong Kong also enjoys strong trade relations with the Chinese mainland through the Closer Economic Partnership Arrangement, or CEPA. The free-trade pact gives 47 sectors, including logistics, financial services and legal services, preferential access to the mainland market. In addition, goods of Hong Kong origin can be exported to the mainland free of tariffs.
With its strict laws protecting intellectual property, Hong Kong is well-suited to technology businesses engaged in innovation.
"If you look for R&D, financing or regional headquarters, you'll find that Hong Kong is a very convenient place," Tong said. The region's low tax rates, strategic location and legacy of British common law are highly attractive to US companies, he pointed out.
Thanks to the mainland's fast economic growth and the special status of Hong Kong, the southern region of 7 million people has seen its economy more than double in size over the past two decades. Gross domestic product is currently averaging 4 percent annual growth, adjusted for inflation, and an unemployment rate of 3.2 percent, the commissioner said.
Tong, who was born in the city, graduated from the Chinese University of Hong Kong and, in 1983, joined the highly respected Hong Kong civil service.
With strong demand from its businesses and consumers, Hong Kong has become the 10th-biggest export destination for US-made goods, according to the Commerce Department in Washington.
"The US is our second-largest trading partner after the mainland and is the major investor in our economy," Tong said. "US exports to Hong Kong have increased nearly twofold over the past 10 years."
In 2011, Hong Kong imported over $36 billion worth of goods from the US, up 37 percent from the previous year. Key US exports to Hong Kong include computer and electronic products, primary metal, manufactured goods, transportation equipment and chemicals.
American wine has become another major export in recent years, after Hong Kong abolished an import duty in early 2008.
The office Tong oversees was established in the US capital in 1987 and plays an active role on issues before Congress that involve Hong Kong and its trade relationship. The office is working to add Hong Kong to a US visa-waiver program to let Hong Kong residents visit the United States without a visa. Currently US citizens don't need a visa to enter the city.
The Economic and Trade Office is also negotiating with Washington on the Comprehensive Agreement for the Avoidance of Double Taxation, to encourage more US enterprises to do business in Hong Kong, and vice versa.
Hong Kong hosts nearly 7,000 foreign and mainland Chinese companies including some 1,330 US firms. Many use the region as a regional headquarters from which to serve the Asia-Pacific market, including China.
Since Tong took the post in 2008, he has visited over 30 US states to talk up Hong Kong and explain how "one country, two systems" works. Some have never heard of the policy, he said.
For instance, even many businesspeople Tong has met aren't aware that Hong Kong is now a site for converting China's yuan as the Beijing government gradually internationalizes the currency.
"Hong Kong has emerged as a platform for offshore business using the mainland currency, and Hong Kong at present has the largest liquidity of [yuan] outside Chinese mainland," he said.
Hong Kong banks handled over 90 percent of total trade settlement in yuan with the mainland in 2011.
Many Americans have asked the Hong Kong envoy about competition from Chinese mega-cities such as Shanghai. He always answers with this metaphor: "The Chinese mainland is a Boeing 747 that needs many engines to fly and Hong Kong is just one of its engines. We won't be, and don't want to be, the only engine. China needs to have many Hong Kongs, many Beijings and many Shanghais to prosper; then Hong Kong will benefit."
Foreign media: Hong Kong - China's "freest city"
Following the installment of a new Hong Kong SAR government and celebrations marking the 15th anniversary of Hong Kong’s return to China, Hong Kong continues to receive full support from the central government to uphold the “one country, two systems” principles.
CNN said trade links between the mainland and Hong Kong have surged in the past 15 years, while quoting former UK Foreign Secretary Lord Palmerston’s remarks in 1842 that “it will never be a mart for trade”.
Despite being under the rule of the mainland, Hong Kong still governs itself; elects its own leaders, and exercise full control of its economy and maintain its own legal system, the website said.
Washington Post said that from the “one country, two systems” cause applied to Hong Kong, it has retained many wide-ranging liberties that has allowed it to become China’s “freest city by far”.
BBC News reported that the mainland is truly sincere in its support for Hong Kong, suggesting that if Hong Kong suffers, the mainland will suffer too.
The economic growth of the Hong Kong Special Administrative Region (HKSAR) can increasingly benefit from the proximity with the Chinese mainland, Italian analysts said on Sunday.
Over the past 15 years, the HKSAR has gained a lot of opportunities for development from the mainland, said Airaldo Piva, CEO of Milan-based Hengdian Group Europe, while commenting on Chinese President Hu Jintao's visit to Hong Kong to mark the 15th anniversary of its return to China.
During his visit, Hu reaffirmed his full support to the government of the HKSAR. This is of course in the interest of the Chinese mainland in the long term, but also especially important to the prosperity of Hong Kong's economy, Piva told Xinhua.
The Chinese president also said on Sunday that the central government will remain committed to the principles of "one country, two systems," "Hong Kong people administering Hong Kong" and a high degree of autonomy.
Hu's visit to Hong Kong was expected as another important stage of the path which started 15 years ago as the Chinese mainland had always highlighted the importance of the "one country, two systems" principle that has been reaffirmed in these days, Piva said.
In fact, he noted "It is especially in the Hong Kong's interest to remain fastened and maintain a solid relationship with the mainland, considered Beijing's increasing leadership role in the world."
The HKSAR's economic development has witnessed radical structural change because of the emergence of the Chinese mainland as a global manufacturing powerhouse, commented Thomas Rosenthal, head of the Strategy and External Relations of Italy-China Foundation.
July 1 2012 Share
Leung Chun Ying sworn in as new Hong Kong leader
Chinese President Hu Jintao shakes hands with Hong Kong's new Chief Executive Leung Chun-ying after taking the oath for a five-year term in office at the Hong Kong Convention and Exhibition Centre on Sunday.
Hong Kong's new Chief Executive Leung Chun-ying and his wife Regina shake hands with supporters during a flag raising ceremony to mark the 15th anniversary of Hong Kong's handover to China on Sunday.
“I vow to defend the Hong Kong... Basic Law,” Leung said in Putonghua as he read out the oath before Chinese President Hu Jintao, then shook hands with the head of state in front of around 2,300 guests in a
Leung proceeded to swear in the members of his own government, in front of a backdrop featuring both the Chinese and Hong Kong flags, with the national emblem slightly larger.
The swearing-in came as Hong Kong marked the 15th anniversary of the handover.
Leung was elected in March by a committee stacked with pro-Beijing elites.
“I will seek to perform my best to repay the trust given to me by the central government and the people,” he said in his inauguration speech as the chief executive, essentially an enhanced city mayor.
“I will honor my election promise to bring change to Hong Kong while preserving stability,” he added.
He takes over the city of seven million people at a time of growing complaints about a worsening gap between rich and poor, as well as rising property prices which have put home ownership out of reach for many.
“We will focus our energies on major and pressing issues,” said Leung, who outlined plans to even out Hong Kong’s widening inequality. He vowed, for example, to provide more affordable housing and land for property development, though he also said “there is no need for a major reversal of policy.”
Leung takes over from Donald Tsang Yam-kuen, a bow-tie wearing civil servant the end of whose term of office came amid a series of controversies over his close ties with business tycoons.
Leung was chosen as chief executive in March, winning 689 votes from a 1,200-seat committee of business elites who mostly voted according to Beijing’s wishes. Hong Kong’s 3.4 million registered voters, who can vote for
neighborhood councilors and half of all lawmakers, had no say.
Beijing has pledged that Hong Kong could elect its own leader in 2017 and all legislators by 2020 at the earliest, but no road map has been laid out.
Despite the debacle, Rita Fan Hsu Lai-tai, a member of the NPC Standing Committee, said Hong Kong should give Leung a chance. “I hope … he can do a few good things for us the Hong Kong people. Concrete things … so that we can gradually and naturally build up confidence in him,” she said.
Businessman Allan Zeman, chairman of Ocean Park, was also optimistic. “If [Leung] can overcome [the illegal structures issue], I think he can have his credibility back. I hope, for Hong Kong’s sake, he will overcome it. And I feel quite confident that we can move beyond that,” he said.
Still, Leung is not widely seen as friendly to the billionaire tycoons that dominate Hong Kong and who initially backed Tang. Trained as a land surveyor and holder of a British degree in estate management, he worked his way up to the top of a property consultancy firm.
Full text of Chun Ying Leung's inauguration speech.
Following is the translation of the speech delivered by the Chief Executive, Mr C Y Leung, at the Inauguration Ceremony of the Fourth Term Government of the Hong Kong Special Administrative Region at the Hong Kong Convention and Exhibition Centre this morning (July 1):
Honorable President Hu, fellow people of Hong Kong, ladies and gentlemen,
Today, I humbly take office as the fourth-term Chief Executive of the Hong Kong Special Administrative Region of the People's Republic of China. During my tenure, I will fulfill the trust placed in me by the Central Government and the people of Hong Kong with policy achievements. I will spare no effort to carry out my election platform and lead Hong Kong in "seeking change while preserving stability". My goal is to develop the economy, improve people's livelihood, promote democracy and build a more prosperous, progressive and righteous society.
Our country has given us staunch support since Hong Kong's return to the motherland. Ample opportunities have emerged. Not only have these guided and spurred our city's development, they have also enabled us to contribute to the reform and opening-up of our nation. We will continue working tirelessly towards the betterment and prosperity of both our country and Hong Kong.
With the efforts of our entire community, we have successfully implemented the concept of "One Country, Two Systems" and the principle of "Hong Kong people administering Hong Kong" with a high degree of autonomy over the past 15 years. I wish to take this opportunity to express my heartfelt gratitude to my predecessors, the Honourable Tung Chee-hwa and the Honourable Donald Tsang. Their relentless efforts have laid down a solid foundation for the successful implementation of "One Country, Two Systems" in Hong Kong. I would also like to thank the Election Committee members and the Hong Kong community, whose participation has brought substantive meaning to this election. I hope that the entire community will render their concerted effort in building the future of Hong Kong.
Since I declared my decision to stand for election for the Chief Executive, I have made over 100 district visits and reached out to over 10 000 people from different strata and sectors of society. In the next five years, my team and I will continue to stay in close touch with the people, so as to narrow both the physical and psychological distances between the Government and the community. We will listen carefully to people's suggestions and ideas. We will respond to their views and needs in a pragmatic manner.
In my election declaration, I stressed that "there is no need for a major reversal of policy. We only need an appropriately proactive government which seeks change while maintaining stability." From today, we will turn words into deeds. We will focus our energy on addressing the major and pressing issues. To formulate effective policies and strategies, the preparatory task forces on Economic Development Commission, Financial Services Development Council and Commission on Poverty will commence operation today. They will address issues from a high-level perspective and with inter-departmental and cross-sector collaboration. We will ensure that both policy research and implementation deliver results.
Continued economic development is the foundation of Hong Kong's prosperity. The livelihoods of our people depend on it. Our business and financial sectors have been the major driving forces behind Hong Kong's economic development. To promote sustained and robust economic development, the Government must assist investors and enterprises, large and small, to seize opportunities arising from our nation's and the world's economic growth.
Economic diversification and thriving industries can improve our job market, provide better opportunities for upward mobility and contribute to a stronger middle class. Our country has given Hong Kong strong backing in the National 12th Five-Year Plan. We must capitalise on the opportunities to consolidate and elevate Hong Kong's status as an international financial centre and help the shipping industry to restructure and upgrade. We must also fully implement all economic and trade agreements signed with Mainland counterparts to expand job opportunities and development potential in the Mainland for Hong Kong people.
We also need to formulate industry policy to promote and support the pillar industries that are essential to our economic development, including supporting Hong Kong enterprises operating outside Hong Kong and new industries with growth potential. We fully recognise the contribution to our economy by Hong Kong businesses operating in the Mainland and will continue to support their restructuring and upgrading.
For our economy to flourish, we must ensure that issues relating to our population and livelihood are properly addressed.
The quality of our society depends on the quality of our people, which in turn depends on the quality of education. My Government will carry out long-term planning on population policy to improve our population structure and the quality of our people. This will sustain steady development of our society and economy, create a bright future for individuals and nurture outstanding talents for society. To this end, education policies must be devised from a professional perspective, taking a student-oriented approach to enable students to equip themselves well and achieve their full potential.
It is a common aspiration for people to own their own home. Housing tops the list of livelihood issues that are of public concern. I believe that housing issues should be tackled through planning and supply. We need to provide more public housing and assist low-income groups to secure flats. Public housing resources should be allocated in a fair and reasonable way to increase circulation. We need to increase land supply appropriately to maintain a stable property market and assist middle-income families to buy their own homes. To enhance the sense of belonging in our society and promote social mobility, we will also encourage home purchase. We will formulate a long-term housing strategy, improve district planning and set up a land reserve to respond swiftly to changes in market. This will enhance the competitiveness of Hong Kong and improve the quality of life for our people.
Families are our pillars and a key element for social stability. We need to foster family harmony and support the underprivileged. It is our social responsibility to ensure that the elderly are honoured for their special place in the family, loved in the way they have loved us and respected for their life-long contributions. Special attention should be given to those who need financial assistance to meet their basic needs.
Young people represent the future of our society. Youth policy should be formulated from a developmental perspective, creating a favourable environment for new generations to unleash their potential, vitality and creativity.
As a generally affluent society, Hong Kong has all the necessary prerequisites to satisfy the basic needs of the people. Everyone in our community should be able to share in the fruits of our economic development. I will set up the Commission on Poverty as early as possible to review, study and systematically address the issues relating to poverty among the elderly, the working poor, cross-generational poverty, poverty affecting new immigrants and ethnic minorities, and regional poverty. We will also actively promote twin-track provision of medical services by the public and private sectors, so that medical services are accessible to all, regardless of wealth.
The seven million Hong Kong people are one family. We will work to make Hong Kong a more livable city. We will encourage energy saving and pollution reduction. We will also further promote awareness of greening and conservation and play a role in protecting our natural environment.
The Government remains committed to respecting the freedom of religion. We will also endeavour to enhance our cultural literacy and encourage creativity.
I will honour the pledges I have made - to uphold justice, protect the rights of the people, safeguard the rule of law, clean government, freedom and democracy which are amongst the core values of Hong Kong, and take an inclusive approach towards different opinions and views. I will do my utmost to safeguard human rights and make sure that press freedom and the independence of the media are respected.
I will promote the development of a democratic political system in accordance with the provisions of the Basic Law and the relevant decisions of the Standing Committee of the National People's Congress. I will further develop the political appointment and accountability system to enhance the efficiency of the Government. I will also build a service-oriented government, establish partnership with the people and encourage public engagement to draw energy from every corner of our community.
The new term Government will continue to uphold the concept of "One Country, Two Systems" and the principle of "Hong Kong people administering Hong Kong" with a high degree of autonomy. While safeguarding the interests of our country and Hong Kong, we should properly address the relationship between "One Country" and "Two Systems". We will also strengthen unity and cohesion between different sectors of our society.
Effective policy implementation hinges on effective governance. The relationship between the legislature and the executive is an integral part of governance. For bills to be passed and policies endorsed, we need the support of the Legislative Council as well as the community at large. It is my hope that my Government will strengthen communication and co-operation with the Legislative Council. With one heart and one vision, we will work for the well-being of our people.
The 18 districts of Hong Kong each have their own strengths and characteristics. We will actively support the functions of the District Councils through resource allocation and policy formulation. This will enable community issues to be resolved and local opportunities seized at the district level.
In my election platform, I shared with everyone my vision that "Hong Kong is our home". To build this home, we need to reinforce solidarity and amass collective wisdom. I believe in the power of the people. I believe in the synergy that comes from unifying different sectors of the community and the many different trades and businesses.
Standing for election was a humbling experience. It made me realise my own shortcomings and helped me appreciate the collective wisdom of our society. What's more, it helped me better understand the importance of accepting media and public scrutiny.
Our community faces many challenges. We need to stand united, face difficulties with fortitude and determination, and respond to different views with an inclusive attitude. I believe that we can resolve the conflicts that exist in our society and the clashes that may arise from different values or political ideologies. We need to listen, and be inclusive and patient in seeking a consensus.
President Hu, fellow people of Hong Kong, ladies and gentlemen, today I am being sworn into office together with principal officials of the fourth-term Government and members of the Executive Council. I trust that my team will work together harmoniously and dedicate themselves to serving the community. With one heart and one vision, we should be able to build Hong Kong into an ideal home for us all. A home where children grow up healthy, young people make their dreams come true, those in the prime of life bring out the best in themselves and the elderly enjoy a decent life. With our concerted efforts, Hong Kong, this Pearl of the Orient, will shine even more brightly.
Hong Kong Government to safeguard the rule of law, freedom, democracy
Chief Executive of the Hong Kong Special Administrative Region Leung Chun-ying, left, takes his oath, administered by Chinese President Hu Jintao, right, during the swearing-in ceremony of the HKSAR's fourth-term government at the Hong Kong Convention and Exhibition Center in Hong Kong, July 1, 2012. Principal officials of the HKSAR's fourth-term government take their oaths, administered by Chinese President Hu Jintao, right, during the swearing-in ceremony of the HKSAR's fourth-term government at the Hong Kong Convention and Exhibition Center in Hong Kong, July 1, 2012.
Hong Kong's new chief executive Leung Chun-ying Sunday said the new government will strive to safeguard the rule of law, clean government, freedom and democracy "which are among the core values of Hong Kong."
Leung made the pledge in his inaugural speech delivered at the swearing-in ceremony of the fourth-term government of the Hong Kong Special Administrative Region.
"I will honor the pledges I have made - to uphold justice, protect the rights of the people, safeguard the rule of law, clean government, freedom and democracy which are among the core values of Hong Kong, and take an inclusive approach towards different opinions and views," he said.
"I will do my utmost to safeguard human rights and make sure that press freedom and the independence of the media are respected, " he said.
The new team Government will continue to uphold the concept of "One Country, Two Systems" and the principle of "Hong Kong people administering Hong Kong" with a high degree of autonomy, he said.
The chief executive said he will promote the development of a democratic political system in accordance with the provisions of the Basic Law and the relevant decision of the Standing Committee of the National People's Congress, China's top legislative body.
"I will further develop the political appointment and accountability system to enhance the efficiency of the Government. I will also build a service-oriented government, establish partnership with the people and encourage public engagement to draw energy from every corner of our community," he said.
Chinese President Hu Jintao on Sunday delivered a speech at the meeting marking the 15th anniversary of Hong Kong's return to China and the inaugural ceremony of the fourth-term government of the Hong Kong Special Administrative Region.
The following is the full text of his speech:
Address by President Hu Jintao of the People's Republic of China at the Meeting Celebrating the 15th Anniversary of Hong Kong's Return to the Motherland and the Inaugural Ceremony of the Fourth Government of the Hong Kong Special Administrative Region
1 July 2012
Fellow Compatriots, Dear Friends,
Today, we gather here on a joyous occasion to celebrate the 15th anniversary of Hong Kong' return to the motherland. First of all, I wish to extend, on behalf of the Central Government and people of all ethnic groups across the country, cordial greetings to all the people of Hong Kong. I wish to offer warm congratulations to Mr. Leung Chun-ying, the fourth chief executive of the Hong Kong Special Administrative Region (SAR), his team and members of the Executive Council who have just been sworn in. I also wish to express my sincere appreciation to all the fellow Chinese both at home and abroad and foreign friends who have cared about Hong Kong and have contributed to its smooth return and to its continued prosperity and stability!
The return of Hong Kong to the motherland will go down as a great achievement in the annals of Chinese history; it will be remembered as a historic event at the end of the last century that has a major international significance. Since the very moment of its return, Hong Kong has entered a new era and begun a new journey. Over the past 15 years, the principles of "one country, two systems", "Hong Kong people administering Hong Kong" and a high degree of autonomy have been fully implemented. Our compatriots in Hong Kong are now masters of their own fate and manage, on their own, affairs that fall within the autonomy of the SAR. Never before have Hong Kong residents enjoyed the range of democratic rights and freedoms as they do now. Despite the impact of the international financial crisis, Hong Kong has registered steady economic growth and has remained an international financial, trade and shipping center. It has all along been considered as the most free and open economy and one of the most competitive and dynamic regions of the world. Hong Kong has enjoyed all-round social development, continued high employment level and significantly improved social security. Its exchanges with the mainland have expanded across the board, with much stronger economic and trade ties and deepened cooperation in various areas. Hong Kong has continued to make unique contribution to the reform, opening-up and modernization drive in the mainland of China, and at the same time it has gained more and more opportunities and endless impetus for its development from the mainland. Our compatriots in Hong Kong enjoy a growing sense of identity and closeness with the country and the nation. In the face of serious disasters, our Hong Kong compatriots and people on the mainland have stood together and supported each other, fully demonstrating that we are kith and kin and blood is thicker than water. Also in these 15 years, Hong Kong has been more active in its external contacts and has seen its international influence further expanded.
All this fully proves that "one country, two system" is the best solution to the Hong Kong question left over from history and the best institutional arrangement for the long-term prosperity and stability of Hong Kong after its return to the motherland. Advancing the cause of "one country, two systems" serves the interests and aspirations of our fellow compatriots in Hong Kong and the fundamental interests of the country and the nation. Through the great practice of "one country, two systems", the pearl of Hong Kong now shines more brilliantly than ever.
The cause of "one country, two systems" is a ground-breaking endeavor and must be pushed forward in a pioneering spirit. Thirty years ago, Comrade Deng Xiaoping creatively put forward the great concept of "one country, two systems". He personally led the efforts to formulate the basic principles and policies of the Central Government for Hong Kong, gave direct instructions for China's negotiations with Britain on the question of Hong Kong the drafting of the Basic law of the Hong Kong SAR, and made foundational contribution to the return of Hong Kong and the great cause of peaceful reunification of the motherland. The third generation of the CPC collective leadership with Comrade Jiang Zemin at the core properly handled various complex problems and challenges before and after the return of Hong Kong, ensured the smooth handover and transition of Hong Kong, and made enormous, pioneering efforts for the full implementation of the "one country, two systems" principle. Over the past year, the Central Government has taken the maintenance of Hong Kong's long-term prosperity and stability as a major objective of governance under the new circumstances, encouraged the SAR government and the people of various sectors in Hong Kong to give priority to economic development, take effective steps to raise living standards, advance democracy in an incremental manner and promote inclusive, common and harmonious development, and supported their efforts in this regard, thus further enriching and improving the "one country, two systems" principle in both theory and practice. It si the shared mission of the Central government, the SAR government and the people of Hong Kong to keep exploring new ways for advancing the cause of "one country, two systems" based on the existing achievements.
The fundamental goal of the principles, policies and major steps of the Central Government for Hong Kong is to safeguard state sovereignty, security and development interests and to ensure long-term prosperity and stability in Hong Kong. This is the core requirement and basic objective of practicing "one country, two systems" in Hong Kong. Therefore, we must correctly and comprehensively understand and implement the principle of "one country, two systems" and act in strict accordance with the Basic Law. We must stay committed to keeping a balance between adhering to the "one country" principle and respecting the differences of the "two systems", between upholding the authority of the Central Government and ensuring a high degree of autonomy of Hong Kong SAR, between safeguarding the overall national interests and protecting the interests of various social sectors of Hong Kong, and between supporting Hong Kong in actively conducting exchanges with the outside world and opposing interference by external forces in Hong Kong affairs.
Fellow Compatriots, Dear Friends,
While fully recognizing the remarkable achievements Hong Kong has made since its return to the motherland 15 years ago, we should also be sober-minded of the deep-seated problems and challenges in the Hong Kong society. The next five years are of great significance to Hong Kong's long-term development and will be a period of important opportunities which Hong Kong must seize and take advantage of. I hope the new SAR government and the people of Hong Kong will work harder in the following four areas.
First, promote social harmony and stability. Harmony and stability underpin development, while improving people's livelihood is essential for building a harmonious and stable society. It is imperative for the new SAR government to follow the principle of putting people first in its administration, accurately gauge public opinion and take concrete and effective measures to properly address issues concerning people's livelihood and social tensions. The SAR government should pay greater attention to ensuring equal opportunities, heed the concerns of disadvantaged groups and care about the younger generation so that the people of all sectors in Hong Kong will share the benefits of the city's development and lead a better life. People from different social groups and sectors in Hong Kong should bear in mind the overall interests, follow the call of loving the motherland and loving Hong Kong, work for the broadest unity, wholeheartedly support the new SAR government in effectively administering Hong Kong pursuant to law, and increase the cohesion of the Hong Kong society.
Second, uphold the authority of the Basic Law. Rule of law is a core value of Hong Kong. The Basic Law has the supreme status in the legal system of the Hong Kong SAR and is the legal basis for administering Hong Kong pursuant to law. It is essential to put into practice each and every provision of the Basic Law and improve the institutions and mechanisms related to the implementation of the Basic Law. The executive, legislative and judicial branches of the Hong Kong SAR should take the lead in strictly observing the Basic Law, firmly upholding the Basic Law and performing their duties in accordance with the Basic Law. Since Hong Kong's return to the motherland, the political system and democracy have developed in an incremental and orderly manner, and achieved much progress. We should continue to advance the democratic process in Hong Kong as provided for in the Basic Law and the relevant decisions of the Standing Committee of the National People's Congress.
Third, enhance competitiveness. Hong Kong must work hard to increase its competitiveness if it is to win in the increasingly intense regional and international competition. It must have better strategic planning for its long-term development and bring into better play the role of the government in promoting economic and social development. It must update its development concepts, encourage and support various innovation programs, enhance the services sector and foster new economic growth points. It must have a thorough understanding of the profound changes in the global economic landscape, make full use of its extensive international reach and its advantages in other areas and grasp critical opportunities for development. At the same time, it is all the more important for Hong Kong to take advantage of the vigorous economic development on the mainland to expand and deepen its exchanges and cooperation with the mainland in order to achieve mutually complementary, win-win and common development.
Fourth, strengthen human resources development. Human resources are the most important strategic resources and lie at the heart of competition in today's world. It is essential to develop education, science and technology and culture with a view to turning out all types of high-caliber professionals at all levels required for the development of various sectors. Priority should be given to nurturing people of leadership quality who love the motherland and Hong Kong, outstanding young potential political leaders in particular, by providing opportunities and platforms for them to stand out and acquire capabilities so that they will carry on the tradition of loving the motherland and Hong Kong and the cause of "one country, two systems".
Fellow Compatriots, Dear Friends,
The central Government will remain committed to implementing the principles of "one country, two systems", "Hong Kong people administering Hong Kong" and a high degree of autonomy, to fully supporting the chief executive and the Hong Kong SAR government in carrying out administration according to law and to maintaining and promoting the long-term prosperity and stability of Hong Kong together with the people of all sectors in Hong Kong. We are confident that with the joint efforts of the Central Government, the Hong Kong SAR government and people of all sectors of Hong Kong, efforts to practice "one country, two systems" will bear richer fruits and the road to common prosperity and development of both Hong Kong and the mainland will open broader prospects.
Hu: Unite for a better tomorrow - Locals turned out on Saturday to celebrate Hong Kong's return anniversary.
The Hong Kong Special Administrative Region will have a brighter tomorrow if the local community remains united to overcome difficulties and challenges, President Hu Jintao said on Saturday.
The "One Country, Two Systems" concept has contributed to Hong Kong's great success that has impressed the world, he told a gathering of community leaders on the second of his three-day visit to the city.
At a welcoming banquet hosted by the HKSAR government, the president advised the people of Hong Kong to carry forward their fine qualities of solidarity, enterprise and creativity.
Hong Kong is a place full of miracles but the road ahead is full of challenges at both the international and regional levels, he said.
"But, no matter how painstaking the road is, (the people of Hong Kong) should have no fear and strive to move forward," said the president.
Hong Kong has experienced many trials and tribulations over the past 15 years, and its achievements have not come easily, Hu said. The city, one of the established global financial hubs, withstood spreading financial crises in Asia and around the world, and still stands as the one of the world's top shipping, finance and trade centers.
Hu urged the city to keep innovating and adapting to changes in a flexible way.
"Hong Kong should follow closely the changes in the external environment, go along with the trend of economic globalization and the global adjustment of industrial structure, seize opportunities and respond accordingly," Hu said.
Hu also asked Hong Kong to make good use of the two markets and resources of both the mainland and the world, and strengthen Hong Kong's existing advantages.
Hu also reminded the city to carry forward the spirit of standing together in the face of difficulties.
"Hong Kong compatriots should always put the overall interests of the country and Hong Kong first, love their common home and work in unity to tackle challenges," Hu said, adding that there should be more cooperation, consultation and inclusiveness.
Stressing that Hong Kong has the strong support of the central government, the firm backing of the mainland and the good foundation that has been built over the past 15 years, Hu said Leung Chun-ying, the new chief executive, and the new SAR government will unite all sectors of society to turn Hong Kong into an international metropolis with economic prosperity, political structural democracy and social harmony, as well as closer links with the mainland and more extensive connections with the world.
In a separate meeting, Hu also met with Executive and Legislative council members, senior government and judiciary officials, as well as representatives of central government agencies based in the HKSAR.
Earlier in the morning, despite the adverse weather brought by tropical storm Doksuri, Hu and members of his entourage toured the mega Kai Tak cruise terminal on the site of Hong Kong's old international airport.
The president, accompanied by State Councilor Liu Yandong, Chief Executive Donald Tsang Yam-kuen and incoming Chief Executive, Leung Chun-ying, spent about half an hour inspecting the 320-hectare project which, on completion, would offer an array of housing, business, community, tourism and community facilities.
At the new Cruise Terminal Building, due to be completed by mid-2013, Hu was briefed on development plans for Kai Tak and East Kowloon by Secretary for Development and incoming Chief Secretary for Administration, Carrie Lam Cheng Yuet-ngor, and Secretary for Commerce and Economic Development, Gregory So Kam-leung.
The president said the project is especially meaningful because it has taken into account Hong Kong's economic development needs.
"This project is one of Hong Kong's 10 key infrastructure projects planned, fulfilling the city's economic development needs, improving the people's living standards while incorporating environmental protection principles. I'm pleased with it," Hu said.
The president also chatted with workers at the site and shook hands with them, reminding them of the importance of building safety while maintaining the progress and quality of the work.
"I'm very happy to meet President Hu, who came despite the heavy rain," said So Tim-hung, an assistant project construction manager, who was among 10 workers who shook hands with the president.
Hu said he would like to visit various other places to better understand the HKSAR's progress and development, saying he's impressed by the city's massive development and would like to hear more of the people's voices.
The president's next stop was Kai Ching Estate - a public-housing project being built at Kai Tak - where Hu was given a first-hand briefing on housing policies by Secretary for Transport and Housing, Eva Cheng Yu-wah.
The president was shown two flats that have yet to be occupied, and talked to workers and technical staff.
The highlight of the president's visit will be on Sunday morning when Hu presides over the inauguration of Chief Executive-elect Leung Chun-ying and his new cabinet.
Meanwhile, the inclement weather failed to dampen the spirit and enthusiasm of Hong Kong people in celebrating the 15th anniversary of the return.
Parks and public squares were bathed in banners and bunting for a weekend that includes carnivals, exhibitions and a fireworks display on Sunday evening.
At Chater Garden in Central, about 2,000 people, many wearing ponchos, braved the rain on Saturday for a carnival that included a marching band with more than 500 performers beating traditional Chinese drums as well as lion dances.
"The storm is just a small problem," said Chow Kwok-fai, one of the carnival's organizers. "I was born and raised in Hong Kong. I hope Hong Kong will have a bright future," he said.
At the Hong Kong Museum of Art, an exhibition featuring 77 sets of paintings and calligraphy, furniture, murals and religious art was held in conjunction with Beijing's Palace Museum.
June 30 2012 Share
Hong Kong Bonds With China Pearl River Delta
By Te-Ping Chen
Mainland Chinese tourists visit a Hong Kong shopping mall. Increased travel between Hong Kong and south China's Guangdong province is part of a broad effort to bolster integration.
Hong Kong and its neighboring Pearl River Delta—south China's industrial hub in Guangdong province—are moving toward tighter integration, aided by new transportation links and efforts by both sides to bolster stronger economic ties.
For the former British colony, the push for tighter relations reflects the need to boost competitiveness and to better capture booming domestic demand in the world's second-biggest economy. Meanwhile, markets in China, as with other parts of Asia, are racing to catch up to Hong Kong's well-established financial institutions and sound regulatory regimes.
Proponents of greater integration say better linkages will allow the region to capitalize on Hong Kong's high-end financial services and Guangdong's manufacturing and services, to become a so-called megalopolis. "We each have our own value that we can bring," says Roy Chung, who heads the Federation of Hong Kong Industries.
On the eve of the 15th anniversary of the city's hand-over to China, Beijing is announcing a raft of policies to further bolster Hong Kong's role as a regional financing center and main offshore hub for its tightly controlled currency, the yuan. The measures are being presented as Chinese President Hu Jintao kicked off a three-day visit to the city on Friday, his first in five years, where he will preside over the swearing-in of incoming Hong Kong leader Leung Chun-ying.
The Chinese government also is supporting the city's efforts to lead development of yuan-conversion and other core services as part of a pilot project in a coastal area of western Shenzhen, at the heart of the delta. The move could benefit Hong Kong's robust services industry, particularly in finance and banking, providing them with greater access to Chinese enterprises in southern China.
Analysts warn that if Hong Kong doesn't do more to capitalize on China's growth and work more closely with its neighbors, the city risks getting left behind. Mr. Leung, the city's new chief executive, noted in his election platform that by some estimates, the city's economy will be ranked just seventh in China by 2015, eclipsed by second-tier cities such as Suzhou and Tianjin.
Massive infrastructure efforts are speeding the integration process, among them projects such as the Hong Kong-Zhuhai-Macau Bridge that, when completed in 2016, will be the world's longest seaport bridge, spanning 18 miles. Hong Kong also is being linked up to China's massive high-speed rail network.
Still, some critics worry that Hong Kong's identity risks getting subsumed into the region. Many residents feel besieged by the waves of mainland Chinese who come to the city to shop, sight-see and buy property. In February, a group of residents paid for a full-page ad in newspapers calling such mainlanders "locusts." The move provoked widespread reaction, including criticisms among mainland Chinese bloggers that Hong Kong people don't regard themselves as Chinese.
Since Hong Kong returned to Chinese rule in 1997, it has continued to operate with distinct political, legal and economic systems.
"For the first few years [Chinese authorities] were very cautious not to touch Hong Kong too much," said Pansy Yau, economist at the Hong Kong Trade Development Council.
But with a subsequent economic downturn, exacerbated by the Severe Acute Respiratory Syndrome, or SARS, outbreak in 2003, Beijing launched a number of policies to help the city, including looser restrictions for mainland Chinese visitors. Last year, some 28 million such visitors traveled to Hong Kong, a boon to the tourism industry and luxury retailers, with most of the tourists originating from prosperous, neighboring Guangdong.
It wasn't that long ago when Hong Kong, a city of seven million, was the only major financial and industrial center near southern China. While China was still closed to most of the world, Hong Kong flourished from the 1960s as a major trading center and manufacturing powerhouse, exporting consumer goods—ranging from electric fans to toys—to Western markets, including the U.S.
It was a common sight at the time for many Hong Kong residents, most of whom are immigrants from China, to carry cartloads of consumer goods and other daily necessities on trains back to their relatives in Guangdong, who were living under harsher conditions.
When China began implementing market reforms from the late 1970s, Hong Kong manufacturers were the earliest to move their factories over the border to Guangdong to capitalize on cheap and plentiful labor.
The fact that Hong Kong and Guangdong residents share a common Chinese dialect—Cantonese—helped to expedite business, as well as social ties between the regions.
The number of China-Hong Kong marriages has soared. The number of such marriages registered in Hong Kong quadrupled from 1996 to 2010. Every day, some 17,000 backpack-toting children cross from Guangdong to attend school in Hong Kong, where the quality of education is perceived as being better.
More integration with the Pearl River Delta is "almost inevitable," says Tsang Shu-ki, senior research fellow at Hong Kong Baptist University's business school. "We depend on China for almost every basic necessity," he says, among them food imports and the vast majority of its water supplies, which are piped from Guangdong.
For the past decade, the value of bilateral merchandise trade between Hong Kong and Guangdong has risen by an average of 17% a year, according to Hong Kong's government. Last year, it stood at US$193 billion. Today, Hong Kong manufacturers employ some 10 million workers in Guangdong, nearly 10% of the province's population.
Though Hong Kong has long been seen mostly as a portal for companies entering mainland China, increasingly, capital has flowed in the other direction. Since 1993, mainland-related enterprises have raised more than 3.2 trillion Hong Kong dollars (US$413 billion) in equity funds in Hong Kong.
Mr. Leung, who takes office Sunday, says Hong Kong needs to develop its relationship with mainland China, both economically as well as culturally. "We are not tenants of a small island, we are one family," he said shortly after winning office in March.
"We may have different backgrounds, but our next generation has a common future," he said. Beijing has said that Hong Kong's independent political, legal and economic systems are guaranteed to last at least through 2047.
June 29 2012 Share
Hong Kong Chief Executive Leung Chun Ying
Chief Executive-elect Leung Chun-ying, centre, leaves a news conference after announcing the newly appointed principal officials for the cabinet on Thursday. The central government announced the line-up of Leung Chun-ying's cabinet on Thursday, three days before he takes office as Hong Kong’s chief executive. Secretary for Development Carrie Lam Cheng Yuet-ngor, 55, will become chief secretary, second in command in Leung’s administration, while John Tsang Chun-wah, 61, will stay on as financial secretary. Their appointments to those posts have been widely anticipated.
Former Bar Association chairman Rimsky Yuen Kwok-keung, 48, will become secretary for justice. The appointments were made to the existing cabinet structure. Nobody was named for the new positions Leung is trying to create: two new deputy secretaries and two new bureaus chiefs. Some current cabinet members will retain their positions, including: Secretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen, 48; Secretary for Financial Services and the Treasury Professor Chan Ka-keung, 55; Secretary for Commerce and Economic Development Greg So Kam-leung, 53; Secretary for Labour and Welfare Matthew Cheung Kin-chung, 61; and Secretary for Home Affairs Tsang Tak-sing. Secretary for the Environment Edward Yau Tang-wah will become director of the Chief Executive’s Office. Undersecretary for security Lai Tung-kwok, 60, will take over as secretary for security. New faces among policy bureau chiefs include Dr Ko Wing-man, 55, as secretary for food and health, and veteran architect Wong Kam-sing, 49, as environment minister. Ko is a former Hospital Authority official.
Discussing the new cabinet members, Leung said their experience and dedication would help him implement his policies efficiently. He pledged that his administration would heed public views, starting with a community visit by him and chief secretary Carrie Lam on July 2. “Each of them has an outstanding performance record in their own area and they share the same goals and ideals with me,” Leung said. “I am confident we together can achieve our goal, that is, to seek change with prudence while maintaining overall stability.” Leung said he would try to get his cabinet revamp plan passed by the Legislative Council soon, to help him better implement his policies. The plan suggests creating two policy bureaus and two new deputy secretaries. Lam said she would help Leung carry out his policy blueprint and deal with tasks such as co-ordinating work among different policy bureaus and leading the civil service. Her experience as director of social welfare, she said, helped her grasp livelihood issues facing underprivileged groups and to reach out to them.
John Tsang said the focus of his coming five years as financial secretary would be on maintaining a balanced budget for Hong Kong, boosting the economy and refining the housing and lands policy to maintain a healthy property market. Rimsky Yuen pledged that, as secretary for justice, he would exhaust all the options within Hong Kong’s legal framework before asking Beijing for an interpretation of the Basic Law. On the controversial anti-subversion bill, Article 23 of the Basic Law, Yuen said it was not on his work plan because Hong Kong was facing many other issues in economic and domestic areas. Yuen acknowledged that his membership in Guangdong’s Chinese People’s Political Consultative Conference had raised public concern over his neutrality as justice secretary. He has resigned from the position, he said.
Other appointments include: Secretary for education: Eddie Ng Hak-kim, 59, currently chairman of the Examinations and Assessment Authority. Secretary for development: Mak Chai-kwong, 62, the former highways chief. Secretary for transport and housing: Anthony Cheung Bing-leung, 60, Executive Council member. Secretary for civil service: Paul Tang Kwok-wai, 56, currently permanent secretary for labour and welfare. Commissioner of police: Andy Tsang Wai-hung, 54, will continue in the post. Director of immigration: Eric Chan Kwok-ki, 53, keeps the post. Commissioner of Customs and Excise: Clement Cheung Wan-ching, 50, retains the position. Commissioner of the Independent Commission Against Corruption: Simon Peh Yun-lu, 57, former immigration director. Director of audit. David Sun Tak-kei, 59, former chairman and managing partner of Ernst & Young.
June 28 2012 Share
British Law firms target Hong Kong as Asian gateway - the 5TH law firm to set up in Hong Kong since 2012
Reynolds Porter Chamberlain (RPC) is a corporate law firm based in London, United Kingdom trace its origins back to 1898. The firm has around 420 people - including 65 partners and 172 other UK lawyers. It is divided into two divisions, Commercial and Insurance.
The firm has a Partnership Executive Committee that includes a full-time Managing Partner, Jonathan Watmough, as well as a Chief Operating Officer, Richard Emanuel. The senior partner is construction partner Robert Hogarth.
The firm is particularly recognised for its insurance industry practice and its professional negligence practice. (It is ranked in Tier One for Dispute Resolution:Mid-Market The firm has niche expertise in media, particularly defamation).
The firm is the only English member of TerraLex.
As Europe struggles, foreign firms move to the region and Chinese go abroad, legal practices are also heading east and setting up shop here.
Rising foreign investment as well as commercial and shipping opportunities in Hong Kong and the region have led to a surge in the number of law firms setting up in the city.
Britain's Reynolds Porter Chamberlain will become the fifth law firm to set up in Hong Kong since the beginning of this year when it formally opens shop in August.
Other outfits that have started practising this year include Howse Williams Bowers, which has around 55 staff after being launched by three former Hong Kong partners at Reed Smith Richards Butler and Watson Farley & Williams, in association with Lau, Leong & Co. Two US law firms, Loyens & Loeff and Akin Gump Strauss Hauer & Feld, inaugurated their offices this year.
Legal sources said Hill Dickinson, another British law firm, was considering opening in Hong Kong but it declined to comment. And Yingke, one of the biggest legal practices in China that already has a raft of international offices including in London, New York and Seoul, has also received approval from the Law Society to open a Hong Kong office.
Commenting on the attraction of Hong Kong, Jonathan Watmough, managing partner of Reynolds Porter Chamberlain, said: "The whole of Asia-Pacific, including Hong Kong, China and Singapore, is like fast-flowing water." By comparison, mature markets such as Europe were "under a lot of pressure" and "slightly shrinking", he said.
The firm will have five partners, including four former Barlow Lyde & Gilbert partners who left BLG following its merger with Clyde & Co in November. Among them are shipping specialists Andrew Horton and Gary Yin, who will help Reynolds Porter Chamberlain to expand its expertise into maritime affairs. "Shipping is new for us," Watmough said. The firm's other practice areas include insurance, intellectual property, corporate, and mergers and acquisitions, especially in financial services.
Asked if the Hong Kong office launch was linked to the BLG departures, Watmough said the firm made a "strategic decision a couple of years ago that we would like to be in Singapore and Hong Kong". It opened its Singapore office in November. He said the Hong Kong market was getting crowded, but added: "We're not coming because we think it's easy - we've got the support of clients."
Watmough said that while there was a lot of interest from foreign firms to expand into China and elsewhere in the region, "some big Chinese firms are big players in London. We've seen a lot of Chinese money coming into London".
The Hong Kong operation would allow Reynolds serve European clients expanding in the Asia-Pacific region and the mainland, as well as Asian clients looking at opportunities overseas. It will have a staff of more than 40, but Watmough said the aim was to double in size in the next three to five years and he expected the firm would "have a base in Shanghai" in the next two to three years.
While Watson Farley & Williams partner Loretta Lau said she recognised the firm was late entering the Hong Kong market, having been in Singapore for 14 years, she and fellow partners Nicholas Hanna and Madeline Leong echoed Watmough's views about growth in the region.
On the firm's shipping practice, they said they thought the number of maritime-related joint ventures and acquisitions would increase while the number of defaults in maritime-related contracts could also rise given the poor market conditions.
June 27 2012 Share
Hong Kong is Hiring
Job seekers pack a Hong Kong job fair amid robust recruitment across a range of sectors
Market research by various recruitment firms in Hong Kong confirms the need: job advertisements are up, and many companies are struggling to secure the talent they need.
According to the latest Asian job index by recruitment consultancy Robert Walters, recruitment activity in Hong Kong continued its rise in the first quarter of this year and remained strong in April and May, particularly in the creative industries. Art and design was up 16.8 per cent, and advertising and marketing up 16.4 per cent. Together with a strong rise in administrative and secretarial jobs, it suggests “a growing confidence in the resilience of the Hong Kong economy.”
There was a similar growth in the number of openings within the financial services and legal sectors, up 14.1 per cent and 11.6 per cent respectively. Retail recruitment also showed steady expansion, driven by Chinese mainland tourism in the region.
Matthew Bennett, Managing Director of Robert Walters Hong Kong, Thailand and Taiwan, said this heightened recruitment activity is explained by the growing number of companies using Hong Kong as a platform to the mainland and other Asian markets.
A hiring spree, particularly in the creative industry, signals economic confidence in Hong Kong
“As more companies look to gain a foothold in the Chinese market, professionals will be required to assist companies in their growth strategies. This has led to job opportunities for Hong Kong professionals with Mandarin language skills or experience dealing with the Chinese market,” he said.
“Even during economic downturns, organisations still need to focus on growth potential and Asia is still seen as the growth region of the world. Having said this, analysts did expect a more positive outlook leading into the third quarter, which is not the case, so we do expect the recruitment market to slow in the second half of 2012.”
Mr Bennett sees creative sector growth as a positive sign. “While most employers remain cautious due to broader economic uncertainty in Europe and the United States, there has been growth within certain industries in Hong Kong that has led to the creation of job opportunities. The creative industry is often a good indicator of economic confidence as it means that organisations are investing in marketing, which can be seen as more of a long-term investment.”
Finance Roles Growing
Matthew Bennett, Managing Director of Robert Walters Hong Kong, Thailand and Taiwan
Even the financial services sector remains resilient. “Companies are vying for a larger market share day by day. This has led to growth in small pockets, despite the general conservative sentiment within the financial services industry. For example, across the middle and back office, areas that hired most actively for the first half of the year included regulatory reporting, liquidity reporting, economic reporting and product control. As more guidelines were implemented by regulators, compliance and governance professionals were increasingly sought after.”
Tony Pownall, General Manager, Hudson Hong Kong, described the current skills shortage as “chronic.” He said Hong Kong’s unemployment rate, now 3.2 per cent, down from 4.6 per cent two years ago, was “really unheard of in global markets.”
Tony Pownall, General Manager, Hudson Hong Kong
“Unemployment is a great indicator and, in Hong Kong, it’s been steadily decreasing. There is a chronic skills shortage here.”
The market is robust for the most talented senior candidates, Mr Pownall added. More than half (61 per cent) of employers in Hudson’s latest Hong Kong survey said they were finding it harder to secure the right candidates in 2012, particularly for senior strategic and managerial roles.
Hopes Remain High
Anthony Thompson, Managing Director of Michael Page, Hong Kong and Southern China
Michael Page research finds that expectations for Hong Kong’s employment market over the coming months remain steady for the majority of employers.
“Unquestionably, the Hong Kong market is reasonably robust compared to almost all other markets,” said Anthony Thompson, Managing Director of Michael Page, Hong Kong and Southern China.
Most sectors, he said, are performing well due to Hong Kong’s proximity to the mainland. “While there is speculation of a slowdown in China, there will still be very positive growth.”
Pointing to the large number of multinational companies based in Hong Kong, Mr Thompson said the city is “still a very comfortable hub to have operations in Asia. Hong Kong-listed companies are being very active, and private companies are continuing to invest.”
For expatriate professionals seeking an overseas position, a Hong Kong assignment is still considered a plum job, according to Hudson’s Tony Pownall.
“China is absolutely in the global spotlight, sometimes to support the ailing sectors of their business elsewhere. Asia is where the tiger exists, and Hong Kong is right smack bang in the middle of it.
“It is the richness of the experience you get here, in businesses looking to grow and develop, that is the Hong Kong difference,” he said.
June 25 2012 Share
Hong Kong HK$1 billion (US$128 million) Branding fund opens
- in Asia "Branding" is everything to ensure successes for your products and services.
All firms registered in Hong Kong may qualify - it cost less than US$1,200 to set
up a Corporation in Hong Kong. From Hong Kong you can reach the entire Asia including Australia and New Zealand through Hong Kong Trade Development Council
(HKTDC) Global Network http://www.hktdc.com/mis/ahktdc/en/s/abt-hktdc-global-network.html,
or contact us at Hawaii, San Francisco and Hong Kong http://www.hkchcc.org/contact_us.htm
Business support: Secretary for Commerce & Economic Development Gregory So speaks at the launch ceremony of the Dedicated Fund on Branding, Upgrading & Domestic Sales.
Applications for the Government’s HK$1 billion (US$128 million) Dedicated Fund on Branding, Upgrading & Domestic Sales opened today, and will be accepted until June 2017 subject to the funding balance.
Secretary for Commerce & Economic Development Gregory So said the fund helps Hong Kong enterprises enhance their competitiveness, and facilitates their business development in the Mainland market.
"I am confident the Dedicated Fund on Branding, Upgrading & Domestic Sales can provide the necessary and adequate support to the trade," he said.
The fund's Enterprise Support Program and the Organization Support Program provide funds for enterprises and non-profit-distributing
organizations to undertake projects to develop brands, upgrade and restructure business operations, and promote sales on the Mainland.
The Productivity Council assists the implementation of the Enterprise Support Program, which is open for all Hong Kong non-listed companies with substantive business operations in Hong Kong.
The Government will cover a maximum of 50% of the total approved project cost. During the tenure of the fund, each enterprise can obtain funding for a maximum of three approved projects, and the cumulative funding ceiling is
$500,000 (US$63,888). Each funded project should be completed within two years.
The Trade & Industry Department implements the Organization Support Program. The maximum amount of funding support for each project is $5 million or 90% of the approved project expenditure, whichever is lower. The maximum duration of a project is three years.
For details visit the Enterprise Support Program’s website or the Organization Support Programme’s website
To help Hong Kong enterprises capture the opportunities arising from the National 12th Five-Year Plan, the Hong Kong Special Administrative Region Government setup a "Dedicated Fund on Branding, Upgrading and Domestic Sales" (the BUD Fund) of HK$1 billion (US$128 million) in June 2012. The Fund aims to provide funding support to assist Hong Kong enterprises in exploring and developing the Mainland market through developing brands, upgrading and restructuring operations, and promoting domestic sales in the Mainland.
The BUD Fund comprises two programs http://www.bud.tid.gov.hk/english/bud/bud_intro.html:
(i) Enterprise Support Program: to provide funding support for individual Hong Kong enterprises. The Hong Kong Productivity Council acts as the Secretariat to assist in implementing the Program
(ii) Organization Support Program: to provide funding support for non-profit-distributing
organizations. The Trade and Industry Department implements the Program.
June 14 2012 Share
Work together on global push, Beijing tells firms - Central government will act as matchmaker to help mainland and Hong Kong companies invest overseas By Jane Cai in Beijing
Shanghai-based Bright Food heeded Beijing's call to expand abroad, buying a 60 per cent stake in British company Weetabix Food in May.
Mainland companies will be encouraged to work with Hong Kong firms to pursue outbound investments as part of Beijing's go-global push.
Deputy Commerce Minister Gao Hucheng told a media briefing yesterday that Beijing would act as a matchmaker, helping more Hong Kong and mainland firms form consortiums to invest overseas.
"We are trying to set up a platform to facilitate the co-operation of Hong Kong and mainland companies so that they can go abroad together," Gao said, adding that the ministry has been organising talks between business delegations, hoping to consolidate tie-ups.
Beijing began encouraging state-owned companies to go abroad in 2007 when it attempted to direct a capital outflow to combat stubborn inflation. Capitalising on the country's rising economic might, Beijing is now determined to encourage Chinese firms to conduct merger and acquisition deals abroad.
The deputy commerce minister's statement signalled that Beijing is keen for Hong Kong companies to play a supporting role in the campaign. Hong Kong companies have the edge on their mainland peers in, for example, fashion design and service industries. Beijing officials want mainland companies to draw on their Hong Kong peers' experience in managing hotels, conference venues and office buildings.
"They have expertise in construction project supervision and consulting, which is much needed by mainland companies making overseas investments," Gao said.
Chinese companies have grappled with regulatory hurdles in the past year to complete overseas acquisitions because of foreign political opposition against Beijing and its state-controlled corporate giants.
Many of the companies now use either a foreign proxy or hire well-known advisers to help seal the deals. In May, Shanghai-based Bright Food (Group) announced it would buy 60 per cent of British cereal maker Weetabix Food for £1.2 billion (HK$14.48 billion), including debt. The deal was advised by the global investment banking arm of Rothschild Group.
Dealogic data showed that the total outbound acquisitions by mainland companies were valued at US$61 billion in 2011, up 20 per cent from a year earlier.
The ministry also plans to step up efforts to support the development of small- and medium-sized firms. Gao said the ministry was confident that year-on-year growth of exports and imports would top 10 per cent this year despite a global slowdown.
June 13 2012 Share
Super-Yacht Adastra built by China shipyard owned by Australian Showcased in Hong Kong
The luxury trimaran Adastra was a collaborative project involving English, Australian and Hong Kong expertise.
The futuristic, 42.6-metre high-tech trimaran, Adastra, was built in an Australian-owned Zhuhai shipyard, McConaghy Boats, at a cost of US$15 million. The structural engineering of the yacht was carried out by John Shuttleworth Yacht Designs of Southamptom, United Kingdom, with interior design by Hong Kong company Jepsen Designs.
The high-speed, fuel-efficient yacht has been hailed by Boat International magazine as “one of the world’s most amazing super yachts that could spell the future for effective long-range cruising.” It was built over eight years for Hong Kong ship-owner Antony Marden, Managing Director of Fenwick Shipping Services Ltd, and his family. The interior designer, Inge Strompf-Jepsen, founder of Jepsen Designs, is another Hong Kong local: an experienced sailor and former commodore of the Royal Hong Kong Yacht Club.
The 42.6 metre high-tech trimaran has been hailed as as “the future for effective long-range cruising
An architect and designer who spent four years on the project, Ms Strompf-Jepsen said it was “one of the most beautiful jobs in terms of design, as everything we did was a one-off, made to order.” As the owner of a Hong Kong company founded in 1988, she said it was “very satisfying” to be involved in such a high-profile project.
Last month’s high-profile launch coincided with the unveiling of the luxurious Squadron 65 at the Hong Kong Gold Coast Boat Show. This marked the first public appearance of the award-winning cruiser in Hong Kong since the appointment of Jebsen Marine as authorised Hong Kong dealer for the British yacht manufacturer Fairline Boats last year.
Fairline, one of the most popular luxury motor yachts in the world
“Hong Kong continues to be one of our most successful markets,” Bryan Jones, President of Fairline Boats Asia, said at the launch. “As more Fairline boats arrive, it heightens the belief in our brand by our clientele to demand the very best.”
One of the brand’s most revered models, the Squadron 65 has three cabins plus a crew cabin, all with ensuite bathrooms. Its flybridge was designed with hospitality in mind, featuring comprehensive entertainment facilities, including two large, luxurious daybeds.
Designer John Shuttleworth (second from left), with Hong Kong owners Anto and Elaine Marden, at the launch Recent sales in Hong Kong have included the brand’s flagship model, the Squadron 78 Custom, sold in December; a Squadron 42, sold in January, and a new Squadron 50, pre-sold and delivered in May.
Bryan Jones, President, Fairline Boats Asia
Mr Jones said the company “strongly believes” that Hong Kong, as part of Greater China, has the capacity to become the world’s largest purchaser. “This market, along with South America, Russia and Southeast Asia, is already contributing to approximately 40 per cent of the company’s turnover.”
He noted that every market in Southeast Asia is growing. “However, Hong Kong and the Chinese mainland continue to outperform all other markets. In addition, there has been a surging trend in the growth of yacht buyers and high net-worth individuals in Hong Kong and the mainland. With over 10 yachting clubs in Hong Kong alone, it continues to be the centre of Asia-Pacific’s yachting scene.”
Mr Jones added that the combination of low taxation on ownership of leisure boats, coupled with the 200 islands and coves that surround Hong Kong, “makes it one of the best places to own a boat within Asia.”
Demand on the Rise
Lars Petersen, General Manager of Jebsen Marine Lars Petersen, General Manager of Jebsen Marine, exclusive distributor of such prestigious brands as Riva and Fairline, said buyer enquiries are increasing. “Since the boating season has just started, we are receiving an increasing number of enquiries, and interest is certain to be high for the Squadron 65, which won a prestigious Motorboat of the Year Award 2010 in her respective category.”
Hong Kong-based Jebsen Marine is well-positioned to benefit from the Chinese government’s plans to develop the yachting industry and related tourism offerings at several coastal locations. The trend often goes hand-in-hand with the development of coastal properties. Quoting figures from the China Cruise and Yacht Industry Association (CCYIA), Mr Petersen said boat ownership is expected to grow from its current 1,500 to more than 100,000 in the next decade. The Italian Trade Commission, he added, has found that the Chinese yacht market will reach US$10 billion by 2020.
Mr Peterson also said that, as a yachting destination, Hong Kong “has its irreplaceable charms. A growing pattern that we’re seeing is families from the northern parts of China berthing their yachts in southern areas such as Nansha, Hainan and even Hong Kong. These families would then travel southward for vacations; it’s very similar to the usage patterns in North America and Europe.”
June 12 2012 Share
Diageo considers Hong Kong listing By Nathalie Thomas
Diageo, the world’s biggest drinks company, has admitted for the first time that it has studied a potential listing on the Hong Kong stock exchange as it continues to cement its Asian expansion.
Diageo, which is growing in Asia where Scotch whisky is becoming increasingly popular, has done some work on a potential listing in Hong Kong.
Paul Walsh, the chief executive, said listing on a stock market in one of the developing regions was something Diageo’s board “do and will continue to consider” as it extends its global footprint.
The drinks giant, which last week unveiled a £1bn investment in Scotch production, is already listed on both the London and New York stock exchanges. But it is looking at Asia as it nears its goal of generating 50pc of revenues from emerging markets by 2015.
When asked if the company had done some work on a potential listing in Hong Kong, Mr Walsh said: “Yes, there will have been some discussion documents provided.”
However he stressed a move was not imminent.
“If we get too besotted about what can be peripheral issues we can risk taking our eye off the ball,” he told The Sunday Telegraph.
“But … it’s something we should keep on the watch list and we will do so.”
It is expected that Diageo will pursue a listing in Asia, likely to be Hong Kong, when it needs to raise funds for a major acquisition.
The FTSE 100 heavyweight is currently in pursuit of Jose Cuervo, the world’s biggest tequila maker by volume.
Analysts anticipate that Mr Walsh will secure a deal in which the brand’s owner, Mexico’s Beckmann family, will take a 3pc stake in Diageo in exchange for control of the drink, which is valued at £2bn to £2.3bn.
June 11 2012 Share
Joseph Yam calls for review of HK-US dollar peg By Lai Ying-kit
Joseph Yam Hong Kong's former financial chief has called for a review of the peg linking the Hong Kong and US dollars.
Hong Kong's former financial chief called for a review of the peg linking the Hong Kong and US dollars, in an article published on Tuesday.
In an academic article titled The Future of the Monetary System of Hong Kong, Joseph Yam Chi-kwong suggests changing the system he helped create in the early 1980s to stabilise the city’s currency.
The article was published by the Institute of Global Economics and Finance of the Chinese University of Hong Kong.
Yam’s proposed changes include pegging the Hong Kong dollar to a basket of foreign currencies, a peg to the yuan and a floating rate.
Commenting on the article, incoming chief executive Leung Chun-ying said Yam’s suggestions were “nothing new”. Leung had no intention of making any such changes after he takes office in July, he said.
“The linked exchange rate system has worked well over the past 30 years or so. My stance is very clear. There is no need to change the system or the level of the exchange rate,” Leung told reporters.
Yam’s suggestions, Leung said, were his personal views and had nothing to do with the incoming administration.
“I hope the international community and foreign monetary institutions will not be affected by Yam’s article,” he said.
Financial Secretary John Tsang Chun-wah said the government saw no need to change the peg. Yam’s suggestions had previously been raised and discussed within the government, and it maintained its view that the peg was working well, he said.
“There is absolutely no need to make any change. The system is the best for Hong Kong,” Tsang said.
Earlier on Tuesday, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam said the linked exchange rate helps to maintain the currency’s stability.
“This view has been repeatedly recognised and supported by the IMF [the International Monetary Fund],” he said.
Chan also dismissed suggestions that the currency peg was a major factor contributing to high inflation, saying other elements – such as changes in supply and demand, the global economy and market sentiment – also played a part. Singapore, like Hong Kong, has been experiencing high inflation and a looming bubble in property prices even with its floating rate, he noted.
In reaction to Yam's article, Financial Secretary John Tsang Chun-wah said on Tuesday after returning from Macau that he saw no need to change the peg.
Chief executive-elect Leung Chun-ying said on Tuesday he had read Yam’s paper and there was nothing new in it.
“The peg has stabilised our financial markets and economy for 30 years,” he said. “So, I think it’s unnecessary to make any changes ... I repeat, the peg won’t change.”
June 11 2012 Share
Leung Chun-ying says any delay to the government restructuring plan could adversely affect Hong Kong's social and economic development, which is already falling behind that of its rivals
In Hong Kong, momentum used to be connected with high speed and high efficiency. But, today, it often suggests the contrary. Hong Kong's economy has registered an average annual growth of 3.96 per cent over the past two decades, while Singapore's progressed at 6.6 per cent. With an economy just half the size of Hong Kong's 10 years ago, Singapore has now surpassed us. Mainland cities are also catching up. In this respect, the proposed reorganisation of the government secretariat, including the setting up of a Commerce and Industries Bureau and a Housing, Planning and Lands Bureau, as well as the creation of deputy secretary of department posts for better policy co-ordination, seeks to boost our social and economic development, which has been slowing for some time.
The two Legislative Council public hearings on the restructuring plan, held on two Saturdays last month, drew more than 250 people who sought to express their views. These included representatives from professional bodies such as the Hong Kong Professionals and Senior Executives Association, the Hong Kong Institute of Surveyors, the Association of Hong Kong Professionals, the Hong Kong Information Technology Joint Council, and the Internet Professional Association. They all expressed their support for the restructuring plan.
Civil service bodies such as the Hong Kong Chinese Civil Servants' Association, the Hong Kong Senior Government Officers Association, the Government Employees Association, the Hong Kong Civil Servants General Union, the Hong Kong Federation of Civil Service Unions, the Disciplined Services Consultative Council (Staff Side) and the Model Scale 1 Staff Consultative Council (Staff Side) have all urged Legco to pass the reorganisation proposal at an early date.
The 36 chairmen and vice-chairmen of the 18 district councils, members of the Federation of New Territories Youth and many other social organisations have also shown their approval for the restructuring plan through newspaper statements. I thank them all for their support.
Legco members have raised questions and concerns about the proposed reorganisation as well as the effectiveness of the political appointment system. My colleagues in the Office of the Chief Executive-elect have been doing their utmost to respond and elaborate. As regards the meetings to be held in the coming weeks, no matter how frequent and lengthy they may be, my colleagues, as always, will fully co-operate.
In the past four weeks, my office colleagues have explained the rationale behind the reorganisation to various Legco panels and the subcommittee to study the proposed legislative amendments relating to the reorganisation of the Government Secretariat in 19 sessions, lasting about 48 hours. In response to legislators' requests, we have also provided supplementary papers on the working relationship between the two deputy secretaries of department and the secretaries of department/directors of bureau, the new-term government's proposed improvements to the political appointment system, the division of work in taking forward co-operation with the mainland and the legality of creating the rank and post of deputy secretary of department.
It has been 10 years since the implementation of the political appointment system. It is true that the system leaves much to be desired and there is room for improvement. However, this should not be directly linked with the reorganisation proposal. When compared with the existing government structure, I believe that our proposed division of responsibilities and co-ordination network, operating under the same accountability system, can better cope with the needs of the community.
I have agreed to conduct a comprehensive interim review of the political appointment system after gaining operational experience. This will include examining the gap between the performance of the system and the expectations of the public, as well as the pay adjustment mechanism. After taking office, I will also study seriously the recommendations of the Independent Review Committee for the prevention and handling of potential conflicts of interest. Post-service employment restrictions and the reward and penalty mechanism are two areas that I will look closely at. In a pragmatic manner, we will take the matter forward with Legco members.
The proposed reorganisation draws on the current government's experience over the past five years and is part of my election manifesto, which was only finalised after widely gauging the views of the public for months. My manifesto embraces community feedback amassed during more than 100 district visits combined with the fruits of continuous communication with the current government and the civil service. The proposed reorganisation is a framework well thought out and based on the city's collective wisdom.
It is high time we addressed our economic and livelihood issues. Further procrastination simply will not help.
Leung Chun-ying is Hong Kong's chief executive-elect
June 7 2012 Share
Q&A with chief executive-elect CY Leung - Barely three weeks before his term as Hong Kong chief executive begins, Leung Chun-ying speaks to the South China Morning Post about his top priorities and biggest challenges By Colleen Lee and Gary Cheung
June 4 crackdown
Q: Under your rule and the principle of "one country, two systems" in Hong Kong, would activities commemorating the June 4 movement be allowed?
A: Freedoms like freedom of speech and of assembly are guaranteed by the laws of Hong Kong. On June 4 next year, those who mourn for the deceased in the same way as [they did this week] can still hold their activities.
I have no plan to change the law [in this respect]. We act in accordance with the law today. The same applies next year.
I am aware that some people have genuine concerns. To them, [I can say that] I will definitely maintain good communication with them. I will let them know my stance through [the media].
Some people, meanwhile, have misplaced apprehensions. Before 1997, many [public figures] openly said … 'As I am a pro-democracy [activist], I will not be able to leave Hong Kong after 1997 as [I am worried that] I will not be allowed to return home'.
Others said 'I could be put into jail after 1997', while some said some newspapers and magazines could be forced to shut down after 1997.
In the 10 years following 1997, did this happen? No, it didn't.
Q: Were you personally touched seeing the turnout of the vigil [on Monday]?
A: I will not ... I am not saying I was not touched. I have no comment [on the turnout].
Reconciliation with the pro-government and pan-democratic camp
Q: How would you assess the result of the reconciliation [between your allies and those who supported defeated candidate Henry Tang Ying-yen]?
A: It is good. Many of Henry Tang Ying-yen's supporters were good friends of mine. But during the election campaign, they supported Tang.
We should have political maturity. There can also be competition in the pro-establishment camp. In the US, when the primary of a party is over, they remain in the same party. Their party will endorse one single candidate. When the battle between two candidates [from two different parties] is over, it is still one country. This is maturity.
Q: Should the scope of reconciliation be enlarged to cover the pan-democratic faction? Will your cabinet include some surprising names - those who are considered democrats?
A: I will try to be as inclusive as possible.
Spending on duty visits
Q: In future overseas trips, will you set a good example by flying business class [rather than first class, as Chief Executive Donald Tsang Yam-kuen has done] and advise the top officials under your administration to follow suit?
A: I will adhere to the following principle: on government-funded duty visits, for long-haul flights, if lie-flat seats are equipped in business class, I will opt for business class. If not, I will fly first class. But most airlines now provide lie-flat seats in business class.
For short-haul journeys to places like Beijing, it is totally unnecessary to fly first class.
Q: Do you think this will put pressure on your colleagues like [your press secretary]?
A: If she proposes it, I will fly economy class along with her.
Pay level of political appointees
Q: After seeking consent from the Chief Executive-elect's office, the government has announced a salary freeze for principal officials in response to public opinion. However, some democrats say the pay of top officials should be cut. If there are growing voices for a pay cut, how would you respond?
A: After I assume the post in July, we will study a mechanism to decide the salary levels of top officials. There was only limited time before July and it was not the best timing to have a big exercise on the issue. I think a salary freeze is appropriate at the moment.
While we are deciding the salary level for main officials, we need to strike a balance between maintaining the attractiveness [of salaries] to recruit talent while catering to people's perceptions. Meanwhile, we also need to consider the salary gap between principal officials and senior civil servants. If there is a pay cut of 30 per cent for principal officials, will it affect the salaries of civil servants?
Q: You mentioned studying a mechanism to decide salary levels. Will this be different from the mechanism proposed by the incumbent government?
A: We will consider that later because there are a lot of issues to be dealt with in the coming few months. The mechanism proposed by the incumbent government was made by an independent committee. But how should we utilise that mechanism after July 1?
Whether it should be decided by the government solely, or by appointing another independent committee to study the issue? And what kind of criteria should we be considering in making the decision? We will need to study all these issues after I take office.
Q: As you have mentioned before, one of the reasons many Hongkongers distrust the government is because they don't have a vote. Do you have any concrete plans or timetable for introducing universal suffrage?
A: I don't have an idea yet. I hope there will be more discussions in society. Learning from the lessons of the previous political reform [adopted in 2010].
We need to have more in-depth discussions - and not just of the number of nominations required to run in the chief executive election. We should also consider the threshold of votes needed to be elected through universal suffrage.
Do we need a simple majority to be elected? If so, we may need multiple rounds of election. If not a simple majority, how many votes required to be elected? Forty per cent or 30 per cent [of the total votes]? This issue is related to the number of candidates allowed to run in the election.
In the US and UK there are a few big political parties who field their own candidates - this not the case in Hong Kong. Therefore, the nomination threshold is not about a screening mechanism but about the mandate of the elected.
I am open to suggestions on all these issues and I believe they are worth discussing.
June 6 2012 Share
Should you work for the Government of Hong Kong?
Sample Hong Kong Annual Pay Scale (Maximum Tax rate 16%, NO sales tax, retirement tax and etc)
Chief Executive (equivalent to Governor) US$540,000
Treasury Secretary (equivalent to US Treasury Secretary) US$480,000
Finance Secretary US$464,615
Attorney General US$449,207
Deputy Directors (all departments) US$441,563
Department Heads US$433,969
Deputy Department Heads US$303,778
Political Assistants assigned to all of the above US$153,846/staff
Civil Servants (Government Employees)
Senior level US$159,846
June 5 2012 Share
Prime Location - launching projects in Hong Kong first – often even before their home country
Fitzroy Place, Fitzrovia, under development in prime Central London
In these days of difficult real estate markets, success of a scheme – however attractive – is by no means certain. Hence, more developers of key projects in prime international cities are launching in Hong Kong first – often even before their home country.
The reasons speak for themselves. Fitzroy Place in prime central London, jointly launched by Savills and CBRE in Hong Kong last month, followed by Singapore and Kuala Lumpur, is believed to be the most successful project launched in Asia-Pacific.
In the past six months, Colliers International has launched three sold-out projects for Regal Homes in Asia. This month, Jones Lang LaSalle is launching its latest prime Central London development, 375 Kensington High Street, in Hong Kong first.
Gavin Sung, Director, Savills in London
Developers from Australia, the United States and Canada are routinely choosing Hong Kong to kick off their Asian roadshows. Gavin Sung, Head of Residential Development Lettings Investment for Savills in London, said the Asia-Pacific, “and specifically Hong Kong,” has the biggest appetite for off-plan purchasing, which draws developers to launch their products here. In the United Kingdom, he explained, buyers are not keen to commit until a project is completed, whereas in Asia, buying property from a plan is natural.
Ashley Osborne, Colliers International Executive Director for International Properties
Prestigious Fitzroy Place, the most significant development in trendy Fitzrovia for more than 50 years, is a case in point. Developed by Exemplar Properties Holdings, and backed by insurance giant Avia plc, the scheme held its global launch in Hong Kong’s Mandarin Oriental Hotel last month.
Mr Sung described the launch of the property, comprising 230 luxurious, bespoke residences designed around a green square within a short walk of Oxford Street, as “extremely successful.”
Apart from Fitzroy Place, Savills has successfully brought its most lucrative development opportunities to Hong Kong over the past few years, including The Lancasters, a Northacre development in W2, Central London; 2 Hyde Park Square, Wellington House, Central Square, EC1; and Chevalier, Knightsbridge. In Hong Kong, the firm markets to savvy, risk-averse investors who “are well-versed in the global economic platform and are quick to make a decision.”
A typical living room at The Residences at St Regis Bangkok, developed by Minor International
Ashley Osborne, Colliers International Executive Director for International Properties-Asia Pacific, finds that developers from London, Australia, North America and Southeast Asia are increasingly looking to launch their projects in Hong Kong.
James Knowles, Vice President Sales and Marketing, Minor International
“Relative to their European and North American counterparts, Asian investors tend to hold a much larger allocation of their personal wealth in real estate assets rather than equities. By virtue of having a diverse portfolio allocation, most investors look to international real estate markets to preserve capital and make potential capital gains,” said Mr Osbourne, who added that low international taxes and weaker international currencies have made locations such as London and Canada popular.
“For a long time, Hong Kong has been an important market for property developers launching their projects because of the number of investors who are prepared to invest in offshore real estate.”
Mr Osbourne expects more will follow. “We continue to see strong growth in demand for offshore investment in London, due to the weakness of the pound, the low tax rates and overall lack of supply relative to demand. Longer term, we see green shoots in the US market and positive sentiment for the Canada market.”
Jones Lang LaSalle agrees that buyers from Hong Kong see prime London property as a safe haven for their wealth and to diversify their existing assets. “Demand for the best London properties remains buoyant and we are seeing lack of supply and more demand for high-end properties,” said James Thomas, International Director of Residential Development and Investment at Jones Lang LaSalle London.
He expects the exclusive 375 Kensington High Street scheme, in the prime Royal Borough of Kensington, to be very well received. Mei Wong, Regional Director and Head of International Property at Jones Lang LaSalle in Hong Kong, noted that in addition to a “famous” address, the property has services and facilities to rival any five-star hotel.”
Hong Kong also remains the main promotional focus for luxury-branded properties in Thailand, according to James Knowles, Vice President Sales and Marketing-Residential Property for Bangkok-headquartered Minor International PCL.
He noted that Hong Kong nationals are the single-largest investor group in St Regis Residences Bangkok (accounting for 25 per cent of unit sales), “and continue to make up a good portion of our regular hotel business in Thailand.”
“Hong Kong is an extremely established market to showcase luxury international properties,” Mr Knowles said. “Our prospective buyers often reside in Hong Kong; the network of quality advertising and PR channels is easy to access and very supportive; and the close affinity that Thailand and Hong Kong share with their tourism and the frequency of air links makes it a natural place for us to come to.”
Record Sales “Overwhelming”
Daniel Van Gelder, Director, Exemplar Properties
When Fitzroy Place, Fitzrovia, held its global launch in Hong Kong in May, the results far exceeded even the highest expectations. The scheme set a record price for prime Central London residential property, and developer Daniel Van Gelder, Director of Exemplar Properties, said he was “overwhelmed” to achieve values of up to £2,900 per square feet for an £8 million penthouse.
“We picked Hong Kong as our initial launch venue for a number of reasons,” Mr Van Gelder said. “Geographically and socially, it is at the heart of Southeast Asia, with some of the fastest-growing economies in the world on its doorstep, and of course, it's the gateway to China.
“There has been a significant increase in recent years of investment in the UK property market, both commercial and residential, from China, so obviously it makes perfect sense to promote the project here first. Sharing the same language obviously helps, as does the highly educated and intelligent investor base who understand the reasons why the UK offers such a good and secure investment base. We will be coming back to Hong Kong this winter with the final building at Fitzroy Place.”
May 31 2012 Share
Hong Kong ranked world's most competitive economy for second consecutive year
Hong Kong has been ranked the world's most competitive economy for the second consecutive year according to the International Institute for Management Development (IMD) World Competitiveness Yearbook 2012.
The Financial Secretary, Mr John C Tsang, said today (May 31), "We welcome the IMD's high regard of Hong Kong as the world's most competitive economy for the second consecutive year.
"Hong Kong is highly competitive vis-à-vis most other economies in the world, especially in terms of government efficiency, business efficiency and macroeconomic performance. In particular, openness to trade, rule of law, a business-friendly environment, sound fiscal policy, mature institutional framework, well-functioning financial market, and global city image are key factors underpinning Hong Kong's success.
"We will continue to enhance Hong Kong's competitiveness on various fronts to strengthen our position as a global city."
According to the IMD World Competitiveness Yearbook 2012 released today, Hong Kong maintains its top position, followed by the US, Switzerland, Singapore and Sweden. Last year, Hong Kong and the US had the same score and were both rated by IMD as number one. This year Hong Kong's score has surpassed the US, which is now in second place.
Among the four competitiveness factors assessed, Hong Kong continues to take the lead in government efficiency and business efficiency, and remains fourth in economic performance.
The report ranks the competitiveness of 59 economies around the world in various aspects. The four competitiveness factors assessed are: economic performance, government efficiency, business efficiency and infrastructure, each consists of five sub-factors. Analysed by sub-factor, Hong Kong ranks first in international trade, public finance, business legislation, finance, attitudes and values, as well as technological infrastructure.
Of the other economies in Greater China, the Mainland ranks 23rd and Taiwan 7th.
IMD World Competitiveness - The International Institute for Management Development (IMD) is a leading business school located in Switzerland. The school publishes the IMD World Competitiveness Yearbook (WCY) annually which ranks about 60 nations based on competitiveness. According to IMD, the WCY is the world’s most thorough and comprehensive annual report on the competitiveness of nations. It has been published since 1989 and covers 57 countries using 329 criteria to provide a comprehensive view of the competitiveness of nations. The WCY also relies strongly on hard statistical data, which represents 2/3 in the overall ranking (1/3 are opinion data).
May 30 2012 Share
Hong Kong Focus on Services
Hong Kong will be allowed to invest in the mainland securities market through the Renminbi Qualified Foreign Institutional Investor program
The visit by China’s Vice Premier Li Keqiang to Hong Kong last summer signalled a breakthrough for Hong Kong services operating on the Chinese mainland under CEPA. Revealing a package of 36 measures, the Vice Premier indicated that trade in services between the mainland and Hong Kong would essentially be liberalised by the end of the current 12th Five-Year Programme in 2015.
It’s perhaps one of the clearest indications yet of how soon and how far the mainland market will eventually open for Hong Kong services suppliers and professionals. They can expect progressive liberalisation in a number of sectors over the next few years, until they’re accorded national treatment.
Culture Among New Services
The latest service liberalization measures under Supplement VIII, the ninth phase in the CEPA arrangements, took effect in April. The new package expands the
liberalization of 16 services sectors through 23 measures already granted, with five measures under three new sectors: inter-disciplinary research and experimental development services, manufacturing services, and library, museum and other cultural services.
The latest CEPA supplement, which took effect last month, makes it easier for Hong Kong services suppliers to do business on the mainland
CEPA Supplement VIII expands the number of liberalised sectors under CEPA from 44 to 47, while bringing the total number of liberalised measures to more than 300.
An important breakthrough is the relaxation of the “substantive business operations” criterion for Hong Kong services suppliers. The business scope now allowed on the mainland won’t be restricted to their business in Hong Kong: services suppliers will, for the first time, be allowed to apply for CEPA benefits on the mainland in areas not confined to the 47 sectors.
The 16 services sectors covered under the latest supplement include legal services, construction services, research and development services, technical testing, analysis and product testing, manufacturing services, job intermediary services, distribution, as well as key insurance, banking and securities services. Medical services, tourism, recreational, cultural and sporting services, road transport services, professional qualification examinations and individually owned stores make up the remainder of the categories.
To cope with the fallout of the international financial crisis that began three years ago, Hong Kong is nurturing the growth of six new industries in which it enjoys clear advantages: education services, medical services, testing and certification services, environmental industries, innovation and technology, and cultural and creative industries. CEPA has incorporated measures geared to benefit those industries. The new measures also reflect the symbiotic relation between Guangdong and Hong Kong as a result of their geographic proximity and strong business ties – and the fact that cooperation between the two economies has been elevated to national-policy level.
Asia’s Financial Center
Hong Kong is known for quality medical services on the mainland
Last December, Hong Kong moved to the top of the World Economic Forum’s Financial Development Index, overtaking the United States and the United Kingdom for the first time since the index was launched in 2008.
The index measures the efficiency and size of banking and other financial services, the business environment, financial stability, and the extent of financial disclosure and market liberalisation. Last September, the Global Financial Centre Index, compiled by the City of London, ranked Hong Kong Asia’s leading financial centre, and only marginally trailing London and New York.
CEPA has been a key mechanism employed to spearhead financial cooperation between the mainland and Hong Kong. Supplement VIII to CEPA supports mainland banks making use of Hong Kong’s international financial services to develop their international business on the basis of prudent operation. To gain preferential access to the mainland market, for instance, it was established in previous CEPA provisions that the minimum asset requirement for establishing a branch or body corporate there would be set at US$6 billion, considerably lower than the requirements that would otherwise apply to non-CEPA foreign banks.
For a Hong Kong bank to set up a wholly foreign-funded bank or a foreign bank branch on the mainland, the minimum time required for maintaining a representative office on the mainland was set at one year prior to the application, compared to the two-year minimum for other foreign-funded banks.
Renminbi Investors Program
Under CEPA VIII, Hong Kong will be allowed greater involvement in the mainland financial market
Crucially, under Supplement VIII, Hong Kong will now be allowed to invest in the mainland securities market by means of the Renminbi Qualified Foreign Institutional Investors (RQFII) programme. While the RQFII programme will be the primary route for Hong Kong subsidiaries of mainland financial institutions to invest in the mainland financial market, the China Securities Regulatory Commission has also indicated that it is studying the feasibility of allowing more overseas institutional investors to participate in the pilot RQFII program. It’s also looking at expanding the investment ratio and products in the future.
The RQFII program will enhance the mechanism of recycling offshore renminbi into the mainland and reinforce the role of Hong Kong as an offshore renminbi centre.
Hong Kong bank branches or wholly foreign-funded banks established in Guangdong are allowed under CEPA to set up “cross-location” sub-branches in Guangdong, without a branch being first established in the same administrative area. More than a dozen Hong Kong banks now operate in Guangdong, many of which have invoked the cross-location sub-branching measure to speed up establishment of their networks in Guangdong.
Supplement VIII to CEPA also stipulates that any mainland-incorporated banking institution established by a Hong Kong bank will be allowed to engage in the sale and distribution of mutual funds from April. This measure will expand the allowable business scope for Hong Kong banks operating on the mainland, taking advantage of mainlander needs for investment diversification as they become increasingly affluent.
Medical and General
Hong Kong’s medical sector is recognised on the mainland for its professionalism and service quality, especially in Guangdong, where many people travel to Hong Kong to take advantage of the city’s premier medical services.
As a hub for medical tourism, Hong Kong is better known for cutting-edge procedures and quality, with top hospitals and doctors offering medical care that rivals the best practices in the world.
Supplement VIII allows the establishment of wholly owned hospitals beyond the five pilot places of Guangdong, Shanghai, Chonqing, Fujian and Hainan, to cover all mainland municipalities and provincial capitals.
This measure will broaden the location for establishing Hong Kong-run hospitals on the mainland. This new liberalisation measure is expected to supplement existing ones by providing greater job opportunities for Hong Kong healthcare practitioners to work in Hong Kong-run hospitals on the mainland.
China Compulsory Certificate
As for Hong Kong laboratory and testing services, mainland authorities are intent on fuelling economic growth with private consumption. To be sold on the mainland, many products must receive the official safety requirement, the China Compulsory Certificate, or CCC mark.
In keeping with Supplement VII, which opened the new sector of CCC product testing for the first time to the Hong Kong services sector, Supplement VIII will expand the scope of CCC product testing from some Hong Kong-processed items to all existing products processed in Hong Kong that require the CCC mark.
The mainland has never opened CCC-related product testing to foreign testing entities before, so this CEPA provision is certainly a “WTO-plus.” Among testing organisations in Hong Kong, about 160 are eligible to benefit from such a scheme. Hong Kong bodies wanting to perform testing for the relevant products under the CCC system will have to be accredited by the Hong Kong Accreditation Service, a unit of the Hong Kong Government.
Though falling short of market expectations, this measure is a marked improvement over the previous supplement, in that it covers all relevant Hong Kong-processed products. It should eventually be expanded to include items other than those processed in Hong Kong.
Service Sectors Benefiting from CEPA (1st to 9th Phase)
| Service Sectors Benefiting from
CEPA (1st to
||Medical and dental*
|Computer and related services
||Professional qualification examinations*
|Construction and real estate*˜
|Convention and exhibitions
||Research and development*
||Scientific and technical consulting
|Freight forwarding agency
||Services related to management
consulting and project management
|Individually owned stores*
||Social services for elderly and disabled
|Inter-disciplinary research and
experimental development service#
||Recreational, cultural and sporting
services (including library/museum services#)
|Job referral agency*
||Trade mark agency
||Translation and interpretation
||Transport (road and maritime)
* Existing services sectors with liberalisation
under Supplement VIII to CEPA
˜ Guangdong pilot and implementation measures under Supplement VIII to
# New services sectors under Supplement VIII to CEPA
Financing America in Asia - Hong Kong is a good partner
Patricia Loui recently visited Hong Kong on the latest of her regular stops in Asia as a member of the Board of Directors of the Export-Import Bank of the United States (Ex-Im Bank). With more than 30 years’ experience in the region, Director Loui is now leading the charge to promote US exports to Asia.
In Six Questions, Ms Loui explains why the official US export credit agency believes it has found a good partner in Hong Kong to help local SMEs finance exports of US goods and services
What brings you to Hong Kong?
The purpose of our visit is to identify opportunities for us to grow our China portfolio. We are interested in Hong Kong for its role as the United States’ 10th-largest trading partner, as well as its hub relationship of pass-through investment to China. We find that Hong Kong’s banking and financial services, as well as legal and other consulting professions, all offer tremendous insight to the trade relationships within the country. And we look to establishing with banks and other consultants in Hong Kong a mutually beneficial and valuable relationship in identifying opportunities in Greater China that will help increase Ex-Im Bank financing to its client base.
What services does Ex-Im Bank provide for small and medium-sized businesses here?
Ex-Im Bank was founded in 1934 to help support US jobs in the manufacturing and services sectors. We’ve been growing rapidly in the last few years, since President Obama launched the National Export Initiative (NEI), which seeks to double exports by 2015.
Currently, 85 per cent of our transactions and 20 per cent of our dollar value go to US SMEs. This benefits SMEs in other countries, because experience shows that SMEs tend to work with each other. One of the risks of a small or medium-size business is collecting on the products and services that you sell. The risk, or at least the perception of risk, is even greater when you are going outside your home country. So one very important product that we offer is insuring the US exporter’s accounts receivable. By doing that, the risk of non-payment is eliminated, enabling the seller to offer more favourable terms to international buyers.
Another major initiative is the Foreign Buyer programme, which allows importers of American products and services to get financing for their purchases of US-made products or services. We’re agnostic about the country of registration, so if Siemens is manufacturing in North Carolina, for example, we can finance them. The buyer-financing programme enables importers to get very competitive terms. We do medium term of five-to-seven repayment terms and, for larger purchases or structured finance projects, we can go up to 10 to 12 years. For renewable energy, we can lend for a term of 18 years at fixed rates.
What gaps in trade financing do you help to bridge?
Ex-Im steps in to provide an additional source of financing when it is not available to a qualified company in the commercial private-sector market.
We also level the playing field. The classic example is Airbus, which has been heavily financed by European export credit agencies. We believe, with confidence, that when American products have comparable financing, our quality, reliability, lifespan and economic life value all give US-made products the ability to compete effectively.
A good example is Hong Kong’s Cathay Pacific, which was looking to buy additional fleet, and considered both Boeing and Airbus. The financing available was critical in their decision-making. With Airbus offering financing through European export credit agencies, they obviously wanted to know what type of financing Ex-Im could match for Boeing. When the offer on financing was comparable, they chose what was perceived as the better product for their needs, and that was the Boeing 777.
Can that also work for smaller companies?
Yes, our smallest loan last year was US$4,000. For example, we financed the export of pickles to China by a family-owned business. In the power sector, we have financed smaller power units that are more suited as independent, stand-alone units within business industrial parks in Southeast Asia. When there are products from Japan, Europe and China, we can level the playing field for a product that is manufactured in the United States.
Another small company we finance is in the water-purification and filtering business. This is another family-owned company selling to large and small buyers around the world, and it has grown significantly due to Ex-Im financing.
In what other SME sectors do you help bridge financing gaps?
Renewable energy is another area. In many cases, renewable energy is more expensive to produce, yet it has a number of great benefits in terms of the economy as a domestic source and the overall environment as a renewable source. So, for example, in the solar area, China is very aggressive in supporting solar panel manufacturers. We’ve also stepped up to finance US-made solar equipment for major projects in India. We offer an 18-year fixed rate for renewable energy. By being able to lock in 18-year financing at a fixed rate, these renewable energy projects become much more viable.
Another area of SME financing is franchising of American brands, which is very big in Asia. We can finance the upfront licensing fee for a foreign buyer and insure accounts receivable for the domestic exporter. In the small-business area, we’ve financed hair care and small automotive products, educational materials and architectural services.
What role can Hong Kong play in supporting your efforts in Asia?
Hong Kong knows the trade finance area extremely well. Historically, it’s been built by trading companies, and this expertise is important to US exporters. One very strong indicator of the important partnership between Hong Kong and the United States is the Pacific Bridge Initiative, which was started by the Hong Kong Trade Development Council. We understand it’s the first agency outside of the United States government to support the US NEI.
And the fact that Hong Kong has a large group of professionals with expertise in trade financing and trade law, trade services and trade consulting benefits Hong Kong and the US. Hong Kong also has a well-developed bank infrastructure and years of experience in the trade finance area. Much of Ex-Im’s work is guaranteeing financing for banks, so this is a product companies here can use. Also, as we see more SMEs move into the Asia-Pacific region, they will be looking for consultants that Hong Kong can offer.
About Patricia M. Loui (PBN November 2 2011):
Patricia M. Loui of Honolulu was confirmed to a seat on the board of the Export-Import Bank of the United States by the U.S. Senate.
Patricia M. Loui has been confirmed for a place on the board of the Export-Import Bank of the United States , Sen. Daniel Akaka’s office said Wednesday.
Loui, who was nominated by President Barack Obama in May to serve on the board, was confirmed by the full Senate late Tuesday night, Akaka’s office said. She will serve on the board until Jan. 20, 2015.
“I spoke to Pat today and congratulated her on her well-deserved confirmation,” Akaka said in a statement. “She brings a wealth of international experience in banking, business, and economic development to the Export-Import Bank, and I am confident that the board will benefit from her skills, background and work ethic.”
Loui, the founder of the Hawaii-based marketing research firm OmniTrack Group Inc., also previously served as president of the East-West Center Association and as vice president of marketing, planning and development at Bank of Hawaii.
She also most recently served on the Hawaii Host Committee for the Asia-Pacific Economic Cooperation meetings, but resigned when she was nominated to the Export-Import Bank board.
May 23 2012 Share
Advantage Hong Kong - Partnering with Hong Kong - Tokyo and Osaka Symposiums
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More than 3,000 Japanese participated in “Think Global, Think Hong Kong” events in Tokyo and Osaka
The Japanese business community got a first-hand introduction to the benefits of doing business in Hong Kong through a major promotional event staged in Japan last week. “Think Global, Think Hong Kong (TGTHK),” held in Tokyo and Osaka, 13-19 May, featured more than 130 Hong Kong government officials and business leaders from 15 sectors, who underscored Hong Kong’s strengths.
Tokyo and Osaka Symposiums
Organised by the Hong Kong Trade Development Council (HKTDC), TGTHK’s two main events were high-profile symposiums in Tokyo and Osaka. More than 3,000 Japanese corporate leaders, government representatives, heads of small and medium-sized enterprises and services providers took part in the symposiums and a Hong Kong Dinner that followed the Tokyo symposium.
“Through the symposiums, we aim to foster even stronger ties between Hong Kong and Japan, highlighting how our city’s unique strengths can assist Japanese firms in spreading their wings to reach markets on the Chinese mainland, across Asia and all over the world,” said Hong Kong SAR Government Secretary for Commerce and Economic Development Gregory So, who led the TGTHK delegation in Japan.
Japanese officials welcomed the Hong Kong initiative. “Osaka’s economy has been suffering for some 20 years now, so we hope that we can harness Hong Kong’s potential as a global economic centre,” said Osaka Prefecture Governor Ichiro Matsui, speaking at the Osaka symposium.
“Hong Kong and Osaka are two cities that very much resemble each other, but Hong Kong is really a much larger international financial centre. So we in Japan’s Kansai region would very much like to utilise Hong Kong’s strengths,” Mr Matsui added.
Doing Business in Asia
Hong Kong Secretary for Commerce and Economic Development Gregory So highlights some of Hong Kong’s “unique strengths” that can help Japanese firms enter the Chinese mainland
The week-long program also featured a series of thematic sessions, offering participants market intelligence and practical information on how Japanese companies can work with Hong Kong to do business in Asia, especially on the Chinese mainland.
“We believe we are an excellent partner for Japanese business, from design and the creative industries to technology specialists, financial services and other companies interested in taking advantage of all that the mainland Chinese market has to offer,” said HKTDC Executive Director Fred Lam.
Breakout sessions included such topics as selling consumer brands, creating and distributing digital content, partnership opportunities in environmental and manufacturing technology, setting up business on the mainland’s Pearl River Delta, professional legal advice for doing business on the mainland, and opportunities from Hong Kong’s expanding renminbi business.
With Hong Kong the largest offshore renminbi banking center, Mr So noted that 187 banks, including 12 branches and subsidiaries of Japanese banks, participated in Hong Kong’s renminbi clearing platform. “Our efficient and reliable clearing platform provides an ideal opportunity for Japanese enterprises to settle trade transaction payments with their business partners in Mainland China using renminbi,” he said.
Partnering with Hong Kong
The Hong Kong Dinner, held in Tokyo, 15 May, attracted nearly 700 business and political leaders from Japan and Hong kong
According to figures from the Hong Kong Census and Statistics Department, more Japanese companies are using Hong Kong to support their regional business operations. Some 1,150 Japanese companies have set up a business in Hong Kong, an increase of six per cent over last year. Among those, about 650 maintain regional operations in Hong Kong.
A recent survey by the Japan External Trade Organisation shows that more than 70 per cent of Japanese SMEs would like to boost their business overseas, with 50 per cent planning to expand exports within the next three years. Out of those, nearly 69 per cent are considering China as their destination. Japan’s outward foreign investment flow jumped significantly, to US$115.7 billion last year, double that of 2010.
During TGTHK, professional services providers from Hong Kong’s financial, corporate, accounting and legal sector offered free business consultations to participants throughout the events. Business-matching sessions were organised in Tokyo and Osaka, with about 250 Japanese companies taking part in Tokyo.
Mitsuyoshi Yanagisawa, Japan’s Senior Vice Minister of Economy, Trade and Industry, urged the Hong Kong business community to continue to partner with Japanese SMEs and “serve as their gateway to international markets”
“Japanese SMEs would hope Hong Kong will continue to be their partner for globalisation and serve as their gateway to international markets,” said Mitsuyoshi Yanagisawa, Japan’s Senior Vice Minister of Economy, Trade and Industry.
The HKTDC’s Mr Lam emphasised the promise of partnership that the two economies can offer each other. “Whatever your product, service or business idea, partner with Hong Kong,” he said. “Together, we can create opportunity that rewards us all.”
May 18 2012 Share
The Next Global Art Powerhouse - With a booming art fair, Hong Kong caters to a new generation of wealthy collectors By Kelly Crow
Daniel Buren, 'Photo-souvenir: From Three Windows, 5 Colours for 252 Places, Work in Situ'
"Expansion" is a six-foot-long, multicolored abstract created by Chinese painter Chu Teh-Chun in 2006. The painting's title could also sum up the ambition of Art HK: The Hong Kong International Art Fair, where the work sold Wednesday to a Chinese buyer for around $900,000.
Since its kickoff five years ago, Art HK has grown into Asia's pre-eminent art fair, drawing over 60,000 people a year into a warren of booths that spread across a pair of vast halls in the Hong Kong Convention and Exhibition
'I Didn't Notice What I Am Doing,' pictured here, by Sun Yuan and Peng Yu., on view at the fair.
This year, at least 700 galleries applied for the fair's 266 slots, said fair director Magnus Renfrew. Several dealers, like Shanghai's Pearl Lam and Paris's Emmanuel Perrotin, waited until fair week to debut their new gallery outposts in Hong Kong. Luxury brands Veuve Clicquot and Shanghai Tang threw late-night parties to coincide with the event.
All of it dovetails with Hong Kong's long-term plans to become a year-round, art-selling hub to rival London or New York—an aspiration wedded to Asia's wealth boom.
There's still an unpredictable energy to Art HK, as Western galleries—who make up about half the fair's dealers—anxiously try to nail down the shifting tastes and spending habits of newer Asian collectors, who are the real power players here.
The mood has been mostly upbeat. Few booths are sold out entirely, but major galleries like Pace are reporting steady sales for works priced under $1 million, thanks mainly to buyers from Asia and Europe. Dealers said at least 300 Australian collectors signed up to attend, happy to have a fair comparatively close to home.
On the other hand, American collectors, who typically flock to major art fairs world-wide, have proven surprisingly scarce. Dealers reasoned that Americans might have gotten their fix at Frieze, a London fair that debuted its own New York edition two weeks ago. Others are also likely saving up for next month's Art Basel, the Swiss contemporary art fair whose owner MCH Group recently bought a majority ownership stake in Art HK. (Next spring, Art HK will be renamed Art Basel Hong Kong.) The fair closes Sunday.
On Wednesday, a reliable group of well-known collectors turned out for the fair's VIP preview, including François Pinault, Christie's owner; Uli Sigg, a former Swiss ambassador to China; Rudy Tseng, a former Walt Disney executive from Taiwan and Richard Chang, the Beijing director of investment firm Tira Holdings.
The galleries also worked to make first-timers feel comfortable. London's Annely Juda Gallery taped up a sign in Mandarin offering to divulge prices for its offerings—something dealers usually just whisper to prospective buyers on a case-by-case basis. Dealer David Juda also placed a small sticker shaped like a red dot beside David Hockney's $950,000 painting of a log, "Felled Totem, September 8th, 2009," to indicate that the work in that booth had already found a buyer. Mr. Juda doesn't apply stickers at other fairs, but he said, "I heard it was a good idea here to reassure people when works are sold."
Plenty of galleries dangled new works by Asian artists in their rosters. In one of the most elaborate displays, the Gagosian Gallery added a carpeted side room to its booth to showcase a pair of new pencil drawings of trees by Zeng Fanzhi, a Chinese painter who is better known for his colorful portraits of men wearing white masks. The gallery used the other walls of this antechamber to offer up paintings by Pablo Picasso, Alberto Giacometti and Claude Monet. The lofty comparison may have helped: Mr. Zeng's drawings sold on the first day for an undisclosed sum.
London dealer Stephane Custot, who sold the Chu Teh-Chun abstract, also brought a $2.2 million Picasso musketeer painting, 1969's "Bust of a Man." But so far, he said passersby had gravitated to their hometown favorite: "It's easier here to sell a Chu Teh-Chun than a Picasso."
Mr. Tseng, the Taiwanese collector, said he thinks the ongoing strength of this fair will lie in artistic mix of East and West. This time, he said he liked German painter Gerhard Richter's wall-size print "Stripe" at Marian Goodman's booth. He also raved about Beijing art duo Sun Yuan and Peng Yu's life-size sculptures of dinosaurs and rhinoceroses, which stood, like a scattered herd, in several fair booths. "See? Everything about this fair is getting bigger," he added.
May 17 2012 Share
French Flock to Hong Kong
From Paris with love: Hong Kong is home to 15,000 French nationals
French nationals are coming to Hong Kong in record numbers, particularly in recent years. Estimated to be about 15,000, the city’s French population has swelled by 60 per cent since 2008, making it the biggest in Asia, and the second-largest worldwide outside of France, behind only Britain. According to French expatriates living here, business as well as lifestyle factors are drawing them to the city.
Audrey Pion, Consul (Political/Public Relation) at the French Consulate General, describes Hong Kong as “the ideal place” to take advantage of the Asian economic boom. The China story, in particular, is the reason why so many French companies are setting up their regional headquarters in Hong Kong, she said. “Besides large corporations, this economic boom also represents opportunities for SMEs and entrepreneurs. More and more French graduates come here to find their first job or set up businesses.”
Hong Kong offers them the longstanding structural advantages, which make it a perfect business hub, Ms Pion continued. “It is a perfect gateway to China,” she said citing the advantages provided by the Closer Economic Partnership Arrangement between Hong Kong and the mainland. “Hong Kong is also an international and business-friendly city, due largely to the high level of business expertise and the legal security that you can find here.”
Ballet de l’Opéra National de Bordeaux, on stage 8-9 June as part of Le French May programme Enterprising Frenchmen are taking advantage of new market opportunities, Ms Pion said. “Besides the traditional sectors like finance, luxury goods, public utilities or construction, French companies are increasingly present in new sectors, such as wine imports, restaurants and hospitality. They particularly appreciate the business-friendly environment.”
With cultural events such as Le French May and other lifestyle synergies, it is easy for French people to feel at home in Hong Kong, Ms Pion said. “It is a very welcoming and diverse city. Because it is a multicultural city, one can enjoy different ways of living and have access to different cultures, such as food, cinema and the arts.
“Events like Le French May, one of the largest French festivals in Asia, which celebrates its 20th edition this year, contribute to this feeling for the French community here. Le French May has become a Franco-Hong Kong festival, a cultural institution that Hongkongers as much as French and international people enjoy and wait for year after year.”
Edouard Malingue feels at home in Hong Kong
French entrepreneurs capitalising on these cultural synergies include Edouard Malingue, who founded his eponymous Edouard Malingue Gallery in Central after gaining experience in Paris (with his father, respected art dealer Daniel Malingue) and London. “When I felt ready to open a gallery, I decided to move to Asia to offer something new: the possibility to see Western modern masters. We opened the gallery with the first Picasso show in Hong Kong in September 2010, presenting 40 original works on canvas and paper,” Mr Malingue said.
Since opening, business has been strong, selling Asian modern art to buyers from Hong Kong, Taiwan, Singapore and the Chinese mainland, as well as Western contemporary art, including Picassos in Europe and the United States. This month, the gallery will participate for the first time in Art HK, the Hong Kong International Art Fair, 17-20 May, presenting Korean master Song Hyun-sook. In addition, nine major galleries based in Paris will travel to Hong Kong to attend Art HK, the region’s premier art event, showcasing contemporary art from 266 galleries, representing 39 international territories.
Brushstrokes by Song Hyun-sook, from Edouard Malingue Gallery’s exhibition at Art HK this month
As for lifestyle enjoyment, Mr Malingue says that, after almost three years in the city, Hong Kong “feels like home.” “From here, I am witnessing how China is becoming a super power, sipping pu-erh tea and enjoying the best dim-sum in the world.”
The famous Bordeaux winery Chateau Margaux now has a presence in Hong Kong
Wine specialist Thibault Pontallier, from legendary Bordeaux winery Chateau Margaux, moved to Hong Kong in March 2010 as the brand’s ambassador for China. At 26, he is one of the many young Frenchmen moving to Asia “to look for adventure.”
He said Hong Kong offers businesses a “safe haven” to the huge potential on the mainland. “Hong Kong makes for an easy transition from Europe to China.”
Thibault Pontallier, Chateau Margaux ambassador for China
Mr Pontallier and his father, Chateau Margaux winemaker Paul Pontallier, are thrilled with the results of the brand exposure Hong Kong offers. “When we arrived in 2010, nobody in the luxury world expected such results,” he said, citing sales that have quadrupled. “Two years ago, China (including Hong Kong and Macau) represented eight per cent of our market – today it accounts for one-third.”
Like so many of his compatriots, Mr Pontallier also enjoys the French-Hong Kong connection that his new home offers, finding similarities in the food and wine culture, as well as general lifestyle enjoyment.
May 15 2012 Share
Brands Strike Gold in Hong Kong
Burberry has chosen Hong Kong for its regional flagship
Hong Kong‘s status as the leading global hub for luxury brands is confirmed in a new report, How Global is the Business of Retail, by commercial real estate services firm CBRE. The comprehensive global research shows that Hong Kong leads the way for luxury and business fashion, with 86 per cent of high-end retailers surveyed present in the city, a rise of two per cent from the 2011 survey results.
Across the board, Hong Kong hosts 40.5 per cent of the international retailers surveyed to maintain its status as Asia’s number one retail city, four places ahead of Singapore, behind only London, Dubai, New York, Moscow and Paris.
CBRE’s annual survey – now in its fifth year – has been expanded to map the global footprint of 372 of the world’s top retailers across 73 countries. Its aim is to identify trends in global retail expansion at country and city levels, covering the vast majority of the world’s economy.
Cross Border Money
Joe Lin, CBRE’s Senior Director Retail Services, Hong Kong, said Hong Kong’s ranking reflects the huge importance of luxury goods to the city. Growth in the sector is largely driven by the continued demand for high-end goods from visiting Chinese mainland tourists, who look to benefit from the price differential between Hong Kong and the mainland, he said.
“With the World Luxury Association forecasting that China could become the world’s top consumer market for luxury goods in 2012, and over 70 per cent of Hong Kong’s visitors now coming from the mainland, Hong Kong is the show window where luxury brands like to set up flagship stores,” Mr Lin said.
Already a magnet for luxury brands, Hong Kong, he said, has attracted even more labels since the economic crisis, as European brands reallocate their resources to a better market. “Hong Kong really is the key market, hence they need to be here.”
In addition to newcomers, many established brands are looking to relocate to the prime retail districts. High rental doesn’t worry them, with premium location the prize, Mr Lin said.
“We are seeing physical changes to the retail make-up of Hong Kong’s shopping areas with a reshuffling of the tenant mix within buildings. He cited the relocation later this year of a Causeway Bay cinema from the ground floor to the upper floor, to make way for luxury brands. “We see landlords in prime retail streets combining shops to create larger façades for tourist-oriented brands to capture premium rent.”
Spending Spree Continues
Gap is "very optimistic" about its entry into Hong Kong
The spend trend is continuing this year, according to the CBRE data. It shows Hong Kong registered a 16 per cent year-on-year climb in retail sales value to almost US$5 billion in February. These results were boosted by a 15 per cent year-on-year increase in tourist arrivals through to the end of February, which in turn, has driven the strong demand for luxury goods.
“Even in suburban areas, we have begun to see luxury brands and international fashion brands branch out into new locations around the city such as Shatin, Tuen Mun, Tseung Kwan O, in search of local, as well as mainland Chinese spend,“ Mr Lin said.
The lure of a retail presence in Hong Kong was underscored by American brand Gap, which opened its first Hong Kong flagship last November. The store spans more than 15,000 square feet over four floors on sought-after Queens Road in Central.
Redmond Yeung, President of Gap Greater China, called the brand’s launch in Hong Kong “a momentous occasion.” “Based on the demand levels we’ve experienced through e-commerce sales over the last year, we know that Hong Kong consumers have a strong appetite for Gap’s affordable, high-quality and uniquely American fashion.”
Stephen Sunnucks, president of Gap Inc. International, said he was “very optimistic” about the brand’s entry into Hong Kong. “We believe it’s a natural next step for our expansion strategy in China, especially given the city’s international relevance as a gateway to the fashion world.”
Harvey Nichols’ new Asian flagship in Pacific Place
British fashion brand Burberry is preparing to open its regional flagship in Hong Kong’s Pacific Place. Expected to open in the second half of 2012, the 21,000-square-foot shop would be Burberry’s biggest outlet in Hong Kong, and its second-largest in the world, according to Knight Frank.
Pacific Place is the same luxury mall where British luxury department store Harvey Nichols opened its Asian flagship last October. Besides offering the Harvey Nichols selection of international, contemporary brands in men’s and women’s fashion and accessories, the 83,000-square-foot store features a comprehensive watch and jewellery division and a new concept in beauty and lifestyle.
This hunger for brands is also expected to attract more luxury retail IPOs to list in Hong Kong, following in the footsteps of Italian brand Prada and French L'Occitane. George Lin, Managing Director and Head of Asia Pacific Consumer, Retail and Healthcare Investment Banking at Credit Suisse said the argument is compelling. "I think Hong Kong, because of its proximity as the gateway to China, will continue to be the listing haven for anything that is driven by China’s consumer growth."
May 1 2012 Share
Four Hong Kong restaurants on top of world By Christy Choi
Amber, at the Landmark Mandarin Oriental Hotel in Central, is at 44.
Hong Kong has four of the world's 100 best restaurants, says an international panel of judges, building on the city's reputation as a foodie paradise.
Michelin-starred favourites Amber, Bo Innovation, Caprice and Lung King Heen made the cut in the San Pellegrino World's Best Restaurants List, announced on Monday.
Just one mainland restaurant - Shanghai's Mr and Mrs Bund - is represented, ranking 95th. Asia as a whole has just 11 representatives, with Macau's Robuchon a Galera ranked at No 82.
Alvin Leung, the mastermind behind Wan Chai molecular gastronomy restaurant Bo Innovation, said the 800 food critics, chefs, restaurateurs and gastronomes who judged the list were encouraging restaurants to develop.
"The list has motivated a lot of chefs to be innovative and creative," said Leung, whose restaurant is 52nd on the latest list. It first joined the list at No 97 in 2009. Amber the Asian-French contemporary restaurant at the Landmark Mandarin Oriental, was the only local restaurant to make the top 50, ranking 44th.
The Four Seasons Hotel's French restaurant Caprice came in 54th, and its Cantonese restaurant Lung King Heen was at No 93.
Leung and Richard Ekkebus, culinary director at Amber, agree that the list has been fundamental in promoting the food culture of destinations such as Sweden, Peru and Brazil, not previously known as destinations for food lovers. "There's a restaurant from Brazil at No 4. When I think of Brazil I think dancing, parties - the last thing on my mind when I think of Brazil is food," Leung said.
Asia is underrepresented on the list, with just five of the top 50 - Iggy's in Singapore is the region's top performer - and Ekkebus says chefs here have to work even harder to get noticed by the judges.
"Most of the places are in Europe or America. Asia is far away, we do not get the travellers, and so we need to work twice as hard to get on the list," Ekkebus said. "I'm looking forward to the Top 50 Asian [restaurants] list that's coming out in February [from the same organisation]."
The world list, originally created by the British magazine Restaurant, is now in its tenth year.
Noma, the Danish restaurant which has topped the list for the past three years, is known for its dedication to the constant investigation of all that is edible in Scandinavia.
Its head chef, Rene Redzepi, forages through forests and combs beaches for ingredients.
April 25 2012 Share
The Right Move - KPMG moves its headquarters to Hong Kong
Australian Michael Andrew was appointed head of the global accountancy firm KPMG International last October. Rather than move to New York or London, however, Mr Andrew decided instead to base himself in Hong Kong – a first for the head of a Big Four firm. The Global Chairman of KPMG explains why he bucked the trend.
Why did you decide to chair KPMG from Hong Kong?
This is where the action is for our profession. It’s the growth in China and the ASEAN countries that are critical to our success. So I thought, you really had to be on the ground, talking to the regulators, the clients, the market, in order to really gain a competitive edge. The second thing was the sheer logistics. This is truly the Middle Kingdom. So the ability to get on a direct flight anywhere around the world is a huge logistical advantage for someone who travels as much as I do. And finally, I got some very good advice from a very wise chairman, who said, “follow the money.” He said everyone I need to see has to come to Hong Kong at some stage, with the power of the exchange and the liquidity that’s in the market here.
Does this reflect the shift from the developed world to emerging countries?
There are a number of factors that are giving rise to that. When I talk to major clients around the world, they’re really trying to tap into the growing middle class in this region, with their products and services. So they’re shifting their investments and operations here. The second factor, in a lot of Western markets, liquidity is a problem in the banking sector. So the ability to raise capital, to deal with banks able to raise their balance sheet, is a competitive advantage. So increasingly, they’re coming to this market to tap into those opportunities.
When referring to emerging markets, you’re really talking about India and China, aren’t you?
More than that. I would also add Brazil and Africa as being very important to us as well. But there’s a second tier of growth that’s coming through –the ASEAN countries, Turkey, the Middle East, and as I said, some of the African countries in particular, are of great interest to us at the moment. I get access to key politicians and bureaucrats, clients and regulators much more readily in these markets, by being able to say that I’m actually based here. I’m one of you.
As one of the architects of KPMG’s global strategy, you know the Asia-Pacific region very well. What’s your outlook and goals in your four-year term?
I actually wrote the first Asia-Pacific strategy for KPMG back in 1992. And then I became chairman for the Asia-Pacific region. I just see this as a huge market opportunity for us. So I’ve set for us the goal of being number one or two in every one of the critical markets that’s here. That means, really looking across the breadth of service that we offer, and being the quality provider in those markets. We’re now a $23 billion practice, and I think by the time I leave the role in three or four years’ time, I’m quite confident we’ll have passed $30 billion at that point. The growth in these markets is enormous. The appetite for the skills we have is huge. And as these markets open up, increasingly there’s a flight to quality, and firms like ours tend to do very well in that part of the cycle.
Is the nature of the business changing from auditing and tax to consultancy services?
It’s interesting that traditionally, in these markets, tax is the entry point. It’s what the international investors want. Then you get to the IPOs of the local clients, and ultimately, they then start to move overseas. As a result of that, they need sophisticated advisory skills, giving them due diligence, teaching them about risk, about major computer installation systems, and looking at world’s best practices. So we’re at the phase at the moment, where advice is going very strongly in this part of the market. The thing about KPMG, we’re a strong, independent brand, which your audit really defines. You’re independent, you’re objective, so your clients will know that you’ll get advice that’s not based on a contingent for you, or something else.
Does that mean that the Big Four companies are going to be making many more decisions with the Asia-Pacific region in mind, giving your company a first-mover advantage?
I hope I’m the only chairman to come to Hong Kong, because I think it has been incredibly well-received in the client base, in the local markets down here. And I do think it’s a significant competitive edge, as the world shifts from West to East, from North to South, to demonstrate that you understand that macrodynamics is very important.
April 24 2012 Share
Lofty Ambitions - Hong Kong's Newest Logistics Facility in Asia
The global economic outlook was decidedly gloomy in 2009, when Australian property company Goodman chose Hong Kong’s busy Tsing Yi port district as the site for what would become the world’s largest industrial project that year. Three years later, the US$644 million Goodman Interlink logistics facility has more than risen above the clouds of uncertainty. The 24-storey structure opened last month with nearly 100 per cent of its 224,000 square-metre capacity leased out to major logistics industry players, including DHL Supply Chain (Hong Kong) Ltd, Yusen Air & Sea Services (HK) Ltd, BEL International Logistics Ltd, as well as a luxury fashion and accessories retailer, and a pharmaceutical and healthcare distributor. “We’ve obviously got some very strong customers,” said Greg Goodman, Group CEO of Goodman. “We’ve really taken advantage of a great deal of demand in space over the last two years.”
Regional Logistics Hub
The view from the top of the Goodman Interlink building includes Hong Kong’s busy Container Terminal 9 and Stonecutter’s Bridge, which connects the district with downtown, the Hong Kong International Airport and major highways to the Chinese mainland
That demand helped ease concerns about taking on such a large project amid global economic uncertainty. “We had the ability to de-risk the project by getting customers to come into the building early, allowing us to have an investment proposition, which some of the biggest investors in the world – including Goodman – backed,” he said. Hong Kong’s place as a regional logistics hub and player in the international supply chain has grown in step with global demand, such as from Yusen Air & Sea Services (HK) Ltd. The company’s Hong Kong Managing Director, Yasuhiko Nojima, is in charge of Yusen’s largest operation outside Japan. “Hong Kong is in a good position – the highway to and from the Chinese mainland is very easy to get to from here,” said Mr Nojima, adding that the new complex was situated in the heart of the seaport and a short drive from the world’s busiest air cargo terminal.
The access ramp at the Goodman Interlink facility starts at the bottom of a 1.6
kilometer, two-way ramp that allows trucks to reach nearly all levels of the building
The state-of-the-art Goodman Interlink building has also earned praise for its environmental credentials, including compliance certificates for the Hong Kong Building Environments Assessment Method and LEED (Leadership in Energy and Environmental Design). Tenants benefit from advanced security, IT, and an access ramp that spirals for 1.6 kilometres – allowing truck access to nearly all levels. Among Asia’s largest logistics facilities, the building is also the world’s tallest, designed to make best use of Hong Kong’s valuable real estate.
Storage racks being assembled at the Goodman Interlink building, which boasts more than 224,000 square metres of space spread over 24 floors
“In markets like the United States and Europe – typically it is just a single-level, big yard, but here in Hong Kong, you have to go vertical,” said Darren Benson, with international commercial real estate services company CBRE Group Inc. Mr Benson, CBRE’s Senior Director, Industrial and Logistics, for Hong Kong, Macau and Taiwan, said the speed in which his team found tenants is solid proof that Hong Kong “is still the destination for logistics in the Asian region.” “It’s a massive investment in a sector where people were saying, ‘Is there a future for logistics in Hong Kong?’ and ‘What’s going to happen with China?’” he said. “We’ve got a lot of demand out there – residential requirement, office requirement, retail-type requirement. The government’s been promoting a revitalisation policy, and that’s created somewhat of a supply crunch at the moment. We’re running about 99 per cent occupancy across the market at the moment – historically high levels.” The Hong Kong Government is starting to ease some of the crunch by opening more land for cargo handling use. Even the vertical aspect of the new Goodman Interlink facility is helping shape the market – with a similar design planned for two more logistics buildings due to come up in the same district by 2015.
“We have a great relationship with the local government so planning was paramount. We had the ability to start the project and finish it in good time,” said Mr Goodman. “This building reflects the vision, which both the government of Hong Kong and Goodman have, to form a world-class logistics hub.” “Hong Kong still is the transportation hub for China – and for the ports in China,” said Mr Benson. “People still want a presence here in Hong Kong for local distribution – retail market consumption here has been so strong, there’s plenty of that kind of demand. Regional distribution centres are still quite active here, and Hong Kong is a free port, so your goods can move quickly for just-in-time delivery.” “China is the factory of the world,” said Mr Nojima of Yusen. “We collect many shipments of parts, distribute and ship them to the mainland, and they make their products and ship them out from Hong Kong around the world. That’s most important.”
April 22 2012 Share
Young Wine Fails to Sell
By Jason Chow
A lot of six bottles from Domaine de la Romanée-Conti, each from a different year starting in 1996 to 2001, sold for HK$726,000 at a Christie’s auction last weekend.
The auction, held Saturday in Hong Kong, was only 74% sold, reflecting the choppy market for the world’s most coveted wines. Earlier in the month, Sotheby’s sold all of its wines at another Hong Kong event.
Christie’s results contrast with last year’s record-breaking sellout events, but these days, the market is fickle.
On Saturday, Château Lafite Rothschild and Château Latour wines went unsold, though Bordeaux wines in rare, large-format bottles, as well as several Burgundy bottles, remained sought-after items.
Since mid-2011, the fine wine boom, which was largely driven by demand from Asian buyers, has started to fizzle. The Liv-Ex 50 Fine Wine Index, which follows the top Bordeaux first-growth wines, is down 23% since its peak in June.
Christie’s tried to put a positive spin on the event, saying that there’s still demand for top bottles. There was “gratifying interest” from mainland Chinese buyers, “my sense is that the focus has shifted from young wines to more mature vintages,” said Charles Curtis, the auctioneer’s head of wine in Asia.
The auction’s biggest sale was a 56-bottle collection of La Tâche Domaine de la Romanée-Conti that included one bottle per year from 1951 to 2008, excluding 1968. It went for 1.2 million Hong Kong dollars (US$155,000), on the low end of Christie’s earlier estimates.
April 20 2012 Share
Awfully successful at franchising - Regina Sam has turned her passion for cakes and focus on quality into success harnessing brands she believes in By Paggie Leung
Former banker and MBA holder Regina Sam is steadily expanding her food and beverage business, thanks to her decision to tap well-known franchise brands such as Awfully Chocolate and New York Fries.
"Sell what you love and the money will follow" may sound like what one reads in a business management book, but this advice has guided the success of young Hong Kong entrepreneur Regina Sam.
The 32-year-old franchisee of Awfully Chocolate, a Singaporean cake business, brought the brand to Hong Kong in 2008. Sam became hooked after tasting its signature chocolate sponge cake at an Awfully Chocolate store in Shanghai. She later became the exclusive franchisee in the city after fending off two other rivals who applied for it.
"At first, I didn't think about setting up my own business," said Sam, who was an account manager at the Royal Bank of Canada in Vancouver for four years before returning in 2004 to Hong Kong, where she earned a Master of Business Administration (MBA) degree at the University of Hong Kong.
"My sister was working in Shanghai in 2006 where there is an Awfully Chocolate store. Whenever I visited her, I would buy a cake. We became friends with the franchisee in Shanghai, who suggested we bring the brand to Hong Kong," she said. "I think I was chosen by the franchisor because I love the cake so much."
To start her cake business, she initially invested about HK$2.6 million to pay expenses such as royalties, rent, and renovations. She managed to break even in six months, and has now expanded the business to four stores selling a total of 200 large chocolate cakes a day.
Besides being the sub-franchisee of another brand, New York Fries, in Hong Kong and Macau, Sam decided to launch her own brand Cheesess last year. It sells different types of cheesecakes at three locations in Hong Kong. Despite being open for less than a year, Sam has already received enquiries from potential franchisees for her cheesecake brand.
She is considering opening three more Awfully Chocolate stores, in Kowloon Tong, Sha Tin and Kwun Tong, and plans to renew the brand's franchise agreement when it expires next year.
Sam also works as managing director and vice-president at her father's firm, Great Time, one of the largest wine and food distributors in Macau.
Here are her thoughts on franchising and how it pays to have a mentor in your corner.
Your family runs a food and beverage distribution firm in Macau. How did this help you set up your own business?
The most direct help [from my family] is when I discuss the credit terms with the suppliers for milk, cream and cheese.
If you are a new firm, they will require you to pay cash. But since many suppliers know our food distribution company, and me, it is easier to get our orders and negotiate better terms.
Why did you establish your own brand Cheesess?
I love cheesecakes and there is a cheesecake shop I like near my university in Canada. Once I made a cheesecake served with strawberry sauce and my friends from Canada said it tasted similar to those from that cheesecake shop. They encouraged me to sell this cheesecake as well.
Have you been affected by your father's management style?
My father taught me his way of managing staff, which I appreciate very much. He treats his staff well. He thinks if the company makes money, it is not because of his own ability but a group of capable staff. A warehouse worker knows how to organise the products better than you do, despite you having a higher education level than he does.
You may be at the top position in the organisational chart, but everyone plays an important role. This is what my father has been teaching us since we were young.
Why did you set up your business through franchising at the start?
I haven't done any retail or cake businesses before, so it is much better when there is someone who can guide you and teach you. The chance that you will get into trouble is lower.
I think it is worth paying a royalty for a teacher to help you out, which is much better than investing a few million dollars to start up a company on your own and end up losing all the money.
Also, the "brand noise" can help too. If you set up a new company or a new brand, it may take a few years to get it known. But when I opened the franchise shop, many people may have tried [Awfully Chocolate] in Singapore and Shanghai. Hence, it shortened the time needed for me to accumulate some customers, and thus the time to break even -which was six months.
What are the drawbacks of the franchising model?
After I met with the founders of Awfully Chocolate, I thought we shared similar business philosophies and that was why we signed the deal. This is really important when choosing a franchisee or franchisor. Otherwise, there will be a lot of disputes and it will be difficult to convince the franchisor to change something and apply it to the rest of the stores.
For example, Awfully Chocolate used to sell large cakes sized 6 inches or 8 inches in diameter. But there are times when only one person wants to eat our cake. And unlike in Singapore, it is less common for people to invite others to their homes [in Hong Kong] to eat a cake, as homes here can be small and our fridges are small, too. The franchisor listened to our views. Last year, we launched some smaller items such as cupcakes.
How do you make your products attractive enough to keep fickle Hong Kong customers returning?
At the beginning, my father and some media also questioned how we could sustain our business by selling only three types of cakes at Awfully Chocolate. But I think our chocolate cake is like an old brand: for instance, a famous beef noodle or wonton noodle shop that customers will keep visiting if the food quality remains high.
If you have a focused item, people will remember what you sell.
What are the challenges of running a food-related business?
It takes a long time to get licences from the Food and Environmental Hygiene Department, which is required if you have food production at your store and offer tables and seats for customers to eat. It took us six months to get a licence, and rents in Hong Kong are so high. It costs a lot if you leave the premises vacant for half a year. To solve the problem, we did not offer coffee and seats at the shop at the beginning but just transported our cakes from our licensed bakery to our retail store for sale.
What is the secret of your success?
It is important that you cannot be too stressed and waste your energy on worrying instead of keeping the business growing.
The teacher of an entrepreneurship course during my MBA program told us that the ability to control stress was a key to becoming a successful business person.
April 13 2012 Share
Insider view: US design pioneer reveals groundbreaking work on hotels in China By Rebecca Lo
Top: Chinese landscaped carp pool garden in the White Swan Hotel in Guangzhou. Above: The lobby of Grand Hyatt Hong Kong.
More than two decades ago, before international hotel operators headed to the growing Chinese market like bees to honey, there was an establishment in Guangzhou that many considered to be the epitome of luxury accommodation in the country.
The fame of the White Swan Hotel, built on Shamian Island in the capital of Guangdong province, was partly thanks to the interior designer Robert Bilkey.
"The hotel was put together by these pre-revolutionary guys working as architects," recalls Bilkey, at the time with HBA, the Los Angeles-headquartered hotel design firm Hirsch Bedner Associates. "They had never dealt with a Western international hotel before. Instead of using carpet stretchers, I'd see guys on the floor pulling on broadloom by hand. That was the way the mainland was in the 1980s."
Born in St Louis and educated in Colorado, Bilkey arrived in China by way of Las Vegas when the Strip was non-existent. He worked for Howard Hughes on legendary hotels such as the original Sands, Desert Inn and Frontier. Then Hughes died and Bilkey found his work pipeline drying up. A supplier suggested that he talk to HBA.
"I spoke with (the late) Howard Hirsch and started in 1978," he says. "Less then two months later, I flew to Hong Kong with the mission of closing down its office there."
Hirsch loved Hong Kong, and it was the first HBA branch office opened outside the United States. It did not work out as he had hoped, though, and Bilkey was given the unpleasant task of chalking up the venture as a failure. Instead, he went immediately to a cocktail party upon landing at Kai Tak international airport and chatted with a few owners and developers. Within a week, he had two Macao hotel design contracts secured.
"I had to explain to Howard Hirsch that the office needed to keep running," Bilkey says with a wry grin. "I became the managing director of it with five people on board. White Swan Hotel was one of our first projects. Its original design was like a cave: all stalactites and stalagmites. We re-did the whole thing, with a lagoon in the middle and a waterfall. We took Chinese elements and blended them into a contemporary design scheme. It was the first time screens were used as room dividers, not up against a wall. We established international design standards from scratch. Its grand opening was attended by Beijing dignitaries; it was the first real international hotel in (the mainland of) China."
Bilkey was neighbors with a charismatic Colombian, Oscar Llinas, when they both lived in Los Angeles and the latter was completing his master's degree in French literature. While working on renovating for the Shah of Iran the house in Acupulco that had belonged to the actress Merle Oberon, he asked Llinas to help translate the project details from English into Spanish. Bilkey then asked Llinas to help with selecting materials, colors and finishes.
"Oscar was really good," recalls Bilkey. "He has an innate ability for design. He joined HBA's L.A. office and worked on FF&E (furniture, fixtures and equipment). When I moved out to Hong Kong, Oscar had to join me."
It was initially Llinas' idea to call Hyatt grand. In the 1980s, Hong Kong was fast-tracked into becoming "Asia's world city" and a mixed-use complex anchored by a state-of-the-art convention center was planned for Wanchai, to be designed by Ng Chun-man. New World Hotels was the owner and developer of the two sites' two hotels, and wanted to get Hyatt on board as an operator. At the time, Hyatt only had Regencies - which was fine for most cities in the United States but not up to snuff for New World's aspirations.
"Oscar said that the hotel for Hong Kong's new convention center couldn't be just another Hyatt," recalls Bilkey. "It should be styled after the grand dames of Europe: a grand Hyatt. So we designed it that way. And standards were set for all the Grand Hyatts to follow."
Grand Hyatt Hong Kong opened in 1989 and immediately became the city's calling card for international visitors flying in for conferences and exhibitions. It remains one of the most popular hotels for locals and tourists today. The same year, 1989, Bilkey, Llinas and Mauricio Salcedo opened shop as Bilkey Llinas.
From the beginning, the firm operated an office in Florida's Palm Beach, its official corporate headquarters. However, its Hong Kong office has about the same number of staff, with Bilkey and Llinas flying back and forth between the two cities overseeing projects and a total staff of 150 people. Palm Beach handles work for South America's mushrooming hotels while Hong Kong is taking on increasingly more projects in China's tertiary cities, with more than half of its contracts on the Chinese mainland.
"I've seen China grow from nothing to a world power in the past 20 years," Bilkey says. "Of course, it needed to have a lot of hotels and expertise had to be brought in from afar to make them. People had to have a place to stay and something on the menu other than chicken feet. It needed international hotels. China has a tremendous workforce and an amazing push to build throughout the entire country. We started working in Shanghai, Beijing and Guangzhou; as time went on, development spread to secondary and tertiary cities."
Most recently, Bilkey Llinas completed the interior design for Four Seasons in Hangzhou based on Song Dynasty-inspired architecture and Yan Club at Kunlun Hotel in Beijing that is imbued with a fantasy garden ambience. With four decades in the business under his belt, Bilkey still loves what he does and still clocks in long hours to ensure it is done properly.
"Perhaps we are not the smartest business people in the world - but we are the happiest. We all work together like a big family. I'm already doing what I want to do when I retire."
April 9 2012 Share
Hong Kong's rich hesitate to have babies - High-income Hongkongers say the expense and emotional burden of bringing up a child, and their busy lives, are hurdles to having a family
By Jennifer Ngo
A majority of Hong Kong's highest earners, childless or otherwise, do not plan to have any children in future, a survey commissioned by the South China Morning Post
(SEHK: 0583) shows.
Financial considerations were the most widely cited factor among those with children, and the emotional burden of raising a child was the main reason preventing those without children from wanting to do so.
"You need time and money to raise a child. But even more importantly, it's also a big emotional commitment," said Joyce Ho Mei-yee, 36, who has a five-year-old daughter.
"I already feel guilty sometimes when I have to work and leave my daughter with the maid."
The poll results provide an insight into why the city's fertility rate is the third-lowest in the world - only Macau and Singapore rank lower.
The low birth rate has raised fears of a looming labour shortage. A government manpower study concluded in February that the city would run short of workers by 2018.
All the 1,004 people surveyed had a household income of at least HK$40,000 - putting them among the richest 22 per cent of the population.
Half had no children, 26 per cent had one child and 18 per cent had two. Just 3 per cent had heeded Chief Executive Donald Tsang Yam-kuen's call in 2003 for couples to have three or more children.
Only 40 per cent planned to have a child in future.
People were asked to choose the three most important reasons for their decision and to rank them in order of importance.
Of those who had children but did not plan to have any more, nearly 60 per cent cited financial considerations as a factor; 29 per cent said it was the most important.
Some 55 per cent of this group said they did not have time to raise another child, and 38 per cent said their living space was too small.
Among those who had no children and no plans to have any, about half cited the emotional burden of child-rearing, closely followed by those who said the local environment was unsuitable for children.
Some 39 per cent said they did not have time to raise a child, and 25 per cent cited a lack of living space.
Respondents were also asked to pick and rank the five most important factors in raising a child.
Financial stability, mentioned by 83 per cent, and a good education system (68 per cent) were the two most important factors, while 51 per cent cited sufficient living space and 40 per cent mentioned social factors.
About two-thirds of respondents, 64 per cent, thought the government did not do enough to support families with children. That includes 8 per cent who felt government support was "non-existent".
Some 27 per cent said the level of government support was "barely enough", while only 7.9 per cent felt it was sufficient.
As to what the government could do to help, 63.2 per cent wanted it to improve the education system. Asked whether they agreed that education in Hong Kong was adequate and affordable, 40 per cent disagreed or disagreed strongly, while 26.2 per cent had no opinion.
The government should help more with housing, 61.1 per cent of respondents said. Financial support - in the form of a tax exemption or allowance - was cited by 55.5 per cent. About 53 per cent said more family-friendly employment policies should be introduced.
Nearly half of those without children would consider having a baby if the government gave more support.
A spokesman for the Chief Secretary's Office said Hong Kong's population was growing despite the low fertility rate, thanks to immigration. He said relying on policy measures to increase the birth rate usually had limited success.
April 3 2012 Share
Hong Kong Airport will spend US$17billion for the third runway to stay a global aviation hub
Poised for Take-Off
Hong Kong International Airport, the world’s busiest cargo hub, will get a third runway
The region's airspace is managed under two separate air-traffic control centres — Hong Kong and Guangzhou — and in a further complication of matters, mainland Chinese controllers use metres and
kilometers to measure height and distance, while those in Hong Kong use feet and nautical miles, which are more commonly used in international civil aviation.
The three-runway option envisages the construction of a third runway and its associated terminal, airfield and apron facilities, which requires the reclamation of about 650 hectares of land north of the existing airport island.
HKIA passenger traffic Projection (Up to 2030)
HKIA freight traffic Projection (Up to 2030)
HKIA Air Traffic Movement Projection (Up to 2030)
Business widely welcomed the Hong Kong Government’s decision to construct a third runway for the city’s airport. Secretary for Transport and Housing Eva Cheng announced last month that the Airport Authority of Hong Kong (AAHK) will proceed with an environmental impact assessment, and plan design details and financial arrangements. Ms Cheng emphasised the need for long-term airport planning, as air traffic in 2011 reached the forecast demand for 2013.
Eva Cheng, Secretary for Transport and Housing
The Hong Kong International Airport (HKIA) last year welcomed a record 53.9 million passengers and handled 333,760 aircraft movements last year, up 5.9 per cent and 8.9 per cent respectively, year-on-year. Although cargo performance decreased 4.6 per cent, to 3.9 million tonnes, reflecting the global slowdown, this followed a 16.5 per cent increase from a year earlier. The HKIA remains the world’s busiest cargo gateway, a title it wrested from Memphis International Airport, the FedEx hub, in 2010. The HKIA has been the world’s busiest international cargo airport since 1996. Now it is the busiest overall.
“Leaps and Bounds”
Hactl’s SuperTerminal 1 at the HKIA is the largest, most advanced terminal in the world
“Airlines will have the room they need to grow here, bringing jobs and prosperity,” said Mark Whitehead, Managing Director, Hong Kong Air Cargo Terminals Ltd (Hactl). “The density of aircraft movements can be maintained at safe levels, and the avoidance of air traffic congestion will reduce the impact on the environment.”
He added that the global air-freight market, and the regional market in particular, is expected to grow by “leaps and bounds” over the next two decades. He said a third runway would allow the HKIA to meet the volume increases and retain its status as the world’s number-one air cargo hub.
Hactl invested more than US$1 billion constructing its SuperTerminal 1 facility at the HKIA in 1998. The company handles some 70 per cent of general air cargo movement in Hong Kong, with an annual throughput of almost three million tonnes.
Investment in Prosperity
John Slosar, Chief Executive, Cathay Pacific
“Connectivity with the rest of the world has made Hong Kong what it is today, so we must be clear on how we can maintain and grow these links,” said John Slosar, Cathay Pacific Airways Chief Executive. “A third runway is the only viable option to ensure the long-term competitiveness of Hong Kong as an important international financial centre, trading and logistics hub, tourism destination and professional services capital.”
Cathay Pacific itself is making significant investments to underscore its commitment to Hong Kong, its home hub. This includes more than 90 new aircraft on order for delivery up to the end of the decade, with a list price of some HK$190 billion, a HK$5.7 billion cargo terminal that is scheduled to open in early 2013, and more than HK$3 billion in new products to give more people a reason to fly to and through Hong Kong. Mr Slosar said Cathay Pacific will also hire staff to match this growth, with plans for about 1,000 more cabin crew, 300 pilots and 600 ground staff this year.
Cathay Pacific Airways is expanding in Hong Kong, adding more aircraft, a new cargo terminal and extra staff
Dragonair Chief Executive Officer Patrick Yeung agreed that the third runway is a crucial step in enabling the airport to meet anticipated growth and for Hong Kong to maintain its position as Asia’s premier aviation hub.
“We believe that Hong Kong, as a whole, will benefit from the enhanced capacity in our home hub, boosting the development of the aviation industry, which makes such a significant contribution to the city’s economy.”
Dragonair recently announced its own expansion plans in light of growing demand and rising passenger expectations, with additional aircraft joining the fleet, a strengthened network, and the recruitment of more cabin crew and pilots.
“The increase in capacity at HKIA will enable us to grow in parallel with the aviation industry in Hong Kong, helping to boost the prosperity and well-being of Hong Kong people in the long run,” Mr Yeung said.
Hong Kong General Chamber of Commerce Chairman Anthony Wu said the decision would benefit Hong Kong’s trade, tourism and logistics sectors. “The construction of the third runway will safeguard Hong Kong’s status as an aviation hub, and enhance the city’s competitiveness.”
Stanley Hui, CEO, Airport Authority Hong Kong (photo: HKIA)
Stanley Hui, CEO of the AAHK, said the authority was committed to full compliance with the statutory Environmental Impact Assessment (EIA) process “and will explore every possible way to avoid, minimise and mitigate any environmental impact that might arise from developing into a three-runway system, including marine ecology, fisheries, water quality, air quality, noise and waste."
The environmental assessment, expected to take two years, will consider marine ecology, noise and air quality. Earlier, the AAHK pledged to undertake air quality studies under the EIA process by benchmarking against the proposed new Air Quality Objectives (AQOs) announced by the government.
"We do not underestimate the challenges ahead, and we are committed to approaching our upcoming work in a highly prudent, transparent and professional manner as always, working closely with all stakeholders along the way," added Mr Hui.
A three-month public consultation on the HKIA Master Plan 2030, undertaken last summer, revealed that 73 per cent of respondents preferred the three-runway option. The runway is expected to be completed by 2023.
April 1 2012 Share
Spotlight on Hong Kong Investigators By Isabella Steger
The Independent Commission Against Corruption is one of Hong Kong's most respected law-enforcement bodies.
One of Hong Kong's most respected law-enforcement bodies is back in the public spotlight, as it takes on what is arguably its most high-profile investigation since the 1980s.
Last week, Hong Kong's antigraft agency, the Independent Commission Against Corruption, shocked the city with the arrest of the chairmen of one of the city's largest property developers, Sun Hung Kai Properties Ltd. No charges have been filed against Thomas and Raymond Kwok, and the inquiry is ongoing.
As part of the investigation, the ICAC arrested the government's former No. 2 official, Rafael Hui, on the same day, according to a person familiar with the situation. No charges have been filed against him. All three men have been released on bail.
Sun Hung Kai said the two executives resumed their duties on Friday but declined further comment. Mr. Hui and the Kwok brothers couldn't be reached for comment. The ICAC wouldn't comment further on the details of the case.
Shares in Sun Hung Kai fell 2.2% Monday after plunging 13% on Friday, the day after the arrests. The company's chief financial officer, Patrick Chan, said on a conference call with some investors Monday that the blue-chip firm's business operations were normal, but didn't elaborate on the investigation against the Kwok brothers, according to people familiar with the matter.
The arrests put the ICAC into the headlines again, following a string of failed prosecutions and a lull in high-profile investigations that contrast sharply with the body's track record of success, particularly in the 1970s and 1980s, when the then-British colony's police force was rife with corruption. It eventually helped put the chief police superintendent in jail.
The need to tackle widespread graft at the police paved the way for the creation of an independent body in Hong Kong that reports directly to the city's top leader. While some states in Australia also have independent antigraft bodies, countries like the U.S. and the U.K. rely mainly on the police to deal with corruption prevention and enforcement.
The ICAC has the power to make arrests. But after an arrest, the Hong Kong Department of Justice examiners the evidence presented by the ICAC and decides whether to prosecute.
The turning point in Hong Kong's anticorruption efforts came in 1973 with the bribery investigation of the chief police superintendent, Peter Godber. Hong Kong Gov. Murray MacLehose set up the ICAC in February 1974 and the agency successfully extradited Mr. Godber from the U.K. back to Hong Kong, where he was convicted of bribery and jailed. According to the ICAC, he amassed assets of some four million Hong Kong dollars (about US$515 million at current exchange rates) during his career through corruption.
Another high-profile case involving the ICAC was the collapse of the Carrian Group in 1983, in what was Hong Kong's largest corporate failure ever.
The property conglomerate was one of Hong Kong's largest listed companies at the time, after its Malaysian founder head George Tan rapidly grew the company through a number of real-estate transactions. Carrian was eventually found to have defrauded two Malaysian state-backed financial institutions, with Mr. Tan pleading guilty in 1996 to counts of corruption and fraud and serving three years in prison.
In 1988, the ICAC arrested Ronald Li, former chairman of the Hong Kong Stock Exchange. He was later convicted and sentenced to four years in jail for receiving preferential treatment when being allotted shares of a listed company.
Over the last few years, however, the ICAC has been involved in lower-profile investigations ranging from corruption at investment banks to milk powder scams aimed at desperate mainland mothers.
The ICAC generated widespread media attention in its investigation of a former senior executive at Television Broadcasts Ltd., one of the world's biggest distributors of Chinese-language programming. The executive was found not guilty of charges of corruption and conspiracy to defraud.
"The ICAC in recent years has had a fairly dismal record with major cases. If you look back at the major cases that they've done in the last five years, a good many of them have ended up in defeat" in the courts, said Kevin Egan, a criminal barrister in Hong Kong.
March 28 2012 Share
Asia's Endangered Species: The Expat
By Lesie Kwoh
Forget expats. Western companies doing business in Asia are now looking to locals to fill the most important jobs in the region.
Behind the switch, experts say, are several factors, including a leveled playing field in which Western companies must approach newly empowered Asian companies and consumers as equals and clients—not just manufacturing partners.
More Western firms are filling their executive positions in Asia with locals. Mei-Wei Cheng is a China-born Cornell graduate who heads Siemens's Chinese operations.
Companies now want executives who can secure deals with local businesses and governments without the aid of a translator, and who understand that sitting through a three-hour dinner banquet is often a key part of the negotiating process in Asia, experts say.
In fact, three out of four senior executives hired in Asia by multinationals were Asian natives already living in the region, according to a Spencer Stuart analysis of 1,500 placements made from 2005 to 2010. Just 6% were noncitizens from outside of Asia.
"It's a strategic necessity to be integrated in the culture. Otherwise, the time to learn all of it takes forever," said Arie Y. Lewin, a professor of strategy and international business at Duke University's Fuqua School of Business. He adds that locals may better navigate a business culture where copycats and competitors often play by different rules.
What's more, a failed expatriate hire can be a costly mistake and slow a firm's progress in the region, said Phil Johnston, a managing director at recruiter Spencer Stuart.
To help companies fill Asia-based executive roles, at least two search firms—Spencer Stuart and Korn/Ferry International—say they have begun classifying executives in four broad categories: Asia natives steeped in local culture but educated in the U.S. or Europe; the foreigner who has lived or worked in Asia for a long time; a person of Asian descent who was born or raised in a Western country but has had little exposure to Asia; and the local Asian executive who has no Western experience.
For companies seeking local expertise, both firms said the first category is by far the most sought-after. But Mr. Johnston said those candidates are difficult to find and retain, and they can command salaries of $750,000 to $1 million—on par with, and sometimes more than, their expat counterparts.
Campbell Soup Company
Campbell Soup last week hired Daniel Saw, born in Asia, as its president of Asia operations.
German conglomerate Siemens AG in 2010 hired Mei-Wei Cheng, a China-born Cornell University graduate, to head its Chinese operations—a role previously held by European executives.
While Siemens's European executives had made inroads with Chinese consumers—building sales in the region to nearly one-tenth of global revenue—the firm realized it needed someone who could quickly tap local business partners.
After an extensive search, Siemens hired Mr. Cheng, formerly CEO at the Chinese subsidiaries of Ford Motor Co. and General Electric Co.
The decision to hire locally seems to have paid off for Siemens: In his first 18 months on the job, Mr. Cheng forged two wind-power joint ventures with Shanghai Electric Group Co.
Mr. Cheng communicates easily with local officials, a major advantage when it comes to selling energy technology to individual cities, says Brigitte Ederer, head of human resources for Siemens and a member of the company's managing board. Many local officials don't speak English.
Bob Damon, president of recruiter Korn/Ferry International's North American operations, said the current talent pool for executive roles is so limited that most top Asian executives simply rotate from one Western company to another, as Mr. Cheng did.
Other companies are adding to the demand by creating new positions in Asia.
Campbell Soup Co. last week announced the appointment of Daniel Saw as its first-ever president of Asia operations, while Canadian conglomerate Bombardier Inc. hired Albert Li to fill a new role overseeing its aerospace business in China. Both executives were born in Asia and have worked as regional managers for Western multinationals.
Meanwhile, younger Chinese professionals are positioning themselves to meet the need for executive talent in the years to come. Nearly four in 10 American M.B.A. programs say China was their fastest-growing source of foreign applicants last year, according to the Graduate Management Admission Council, which administers the Graduate Management Admission Test.
Foreigners with no Asia experience, on the other hand, need not apply, recruiters said. Spencer Stuart's Mr. Johnston said he occasionally receives inquiries from Western middle managers, proclaiming that they are finally ready to make a career move to the region. He advises them that "there is nothing about their experience that is interesting or relevant to Asia."
In hubs like Singapore and Hong Kong, expats receive as much as $200,000 a year in subsidies for housing, transportation and private schooling, Mr. Johnston said. Payments to offset taxes for these benefits add up to another $100,000. Altogether, a bad match can cost a company as much as $1 million, after figuring in relocation costs, he said.
Monster Worldwide Inc. Chief Executive Sal Iannuzzi said the company has been hiring locally for several years, in part because he found deploying expatriates cost too much. "It takes them six months to figure out how to take a ferry, they're there for 12 months, and then they spend the next six months figuring out how to get home," he said.
Like some other companies, Monster now tracks its own workers to ensure a pipeline of talent.
The online job-search company's current head of China operations, Edward Lo, a former fraternity brother of Mr. Iannuzzi, understands the local scene, is well connected in China and knows how to recruit, Mr. Iannuzzi said.
Among Mr. Lo's duties: finding his own successor before he retires.
Job seekers line up outside a job fair venue in Hefei, in central China's Anhui province.
Starwood Hotels & Resorts Worldwide Inc., based in White Plains, N.Y., also develops its own leaders for Asia, plucking people who have come up through the company ranks. For example, the head of Asia Pacific started in the 1970s on the finance team in Hong Kong, and the head of the Middle East region was a hotel manager who worked his way up.
Having grown up in their markets, managers understand customer needs, said Starwood CEO Frits van Paasschen. Regional heads in China, for instance, know that when dealing with land owners or developers, deals are less "transactional," and more "trust-based," he said. They also know that Chinese travelers—who now comprise the majority of hotel guests in the region—feel more at home when they're supplied with tea kettles, slippers and chopsticks, he added.
For fast-food company Yum Brands Inc., CEO David Novak calls his Asia-bred regional head and executive team "our single biggest competitive advantage." China has become the company's biggest earnings driver, comprising more than 40% of operating profit.
Thanks to Yum's China leaders, Mr. Novak says, KFC in China began serving rice porridge and soy milk for breakfast, and Pizza Hut now offers an afternoon tea menu—both of which have been big hits among local customers.
March 25 2012 Share
Chun-ying elected as Hong Kong chief executive
Leung Chun-ying, former convenor of the Non-Official Members of the Executive Council of Hong Kong, celebrates with his wife Regina Tong Ching-yi as he attends a news conference after Leung won the chief executive election at a vote counting station in Hong Kong March 25, 2012.
Leung Chun-ying, former convenor of the Non-Official Members of the Executive Council of Hong Kong, was officially declared the winner of the election of the fourth-term Chief Executive of the Hong Kong Special Administrative Region on Sunday.
At about 12:33 pm, Returning Officer Justice Poon Shiu-chor announced that of the 1,132 votes cast by members of the 1,200-member Election Committee, Leung Chun-ying won 689 votes.
The two other candidates, Henry Tang Ying-yen and Albert Ho Chun-yan, got 285 votes and 76 votes respectively.
At a press conference soon after the announcement, Leung who bowed and waved to the hailing audience said he was grateful for the support of the public throughout the campaign, and it was a privilege of him to serve the communities for the next five years as chief executive.
Hong Kong has many competitive advantages, people of Hong Kong are innovative, hardworking and adaptable, as long as we seek the opportunities, our economy will continue to thrive and the livelihood of our people will improve, Leung added.
Voting began at 9 am for two hours, with each member of the election committee entitled to cast a single vote by secret ballot.
A candidate must secure at least 601 votes to win the election.
The main polling station and the central counting station are both located at the Hong Kong Convention and Exhibition Center.
The three candidates were nominated on Feb 29, with Leung nominated by 305 members of election committee and Tang receiving supports from 390 members. Ho's nomination was endorsed by 188 members.
Incumbent Chief Executive Donald Tsang, whose term ends on June 30 this year, is barred from seeking a third term.
Leung Chun-ying (R), former convenor of the Non-Official Members of the Executive Council of Hong Kong, shakes hands with his rival Henry Tang after winning the election of the fourth-term chief executive of Hong Kong Special Administrative Region in Hong Kong, south China, March 25, 2012.
March 20 2012 Share
Asia's Age of Wine - Hong Kong Wine Market Bubbling
View Video on Youtube http://www.youtube.com/watch?v=SSyTTKTPUw8
Hong Kong's wine market has been attracting some of the world's leading auction houses, eager to tap Asia's growing thirst for fine wine. Among them is America's oldest fine-wine merchant, Acker Merrrall & Condit, which has been setting records at its Hong Kong auctions since launching regular wine sales in the city three years ago.
Since the Hong Kong Government scrapped wine duties four years ago, wine trade has flourished. The move made Hong Kong the first free wine port among the major economies – a title it retains today with stunning success.
Hong Kong is also the only place that has an agreement with the Chinese mainland, allowing traders to quickly export wine into the mainland, tariff-free. These advantages make the city an unrivalled gateway to the world’s fastest-growing wine market, attracting industry players from around the world to launch or expand their business in Hong Kong.
UK auction house Spink is among the more recent arrivals. Established in 1666, the company best known for its auctions of rare coins, stamps, medals and banknotes entered the fine wine trade through the acquisition last year of Hong Kong-based Oeno China, founded by local businesswoman Anna Lee.
Natural Step Out
Olivier Stocker, Chairman and CEO, Spink
“We feel very strongly that this acquisition in Hong Kong is a natural step forward in global expansion for the company,” said Olivier Stocker, Chairman and CEO at Spink. “
“We’ve been looking for some time to find the right partner to open an office in this area, and feel we have finally found the perfect fit with Anna Lee,” he said, noting that the acquisition would enable Spink to “hit the ground running.” Its first fine wine auction, held earlier this month, featured 380 lots of exceptional wines from around the world.
Spink achieved HK$183,000 for this Rémy Martin Louis XIII Rare Cask Cognac at its debut wine auction in Hong Kong
“Hong Kong is the largest wine auction market in the world, and after two decades of collectables auctions in Hong Kong and Singapore, we realised that our most passionate wine collectors were in Hong Kong and the region,” Mr Stocker said.
Hong Kong Gateway
Robert Lench, Managing Director, BWI
Hong Kong will also serve as the company’s springboard into the Chinese mainland, he added. “From our very successful annual Hong Kong auctions, we have been servicing more and more collectors from China. I have no doubt in saying that the most important collectables market in the world is in the region.”
China is the world’s fastest-growing wine consumption market, jumping by 140 per cent between 2006 and 2010, and a further 21.5 per cent in 2011, according to VINEXPO, an exhibition created by the Bordeaux Chamber of Commerce and Industry in 1981. Its study forecasts a further 54.25 per cent increase in consumption between 2011 and 2015, positioning China as the fifth-largest wine-consuming nation in the world, behind the United States, Italy, France and Germany.
UK specialist wine merchant Bordeaux Wine Investments (BWI) expanded to Hong Kong last October. The firm was established in 1998 to offer opportunities for private clients looking to buy, collect, consume and invest in fine Bordeaux wine. It has a sister company, Bordeaux Wine Locators, in the United States.
Managing Director Robert Lench said a prime focus of the firm’s global business development has been to access the growing market for high-quality wines in the Far East, principally Hong Kong. “We were sending someone out to the Far East about three times a year, so it was clear that soon we would need a permanent presence in the region.”
Platform for Growth
Record-breaking numbers of traders and buyers attended Hong Kong International Wine & Spirits Fair - Starting with a small number of clients, Mr Lench said the Hong Kong side of the business had been growing for a decade.
“We certainly noticed a significant increase in activity after the duty and taxes were abolished by the Hong Kong authorities. However, this was not the only reason for opening the office,” he said. “We have experienced a growing number of clients being introduced to BWI and transacting business with us. As the volume of clients grew, the constant message was that we could do so much more if we were represented in Hong Kong.”
Since opening, the business and client base have grown significantly, “vindicating our decision,” Mr Lench said. “Based on the reaction to our presence thus far, we expect this growth to continue.”
The firm is also eyeing the mainland market, which it intends to enter “when the time is right.” Meanwhile, “we have ambitious expansion plans for the Hong Kong office, which we see as a hub for the Far East,” Mr Lench said. “Places such as Singapore, Thailand, Malaysia and South Korea are all good areas of opportunity, and we would use Hong Kong as our Far Eastern head office. We are fully committed to the Far East and Hong Kong in particular.”
Booming Wine Fairs
Thriving wine trade events are also testament to the Hong Kong opportunities being grasped by merchants from around the world. Last November, more than 19,000 buyers attended the fourth HKTDC Hong Kong International Wine & Spirits Fair, a 37 per cent increase on a year earlier. Exhibitor representation also rose significantly, including an 86 per cent increase from Italy, 82 per cent from the mainland, and 59 per cent from France.
This record-breaking success of the fair at the Hong Kong Convention and Exhibition Centre (HKCEC) has propelled it to be the largest international wine event in Asia in just four years. Traders will return to the HKCEC for Vinexpo Asia-Pacific 2012, 29-31 May, when another record attendance is expected. Organisers say exhibition space was sold out months ahead of the event. France will be “well represented again this year,” along with other major wine-producing nations, including South Africa, Australia, the US, Chile, New Zealand, Spain, Italy, Lebanon and Greece.
A vertical collection of 10 vintages of Solaia will be offered at the Acker Merrall & Condit auction in Hong Kong this month.
John Kapon, CEO of Acker Merrall & Condit Companies, America's oldest fine wine merchant, said Hong Kong is at the epicentre of a new stage in the global auction market for fine and rare wine. “The wine market is diversifying, and once again Hong Kong is leading the way.” Acker Merrall & Condit will hold its 20th Hong Kong sale on 30- 31 March.
“We are experiencing the rapid growth of wine collectors in Hong Kong and China, who want to own and explore the finest wines of Europe and beyond, while continuing to build great collections of Bordeaux and Burgundy,” Mr Kapon said.
“Alongside a stunning array of the latest sale will also feature selections of Rhone, Champagne, White Burgundy and Italian wines."
March 18 2012 Share
Ranks of foreign lawyers double in Hong Kong - IPOs and economic pact with mainland drive surge in overseas lawyers in recent years - they now account for 10pc of those practising in HK
By Adrian Wan
The number of foreign lawyers practising in Hong Kong has doubled over the past seven years. Their arrival has been driven by strong demand for legal services, both from the mainland and from the financial sector for initial public offerings.
The number of foreign lawyers was 777 in 2005, 1,041 in 2007, 1,203 in 2009 and 1,431 at present.
The number of foreign law firms has also increased: 36 in 2005, 56 in 2007, 70 in 2009 and 72 now.
Foreign lawyers may practise only the law of their home jurisdiction; they can advise Hong Kong clients on foreign law to help them set up businesses or resolve disputes abroad.
Those who wish to practise Hong Kong law must sit a localisation exam, and 700 - about 10 per cent of all local solicitors - have done so, according to Junius Ho Kwan-yiu, president of the Law Society.
Some local lawyers, who asked not to be named, expressed concern about competition from their foreign counterparts.
"Clients involved in major lawsuits usually look for international law firms or expatriate lawyers, instead of small local firms," one said.
In Singapore's Parliament last month, lawmaker Hri Kumar said "international law firms dominate nearly every area of law" in Hong Kong, according to Bloomberg.
Rotterdam-based Loyens & Loeff, which advises on international tax structuring and mergers and acquisitions, opened a Hong Kong office last month.
This month, London-based Berwin Leighton Paisner did the same, setting its sights on work in several sectors on the mainland.
The Closer Economic Partnership Arrangement (Cepa) between Hong Kong and the mainland allows certain lawyers qualified to practise locally to do so across the border.
"Some local firms are enjoying the benefits Cepa brings, but not a lot of them are," Ho said.
Sixty-three of the 100 biggest global law firms have offices in Hong Kong, the Law Society said. Among them, 42 practise as local firms.
"They then enjoy the advantages of Cepa and enter the mainland … where the goldmine is," Ho said.
The number of foreign lawyers sitting the annual Overseas Lawyers Qualification Examination has been on the rise since 2009: between 200 and 300 of them try to qualify as local lawyers every year.
Those who pass are no longer considered foreign lawyers.
Each year for the past five years, about 22 per cent of all the lawyers admitted to the bar in Hong Kong have qualified by taking the exam.
While Ho says the competition is getting fiercer, he denies it poses a threat to local lawyers.
"There's no such thing as an indigenous right among us professionals," he said. "There's only whether you are capable or not."
Local solicitor Lau Kar-wah, who has practised law for about 20 years, focusing on personal injury claims, said "areas like mergers and acquisitions and other big financial deals are indeed dominated by big global firms, but that doesn't really hurt local lawyers' business, because we focus on different areas".
March 17 2012 Share
Hong Kong Rise in arbitrators' power queried - Mediation group's head offers assurance on move to enable freezing of assets and saving of evidence
By Stuart Lau
Hong Kong commercial arbitrators will soon have judge-like emergency powers to freeze assets and preserve evidence, a move that has alarmed some lawmakers.
But Albert Wong Kwai-huen, the chairman of the city's arbitration centre, sought to assuage such fears, saying it would be a useful extension of existing, but rarely used, powers.
At present, only judges can issue such interim orders, but under the Arbitration Ordinance, which came into effect in June, independent arbitrators registered with the Hong Kong International Arbitration Centre will have the same powers, once the centre puts rules in place.
The expanded powers are designed to close a legal loophole and stop parties from tampering with assets and evidence before an arbitrator begins hearing a claim.
Under existing rules, nothing can be done within the arbitration system when a party tries to remove assets or destroy evidence before an arbitrator is appointed, a process that usually takes months or even longer after a case is lodged.
The issue is increasingly important as arbitration becomes a quicker and cheaper option for settling business disputes and with Hong Kong aspiring to be an Asian arbitration hub, particularly in relation to the mainland.
Lawmaker and barrister Alan Leong Kah-kit said he had reservations about the expansion of arbitrators' power.
"There are many people who are qualified as arbitrators. If so many are allowed to exercise a power equivalent to judges, it could have a huge impact if the power is misused," Leong said.
He said the rules should stipulate the extra powers could only be used in limited circumstances.
Lawmaker Lee Wing-tat said although arbitration should be used more often to ease the burden on an increasingly busy judiciary, the extent of arbitrators' powers needed further discussion.
"The training for arbitrators is less stringent than that for barristers and solicitors," he said. "Although the powers might seldom be invoked, discussions about the powers, and the conditions and restrictions [on their use] are needed."
According to the centre's website, 269 people are registered with the city's panel of arbitrators. Wong said most were lawyers and some were professionals in other fields.
He conceded that some barristers and retired judges had voiced concerns about arbitrators not being qualified to exercise such powers.
"I have heard some say that … arbitrators may not fully understand the powerful measures," Wong said. "But this is not correct."
He said that as disputing parties had to first agree to have a case settled by an arbitrator, it was unlikely they would doubt his or her ability to make such orders. Wong said arbitrators rarely imposed such orders.
No timetable had been set for the ordinance to be incorporated into the centre's rules and regulations, but members are being consulted.
March 8 2012 Share
Vice-President Xi Jinping calls for end to Hong Kong's chaos and mud-slinging
By Tanna Chong
Vice-President Xi Jinping yesterday essentially called for an end to the chaos and scandal-mongering in the city's chief executive election.
In a meeting in Beijing, Xi (pictured) told Hong Kong delegates to the National People's Congress not to focus on personal interests but to take care of the overall well-being of the city and state, according to Maria Tam Wai-chu, who was at the meeting.
Politicians and analysts said Xi's remark was code intended to remind the supporters of both front runners, Henry Tang Ying-yen and Leung Chun-ying, to refrain from further smear campaigns.
"This year marks the 15th anniversary of the handover and the chief executive election will also be held," Tam said. "The vice-president said patriots of China and Hong Kong should serve as role models to prioritise the overall interests of the country above their personal interests, to stand tall and look at the bigger picture when contemplating the city's development."
Hong Kong and Macau Affairs Office director Wang Guangya said society's views and those of Election Committee members were important in choosing the chief executive.
China affairs expert Johnny Lau Yui-siu said Beijing felt that both camps had started to lose control, so it sent a reminder to both sides asking for self-restraint. "When Xi asked the people to stand tall and look at the bigger picture, he meant the people should make sacrifices for the greater benefit of society," said Lau.
"The series of scandals is not only causing chaos for the election, it is putting Beijing in a difficult position. It is not helping anyone."
NPC deputy Wong Kwok-kin said Xi's remarks showed the central government was concerned about the "ungentlemanly contest" and hoped it would "get back on track".
But Rita Fan Hsu Lai-tai, a standing committee member of the NPC, said Xi - set to become Communist Party chief this year - was speaking about the overall development of the city, not the election. Fan said she talked to Xi about the conflict-of-interest allegations surrounding Chief Executive Donald Tsang Yam-kuen.
"Hongkongers have more Westernised thinking, but we can act as a driver of modernisation for the mainland," said Fan. "The chief executive has allegedly received benefits ... while some mainlanders think we overreacted, others appreciate our high anti-corruption standards."
Fan said her remarks did not amount to pointing the finger against the chief executive in front of the state leader. "I do not have to do that," said Fan. "I hope that will have an impact on promoting society's integrity."
Meanwhile, a source close to Tang's camp confirmed that, in a meeting last night, Beijing officials said they do not want to see the poll aborted - a possible scenario if no candidate gains more than half of the 1,193 votes - or blank votes cast.
February 28 2012 Share
Hong Kong's 'CAN-DO' SPIRIT By Anthony Cheung Bing-leung
Distracted minds - Anthony Cheung says Hong Kong needs to rediscover the 'can do' spirit that once animated its society, and break away from a downward spiral of knee-jerk reactions, inertia and blaming others.
The unfolding chief executive election drama has turned many people into sceptics of the system. Negative news is hogging headlines, and most disappointing is the lack of focus on, and interest in, the real issues - the many problems faced by Hong Kong right now and the policies needed to tackle them, together with the looming crisis of confidence in the government.
There is a growing feeling that Hong Kong is regressing. A recent article by Hugo Restall in The Wall Street Journal claimed that "Hong Kong was better under the British", alluding to the remarks of Derek Davis, former editor of the Far Eastern Economic Review, many years ago.
My generation grew up in Hong Kong in the 1950s and 1960s amid colonial alienation, discrimination and corruption. During our university days, we fought for Chinese to be recognised as an official language and against rampant corruption.
The colonial government only began policy reforms and modernising public administration in the 1970s, partly to seek a way out of the governance crisis following the 1967 pro- communist riots, but largely due to mounting social pressure for change and the demands of a locally born new generation.
Over the decades, the local community - including civil servants and professionals - has played a crucial role in remaking Hong Kong. We are proud of its modern core values and resilient institutions, such as clean and efficient government, fairness and public accountability. To attribute the city's past success only to the British officers and their "accountability" to a democratically elected government in London is to whitewash colonial history.
Of course, Hong Kong has encountered multiple problems of governance following reunification with China in 1997, and new constraints and challenges in the process of integration. However, its freedom, openness of government and political accountability are better than in the British colonial days.
It is also true that more Hongkongers, especially the young generation, have become less happy about the city. The widening wealth gap and fading upward social mobility are at the root of public discontent. It is made worse by a sense of despair and inability to change things. The middle class, which by and large identified with the "Hong Kong way" in the 1980s and 1990s, has become disenchanted with the political order.
A new mindset, like governor Murray MacLehose's social reforms in the 1970s, is urgently needed to guide the agenda of the next chief executive.
We must also get the system right. As Deng Xiaoping once said after the Cultural Revolution, if you don't have a good system, even good people could do terrible things.
Just before the handover, Davis had argued that colonial officials, aware of their lack of legitimacy as an alien, non-elected government, strove not to alienate the population. Be that as it may, logic along the lines of "their nervousness made them sensitive" could equally be observed after 1997, in the form of short-term populism in our political scene. In the absence of a democratic mandate, our government leaders and civil servants have become too "sensitive" about public reaction expressed via the media and opinion polls.
Not only that, any issue or controversy can quickly escalate to the apex of the system - the chief executive and his ministers, who have to immediately come up with an answer. In the knee-jerk search for a quick fix, neither bureaucratic wisdom within departments nor community and expert wisdom (including that of think tanks) is allowed to play its rightful role to generate ideas and find solutions. Middle-level officials, meanwhile, have little incentive to work out their own bottom-up answers to day-to-day issues, knowing that their bosses and the media will override them anyway. Everyone is bogged down with putting out the fire, giving less time and attention to more deep-seated problems and longer-range issues. The blame game is feeding into a vicious cycle of impatience, intolerance and not recognising a role for individuals.
Such a system is not favourable for Hong Kong's traditional strength in creating smart local solutions, driven by a "can do" culture that somehow seems to have been lost. Hongkongers need to change the political system as well as their own mentality and attitudes.
Anthony Cheung Bing-leung is an executive councillor and founder of SynergyNet, a policy think tank
February 22 2012 Share
Hong Kong Was Better Under the British - Democracy is the only form of government that can match the hybrid form of political accountability Hong Kong enjoyed as a colony
By Hugo Restall
The English queen is a red sun in the Hong Kong people's hearts.
The slow-motion implosion of Henry Tang, Beijing's pick to be Hong Kong's next chief executive, brings to mind a speech given shortly before the 1997 handover by former Far Eastern Economic Review Editor Derek Davies. Entitled "Two Cheers for Colonialism," it attempted to explain why the city flourished under the British. Fifteen years later, the Chinese officials who are having trouble running Hong Kong might want to give it a read.
The Brits created a relatively incorrupt and competent civil service to run the city day-to-day. Mr. Davies' countrymen might not appreciate his description of them: "They take enormous satisfaction in minutes, protocol, proper channels, precedents, even in the red tape that binds up their files inside the neat cubby holes within their registries." But at least slavish adherence to bureaucratic procedure helped to create respect for the rule of law and prevented abuses of power.
Above the civil servants sat the career-grade officials appointed from London. These nabobs were often arrogant, affecting a contempt for journalists and other "unhelpful" critics. But they did respond to public opinion as transmitted through the newspapers and other channels.
Part of the reason was that Hong Kong officials were accountable to a democratically elected government in Britain sensitive to accusations of mismanaging a colony. But local officials often disobeyed London when it was in the local interest—for this reason frustrated Colonial Office mandarins sometimes dubbed the city "The Republic of Hong Kong." For many decades it boasted a higher standard of governance than the mother country.
Mr. Davies nailed the real reason Hong Kong officials were so driven to excel: "Precisely because they were aware of their own anachronism, the questionable legitimacy of an alien, non-elected government they strove not to alienate the population. Their nervousness made them sensitive."
The communists claim that the European powers stripped their colonies of natural resources and used them as captive markets for their manufacturers. But Hong Kong, devoid of resources other than refugees from communism, attracted investment and built up light industry to export back to Britain. And as for taking back the profits, Mr. Davies noted, "No British company here would have been mad enough to have repatriated its profits back to heavily-taxed, regularly devaluing Britain."
Most expatriate officials retired to Blighty, so they were less tempted to do favors for the local business elite. The government rewarded them with pensions and OBEs. A Lands Department bureaucrat didn't have to worry whether his child would be able to find employment in Hong Kong if a decision went against the largest property developer.
Contrast all this with Hong Kong post-handover. The government is still not democratic, but now it is accountable only to a highly corrupt and abusive single-party state. The first chief executive, Tung Chee Hwa, and Beijing's favorite to take the post next month, Henry Tang, are both members of the Shanghainese business elite that moved to the city after 1949. The civil service is localized.
Many consequences flow from these changes, several of which involve land, which is all leased from the government. Real estate development and appreciation is the biggest source of wealth in Hong Kong, a major source of public revenue and also the source of most discontent.
In recent years, the Lands Department has made "mistakes" in negotiating leases that have allowed developers to make billions of Hong Kong dollars in extra profit. Several high-level officials have also left to work for the developers. This has bred public cynicism that Hong Kong is sinking into crony capitalism.
This helps explain why the public is so upset with Mr. Tang for illegally adding 2,400 square feet of extra floor space to his house. Likewise Michael Suen, now the secretary for education, failed to heed a 2006 order from the Lands Department to dismantle an illegal addition to his home. His offense was arguably worse, since he was secretary for housing, planning and lands at the time.
In both cases the issue is not just a matter of zoning and safety; illegal additions cheat the government out of revenue. But it's unlikely Mr. Tang will face prosecution because nobody above or below him is independent enough to demand accountability. So now there is one set of rules for the public and another for the business and political elites.
Under the British, Hong Kong had the best of both worlds, the protections of democracy and the efficiency of all-powerful but nervous administrators imported from London. Now it has the worst of both worlds, an increasingly corrupt and feckless local ruling class backstopped by an authoritarian regime. The only good news is that the media remains free to expose scandals, but one has to wonder for how much longer.
Hong Kong's Chinese rulers have been slow to realize that, to paraphrase Lampedusa, the only way to keep Hong Kong the same is to accept change. It is no longer a city of refugees happy to accept rule by outsiders. And democracy is the only system that can match the hybrid form of political accountability enjoyed under the British.
Mr. Davies ended his appraisal of colonialism's faults and virtues thus: "I only hope and trust that a local Chinese will never draw a future British visitor aside and whisper to him that Hong Kong was better ruled by the foreign devils." Fifteen years later, that sentiment is becoming common.
Mr. Restall is the editorial page editor of The Wall Street Journal Asia.
February 17 2012 Share
Hong Kong tops list of
globalized economies - City takes No1 spot on index for second straight year - followed by Singapore and Ireland By
Hong Kong has been ranked the most globalised of 60 economies for the second consecutive year in a survey by accounting firm Ernst & Young.
Hong Kong scored the highest on average on five measures of globalisation - openness to trade, capital flow, exchange of technology and ideas, labour movement and culture integration. It was followed by Ireland and Singapore.
Taiwan ranked 12th while the mainland was 39th in the survey, for which Ernst & Young interviewed 1,000 senior executives from companies in Asia, Europe and the United States at the end of last year.
Hong Kong has become the largest initial public offering market in the world over the past three years. Beijing granted Hong Kong a role as an offshore yuan settlement centre last year, facilitating cross-border transactions in the currency.
And as international firms eye up the mainland market, the number of regional headquarters in Hong Kong increased to 1,340 by the end of last year from 1,285 in 2010.
However, recent tensions between Hongkongers and mainland tourists have raised concerns about how easy it will be for the city to promote cultural integration.
"It will be interesting to see how the recent conflicts with people over the border affect the scores in the next survey," said Agnes Chan, regional partner, Hong Kong and Macau, at Ernst & Young.
The accounting firm urged the government to improve the city's standard of living to lure more foreign professionals if it wants to retain its top position in the rankings.
"There is much room for improvement in terms of quality of life in Hong Kong," said Chan, citing poor air quality and cramped living space as issues that can deter expatriates from moving here. "It's quite disappointing that the recent budget failed to address the problem of air pollution."
An acute shortage of international- school places was also a problem, she said. "The Hong Kong government should address the problem by allocating more land for international schools as well as encouraging local students to study at local schools."
It is the third year Ernst & Young has released its Globalisation Index, in collaboration with the Economist Intelligence Unit. Singapore took the top spot in the 2009 survey.
February 15 2012 Share
The global demand for high-tech products has made security a pressing issue for logistics companies. In Hong Kong, leading logistics providers are adopting the world's best anti-theft technology to protect clients throughout the supply chain.
Ivan Ha, Product Manager, China and Hong Kong, Systems & Services Certification, SGS Hong Kong
According to the European Union, the theft of high-value, high-risk products moving through European supply chains costs business more than €8.2 billion a year. In Hong Kong, Swiss company SGS counters such risk by offering Technology Asset Protection Association (TAPA) TSR accreditation, the highest anti-theft accreditation, equipping local companies with a competitive edge in the logistics industry.
Headquartered in Geneva, SGS was established in Hong Kong in 1959. The company said Hong Kong has emerged as one of the world’s most competitive logistics hubs, spearheading a recent growth spurt that has seen its local employee numbers swell from 300 in 2005 to 1,200 today.
“Hong Kong’s location as the gateway for global enterprises going to China, as well as for Chinese companies connecting with the world, its free-port status and superior connectivity, remain hallmarks of the city’s competitive edge,” said Ivan Ha, Product Manager, China and Hong Kong, Systems & Services Certification, SGS Hong Kong Ltd.
Kerry Logistics uses the TAPA framework for optimal security in its high-value freight transportation
He added that Hong Kong remains the preferred hub for management of a wide range of critically important cargo, ranging from precious and dangerous goods, to drugs and items in need of special intellectual property rights protection. “China’s economic boost in recent years draws in increasing volumes of luxury consumer goods and high-price value goods. Hong Kong is uniquely placed to channel these growing import flows.”
High-value products need top security and, as the only certification body that issues TAPA TSR in Hong Kong, SGS Hong Kong has helped various logistics companies enhance their supply chain security, and their competitiveness, since 2009, according to Mr Ha.
A commitment to safety and TAPA standards is important to CEVA customers
He said that the TAPA TSR standard was established to ensure the secure transportation of assets throughout the supply chain. Accreditation, he added, enhances security during cargo transportation, reduces insurance liability exposure and allows organisations to be more marketable.
Mr Ha described TAPA TSR as an “indispensable accreditation” to combat organised crime in the logistics process. It makes the transport of high-value/high-risk products more affordable, hastens the tendering process required by some global companies, and builds trust in a business relationship. Since 2009, SGS has accredited more than 50 logistics companies in Hong Kong and southern China with TAPA TSR certification.
Benjamin Karl Scholz, Vice President Operations, Greater China, CEVA Logistics
CEVA Logistics, established in August 2007, from the merger of TNT Logistics and EGL, was the first to be awarded the certification, achieving TAPA TSR accreditation in March 2010. Benjamin Karl Scholz, Vice President Operations, Greater China, said it was important for CEVA, which specialises in the technology, industry, consumer, energy and automotive sectors, to develop specific solutions to meet its customers’ complex needs.
“With the steadily increasing trend in domestic transportation volumes, we are having more cargo loads of high-end technology, apparel, medicine, raw materials on the road today,” he said. “We believe our customers require a highly secure supply chain: safe and secure transportation that complies with global standards; trucks equipped with anti-theft and anti-hijacking devices; well-trained drivers; and control-tower operators in place, along with best-in-class security procedures. Achieving TAPA TSR accreditation helps confirm CEVA’s positioning in providing quality transportation service with global standards.”
Crystal Logistics’ TAPA accreditation ensures security and confidentiality of goods in transit
Crystal Logistics Group Company, established in Hong Kong in 1995, was another early mover, gaining TAPA TSR accreditation for Hong Kong and the Chinese mainland in 2010, and for all ASEAN countries last December. Company Chairman Andy Chau said TAPA’s well-designed security policy ensures documents and goods are managed with utmost confidentiality. Its strict requirements and standards extend from the trucking team and warehousing, encompassing security systems, CCTVs and fire alarms, to scrutiny of staff. “TAPA provides a training manual to help us teach employees how to manage daily operations and their reaction during an emergency. On long-haul or short-haul routes, TAPA has a standard for teaching its member to choose the safest and steadiest route.”
Andy Chau, Chairman, Crystal Logistics Group
A high level of compliance in safety, management and goods handling is required to reach TAPA’s requirements, and Mr Chau said accreditation elevates his company’s reputation. “From our customers’ viewpoint, whose emphasis is on security and high-quality management, TAPA accreditation helps build a trusting relationship. It also helps our company improve our management, daily operations and security systems, resulting in safer, smoother-flowing operation.”
Alex Ng, General Manager, Kerry Logistics (Thailand)
Kerry Logistics, a Hong Kong company with offices in 23 countries, about 16,000 employees and a transportation fleet of 8,000 vehicles, achieved TAPA TSR accreditation last October for KART, its member-company based in Bangkok. The company caters to the rapidly growing demand for road services across the region, especially with such emerging economies as Vietnam, Laos and Cambodia, and into the mainland.
“As the pioneer in creating an ASEAN-wide, cross-border road transportation network, Kerry Logistics has linked Singapore, Thailand, Vietnam, Cambodia, and Laos directly to Kunming in western and Shenzhen in southern China. By owning and managing 2.4 million square metres of logistics facilities, our network provides customers with reliability and flexibility to support their future expansion and long-term growth,” said Alex Ng, General Manager, Kerry Logistics (Thailand).
“TAPA TSR signifies that the freight transportation services we provide to our customers have been assessed to meet a high standard of security,” said Mr Ng. “It also helps us raise the standards to meet growing demand from our customers for seamless and secure supply chains for high-value products.”
February 7 2012 Share
Contemporary Takes on Buddha
By Alexandra A. Seno
Michael Joo’s ‘Bodhi Obfuscatus (Space-Baby),’ an installation that includes a Gandharan Buddha, mirrors, flat-screen monitors, video projection, fiberoptic cable and live surveillance cameras
When John D. Rockefeller III helped found the Asia Society, his donations included millennia-old Buddhist hanging scrolls and sculptures.
A handful of them will be on display at the Asia Society’s new Hong Kong site, paired with, among other contemporary works, “Bodhi Obfuscatus (Space-Baby),” a Buddha statue encircled with fiber-optic cable, whose face appears on video displays around the gallery.
The exhibit, called “Transforming Minds,” aims to bring together ancient Buddhist art with their 21st-century descendants that, as curator Melissa Chiu says, “respond to or are informed by Buddhism.” It opens Friday and runs to May 20.
“We wanted to do a show that spoke to the Asia Society’s contribution to cultural life in Hong Kong—pan-Asian, bringing the past and present together,” Ms. Chiu says.
“Bodhi Obsfuscatus,” by Michael Joo, incorporates a second- or third-century Buddha from Gandhara (a kingdom in South Asia whose sculpture carries Greek influences, thanks to Alexander the Great) from the Rockefeller bequest. An homage to video-installation artist Nam June Paik, it was commissioned by the Asia Society in 2005 and is showing in Hong Kong for the first time.
In addition to Mr. Joo, Mariko Mori, Zhang Huan and Montien Boonma also have contemporary works on display.
The show shines a spotlight on a school of curatorial thought gaining traction: Looking at today’s Asian art in the context of cultural history.
“Contemporary art, generally speaking, doesn’t tend to refer to historical antecedents,” Ms. Chiu says. “For a long time in the U.S., people would say Asia had no good contemporary art, because they would think of Asia in terms of past glories.”
She adds, however, that it is not the only way of looking at the contemporary work. “This idea of having a dialogue with the past is one strain we find in Asia, but it is one of many in a complex region,” she says. “There are also many artists who are not interested in the past.”
February 3 2012 Share
A central role - Andrew Sheng says Hong Kong's exceptional skills in business and organisation - as the health of its finances attests - hold the key to its future in a global economy where the power balance is tilting East
Financial Secretary John Tsang Chun-wah's fifth and final budget of the current-term Hong Kong government was a model of fiscal design, the envy of most governments.
Which government around the world can boast a surplus of HK$66.7billion, against a forecast deficit for this fiscal year of HK$8.5 billion, amid a year of crisis in Europe and global slowdown?
Which government indeed (perhaps with the exception of Singapore) can claim fiscal and foreign-exchange reserves equivalent to 35per cent of gross domestic product or 22 months of government expenditure?
And which government can claim to have pure government debt (excluding statutory body debt) of less than 2per cent of GDP?
Ministers of finance in Europe who are struggling with their debt crises can only shake their heads at the ability of Hong Kong to increase tax allowances, cut property taxes and waive some profits tax. All these goodies, and the forecast deficit for next year is (only) HK$3.4billion. We should nominate Tsang for the post of commissioner for fiscal reform in Europe.
The financial secretary is correct to warn about potential shocks from global crises. Growth in real terms in 2012 is forecast at 1-3per cent, but the medium-term average (2013 to 2016) is projected at 4per cent.
In his concluding remarks, Tsang said he has worked conscientiously as a financial secretary and I could not agree more.
It has not been easy for him to navigate the most open economy in the world amid the huge turbulences worldwide. But Hong Kong has been lucky to be part of the fastest growth story in the 21st century and to be located in the right neighbourhood.
Tsang spent a fair amount of time reflecting on how to capitalise on Hong Kong's competitive edge, mentioning specifically that the nation's 12th five-year plan has a dedicated chapter on Hong Kong and Macau.
He identified several opportunities for development: the importance of further liberalisation of the mainland economy, the promotion of cross-strait relations, further linkages to Asean and the BRIC countries, and the promotion of more parent companies to locate in Hong Kong.
I commend his analysis of the need to develop our social capital and focus on urban renewal. Ditto the need to promote the four pillar industries of trade and logistics, financial services, business and professional services, and tourism, in addition to the six industries where Hong Kong has competitive advantages.
What I missed from the budget speech was a discussion of what role Hong Kong will play in the global game, when there is now a perceptible shift in economic power from West to East, and how Hong Kong needs to position itself to facilitate that shift so that this will be achieved without major conflict and volatility.
Coming back from recent visits to Saudi Arabia, Indonesia and India, my perception is that emerging markets in Asia are now looking at different models of growth. One trend that is emerging is that the future of competition may be less of nations, but between cities.
The reason is simple. With 60per cent of the global population in Asia and mostly in rural areas, one path for development is through urbanisation. The McKinsey Global Institute has estimated that just 380 cities in the advanced countries accounted for half of the world's GDP in 2007. China and India are urbanising very fast, and the new mega cities will all be searching for solutions to deal with jobs, environment, traffic congestion, education, health care and social welfare.
No one could question the fact that one of Hong Kong's core competencies is that it is one of the most successful cities in Asia, if not the world. That knowledge alone can be exploited to engage in new partnerships with other cities to bring economic opportunities to all.
What does that mean for planning for the future? The current paradigm of economic theory, based on neoclassical thinking and free-market ideology, is too simple and flawed to help us think through the complex and evolving challenges today. Eric Beinhocker, in his book The Origin of Wealth, suggested that wealth is created through the interaction between three forces - business plans, physical technology and social technology.
It is clear in my mind that Hong Kong's comparative advantage is not in physical technology, not because modern cities cannot buy or attract the technology or hardware, but because of scale.
Hong Kong's real comparative advantage is its vibrant entrepreneurial business models that are flexible and competitive on a global scale, and its social technology, which is defined as methods and designs for organising people in pursuit of goals.
In other words, Hong Kong does not have hard power, but soft power. Competition and innovation in the future will be less about more hardware (Hong Kong has infrastructure that is already at the forefront), but about the software of people, skills and experience, and how to organise them in business and government.
People who push for hardware-driven innovation think that helping guys in garages make the next Microsoft or funding large research and development labs and science parks will create the next breakthrough in wealth creation.
For large countries with large resources, this may be true. But for cities like Hong Kong, the real breakthrough, which is already happening, although perhaps not much recognised, is in the innovation in business plans and social technology that Hong Kong is very good at. Facilitating the next phase of innovation in social technology and business plans for Hong Kong to maintain not just its hardware leadership but its thought leadership, globally, will be the real challenge for the next generation of Hong Kong leaders.
Andrew Sheng is president of the Fung Global Institute
February 2 2012 Share
What a relief ... for hong Kong middle class - Finance Scretary John Tsang doles out HK$80 billion (US$10.2 billion) in swansong budget that provides shelter from the looming economic storm for some.
By Gary Cheung, Peter So and Tanna Chong
Note US$1 = HK$7.75
The last budget statement - by Independent News Transmissions Limited http://www.youtube.com/watch?v=Cy5lOQUgMhg
Revised estimates for 2011-12
A surplus of HK$66.7 billion in consolidated account, equivalent to 3.5 per cent of gross domestic product.
Fiscal reserves are expected to be HK$662.1 billion, equivalent to 35 per cent of GDP or 22 months of government expenditure.
Estimates for 2012-13
GDP growth: 1 per cent to 3 per cent.
Headline inflation: 3.5 per cent.
Government expenditure: HK$394 billion (up 7 per cent).
Government revenue: HK$390 billion.
A deficit of HK$3.4 billion in consolidated account.
Fiscal reserves estimated at HK$668.7 billion by end-March 2013, equivalent to 34 per cent of GDP or 20 months of government expenditure.
Help for small and medium-sized businesses
Business registration fees to be waived for the year.
Profits tax to be reduced by 75 per cent for 2011-12, subject to a ceiling of HK$12,000.
Charges to be halved on import and export declarations, capital duty levied on local companies to be abolished.
SME financing-guarantee scheme to be enhanced by increasing the maximum loan guarantee ratio to 80 per cent, for which the government will provide a guarantee commitment of HK$100 billion, while the guarantee fee will be lowered.
Hong Kong Export Credit Insurance Corporation will offer discounts to SME policyholders.
HK$220 million for Construction Industry Council to enhance training programmes.
Employees Retraining Board will offer 130,000 training places for the unemployed and people seeking employment.
HK$100 million injection for the Enhancing Employment of People with Disabilities through Small Enterprises Project, which grants funding to non-government
organizations to set up small enterprises employing people with disabilities.
Housing land supply for 2012-13 estimated to provide 30,000 private residential flats.
Application list in the Land Sale Programme will include 47 residential sites, of which half are new sites. They would provide 13,500 flats if sold.
A public consultation will be launched on two property projects above the MTR West Rail Kam Sheung Road station and Pat Heung depot - estimated to provide about 8,700 flats.
75,000 public rental flats to be built in the five-year period from 2011-12.
Six sites in Sha Tin, Tsuen Wan, Kwai Tsing and Yuen Long initially identified for the first batch of developments under the new Home Ownership Scheme.
Urban Renewal Authority invited to launch redevelopments of industrial buildings in the form of a pilot scheme.
Government expenditure estimated at HK$60 billion (up 7 per cent).
HK$1 billion to implement a new programme modelled on Project Yi Jin for further education for secondary school leavers and adult learners.
HK$2.5 billion to launch the sixth Matching Grant Scheme, which will cover all statutory and approved post-secondary institutions.
Two separate injections of HK$1 billion each, into the HKSAR Government Scholarship Fund and Self-Financing Post-Secondary Education Fund, to establish more scholarships or award schemes.
HK$5 billion to Research Endowment Fund to enhance the academic and research development of tertiary institutions.
Recurrent expenditure estimated at HK$45 billion (up 8 per cent).
HK$2.2 billion towards Hospital Authority clinic and hospital projects, including the expansion of the United Christian Hospital and redevelopment of Yan Chai Hospital, Kwong Wah Hospital and Queen Mary Hospital.
HK$10 billion to the Samaritan Fund.
Government spending estimated at HK$44 billion (up 9 per cent).
Extra spending for implementing public-transport concessions for the elderly and disabled, providing additional 1,000 subsidised residential-care places and other elderly care services.
HK$900 million for improving facilities at 250 district elderly community centres.
Extra allowance, equal to one month's payment, for all Comprehensive Social Security Allowance, Old Age Allowance and Disability Allowance recipients.
Two months' rent waived for public housing tenants.
Subsidy of HK$1,800 for each residential electricity account, benefiting 2.5 million households.
Waiving of property rates for 2012-13, subject to a ceiling of HK$2,500 per quarter - estimated to cover almost 90 per cent of properties.
Reduction in salaries tax and tax under personal assessment for 2011-12 by 75 per cent, subject to a ceiling of HK$12,000.
Raising of basic tax allowance to HK$120,000.
Raising of married person's allowance to HK$240,000.
Raising of allowance for maintaining a dependent parent or grandparent aged 60 or above to HK$38,000.
Raising of child allowance to HK$63,000.
Raising of dependant brother/sister allowance to HK$33,000.
Raising of disabled dependant allowance to HK$66,000.
Extending entitlement period for the tax reduction for home-loan interest to 15 years of assessment.
Increasing maximum tax deduction for mandatory contributions to Mandatory Provident Fund schemes to HK$15,000.
Giving all student-loan borrowers who complete their studies in 2012 the option to start repaying their student loans one year after completion of studies.
Hong Kong Mortgage Corporation to introduce a three-year pilot scheme of microfinance. The maximum loan amount will be capped at HK$100 million with a repayment period as long as five years.
Injecting HK$200 million into the Community Investment and Inclusion Fund to promote social-capital development.
A further issuance of iBonds worth not more than HK$10 billion.
Allocating HK$150 million to the Mega Events Fund and extending its operation for five years.
Setting up a fund of HK$1 billion to help Hong Kong enterprises tap the mainland market.
The value of infrastructure projects approved and to be submitted to the Legislative Council is HK$400
billion (US$51.38 billion).
John Tsang's budget speech is broadcast live on a screen at Grand Millennium Plaza in Central yesterday. Every year as financial secretary he has forecast a deficit - and the government has turned in a surplus
In what is likely to be his final budget, the financial secretary presented an HK$80 billion basket of relief and fiscal measures - HK$28.2 billion of which will mostly benefit the middle class.
Observers say that given the city's fiscal reserves - which are expected to reach HK$658.7 billion by March 2013 - the 2012-13 budget came down on the side of caution and ignored many long-standing problems, including the city's wealth gap.
However, John Tsang Chun-wah said caution was justified because of the difficult outlook facing the global economy, particularly in the United States and Europe, which was certain to have an impact on Hong Kong.
Relief measures included a salaries tax rebate of up to HK$12,000 for the 2011-12 financial year, an increase in the basic allowance from the current HK$108,000 to HK$120,000, and a waiver of property rates.
Tsang also extended the period for tax deductions for home-loan interest to 15 years from the current 10, the second time the qualification period has been lengthened.
A five-year tax deduction of up to HK$100,000 was announced in the 1998-99 budget, when Chief Executive Donald Tsang Yam-kuen was the financial secretary, and extended to 10 years in 2006.
The finance chief's incentives were seen as an attempt to appease the middle classes, who were angered by the government's initial refusal in last year's budget to grant a tax rebate and by its controversial U-turn on injecting cash into Mandatory Provident Fund accounts. A HK$24 billion MPF injection was scrapped in favour of a HK$6,000 cash handout to the city's adult permanent residents, worth HK$37.9 billion.
This year's budget was tempered by the gloomy outlook for the city's economy, which Tsang warned would grow by just 1 to 3 per cent this year, compared with 5 per cent last year, amid bleak prospects for Europe and the United States.
Nevertheless, Tsang was able to offer some sweeteners, as the government coffers are flush with cash. Thanks to record land, salaries and profits tax revenue, he estimated a surplus of HK$66.7 billion for the current financial year - against the original forecast deficit of HK$8.5 billion.
Tsang's increase in the basic allowance for salaries-tax payers, the first since the 2008-09 budget, takes 130,000 taxpayers out of the tax net and leaves the number paying salaries tax at 1.5 million in a city of around seven million people.
"Tsang's proposal will further narrow Hong Kong's tax base. The government will face huge political pressure to cut the basic allowance if the public finances deteriorate in future," said Li Kui-wai, associate professor of economics and finance at City University.
A senior administration official admitted the government would pay a price in the short run for the increase in the basic allowance, but said it was an effective response to the interests of the middle class.
"Drafting a budget is not only a process of compiling fiscal figures. A budget is actually a political tool to achieve the government's political mission, including the implementation of the goals set out in the policy address," the official said.
Speaking at a post-budget news conference, Tsang said that every government wanted to expand its tax base. "All citizens say they would like to expand the tax base, but no one wants to pay extra money."
While the relief measures were generally welcomed by parties across the political spectrum, all of them urged the government to introduce measures to address the city's deeprooted problems.
"Although their term is ending soon, I hope officials can prepare the city for the economic turmoil ahead," said Chan Kam-lam, a lawmaker from the government-friendly Democratic Alliance for the Betterment and Progress of Hong Kong.
Henry Tang Ying-yen, the former chief secretary who is hoping to succeed Donald Tsang as chief executive this year, said the government could have been more proactive in rolling out relief measures.
"I think we can extend the tax concession for middle-class people paying their home-loan interest, and increase the amount. And we could also increase the allowance for maintaining parents progressively, according to the dependents' age," said Tang.
"We should further assist the grass-roots sector via the Community Care Fund."
Leung Chun-ying, Tang's main rival to be the next chief executive, said this year's budget was similar to many proposals that are in his own manifesto.
"The basket of measures can take care of the interests of both the grass-roots sector and the middle classes ... and coincide with quite a number of our political platforms," Leung said.
Hong Kong financial chief delivers budget speech
Hong Kong's financial chief John Tsang unveiled the budget proposals for the fiscal year 2012-2013 at a Legislative Council meeting Wednesday, which is the last budget for the current Hong Kong Special Administrative Region government.
The city's economy grew by 5 percent in 2011 in real terms, the lower range of the forecast made in last August, Tsang said in his speech which was live broadcast for Hong Kong's 7.1 million people.
Hong Kong's Financial Secretary John Tsang speaks during a news conference after unveiling the annual budget report in Hong Kong Feb 1, 2012.
Talking about inflation, Tsang said that the underlying inflation rate for 2011 averaged 5.3 percent, a marked rise from the 1.7 percent in 2010.
Looking ahead, Tsang was not optimistic about Hong Kong's export performance in the first half of 2012 due to the deterioration of the external environment.
Fortunately, Asian economies, especially the Chinese Mainland, should be able to serve as an anchor for the global economy. Hong Kong's external trade may also see some improvement in the second half of this year, he said.
Tsang expected the economic growth in 2012 will inevitably be lower than the average growth rate over the past decade, with GDP growth of 1 to 3 percent in real terms for 2012.
He also announced that the inflation rate would ease quite visibly in the second half of 2012. The average underlying inflation rate for the year is expected to drop to 4 percent this year.
Tsang estimated that the operating expenditure for 2012-2013 would be 315 billion HK dollars ($40.6 billion), an increase of 6 percent over the revised estimate for 2011-12. As for the total government revenue, it is estimated to be 390.3 billion HK dollars.
Taking both expenditure and revenue into account, Tsang said," there will be a small deficit in our accounts in the coming years, and will largely achieve fiscal balance."
For the medium term, Tsang projected the annual average growth rate will be four percent in real terms for the period of 2013-2016, while the underlying inflation rate will average 3.5 percent.
In order to better prepare Hong Kong people for the difficult time ahead, Tsang introduced measures worth nearly 80 billion HK dollars ($10.3 billion) to support enterprises and people in meeting challenges. He said the strong package of measures would help stimulate the economy by 1.5 percentage points in 2012.
Tsang pledged the government will firstly lend support to small and medium enterprises which make up the vast majority of the enterprises in Hong Kong. The measures include increasing in loan guarantee ratio and reducing the annual guarantee fee for a loan for small and medium enterprises.
"In the face of the worsening external economic environment, we need to help our enterprises by reducing their operating costs and enhancing our competitiveness so as to protect employment," said Tsang.
To preserve employment, Tsang pledged to continue with the strategy which helped Hong Kong tackle the 2008 financial tsunami. He argued that apart from stabilizing the employment market through the supportive measures for enterprises, the government should provide suitable employment support and training directly targeted for working population.
Tsang also proposed to take effective measures to care for people's livelihood, with the priority of education, health and social welfare.
"We shall continue to allocate resources to recurrent items relating to people's livelihood. We shall, as in the past, adopt fiscal stimulus measures to help those in need by providing them with appropriate services and facilities," Tsang said.
Besides, to ease the tax burden of middle class, Tsang proposed seven tax measures for the coming fiscal year, including raising the tax exemption allowance for tax payers.
In order to promote economic development, Tsang said Hong Kong must take advantage of the existing competitive edge. He continued that the city should "actively take forward" the 36 supporting measures announced by Vice Premier Li Keqiang during his visit to Hong Kong last August.
The continued liberalization of the Mainland economy has presented Hong Kong with an opportunity to further develop its economy, said Tsang, adding that Hong Kong should improve its market infrastructure, seek to enhance the market connectivity of the Mainland and the city, and increase its market capacity.
Tsang also said that Hong Kong should further expand its linkage to the world, pursuing participation in multilateral and regional economic co-operation.
"I believe that we should take full advantage of our relationship with the Mainland while enhancing our international outlook. This should continue to be our way forward. It will further reinforce Hong Kong's position as a global economic, financial and commercial center," said Tsang.
Besides, Tsang also emphasized the importance of promoting four traditional pillar industries, namely trading and logistics, financial services, business and professional services, and tourism, and six emerging industries, including cultural and creative industries, medical services, education services, innovation and technology, environmental industries, and testing and certification services.
Taxpayers can look forward to lower bills - Savings from rebates, rate cuts and allowance rises announced yesterday will ease the pain of inflation
By Amy Nip and Colleen Lee
Wilson Shea says expected savings from the tax cuts could help offset inflation.
Entrepreneur Wilson Shea Kai-chuen, with a family of six, will have HK$24,000 more in his pocket this year thanks to the tax rebates. His family is also expecting to pay HK$5,610 less tax next year after an increase in allowances.
Shea, 49, is among the 1.5 million taxpayers who will benefit from a 75 per cent rebate of salaries tax and tax under personal assessment for 2011-12, subject to a ceiling of HK$12,000 per person. The rebate cannot cover his children's education costs, which amount to HK$60,000 a year, but a smiling Shea looks satisfied.
"It's already quite good," he said. "The amount can be used on tutorial lessons for my daughters. Some of it would be for offsetting inflation."
Raising children is never easy, and for a big family like Shea's costs can run high. Two of his daughters are in Form Four and another is taking an associate degree programme. His eldest daughter recently graduated from university.
Costs for attending interest classes and tutorial classes can add up to a substantial amount over and above school fees, he said.
Taxpayers have already prepaid the tax for the current financial year, but will get the rebate assuming the Legislative Council passes the government's budget - a virtual certainty. In addition, they will pay less tax in the financial year 2012-13 thanks to higher allowances.
Increasing the basic tax-free allowance per person to HK$120,000 from HK$108,000 and the married person's allowance to HK$240,000 from HK$216,000 will benefit 1.38 million taxpayers.
The child allowance will go up from HK$60,000 to HK$63,000. Increases in other allowances were also announced.
Those who are still paying off home loans will also be glad to hear they will benefit from mortgage interest tax relief for an additional five years on top of the current 10 years. Employees who pay into Mandatory Provident Fund schemes or other retirement schemes will see the maximum annual tax deduction for their pension contributions rise to HK$15,000 from HK$12,000.
The budget also includes a property rates waiver for 2012-13, with a ceiling of HK$10,000 a year for each property. Each household will also receive an electricity subsidy of HK$1,800.
For Shea, who makes about HK$60,000 a month, the increase in allowances is not going to make a big difference in his tax bill. The family spends HK$30,000 a month on rent and he was disappointed that there is no allowance for that.
"Many people cannot afford to buy a flat and have to pay a lot of rent every month," he said.
KPMG partner Jennifer Wong Wan How-yee says her calculations show single taxpayers will reap the biggest benefit. A single man who earns a monthly income of HK$20,000 and has no dependents will pay HK$2,040 less in salary tax next year - a near 20 per cent drop.
Married couples will see a bigger drop if they have children. A household with a monthly income of HK$50,000 and two children will pay 15.5 per cent less tax. The bill will fall by 7.7 per cent, to HK$49,200, for a couple without children.
Although the tax reductions do not amount to much in absolute terms, Wong found them to be reasonable.
"Hong Kong's tax base is narrow," she said. "Less than 40 per cent of the working population needs to pay tax. If the government increased the allowances by a large amount, many people would drop out of the tax net altogether."
Ayesha Lau, head of the Hong Kong Institute of Certified Public Accountants' taxation committee, said the government had not accepted suggestions for new allowances.
"We support the tax concessions," Lau said. "But ... there is nothing innovative."
HK$10b to help needy buy medicine - Injection to Samaritan Fund will help patients obtain drugs not on subsidy list; health budget also includes redevelopment of two old hospitals
By Emily Tsang and Lo Wei
A planned HK$8.4 billion redevelopment of Kwong Wah Hospital is due to be completed in 2020.
A record HK$10 billion will be provided for the Samaritan Fund to subsidise patients' purchases of medicines, Financial Secretary John Tsang Chun-wah announced in his budget speech.
The fund supports 1,300 patients who rely on long-term drugs such as cancer medicine and growth hormones.
Hospital Authority chairman Anthony Wu Ting-yuk said the HK$10 billion would be spent over the next 10 years.
The HK$10 billion contribution is part of HK$59.2 billion in health expenditure for the coming year.
Tsang said recurrent funding for the Hospital Authority would increase by nearly 40 per cent to HK$40 billion in the next financial year. Some HK$15.4 billion will be spent over the next several years to redevelop Queen Mary Hospital at Pok Fu Lam and Kwong Wah Hospital in Yau Ma Tei.
The Samaritan Fund, financed by donations, helps patients with financial problems buy expensive drugs that are not on the Hospital Authority's list of subsidised medicines.
As well as the one-off injection, the threshold for households to qualify for the scheme has been lowered.
As a result, about 2,300 more patients are expected to benefit, including middle-class patients who failed to obtain a subsidy under the old scheme, a government source said.
"We understand a family faces a lot of pressure if a member is on long-term medication," the source said. "We hope the scheme will improve the living quality of people who unfortunately fall ill, especially those in the middle class [who did not benefit] under the old scheme."
The cash injection is the government's fourth to the fund since 2005, and the highest yet - ten times its previous contribution of HK$1 billion, made in 2008/09.
Allowances will also be simplified. Bigger families will enjoy higher subsidies.
"Assuming a family of four has an annual disposable income of HK$100,000, and another HK$400,000 in [liquid assets], drug expenses may eat up HK$100,000 a year," the source said.
"But under the new scheme, a cap ... will be set at 10 per cent of the annual disposable income, meaning HK$10,000. That is all they need to pay. The other HK$90,000 will be funded."
Tim Pang Hung-cheong, of the Patients' Rights Association, welcomed the input but said more self-funded medicine should be included in the list covered by the fund.
Queen Mary Hospital and Kwong Wah Hospital will be rebuilt on their current sites.
The redevelopments will not add extra beds at either of the hospitals.
Wu said the redevelopments would be problematical. Queen Mary Hospital is built on a slope and some of its buildings have heritage status, while the Kwong Wah Hospital site is small and has construction constraints.
The HK$7 billion redevelopment of Queen Mary Hospital would focus on upgrading emergency and cardiology services, the government source said. Work could start as soon as the Legislative Council approved funding in 2014, and was expected to be complete by 2025.
Microbiology professor Ho Pak-leung, of the University of Hong Kong, questioned why the project had to take 14 years, considering the speed with which the new government headquarters at Admiralty was built.
He agreed the work had to be done. "Queen Mary is really old and backward in facilities. It often floods during the rainy season."
At Kwong Wah Hospital, a new complex will replace six of the seven current buildings at a cost of about HK$8.4 billion.
Kwong Wah Hospital chief executive Dr Nelson Wat Ming-sun expects the work to be complete in 2020. "Accident and emergency services will not be affected and other services will be adjusted to minimise the impact," Wat said.
Tsang also proposed spending HK$32 million to expand services at maternal and child health centres, in the face of increasing numbers of non-local women giving birth in the city.
12 2012 Share
Hong Kong Ranked World's Freest Economy for 18th Consecutive Year
Hong Kong has been ranked the world's freest economy for the 18th consecutive year in the 2012 Index of Economic Freedom, released today by The Heritage Foundation and The Wall Street Journal.
The Financial Secretary, John C. Tsang, welcomed the Heritage Foundation's high regard of Hong Kong as the world's freest economy. He stated that the government was determined to uphold economic freedom in Hong Kong, which was the cornerstone of sustained economic stability, growth and prosperity.
"We see the role of the government as that of an active facilitator. We provide a business-friendly environment where all firms can compete on a level-playing field," Mr. Tsang said.
"We have sound regulatory regimes in place to ensure the integrity and smooth functioning of a free market. We also strive to remove impediments and provide support in an open and equitable manner to facilitate industries tapping into new markets or new growth industries."
On a scale from zero to 100, Hong Kong scores 89.9, well above the world average of 59.5.
The index, which ranks the degree of economic freedom of 179 economies, evaluates economies in the following 10 categories: labor freedom, business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, and freedom from corruption.
Among the 10 categories assessed, Hong Kong ranks first in financial and trade freedom, second in investment freedom and property rights, and third in business freedom.
Hong Kong is ranked first out of 41 economies in the Asia–Pacific region.
Hong Kong Commissioner to the United States, Donald Tong, welcomed the index's findings, saying: "I am happy to learn that Hong Kong's adherence to a free-market philosophy, together with its business-friendly environment and sound regulatory regimes, has once again garnered such accolades for the 18th consecutive year. Economic freedom underpinned by a commitment to the rule of law is the bedrock of our success.
"We do not take such recognition for granted and are always working to enhance Hong Kong's competitiveness and maintain its standing as a global business, financial, and logistics center."
The index commended Hong Kong's tax system as simple and efficient, and considered the city's monetary stability well maintained.
It further complimented Hong Kong's high-quality legal framework, which "provides effective protection of property rights and strong support for the rule of law." In addition, the index found that the city's regulatory efficiency and openness to global commerce strongly support entrepreneurial dynamism. Moreover, there is little tolerance of corruption.
10 2012 Share
Hong Kong Braced for the Challenge
Reasons for such optimism are outlined in the latest hiring trend insights from Morgan McKinley. The recruitment firm’s research found that, while Europe’s debt crises have dampened employment markets in the Asia-Pacific, Hong Kong, showing typical resilience, is expected to bounce back quickly.
Hong Kong businesses look resilient despite the challenging global economy
The research painted a picture of a strong hiring market in Hong Kong from 2010 well into 2011, with increased levels of hiring seen across the board. Demand was particularly high in sales and marketing and technology in the commercial sector, and risk and compliance in the financial services sector. The insurance hiring market was also robust, with actuaries, underwriters and claims specialists remaining highly sought-after.
A significant drop in hiring volumes in the financial services sector was noted in the third quarter of last year, as the European debt crisis, poor United States economic data and a drop in Chinese mainland growth affected markets globally, including Hong Kong. The commercial sector remained relatively buoyant, however, as demand for luxury goods continued from local and mainland consumers.
What Lies Ahead
The findings were gleaned from a survey of more than 1,050 senior-level operational and human resources managers working across the financial services and commercial sectors in the Asia-Pacific region. Respondents were asked about their hiring plans for 2012, and the challenges they expect to face in the Hong Kong market over the coming year.
Nick Lambe, Managing Director, Morgan McKinley Hong Kong
Their responses led Nick Lambe, Managing Director, Morgan McKinley Hong Kong, to be cautiously optimistic. “Though the outlook for Hong Kong’s economy is clouded by the instability of global financial markets, we anticipate this period of low visibility will be short-lived. Once the markets regain strength, we expect there will be a bounce-back in hiring.”
Most respondents from the financial services sector are concerned about the impact of global uncertainty on Asia-Pacific markets, with more than half of employers believing that headcount restrictions will be a major factor influencing hiring levels over the next six to 12 months.
Employers surveyed across commerce and industry seemed less concerned about global market conditions affecting Asia-Pacific growth, with almost half saying they would look to hire within the next six months. And 38 per cent anticipate their hiring volumes will be higher in the next 12 months compared to the previous year.
Mr Lambe was not surprised. “In recent years, Hong Kong has had a number of events – the Asian market crash in 1997, SARS in 2003, and the global financial crisis in 2008 – where Hong Kong has demonstrated its economic resilience. Its proximity to the mainland and the financial flow from there significantly aids the demands placed on Hong Kong's industries, from financial services to property to luxury goods and manufacturing.”
A level of cautious optimism is also evident in research compiled for The Hudson Report. The recruitment firm’s last survey of Hong Kong executives across key business sectors showed a sharp decline in hiring expectations for the last quarter of 2011. Nevertheless, most respondents (76 per cent) were still confident about their company’s future performance.
Although a report from Grant Thornton International published this month indicates that many Hong Kong businesses expect challenging times ahead, Daniel Lin, Managing Partner of Grant Thornton Jingdu Tianhua, expects companies will respond by “working harder than ever to maintain margins and competitiveness.”
The “bright spot in the gloom” is that employment needs in Hong Kong remain strong, Mr Lin said. His firm’s findings show that 47 per cent of Hong Kong businesses hired new staff in 2011, ranking among the top five in the world.
Skills in Demand
In 2012, Mr Lin expects a mix of ups and downs in the local job market. “The employment outlook for 2012 will remain optimistic for those who have the right skills and experiences. However, considering the gloomy market outlook in Europe and global markets, fresh graduates and people with less experience may find it a challenging year.”
Daniel Lin, Managing Partner, Grant Thornton Jingdu Tianhua
Not surprisingly, a separate survey by Morgan McKinley has found that continuing job cuts and hiring freezes overseas are pushing more Americans and Europeans to look East for career opportunities. In a survey conducted with 560 financial services professionals in London, Hong Kong was identified – alongside Singapore and New York – as one of the top three destinations for those looking to further their careers with a move abroad.
Mr Lambe said professionals at mid-management level or above can rightly expect to advance their careers through experience in Hong Kong. “These individuals will spend a number of years furthering their career, managing teams that they might not have the opportunity to do in their domiciled location. After these stints, professionals can then move to a mature market and potentially move up the career ladder within their own or another organisation.”
He cautioned, however, that while job creation in markets such as Hong Kong is faster than in the West, the region has not been left unscathed by the financial crisis. “People with experience in more mature markets are advised against the misconception that they will walk into a job in Hong Kong. While this is certainly the case for niche skill-sets, it may not ring true for all types of professionals,” he said.
*News information are obtained through various sources:
South China Morning Post, The Standard, Hong Kong Trade Development Council,
Hong Kong Economic and Trade Office, Hong Kong Government, Asia Society, Wall
Street Journal, China Daily, Xinhua, World Journal, The Singtao Newspaper, TVB,
CCTV Stations in China and others that are deemed reliable, but not guaranteed