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July 11 2016

If I have an auto accident in California, do I have to stop?

Yes. California law says you must stop—whether the accident involves a pedestrian, a moving car, a parked car or someone’s property. If you drive away, you can be charged with hit and run even if the accident was not your fault. You must also exchange information with the other driver—your name and driver’s license number, the vehicle identification number of the car you are driving, the name and address of the car’s owner, the name and address of your insurance company and your insurance policy number (or other evidence of financial responsibility, such as a bond posted with the Department of Motor Vehicles).

Hit-and-run penalties are severe. Depending on the damage or injuries, you may be fined, sent to jail or both. You also could lose your driver’s license.

If you hit a parked car or other property, try to find the owner or driver. If you cannot, the law says you may drive away only after you leave behind, in a conspicuous place, your name, address and an explanation of the accident, and the name and address of your car’s owner (if other than yourself). You also must notify the local police or California Highway Patrol (CHP) either by telephone or in person as soon as possible.

You must call the police or the CHP if the accident caused a death or injury. An officer who comes to the scene of the accident will conduct an investigation. If an officer doesn’t show up, you must make a written report on a form available at the police department or CHP office as soon as possible.

2. What should I do if someone is injured?

The law requires you to give reasonable assistance to anyone who is injured. For example, you may need to call an ambulance, take the injured person to a doctor or hospital, or give first aid—if you know how.

If you are not trained in the appropriate first aid procedures, do not move someone who is badly hurt; you might make the injury worse. However, you should move someone who is in danger of being hurt worse or killed (for example, in a car fire) even if you do make the injury worse.

To help prevent additional collisions, try to warn other motorists that an accident has occurred. Placing flares on the road (only if there are no flammable fluids or items nearby), turning on your car’s hazard lights and lifting the engine hood are usually good ways to warn others on the road. Arrange to get help for anyone who is injured, and try not to panic.

3. How can I get help?

As soon as you can get to a telephone, call 911. Explain the situation and give the exact location of the accident, so that help can arrive quickly. Be sure to mention whether you need an ambulance or a fire engine. Remain on the telephone until the operator tells you it is okay to hang up. Or, flag down a passing car and ask the driver to go for help. The driver may have a cell phone in the car and can make an emergency call on the spot.

4. What information should I gather at the accident scene?

Since many records now are confidential under the law, you may not be able to obtain the information that you want from the Department of Motor Vehicles (DMV). So be sure to get as much correct and complete information as you can at the scene of the accident.

You and the other driver should show each other your driver’s licenses and vehicle registrations. Then you should write down:

The other driver’s name, address, date of birth, telephone number, driver’s license number and expiration date, and insurance company.

The other car’s make, year, model, license plate number and expiration date, and vehicle identification number.

The names, addresses, telephone numbers and insurance companies of the other car’s legal and registered owners—if the driver does not own the car.

The names, addresses, dates of birth, driver’s license numbers and telephone numbers of any passengers in the other car.

The names, addresses and telephone numbers of any witnesses to the accident. Ask them to stay to talk to the CHP or police. If they insist on leaving, ask them to tell you what they saw and write everything down.

Try to identify people at the accident scene, even if they will not give their names. For example, if someone who saw the accident drives off, take down his or her license plate number. Law enforcement officials can trace the owner’s name and address.

The name and badge number of the law officer who comes to the accident scene. Ask the officer where and when you can get a copy of any accident report.

A simple diagram of the accident. Draw the positions of both cars before, during and after the accident. If there are skid marks on the road, pace them off. Draw them on the diagram, noting the distance they cover. Mark the positions of any crosswalks, stop signs, traffic lights or streetlights. If you have a camera with you, take pictures of the scene, and of the other drivers and occupants. However, do not place yourself in a position of danger in order to complete an accident diagram. Be aware of traffic conditions and skip any measurements that could place you in a position of harm. 

Make notes, too, on weather and road conditions. If the accident happened after dark, note whether the streetlights were on. Estimate your speed and that of the other vehicle. Be sure to record the exact time, date and place the accident happened.

The State Bar of California
Office of Media and Information Services
180 Howard Street
San Francisco, CA 94105-1639
415-538-2000
Publications: 1-888-875-LAWS (875-5297)
pamphlets@calbar.ca.gov
www.calbar.ca.gov
http://www.calbar.ca.gov/Public/Pamphlets/AutoAccident.aspx 

Accident Guide in California - CA Accident Guide

In the unfortunate event that you are involved in a traffic accident there is much you need to know. 

Stop and Assess the Situation

First, stop and assess the situation. Are there any injuries or death? Investigate the extent of the damage, and call for assistance if necessary. In California, failure to stop at the scene of an accident in which you are involved could result in serious criminal hit-and-run charges.

You must stop to assess the situation even when the accident involves merely damaging property or running into a parked car. If you hit a parked car or damage someone's property, but are unable to locate the owner, leave a note with your name and address, as well as the name and address of the owner of the automobile you are driving, secured to the vehicle or property damaged.

You will also be responsible for reporting the accident to the police or to the California Highway Patrol (in an unincorporated area).

When animals are involved don't take your responsibility any more lightly. Again, pull over. Try to find the owner. If the owner cannot be found call the Humane Society, the police, or the Highway Patrol.

What You Will Have to Show

Once you assess the accident, you must your show driver license, registration card, evidence of financial responsibility, and current address to others involved and any peace officers present.

If you cannot show proof of financial responsibility, namely from an insurance company with a current policy number, you face a potential citation and fine.

Serious Accidents

An accident must be reported to the DMV within 10 days when someone is killed, injured, or property damage exceeds $750.

To report an accident to the DMV you, your insurance agent, or legal representative must complete the Report of Traffic Accident Occurring in California (Form SR-1).

You must also submit an SR-1 in addition to other filings the insurance companies, police, and other administrative agencies require. In order to fill out the SR-1 you need to gather important information at the scene of the accident:

Place and time of accident.

Other driver's name, address, and date of birth.

Other driver's driver license information(#/State).

Other driver's license plate number and state.

Other driver's insurance company, policy number, and the expiration thereof.

Policy holder's name and address.

Vehicle owner's name and address.

Explanation of injuries or property damage.

The DMV SR1 is also required regardless of whether the accident occurred on private property or was caused by someone else.

Failure to file a necessary Report of Traffic Accident Occurring in California (Form SR-1) or failure to show proof of financial responsibility may result in the suspension of your license.

Unless the officer finds the other driver at fault, any accident the police report to the DMV will go on your driving record.

Removed your vehicle from the street or highway

Don't forget to have your vehicle removed from the street or highway. Failure to do so may result in your vehicle being towed or impounded.

http://www.dmv.org/ca-california/accident-guide/ 

October 22 2015

These 26 key words will be written into the history of Sino-UK relations By Yao Xinyu, Yuan Can People's Daily 

China's President Xi Jinping is on a state visit to the UK at the invitation of the Queen Elizabeth II from Oct. 19 to 23, 2015. Xi's visit to the UK is the first by a Chinese president in over a decade. China and the UK will work together to usher in a "golden era" for comprehensive strategic partnership between the two countries. The Sino-UK relationship is in a growth trend and faces new development opportunities. What highlights in the Sino-UK relationship will be written into the annals of the history? People's Daily Online sums up 26 key words from A to Z.

Chinese President Xi Jinping (R) holds talks with British Prime Minister David Cameron at 10 Downing Street in London, Britain, Oct. 21, 2015. 

A- Asian Infrastructure Investment Bank (AIIB)

In March 2015 the United Kingdom applied to join the Asian Infrastructure Investment Bank and became the first major Western country to apply full membership of the AIIB. China positively commented on the UK’s action.

B- Bilateral ties lifted to a new height

On Oct. 20, 2015, President Xi Jinping delivered a speech at the British Parliament. He emphasized that China and the UK strengthen mutual understanding, support and friendship. On Oct. 21, President Xi and Prime Minister Cameron reached an agreement to build a “global comprehensive strategic partnership” in the 21st century.

C- Chequers Talk

During this visit, President Xi and his wife come to Chequers, a country house retreat of the British Prime Minister and had dinner with the Camerons.

D- Destination of Investment

By the end of 2014, direct investment from China to the UK had reached over 40 billion dollars. The UK has become China’s biggest destination of investment in Europe, and over 500 Chinese companies have set up offices in the UK.

E- Education cooperation

The number of Chinese students in the United Kingdom has reached 150,000, taking almost half of the total number of Chinese students in EU and ranked the first of all overseas students in the UK. The Chinese government is still annually increasing scholarships for overseas students, and the UK government has been encouraging students to come to China through its “Generation UK” project.

F- Football Cooperation

In recent years China and the UK have had great cooperation and exchanges on football. In 2015, the two countries signed a Sino-UK youth football project.

G- Golden Era

The Prime Minister of the United Kingdom David Cameron said the relationship between China and the UK has entered a “Golden Era”. He stressed that President Xi’s visit is the best opportunity to deepen China-UK relations. In the written interview with Reuters, President Xi said he hopes his visit to UK will chart the course for the future growth of China-UK relations, inject new impetus in practical cooperation between the two countries in all fields and enable the two sides to jointly usher in a "golden time" for China-UK comprehensive strategic partnership.

H- High-speed Railway

In April, 2015, China and the UK set up a joint railway working group, and are encouraging corporations and financial organizations to join the UK’s second high-speed rail project HS2. When the Chancellor of the Exchequer George Osborne visited China in September, he opened the HS2 contract bidding that was worth 11.8 billion pounds.

I- Interests in common

President Xi said in his speech at the UK Parliament on Oct. 20, 2015 that China and the United Kingdom are “increasingly inter-dependent and becoming a community of shared interests.”

J- Joint Scientific Innovation Fund

The two countries have set up the Joint Scientific Innovation Fund, which is a new exploration in China-UK cooperation. This milestone in scientific cooperation helped propel cooperation in basic research, innovation, talent cultivation, etc., between the two countries.

K-Keynote speeches

During President Xi Jinping’s visit to the UK, he delivered several key note speeches, including one at the UK Parliament, one at the China-UK Business Leaders’ Summit, and one at the dinner hosted by the Lord Mayor of the City of London Alderman Alan Yarrow.

L- Legal Enforcement and Security Cooperation

The UK and China have been maintaining very good cooperation in legal enforcement and fighting against corruption. In July 2015, President Xi’s special envoy Meng Jianzhu said when he was meeting with Prime Minister Cameron that legal enforcement and security cooperation is an important component of the China-UK comprehensive strategic partnership, and embodies high mutual trust between the two countries, a highlight of China-UK cooperation in a new era.

M- Market Economy Status for China

The UK recognized China’s market economy status, and being supportive in relations with the EU. For years the UK has been suggesting that the EU give market economy status recognition for China.

N- Nuclear Power Station

During an interview with Reuters Chinese President Xi Jinping said that The Hinkley Point is the product of tripartite cooperation among China, the UK and France. “I hope that the companies of the three countries will fully leverage their respective strengths to ensure the successful launch of this project and deliver benefits to the British people,” he said.

EDF Energy reached an agreement with China General Nuclear Power Corporation (CGN) for a nuclear power plant at Hinkley Point, Somerset on Oct. 21, 2015.

O- Offshore Trading Hub for RMB

London launched its RMB business-centre programme in 2012. After several years of development London has become one of the most dynamic and important offshore trading hubs for RMB.

P- People-to-People Exchange

The number of Chinese traveling to the U.K. maintained double-digit growth every year for the past five years. Five years ago residents from mainland China accounted for 300,000 trips to the U.K. as their first travel destination, while the number reached nearly 530,000 in 2014. Bilateral personnel exchanges exceeded 1.1 million in 2014.

Q- Qualified Foreign Institutional Investor for RMB

The U.K. is the first non-Asia country that has been approved as a Qualified Foreign Institutional Investor in RMB.

R- Royal Gallery

Xi Jinping delivered a speech in the Royal Gallery of United Kingdom Parliament at Westminster. According to the official website of the Parliament, the Royal Gallery is only used for state events.

U.S. President Ronald Reagan and Bill Clinton, King of Spain Juan Carlos I, President of France François Mitterrand and the Chancellor of Germany Angela Merkel have delivered speeches there.

S- Sovereign Bonds Denominated in RMB

The U.K. is the first Western country to issue a sovereign bond denominated in the RMB.

T- Third Party Market Exploration

Gao Hucheng, Commerce Minister of China, said before Xi's U.K. visit that China should take full advantage in equipment manufacturing and capital, and UK should make use of its advantages in technology, innovation, management experience and financial services, to boost cooperation in third-party markets and create new places for bilateral economic and trade cooperation.

U- Upgrading Infrastructure Plans

The U.K. government plans include upgrading infrastructure, building an economic-center in northern England and the U.K. Industry 2015 Strategy. These plans fit nicely with China's "One Belt One Road" initiative and "Made in China 2025" strategy. Experts think that the U.K.'s need to upgrade infrastructure might become a new spotlight in Sino-U.K. cooperation.

V- Visa Application

To facilitate residents of China traveling to the U.K., the British government has simplified the online application process for Chinese individual travelers. The U.K. not only offers 24-hour visa service, but also a British-Irish and British-Belgian visa allowing Chinese citizens travel to Ireland and Belgium on a single visa.

From January 2016, new visitor visas for tourists from China will be valid in the UK for 2 years – 4 times the usual 6-month limit for a standard visitor visa – bringing significant benefits to the UK economy, Prime Minister David Cameron announced on Oct.21, 2015. The application fee for the new visa will be the same as it is now.

W- Windsor Dynasty

During Xi Jinping's visit to the U.K. he will make a formal meeting with Elizabeth II, Queen of the United Kingdom and her husband Prince Philip, Duke of Edinburgh. Queen Elizabeth II has been Queen since Feb.6, 1952 and she is the fourth monarch of the Windsor Dynasty.

X- Xi’s First State Visit to the UK

China's President Xi Jinping is on a state visit to UK at the invitation of Queen Elizabeth II from Oct. 19 to 23, 2015. Xi's visit to the U.K. is the first by a Chinese president in over a decade.

Y- Year of China-UK Cultural Communication

2015 is the year of China-UK cultural communication. U.K culture fairs were successfully held in China in the first half of 2015. The U.K. showed its products in many places in China. Chinese culture themed fair "Innovation China" will be shown in the U.K. in the second half of the year.

To mark the 400th anniversary of the death of playwrights Tang Xianzu and William Shakespeare, China and the U.K. are planning to hold relevant commemoration activities.

Z- Zone of China-EU Free Trade

Talks on China-EU Investment Treaty began in 2013. The U.K, a significant member state in the EU and an advocate of free trade, hold an optimistic attitude towards research on a China-EU Free Trade Zone. China hopes that the U.K. can act supportive during negotiations with the EU on the China-EU Free Trade Zone. 

中國和平崛起的8原則 China's 8 principles of her peaceful rise 習近平8原則澄清 (台灣旺報) 中國永不稱霸、永不搞擴張、永不會把自己的意志強加於人, 中方是參與者,不會挑戰國際秩序, 「一帶一路」 是開放的「朋友圈」,不是某一方的「私家小路」,而是大家攜手前進的「陽光大道」。 

Posted: 09/24/2015 12:45 pm EDT Updated: 09/24/2015 12:59 pm EDT

America's Biggest Enemy Is Neither China nor Russia -- It's Us 
美國最大的敵人不是中國也不是俄羅斯 - 這是我們



By William H. Overholt Senior Research Fellow, Harvard Asia Center
Posted: 09/24/2015 12:45 pm EDT Updated: 09/24/2015 12:59 pm EDT
http://www.huffingtonpost.com/william-h-overholt/america-enemy-china-russia_b_8170624.html 



For half a century after World War II, the United States pursued one of world history's most successful national strategies: it nurtured the economic and institutional rebuilding of Europe and Japan, the development of other countries, especially in Asia, and bonded them economically, while protecting this strategy with superior military force. Beginning with the Marshall Plan, Presidents Truman and Eisenhower fashioned this bipartisan strategy, limiting military expenditure whenever it threatened resources for the core economic strategy, and all presidents through Clinton pursued it, the latter with particular vigor. This strategy defeated the Soviet Union, which also had a powerful military and a powerful ideology (however perverted the practice), but gave nearly exclusive priority to the military.

Analogues of this economics-focused strategy consolidated the security of U.S. allies. Japan became a big power despite lacking a strong military. In South Korea, General Park Chung Hee took over a country inferior to the North politically, economically and militarily, and shifted to an overwhelming priority for economic development; today South Korea is stronger in all respects due to an economy more than 20 times the size of that of its military-obsessed adversary. In Indonesia, General Suharto abandoned territorial claims to most of Southeast Asia in order to focus on development and made Indonesia the clear regional leader. China's Deng Xiaoping, emulating them, cut the military budget from 16 percent of GDP to 3 percent in order to focus on development, and China became a great power in only 30 years.

In 2001, the United States abandoned its successful economics-focused strategy. For the first time in modern history, all major foreign policy positions were held by defense specialists: General Colin Powell as secretary of state, Richard Armitage as his deputy, Donald Rumsfeld at defense and Condoleezza Rice as national security advisor, all led by a former defense secretary, Vice President Cheney.

As a result, in planning the Iraq war, there was no economic voice; any development expert knew that dismissing the entire ruling class would be catastrophic. Even after great revolutions like those of France and Russia, a country can only be run by the experienced bureaucracy. In Afghanistan, expenditures on economic development were pitiful and Rumsfeld insisted that economic development must be controlled by the military; the accumulated civilian expertise and success of half a century were contemptuously dismissed.

With its overwhelming military priority, the United States now has the most powerful military in world history. Because of its exceptional competence and devotion, Americans rightly hold the military in higher esteem than any other government institution. But this great military has lost every war it has fought since the change of strategy, and continues to lose.

The problem lies not with the military but rather with lack of civilian leadership. Chopping off the economic arm and relying on one-armed military tactics was not partisan and was not a calculated decision. It was initiated by a right-wing Republican administration, then persisted under Democrats. It is sustained not by explicit strategy, but rather by inertia and interest group pressures. The lobby for ever-increasing military emphasis holds near-absolute sway in Congress, which imposes even weaponry and bases the Pentagon doesn't want while starving the State Department and economic institutions.

This great military has lost every war it has fought since the change of strategy, and continues to lose.

Nor is the problem lack of money for a positive economic policy. Much of the needed local institution building and international trade regime development have minimal cost. Given scarce resources, Eisenhower and Truman trimmed back the Pentagon budget. Moreover, the almost exclusively military-focused strategy has turned out to be wildly expensive. Future historians will likely say that the United States wasted at least $2 trillion on unbalanced strategy in the Middle East and Afghanistan. The problem is misallocation.

Although all presidents through Clinton, indeed particularly Clinton, adhered to a balanced military-economic strategy, congressional provincialism initiated the gradual abdication of U.S. economic leadership even before 2001.

U.S. Congress Abandons U.S. Economic Leadership

The institutions of U.S. global leadership were the International Monetary Fund and World Bank (1944); the Marshall Plan (1947), followed by generous development assistance for the poorer countries; the U.S. dollar's global dominance; and U.S. leadership through the General Agreement on Tariffs and Trade and the World Trade Organization in a trade and investment regime that spread prosperity. Any enemy of U.S. global leadership must undermine these institutions. That is happening.

The preeminence of the dollar derives from the superior liquidity of dollar markets and from confidence that the U.S. Federal Reserve and the U.S. Treasury will provide liquidity in crises. Dollar liquidity has declined but remains greatly superior to all alternatives. Trust that the United States will help in crises has, however, been shattered, particularly in Asia. In the Mexican crisis of 1994, the United States used its Exchange Stabilization Fund to prevent Mexico's currency crisis from becoming a catastrophe. The Mexican intervention cost the United States nothing, but Congress prohibited future similar interventions.

While the U.S. executive has always backed the Bretton Woods system, Congress has undermined it.

When the Asian crisis began in Thailand in July 1997, the United States therefore could not intervene and some of America's strongest Asian allies felt abandoned. Punitive IMF conditions crashed Thailand's economy and collapsed Indonesia's banking system. In a precursor of the Asian Infrastructure Investment Bank controversy, the United States insisted that Japan withdraw an offer to create a recovery fund that the United States feared would compete with the IMF. Therefore, in Asian eyes, the United States was accountable for catastrophic IMF policies; distrust for the U.S.-Bretton Woods system persists.

Key congressional restrictions continue. At the time this article was written, the United States had five standing swap agreements worth $333 billion; China had 28 worth $499 billion.

While the U.S. executive has always backed the Bretton Woods system, Congress has undermined it. The World Bank and the IMF were designed, at Bretton Woods, for the world of 1944, in the scale of their resources and the structure of their governance. Afterward, presidents of both parties consistently supported augmentation of their resources to cope with a growing global economy. But from 2009, Congress has rejected this bipartisan tradition.



Xi Jinping attends a meeting of representatives at the signing ceremony for the Asian Infrastructure Investment Bank. 

That refusal led directly into the recent controversy over China's founding of the Asian Infrastructure Investment Bank. Outside Washington, the AIIB debate has focused on the scale of need, $8 trillion of investment over a decade. The World Bank ($223 billion) and the Asian Development Bank ($168 billion) have a combined capital of $391 billion. China and virtually all U.S. allies and the U.S. administration pressed for that capital to be increased, but Congress refused. China wants to strengthen these institutions; it is the U.S. Congress undermining them.

While the old institutions' capital stagnates, China Development Bank is putting some $190 billion into foreign loans, the New Development Bank has initial capital of $50 billion and authorized capital of $100 billion, the Silk Road infrastructure fund will have $62 billion and AIIB will have $100 billion, overshadowing the Bretton Woods institutions. Given those numbers, the U.S. refusal to capitalize the existing institutions ensures that they will lose leadership.

Refusing Governance Reform of Global Institutions

Likewise on governance reform. For many years there has been a global clamor, mainly from friends and allies of the United States, supported by the U.S. president, to revise the governance of these and other postwar institutions to reflect today's world. But Congress rejects reform.

The United States has three options: update existing institutions sufficiently so that they can provide leadership; refuse modernization and embrace new institutions that fill the resulting vacuum; or refuse modernization of the Bretton Woods institutions and oppose new ones. The first two options both provide a decent chance that the United States will remain the preeminent economic leader, albeit with more influential colleagues. Ironically, congressional choice of the third option ensures that the new institutions will be preeminent and that China will be preeminent within them.

Moreover, the Obama administration's argument that China can't be trusted to provide sound AIIB governance was worse than weak. Some dispassionate observers even think AIIB governance will be superior to that of the Bretton Woods institutions, because it will properly represent emerging countries, because China has taken the lead in promoting green financial structures and because the World Bank is muscle-bound, unable to make decisions in reasonable time at reasonable cost. China's creation of AIIB was based on a decision that, after having lent over $600 billion unilaterally, its funding would be more effective in a multilateral institution -- a decision aligned with U.S. interests and strongly supported by leading Europeans as system-supportive, not destructive.

The Obama administration's argument that China can't be trusted to provide sound AIIB governance was worse than weak.

The global financial crisis degraded U.S. economic leadership in multiple ways. As China's most respected bank reformer told this writer, "We discovered that our teacher didn't know what he was talking about."

During the global financial crisis, trade finance suffered a severe collapse -- one that for Asia's trade-dependent economies was potentially catastrophic. Not surprisingly, Asian banks, especially Chinese banks, moved to limit the shortfall. After the global financial crisis, global financial leaders (dominated by Americans and Europeans) agreed on new bank capital standards that heavily burdened trade finance, even though trade credits are fully collateralized and self-liquidate in less than a year. These standards made trade finance relatively less attractive and thereby ensured a continued shift toward non-Western banks. That set the stage for what seemed impossible five years ago: the Chinese renminbi has surpassed the euro as the second most important settlement currency.

The global financial crisis and qualitative easing have created incentives to reduce dependence on a dollar-based system. After the financial crisis, China and Russia both called for an alternative monetary system; the pain they suffered would have inspired such calls even if they were on good terms with the United States. While the United States bitterly complained about national loss of 3 million manufacturing jobs in a decade -- mostly to automation -- the global financial crisis cost China more in a single city in one year.

A Tsunami of Money

Subsequently, U.S. monetary policy has created a tsunami of money into emerging markets that is beginning to wash out. The results have included huge housing bubbles and over-indebtedness globally, and socially disastrous inflation of food prices in the Middle East and India, likely to be followed by bubble-popping and financial crises. The Fed is de facto the central bank of the world but makes decisions, as its legal charter requires, on U.S. considerations. The U.S. position was once famously summarized by Treasury Secretary John Connally as "It's our dollar. It's your problem." More than any time since the 1940s, much of the world is actively seeking to address their problem.

Further erosion of the U.S. role results from making bank fines the foreign policy instrument of choice. Multi-billion-dollar fines are now common for dealing with Iran or Russia or for infringement of U.S. banking rules. These fines fall largely on the banks of U.S. allies, so Europeans now speak of the dollar's "weaponization." This affects a key aspect of U.S. financial leadership: throughout the world, commodity prices, derivatives and much else are largely denominated in U.S. dollars. But, since dollar transactions must clear through the U.S. system, they subject the foreign bank to the risk of U.S. sanctions for transactions that are legal at home.

The U.S. position was once famously summarized by Treasury Secretary John Connally as 'It's our dollar. It's your problem.'

France believes it illegitimate for the United States to enforce its foreign policies by levying huge fines just because dollar transactions have to clear through the United States. Standard Chartered, a UK bank, disputes the legitimacy of being fined for not fully following U.S. sanctions on Iran, just because it has to clear U.S. dollar transactions. U.S. isolation of Iran from the Society for Worldwide Interbank Financial Telecommunication (which did not increase sanctions' effectiveness), and threats to ban Russia from using SWIFT, the global foreign exchange clearing system, have led to interest far beyond Russia and Iran in developing alternatives. Some Asian finance ministers call it abusive that, because their banks have to clear dollar transactions, U.S. FATCA rules force their banks to report every U.S. account to them while Washington refuses reciprocity.

This perception of abuse has induced nascent efforts to avoid dollars and to develop alternatives to U.S. clearing institutions. Since the Hong Kong dollar is a near-perfect proxy for the U.S. dollar, but does not create vulnerability to U.S. sanctions, extraordinary surges of Hong Kong dollar transactions have strained Hong Kong's ability to maintain its currency system. Likewise, countries and companies are quietly seeking ways to circumvent (Belgium-based) SWIFT and CLS. While each particular sanction may be justified, such heavy reliance on sanctions is eroding the willingness of foreigners to rely on dollar-based institutions. Today there is no alternative; the likely future beneficiary is the renminbi.

The Next Evolution of the Global Monetary System

As the renminbi becomes more prominent, the United States is opting out of leadership in the next evolution of the global monetary system. Hong Kong, Singapore, Seoul, Sydney, London, Frankfurt and Paris have all rushed to become RMB settlement centers. With the United States uninterested, the North American settlement center is now Toronto.

Crucially for U.S. leadership, the United States has lost its enthusiasm for liberalizing global trade and investment, primarily because the left of the Democratic Party, dominated by unions opposed to economic adjustment, has superseded the party's center. The Democratic left held up trade liberalization agreements during the George W. Bush administration, and the Obama administration was very slow to promote trade agreements. Asians, particularly China, have moved faster.

A Mistake to Exclude China

An equally important risk to U.S. leadership is the new global trading structure that the United States is promoting. The Trans-Pacific Partnership envisions a new era across the Pacific, and the Transatlantic Trade and Investment Partnership across the Atlantic. Omitted from these agreements is the world's largest trading economy, China. Washington argues that China is not ready for the high standards of TPP, but this argument is belied by the inclusion of Vietnam and Japan. Vietnam lags China in every dimension addressed by TPP. Japan is much more closed to foreign trade and investment than China and has demonstrated none of the heroic willingness to adjust to higher standards that China showed when it joined WTO. Shanghai streets teem with Buicks, whereas American cars are rare in Tokyo.

obamaspeech.jpg (51121 bytes)

President Obama speaks before signing an act that will allow him to negotiate trade treaties, including the TPP. 

Much of the world concludes that, as with the governance arguments over AIIB, the "higher standard" arguments for TPP are cover for efforts to isolate China. Key U.S. business leaders say that Bush 43 promoted TPP over their favored Free Trade Area of the Asia-Pacific because TPP excluded China. President Obama presents TPP as an antidote to Chinese influence in every speech promoting it.

The effort to exclude China jeopardizes one of the greatest achievements of U.S. postwar strategy. China and the United States have become the greatest economic partners in world history. Their trade in goods and services now exceeds $600 billion, or $700 billion including Hong Kong. Between 2000 and 2014, China invested $47.5 billion in the United States, including $12 billion in 2014 alone. Its integration into the Western investment, production and distribution system; its openness to vast amounts of foreign investment; its embrace of U.S. products to a degree that exceeds America's main Asian allies; its heroic adjustments to join the WTO, accepting an agreement far tougher than those imposed on any other country; and its acceptance of WTO adjudication mechanisms, constitute one of history's great reversals of alliance. The poorer part of the U.S. population has benefited from inexpensive goods to an extent that no imaginable welfare system could ever have provided.

The risk of the United States partially isolating itself from Asian market liberalization, centered on China, is the greatest risk to U.S. foreign policy preeminence since the isolationist movement preceding World War II.

Western producers are about to benefit from a wave of over 3 billion new emerging market consumers, centered in China, that will be the fastest growing export market in world history. Congressional politics has focused on the inevitable frictions, blaming China for the consequences of automation, largely ignoring the mutual interests, and thereby undermining a moment of U.S. triumph. The risk of the United States partially isolating itself from Asian market liberalization, centered on China, is the greatest risk to U.S. foreign policy preeminence since the isolationist movement preceding World War II.

For a positive economic strategy one must look across the Pacific to China. This was the way Truman and Eisenhower did strategy. The Chinese vision comprises one silk road on land and one on the sea, stimulating integrated economic development of 60 countries. The land silk belt will connect Southeast Asia, Eurasia and Western Europe with infrastructure built to common standards, gradually negotiating common standards of many other kinds. Already rail traffic from China to Germany is three times faster than by ship and it will soon become far faster. Chongqing is becoming a gigantic Chicago, a hub for Eurasia. The sea Silk Road intends to integrate Africa and South Asia into this network of development. New international financial institutions will fund this. China will continue to open its markets to neighbors faster than formal agreements require.

China Rolls Out the Silk Road

China's $46 billion infrastructure plan for Pakistan could stabilize what will otherwise remain one of the world's greatest reservoirs of terrorism and nuclear dangers. Its plans for the port of Gwadar would clean up the greatest regional hub of criminal gangs, drug smuggling and human trafficking. Negotiations over Gwadar have led to the most important tentative regional peace deals in decades, including compromise over a vital watershed.



The construction site at Gwadar port in the Arabian Sea. 

China's dual silk road strategy effectively appropriates abandoned U.S. intellectual property. Like its U.S. predecessor, if implemented successfully despite formidable hurdles, it offers the world's sole coherent strategy in today's world for containing, over decades, the explosions of violence that endanger global stability. China's strategy is the exact analogue of the U.S. strategy that contained and eliminated most ideological and religious violence in Southeast Asia. In Southeast Asia more people died, the ideological interactions were more complex (including Islamic fundamentalism and wild Maoism) and the risk to global balance was more dangerous. Given proper strategies, today's problems are simpler.

America's purely military strategy in this vast region is like pushing on a balloon with a hot hand; the problem just pops up nearby with greater intensity. On the other hand, a pure (Chinese) economic strategy will fail without military protection, and China alone may be unable to implement the economics effectively. The United States has several options:

Oppose the strategy because it will enhance China's influence. U.S. allies would then desert and there will be no chance of containing regional jihadism.

Proceed with current U.S. military operations independent of China. That would waste both U.S. and Chinese resources. China will need military protection of its economic strategy, as the United States did during the Cold War, and will develop the necessary capability.

Provide the military counterpart of China's economic strategy. This could be relatively efficient, but China will be seen as the good cop, the United States as the bad cop, and China will reap disproportionate rewards.

Reassess U.S. global strategy, reverting to a balanced economic and military strategy and coordinate with China, striving to recreate the substantial partnership that joined China and the United States against the Soviet Union. The collaborative spirit might well make it possible to resolve less important issues such as the South China Sea. There would be no assurance of that outcome, but Beijing has determinedly sought to re-focus the relationship on win-win economic relations rather than zero-sum military competition.

Whether the United States ends up mainly competing with China or mainly cooperating with it, continuation on the path of overweening military priorities will continually degrade U.S. influence, while restoration of a more balanced policy will revive it. The gravest threat to American global leadership is neither Russia nor China but rather continued interest group-driven congressional abandonment of the kind of balanced strategy that won the Cold War. Pogo understood in 1970: We have met the enemy and he is us.

The following translated using Google Translate

美國最大的敵人不是中國也不是俄羅斯 - 這是我們

對於二戰結束後的半個世紀裡,美國推行世界歷史上最成功的國家戰略中的一個:它哺育歐​​洲和日本,其他國家的發展經濟和體制重建,特別是在亞洲,經濟保稅他們,而保護這一戰略具有超強的軍事力量。與馬歇爾計劃開始,總統杜魯門和艾森豪威爾塑造這個兩黨的策略,限制軍費開支時,它受到威脅的資源為核心的經濟戰略,並通過克林頓總統都追求它,後者與特定的活力。這種策略擊敗了蘇聯,它也有一個強大的軍事和強大的思想(但是變態的做法),但給了近獨家優先給軍隊。

這種經濟為中心的戰略類似物鞏固美國盟友的安全。日本成為一個大國,儘管缺乏一個強有力的軍隊。在韓國,一般朴正熙一個國家遜色接手北政治,經濟,軍事,並轉移到了壓倒性的優先經濟發展
;今天韓國在各方面均較強,由於經濟超過20倍,其軍事痴迷對手的大小。在印尼,蘇哈托將軍放棄了領土要求,以東南亞大部分國家,以專注於發展作出了印尼的明確區域龍頭。中國的鄧小平,模仿他們,削減軍事預算佔國內生產總值的16%至3%,以專注於發展,在中國只有30年成為一個大國。

2001年,美國放棄了其成功的經濟為中心的戰略。第一次在現代歷史上,所有主要的外交政策立場進行了辯護專家召開方式:鮑威爾將軍出任國務卿理查德·阿米蒂奇作為他的副手,拉姆斯菲爾德在國防和賴斯擔任國家安全顧問,全部由一名前國防部長,副總統切尼。

因此,在策劃伊拉克戰爭,也沒有經濟之聲
;任何開發專家知道,駁回了整個統治階級將是災難性的。即使像法國和俄國的大革命,一個國家只能由有經驗的官僚機構運行。在阿富汗,對經濟發展支出可憐和拉姆斯菲爾德堅持認為,經濟的發展必須由軍方控制;積累的民用專業知識和半個世紀的成功,被蔑稱駁回。

憑藉其壓倒性的軍事優先,美國目前擁有國內最強大的軍事力量在世界歷史。由於其特殊的才幹和獻身精神,美國人理所當然地舉行軍事自尊比其他任何政府機構高。但這個偉大的軍隊已經失去了所有的戰爭是因為戰略的變化已經轉戰,並繼續輸。

問題不在於軍事,而是與缺少文職領導的。斬去經濟胳膊依靠一個武裝的軍事戰術沒有黨派,並沒有計算決定。它是由一個右翼共和黨政府發起的,然後在民主黨依然存在。它是持續不明確的策略,而是由於慣性和利益集團的壓力。大堂為不斷增加的軍事強調保持近乎絕對的揮灑在國會,其中規定即使武器和基地而挨餓國務院和經濟機構,五角大樓並不想。

這個偉大的軍隊已經失去了所有的戰爭是因為戰略的變化已經轉戰,並繼續輸。
也不是缺錢的問題進行了積極的經濟政策。大部分需要地方機構建設和國際貿易體制的發展具有最低的成本。由於資源稀缺,艾森豪威爾和杜魯門修整過五角大樓的預算。此外,幾乎完全是軍事為中心的戰略已被證明是瘋狂昂貴。未來的歷史學家可能會說,美國至少浪費了
$ 2萬億中東和阿富汗不平衡的策略。現在的問題是分配不當。

雖然通過克林頓總統都確實特別是克林頓,堅持均衡的軍事和經濟策略,國會鄉土甚至在
2001年以前開始的美國經濟領導地位的逐漸退位。

美國國會放棄了美國經濟領導地位

美國的全球領導地位的機構有國際貨幣基金組織(
IMF)和世界銀行(1944年);馬歇爾計劃(1947年),其次是對較貧窮國家慷慨的發展援助;美國美元的全球支配地位;和美國的領導通過關稅與貿易總協定和世界貿易組織的貿易投資管理體制的傳播繁榮。美國的全球領導地位的任何敵人,必須破壞這些機構。這正在發生。

美元的卓越源於美元市場的優越的流動性和自信心,美國聯邦儲備委員會和美國財政部將提供流動性危機。美元流動性有所下降,但仍大大優於所有的替代品。相信,美國將在危機中幫助了,但是被打破,特別是在亞洲。在
1994年的墨西哥危機,美國利用其匯率穩定基金,以阻止墨西哥貨幣危機變成一場災難。墨西哥干預耗費了美國什麼都沒有,但美國國會禁止今後再發生類似的干預措施。

雖然美國高管一直支持布雷頓森林體系,美國國會已經破壞了它。

當亞洲金融危機開始在泰國
19977月,美國因此不能干預,一些美國最強大亞洲盟友感到被遺棄。 IMF的懲罰性條件墜毀泰國經濟和折疊印尼的銀行系統。在亞洲基礎設施投資銀行爭議的前體,美國堅持認為,日本撤回要約創造美國擔心會與國際貨幣基金組織競爭復甦基金。因此,在亞洲人眼中,美國是IMF的災難性政策負責;不信任的美國布雷頓森林體系仍然存在。

重點國會限制繼續。在我寫這篇文章的時候,美國有價值
$ 333號十億五個常設互換協議;中國有28價值$ 499十億。

雖然美國高管一直支持布雷頓森林體系,美國國會已經破壞了它。世界銀行和國際貨幣基金組織進行了設計,在布雷頓森林會議上,對
1944年的世界,在他們的資源的規模和其治理結構。隨後,雙方的總統一貫支持其資源擴充,以應付不斷增長的全球經濟。但是,從2009年,美國國會拒絕了這一兩黨的傳統。



習近平出席代表的亞洲基礎設施投資銀行的簽約儀式舉行會議。

這種拒絕直接導致到最近的爭論亞洲基礎設施投資銀行中國的成立。外華盛頓
AIIB辯論集中在需要的規模,$ 8個萬億投資超過十年。世界銀行($ 223十億)和亞洲開發銀行($ 168個十億)是$ 391號十億組合的資本。中國和幾乎所有美國的盟友和美國政府迫切要求,資本將增加,但國會拒絕了。中國要加強這些機構;它是美國國會破壞它們。

雖然老機構的資本停滯,中國國家開發銀行很可能在
$ 190個十億到國外貸款,新的開發銀行有$ 50十億初始資本和$ 100十億註冊資本,絲綢之路基礎設施基金將有$ 62個十億和AIIB將有$ 100個十億,掩蓋了布雷頓森林機構。鑑於這些數字,美國拒絕利用現有的機構可以確保他們會失去領導地位。

全球機構拒絕治理改革

同樣,在治理改革。多年來一直存在一個全球性的叫囂,主要是從朋友和美國,由美國總統支持的盟友,修改這些和其他戰後機構的治理,以反映當今世界。但國會拒絕改革。

美國有三個選項:更新現有機構足夠使他們能夠提供的領導
;拒絕現代化和擁抱填補由此造成的真空新的機構;或拒絕布雷頓森林機構的現代化,反對新的。前兩個選項都提供一個像樣的機會,美國將保持卓越的經濟領導者,儘管有更多的有影響力的同事。諷刺的是,第三個選項的國會選擇確保新機構將卓越,而中國將在其中做得很優秀。

此外,奧巴馬政府的說法,中國是不可信任的,以提供完善的
AIIB治理較薄弱差。一些冷靜的觀察家甚至認為AIIB治理將優於布雷頓森林機構,因為它會妥善代表的新興國家,因為中國已經率先在推動綠色金融的結構和,因為世界銀行是肌肉發達的,無法進行決定在合理的時間以合理的成本。中國創造AIIB的是基於一個決定,即在已經借給購物滿$ 600元十億單方面,其資金會更有效的多邊機構 - 美國的利益一致,並堅決支持領先的歐洲人系統的支持,而不是破壞性的決定。

奧巴馬政府的說法,中國是不可信任的,以提供完善的
AIIB治理較薄弱差。
全球金融危機惡化,美國經濟的領導以多種方式。作為中國最受尊敬銀行重整告訴筆者,
我們發現,我們的老師不知道他在說什麼。

在全球金融危機中,貿易融資遭遇了嚴重的崩潰 - 一個為亞洲的貿易依賴型經濟體是潛在的災難性。不足為奇的是,亞洲銀行,特別是中國銀行,移動限制的不足。在全球金融危機後,全球金融領袖(由美國人和歐洲人佔主導地位)商定了負擔沉重的貿易融資新的銀行資本標準,即使貿易信貸是完全抵押和自我清算在不到一年的時間。這些標準使得貿易融資相對缺乏吸引力,從而保證持續轉向非西方銀行。這搭建了舞台,而且不知是不可能在五年前:中國人民幣已經超越歐元作為第二個最重要的結算貨幣。

在全球金融危機和質化寬鬆創造激勵機制,以減少美元為基礎的系統的依賴。金融危機之後,中國和俄羅斯都呼籲一個替代貨幣體系
;他們遭受的痛苦會激發,即使他們是在與美國的良好關係這樣的電話。儘管美國表示強烈不滿300萬個製造業崗位十年國家的損失 - 主要是自動化 - 全球金融危機使中國更多的在一個城市一年。

貨幣海嘯

隨後,美國的貨幣政策創造了海嘯的錢投入到正在開始洗出新興市場。該結果包括巨大的房地產泡沫和全球過度負債,以及食品價格在中東和印度社會的災難性的通貨膨脹,可能會跟著泡沫爆裂和金融危機。美聯儲事實上的世界中央銀行,但做決定,因為它的法律章程要求,美國方面的考慮。美國的立場是曾經有一句名言概括財政部長約翰
·康納利為這是我們的美元,這是你的問題。超過自19​​40年以來的任何時候,在世界許多地方正在積極尋求解決他們的問題。

美國作用的進一步侵蝕的結果作出罰款的銀行選擇的外交政策工具。數十億美元的罰款,現在常見的對付伊朗或俄羅斯或侵犯了美國銀行業的規則。這些罰款下跌主要是對美國盟國的銀行,所以歐洲人現在講美元的
武器。這會影響美國的金融領導力的一個重要方面:在世界各地,商品價格,衍生工具和其他許多在很大程度上是以美元計價的。不過,由於美元的交易必須通過清除美國的體系,他們受到外國銀行的美國制裁是合法在家交易的風險。

美國的立場是曾經有一句名言概括財政部長約翰
·康納利為這是我們的美元。這是你的問題。

法國認為它不合法為美國通過徵收巨額罰款只是因為美元交易要明確通過美國實施其外交政策。渣打銀行,英國銀行,糾紛被罰款不完全跟隨美國對伊朗實施制裁的合法性,只是因為它有明確的美元交易。伊朗從環球銀行金融電信協會(這並沒有增加制裁的有效性),並威脅美國的隔離,禁止俄羅斯從使用SWIFT,全球外匯清算系統,已經導致超過俄羅斯和伊朗遠興趣發展替代品。一些亞洲財長稱其濫用了,因為他們的銀行有明確的美元交易,美國FATCA規則強制本國銀行報告每一個美國帳戶給他們,而華盛頓拒絕互惠。

這種看法濫用已致新生的努力,以避免美元,並制定替代美國的結算機構。由於港元對美元近乎完美的代理,但不建立易受美國的制裁,港元交易的非凡潮褪去,以保持其貨幣制度香港的能力。同樣,國家和企業都悄悄地尋求各種方法來規避(比利時的),
SWIFTCLS。雖然每個特定的處罰可能是合理的,制裁這種嚴重依賴正在侵蝕外國人願意依靠美元為基礎的機構。今天有沒有替代;未來可能的受益者是人民幣。

發展未來全球貨幣體系

由於人民幣顯得更為突出,美國正在決定退出領導在全球貨幣體系中的下一個演進。香港,新加坡,首爾,悉尼,倫敦,法蘭克福和巴黎都趕到成為人民幣結算中心。隨著美國無心戀戰,北美結算中心現在是多倫多。

最重要的是對美國的領導地位,美國已經失去了熱情,開放的全球貿易和投資,主要是因為民主黨的左側,由工會反對經濟調整為主,已經取代了黨的中心。小布什政府時期的民主左翼舉行了貿易自由化協議,以及奧巴馬政府是促進貿易協定非常緩慢。亞洲人,特別是中國,已經移動的速度。

錯誤的排除中國

同樣重要的風險,美國的領導是,美國正在推動新的全球貿易結構。在跨太平洋夥伴關係的設想橫跨太平洋和跨大西洋跨大西洋貿易和投資合作的新時代。從這些協議中省略是世界上最大的貿易經濟體,中國。華盛頓認為中國還沒有準備好為高標準的
TPP,但這種說法被列入越南和日本的掩飾。越南落後於中國,通過TPP解決每一個層面。日本更封閉,對外貿易和投資比中國並沒有表現出英勇的意願進行調整,以更高的標準,中國表明,當它加入世界貿易組織。上海街頭盛產別克,而美國車是罕見的在東京舉行。

奧巴馬
TPP

obamaspeech.jpg (51121 bytes)

美國總統奧巴馬簽署法案,將允許他談判貿易協定,包括TPP之前說。 

在世界許多地方的結論是,與超過
AIIB治理參數,更高標準的論據,TPP的掩護努力孤立中國。關鍵的美國商界領袖說,布什43推動TPP在亞太自己喜歡的自由貿易區,因為TPP排除中國。美國總統奧巴馬提出的TPP作為解毒劑,以中國的影響力在每一次演講推動它。

排除中國的努力,危及美國戰後戰略的最大成就之一。中國和美國成為最大的經濟合作夥伴在世界歷史。他們在商品和服務貿易,現在超過
$ 1200十億,或者$ 700個十億包括香港。 2000年至2014年,中國投資在美國$ 47.5十億,包括$ 12個十億在2014年孤獨。其融入西方的投資,生產和銷售系統;它的開放性,以大量外國投資;美國產品在一定程度上超過美國的主要亞洲盟友的擁抱;其英勇的調整,以加入世界貿易組織,接受一項協議,遠比強加於任何其他國家更嚴厲的;其接受WTO裁決機制,構成了歷史上最偉大的聯盟的逆轉之一。美國人口的貧窮的一部分得益於物美價廉的商品沒有想像的福利制度都不能提供的程度。

美國的風險部分來自亞洲市場的自由化,以中國為中心自我孤立,是美國自第二次世界大戰前的孤立主義運動中風險最大的外交政策優勢地位。

西方生產商即將從一波超過
30十億新興市場的消費者,集中在中國,這將是增長最快的出口市場,在世界歷史中受益。國會政治的重點是不可避免的摩擦,指責中國對自動化的影響,在很大程度上忽視了共同利益,從而損害美國的勝利的時刻。美國的風險部分來自亞洲市場的自由化,以中國為中心自我孤立,是美國自第二次世界大戰前的孤立主義運動中風險最大的外交政策優勢地位。

對於一個積極的經濟戰略必須要看看橫跨太平洋到中國。這是方式杜魯門和艾森豪威爾做了策略。中國的願景包括對土地一絲路上,一個在海上,拉動
60多個國家的綜合經濟發展。土地綢帶將連接東南亞,歐亞和西歐的基礎設施建設,以共同的標準,逐步談判等多種常用的標準。已經軌道交通從中國到德國比乘船快三倍,它很快就會成為快得多。重慶正在成為一個巨大的芝加哥,為歐亞大陸的樞紐。海絲綢之路打算非洲和南亞融入這個網絡的發展。新的國際金融機構將資助這一點。中國將繼續開放市場給鄰居的速度比正式的協議要求。

中國推出的絲綢之路

巴基斯坦中國的
$ 46個十億的基礎設施計劃,可以穩定什麼,否則將仍然是世界上最大的恐怖主義和核危險的水庫之一。它的計劃,瓜達爾港將清理犯罪團伙,毒品走私和販賣人口最嚴重的區域樞紐。談判在瓜達爾導致最重要的暫定地區和平協議的幾十年裡,包括妥協了一個重要的分水嶺。

瓜達爾港



建設地點在瓜達爾港在阿拉伯海。 

中國的雙絲綢之路戰略有效地佔有拋棄了我們的知識產權。像它的前身是美國,如果儘管難以克服的障礙成功實施,它提供了世界上唯一的連貫的策略在當今世界含有,幾十年來,暴力事件的爆發危及全球穩定。中國的戰略是美國的戰略遏制和消除在東南亞大多數意識形態和宗教暴力的精確模擬。在東南亞更多的人死亡,思想的互動更複雜(包括伊斯蘭原教旨主義和野生毛主義)和風險對全球平衡是更危險的。給予適當的策略,今天的問題是簡單的。

美國在這
​​片遼闊的地區純粹的軍事戰略就像推一個手熱氣球;問題只是彈出附近以更大的力度。在另一方面,純(中國)的經濟戰略會失敗,但不會軍事保護,和中國就可能無法有效地實施經濟性。美國有幾種選擇:

反對的策略,因為這將增強中國的影響力。美國的盟國隨後將沙漠,就不會有機會含區域聖戰主義。

繼續執行美國現行的軍事行動中國獨立。這會浪費雙方美國和中國的資源。中國需要經濟戰略的軍事保護,為美國在冷戰期間做了,將制定必要的能力。
為中國的經濟戰略的軍事對應。這可能是比較有效的,但中國將被視為好警察,美國的黑臉,而中國將獲得不成比例的回報。

重新評估美國的全球戰略,恢復到一個平衡的經濟和軍事戰略,並與中國的協調,努力重新創建加入中國和美國對蘇聯的實質性合作。該協作精神很可能使人們有可能解決不那麼重要的問題,如中國南海。會有無法保證結果,但北京一直堅決試圖重新專注於雙贏的經濟關係而不是零和軍事競爭的關係。

無論是美國結束了主要競爭對手是中國或主要與它的唯我獨尊的軍事優先路線上的合作,將繼續不斷地降低美國的影響力,同時恢復一個更加平衡的政策將恢復它。美國全球領導地位的最大威脅是無論是俄羅斯還是中國,而是持續的利益集團驅動的國會放棄那種平衡的策略,贏得了冷戰。波戈了解
1970年:我們已經遇到了敵人,他是我們的。

May 25 2014

Chinese behavior in Asian seas driven by American's Monroe Doctrine of its own by Patrick Mendis

Patrick Mendis says as China flexes its muscles according to a Monroe Doctrine of its own, the US response has been a policy of ambiguity. However, both understand the danger of conflict - 

Two centuries ago, the increasingly assertive United States declared that the Western hemisphere was off limits to the great colonial powers of Europe. Just as president James Monroe's eponymous doctrine altered the nature of transatlantic relations, so today China is essentially following the American footprints in transpacific affairs with its own Menluo (a transliteration of Monroe) Doctrine in the East and South China seas.

Beijing's competing claims primarily involve the Diaoyu (or Senkaku in Japan) Islands dispute with Tokyo; the Paracel (or Xisha in China, Hoang Sa in Vietnam) archipelagos with Hanoi; and finally the Scarborough Shoal clash (or Huangyan Island in China), along with the Second Thomas Shoal (known as Renai in China), with Manila. This maritime territory encompasses a historical "nine-dash line" map of China.

Last month, a few days after making a strong statement about the US treaty obligations to defend Japan over the Diaoyu Islands, President Barack Obama reiterated at a news conference in Manila that the Philippines and Vietnam should bring the disputed claims against China before an international tribunal under the UN Law of the Sea Treaty.

During his four-nation tour in Asia, Obama emphasised the US commitment to the "rebalancing" policy in the Pacific, saying "we don't think that coercion and intimidation is the way to manage these disputes".

On its part, China unilaterally declared an air defense identification zone over parts of the East China Sea last November. Since then, it has clashed with its neighbors over the disputed fishery-rich Scarborough Shoal claimed by the Philippines, and an oil rig near the Paracels claimed by Vietnam.

The US and its regional allies do not have a straightforward geostrategy to deter China's assertive behavior.

Despite America's self-assured foreign policy in the 19th century, for example, a number of Caribbean islands still continued to maintain close relations with their colonial masters over the Atlantic, but the US never went to war with them. The Monroe Doctrine has had mixed results as economics triumphs over politics.

Given China's own history, could Beijing afford to continue its proclaimed economically driven "peaceful rise" strategy over political identity?

President Xi Jinping is now pursuing his Chinese Dream - a strategic variation of the American Dream with Chinese characteristics - to placate the increasingly agitated growing middle class. Xi has unwillingly unleashed organic processes of freedom - with the liberalisation of overseas travel, studying abroad, working in infrastructure projects, and greater openness in social media like microblogs.

In America, a silent transformation is also taking place. As the US expands its energy self-sufficiency with new sources of gas and oil, Washington's economic interests in the oil-rich Middle East and its traditional alliances in Europe have begun to change. Given all this, Obama's Asia "pivot" strategy is neither a pivot nor a rebalance; it is about trade, investment and finance, as epitomised by his Trans-Pacific Partnership.

Obama will surely use political rhetoric, like his famous "crossing of the red line" speech on Syria and his reluctant but vocal engagement over the Russian annexation of Crimea. In his view, however, America's overarching national interests are directly related to economic and trade relations. For example, the US would hardly go to war with a nation that imports unwanted chicken feet.

In the disputed waters, American policy is one of ambiguity. As Washington and Manila signed a defence agreement, American rhetoric has signalled that the Philippines must find an international tribunal process for conflict resolution, which essentially sent a conflicting message to Beijing.

Unlike the Philippines, Washington does not have a defense treaty with Hanoi but the potential for American access to Cam Ranh Bay - a deep-water naval base - is a sensitive matter to Beijing.

Recently, however, the economically intertwined Sino-American relationship has shifted to the deepening of military-to-military relations.

Following Defence Secretary Chuck Hagel's visit to the first Chinese aircraft carrier, the Liaoning, in April, General Fang Fenghui of the People's Liberation Army toured the nuclear-powered USS Ronald Reagan this month. This is an encouraging sign.

As meetings between Fang and his US counterpart, Chairman of the Joint Chiefs of Staff General Martin Dempsey, took place in Washington, the oil rig incident incited anti-Chinese protesters in Vietnam. Public protests would hardly take place in Vietnam without the tacit approval of the communist government in Hanoi.

In all this, Obama's rebalance strategy is not necessarily a containment policy but an expression of geostrategic deterrence and commercial advancement of mutual interdependence. Indeed, political realities and economic necessities on both sides of the Pacific are different, and alliances are constantly changing.

China needs the overseas markets and natural resources to sustain its economic growth. To maintain global superiority, American military and intelligence agencies must have expansive budgetary allocations, for which Washington needs Beijing.

These are powerful incentives; both governments in Beijing and Washington understand that a conflict or a proxy war would be counterproductive and catastrophic. Reflective - but not overconfident and reckless - leadership is needed to avoid the likelihood of human tragedies.

Patrick Mendis is a distinguished senior fellow and affiliate professor of public and international affairs. A former American diplomat, he served as a military professor in Japan and South Korea. This article is developed from his recent book, Peaceful War: How the Chinese Dream and the American Destiny Create a Pacific New World Order

May 5 2014

Nominating committee's vital role in safeguarding Hong Kong's interests香港提名委員會在維護香港利益的重要作用 By Johnny Mok

Johnny Mok says the requirement for a 'broadly representative' nominating committee serves the vital function of safeguarding the interests of key sectors, and our capitalist system, while providing a check against populism. Johnny Mok is a senior counsel and member of the Basic Law Committee

The Basic Law was drafted as part of the Sino-British Joint Declaration covering Hong Kong after its handover to China on July 1, 1997. The joint declaration stated that Hong Kong would be governed under the principle of ‘one country-two systems’ and would continue to enjoy its capitalist system and individual freedoms for 50 years after the handover.

Article 43 of the Basic Law provides that the chief executive shall be accountable to the central government and the Hong Kong Special Administrative Region. These two obligations do not sit well together in the mind of some people - those who regard the accountability to Beijing as being paramount; and others who insist that the will of the people of Hong Kong must take precedence.

The divergent, and sometimes selective, attention being paid to the provisions of the Basic Law has made it extremely difficult for a compromise to be reached on the important subject of election of the chief executive by universal suffrage.

Among the wide spectrum of views expressed, however, one common point may have emerged - Beijing does have discretion to decide whether or not to appoint an elected chief executive candidate. Some even suggest that this power alone is sufficient to protect the central government's interests - the so-called "guarding the final gate" theory.

This theory belies a much more fundamental concession. It implies that the election result could somehow be overridden by an exercise of discretion by Beijing. If the discretion is an unfettered one, this theory cannot possibly be rationalised by reference to the principle that the election result must reflect the free expression of the will of the electors, in accordance with Article 25 of the International Covenant on Civil and Political Rights. There are, indeed, other important constitutional principles at work.

The Basic Law guarantees the preservation of the "capitalist system and way of life", subject to the mandatory principle of balancing the budget, and the further assurance that the "socialist system and policies shall not be practised" in Hong Kong (Articles 5 and 107). To achieve this, the constitution confers on the chief executive the responsibilities to implement the Basic Law and to decide on government policies and to issue executive orders (Article 48).

To date, the chief executive has been elected by a "broadly representative Election Committee" comprising four sectors, as defined in Annex I. The justification for such a structure was the maintenance of stability and prosperity.

In 1990, chairman of the Basic Law Drafting Committee Ji Pengfei made clear in an address to the National People's Congress that Hong Kong's political structure shall "aim to maintain stability and prosperity in Hong Kong in line with its legal status and actual situation. To this end, consideration must be given to the interests of the different sectors of society and the structure must facilitate the development of the capitalist economy in the region". Further, as stated in a 2007 decision of the NPC Standing Committee, the nominating committee may be formed with reference to the current provisions regarding the Election Committee in Annex 1 of the Basic Law. Since the Election Committee based on the four sectors is (as described in Annex I) "broadly representative", a nominating committee modelled after it would likewise satisfy this constitutional requirement. The historical role of a committee so structured was to maintain stability and prosperity, and facilitate the development of the capitalist economy.

The global state of democracy was analysed in depth in a recent article in The Economist, covering situations in the Middle East, the US, European Union, South America and beyond. In describing the extent to which some democracies have degenerated, the author noted that the "border between poking fun and launching protest campaigns is fast eroding".

"This popular cynicism about politics might be healthy if people demanded little from their governments, but they continue to want a great deal," the article said. "The result can be a toxic and unstable mixture: dependency on government on the one hand, and disdain for it on the other. The dependency forces government to overexpand and overburden itself, while the disdain robs it of its legitimacy. Democratic dysfunction goes hand in hand with democratic distemper."

Hong Kong may not be a paragon of democracy, but it is a paragon of stability and prosperity. The architects of the Basic Law have laid out a political road map built on the previous system of sector-based representation. A sector-based structure will remain (through the transformation of the Election Committee into the nominating committee) as a feature of universal suffrage. The committee's composition may of course be modified to make it more "broadly representative", with a view that the ultimate result better reflects the will of the electors. But this is by no means its only function. Unlike other democracies, the Hong Kong SAR is constitutionally mandated to guard itself against any degeneration into an overexpanded and overburdened economy. The participation of representatives of the key sectors in the nominating committee means inevitably that the candidates will be nominated from the perspective of not only the populace, but also the interests of the sectors they represent. It is a check against populism and toxic instability in the future.

Strategically, the preservation of Hong Kong's capitalist system and way of life also happens to be a goal of the country and, by extension, the central government. "Loving the country and loving Hong Kong", while not being expressed as a legal prerequisite to election as chief executive, is nevertheless reflected in the spirit of Article 43 - the chief executive must be accountable to both Beijing and the Hong Kong SAR, "in accordance with the provisions of [the Basic Law]". These include, as one of the constitution's main tenets, the maintenance of capitalism and the forsaking of the socialist system and policies. This is not just a matter of taking the chief executive oath post election.

By design, the candidates must undergo the democratic procedure of nomination by the nominating committee and, if nominated, election by universal suffrage - a combined process through which they will have ample opportunities to demonstrate their capability of performing the dual obligations in accordance with the Basic Law.

April 27 2014

Growing numbers of Americans renounce United States citizenship By Associate Press


A record 2,999 Americans renounced their US citizenship last year, with many and varied reasons for making the once-inconceivable decision - Quincy Davis has renounced his US citizenship. 

Inside the long-awaited package, six pages of government paperwork dryly affirmed Carol Tapanila's anxious request. But when Tapanila slipped the contents from the brown envelope, she saw there was something more.

Her United States passport had four holes punched through it from cover to cover. Her departure from life as an American was stamped final, with the words: "Bearer Expatriated Self."

With the envelope's arrival, Tapanila, who has lived in Canada since 1969, joined a largely overlooked surge of Americans rejecting what is to many a highly sought prize: US citizenship.

Last year, the US government reported a record 2,999 people renounced citizenship or terminated permanent residency. Most were widely assumed to be driven by a desire to avoid paying taxes on hidden wealth.

The reality is more complicated. The government's pursuit of tax evaders among Americans living abroad is indeed driving the jump in abandoned citizenship, experts say. But renouncers - whose ranks have swelled more than five-fold from a decade ago - often contradict the stereotype of the financial scoundrel. Many are from vastly different economic circumstances.

Some call themselves "accidental Americans" who recall little of life in the US, but long ago happened to be born in it. Others say they renounced because of politics, family or personal identity. Some say signing away citizenship was a huge relief. Others recall being sickened by the decision.

One of the few times rejected US citizenship has received significant attention was Facebook co-founder Eduardo Saverin's 2011 decision to turn in his passport after moving to Singapore. Saverin probably avoided millions of dollars in taxes by doing so shortly before Facebook's initial stock offering.

Other wealthy Americans have relinquished citizenship. Denise Rich, the ex-wife of pardoned trader Marc Rich, expatriated in 2012 and lives in London. Last autumn, singer Tina Turner, a resident of Switzerland since 1995, relinquished her US passport.

In recent years, federal officials have increased pursuit of potential tax evaders, using a law that requires Americans overseas to report assets to the IRS or pay stiff penalties.

Those trying to comply complain of costly fees for accountants and lawyers, having to report the income of non-American spouses, and decisions by some European banks to close accounts of US citizens or deny them loans.

Decisions to renounce "are driven by a whole range of emotional considerations. You've got anger, you've got fear, you've got a strong sense of indignation", said John Richardson, a Toronto lawyer who advises people on expatriation. "For many of these people, this is not a tax issue at all."

Sports played the central role in Quincy Davis' decision. Davis, raised in Los Angeles and Alabama, played professional basketball in Europe. By 2011, he was home studying to become a firefighter when he was offered a spot on a Taiwanese professional squad. He has since helped lead the Pure Youth Construction team to two championships.

When the team's owner suggested last year that he join Taiwan's national team, Davis says he found little motivation to keep his US citizenship.

"When you think about who I am as a black guy in the US, I didn't have opportunities," he said. "You get discriminated against over there in the south. Here everyone is so nice. They invite you into their homes, they're so hospitable. ... There's no crime, no guns. I can't help but love this place."

Until the 1960s, US citizenship remained a privilege the government could take away on certain grounds. It's only since then that US citizenship has come to be viewed as belonging to an individual, who could keep — or surrender it — by choice.

April 14 2014

China’s unstoppable market liberalization


Ben Hung says the Shanghai-Hong Kong 'through train' share-dealing scheme, while not perfect, is a big step in the opening up of China's capital account, part of the irreversible journey of market liberalization

I was surprised to hear the positive news first hand from Premier Li Keqiang at the Boao Forum last week that investors on the mainland and in Hong Kong will soon be able to trade shares on each other's exchanges. It is not common for such policies to come from the premier himself. The announcement goes beyond adding weight to the importance of the scheme; it underscores Beijing's strong determination for reform.

The Shanghai-Hong Kong Stock Connect program, or so-called "through train" scheme - is set to be launched in six months, and is a significant step in the opening up of China's capital account.

Enabling cross-border two-way capital flows, the programme is a long-awaited, missing ingredient in the internationalization of the renminbi. Up to this point, the liberalization of China's currency has primarily been focused on the economy's current account and, in particular, on trade and direct investments. Since last year's change in leadership, there has been a noticeable step up in the pace of reform. This latest Shanghai-Hong Kong linkage is one of a plethora of new measures rolled out by the Chinese government at a breathtaking pace. In the past months, we have seen a widening of the renminbi trading band, the end of the People's Bank of China's control on bank lending rates, as well as the launch of Shanghai's pilot free-trade zone, which opens up two-way corporate payment flows.

The programme is also a first step to quench the thirst of investors for Chinese assets, which have hitherto been inaccessible. Hong Kong, the leading offshore renminbi centre, will soon become the choice connector to bridge, on one side, global investors, who will gain direct access to China's stock market and, on the other, tens of millions of mainland savers keen to diversify their assets.

The "through train" scheme allows mainland investors to trade up to a quota of 250 billion yuan (HK$314 billion) of Hong Kong shares, and Hong Kong investors to trade up to 300 billion yuan of Shanghai-listed shares. Up to now, access to China's A-share market has been limited to licensed institutional investors going through the Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor quota schemes. The new programme provides a more direct and flexible means for investors, including retail investors, to trade Shanghai-listed shares without having to go through fund managers.

Like most reforms, every change will bring knock-on effects. As a start, the programme may narrow valuation gaps between the Shanghai and Hong Kong equity markets. The daily 20,000 yuan conversion cap for Hong Kong residents may become the next regulatory consideration in China's pipeline. Listing in Hong Kong may present a fresh appeal to foreign issuers. And, given that the scheme is denominated in renminbi, the implicit convertibility of the yuan has never been clearer. These are all plausible suppositions for all to bear in mind.

Sceptics may argue that the quotas set by Beijing limit the scale and relevance of the "through train" programme. But it is important to note that the quotas are net amounts, not gross, and that underlying trading value can be many times greater.

For policymakers, it is more straightforward to bring about changes when a market is either all open or closed. It is a different matter when a market is trying to move from one spectrum to the other, where far more risk considerations need to be taken. It is true that by imposing quotas, China has stopped short of a complete opening of its capital account.

Yet, quotas are absolutely necessary to manage the transition from a closed economy to an open one - not to mention this is an economy worth 57 trillion yuan and second in size only to the US. Even the smallest degree of change in China's policy could cause tectonic shifts on the mainland, and send ripple effects across global markets.

China always moves one step at a time, starting new programmes small and expanding them in an orderly manner only when the time is right. To be successful, the "through train" scheme will need expanding and it may prove difficult to achieve the desired results without going all the way.

The opening of stock trading will bring about a different approach to qualified foreign and domestic institutional investor schemes. The former offers a new avenue to directly invest in China and Hong Kong stocks, whilst the latter still has its intrinsic portfolio value as it spans a wider spectrum of investment alternatives, including bonds and futures. The introduction of a "mutual recognition" programme is also on the horizon. This will allow Hong Kong-based mutual funds to raise money from mainland investors and vice versa. All these are progressive examples of China's willingness to experiment with different policy variations in the journey to open up its economy.

The "through train" scheme is part of China's bigger reform train which has strong forward momentum and no reverse gear. It should be clear that the opening of China's capital account is an irreversible journey, just like the internationalization of the renminbi, which has taken place at breakneck speed in the past few years.

This program is not perfect. There will be questions and concerns over the quota application, and what happens when quotas are reached. Inevitably, any quota system will create distortions and may induce unnecessary problems.

Investors should brace themselves for bumps along the way, but they should not be put off participating in this significant step in China's market liberalization. What lies ahead will be well worth the ride.

Ben Hung is CEO for Greater China and Hong Kong at Standard Chartered Bank

April 10 2014

Veterans remember small beginnings of Hong Kong MTR By Ada Lee ada.lee@scmp.com

Exhibition visitors can travel through 35-year history of transportation system - Winnie Mang Siu-mei and Andies Chan at the opening of the MTR exhibiton today. 

Why Hong Kong's MTR beats Singapore's MRT https://www.youtube.com/watch?v=l3ZCeKvyZWo 

In their 35 years with the MTR, Winnie Mang Siu-mei and Andies Chan have seen many changes as the system has grown from a small eight kilometer (4.97 miles) track to 182 kilometers (113.09 miles) of busy transportation routes today.

They are two of some 200 employees who have worked for the railway company since its launch in 1979. Mang and Chan were on hand today as the MTR celebrated its 35th anniversary with an exhibition at Telford Plaza, Kowloon Bay,

Mang, an officer at Shek Kip Mei station, started as a “courtesy girl” helping passengers with the ticket machines when the MTR services first started.

The 56-year-old has worked at the same station for most of her time with the company, spending time with thousands of passengers every day, and has even made friends with some of regular commuters.

“There is a boy whom I know since he was in secondary school, and when he got married 20 years ago, I was invited to his wedding,” she said.

“I like being in the front-line, dealing with passengers.”

Mang recalled the company’s dark coloured uniforms had a more serious tone when she first joined. Today’s yellow uniforms give a warmer tone, she said.

As passenger numbers increase, she said more strategies are needed to manage the different requests of passengers.

Chan started also as a station worker when he was 23 years old, but moved on to a network control job six years later. Now a deputy operations network control manager, he said the job requires teamwork.

When the first section of the MTR opened in 1979, trains ran only between Shek Kip Mei and Kwun Tong. The main system then gradually expanded to nine lines of 182 kilometres.

Daily patronage has also grown from 85,000 to 5.2 million today.

In 2007, MTR Corp took over operation of railway lines originally run by the Kowloon-Canton Railway Corporation—the Ma On Shan line, West Rail and East Rail.

Visitors to the Telford Plaza exhibition, which opens today and lasts until Sunday, can see part of a original train system control panel from the first central control room in Kowloon Bay. Mock-ups of ticketing machines and in-train grab handles of different generations are also exhibited. The exhibition will reopen from May 14 to May 18.

On May 20 to 25 the exhibition will move to Martime Square in Tsing Yi, PopCorn in Tseung Kwan O and Hong Kong Station.

April 5 2014

Travel to the U.S. From China – We’re Missing the Boat BY DR. RICHARD KELLEY

Tourism from Mainland China is booming but the U.S. is not getting but a fraction of this high-spending market due to bureaucratic rules that make it very difficult to get a visa to travel to the U.S.A. After reading this newsletter, call your representative or senator to get it fixed!

Later this month, I will have a chance to visit the city of Sanya, Hainan Island, China to attend the World Travel & Tourism Council’s Global Summit. I will also have the opportunity to visit the site of one of our future properties, Outrigger Clearwater Bay Resort, which will soon be built on a waterfront site nearby. In the process of arranging my travel plans, I applied for a visa to visit China. It took several telephone calls, emails and a short visit to a visa-processing firm in Denver, Colorado. The experience caused me to think about how much more difficult it is for citizens of China to get a visa to visit the United States and why the U.S. is getting only about 1 percent of China’s boom in high-spending international travelers. 

Artist’s rendering of the Outrigger Clearwater Bay Resort 

To get my China visa, WTTC arranged for the Hainan Provincial Tourism Development Commission to send me an official letter of invitation to the Global Summit. Then, using my native language, English, I filled in a three-page form that asked for basic personal information, passport number, travel dates, hotel and airline details; paid a $145 consular fee; added the letter of invitation and my passport plus an extra photograph; and handed it all to a pleasant gentleman at a visa-processing firm about five miles from my home in Denver. My visa application was immediately sent to Chicago, one of the five U.S. cities with a Chinese consulate that issues visas. I was told I could expect to receive my passport back with a Chinese visa in less than two weeks.

Now, let’s look at what a person in China must do to visit the U.S. – let’s say Hawai‘i – as a tourist. Let’s call our applicant “Mei Ting,” using the name of a famous Chinese actress. Our fictional Mei Ting lives in Chongqing, a large city formerly known as Chungking with a current population of over 9 million (28 million in the metropolitan area). There is no U.S. consular office there. Follow the graphic (below) to see what Mei Ting has to do to get her U.S. visa.

1) Gather a proper photo of herself and other necessary documentation (such as proof of employment, reason for travel, home ownership or other indicators of financial status, whether or not she has family members in China and/or the U.S., etc.) listed on the U.S. Embassy website.

2) Pay a $140 fee to CITIC Bank. Purchase a pre-paid PIN card, which she will need to 

3) Make an appointment at a U.S. consulate. 

4) Complete her visa application form online in English (not her native language).

5) Get an appointment to be interviewed by a U.S. consular official in one of the five Chinese cities that have a U.S. embassy or consulate. Mei Ting chooses the nearest, Chengdu.

6) Travel by train to Chengdu, about five hours away, depending on routing. 

7) Stay in a Chengdu hotel for two to three nights.

8) Go to the U.S. consulate for an interview. (She must appear for her appointment alone and is not allowed to carry a cell phone, computer, camera, backpack or purse to the interview room.)

9) Get fingerprinted and have her documents reviewed by U.S. consular clerks.

10) Walk alone into the interview room where a U.S. diplomat grills her about her documents, her reason for traveling, her family, her job and financial status and anything else that might make it appear she would try to remain in the U.S. as an undocumented alien.

11) Return to Shenzhen by train and wait for up to 60 days for the approval or denial of her visa application.

For many years, very few Chinese were allowed the privilege of traveling abroad. This began to change in the 1990s. By the year 2000, some 10 million Chinese citizens were able to travel to international destinations. In 2007, China gave the U.S. its “approved destination” status, and for the first time, the flow of Chinese visitors to the U.S. began exceeding what had previously been a mere trickle. The pace has picked up noticeably since then, and in 2013, it is estimated that nearly 1 million mainland Chinese visited the U.S., as reported in a recent USA Today article. But that is still only about 1 percent of the estimated 97 million Chinese who went abroad last year. Interestingly, Chinese are big spenders when they travel abroad, ranking in the top 5 or 10 percent or higher in almost every study.

Until the U.S. government wakes up to the dramatic shift in the market and makes it much, much easier for citizens of mainland China to get a U.S. tourist visa, you will see many more Chinese travelers in places like Japan; Thailand; Indian Ocean resorts in the Maldives, Seychelles and Mauritius; and European capitals like Paris, London, Berlin, Amsterdam and Rome than you will in New York, Las Vegas, San Francisco or Honolulu.

In 2013, Hawai‘i received only 132,634 visitors from China, just 1.6 percent of the 8,235,510 visitors to the 50th state, according to the Hawai‘i Tourism Authority. It does not need to remain that way. The U.S. Travel Association and many, many leaders in Travel & Tourism have worked hard to improve the visa processing system for China, India and Brazil. Check out their detailed program at www.smartervisapolicy.org. I feel sure this will be a topic for discussion at the WTTC Global Summit later this month.

Posted in: Dr. Kelley's Weekly Briefing, Featured Post, Our Industry, Our Thoughts

South China Morning Post Hong Kong January 6 2014

America's double standards on terrorism - Zhou Zunyou says fair and equal treatment by the US government in defining acts of terrorism at home and abroad would help it forge allies in the global campaign to combat the violence.

At the end of 2013, terrorist violence befell both China and Russia. On December 30, nine assailants armed with knives and homemade explosives attacked a police station in Yarkand, a county administered by Kashgar prefecture in Xinjiang . During the clash, eight attackers were shot dead; one was captured.

Also on December 30, a suicide bombing occurred on a crowded trolleybus in the city of Volgograd in southern Russia, a day after a suicide bomber launched an attack at the city's main train station. The two attacks killed 34 people and injured many more.

Shortly after the terrorist attacks, President Xi Jinping extended his condolences to his Russian counterpart, Vladimir Putin. Plagued by Islamic terrorists fighting for ethnic independence, China and Russia have common interests in combating terrorism within the framework of the Shanghai Co-operation Organisation.

The US also immediately showed its solidarity with Russia, but the message of solidarity was not sent from President Barack Obama. Instead, State Department spokeswoman Marie Harf condemned the terrorist attacks in Volgograd "in the strongest terms" during a daily press briefing.

However, when asked about the latest attack in Xinjiang, Harf refused to label that attack as terrorism. Instead, she called on the Chinese government to "permit its citizens to express their grievances freely, publicly, peacefully and without fear of retribution".

So, just what does constitute an act of terrorism in US eyes? Up to now, the international community has failed to agree on a single definition. Terrorism is even defined differently within different US government departments, such as the State Department, the FBI, and the departments of homeland security and defence.

In order to understand America's position on terrorist attacks in foreign countries, it's necessary to look at the definition used by the State Department. According to this agency, "terrorism" refers to "premeditated, politically motivated violence perpetrated against non-combatant targets by subnational groups or clandestine agents". In particular, the term "non-combatant targets" is interpreted to include both civilians and military personnel who are not deployed in a war zone or a war-like setting.

For the State Department, terrorism is perpetrated by non-state entities, involves the premeditated use of violence, is committed against non-combatant targets, and has political aims. Given these four requirements, the Xinjiang attack cannot be categorised as terrorism, because it targeted police officers rather than so-called "non-combatants".

But, if this definition is used to evaluate the jeep crash in Tiananmen Square last October that killed five people, including the three attackers, and injured 40, there will be a different conclusion.

This incident satisfies all four requirements: it was carried out by a group of Uygurs; it involved a premeditated suicide explosion of an SUV; it targeted tourists at Tiananmen Square; and the flag that was found in the SUV calling for "jihad" indicated a political aim.

And while the US government declined to designate the Beijing incident as terrorism, it reacted quickly to call the Boston Marathon bombings in April that left three people dead and more than 200 others wounded "an act of terrorism".

The jeep crash and explosion in Beijing was remarkably similar in nature to the Boston bombings and undoubtedly met the State Department's definition of terrorism. So, if the US had applied the same standards for both cases, it could have labelled the Beijing incident a terrorist attack. The American use of double standards on terrorism has been drawing strong criticism from Chinese authorities and the media.

At the December 30 press briefing, when asked to comment on accusations of double standards in the case of the Beijing incident, Harf said: "We don't just jump to conclusions or call things by a certain name if we haven't gathered all the facts ourselves."

This is clearly a shoddy excuse. When declaring the Boston incident a terrorist act, Obama admitted knowing nothing about who had carried out the bombings. And when Washington identified the attacks in Volgograd as terrorism, the identities of the bombers were not known.

In previous years, the US often displayed sympathy for Islamic terrorists in Chechnya. Its solidarity with Russia this time seems to be a change of policy. One possible reason may be that the terrorism in Russia has caused considerable pain to the US, as demonstrated by the fact that the two brothers accused of the Boston bombings were ethnic Chechens.

US double standards on terrorism point to an awkward mindset among American politicians: political violence may be called terrorism only if it is perpetrated by those they do not like.

Terrorism is a crime against humanity. Counterterrorism requires effective international co-operation. For the sake of global anti-terrorist campaigns, the US must stop this unwelcome practice.

Zhou Zunyou, head of the China section at Germany's Max Planck Institute for Foreign and International Criminal Law, is working on a research project on counterterrorism legislation

ABC Television USA promote HATE CRIME - MUST APOLOGIZE 美國ABC電視台推動仇恨華人必須道歉 [The show is in English] This kid's program in America said since we owe China 1.3 trillion - why don't we kill all the people in China so we do not have to pay our debt - is this the way we want to teach our children? 美節目請兒童支招政府債務小朋友 :殺光中國人 美國節目《吉米雞毛秀》(Jimmy Kimmel Live)請來一群小朋友召開兒童圓桌會議,讓他們發表對美國政府停擺問題的意見。當問到欠中國1.3萬億美元該怎麼還時,一位小朋友語出驚人:我們繞到地球那一邊去,把中國人都干掉~ ” 有華人網民聽表示不安, 更有人指出美國好多小孩子都是受其家庭的影響. 很多仇視中國人的人都是 loser. 因為他們自己過的不好,將其原因歸究與中國人. https://www.facebook.com/photo.php?v=582054598499005&set=vb.434675049918587&type=2&theater or http://v.youku.com/v_show/id_XNjI1ODgxODQ0.html 

As of October 25 2013

White House Petition - To do it:

1) Log in to the White House website by clicking on the link https://petitions.whitehouse.gov/petition/investigate-jimmy-kimmel-kids-table-government-shutdown-show-abc-network/tLxzbBjg 
2) First time user - you need to create an account and they will ask you for 5 pieces of information
2a) First Name
2b) Last Name
2c) Email address - be sure is a real email address as they will send you a confirmation email with a password
2d) Your zip code or you can use 96813
2e) They will provide you with a question such as 2 + ten = (of course the answer is 12) White House want to make sure it is not a spam signed up
3) Within 2 minutes you will get a confirmation email from the White House, you click on the link and sign in with the password provided
4) All you need is to click on the petition button - if you have a Facebook account - White House want to find out if you want to share it - if yes click on the share button.

That is all, it took me 2 minutes to complete the entire process.

October 28 2013

ABC apologizes for ‘kill everyone in China’ comment on Jimmy Kimmel show By Chris Luo chris.luo@scmp.com

View Video https://www.facebook.com/photo.php?v=582054598499005&set=vb.434675049918587&type=2&theater or http://v.youku.com/v_show/id_XNjI1ODgxODQ0.html 

US television network ABC has issued a formal apology for allowing the comment “Kill everyone in China” to air on its late-night show Jimmy Kimmel Live, which has provoked outrage from Chinese communities around the world.

“We’re writing to offer our sincere apology,” read a copy of a letter obtained by the South China Morning Post sent from ABC on Saturday to 80-20 Initiative, a cyberspace-based organisation in US promoting equal opportunities for Asian Americans.

“We would never purposefully broadcast anything to upset the Chinese community, Asian community, anyone of Chinese descent or any community at large...our objective is to entertain,” read the letter signed by Lisa Berger, ABC Entertainment’s executive vice president who oversees the Jimmy Kimmel Live show, and Tim McNeal, vice president of ABC’s talent development and diversity branch.

The senior executives added in the letter that ABC had removed the controversial comment from all media platforms and would edit the comment out of any future airing of the show.

Video: Jimmy Kimmel's show stirs controversy with comment about killing Chinese

This is the first known apology the television network has issued over the controversial skit originally aired on the “Kid’s Table” segment of Kimmel’s late-night talk show on October 16. It showed a young boy who suggested that the US should resolve its debt crisis by “killing everyone in China.”

S.B.Woo, chairman of the 80-20 Initiative and of Hong Kong-origin, told the Post by telephone that he immediately lodged a protest with the television network as soon as he found out that the Jimmy Kimmel Live programme was actually not live.

“Otherwise, personally I do not think it is a big deal – because kids say the darnedest things,” said Woo. “However, allowing it to air shows ABC’s grievous lack of judgment.” He added the programme would not dare to air a similar comment aimed at black or Jewish people.

“Personally I don’t consider [the apology] a victory at all,” he said.

Woo added that the incident only reflected that Asian-American communities were not doing enough to have their voices heard in American society and he urged them to unite in the face of similar situations in the future. If they had done so in this case, “the outcome of this incident would have been even more satisfactory,” he said.

ABC is not immediately available for comment on the apology letter on Monday. 

Walt Disney/ABC Television Show "Kill ALL Chinese" Apology NOT Acceptable - It apologize to 1 person and NOT the Chinese Community 

October 25 2013

Chinese community rallies against Jimmy Kimmel for 'kill everyone in China' comment By Jeremy Blum jeremy.blum@scmp.com

Protesters include mainland netizens and Chinese Americans from over 37 states - An image of Jimmy Kimmel during the airing of the skit. A map showing the locations of various petition signers, who come from states all across the US. A sign shared on a Facebook page protesting ABC network. 

Overseas Chinese Americans and domestic Chinese citizens alike have rallied together against US comedian Jimmy Kimmel and television network ABC for a late night talk show skit that suggested Americans “kill everyone in China”.

The skit, originally aired on the “Kid’s Table” segment of Kimmel’s talk show on October 16, instantly drew ire from the Chinese community, who began a White House petition calling for a formal apology.

The petition called the skit “extremely distasteful and … the same rhetoric used in Nazi Germany against Jewish people.”

Since its creation, the petition has received over 35,000 signatures, and according to rules on the White House page, will be reviewed by political staff if it is signed more than 64,283 times before November 18. 

A Facebook page accompanying the petition, entitled “Investigate Jimmy Kimmel Kid’s Table Show on ABC Network” has gathered over 2,600 likes and reveals that signers of the petition include Canadians, mainland Chinese residents and Chinese Americans from over 37 states, including California, New York and Texas.

Word of the controversy and videos of the skit have also attracted attention in China’s microblog community, where SIna Weibo users urged all overseas Chinese living in the San Francisco area to make their voices heard at ABC’s headquarters.

“All Chinese living near San Francisco, let’s form a collective on Monday and protest outside the doors of ABC,” one outspoken Weibo user living in California wrote. “Spread the word!”

Joe Wong, a Chinese American stand-up comedian, has been particularly vocal in his support of the petition on his own microblog.

“I am a comedian,” Wong wrote. “But I’m also Chinese. Some [Americans] dare to make fun of Chinese minorities, but they would not do the same thing to other races. Why? Because when they offend African Americans or Jewish people, the consequences are too serious.

“There are millions of Chinese out there, but only tens of thousands have signed [the petition] … Everyone may be busy, but the point of being busy is to give yourself and future generations the chance to live in a society that understands and respects Chinese people. Please grasp this opportunity and sign this petition.”

The original clip of the skit has been removed from Youtube, but neither Kimmel nor ABC have responded to the controversy yet.

October 22 2013

'Kill everyone in China': Outrage over comment during Jimmy Kimmel skit By Jeremy Blum jeremy.blum@scmp.com

Comedian Jimmy Kimmel has angered Americans with a skit that many did not find funny - A screenshot of the segment on Kimmel's show. Jimmy Kimmel's show stirs controversy with comment about killing Chinese.

Comedian Jimmy Kimmel has drawn ire from offended Asian Americans for a skit on his late-night talk show which jokingly suggested that Americans should deal with their debt crisis by “killing everyone in China.”

The clip in question, aired on the United States’ ABC Network on 16 October, featured a critique of the recent US government shutdown. In it, Kimmel and a group of children preside over a discussion panel titled “Kid’s Table” and spark a satirical debate over how the US should deal with the government shutdown and the debt owed to China.

One of the children’s comments that the US should “kill everyone in China” produced controversy, and critics have taken to Youtube and created a White House petition boycotting Kimmel’s decision to air the comment on his show.

“I was very disturbed by Jimmy Kimmel’s ‘Kids Table’ show,” the White House petition reads. “It was aired on ABC recently and talked about killing all the Chinese so that the States do not need to pay back their debts to China. The kids might not know anything better. However, Jimmy Kimmel and ABC’s management are adults. They had a choice not to air this racist program, which promotes racial hatred. The program is totally unacceptable and it must be cut. A sincere apology must be issued. It is extremely distasteful and this is the same rhetoric used in Nazi Germany against Jewish people. Please immediately cut the show and issue a formal apology.”

To date, the petition has received more than 14,000 signatures, and Asian American bloggers and online magazines have echoed its criticisms.

“When Jimmy Kimmel asked the kids about what to do with the $1.3 trillion US debt to China, one boy replied: ‘Kill everyone in China,’” wrote David Li of Bostonese, an online journal servicing Boston’s Chinese community. “Jimmy Kimmel commented ‘that’s an interesting idea,’ and went on to discuss more about this idea as if there was nothing wrong with it.

“The editors and managers of ABC must have felt the same way, and aired these racist and genocidal discussions on air… Mr. Kimmel, this is not funny at all. You have missed a great opportunity to teach the boy a lesson when the senseless remarks were made.”

Not all viewers of the parody found it objectionable. While many Youtube commentators pointed out that the skit was in bad taste, others called it “hilarious” and pointed out that it had been meant as satire.

“If you feel threatened by a 5-year-old’s comments then you need to question your moral high ground,” one Youtube poster wrote. “I'm not American, [but] all this carries is entertainment value. I don't think it warrants this reaction. This kid meant no harm.”

ABC and Kimmel have yet to respond to the complaints.

ABC Television USA promote HATE CRIME - MUST APOLOGIZE 美國ABC電視台推動仇恨華人必須道歉 [The show is in English] This kid's program in America said since we owe China 1.3 trillion - why don't we kill all the people in China so we do not have to pay our debt - is this the way we want to teach our children? 美節目請兒童支招政府債務小朋友 :殺光中國人 美國節目《吉米雞毛秀》(Jimmy Kimmel Live)請來一群小朋友召開兒童圓桌會議,讓他們發表對美國政府停擺問題的意見。當問到欠中國1.3萬億美元該怎麼還時,一位小朋友語出驚人:我們繞到地球那一邊去,把中國人都干掉~ ” 有華人網民聽表示不安, 更有人指出美國好多小孩子都是受其家庭的影響. 很多仇視中國人的人都是loser. 因為他們自己過的不好,將其原因歸究與中國人. https://www.facebook.com/photo.php?v=582054598499005&set=vb.434675049918587&type=2&theater 

October 25 2013 ABC Television bow to pressure to shut down the "Killing ALL Chinese Show".

October 25 2013 - ABC Television bow to pressure to shut down the "Killing ALL Chinese Show". New York Chinese American insist ABC Television MUST apologize.

October 24 2013

October 23 2013

October 22 2013

October 21 2013

October 18 2013

End of government shutdown won't revive dying United States democracy 政府重開 不會重振垂死的美國民主政府 By Kevin Rafferty

Kevin Rafferty mourns the decline of a great nation that has been hijacked by money politics - Obama leaves after delivering a speech in the State Dining Room of the White House.

When I worked on The Guardian, its stylebook instructed journalists not to use the word "shambles" unless there was blood on the floor (a reference to the origins of the word in butchery). But it is hard to find words that more accurately describe what is happening to the US than shambles or shambolic.

The US is tearing itself apart. The smashed and mashed entrails of everything that was good and great about America - its democracy, its freedom and promise of economic opportunity for all, its generosity towards others - are spilling all over the floor.

The pernicious politics of the moment are merely exacerbating dangerous longer-term trends and tendencies.

Sadly, almost none of the political actors playing out their self-centred drama have the sense of perspective to see where all this is leading, less still to understand the damage that they are doing to the reputation and future role of the US in the world. How can anyone trust a country whose government and governing system is in such a mess?

Is the US any longer a democracy? In the last election for the House of Representatives, Democratic candidates won more votes than their Republican rivals, taking almost 60 million votes against 58.5 million won by the Republicans. But the Republicans won 234 seats in the 435-member house, against the Democrats' 201.

The Republican majority was largely won thanks to gerrymandering by Republican-controlled state legislatures of the constituencies for the house after the 2010 census.

Was this an expression of democracy? Hardly, though there seems to be little debate about the anti-democratic nature of the Republican majority, and less discussion of how such gerrymandering should be stopped or punished. Republicans regard their victory as clever politics.

What is certainly undemocratic is the way that a minority within the Republican party has captured the political arena and brought the government to its knees. The arrogance of the so-called "tea party" Republicans is such that they tried to bring down the whole budget in order to overturn one legitimately passed law.

Majorities also have rights, but unfortunately Republican leader John Boehner did not have the guts to stand up against his party's rebels in the name of the country, until the virtually last-hour deal in the Senate led the way to a government reopening - and postponed the next performance of kabuki over the death of American democracy until February.

Rebel Republicans care little about the good name of their country. The perceptive Oxford University professor Timothy Garton Ash, returning to Europe after a summer of watching the rutting stags of Congress fighting close to the cliff edge, commented that, "America should do a reverse Columbus. The world no longer needs to discover America; but America urgently needs to discover the world's view of America."

The shambles in Washington has allowed a nervous China - which of course has a vested interest in what is going on through its trillion-dollar holdings of US Treasuries - to step up its calls for, as Xinhua put it, "building a de-Americanised world".

Frank Li, a Chinese-born naturalised American, who founded a company called West-East international, writes in his provocative book that China, although theoretically Communist, is run like an efficient business, while the free enterprise system of the United States is being sabotaged by flaws in its theoretically democratic polity.

His judgment about China might be questioned. We might ask, for example, how long China's economic miracle can continue when it represses free expression and criticism.

But Li is surely correct in claiming that the US political system is "deeply in trouble" and incompetent compared with China. The US has elected a series of inexperienced presidents and careerist politicians concerned principally with their re-election.

America's problems run deeper. The government shutdown hurt the vulnerable the hardest, and cost the government dearly because the workers who did not work will have to be paid for their time not working.

Research shows that America's rich and super rich continue to grab most of the benefits of growth. Tax rates paid by the 0.01 per cent super rich are at their lowest while they grab a bigger share of the national cake. The share of wages in America's gross domestic product has fallen from half 50 years ago to 42 per cent.

Both George Bush and Bill Clinton, as well as Barack Obama, won because they had huge campaign funds and good links with Wall Street. As the politicians danced with default, Wall Street wobbled but did not plummet from near record levels, and when the shabby deal was announced, the markets soared. Money politics is alive and well as democracy dies.

Kevin Rafferty is a professor at the Institute for Academic Initiatives, Osaka University

October 12 2013

Chinese job applicant calls ITER hiring process unfair By Stephen Chen chen.binglin@scmp.com

The convoy testing the strength of the roads and the bridges to the construction site of the International Thermonuclear Experimental Reactor (ITER) drives between Berre-l'Etang and Cadarache, southern France, to the site of the ITER. 

The experience of one Chinese applicant who was turned down for a key position at the International Thermonuclear Experimental Reactor (ITER) could shed light on how the project's staff became dominated by Europeans.

The applicant, who spoke on the condition of anonymity, applied through open recruitment this year for a team leader position in the France-based organisation's all-French human resources department.

But she soon learned the department's director had hired a French woman on a temporary contract to fill the position, shortly after it became vacant. Such a temporary hiring can been approved by the department head directly while the formal job search continues.

"Nobody wants to compete with someone who is already doing the job," the Chinese applicant said. "She will have a head start and will be familiar to the board members who will conduct the job interview. This is unfair."

Two of the five people on the selection committee for the position already knew the French applicant from work. The French candidate got the highest score; the Chinese candidate came in second.

"They called me and told me that I did great in the interview, but I was too young to manage 'a group of old French ladies'," the Chinese applicant said. "I was offered a lower-ranking job instead, which is equivalent to the job of my assistant. I turned it down immediately and I felt humiliated."

None of the directors or top section leaders in the department overseeing the critical construction of the reactor are Chinese, according to the ITER website.

ITER spokesman Dr Michel Claessens denied allegations of discrimination and said the organisation followed the recruitment process set by participant nations. He said he could not comment on the Chinese applicant's case.

Dr Liu Huajun , a fusion scientist with the Chinese Academy of Sciences' Institute of Plasma Physics, said: "As nearly all section heads are controlled by other countries, Chinese candidates have often received unfair treatment or outright discrimination."

September 8 2013

UH Manoa ranks among the top universities in the world – what goes that really meant to us?

I am a product of the University of Hawaii. When I first read it, I felt proud, but a minute later, the reality sets in.

For almost 40 years, we have tried to promote University of Hawaii to the rest of the world with special focus in Asia.

But who we think we are? Or what the academic world think we are could be night and day to our end users: past, current and future students of University of Hawaii.

Five schools at the University of Hawaii stands out during the past decades: Medical School, Law School, Cancer Research Center, Astronomy and School of Travel Industry Management (TIM School).

I have just returned from Hong Kong 10 days ago helped put together the largest alumni event in UH history attended by more than 170 international guests from around the world. Many have flown in spending 1,000s of dollars just want to be part of it. We have raised almost US$100,000 in one single evening for one of the top schools at UH which happened to be UH top brand in Asia. http://johnsonchoi.com/chuckgee.htm 

Would you believe me if I tell you UH had tried for 5 years to shut down the School supporting the largest industry in Hawaii purely for political considerations. UH Chancellor Tom Apple has now promised at the UH reception at the Waialae Country Club on Aug 27 2013 that it will not happen under his watch. As a fellow Rotarian at the Metropolitan Rotary Club of Honolulu, I believe him.

We are not saying other schools are not good. The question is how our end users sees it: our students.

Last week at a UH Alumni get together in San Francisco, there were other friends graduated from other colleges at the dinner. One of the discussions was one of the friend's daughter is making plan to attend college. And it happened that fall into the five schools I listed above.

We have suggested to the parents and their daughter to apply to the University of Hawaii. They are not interested. Their main reason is if their daughter could go to a University in a big city (they consider Hawaii too country), the alumni network could enhance their daughter's future career path. The parent is making good income. Just like so many parents in Hawaii making good income with smart children, they do not mind to send their children to universities in big cites costing them 4x more. They also want their children to expose to the real world, able to compete and survive in big cities.

Yesterday we ran into a friend and a very successful businessman while shopping at Costco, he asked why Kapiolani Community College does not even offer a food program to train Chinese cook? And everything is so political here, he added. Sport programs at the University of Hawaii seems to trump our academic programs. His two children also attended mainland universities and they are not coming home to Hawaii.

When our taxpayers are paying 4x more to send their kids to mainland colleges. Many thought it applies to the riches in Hawaii – Not so. We have clients working in the low pay service industries jobs. Between the parents, work 3 – 5 jobs, save enough money or mortgage their home to send their children to mainland universities. 

From the financial prospective, it does not make any sense at all. But for most of the parents willing to bite the bullets, not belonging to the rich elite in Hawaii repeatedly told us, they have seen enough of Hawaii on where it is heading. Hawaii is not the place for young people smart with brains. Going to mainland universities is the best way for their kids to get exposed to the real world by interacting with the local there and the international students with deep network from their home countries.

Therefore when we tell our Ohana (family) that University of Hawaii is the top 100 university in the world. It does meant something, especially for us – the alumni. After getting over the moment of pride, the reality does set in.

In the academic world, top 20 or top 50 or top 100 is great. But in the business world, unless you are the top 10, you are just part of the crowd.

Therefore before we raise the champagne glass to toast to congratulate ourselves, we need to ask again why the young smart people with brain continue to leave Hawaii by the 100s every month? And why those that are very successful making 2 – 10 times income of their pier group in Hawaii not returning home.

Yes, I do care University of Hawaii at Manoa is the top 100 university. But I am having hard time selling it to the rest of world.

But since 80% of the people live in Hawaii never been to the rest of the world. Does it really matter to the majority of the taxpayers in Hawaii?

For many of the sport fans, we know what is more important to us. Do you?

See UH article: http://www.hawaii.edu/news/article.php?aId=5387 

Johnson Choi
President
Hong Kong.China.Hawaii Chamber of Commerce
Hawaii - San Francisco - Hong Kong - Shanghai
http://hkchcc.org/index.htm 

*Aug 6 2013

China adds valid voice to shaping international order By Phil C.W. Chan

Phil C.W. Chan says China's assertion of its sovereignty should not be automatically seen as a sign of its aggression, or as acting outside international law and threatening global order - China adds valid voice to shaping international order.

Following China's vetoes of United Nations Security Council action over Syria, Susan Rice, the now former US ambassador to the UN, expressed disgust about China impeding protection of civilians and enabling mass killings.

On whistle-blower Edward Snowden managing to travel from Hong Kong to Moscow, US Secretary of State John Kerry accused China of meddling.

Through its territorial claims in the East China Sea and the South China Sea, China also stands accused of aggression towards its neighbors.

Central to these accusations is the principle of state sovereignty. In Western academic and policy circles, sovereignty has become a word almost dirtier than war. The reality is that sovereignty is as important as it ever has been.

The United States invariably justifies its domestic and foreign conduct on the basis of its interests and its laws. In its messy relationship with the European Union, the United Kingdom emphasises British interests, British laws, and British sovereignty. And as China lays claims to islets in the East China Sea and the South China Sea, Japan, the Philippines and Vietnam assert their territorial sovereignty.

But many assume that, in exercising sovereignty, China will ignore international law and even threaten international order. Such an assumption overlooks how international law moderates China's exercise of sovereignty.

In caricaturing China's approaches to international law as signifying its aggressive strategies, the assumption also deprives the development of international law of important input.

In appraising China's approaches to international law and the international order, one must be cognisant of China's historical experience. China's approaches have been heavily influenced by the military events and international agreements since its defeat in the opium war in 1842.

There is a real and enduring mentality on the part of China, its politicians and people, that China has been a victim of international law. Having been reduced almost to a colony, China regards state sovereignty to be the bulwark against foreign invasions and interference.

China (and many non-Western countries) and Western powers disagree over the many facets of human rights, democracy, self-determination, and international peace and security. Western powers, often without due regard for their own domestic action, assert that international human rights law possesses a universal character, on the basis of the (non-legal, non-binding) Universal Declaration of Human Rights, customary international law, international human rights treaties, and the normative and moral values of human rights.

The views, interests and concerns of Asian and African states and their peoples are relegated to secondary or little importance. Worse, they are regarded as hindrances or threats to the stability of the international order. When Western powers disregard international law, their non-compliance is taken as random or justified by necessity or political realities, or as reiteration of the legitimacy of Western systems, values and norms.

The people of Hong Kong ought to remember that our struggle for universal suffrage has its roots not in Chinese communism, but in British denial of this most basic right for a century and a half. When the United Kingdom changed its law to deny us British citizenship, there was little international outcry.

Every state has its characteristics, traditions, and pretensions. Wholesale dismissal of China's historical-cultural orientation does not help one understand China's approaches to the international order. It also perpetuates international law's Western-centric nature.

Of course, identities, behaviour and norms evolve over time.

China's potential to influence, shape and benefit the content of international law is often disregarded or misunderstood. In the process, China is reduced to the role of a passive object of international law. Non-compliance is taken as evidence that China is a threat, a non-status-quo power, or a power intent on revising the international order. The potential of China's non-compliance as positive change to those norms and rules, if not also to the international system itself, is discounted.

The assumption that Western systems, values and norms are superior serves to deny the "outsider" legitimacy in transnational discourses. Any criticism by the "outsider" of the flaws or failings of the "insider" is automatically dismissed. Both compliance and non-compliance with a Western system, value or norm are then taken as reflecting and reaffirming the legitimacy of the Western system.

The roles China plays in international affairs exemplify the potential and limits of its interactions with the current order as it acquires greater recognition and influence as a rising power. Between 1945 and August 2012, the veto was exercised 269 times. The Soviet Union/Russia cast its veto 127 times, the United States 83 times, the United Kingdom 32 times, France 18 times, and China eight times.

The fact that China vetoed an otherwise widely supported draft Security Council resolution, over the internal conflict in Syria, at the expense of its popularity, speaks volumes about China, the Security Council, and the current international order governed under the framework of international law.

Instead of weakening the Security Council, China has prevented it from being what scholar Richard Falk calls a "law-laundering service" to legitimise the unilateral will of powerful states.

Phil C.W. Chan is senior research fellow at the Max Planck Institute for Comparative Public Law and International Law in Heidelberg and at PluriCourts, University of Oslo

*July 3 2013

Thanks to Snowden, a chance to reset Sino-US relations By Lanxin Xiang

Lanxin Xiang says the fallout from Edward Snowden's revelations may not be as damaging to Sino-US ties as feared, but could instead provide an opportunity for recalibration.

Edward Snowden seems to have opened a Pandora's box. Unlike WikiLeaks, which has released official documents - often banal conversations between government bureaucrats - Snowden has exposed the operation of the world's most powerful state-sponsored cyberespionage of a community that most prizes individual freedom. Hero or not, Snowden will go down in history as a whistle-blower who triggered a moral earthquake which few individuals in the world can escape.

This is the cyberversion of George Orwell's Nineteen Eighty-Four.

Given that Hong Kong was Snowden's first choice of destination, most commentators seem to believe that the leaks have done great damage to US-China relations, which were only recently "reheated" at the Sunnylands summit in California. But the contrary may also be true.

First, there was little meeting of minds at the summit. The key Chinese preoccupations didn't match those of the White House. The Chinese wanted a consensus with the US over the meaning and content of a "new type of great power relations", while the United States, prior to the summit, was very much in the mood of avoiding another Peloponnesian War, a democratic Athens versus the military-authoritarian regime of Sparta.

Admittedly, the logic of this "new type" of relationship sounds rather old-fashioned, starting with the premise of a global power shift, and ending with the demand for recognition of equal status with the US. The US government refused to take it seriously. Moreover, another favourite theme of President Xi Jinping , the "China dream", was also met with disdain. President Barack Obama seemed unwilling to entertain Xi's claim that the Chinese and American dreams have something in common.

Post summit, Xi's greatest victory was to repel the attack by the US government on alleged Chinese cyberespionage, albeit with more than a little luck. The timing of Snowden's revelations disrupted the American strategy. The fallout will last a long time and will shield China from similar accusations for a while. The immediate impact is clear: the US is losing the moral high ground in the eyes of its own people and people all over the world.

There is at least one striking revelation: the US, the world's only superpower, while accusing other countries of preparing for cyberwar, has been on a sort of cyberwar footing for quite some time. The Prism project has, after all, been carried out by the US military.

Two rationales seem to have buttressed the US government's decision to treat cybercommunication as a major war zone. The first is provided by the September 11 terrorist attacks. As long as the US government considers its fight against terrorism a "war", the cyberwar will have no legal or operational limitations. The second is that the US government has always been obsessed with the logic of the rise and fall of great powers. For the only superpower to maintain its top position, technological superiority has to be a priority.

Like nuclear technology, cybertechnology is also a dual-use technology. It has the potential to release even greater destructive power than nuclear weapons. With a perennial mentality of great power conflict, a cyberwar footing is thus necessary to prepare for a future showdown with potential challengers.

Throughout modern military history, superior technological devices for military reconnaissance or espionage were more often than not transformed into attacking weapon systems. If one firmly believes that military conflict between a rising power and existing power is inevitable, then it's not entirely wrong to prepare for a cyberwar. Weapon systems such as submarines, and the air force during the first world war, and carriers during the second world war, were initially envisioned as reconnaissance devices, but soon became powerful attacking weapons in actual warfare.

Cyberwar is of course quite different. Traditional weapons do not involve a citizen's daily routine; cyber devices are part of everyone's normal life. Hence, the Snowden affair has weaved together the human dilemmas in international and domestic politics, and prised open many moral dimensions of technological advances for societies.

Friedrich Nietzsche once said: "If you look into the abyss, it will also look back at you." Societies know the frightening aspects of technological advances, despite the convenience they also provide, but most of us prefer to close our eyes and not look into the abyss. Snowden has forced us to reflect seriously on the future of our cyberworld, at a time when there are no international rules on cyberactivities.

A salutary effect on US-China relations might be for both sides to reflect on the urgent need for establishing true strategic trust between the two leading powers.

On the one hand, the US has to tone down its attacks on Chinese cyber-activities and focus instead on how to reset relations with China on political, not purely military and geostrategic, premises.

On the other hand, the Chinese idea of a new type of relations might get a better hearing in Washington, despite the obvious lack of clarity on Beijing's side. In fact, Washington could work with Beijing to arrive at a mutually agreed definition of this relationship.

For the Chinese, the Snowden affair is a god-sent opportunity to firm up the elusive concept of a new type of relationship and engage the US on fundamental issues of mutual concern. The premature initiative of linking the Chinese dream to the American dream is going nowhere.

China must also take the initiative to engage the world in rule-setting actions over cyberactivities.

More importantly, China is hardly immune from accusations of cyber-monitoring its own citizens and for internet censorship. Beijing has no reason to be complacent; it's not inconceivable that a Chinese Snowden could emerge.

China must make a positive contribution not only to the global cause of preventing cybertechnology from becoming another weapon of mass destruction, but also to the cause of political and social transparency and reform.

Lanxin Xiang is professor of international history and politics at the Graduate Institute of International and Development Studies in Geneva

*May 22 2013

Why living in Hong Kong as mainland Chinese is no piece of cake by Joy Yang

Joy Yang first wrote in Chinese about her experience as a person from the mainland living in Hong Kong. Her story was a hit on Weibo and sparked heated discussion. She has translated her article into English to share with SCMP readers. Joy Yang works in the financial industry in Hong Kong. 

We constantly hear Hong Kong locals complain about people who visit from the mainland and buy up milk powder or take up space in maternity wards, but rarely are the voices of those from the mainland heard.

My first impression of Hong Kong was not a good one. I was part of a batch of 28 undergraduates who had arrived from top universities on the mainland to study at the University of Hong Kong in 1999. I was 18 and excited about starting an adult life in the “Pearl of the Orient”, with its fancy shops, pop stars and legends of successful businessmen.

This excitement was soon replaced by anger and disappointment. A few days after arriving, a tutor at the hall of residence and a local female student came to my room and asked if they could search it. The girl said her mobile phone had been stolen. They rummaged through our bags then left with no apologies. But it was clearly written on their faces what they were thinking: “Where the hell are these two poor mainland girls hiding my mobile phone?”

I felt angry, but, sadly, it was not the last time this would happen. When something went missing in the hall of residence, the mainland students were always the first ones, and for most of the time the only ones, to be suspected. What was particularly insulting was that most of the suspected stolen items were insignificant - a slice of cheese or a bottle of milk. Yes, China’s per-capita GDP was low, but were we so poor in those locals’ eyes that even an orange was worth stealing?

After such bad experiences, I was always ready to strike back whenever I felt insulted or discriminated against. One time a local asked for my help on her class project comparing Hong Kong with Shanghai. Her first question was whether there was karaoke in Shanghai. Such an ignorant question offended my big Shanghainese ego. And when she asked about the living conditions there, I answered, with full arrogance: “My home in Shanghai was more than 1,000 square feet. How big is your home in Hong Kong?”

I did not make many good friends with local students at first, but I did not care. I don’t have to blend into the local culture, I told myself.

Sooner or later, those Hongkongers will recognise that mainland China is no longer a poor country, and we will influence the world with our growing economic and political power – more than Hong Kong does. So why should I care about blending into the local culture?

I could have kept “fighting” like that until one incident changed me.

After many conflicts I had with local students, the student union decided to kick me out of the hall of residence. The last straw, I believed, was when I defended a mainland tutor at a meeting and argued that her critics were discriminating against mainlanders. The mainlanders are my ally, and Hongkongers are our common enemy – I truly believed it at that time.

But when the student union labelled me as a troublemaker, not only did the tutor not speak out for me as I did for her, but she also turned her back on me.

“Who asked her to fight with the local students?” she told others behind my back. I felt betrayed.

I started losing hope that I would find a place to live until a Hong Kong tutor called me to say that the hall of residence had decided to give me another chance. She said some locals had argued that I was simply from a different culture and that the hall should welcome different views.

I was shocked when I heard that.

Betrayed by my ally only to be saved by my enemy - that completely changed my mentality. I became more receptive to local culture. More locals said they were eager to learn from me about the mainland, and I apologised to them, admitting that I had been too extreme in the past.

What I want to say is simple: blending into Hong Kong’s local culture is not that difficult, if we have the right attitude. That is what I learned 10 years ago. I left Hong Kong in 2002 for graduate school in the US, with full appreciation of what Hong Kong had taught me, both academically and non-academically.

But life is always more complicated than we think. I returned to Hong Kong in 2011, after studying and working in the US for nine years. Nowadays in Hong Kong, I find that blending into the local culture is not as simple as 10 years ago.

I started noticing the rapidly changing dynamics between locals and mainlanders from afar.

For example, HKU offers one-year exchange programmes for its undergraduates to study abroad. Students are selected based on academic performance and extra-curriculum activities. Each year we received about four to five HKU students in Los Angeles, and usually three or four of them were students originally from the mainland.

This had to do with the rising population of mainland students in Hong Kong. Back in my day, the economics department only had three to four mainland students. We got As most of the time, but plenty of As were left for local students. Today the economics department has about 20 to 30 mainland students, and when they get most of the As, as I heard from a HKU professor, a B is the best that a local student can hope for.

It’s not about who is smarter. After all, one is selected from a population of 1.4 billion and the other is from a population of seven million. Even though universities are supposed to be a place for fair competition, it is understandable why many Hong Kong students dislike their mainland peers. Ten years ago we “stole” apples and milk; today we “steal” As in class.

The younger generation from the mainland constantly outperforms locals in other aspects too. They score high in exams, participate in social activities and even speak better English than many local students. “We invited investment bankers to give seminars on campus,” an HKU professor said, “and after, all the mainland students rushed to socialise with the speaker, handed in their resumes and asked for internship opportunities, while many local students just hid themselves in the back rows.”

My speculation that Hongkongers felt threatened by mainlanders was confirmed when I returned in 2011. Yes, there are more mainlanders in Hong Kong than ever, and Hong Kong has never been this close to its motherland. But if you think that made my life here easier, you are wrong. Locals are rejecting mainland people and culture harder than before.

That’s why I realise that having a happy life in Hong Kong is no longer as simple as having the right attitude. It is harder to blend into the local culture than 10 years ago because the pushback from local people is harder than ever. This view is probably not shared by some of my mainland peers living in Hong Kong. Some of them do not think it necessary to blend into the local culture. “I earn more money than most of the Hongkongers” and “I always ask them to speak Putonghua to me”, one of my Beijing friends said with pride.

Resistance from locals is particularly obvious in two areas – the financial sector and the working class. The lack of transparency and the unique Chinese culture are often challenging for foreigners working in the Chinese market. Top investment banks and hedge funds prefer to hire mainlanders – over Hongkongers, ABCs and Westerners – for their China business knowledge. In Central, Putonghua is becoming a popular language, not only in shopping malls, but also in offices.

Working-class people are probably the ones who are mostly affected and, to some extent, squeezed. They face shortages of milk powder and of hospital beds, and a crowded Ocean Park - I would complain too if I were a local.

The problem is not unique to Hong Kong. Beijingers and Shanghainese complain about new migrants in their cities too. It’s all about competition for limited social welfare. In some aspects, Hong Kong is worse off. At least for a baby born in Shanghai or Beijing, she is not qualified for a hukou [residency permit] in the city if neither parent has one. But in Hong Kong, any child born here would automatically get access to the social welfare system – even if their parents are not permanent Hong Kong residents.

So who should be blamed for the rising tension between Hong Kong and the mainland? In my view, some Hong Kong media could take more responsibility. They could be fairer and stop reporting biased stories for the sake of boosting sales. The central government should also take more decisive actions to solve its food safety problem, so that mainland mums do not have to travel to Hong Kong for milk powder. Joint efforts by Hong Kong people, mainlanders, media and government will make the city a friendlier place to study, work and live.

I’d like to ask a question to end my story: nowadays in Hong Kong, should I speak Putonghua or Cantonese when I go shopping? I tried once to speak Cantonese in the Harbour City shopping mall, but the saleswoman turned away and greeted other mainland shoppers with her fluent Putonghua. I then tried to speak Putonghua at another store in Causeway Bay and received good service. But when I decided to leave without buying any shoes, the salesperson’s face went dark. She asked angrily: “Why you don’t buy? They are so cheap! And it’s another 20 per cent off if you pay with RMB!” I realised finally that it’s not about language; it’s all about your wallet.

Joy Yang is from Shanghai. She studied at the University of Hong Kong and at the University of California, Los Angeles in the US. She worked in Washington DC as an economist for the International Monetary Fund and now works in the financial industry in Hong Kong.

*May 2 2013

The racist curse of Fu Manchu By Ian Young in Vancouver ian.young@scmp.com

The archetypal 'yellow peril' villain - back in the spotlight thanks to a pulled car ad - is a Sinophobic stereotype that won't go away. With talon-like fingernails and ludicrous "yellow-face" makeup, the character of Dr Fu Manchu embodies a stereotype of Chinese villainy that now seems comically racist.

In the 1932 film, The Mask of Dr Fu Manchu, he offers up a virginal blonde to his baying Asian horde. "Would you have maidens such as these for your wives?" he says. "Then conquer and breed! Kill the white man … and take his women!"

His words drip with malice and evil genius; his moustache droops low and his eyebrows arch high. But while there seems little place for Dr Fu Manchu in a modern multicultural world, variations on the character have proved remarkably resilient, says Dr Jenny Clegg, a British Sinologist who has studied the stereotype.

"Racial stereotypes of any kind can be very persistent, they recur again and again in different variations depending on the changing circumstances, but it gets back to the same message, which is this conception of 'us' and 'other'," said Clegg, author of Fu Manchu and the Yellow Peril: The Making of a Racist Myth. "It's all about dividing people according to salacious ideas about race that underlie the feeling of western superiority."

The spirit of Fu Manchu is not yet extinct. He was recently referred to in an ill-fated Chevrolet commercial, which was pulled worldwide this week after its content was highlighted by the South China Morning Post. The advertisement's soundtrack referred to China as "the land of Fu Manchu", where people say "ching-ching, chop suey".

Chevrolet's parent, General Motors, apologised profusely for any offence caused. The ad, which had been screening in Canada since March, had been the subject of complaints and was deemed offensive by Chevrolet Canada executives, who quietly cut the offending lyrics last week and released an edited version of the ad locally. The entire global campaign was pulled on Wednesday as a result of the furore.

The ad and its Fu Manchu reference never reached TVs beyond Canada, GM said.

But a Fu Manchu-like character is receiving far wider viewership with the release of Hollywood blockbuster Iron Man 3, featuring arch-villain The Mandarin. The film opened in most parts of the world, including Hong Kong, last week and hits US cinemas this week.

Iron Man 3's "Mandarin problem" has been widely discussed by fans of both the film series starring Robert Downey Jnr, and the Marvel comic universe. The problem? The comic-book Mandarin is a "racist caricature" of a Chinese bad guy, according to Iron Man 3 director Shane Black.

"In the old comics, he's this sort of screeching Chinese warlord with his fist in the air all the time saying, 'Fools! Come back when you have information, I'll have your heads!'," Black told the Los Angeles Times last week.

Black and others went out of their way to remove any Chinese references from the film's Mandarin, played by Anglo-Indian actor Sir Ben Kingsley. Instead of the Manchurian goatee favoured by the comic, Kingsley sports a fuzzy, Castro-like beard; the comic version has mixed-race Chinese ancestry, but Kingsley plays a Mandarin with indeterminate nationality and what sounds like a Texan drawl. Adding to sensitivity over the matter was the fact that Iron Man 3 was partly filmed in China and received Chinese financing.

The film opened on the mainland on Wednesday and smashed the opening day box-office record, taking 130 million yuan (HK$162.4 million), said website mtime.com The mainland release had four minutes of extra footage targeted at the local audience, featuring mainland actors Wang Xueqi and Fan Bingbing along with, according to the Hollywood Reporter, product placement for mainland brands.

But the character echoes a stereotype of Eastern "otherness" described by Clegg. "He [The Mandarin] is very obviously a reincarnation of Fu Manchu," said Clegg, a vice-president of the Society for Anglo-Chinese Understanding.

She summarises the attributes of Fu Manchu as "a criminal mastermind … secretive, and insidious, he has an abhorrence for the truth, he has nasty kinds of torture and nasty ways of disposing of enemies".

There is also a sexual component to the character, who controls innocent white women with hypnosis and drugs. His daughter, Fah Lo See, is depicted as a depraved nymphomaniac. In The Mask of Dr Fu Manchu, she has the white hero stripped and whipped unconscious before taking him back to her bedchamber, presumably to rape him.

Fu Manchu was introduced to the world by British novelist Sax Rohmer in 1912's The Mystery of Dr Fu Manchu, and went on to star in numerous books, films and comics. The inscrutable monster was most famously played by English actor Boris Karloff, whose hulking frame and massive jawline made for an unlikely looking Chinese.

Ironically, the character rose to prominence at a time of profound Chinese weakness, and dominance of the nation by foreign powers. "The remarkable thing that struck me … Fu Manchu is ruthless, he has this mad scheme to rule the world," said Clegg. "But at the time he was conceived by Sax Rohmer, it was at the height of British imperialism.

"This was a new phase of western dominance over the world. Why suddenly is the victim portrayed as the perpetrator? Why is the victim of western dominance portrayed as a threat to the west? It's really a justification for the expansion of western influence in [pre-first world war] China."

The Fu Manchu myth may not have died out, but it is unfamiliar to many young ethnic Chinese. Hong Kong-born David Poon, who works in digital operations for the Mindshare advertising agency in Toronto, said he had "never heard anyone in Canada use anything remotely similar" to the Fu Manchu and "ching-ching, chop suey" lines of the Chevrolet ad.

Poon, 26, said he worked on car advertising, although not for GM. He said he was greatly disappointed by the ad. "Now, I can understand how something like that could slip through, but I work in advertising and I know how many different sets of hands this would touch. I wasn't so much offended, as I was surprised and disappointed that no one picked it up."

Ryndee Carney, a Detroit-based spokeswoman for GM, confirmed that the ad created by the Commonwealth agency went through "multiple layers" of approval. "The ad was tested as it would be under normal procedures. It tested well," said Carney on Wednesday. She was unsure where it was tested.

To GM's credit "they responded really quickly", said Poon. "I know it's not just them [GM], there were a lot of different people involved in this mistake. [But] at the end of the day it's a reflection of the kind of people working behind the scenes. When there are oversights like this, that often suggests that there is a lack of diversity in the team, and it makes you wonder about the people behind the scenes." Clegg echoed Poon's comments, citing a lack of awareness about Sinophobia, in Britain at least. "I know lots of people who talk about Islamophobia, but they don't recognise it when I see something that I regard as Sinophobic," she said. "On the other hand, when I talk to my students, they say they don't have a negative view [of Chinese] at all. On the whole, people have a relatively benign view of the Chinese. But these kind of negative stereotypes lurk just below the surface and because of constant repetition it is easy for the media to whip up anti-Chinese hysteria." 

She said there were real-world risks associated with the far-fetched image. Clegg cited recent concerns about China's aid schemes to Africa, which were worth US$75 billion since 2000. "It's very easy for people to switch and believe, for instance, that the Chinese are running rampant across Africa, with exploitative rapaciousness, on the basis of very little evidence," she said.

"I get the impression that the Chinese people are very confused as to why they receive a hostile reception in the western media, and why they are perceived in a negative fashion. Chinese people tend to think that their rise is peaceful and they don't understand the 'China threat' idea that prevails in the west."

*April 9 2013

China-US Trade Winds

President Obama’s administration has actively used the WTO dispute-settlement mechanism to resolve trade issues with China

US President Barack Obama may have appeared tough on China during his election campaign, but he’s expected to continue to foster pragmatic and collaborative relations with Beijing during his second term. His administration will likely keep resolving trade and economic issues through such bilateral channels as the Joint Commission on Commerce and Trade (JCCT) and the Strategic and Economic Dialogue (S&ED).

Washington, however, remains committed to a vigorous trade-remedy regime, seeing it as a vital component of US trade policy enabling American manufacturers to compete on a level playing field.

The most important recent development in US-China trade was legislation, last March, explicitly allowing the US government to impose countervailing duties on goods from such non-market economies as China. The bill reversed an appellate court ruling against that practice, and its retroactive application allowed the US to continue 23 countervailing duty orders and several ongoing investigations involving mainland goods.

Counting on the WTO

The Interagency Trade Enforcement Center (ITEC) is expected to continue expanding its role this year as the primary forum coordinating federal agencies’ efforts to enforce US trade rights under international trade agreements. ITEC will focus its efforts on obstacles to US exports in six countries, including China. It will also be one of several mechanisms available to US firms, allowing them to voice their concerns, while helping improve the executive branch’s decision-making concerning which foreign trade barriers to take action against. This process could result in additional complaints at the World Trade Organization (WTO). Any such decisions would factor in the economic cost of the problems at issue, while setting a WTO ruling precedent.

The Obama administration has actively used the WTO dispute-settlement mechanism, having filed eight of the 15 US cases against China since the mainland joined the WTO in 2001. The US remains a heavy user of trade remedies against Chinese products, although anti-dumping and countervailing duty activities moderated last year. The US initiated only three new anti-dumping investigations and two new countervailing proceedings on mainland products in 2012, compared to five investigations and four proceedings, respectively, in 2011. China, however, is the US supplier with the highest number of anti-dumping and countervailing duty orders in place against its products, with 94 orders and 25 orders, respectively, at the beginning of 2013. The numbers continue to grow because sunset reviews of existing measures rarely result in their elimination.

Still, a positive development for Hong Kong and mainland tire exporters was the expiration, last September, of the Section 421 safeguard duties that were in place on mainland pneumatic rubber tires. The ability to invoke the Section 421 safeguard will remain available only through December, and will almost certainly never be used again.

Renminbi Headache

US lawmakers remain concerned about the alleged under-valuation of the renminbi, and have urged the administration to adopt a firmer stance. From the US perspective, the mainland currency, despite its steady appreciation, remains undervalued, suggesting an intention to keep pressing Beijing to let market forces play a larger role in determining the exchange rate. But while Mr Obama toughened his position during the presidential campaign, he is unlikely to deviate during his second term in office from the generally conciliatory approach he pursued during his first term. As a result, the Treasury Department is unlikely to name China as a currency manipulator in its semi-annual report on foreign exchange rate policies.

IPR and Industrial Policies

The Obama administration has a range of lingering concerns in the area of industrial policies and intellectual property rights (IPR), and will continue to use the JCCT and the S&ED to persuade Beijing to implement additional reforms. The US and China achieved moderate progress last year at the JCCT and S&ED, in such important matters as the purchase of legitimate software by government authorities, technology transfer and cooperation, indigenous innovation, conformity certification, IT regulation, encryption standards, strategic emerging industries, IPR protection, export financing and state-owned enterprises.

Failure to resolve key bilateral irritants in these areas could compel the US to file additional complaints at the WTO. US officials also remain uneasy with what they view as China’s pursuit of expansive industrial policies that are often designed to limit market access for imported goods, foreign manufacturers and foreign services suppliers, while offering substantial government guidance, resources and regulatory support to mainland industries.

The US government recently blocked Chinese companies from buying strategic American assets on national security grounds

The US will continue seeking the elimination of China’s export restraints on raw material inputs through cases it has brought at the WTO. According to the US Trade Representative, China made real progress on the IPR front last year, but much work remains to be done. This year, the US will continue to work closely with US industries and devote considerable staff and resources, both in Washington and in Beijing, to addressing IPR’s many challenges.

The US will also seek to intensify its bilateral engagement with China to achieve significant reductions in IPR infringement levels. US officials are expected to continue pressing China to improve its Internet copyright protection measures following its accession to the World Intellectual Property Organisation Internet treaties, correct deficiencies in its criminal IPR enforcement measures, and improve the overall effectiveness of its IPR enforcement regime.

Barriers to Investment

Political disputes are unlikely to dislodge progress made in US-China trade ties (photo: EyePress)

The US and China recently resumed negotiations on a bilateral investment treaty (BIT), holding their first formal round of talks in several years. Talks were on hold while the Obama administration revised the BIT model, which it unveiled last April. This includes changes involving the transfer of technology, details on when BIT disciplines apply to state-owned enterprises and clarification about when government authority is delegated. It also contains new transparency provisions. An issue that could gain relevance is the increased scrutiny on mainland investments in the US on national security grounds. Last September, President Obama issued an order blocking a US-based, mainland-owned corporation and its subsidiaries and affiliates from acquiring four wind-farm companies in the state of Oregon. It marked the first time in more than 20 years that a US president has issued an order specifically blocking a company from investing in the US on national security grounds. 

Increasing US Influence in Asia

US trade enforcement efforts will remain vigorous, and the number of anti-dumping and countervailing duty orders on mainland products will continue to grow, albeit at a slower pace than five years ago. In the meantime, ITEC is expected to continue expanding its role as the primary forum for the coordination of US trade enforcement efforts. When outstanding issues cannot be resolved bilaterally, US enforcement activities at the WTO are likely to intensify.

The US will also likely seek to increase its influence and act as a counterbalance to China in Asia by concluding an ambitious Trans-Pacific Partnership agreement. Negotiations include four Asian countries (Brunei, Malaysia, Singapore and Vietnam), but other countries in the region, including Japan, have shown interest in joining the talks.

Export Controls 

In 2010, the Obama administration launched a comprehensive effort to reform US export controls by creating a single licensing agency administering a single list of controlled items, operating on a single IT platform, and enforced by a single export enforcement coordination agency.

In light of legislative limitations, the administration’s regulatory strategy on export control reform currently rests on two main pillars: revising the US Munitions List (USML) to clearly identify those items that provide the US with a critical military advantage or that otherwise warrant case-by-case licensing to essentially all destinations; and controlling all the remaining items specially designed for military applications on the Commerce Control List (CCL), which allows for conditional licensing exceptions for exports to close allies and strict prohibitions and controls on exports and re-exports to other countries, including China.

A number of proposed rules have been issued over the past two years to shift, from the USML to the CCL, a range of items that the President believes no longer warrant strict military controls. Items under consideration for such a shift include certain military electronic equipment and related items.

As regards the Validated End-User (VEU) programme for China, the Bureau of Industry and Security made some modifications, in January 2013, concerning written shipment notification to the recipient VEU, as well as VEUs subject to item-specific conditions.

*February 24 2013

The Lantern Festival 中國新年元宵節 that falls on Sunday Feb 24 2013 this year is an important part of Spring Festival, and marks the official end of the long holiday. Eating yuanxiao 湯圓 (sweet dumplings 湯圓 made with glutinous rice flour) is one of the special traditions of Lantern Festival. Be sure to eat yuanxiao 湯圓 on February 24 to ensure good luck for the rest of the year.

The Lantern Festival falls on the 15th day of the 1st lunar month, usually in February or March in the Gregorian calendar. As early as the Western Han Dynasty (206 BC-AD 25), it had become a festival with great significance.

This day's important activity is watching lanterns. Throughout the Han Dynasty (206 BC-AD 220), Buddhism flourished in China. One emperor heard that Buddhist monks would watch sarira, or remains from the cremation of Buddha's body, and light lanterns to worship Buddha on the 15th day of the 1st lunar month, so he ordered to light lanterns in the imperial palace and temples to show respect to Buddha on this day. Later, the Buddhist rite developed into a grand festival among common people and its influence expanded from the Central Plains to the whole of China.

Till today, the lantern festival is still held each year around the country. Lanterns of various shapes and sizes are hung in the streets, attracting countless visitors. Children will hold self-made or bought lanterns to stroll with on the streets, extremely excited.

"Guessing lantern riddles"is an essential part of the Festival. Lantern owners write riddles on a piece of paper and post them on the lanterns. If visitors have solutions to the riddles, they can pull the paper out and go to the lantern owners to check their answer. If they are right, they will get a little gift. The activity emerged during people's enjoyment of lanterns in the Song Dynasty (960-1279). As riddle guessing is interesting and full of wisdom, it has become popular among all social strata.

People will eat yuanxiao, or rice dumplings, on this day, so it is also called the "Yuanxiao Festival."Yuanxiao also has another name, tangyuan. It is small dumpling balls made of glutinous rice flour with rose petals, sesame, bean paste, jujube paste, walnut meat, dried fruit, sugar and edible oil as filling. Tangyuan can be boiled, fried or steamed. It tastes sweet and delicious. What's more, tangyuan in Chinese has a similar pronunciation with "tuanyuan”, meaning reunion. So people eat them to denote union, harmony and happiness for the family.

In the daytime of the Festival, performances such as a dragon lantern dance, a lion dance, a land boat dance, a yangge dance, walking on stilts and beating drums while dancing will be staged. On the night, except for magnificent lanterns, fireworks form a beautiful scene. Most families spare some fireworks from the Spring Festival and let them off in the Lantern Festival. Some local governments will even organize a fireworks party. On the night when the first full moon enters the New Year, people become really intoxicated by the imposing fireworks and bright moon in the sky.

*February 19 2013

Exploring identities By Kelly Chung Dawson



Museum of Chinese in America curator Herb Tam at his museum in New York City.  Museum curator Herb Tam uses art to explore the dynamic, variegated experience of Asians in the US, Kelly Chung Dawson reports from New York.

Before he moved to the New York City borough of Queens in 2004, Herb Tam had always defined himself as Chinese. "Asian-American" was a label that felt removed from his upbringing in San Francisco's Chinatown and, later, the predominantly white suburbs of the Bay Area.

However, suddenly surrounded by Chinese-speaking immigrants in Queens' heavily Asian neighborhood of Flushing, Tam realized the overlap between his experience and that of, say, a second-generation Korean-American might be wider than he imagined.

"My relationship with being Chinese became more complicated when I moved to a Chinese community," says Tam, who was born in Hong Kong and moved to the United States as an infant. "It made me rethink the whole notion of being Chinese; it shifted my ideas of Chinese-ness," he says.

"This concept of an Asian-American community took on greater significance when I realized that I might share more in common with someone with parents from Japan who had lived in the US for most of his or her life. They might have a more similar belief system, or face the same types of discrimination. That's when Asian-American-ness became a concrete idea for me."

As curator of the Museum of Chinese in America, which opened in 1980 in Manhattan's Chinatown, Tam regularly confronts the shifting contours of ethnic and cultural identity among communities that include Chinese-Americans and newer immigrants. The museum in recent years has shifted from a historical focus toward exploration of Chinese and Asian-American contemporary culture, partly due to Tam's influence.



Recent exhibitions at the New York museum include America Through a Chinese Lens, a survey of photography by Chinese and Chinese-American artists; the dual presentation Marvels and Monsters: Unmasking Asian Images in US Comics and Alt.Comics: Asian American Artists Reinvent the Comic; and a series of installations by the conceptual artist Lee Mingwei.

Panel discussions at MOCA, as the museum is known, have touched on topics such as basketball player Jeremy Lin, the history of Asian-American grassroots political activism and Chinese slam poetry.

Eugenie Tsai, curator of contemporary art at the 118-year-old Brooklyn Museum, says Tam represents a new generation of curators and arts critics who are focused on global culture.

"He is keenly aware of the ties between Chinese Diaspora communities around the world," Tsai says. "He can't be pigeonholed as a curator who is only interested in Asian-American art; he has a broader, contemporary perspective with specialized, focused interests. Within this new generation of curators, there's an awareness of how the world has expanded, and I think Herb's outlook is very much shaped by that."

Tam was born in Hong Kong in 1974, shortly after his parents left the Chinese mainland. Like many contemporaries, the family's intended destination was the United States.

During the "cultural revolution" (1966-76), Tam's parents had been sent to work in the Chinese countryside for little remuneration, and the US represented for them the idea that hard work could result in a life of one's choosing, he says. Two months after Tam's birth, the family relocated to San Francisco.

As a child, he played in Chinatown's sweatshops, while his mother sewed clothing and his father delivered groceries. Later, his parents opened a coin laundry in the suburbs, then a dry-cleaning chain; Tam and his sister worked shifts.

As one of just a few Chinese families in San Mateo, a city about a half-hour drive from San Francisco, they regularly experienced racism, Tam says. Even after moving to the slightly more diverse suburb of Milbrae, he and his relatives found racial divides hard to avoid.

"I just thought that's how white people were," he says. "When you're a kid you have sore spots, and they become huge. For so long I thought all of white America was racist."

He gravitated toward rap music because of its anti-establishment posture, and started drawing; both influences would later resurface in his work. In college, he studied graphic design and art. Tam soon realized he could give voice to his anger about what he calls "institutional lies and forms of racism, and the ways that specific groups of people have controlled social institutions and functions".

After graduating in 2000 with a master of fine arts degree from the School of Visual Arts in New York, he worked various jobs and became involved in Godzilla, just as that Asian-American artists network was disbanding.

He began curating exhibitions, and landed a job at the Queens Museum of Art. Surrounded by Chinese, Korean and South American communities, the museum was keenly aware of racial and cultural matters. He began thinking more about his own cultural identity and how it might connect to art and ethnicity.

But he shied away from explicitly exploring Chinese culture in his work for a long time. Tam's next curatorial effort was also in Queens, at the Jamaica Center for Arts and Learning, where in 2007 he presented a show about the effects of crack cocaine and hip-hop on the surrounding neighborhood. His work touched on police brutality, the judicial and prison systems, and the cycle of abuse that has ravaged poor communities.

"That show was a huge revelation for me because I realized that art does not need to be in the service of itself and its own limitations. There's a way that art can be used as a social document," he says.

From 2007 to 2011 he worked at Exit Art, a Manhattan gallery with a focus on identity politics. During that time he learned that the nearby MOCA, which Tam had visited often, was moving to a new space designed by architect Maya Lin. Most of the shows he had seen at the original location were historical in nature, with few opportunities for contemporary Chinese artists to showcase their work. He began thinking more seriously about how the museum might move toward a contemporary focus. In 2011, he joined MOCA as its curator.

The museum staff, including executive director Helen Koh, director of education Heather Brady and director of public programs Nancy Bulalacao, are dedicated to expanding MOCA's audience and profile, Tam says. That requires a focus that goes beyond the local, and an awareness of demographic shifts.

Hua Hsu, a professor at Vassar College and contributor to the New York Times, the Atlantic and other publications, points to MOCA's partnership with the Asian American Writers Workshop and similar organizations. (Hsu is on the board of the AAWW.)

"He's building a strong foundation for the future at MOCA," Hsu says. "I think his experiences at the Queens Museum and Exit Art offer him a broader context for his curatorial work. He's able to engage the local community but also understands how MOCA fits within a larger constellation of institutions."

Tam is notable for an unpretentious approach that's uncommon in the art world, Hua says.

"Instead of chasing trends or viewing alternate spaces as stepping stones to mainstream institutions, Herb's curatorial work is driven by a set of vital, if unpopular, questions around identity politics, globalization and self-expression that might not view itself as 'art'."

Jane DeBevoise, chairwoman of the board at the Asia Art Archive in Hong Kong and a former deputy director of New York's Guggenheim Museum, says MOCA focuses "on the now".

"This embrace of both the past and the present, the underexplored and the well-established, will keep MOCA both vibrant and relevant, not just for the Chinese and Asian-American communities but for the wider art communities in New York and elsewhere," she says.

While understanding that the history of Chinese immigration and discrimination in the US is important, Tam believes the rise of China and Chinese-American culture provides a broad range of contemporary topics for exploration.

Although the ascent of China is inevitably of interest to the museum, the process of determining how to engage with the country is still in flux, according to Tam.

"You can't help but make those connections, because the history of Chinese people here is obviously intertwined with political and economic developments in China. So how can you not talk about what's going on over there, if you're going to relate it to what's going on here?

MOCA serves an important function, the curator says. As New York's ethnic Chinese population grows ever larger, institutions that recognize the diversity of identity and experience in the community are crucial.

"It's important to have a representation of yourself in museums, because it means, 'We've made it as a people.' A museum like MOCA becomes a reflection of people's aspirations and the realities of what it means to be Chinese. It's an important responsibility."

*February 1 2013

Businesses often fail overseas because the world is much less 'global' than they assume By Michael A. Witt

Key decision-makers often underestimate just how big, and important, global differences are...Trained mainland employees tend to be poached by competitors.

"Professor, we have a problem with our international strategy. Things are not running as smoothly and profitably as we thought they would."

"Did you assess market size and market growth?"

"Of course!"

"Did you do a competitive analysis?"

"Oops, we forgot. Will do this right away!"

"Did you analyse institutional differences?"

"What do you mean?"

This dialogue, fictitious but not unrealistic, captures in a nutshell why so many companies do not reach their full potential abroad: incomplete preparations and follow-up.

While virtually no firm would expand abroad without knowing whether there was a growing market for its products, experience suggests that other parts of a proper entry analysis and subsequent strategic control are given short shrift.

Surprisingly, many companies, even large multinationals, do not analyse the competitive landscape of the local market to determine whether it is possible to operate profitably.

Levels of competition in China continue to take many foreign firms by surprise. They should not, because the conditions leading to hypercompetition in many industries, as well as the relevant analytical frameworks, have been in place for decades.

Yet even companies with extensive annual business planning exercises, including analysing the competitive landscape, usually pay little attention to what makes international business so difficult: things work differently in other markets.

Globalisation was supposed to level out these differences. As people and businesses from different parts of the world interact, so the story went, they would converge on the respective best practices.

However, the world is much less globalised than is often believed. For instance, the entire stock of US investment in China in 2011 was a mere US$54 billion. That is a lot of money in your bank account, but for a US$15 trillion economy, it is peanuts. As a result, convergence remains elusive, as research over the past two decades has documented.

Ironically, the tendency to fall for the fallacy that the world is indeed "flat" increases with corporate seniority. This is natural, as senior executives extrapolate from their own experiences within a confined international elite.

It is also highly problematic, because it leads key strategic decision-makers to underestimate just how big the differences are. And as the international business literature has shown time and again, what kills companies abroad is their inability to handle these differences and deal effectively with the attendant "liability of foreignness".

Institutional variations represent one key dimension of such differences. They are a leading source of liability of foreignness.

In business and management, the term "institutions" is defined as the "rules of the game" of doing business. Some institutions are formally codified, such as laws and regulations.

Other institutions are informal and include aspects of culture, such as social norms and customs. Taken together, formal and informal institutions determine what is possible in a given society and what is not, what will be encouraged and what sanctioned.

Institutional variations are visible in numerous areas. At the most fundamental level, they show themselves in what a society accepts as the legitimate purpose of doing business. Business school orthodoxy for the past decades has been that firms exist to maximise shareholder value.

My own research, jointly undertaken with Gordon Redding, suggests that outside the Anglo-Saxon world, few societies and senior managers accept this view.

To simplify very crudely, Hong Kong firms exist to produce family wealth; German firms, to produce needed goods and services for society; Japanese firms, to provide benefits to their employees; and South Korean firms, to keep highly conflictual demands by controlling families and hostile stakeholders in balance.

Few companies ever pause to consider these issues and their implications when expanding abroad. Many an international partnership was, foreseeably, doomed from the beginning because fundamental objectives did not match.

The differences, of course, do not stop there. Cultural differences mean that societies are structured differently, both in terms of hierarchies and belongingness to groups. In general, Asian societies tend to be relatively hierarchical and collectivist, while the opposite is true for much of the West. However, the devil is, as always, in the detail.

For instance, while the key reference group in Chinese societies tends to be the family, for most Japanese males, it is their companies. Behaviour and loyalties will vary accordingly.

Further variations are visible in the environment of the firm. Take the question of where to find skilled employees. Countries such as Germany have highly effective public training systems which provide a steady supply of skilled workers. Japanese firms train their workers themselves, a practice made possible by long-term employment (which, despite persistent rumours to the contrary, statistics clearly show to continue to be the norm in Japan).

On the mainland, on the other hand, no effective public training system exists, and employees tend to be poached by competitors once they are trained. Firms requiring highly qualified labour struggle on the mainland unless they adjust their processes accordingly.

The list of issues continues far beyond these examples. Fortunately, frameworks enabling firms to assess these differences and the attendant challenges exist, together with detailed analyses of the main characteristics of major Asian and Western markets. While surprisingly few business schools teach them, more and more are finding their way into print.

Particularly useful in the Asian context should be, later this year, the Oxford Handbook of Asian Business Systems (Oxford University Press), which draws on the efforts of 31 leading scholars to outline what is known and needs knowing about business from India to Japan. A good look at the relevant chapters should be time well spent for international managers wanting a leg up on the competition.

Michael Witt is a Professor of Asian Business and Comparative Management at INSEAD

*November 1 2012 

Hong Kong ranked world's top financial centre for second year By Lai Ying-kit

Hong Kong is ranked first in banking financial services. Hong Kong has topped the World Economic Forum’s (WEF) Financial Development Index for the second consecutive year.

The index ranks the breadth, depth and efficiency of the world’s leading financial centres by analysing drivers of financial system development that support economic growth. The rankings were released late on Wednesday.

Hong Kong SAR ranked first among 62 countries, with an overall score of 5.31 on a scale of 1 to 7. The score is measured on a vast amount of data intended to set standards for the world to follow.

Financial Secretary John Tsang Chun-wah on Thursday welcomed the WEF’s latest index.

“Hong Kong is highly competitive vis-à-vis most other financial systems in the world, especially in terms of contract enforcement, taxes and the infrastructure of the business environment, as well as the efficiency of banking financial services,” he said. “Our strengths in IPO activity, equity market development and commercial access are also well recognised by the WEF.”

Last year, Hong Kong leapfrogged the United States and Britain to become the first Asian financial centre to top the index that began in 2008. The city was fourth in the 2010 rankings.

Out of seven component pillars by which countries are assessed, Hong Kong is ranked among the top five in four areas: banking financial services (first), business environment (second), financial access (fourth) and financial markets (fourth). It is among the top ten in the three remaining areas, namely, institutional environment, financial stability and non-banking financial services.

The United States came second overall this year, Britain was third, while Singapore and Australia claimed the fourth and fifth places, respectively. The mainland dropped to 23rd place from 19th last year.

Tsang said the government would continue to strengthen Hong Kong as a leading financial centre and as the mainland’s offshore yuan centre.

*October 29 2012 

Is United States the biggest currency manipulator (a thief yelled to catch a thief - who is the thief)? 

Ben Bernanke: Currency Manipulator - Latin America is rightly worried about the Federal Reserve's monetary policy By Mary O'Grady

The dollar is our currency, but it's your problem. — U.S. Treasury Secretary John Connally, 1971 - Is it why QE1, QE2, QE3..and may be more kept coming?

In the final televised presidential debate, Mitt Romney promised that if he is elected on Nov. 6 he will "label China a currency manipulator" on "day one" of his presidency. He also pledged to pay more attention to trade with Latin America, noting that the region's "economy is almost as big as the economy of China."

To be consistent, Mr. Romney should call out the Federal Reserve on day two for engaging in its own currency manipulation by way of "quantitative easing," which undermines the value of the dollar relative to Latin American currencies. After all, no one can expect a healthy trade relationship with the region if the Fed is goading U.S. trading partners into competitive currency devaluations.

But that's not the main reason why a new U.S. president should want to rein in the Fed. The greater worry is the one that International Monetary Fund Managing Director Christine Lagarde warned about at the IMF's October meeting in Tokyo. Easy money from the central banks of developed countries, she said, creates the risk of "asset price bubbles" in emerging economies.

If history is any guide, such bubbles are likely to lead to financial crises that in turn lead to setbacks in development. Aside from the damage that does to middle-income countries like Brazil, emerging-market financial crises also undermine U.S. economic and geopolitical objectives.

From September 2008 through the end of 2011, Mr. Bernanke's Fed created $1.8 trillion in new money. But Fed policy makers were only warming up. In September they announced that they will engage in a third round of quantitative easing—that is, more money creation, ostensibly to spur growth and thus bring down unemployment—at a rate of $40 billion per month with no deadline.

With so many dollars sloshing around in U.S. banks and with a fed-funds rate set near zero, investors have found it hard to earn a decent return. The scavenger hunt for yield has sent dollars rushing into emerging markets where, as they are converted into local currency, they put upward pressure on the exchange rate.

Brazil has experienced this in spades. Brazilian Finance Minister Guido Mantega has complained bitterly about it because in his mind the higher relative value of the real makes Brazil worse off.

In Mr. Bernanke's remarks at the IMF meeting in Tokyo, he suggested that emerging economies ought to simply let their currencies appreciate rather than "resist appreciation" through "currency management." To do otherwise, he noted, can mean "susceptibility to importing inflation," which means making Brazilians poorer.

Mr. Bernanke has a point. The closed, heavily regulated Brazilian economy is held back by too much government, not a strong real.

Indeed, the quest for a weak currency to boost exports is counterproductive if the goal is development. As former Salvadoran Finance Minister Manuel Hinds wrote earlier this month for the Atlantic magazine's new online publication, Quartz, the Brazilian boom in industrial production, which stirred "the idea that [Brazil] would become the engine of the world," came from "the inflow of dollars that Mr. Mantega hates so much."

But Mr. Bernanke's dismissive posture toward emerging economies missed the larger point. As Mr. Hinds also pointed out, "the exceptional prosperity would last only as long as the dollars kept on coming." And there's the rub. The boom is an artificially high valuation of the Brazilian economy, produced only because Mr. Bernanke has made the world awash in dollars.

The sustainability issue is troubling. As Bank of England Governor Mervyn King noted in a speech last week: "When the factors leading to a downturn are long-lasting, only continual injections of [monetary] stimulus will suffice to sustain the level of real activity. Obviously, this cannot continue indefinitely."

In a perfect world, the end of the dollar flows—or a downturn in soaring commodity prices when investor expectations begin to shift—would simply mean an economic slowdown. But booms are almost always accompanied by credit expansions, and Brazil's is no different. Since 2004, bank credit has grown to 167% of gross domestic product from 97%.

What happens when a leveraged economy, living on accommodative monetary policy, suddenly finds the spigot turned off? Ask Americans who were on the receiving end of Fed tightening in 2007.

In Tokyo, Mr. Bernanke spoke to the world the way former U.S. Treasury Secretary John Connally spoke to the G-10 in Rome in 1971 after the U.S. abandoned the Bretton Woods agreement that had tied the dollar to gold: Get over it. We do what we want.

That attitude wasn't constructive for Americans or the rest of the world. If some future U.S. president intends to restore American prestige in economic leadership, restoring Fed credibility as a responsible manager of the world's reserve currency is a necessary first step.

*October 28 2012 

The Week Explained: Tax Avoidance By Stephen Vines

Mug's game: Starbucks has not paid corporate tax for the past three years.

Those of us who assumed that there was something dubious about the world's most famous purveyor of milky hot drinks (it calls itself a coffee specialist) have discovered that there is also something dubious about Starbucks' tax arrangements.

Starbucks is under fire in Britain for paying no corporate tax in the past three years despite sales of £1.2 billion (HK$15 billion). Starbucks says it paid no tax because it made no money. Yet it has consistently told shareholders its British operations are profitable.

The "losses" stem from complex intra-company arrangements where very high charges are levied against earnings in the form of royalties and the parent company receives high loan repayment fees from the British operations.

It is not alleged it has engaged in tax avoidance, which is illegal, but that it has focused the efforts of its accountants on tax avoidance.

Donald Johnston, ex-head of economic watchdog OECD says tax avoidance is harder to identify, but draws a distinction between "unacceptable tax avoidance" and "acceptable tax planning". However, this is far from a precise definition.

Some people argue that paying taxes is a social responsibility - the price citizens pay to keep policemen on the streets, schools open, roads built and so on.

But the more extreme advocates of the free market believe that all taxation is theft, and contributes to excess government and controls.

Hong Kong is often cited as a paragon of tax virtue because it has a low and relatively simple tax system. This regime is simple for individual taxpayers who, unlike Americans, don't need to employ accountants to fill in their tax forms and ensure that they are compliant.

Yet the richer you are the more likely it is you will pay a smaller proportion of your income in tax. This is because there is no dividend or capital gains tax in Hong Kong.

Seriously rich people, who do indeed employ accountants to deal with their tax affairs, know how to manage the system. This also applies to many other people who own companies and arrange their affairs so that the bulk of their earnings comes from dividends.

Hong Kong seems the epitome of the declaration by the convicted tax cheat Leona "Queen of Mean" Helmsley who said, "only the little people pay taxes". Although the rich slide out of income tax liability, Hong Kong still generates some 60 per cent of its revenue from direct taxation. Much of the rest is from stamp duty on property and shareholding transactions.

Hong Kong is a poster boy for the anti-tax brigade but the system can cause distortions that can damage business. Because dividends are not taxed, many owners of listed companies divert profits into dividends. Because they are the majority shareholders they are the biggest beneficiaries of this, but it can also mean that companies are starved of investment resources.

Moreover the absence of capital gains tax encourages the kind of speculative activity that puts the property market out of reach for even middle-class people.

Property trading is a favourite pastime of both individuals and companies, not least because the profits are untaxed.

In response to the furore in Britain, Starbucks has said its tax payments are consistent with its value system: "balancing our need to operate a profitable business with a social conscience". But, then again, it also claims its drinks are synonymous with coffee.

*October 5 2012 

Dr Henry Kissinger: Candidates' China rhetoric criticized By Tan Yingzi & Sun Chenbei in Washington

Thumbnail http://www.youtube.com/watch?v=EFJWRGvEjUI

Thumbnail Former Secretary of State, Henry Kissinger and former Governor of Utah, former Ambassador to China, and current Presidential hopeful, Jon Huntsman to discuss U.S.-China relations http://www.youtube.com/watch?v=5aa6zV8J2Nc 

Henry Kissinger says both candidates have been making irresponsible comments about China during the campaign.
Both candidates have labeled China as "Cheats" and "Crooks".

US should adjust and cooperate, say experts - Harsh campaign rhetoric about China from both US presidential candidates is a big foreign policy mistake that will hurt bilateral ties, experts from each country said on Thursday.

The next American president should adjust to the rising economic power of China, welcome Chinese investment, manage any conflict and increase cooperation, they said.

Challenger Mitt Romney has vowed that he would label China a "currency manipulator" if he makes it to the White House, and he reiterated during Wednesday's presidential debate that he would take on China in trade disputes as one of his five economic fixing plans.

Both President Obama and Romney have blamed China for American job losses and a trade deficit, and have also criticized each other for outsourcing jobs to China.

In a panel discussion on Wednesday afternoon before the first presidential debate, Henry Kissinger, former US secretary of state, said both candidates had been making irresponsible comments about China during the campaign.

"In each country there are domestic pressures that emphasize disagreements that arise, and we see that in our political campaign, in which both candidates are using language that I find extremely deplorable," Kissinger said at the Woodrow Wilson Center in Washington.

"Both used the word 'cheat' as applied to China, in trade," Kissinger added, saying that "theoreticians" unschooled in the nuances of the US-China relationship "want to turn this into a crusade."

Former US ambassador to China Stapleton Roy said both candidates are making "two fundamental mistakes" in dealing with China in the campaign.

"First of all, the issue is not currency manipulation," he said from the Carnegie Endowment for International Peace, a Washington-based think tank. "China's current account has been declining sharply. Its accumulation of foreign exchange reserves has slowed markedly, and its currency has appreciated over 30 percent since 2005, and it's continuing to appreciate."

What really concerns the US business community, he added, was intellectual property protection, market access and investment conditions.

"The second mistake is when you're trying to manage a difficult relationship, you don't make it more difficult," he said.

Elizabeth Economy, director of Asia studies at the Council on Foreign Relations, said both candidates have targeted China as a scapegoat for America's economic ills instead of engaging the Asian country in a "serious or substantive" manner.

"What should they be talking about?" she said. "I think the issues that we're going to discuss today - namely, how can the US enhance its economic position vis--vis China and the bilateral relationship? Are there opportunities for the United States and China to cooperate more on global issues? And does the US have it right when it comes to the pivot or rebalancing, as I guess it's now called more broadly within Asia?"

Yan Xuetong, director of the Institute of International Studies at Tsinghua University in Beijing, said the candidates' accusations of China of "stealing" American jobs have a negative impact on China-US relations and undermine the cooperation between them.

On security and military matters, former ambassador Roy said both the US and China have a legitimate right to develop defense, but the next American president should control the growing military build-up.

"The question is how much is enough?" Roy said. "I think the next American president and the current American president have a responsibility to try to bring an unconstrained competition over military capabilities between the Chinese military and the US military under control. Otherwise we are going to pour trillions of dollars into a competition which is not driven by the reality of the differences that we have with China, that simply don't justify that high level of spending."

On the attitude towards Chinese investment, experts agree that Chinese money is a good thing for the American economy, but Washington needs more transparency in its review process on foreign investment.

The Committee on Foreign Investment in the US has rejected several high-profile deals from China in recent years over concerns about national security. Last Friday, President Obama blocked the proposed purchase of a wind farm in Oregon by a Chinese company on the grounds that it could damage America's national security interests.

"I think they (CFIUS) make mistakes," said Chas Freeman, chairman of Projects International and a leading China hand. "They do it on a fairly routine basis, and they reflect fair amount of paranoia within the Beltway that's quite contradicted by attitudes in the country at large."

中國屢遭負面渲染 奧巴馬和羅姆尼標籤中國人是騙子 基辛格怒批兩候選人 (美聯社華盛頓3日電 )

美國前國務卿基辛格3日發表言論,嚴厲批評奧巴馬和羅姆內兩位總統候選人在競選中大肆渲染對中國的質疑 。 他指出,兩位候選人關於中國在貿易問題上使用欺詐手段的言論,應受到「強烈譴責」。

上周,奧巴馬和羅姆內不約而同發布廣告,允諾將對所謂的中國在貿易中的一系列違規操作行為採取強硬手段。中國的貿易行為常被政客指責為導致美國人失業的罪魁禍首。

基辛格是
40年前中美重新建交的重要推手,他至今仍強烈支持中美兩個超級大國間應建立更友好的合作關係。

儘管基辛格此前公開背書羅姆內,但他當天明確表態反對羅姆內稱中國操控貨幣的說法,表示所有的中國專家都會反對這種提法。

基辛格說,只有那些紙上談兵的理論家們才喜歡這種叫法,因為他們缺乏同中國打交道的實際經驗,便只能施以口誅筆伐,企圖打敗中國。

基辛格的這番言論是在華盛頓的威爾遜中心發表的。

*September 19 2012 

"China bashing" by U.S. presidential candidates comes under criticism By Chen Zhi

The "China bashing" tactic being employed by two U.S. presidential campaigns came under criticism on Wednesday as a major U.S. newspaper warned about the risks of sparking a trade war that will hurt both countries' interest.

In an editorial, The Washington Post decried the "iron law of U. S. politics: You can't go wrong bashing China," as polls show that the U.S. public believes the country is losing jobs due to "unfair economic competition from abroad, especially from China."

President Barack Obama on Monday announced a new trade case at the World Trade Organization (WTO) against China for subsidizing the production of auto parts. The move, called by the Post as "a transparently political use of his incumbency," was mainly aimed at wooing votes from the struggling U.S. manufacturing industry based in some crucial swing states, such as Ohio.

The Obama move was also in response to the criticism from his Republican challenger Mitt Romney, whose campaign has been recently broadcasting a TV ad to accuse Obama of failing to stop " China cheating," referring to Obama's reluctance to name China's as currency manipulator. Romney has vowed to do so on the first day of office if he is elected.

In the opinion piece, the Post noted that the Obama administration has already yielded some modest success over the past three years in terms of pressuring China to raise the Chinese yuan's currency exchange rate against the dollar, during which the yuan has appreciated remarkably. Some experts believe that the value of the yuan is close to the market-determined level.

The article went further to point out that, in fact, the growth of imports of auto parts from China or Mexico may have helped created more American jobs than they cost.

Noting that China's retaliation against the U.S. trade punishments could cost more American jobs, the article warned U.S. politicians against playing protectionism for political gains, as it will backfires.

"Protectionist measures may 'save' jobs for higher-paid workers at the expense of those who make less. These are the sorts of nuances and trade-offs to which we hope the winner of this election will pay more attention. Though the United States and China are competing for global market share, avoiding an actual trade war is very much in both nations' interest," it said.

WSJ article rebuts presidential candidates' tough remarks on China By Chen Zhi

An article carried by The Wall Street Journal on Tuesday criticized U.S. President Barack Obama and his Republican challenger Mitt Romney for their tough remarks on trade with China in their election campaigns.

The opinion article entitled "Importing Jobs From China," said that it is "a good moment to look at the actual evidence and see how imports from China often create American jobs."

The article was published amid reports that the Obama Administration plans to file new complaints with the World Trade Organization against Chinese autos and auto parts.

Chinese imports in apparel and toys alone supported a total of 576,000 jobs in the United States in 2010, the article said, citing a new report from the Heritage Foundation.

And a 2010 paper from the Asian Development Bank Institute found that although each iPhone 3G exported from China to the United States with a declared value of 178.96 U.S. dollars, only 6.50 dollars of that value was clearly attributable to China, where the phones underwent final assembly, it said.

The article gave further evidence to expand the point.

"Up to 55 cents of every 1 dollar spent on a product with a 'Made in China' label actually goes to Americans who design the products; manufacture components that are shipped to China for final assembly; transport the goods; market and retail them; finance their production and trade, and so on," it quoted economists at the Federal Reserve Bank of San Francisco as saying in a study.

Refuting the purported huge American job losses from trade -- 2.7 million net jobs lost to Chinese imports between 2001 and 2011, the article said: "These calculations wrongly assume that a product not manufactured in China would automatically be made in America."

"Yet manufacturing has often shifted to China not from the U.S. but from countries like South Korea or Japan from which America used to import," it said.

The article admitted that the presidential election is "bringing out the worst in both candidates on trade."

But what the country really needs, it said, is "a President willing to educate Americans about the benefits of trade - even with China."

*September 5 2012 Share

Trade Relations with China and US Votes - China-bashing rhetoric may increase in the run-up to the election 

US trade enforcement efforts will be carried out through the recent creation of a new unit, the Interagency International Trade Enforcement Center 

Economic and trade relations between the United States and China in the run-up to the American presidential election in November has certainly been on Hong Kong exporters watch list. Fortunately, the basic framework of these ties has remained relatively unchanged over the past year, despite some China-bashing rhetoric. And relations are not expected to undergo major new directions in the months ahead.

The Obama administration has generally emphasised cooperation over confrontation in its dealings with the Chinese mainland, through such bilateral channels as the Strategic and Economic Dialogue (S&ED).

Nevertheless, the US remains committed to ensuring vigorous enforcement of its trade laws, and is expected to pursue multi-faceted policies. The US Congress and the administration believe that a vigorous trade remedy regime is a vital component of US trade policy.

There have been two major developments this year. They showcase the growing importance of trade remedies, and are expected to shape the administration’s actions in coming months.

Last March, the US enacted into law legislation that explicitly allows the federal government to impose countervailing (CV) duties on goods from such non-market economy countries as China. The bill allows the US to continue 23 CV duty orders and several ongoing CV investigations involving mainland goods.

Calls by legislators to get tough on China and other countries considered unwilling to play by international rules typically play well with the US electorate and tend to intensify during election years. That would likely be accompanied by calls to protect US manufacturing and employment and encourage US exports.

Asia-Pacific Economic Cooperation member leaders met in Hawaii last November to discuss trade policies 

The US Court of Appeals for the Federal Circuit, however, has ordered a review on the constitutionality of the CV legislation, leading to uncertainty over how this latest development could affect mainland imports.

The second major development is the creation of a new trade enforcement unit that, according to US President Obama, “will be charged with investigating unfair trading practices in countries like China.”

The Interagency International Trade Enforcement Center (ITEC) will serve as the primary forum for the office of the US Trade Representative (USTR) and other agencies. Headed by a senior-level USTR official, ITEC is expected to become a core component of US trade enforcement efforts once fully operational.

Tellingly, Mr Obama announced the establishment of this new inter-agency mechanism during his 2012 State of the Union address. In that speech, he promised not “to stand by while our competitors don’t play by the rules,” and highlighted the trade enforcement cases his administration has brought against China in recent years.

The Obama administration, in fact, has been a moderate user of the World Trade Organization (WTO) dispute settlement mechanism, filing six of the 13 cases the US has pursued against China since the latter joined the WTO. In light of its successes to date and its strong commitment to trade enforcement, the administration is likely to file new cases only on critical issues that can’t be resolved through bilateral engagement.

Currency Clash 

US lawmakers remain concerned about the alleged undervaluation of the Chinese currency

Despite a relatively stagnant renminbi against the US dollar, US lawmakers remain concerned about the alleged undervaluation of the Chinese currency, and have urged the Obama administration to adopt a firmer stance on this issue.

Calls for Congress to consider and approve comprehensive Chinese currency legislation will also likely intensify in the months ahead, as Democratic and Republican lawmakers, and President Obama and Republican presidential candidate Mitt Romney, gear up for the election.

The House and Senate in recent years have approved various versions of currency legislation that never passed. The likelihood of such a bill being considered again may increase as the general election approaches, but its passage is unlikely. The Treasury Department has not designated China as a currency manipulator in its just-released, semi-annual report to Congress on international economic and exchange-rate policies. Instead, it is expected to continue working with Beijing to rebalance the mainland economy.

Rebalancing China’s economy to stimulate consumer demand is particularly important for the Obama administration , to help advance its goal of doubling exports by the end of 2014, thereby increasing US employment, a key priority for the US administration.

Following the S&ED meeting in May, Undersecretary of the Treasury for International Affairs, Lael Brainard, highlighted the fact that since 2009, US exports to the mainland have more than doubled, to more than US$130 billion a year, while the renminbi’s exchange rate has appreciated 13 per cent against the dollar in real terms over the past two years.

IPR Irritants

Ensuring the safety of the US food and drug supply chain remains a top priority in Washington 

The widely perceived lack of effective enforcement of US intellectual property rights (IPR) on the mainland remains a key issue in Sino-US trade relations. US officials are also concerned about the comprehensive web of industrial policies alleged to rely on excessive, trade-distorting government intervention and intended to promote or protect China’s domestic industries.

Measurable progress has been achieved in these two areas over the past year, as the US government seeks to persuade Beijing to embrace market liberalisation and enhance transparency as core principles.

The US administration’s trade policy agenda for 2012 indicates that it will seek timely and thorough implementation of mainland commitments. These include not requiring foreign automakers to transfer technology to Chinese enterprises or establishing Chinese brands to invest and sell electrical vehicles on the mainland.

US officials are also pushing to make foreign-invested enterprises eligible on an equal basis for incentive programmes on electric vehicles. Another priority is to ensure an end to alleged discriminatory indigenous innovation policies. And at the 2012 S&ED, both sides agreed to intensify negotiations on a US-China bilateral investment treaty.

On the IPR front, the US is encouraged by steps taken by mainland authorities, including a decision to establish a State Council-level leadership structure to lead and coordinate IPR enforcement efforts in China.

At the recent S&ED meeting, the mainland also agreed to extend efforts to promote the use of legal software by mainland enterprises and to conduct more regular audits of software on government computers.

On the US export front, the Obama administration launched a comprehensive effort two years ago to reform controls. The administration intends to achieve this in a three-phase process that would result in a single export control list, a single export licensing agency, a single enforcement coordination agency and a single information technology system for exports.

The first phase, already completed, began the transition toward the single export control list and the single licensing agency by establishing the necessary framework to create the new system. The administration is currently in the midst of phase two, which includes working to revise the US Munitions List and the Commerce Control List, so that they both use common terminology and structures.

Border Enforcement

Over the past two years, the administration has worked to enhance trade enforcement efforts on the US border, fostering inter-agency cooperation. These efforts have targeted a range of products from around the world. Chinese goods, however, have been disproportionately affected, because the mainland is the largest US supplier of consumer goods and other products, whose quality and safety are particularly important for the US.

Perhaps the most significant recent outcome in this area has been the consolidation of a robust collaborative relationship between the US Customs and Border Protection (CBP) and the Consumer Product Safety Commission (CPSC), which has allowed CPSC investigators to conduct import safety risk assessment, perform targeting and other collaborative work.

Also of note is a proposal under consideration by the CBP. It would allow the agency to refuse entry into the US of consumer products and industrial equipment deemed non-compliant with the 1975 Energy Policy and Conservation Act.

The CBP has intensified scrutiny of consumer products with potentially hazardous levels of radiation. Ensuring the safety of the US food and drug supply chain also remains a top administration priority.

Policy Change Unlikely

While anti-China rhetoric may increase in the run-up to the election, neither Congress nor the Obama administration is expected to deviate significantly from the policies they have pursued to date.

There’s a possibility of China-related legislation being attached to a handful of trade bills that may move through Congress this year, including a bill to extend permanent normal trade relations to Russia.

Indeed, China’s rise as a global economic superpower is still viewed with suspicion in some Washington circles. But successful resolution of several bilateral irritants, combined with a moderate recovery of the US economy, have both proved helpful. So is the fact that US goods exports to the mainland have grown by nearly 50 per cent since 2009, given a deceleration in recent months. Current developments suggest that the delicate balance in Sino-US relations is more likely to be upset by political rather than purely economic or trade issues.

*August 26 2012 Share

奧 運 金 牌 離 不 開 國 家 觀 念 ( 星島社論 )

2012 Olympics Gold Meadow and New World Record Holder Sun Yang & Singer Leo Ku Hong Kong 孫楊和古巨基在香港合唱

Thumbnail http://www.youtube.com/watch?v=JsoYz5DeNv0 Thumbnail http://www.youtube.com/watch?v=ky4lEfF7aik

國家隊在倫奧奪金的運動員訪港,陣容浩浩蕩蕩,個別體育明星如孫楊、林丹等成為焦點。在金牌運動員的記者會上,香港鬧得沸沸騰騰的國民教育,成為被問得最多的議題之一。其實,國際大型比賽,主要都以國家隊作賽,勝出時會播出國歌,可見在交通資訊發達,世界逐步變成地球村的同時,國家觀念仍是一種普世價值,國家隊訪港,無論有意或無意,必定會產生宣揚國家觀念的作用。

運動被賦予崇高理想,超越政治、種族等界限,每個參加者憑天賦才能加上後天努力,在競技場上公平比賽;與此同時,由於比賽形式以國家作為甄選資格,奧運、世界盃等賽事,便成為宣揚國家主義的重要場合。

奧運被賦予國家或政治元素,最經典是美國田

徑英雄歐文斯(
Jesse Owens)在宣揚白人優勝主義的希特拉面前,拿下百米飛人金牌,令美國田徑隊擊倒德國田徑隊。這次彪炳的戰績,無論在大戰時和戰後,都成為西方大力宣傳的國家英雄故事。

美國有歐文斯和夢幻隊

奧運成為國家較勁的場地,這種色彩在二戰後仍然維持,主角就變成兩大陣營霸主之爭,西方以美國為首,共產陣營則以前蘇聯為首,當時蘇聯的附庸小國,同樣在個別項目全力出擊,以圖發光發熱,這種另類冷戰直至前蘇聯瓦解才褪色。

在今屆奧運,美國再次成為奪取金牌和獎牌最多的國家,中國排行第二,東道主英國第三,俄羅斯排第四。相比冷戰時代的兩大陣營角力,現時中美的搶奪龍頭地位的政治色彩,應算是相當平淡,反而國家或民族主義,仍然不時在賽事間滲透。

美國是體育強國,運動英雄等同是國家英雄,像破盡所有金牌紀錄的游泳選手菲比斯,就是家傳戶曉的人物,比個人更加有象徵意義的,則是美國籃球隊。美國職業籃球水準遠超所有國家,運動員囊括全球精英,但一到奧運,他們就各自歸隊,美國多年來以夢幻隊的名義落場,盡顯最強在我的王者氣派,今屆倫奧西班牙以黃金一代最後出擊,在決賽力拼美國,全場緊逼,終於無功而還,當哨子響起,美國隊得勝,千萬計在電視旁的美國人,國家認同感大盛,美國第一的信念自然獲得鞏固。

借助香港舞台才是關鍵

自由、平等、博愛是無界限的普世價值,至少現今為止,國家觀念同樣被廣泛接納,來港訪問的國家隊成員相信都不例外,他們來港訪問,與近日本地鬧哄哄的國民教育爭議是否有關,又是另一回事。畢竟,香港的這場爭議,對運動員來說是具體而微,對平日忙於應付訓練或賽事的運動員,根本不可能了解,故此對於這類問題,大抵只能用大原則作答,為國民教育護航作用有限;另一方面,自回歸以來,奧運金牌選手來港已不止一次,相信不論有沒有國民教育的爭議,他們都一樣會來。

在一國兩制下,香港是中國很特別的城市,加上資訊發達,對外聯繫頻繁,是推廣和流通訊息的好地方,中國在奧運取得好成績,要表揚運動員的努力,訪港是絕對好的安排;同樣,面對內地經濟騰飛,如果中國各領域的精英不再以香港作為舞台,恐怕是不易承受的打擊,這也是現實真正的雙贏。至於金牌運動員是否發揮了國民教育的效果,相信來港與否都差不多。

The visiting athletes landed Friday morning at the city’s airport, where they were greeted by hundreds of students bearing flower garlands and waving flags to the tune of a marching band. But by that afternoon, the atmosphere had turned stiffer. At an occasionally fraught afternoon question-and-answer session, journalists quizzed the athletes at length about their views on Hong Kong’s plans to launch moral and national education curriculum in its schools.

Wu Minxia, the Olympic gold swimmer, said she thought the answer was yes. “We’ve had to put in a lot of effort and go through a lot of pain,” said Ms. Wu, adding that those Olympic tribulations could offer lessons to young children. 

Hong Kong is the perfect international stage

Liberty, equality, fraternity boundaries universal values, at least today, the concept of state also is widely accepted, to visit Hong Kong national team members believe are no exception, they come to visit Hong Kong, and the national education controversy recently local noisy whether , is another matter. After all, this controversial athletes is reflected in microcosm, weekdays busy with training or competitions, athletes, and impossible to understand, therefore, for this type of problem, probably can only answer with a major principle for the limited role of the national education escort ; the other hand, since the reunification, the Olympic gold medalist in Hong Kong has been more than once, or national education controversy, they are the same will come.

*July 26 2012 Share

Knowing how China's leaders think By Andrew Moody

New York-born banker and author has an insider's understanding - Robert Lawrence Kuhn says China's growth is good for the world, but it cannot 'save the world'. 

Robert Lawrence Kuhn says the West often doesn't understand the Chinese leadership's key priorities for China. The 67-year-old American is seen by many as one of the few figures outside the world's second-largest economy who actually does.

He is regarded as a knowledgeable insider, having been an adviser to a number of leading Chinese bodies since the late-1980s and knowing many of the country's top political figures personally.

"There is rarely alignment between what topics China's leaders think are important about China and what the world thinks," says Kuhn, also an international corporate strategist and investment banker. "Understanding China requires knowing the difference."

He was speaking recently in the five-star Grand Hyatt hotel in central Beijing, which is his home for 90 days a year. He divides the rest of his time between his three homes in the United States and traveling elsewhere.

"They treat me very well here. Even when I travel around China, I keep a room here," he says.

The hotel is well placed near China's seat of government around Tian'anmen Square where he has an extensive network of contacts.

His latest book, How China's Leaders Think: The Inside Story of China's Past, Current and Future Leaders, which is now out in paperback and runs to more than 500 pages, goes into extensive detail about those who have the responsibility for shaping modern China.

Kuhn, who cuts a dapper figure, says many in the West often have an outdated view about modern Chinese leaders.'

"The reality is that China's leaders are meritocratic," he says.

"Many have strong academic backgrounds from top universities and all have significant experience, often having run two or more provinces or major municipalities as Party secretary, governor or mayor."

Kuhn, who is also a new China Daily columnist, is much in demand from major news organizations around the world and makes TV appearances on BBC, CNBC, Euronews and Bloomberg TV. He says he has had complete freedom to express his opinions.

"I have written three books about China, and dozens of articles and columns. I've produced two major TV documentaries about China and given scores of media interviews - and never has anyone in China even requested to censor anything I've published or broadcast outside of China," he says.

Some in the West, however, have accused him of being too much of an insider and not giving the full picture about China because he was too close to the leadership.

"I deem it vital, considering China's importance in the world, that China's leaders become more known to the world, and known not just via sound-bites and photo ops, but by seeing them up close as real people - hearing their own words, listening to their stories, getting their ways of thinking. I'm pleased to facilitate some of this," he says.

"I also offer my own analysis. As for my accuracy and understanding, readers or viewers can judge for themselves."

Kuhn, who was born in New York, began his career as a scientist. After studying biology at Johns Hopkins University, he did a doctorate in anatomy and brain research at the University of California at Los Angeles in the 1960s. Brain science and consciousness remain major interests of his.

His first involvement in China was through the scientific community when he worked with scientists reforming China's research and technology base.

He received an invitation from Song Jian, then a State councilor and chairman of the State Science and Technology Commission.

At the time he was developing a parallel business career and became president of The Geneva Companies, a leading US mergers and acquisitions company, which he eventually sold to Citigroup in 2000.

At the same time he was cementing links with leading business and political figures in China.

His organization, The Kuhn Foundation, with China Central Television, produced the documentary In Search of China for PBS in the US, which was broadcast in 2000.

He is now working on a new five-part series, China's Challenges, which will be broadcast in China in the autumn and syndicated to PBS stations in the US next year.

Perhaps Kuhn's most significant project was writing a biography of former president Jiang Zemin, which was the best-selling book in China in 2005.

How China's Leaders Think was based on interviews with more than 100 leading Chinese political figures, some of whom he has known for more than a decade.

"I know many personally and have worked with several for a number of years. When you hear them speak over a period of time, it gives you a sense of their personalities and character as well as their intellectual capabilities, leadership style and political progress," he says.

Kuhn sometimes likes to invoke humor to explain why there is sometimes friction between Chinese and American leaders.

"Some people think it is because of ideological, historical or cultural reasons that we have communication problems. As I once pointed out, perhaps it's because China's leaders, the members of the Politburo Standing Committee, were trained as engineers, and most American politicians were trained as lawyers. Maybe the problem is that lawyers and engineers can't talk to one another!"

Kuhn says the main focus in the West is often the Chinese economy and whether it will continue to motor ahead.

"China should have 10 to 20 more years of what we should still call relatively high growth, driven by continuing the country's unprecedented urbanization and modernization.

"Growth rates will naturally ease from reform's historic averages - probably to 6 to 8 percent per annum - which is less than we are used to, but which may be optimal because China can more effectively deal with its most severe problems, particularly economic and social imbalances and sustainable development.

"However, China's economy is fragile, vulnerable to exogenous shock. China's growth is good for the world, but it cannot 'save the world'," he says.

Kuhn says there is often a danger of China being misrepresented because it is seen through a narrow perspective.

"Western media takes China's very real problems and reports them as if they were, say, 80 percent of China's story. I take the same problems - which are genuine and often intractable - and they make up, say, 35 percent of my work," he says.

"It is not that Western media is conspiratorially biased or always anti-China, it is that they often do not provide proper and sufficient context," he says.

July 13 2012 Share

United Nation Economist: Author details end of American dream By Ariel Tung in New York

Howard Friedman compares the US to 13 other wealthy countries in five key areas. 

The United States may be a land of opportunity no more. The "American dream"— consisting of the traditional ideals of freedom, equality and an upward social mobility achieved through hard work — turns out to be a myth, according to Howard Friedman, a statistician and health economist at the United Nations.

Friedman, a New York-born adjunct associate professor at Columbia University, drew this conclusion after systematically comparing the United States to 13 other wealthy countries in five key areas: health, education, safety, democracy and equality.

Friedman's comparisons are presented in his book, The Measure of a Nation: How to Regain America's Competitive Edge and Boost Our Global Standing. His analysis shows that the US, once a world leader, is now lagging behind in many areas.

The countries he used for comparison were all wealthy, with GDP per capita exceeding $20,000, and have populations of more than 10 million. They are: Australia, Belgium, Canada, France, Germany, Greece, Italy, Japan, Portugal, The Netherlands, South Korea, Spain and the United Kingdom.

The biggest challenge facing the US is its rising income inequality, said Friedman. In the last 30 years, the gap between rich and poor has widened. The top 1 percent of US citizens saw their incomes grow by 275 percent between 1979 and 2007, according to the Congressional Budget Office. At the same time, the bottom one-fifth of US citizens only experienced income growth of 18 percent.

"The amount of support poor people get in the US is much less than in any other country in terms of social benefits. There's not much of a safety net to help you out. On the other hand, if you do well, you can do very well in the US," said Friedman.

But what concerns Friedman more is the "inequality of opportunity". The US has very little socioeconomic mobility compared to other wealthy nations. Canada has nearly twice the level of socioeconomic mobility as the US.

"In America, if your parents were poor, you were more likely to be poor compared to other countries. The top student from a poor neighborhood has roughly the same chance of graduating from college as the worst student from a wealthy neighborhood," said Friedman.

Through his findings, what surprised Friedman most is the "disconnect between America's self-perception of excellence and the reality of the objective data".

"Few politicians were wiling to acknowledge the fact that Americans spend on average nearly two to four times more on healthcare than any other wealthy country, yet have lower life expectancies," said Friedman.

"Many Americans are confident that the US' education system is one of the best in the world, but again, the data indicates that this perception is not supported by facts."

Friedman said that if the US were a corporation, it would today be the equivalent of IBM in the early 1990s. IBM had been a technology leader for decades, but it lost its place in the 1980s after outsourcing key elements to competitors.

In his book, Friedman backs up assertions with facts: in 1960, the US had the 12th-lowest infant mortality rate in the world, but it sank to 34th by 2008; the US used to have the highest rate of college education and now it barely makes it into the top 15.

While most of the information he used is easily obtained from public websites, Friedman found that there wasn't a lot of work that "systematically identifies where the US is succeeding or lacking or what it can learn from others".

On the other hand, a Beijing report on the US "echoes many of my criticisms", said Friedman. On May 25, China released a report on human rights practices in the US, following a 2011 report by the US State Department on human rights practices in China and about 200 other countries. The US has been releasing this annual report for 40 years now.

Beijing's own report on the US, which is in its 13th year, criticized the US for its huge wealth gap, high incarceration and homicide rates, inadequate insurance coverage and education budget cuts, among many others.

Beijing said that in the last 20 years, incomes of 90 percent of US citizens have stagnated, while incomes of the richest 1 percent have grown by 33 percent.

According to the Beijing report, the US has the largest prison population in the world per capita and the highest rate of incarceration. One out of every 132 Americans is behind bars.

In his book, Friedman notes that US incarceration and homicide rates are 10 times higher than Japan's.

"There's an interesting financial incentive. Not all prisons are run by the state. Those privately run prisons make profits when people are put into jail, so they support laws that improve incarceration," he said.

Some experts referred to The Measure of a Nation as a "wake-up call" and "must-read" for anyone interested in seeing their country achieve greatness.

"Friedman presents a thorough, unbiased analysis of how America compares with the rest of the developed world in health, safety, education, democracy and other quality-of-life indicators," said Steven Hill, a political writer and columnist.

Richard Butler, distinguished scholar of International Peace and Security at Pennsylvania State University, said Friedman's book is a "persuasive and pointed analysis that holds up a mirror to America's entrenched interests and capacity for self-deception".

"It exposes directly how much error and plain falsehood is found in current political and media discourse on matters of fundamental importance."

June 30 2012 Share

Hong Kong plays an irreplaceable role as an international financial hub has since then been elevated and enhanced By Stephen Cheung Yan-Leung

Hong Kong returned to China 15 years ago, and its role as an international financial hub has since then been elevated and enhanced.

The City of London Corporation has published the Global Financial Centres Index twice a year since 2007, and most of the time Hong Kong has ranked behind only New York and London.

The development of Hong Kong's stock market remains robust. The number of companies listed on the Hong Kong Stock Exchange was 1,496 in 2011, up from just 658 in 1997, representing a total market capitalization of HK$17.5 trillion ($2.26 trillion), more than five times the HK$3.2 trillion of 1997. Meanwhile, the average daily turnover increased from HK$15.5 billion in 1997 to HK$69.7 billion in 2011.

Noticeably, Hong Kong's stock market has become an important platform for mainland companies to raise funds. Mainland companies represented less than 20 percent of the market capitalization and less than 40 percent of the market turnover in 1997. However, by 2011, 640 of the listed companies were from the Chinese mainland, registering a market capitalization of $1.25 trillion, or 55 percent of the total, representing more than 60 percent of Hong Kong's total equity market turnover. With large-sized State-owned enterprises being listed, Hong Kong ranked the world's largest initial public offering market in 2011, claiming the top spot for the third consecutive year.

Hong Kong has also helped facilitate the reform of mainland companies. Specifically, mainland companies have to make systemic changes to meet the listing requirements of the Hong Kong Stock Exchange and certain disclosure requirements and legal regulations. As investors worldwide hold stakes in the companies after they are listed, the companies have to take into account stakeholders' expectations and their business operations are subject to supervision. Through its strict requirements for governance structure and investment decision-making, the Hong Kong equity market has helped spur the transition of these mainland companies into modern corporations and sharpened their global competitiveness.

Hong Kong has also contributed to the mainland's economic development over the past 15 years, and the mainland's continued economic boom in the next few years will renew opportunities for Hong Kong. China promulgated its 12th Five-Year Plan (2011-15) last year and for the first time incorporated a chapter on the Hong Kong Special Administrative Region, which demonstrates its support for consolidating and enhancing Hong Kong's role as an international financial center and support for Hong Kong's development into an offshore yuan center and an international asset management center.

With the central government's support, Hong Kong will continue to facilitate the reform of mainland companies and serve the national "going out" strategy.

This strategy aims at, on the one hand, encouraging Chinese companies to expand their business overseas, and on the other hand, internationalizing the yuan. The 12th Five-Year Plan (2011-15) emphasizes expediting the implementation of the strategy, encouraging and guiding mainland companies to invest overseas.

The outbound direct investment made by mainland companies is thus expected to grow rapidly. Hong Kong remains a major center for overseas direct investment flows, and more than 60 percent of the mainland's overseas direct investment has gone to or through Hong Kong in recent years. The increasing ODI by mainland companies will generate great demand for finance and investment consultancy services, and Hong Kong is, and will remain, the strongest provider of such services.

Hong Kong has also played a key role in efforts to internationalize the yuan since it was established as an offshore yuan business center. The onset of the global financial crisis in 2008 and the ongoing European debt crisis have exposed the fundamental weaknesses of the current international monetary system and affected China's foreign trade and foreign exchange reserves. China is now the world's second largest economy and has good reasons to internationalize the yuan.

The current global economic landscape and China's immature financial system will continue to prevent the yuan from becoming a fully convertible currency any time soon. So the development of offshore yuan centers remains the ideal choice to orderly and gradually expand the international use of the currency. Hong Kong is now taking the lead in this, and the rapid growth in yuan-denominated business worldwide will continue to benefit Hong Kong.

Despite the aforementioned opportunities, concerns have arisen that Hong Kong's status as a global financial center is threatened by mainland cities especially Shanghai. However, their relationship is actually better defined as complementary and cooperative. China is a vast country with an economy large enough to accommodate two global financial centers.

The reality is, although Shanghai is the economic hub of the Chinese mainland with sound economic foundations and policy support, it still falls short of international standards in terms of institution building, especially legislative construction and financial liberalization. It is Hong Kong that serves as the bond connecting the Chinese mainland and the global economy, and its role cannot be replaced by Shanghai in the short term. Rather, its position as an international financial hub will be further consolidated and enhanced through its continued cooperation with mainland cities.

The author is dean of School of Business of the Hong Kong Baptist University.

June 27 2012 Share

To Improve Kids' Chinese, Parents Head to Asia By Sarah Tilton and Joanne Lee-Young 

Some American families are packing up and moving to China or other parts of Asia to give their kids an immersive experience and a leg up in Mandarin. WSJ's Andy Jordan reports on two families who thought Mandarin lessons in America just weren't enough. Jeff Baird and Millie Chu-Baird at Taipei's zoo, took their daughters on a trip to explore the idea of a year in Asia.

Michael Roemer had never lived abroad before he took a one-year leave of absence from his job as an attorney, rented out his family's Orinda, Calif., house, and moved to Chengdu, a city in western China, in 2010 with his wife and two children.

Mr. Roemer's goal: to give his kids, Erin and Conor, an up-close look at China and an edge in what is fast becoming a must-learn language. "Speaking Mandarin is important," says the 57-year-old Mr. Roemer.

The Roemers are among a growing group of Westerners going to great lengths to give their kids a leg up in Mandarin. With China's rising global influence, these parents want their children to be able to communicate fluently with the country's 1.3 billion people. The phenomenon is similar to what happened in the '80s, when Japan's economy boomed and there was a rush to learn Japanese.

But this time, after-school classes aren't enough for some people. Families are enrolling their children in Mandarin-immersion programs that are springing up from California to Maine. They are hiring tutors, Skyping with teachers in Beijing and recruiting Chinese-speaking nannies. Some are stocking their playrooms with Disney videos in Mandarin—not to mention the iPhone apps aimed at making kids into Mandarin speakers.

Of learning Mandarin, Mr. Roemer says, "mastering that challenge gives [the kids] a great deal of confidence." Learning Chinese, he adds, is "good for the brain." Still, he says it was stressful watching his children struggle in a place where at first they didn't understand much of what was happening at school.

Now back in the U.S., the Roemer kids say they value that year in China learning Mandarin, even if they can't quite keep it up now. "It was cool living in a foreign country" for a year, though achieving command of Mandarin's tones remains difficult, says Erin, age 9. Her 11-year-old brother Conor says he likes being able to switch into a different language when he doesn't want other people—like his father—to understand. "Sometimes my dad doesn't know as much as we do, so if we're talking about his birthday present we can keep it from him," Conor says.

Recruiters say Mandarin gives candidates an edge in the job market. "When it comes to Mandarin speakers, we don't have them [in the U.S.], so does it give you a competitive advantage to have it? The answer is yes," says Michael Distefano, a Los Angeles-based senior vice president at executive recruiting firm Korn/Ferry International KFY +1.56% . Mr. Distefano's own son is studying Mandarin in high school, with an eye towards possibly working in Asia.

Jim Rogers, 69, and his wife, Paige Parker, 43, sold their New York City home and moved to Singapore in 2007, specifically so their children could grow up speaking Chinese. The couple now rent a house across from Singapore's Botanic Gardens. The address positioned them to get their 9-year-old daughter, Happy, into a top local school called Nanyang Primary, where core subjects are taught in Mandarin. Her sister, Bee, 4, attends Nanyang Kindergarten, where instruction is completely in Mandarin for two years.

Mr. Rogers, who started Quantum Fund with financier George Soros, doesn't know Mandarin and had never lived in Asia. But he says it's crucial for his kids to learn Chinese naturally from the start. "This is going to be the century of China, so we're preparing them," he says.

Mandarin is notoriously difficult to learn. The language is tonal, and fluency requires mastering thousands of characters. Mandarin competence takes 2,200 class hours, with half of that time spent in a country where it's spoken, according to the U.S. State Department's Foreign Service Institute, whereas Spanish can be learned in 600 to 750 class hours.

Educators say there's no one right way to learn Mandarin. Jeff Bissell, head of the Chinese American International School in San Francisco, says teaching is "evolving" as metrics and standards are established. He applauds efforts to get students to China to learn Mandarin, which he calls "a major strategic priority."

What happens after moving back from China is another matter. Jim Cashel and his wife, Anne Ching, a fourth-generation Chinese-American who never learned Mandarin growing up, moved from Sonoma, Calif., to Chengdu in 2009 with their two daughters. Their goal: to learn Chinese and experience China.

Since moving back to Sonoma in 2010, Ms. Ching and her older daughter regularly Skype with a teacher in Chengdu to maintain their Mandarin. But there's no real chance to practice Mandarin otherwise, acknowledges Ms. Ching. "My whole approach is I'm just going to keep working on it for the next decade," she says.

Among parents considering a move to Asia for a year is Jeff Baird, a hedge-fund manager who lives in Berkeley, Calif. In April, he took his wife and two daughters, ages 3 and 6, on a tour of Taipei and Singapore to see schools and research the idea.

His wife, Millie Chu-Baird, is Chinese-American but can't read or write Mandarin, having grown up in Columbus, Ind. "More than just instilling Mandarin into them, we would want it to be about giving them the joy of experiencing the language overseas," says Mr. Baird.

In Singapore, the Bairds visited Mr. Rogers, Ms. Parker and their daughters to discuss the best place to learn Mandarin. As the playdate progressed, Happy Rogers was asked to name the hardest thing about learning Mandarin. She replied, in Mandarin: "Oral tests. And composition. And comprehension. And Q and A."

Her mother, who doesn't speak Mandarin, stared at Happy uncomprehendingly. After a reporter translated Happy's answer, her mother said, "So basically, everything?"

"Yes," Happy nodded.

May 17 2012 Share

Asia's Lighter Taxes Provide a Lure By Shibani Mahtani

Some 100 Americans opted out of U.S. citizenship in Singapore, above, last year.

Facebook co-founder Eduardo Saverin's recent decision to give up his U.S. citizenship in favor of long-term residence in Singapore has drawn fresh attention to the appeal of residing and investing in the wealthy city-state and other parts of Asia, where tax burdens are significantly lighter than in many Western countries.

Although the number of Americans throwing away their passports remains small, the trend has accelerated over the past two years—especially in Asian financial centers. Some 100 Americans opted out of U.S. citizenship in Singapore last year, almost double the 58 that did so in 2009, according to data from the U.S. Embassy in Singapore. Globally, 1,780 Americans renounced their citizenship last year, compared with 742 in 2009, according to U.S. government records.

The increase of Americans choosing to renounce their citizenship comes amid heated tax debates in the U.S. Many businesses and high-income individuals are worried that the urgency to reduce the country's federal deficit will translate into tax increases in future years. Without a bipartisan deal to reduce the country's deficit, Bush-era tax cuts and a payroll-tax cut for this year will expire by early next year.

Even if U.S. tax rates increase slightly, they would remain historically low.

The superwealthy are also worried about possible future passage of the so-called "Buffett Rule" that would ensure high earners pay at least 30% in federal tax.

The Asian financial hubs of Singapore and Hong Kong, on the other hand, have kept personal and corporate taxes among the lowest in the world to attract more foreign investment. Top individual income-tax rates are 20% in Singapore and 17% in Hong Kong, compared with 35% at the federal level in the U.S., according to an Ernst & Young report.

Eduardo Saverin has given up his U.S. citizenship. He could see at least $39 million in savings on his Facebook stake, according to Wealth-X.

The two Asian financial centers have also been praised by experts for having simpler taxation systems than the U.S. and other countries. Businesses must make an average of three tax payments per year in Hong Kong and five in Singapore, compared with 11 in the U.S. and a global average of 28.5 per year, according to PricewaterhouseCoopers UK and the World Bank Group. The tax codes are also more transparent so that many people don't require a consultant or adviser.

"The U.S. used to be a moderate tax jurisdiction compared with other countries and it used to be at the forefront of development," said Lora Wilkinson, senior tax consultant at U.S. Tax Advisory International, a Singapore-based tax services firm that specializes in U.S. taxation laws. Now "it seems to be lagging behind countries like Singapore in creating policies to attract business."

She said she gets at least one query per week from Americans who are interested in renouncing their citizenship in favor of becoming Singaporeans.

Not all Asian countries have a reputation for lighter tax burdens. In China, the top tax rate for high-income earners is 45%, though corporate taxes there are relatively low. Japan is also known as a relatively high-tax country.

There are also other reasons why wealthy Americans choose to renounce citizenship. Stronger economic growth in Asia has attracted many Americans who now have no intention of returning to the U.S., which unlike many other countries requires expatriate citizens with high salaries to keep paying taxes back home.

Some private wealth managers say they no longer take on American clients because it involves too much work and risk complying with strict U.S. banking rules. The number of people renouncing in Singapore is believed to be especially high in part because the country doesn't allow its citizens to hold dual citizenship so people with partners and children in the city-state may simply choose to keep citizenship there.

"It is not just about fat cats evading their fair share of tax," said Eugene Chow, a principal at Chow King & Associates, a Hong Kong-based law firm that specializes in U.S. and international immigration. In addition, Asian countries offer a business climate and lifestyle that many find attractive: "America is no longer the Holy Grail."

Because of his high profile, Mr. Saverin's case could help popularize the practice by making more wealthy Americans aware of the potential benefits of renunciation.

For Mr. Saverin—a 30-year-old investor listed by Forbes as one of the 20 youngest billionaires in the world—giving up his U.S. citizenship could mean millions in tax savings, a decision he took months before Facebook announced its plans to hold an initial public offering. In addition to lower corporate and personal income taxes, Singapore also has no capital-gains tax, no tax on bank interest and no dividends tax.

According to Wealth-X, a Singapore-based firm that tracks information on high-net-worth individuals, Mr. Saverin could see at least US$39 million in savings on his Facebook stake alone, or roughly 1% of his approximately US$3 billion net worth. The results are contingent upon how well Facebook performs in its IPO.

Mr. Saverin will still have to pay a hefty exit tax in giving up his U.S. citizenship, calculated as a one-time payment for any American with assets with over US$2 million. U.S. tax experts note that while this exit tax sometimes dissuades older American millionaires from giving up their citizenship—with few years left to make huge capital gains, tax-free—the move often makes more financial sense for younger people like Mr. Saverin.

Mr. Saverin now holds Brazilian citizenship, where he was born, and permanent residence in Singapore, a status that allows foreigners to stay in the city-state without visa restrictions and opens the door to full citizenship later on. It is unclear whether Mr. Saverin is seeking to obtain Singapore citizenship. Mr. Saverin, who rarely speaks to the press, declined to comment and forwarded press queries to a New York-based spokesman.

The spokesman said Mr. Saverin's decision to renounce his citizenship was primarily rooted in "business reasons" rather than being tax-related. "U.S. citizens are severely restricted as to what they can invest in and where they can maintain accounts," said Tom Goodman, the spokesman, in a statement to The Wall Street Journal. "Many foreign funds and banks won't accept Americans."

On Monday, Mr. Goodman added that Mr. Saverin has been living in Singapore since late 2009, and felt the city-state was "an attractive place to live and a convenient travel hub for doing business in Asia."

May 14 2012 Share

Former U.S. Fed official says U.S. dollar value has been manipulated By Herman Cain



When United States accused other countries manipulate their currency, former U.S. Fed official says dollar value has been manipulated By Herman Cain, the former chairman of the Federal Reserve Bank of Kansas City

WASHINGTON, May 14 2012 -- The present U.S. monetary system is an abysmal failure and the value of the dollar has been manipulated, according to a former Federal Reserve official.

"For the last 40 years in Washington, regulate has meant manipulate, with the Federal Reserve raising and lowering interest rates and buying and selling assets at its own discretion," Herman Cain, the former chairman of the Federal Reserve Bank of Kansas City, said in an article published Monday by The Wall Street Journal.

"All of this manipulates the value of the dollar," he noted.

Cain argued that however imperfect a gold standard may be, it remains the best among all alternatives. During the time of the classical gold standard and the flawed "gold -exchange" standard, the U.S. economic growth was stronger, unemployment rates lower, the price level more stable, and recessions less frequent and less severe than under the present monetary system.

In his view, a dollar should be defined -- as it was prior to 1971 under the postwar Bretton Woods system -- as a fixed quantity of gold.

However, Cain added, the Washington establishment goes ballistic at this suggestion because gold is "Kryptonite to big-spending politicians." "It is to the moochers and looters in government what sunlight and garlic are to vampires," he explained.

The U.S. central bank has kept the interest rate at exceptionally low level since late 2008 and conducted two rounds of assets buying since 2009. It reaffirmed after its latest policy-making meeting that it would keep current ultra-loose monetary policy at least through late 2014 to support economic recovery.

The Fed's unfettered asset-buying has provoked criticism even from its top officials who said the Fed should have clear limits on how much and in what way it can expand it balance sheet. It should not blur the lines between its monetary policy and the U.S. government's fiscal policy.

May 25 2011

Selling Strategic Marketing 



Eddie Choi is a firm believer in the power of social media. The Managing Director of Frontiers Digital Agency and four partners moved their boutique digital-strategy agency from the United Kingdom to Hong Kong three years ago to tap the booming online consumer market on the Chinese mainland. 

In 2009, the Hong Kong-based agency expanded into the mainland, where Mr Choi said the number of online users is growing exponentially. China’s Internet penetration rate ranks fourth in the world, and is expected to reach 50 per cent by 2014. In Six Questions, Eddie Choi talks about the impact of social media on online marketing. 

Tell us about your company.
Frontiers Digital Agency is a boutique digital strategy agency, offering marketing and advertising services to primary and multinational companies on the Chinese mainland, including such companies as Michelin and Make Up For Ever. Working with online media, we do media planning. Most of the work we do is strategy work.

Unlike traditional advertising agencies, which do more media buying, we provide pre-media-buying services, including coming up with a plan and strategies that tell clients why they need to buy that media. So there is a difference between a strategy agency like us and a media agency. We plan, investigate and research to help our clients decide whether to buy the media advertising.

Where did your company get its start?
We started as a United Kingdom-based agency, but moved to Hong Kong in 2008. I have four UK partners. One is former Myspace Managing Director of UK & Europe David Fischer. Another, Luke Townsend, was former Head of Agency Sales at AOL UK. I had done a lot of B2B work, and my background is in search marketing, mainly in Hong Kong, but also elsewhere in Asia.

We came together with our accumulated experience to start this business because we didn’t see a lot of strategy work being done in Hong Kong, where not many companies provide international online marketing services.

The Hong Kong market is so small that if you were to count the number of online media, you would find that there are no more than 10. So we started our first Asian office in Hong Kong in 2008 and expanded into the mainland in 2009 because of the market shift. We have a lot more media and resources plans for our clients there, and strategy work only works in places where you have a lot of resources.

What’s the latest development in online marketing on the mainland? 
China has become the biggest market, with more opportunities, more budget and more media compared to Hong Kong. But the Internet is only partially open. The first decision we made was to have a fully local team, because everything was different when we went to the mainland. People are not on Facebook; they have their own version of Facebook. Online behaviour on the mainland is totally different, the demographic is different, even the search engine is different.

But everyone is into social media and it’s a natural behaviour. In China, you can find more people are staying with social media rather than search engines. Of course, search engines are still more commonly used, particularly for those in the B2B business. You rely on search engines for business information. If you are in B2C, you do a lot of product search.

In China, there are three major components in online marketing: search engines, social media and online shopping. The three platforms are connected. A typical cycle goes like this: people search online for a shopping site. They then shop on the site and share their shopping experience through social media. If you are planning online marketing strategy on Google search, you should know that it will end up having something to do with social media.

Why is social media such an important component of e-business on the mainland?
Social media connects people in different parts of China. Unlike Hong Kong, where you can see your friends every day, on the mainland the situation is a little bit like in the United States, where the population is dispersed.

The information circulation within a friend group is powerful because it involves trust. You can do even more powerful word-of-mouth marketing on social media because it involves trust. I call social media marketing “second-opinion” marketing.

For example, when you need to make an important (buying) decision, which information will you believe? Are you going to believe the first-hand information from a sales brochure? You will take that information and verify it with your friends for a second opinion. So that second opinion becomes important and circulates among people on social media. People rely on social media for information that they can trust or verify. That’s what makes social media so powerful in China.

What is the main difference between China and Hong Kong’s online shopping behaviour?
Online commerce will grow bigger because of market demand. Hong Kong people remain sceptical about paying or shopping online, but online marketing is more acceptable on the mainland. I believe Chinese consumers are more open to advertising, which they see as trustworthy information. But in Hong Kong, advertising is advertising, which they don’t trust 100 per cent.

Geographically, Hong Kong also is very small. People can shop at physical stores and see products for themselves. But in third- or fourth-tier mainland cities, people rely on a campaign picture or a website to shop for what they want. Also, the logistics development, shipping and customer service are improving. In future, when people continue spending money online, they will become more cautious and will want more information to justify their spending.

Why did you choose to base your business in Hong Kong when the majority of services you provide are on the mainland?
Hong Kong is a good place to build a company with good management. We have better information flow from the East and West. It’s a unique location, where we can get and process information freely. I’ve worked in the United States, but I couldn’t get much information about China there. Second, is Hong Kong’s proximity to the mainland. Third, Hong Kong still has free trade. That’s why we decided to position the company here, where all the resources are within reach.

May 12 2011

The Move Inland 

Enterprises in the garment industry have indicated plans to set up new production bases in the next three years 

The shortage of mainland migrant workers hit the headlines after the Lunar New Year, with reports describing the problem as even more acute this year. Shanghai reportedly dispatched hundreds of buses to bring workers back from provinces that were large sources of migrant workers. Preliminary estimates suggested that Guangdong Province alone would be short one million workers after the New Year.

To all manufacturers operating in the Pearl River Delta (PRD), labour shortages are a chronic problem, and raising wages to retain workers is often deemed inevitable. The PRD’s labour shortages are attributed to structural changes in society and the economy. Given the changing structure of the region’s population, the number of people joining the workforce overall has dropped. By contrast, job opportunities in the central and western regions are surging, prompting more migrant workers to find jobs in places nearer their hometown.

Cost Advantages

The labor issue is only one of many changes in the coastal investment environment. Other factors, including local industrial and land policies, are also putting pressure on manufacturers.

Given this changing business environment, most Hong Kong manufacturers are trying to upgrade their operations, improving production technology, raising product quality, launching new products or developing their own brands. Other companies are choosing to relocate part of their production lines to the inland regions that have more plentiful labour. Some large-scale major OEM enterprises, such as Taiwan-headquartered Foxconn and Inventec, have moved some of their production lines inland as far away as Chongqing.

With relatively lower land, water, electricity and labour costs, inland regions hold strong cost advantages. There is still a gap between some central and western regions and the coastal areas, in terms of average worker salaries. For instance, workers’ average wages in Jiangxi Province from January to September 2010 were only about 70 per cent of their counterparts’ in Guangdong Province.

Decentralising Production

Manufacturers generally don’t hold out much hope that the difficulty in recruiting workers can be overcome by moving inland. Yet, as more migrant workers seek jobs in their own neighbourhoods, some enterprises, particularly in such labour-intensive sectors as the garment industry, have begun to decentralise.

Certain cities in inland provinces have proven attractive to foreign investment 

Production processes are carried out at smaller production points located across regions with sufficient labour supply, instead of operating a large production base in the PRD or other locations. By doing so, manufacturers hope they can recruit more workers.

Choi Koon-shum, Chairman of the Chinese General Chamber of Commerce in Hong Kong, said that Hong Kong investors relocating their production facilities share a common trait: their operations are not relocated in one go.

Instead, most investors tend to move gradually, with some production processes relocated first. Mr Choi added that subsidiary factories may also be set up in other provinces, a process he described as “relocation with increased production activities.”

Enterprises adopting this strategy will retain the PRD as their main production base. Some of the high-tech processes and packaging activities, particularly for products where transport costs differ significantly before and after packaging, are carried out in the PRD. Low-tech processes are moved elsewhere, usually near Guangdong, where transport links are more convenient, minimising time and cost.

Likely Movers

A survey by the HKTDC revealed that, although there had not been a massive wave of relocations among Hong Kong companies with PRD production facilities, some were considering expanding production to other mainland regions.

Among companies with ongoing production activities in the PRD, 6.2 per cent said they planned to embark on new mainland production activities over the next three years. The PRD was their main choice of location, followed by areas in Guangdong Province (other than the PRD) and inland provinces near Guangdong.

Among sectors selected, a higher proportion of labour-intensive industries plans to start new production activities in other regions. The garment industry is one example, with 14.3 per cent of surveyed enterprises indicating a plan to establish new production bases over the next three years.

Among them, more than 30 per cent would choose a location in Guangdong other than the PRD or in such neighbouring provinces as Jiangxi and Hunan.

In the electronics industry, which has higher technology content, only 5.7 per cent of respondents said they planned to establish new production bases over the next three years. Textiles and printing and packaging are two other industries where a relatively higher ratio of respondents planned to set up new production bases. These two sectors typically have to follow their clients on relocation.

Inland Relocation

China’s Ministry of Commerce recently designated alternate locations in a bid to coordinate regional economic development and promote the transformation and upgrading of processing trades in the central and western regions. To encourage industries in the coastal areas to move inland, the Central Government announced 44 pilot sites for relocating processing trade activities in the central and western regions.

After years of development, the PRD has grown into one of the world’s most efficient industrial clusters, and relocation on a massive scale within a short period will not be easy. Macro-statistics in the past few years reveal that, in addition to the northern, eastern and western flanks of Guangdong, some inland provinces, particularly those in the central region and close to Guangdong, have been successful in attracting relocated industries.

Average pay for workers still lags in central and western regions compared to their counterparts in coastal areas

Some manufacturers have noted that northern Guangdong, along with Jiangxi and Hunan provinces, could assume an increasingly important role as “the factory at the back” for Hong Kong’s manufacturing sector.

Figures for the actual growth of foreign direct investment in recent years also show that regions in the proximity of Guangdong, such as Jiangxi, Hunan and Guangxi, have performed extremely well, while central regions such as Hubei and Henan have also recorded reasonably good growth.

These regions outperformed the entire nation – and even Guangdong – in soliciting foreign direct investment. Certain cities in these inland provinces were particularly good in wooing foreign investment. For instance, Chenzhou in Hunan Province is relatively close to Guangdong, and its foreign investment soared by an annual average 17 per cent from 2006 to 2010, making it Hunan’s second-largest city for attracting foreign investment.

Ganzhou in Jiangxi Province, another city near Guangdong, was second to Nanchang, Jiangxi’s provincial capital, for luring foreign investment. There are signs of foreign investment penetrating further north in their entry to inland provinces.

Yongzhou, in Hunan Province, registered a 25 per cent average annual growth rate for foreign investment in 2008 and 2009; this climbed a further 39.5 per cent in the first nine months of 2010.

Similarly, Ganzhou in Jiangxi Province witnessed a 20 per cent increase in foreign investment in the first 11 months of 2010. Ji’an, another city further north, recorded a 16.7 per cent foreign investment growth rate in 2009, and a 17.8 per cent increase in the first 11 months of 2010. In Shangrao, a city even further north, a 30 per cent increase in foreign investment was reported over the same period. Hong Kong companies could benefit from watching these trends closely.

March 18 2011

Here’s the Plan - China's 12th Five-Year Plan: Hong Kong's Advantage 

Hong Kong has a significant role in the Central Government’s latest Five-Year Plan, unveiled this month

View Video Presentation Online http://www.vimeo.com/21160300 

It used to be said that highly flexible economies like Hong Kong’s didn’t “do” five-year plans. But given the impressive achievements of the Chinese mainland’s economic reforms, Hong Kong would do well to reconsider that idea. 

Hong Kong’s advantages, with its fine natural port and international levels of trade and finance, are well-suited as a platform for the mainland. It has attracted investment and capital and served as a mighty anchor for the entire country’s export drive. 

Hong Kong’s economy has flourished by keeping pace with the mainland’s economic development – and it’s been in lock step for years. The many opportunities offered by the mainland market have also provided early opportunities to key Hong Kong industries, including banking, logistics and professional services.

While manufacturing now accounts for only 2.5 per cent of Hong Kong’s economy, local manufacturers have not vanished, but simply changed position. They have seized the moment, taking full advantage of the Pearl River Delta’s (PRD) proximity and low production costs. They have expanded vigorously while fuelling the growth of Hong Kong’s services sectors and export trade. 

The 12th Five-Year Plan (FYP), which runs until 2015, is designed to deepen the mainland’s economic reforms, introducing fundamental changes to the country’s development model. Under the FYP, strategic adjustment of the economy will get underway. The FYP will boost domestic consumer demand, raise the contribution of the services sector and lift the level of urbanisation. 

Green technology is one of the seven strategic industries set out by the Central Government’s latest Five-Year Plan 

The mainland intends to develop one of the world’s largest domestic markets and, at the same time, construct seven strategic emerging industries, as well as a services sector and a sustainable economic model. Those seven key industries are green technology; next-generation information technology; biotechnology; high-end equipment manufacturing; alternative energy; alternative materials; and alternative-energy vehicle industries. Hong Kong’s future may well depend on its ability to capitalise on these opportunities, and keep pace as the mainland moves to another level of reform. 

Changing Consumer Patterns

As many leading commentators have noted, the world’s economic centre of gravity is shifting to Asia. So, too, is consumption growth. Personal consumption in Asian countries has risen markedly over the past 10 years; on the mainland alone, total personal consumption as a percentage of world consumption climbed to five per cent in 2009 from 2.8 per cent in 2000. 

The scale of the mainland’s personal consumption is only one-sixth that of the United States, but the increase in its share will produce significant effects. For example, the mainland became the world’s largest car consumer market and the second-largest luxury market in 2009, attracting large-scale development by many retailers and brands from Europe, the US and Japan, as well as South Korea and Taiwan. 

Hong Kong companies have always considered the mainland a manufacturing heartland, producing goods mainly for export. But with the expansion of the mainland consumer market, spending power is rising, and Hong Kong should adjust to take advantage of it. 

Global brands are drawn to the growing spending power of Chinese mainland consumers

Consumer awareness and concepts are maturing on the mainland, giving Hong Kong companies new opportunities to develop domestic sales, build sales channels and establish brand names that will magnify value-added goods and services. 

HKTDC surveys have found that mainland middle-class consumers have a particularly good impression of Hong Kong products, rating them highly for quality and design. Hong Kong is seen as a fashion centre, giving it an edge over mainland markets. Fast-growing mainland towns and cities are conducive to better-run regional distribution networks, helping solve the scattered distribution channel problems of the past. On a broader level, urbanisation continues to drive opportunities for investment and employment growth, raising people’s incomes and spending power. 

Judging from consumer figures in the coastal cities, urbanisation will bring changes in the demand for goods, and the development of towns and cities will stimulate consumption of services. These services will include catering and entertainment. And urbanisation will create demand for other services such as property management, cold chain logistics, mass transportation and garbage disposal. 

Adjusting Strategies 

Hong Kong’s diversified financial services can provide the necessary capital for mainland technology projects 

China’s young population is likely to peak in 2011, with the overall labour force expected to decline from 2015 on. The continuing arc of the mainland’s urban growth, increases in employment opportunities in the central and western regions, and rural workers’ lower incentive to seek employment outside their home provinces are other developing trends. 
All this will mean continuing labour shortages in the PRD, which already faces other challenges, particularly rising production costs and competition from inland provinces and cities. These factors should see increased investment by multinationals and large Chinese enterprises in the central and western regions, gradually resulting in the formation of new manufacturing clusters. 

Whether approached from the point of view of the production chain or from domestic sales considerations, there is but one conclusion: there will be increasing incentives for Hong Kong manufacturing enterprises to move inland from the PRD. 

Nevertheless, there may well be renewed interest in the PRD or, more broadly, on the mainland, for Hong Kong services. Much depends on their level of expertise and applicability. The expertise to steer high-end industrial chains, set up regional headquarters, R&D and distribution centres and form services sectors in major coastal cities pose strong competition to Hong Kong’s professionals in these areas. 

Indeed, it’s worth considering whether Hong Kong’s services can cope with the development needs of the mainland’s seven strategic emerging industries. In any case, Hong Kong companies should brace themselves for these changes as early as possible. 

Importing Technology 

Under the FYP, advanced technology and innovation will serve as a cornerstone for changing China’s economic development model. Hence the seven strategic emerging industries all focus on fostering and developing scientific and technology content. 

In certain technology areas, the mainland is level with or even ahead of mature economies. But in terms of overall scientific research activity, it lags behind advanced countries. As a result of the technology gap, the mainland still needs to bring in key technology to support its industrial development. 

For instance, if the mainland achieves its target of building a resource-efficient, environmentally friendly society, it would need a lot of environmental technology. According to a United Nations research report, the mainland needs 62 key specialised and general technology to undertake energy-saving and emission-reduction tasks. But in about 70 per cent of these areas, it still has not mastered the core technology and will have to rely on imports. 

Hong Kong is the mainland’s window for procuring technological products and possesses extensive experience in assembling technological cooperation overseas. Coupled with well-regarded intellectual property rights laws, the city is able to introduce foreign technology through technology transfers, licensing and other means. Hong Kong’s diversified financial services, such as venture capital funds, can also provide the necessary capital for mainland technology projects. 

During the FYP period, increasing numbers of mainland companies will seek listings and funding in Hong Kong as the mainland transforms its manufacturing industries and steps up its “going out” strategy. 

The Framework Agreement on Hong Kong/ Guangdong Cooperation, signed last year, will likely be used to help implement various pilot cooperation projects. The Agreement suggests setting up a financial cooperation zone, with Hong Kong as a leader. In addition, Hong Kong is emerging as an offshore renminbi centre. Both initiatives would be favourable to Hong Kong’s continuing development as an international financial centre. 

January 4 2011

Hawaii's Brain Drain - Isles lose many of ‘the best and brightest’ The mainland offers graduates more money, opportunities and prestige By Lavonne Leong Special to the Star-Bulletin (3-24-1999)



An article almost 12 years ago could change the date and still apply to Hawaii today...100s of our smartest and brightest continue to leave Hawaii monthly.

Recent University of Hawaii graduates in finance were asked, "What advice would you offer current and soon-to-be graduating students in your major?"

Almost 25 percent responded, "Move to the mainland."

More students are taking that advice as they survey Hawaii's economic landscape. While a lot of the perception of a "brain drain" is anecdotal, numbers back it up. Census reports released late last year show that in a 1997 and 1998 period almost 17,000 more people moved from Hawaii to the mainland than moved from the mainland to Hawaii.

Hawaii's population growth rate is third-lowest in the United States, extraordinary given Hawaii's high birthrate and high foreign immigration.

And Hawaii Data Book figures show a gradual rise in the average age of Hawaii's citizens, indicating that those who leave are disproportionately young.

"In the earlier days, I think that everybody pretty much wanted to stay home," said Dr. Eleanor Len, director of career services at UH. "Now I think they're beginning to say, 'I'm willing to go to the mainland.' "

Some experts are reluctant to use the term "brain drain."

Nicholas Ordway, professor of financial economics and institutions at UH, would rather talk about the "education drain."

Ira Rohter, UH associate professor of politics, preferred to talk about the "soul drain," but added, "I think there is a real brain drain in Hawaii if you mean ... that the best and the brightest are leaving."

Ordway described the typical mainland-mover as young and well educated. "Many of the recently educated or soon-to-be educated college-age students are leaving and probably will never come back to Hawaii, except to visit with family," he said.

The economy is the reason cited most often for the exodus, but not always for the obvious reasons. Statistics first started showing more workers leaving for the mainland than coming here in 1987 -- a year the economy was booming. Every year since then has recorded a deepening trend toward people leaving.

Ordway said the brain drain has become an issue "because of a series of dynamics that came together and created high-housing prices, low-paying jobs and a lack of opportunity. We can place any graduate from UH in any major job any place except in Hawaii."

Yet the economy is only one of a number of reasons why people leave and stay away.

About 5 percent of Waipahu High's graduates attend mainland colleges. About 10 to 15 percent of Roosevelt High's college-bound students go to the mainland. And although UH is the single school that receives the most Punahou students, 87 percent of the Punahou class of 1998 left Hawaii to attend college.

"A large number of kids (nationally) go to college within a 500-mile radius," said Myron Arakawa, Punahou's director of college counseling. "Well, for Hawaii kids, 500 miles is in the middle of the Pacific. It's not abnormal for Hawaii students to want an adventure away from home. Unfortunately, 'away from home' is awaaay from home."

That's not necessarily bad. Students who go to the mainland for college "have so many different and new positive experiences that they feel that those who stay back may not have had the chance to get involved in," said Lillian Yonamine, counselor for Waipahu High. "They feel, 'Oh wow, my friends (who stayed in Hawaii), they seem like they're still in high school.' "

That's fine, said Rohter. "The problem is coming back."

Most high-schoolers leaving for college on the mainland intend to return. Rory Padeken, a sophomore at Punahou, thinks he might want to go to Stanford. "It's away from home but not too far away," he said. "Hawaii's home."

But Roosevelt High counselor Nancy Scarci said that intending to return when Hawaii is all you've ever known is one thing; actually returning, after building another life elsewhere, is another.

"I think 'eventually' is the key thing," she said. "They want to come back 'eventually.' A lot of them say 'I want to raise my family here,' or 'When I get married, I want to come home.' "

Passing milestones

Once they become tracked into mainland life, however, the urge to return diminishes. "By that time -- this is maybe 10 years after they graduate -- (moving back) is a nice idea but then he looks at the size of the house, you look at job opportunities ..." Scarci said.

Those who put down roots on the mainland are least likely to return. Putting down a root can mean passing any of the big milestones: marrying, buying a house, having children. Students who are waiting for the right career opportunity to surface in Hawaii have found it difficult to postpone building a life wherever they are.

"They've bought homes. They're raising their kids," said UH's Len.

State Rep. Brian Schatz, 27, said many of Hawaii's children leave before they have had a chance to participate in an adult Hawaii: "When you're 18, 21, you go to other people's events. As you get older, you start giving them -- you are the party, you are the community organization."

For those who have moved to the mainland, Hawaii has often become just a distant place to go for food, sun, and a quick shot of ohana -- a vacation spot, fraught with rumors of a bad economy and gridlocked politics.

"When I went to school in Texas," said Ronald Atienza, "I built enough of a life there that I missed Hawaii less and less. People leave Hawaii for one reason, then become attached to their new home for another."

Hawaii can fall victim to its own easygoing image as a tourist escape from the real world.

"I think people equate staying here with a lack of drive," said Kippen Chu. After graduating from the American University in Paris, Chu returned to Hawaii and now works in the state Legislature. "It's like, 'Oh you just want to stay here so you can go beach every day.' "

The fashion lag -- the feeling that Hawaii finds fads just as the mainland is abandoning them -- contributes to the peripheral feeling, said Vu Van, a junior at UH. "New York sets the trends, then they move down to Los Angeles, and then Hawaii gets it six months afterwards."

"We believe, and we've always believed, that we're five steps behind," said nationally acclaimed author Lois-Ann Yamanaka. "It's the 'You're only good [enough] to be on this rock' mentality. It's ingrained. And when your neighbor's kid goes to Stanford and you had to stay in Hilo College -- I mean, heaven forbid! To me it's sad because I felt that way."

Many assume that it's impossible or unambitious to live in Hawaii, and they leave even before they have looked for jobs here. "Part of it is the economic situation in our state, but there's also a psychology among young entrepreneurial people about different cities," Schatz said. "People are very fickle about what cities they think are hip. Sure, there are more jobs in San Francisco, but part of the reason that there are more jobs there is that everyone is going there to start businesses, to be entrepreneurial."

The heady "playing with the big boys now" feeling associated with a mainland job can make a job in Hawaii seem less desirable. "When it comes to class reunion time," said Chu, a Punahou '83 graduate, "it's much more prestigious to say that you're a communications consultant for Boeing in Seattle than a marketing specialist for Bank of Hawaii."

Schatz said the media's magnifying glass on economic woes can augment the problem: "I think the media does a disservice to local kids sometimes by exaggerating our economic problems and focusing on what's not possible rather than focusing on what's possible."

The brain drain can be a vicious circle: A perceived lack of opportunity makes people look elsewhere for jobs. They leave, so the skilled work force diminishes. Then companies coming in decry the lack of a skilled work force and fill skilled positions with non-Hawaii employees.

"We would be able to keep more of our people here if some of the captains of our industry here made it a point to hire people from here rather than bring people in," said Gov. Ben Cayetano.

Financially, said Ordway, the brain drain "probably reinforces a single-industry state, i.e. tourism, which doesn't depend on that many well-educated individuals. It is probably making Hawaii less attractive to high-tech industries."

Lack of innovation

Ordway also said he thinks the brain drain is partly responsible for a dearth of innovation here. Given Hawaii's wealth of scientific natural resources, scientific breakthroughs like Ryuzo Yanagimachi's cloned mice should not be isolated incidents. "Hawaii is producing about one-fourth to one-fifth the number of patents it should, given the size of its population," said Ordway, "and despite the fact that we have a comparative advantage in astronomy, biology, botany."

The total population will also get older. "The migration is not symmetrical; it's asymmetrical towards the younger ages. So what is happening is that the overall population in Hawaii is aging," said Ordway.

If Hawaii continues on this path, UH Law professor Randall Roth's projections for five years down the road are grim. He described a changed Hawaii, with less aloha spirit and fewer people with roots in Hawaii. People have continued to move to Hawaii from elsewhere, but "their life experiences and values are not identical to those of the folks whose places they took.

Typical case: Wed outside Hawaii; may never return

Lavonne Leong is a 1993 graduate of Punahou. She received a bachelor's degree in English from Barnard College and is now in the third year of a doctoral program in English literature at Oxford University in England. In many ways, she is the embodiment of Hawaii's brain drain. Asked about her future plans, she said:

"Do I want to move back to Hawaii? The answer is yes, but I guess I'm your typical case. I spent several years building a life away from Hawaii, and married an Englishman, who agreed to move back to the U.S. with me, but feels Hawaii would be an ocean too far unless there was something really good there for both of us.

"So I guess you could say something like, 'After her doctorate, she plans to move somewhere in the western half of the United States with her husband to pursue an academic and writing career.' "

December 2 2010

簽證貴 團費高 缺直航機 中國人到夏威夷觀光障礙多

州長林格曾積極爭取直航機往來中國與夏威夷,但未有結果。

北京居民王先生(
Benny Wang)和妻子趙氏(Echo Zhao)想去海邊旅遊時,由於進出韓國比較容易,因此選擇韓國。其實,兩人一直夢想來夏威夷旅遊,只是受到旅行限制和成本高昂而無法成行。

據《檀香山星廣告人報》報道,他們不是唯一有這種做法的旅客。夏威夷雖是世界頂級觀光地點,在爭取中國旅客的工作上,也遭逢現實世界的諸多阻礙。

2009 年中國外遊旅客人數增長至 4,000  萬人,其中僅約 45,000 人到夏威夷。據夏威夷觀光局表示,雖然中國觀光人數迅速大幅增長,估計今年和明年來夏威夷的旅客人數大概仍只有 63,000 萬人和 85,000 萬人。

在北京美國大使館對面的
Pegasus & Taihe 國際娛樂公司工作的趙女士嘆氣說:「到夏威夷實在很困難。」她說,美國政策規定,旅客必須親自接受面試才能取得旅遊簽證,每天從早上到晚上 6 時前,使館外面都有申請人排成長龍等候面試。

縱使費盡千辛萬苦取得簽證,還有另一障礙:沒有直航班機。旅遊業者指出,目前到夏威夷必須在首爾、東京或三藩市轉機,頗費周章,原本的
5日遊結果只剩3天可用來觀光。

此外,由於變數頗多,組織旅行團的公司很難保證中國海南航空或其他航空公司會提供到夏威夷的機位。業者透露,目前有
23 家公司可包機直飛夏威夷,但成本一般來說相當高,單程價格就高達 40 萬元。

業界原本預期海南航空今年第二季會開闢北京直飛檀香山的航班,但最後落空,海南航空改而開闢直飛新加坡、河內、曼谷和布吉島等其他旅遊地點的航線。海南航空將重點放在新興旅遊市場,甚至使得該公司原來直飛夏威夷的包機服務受到影響。

爭取中國直飛夏威夷的航空服務,曾被林格州長視作優先考量工作,她四度到中國訪問,促進雙方的了解,並與海南航空管理層在夏威夷見面,討論他們提出的著陸費等費用打折的要求。但雙方未達成共識,預料在林格州長於下月卸任時,此事仍將懸而未決。

中國有旅遊業界人士稱,美國簽證費太高也是令人不想來夏威夷的原因,目前申請美簽的費用大約
220美元,澳大利亞簽證只要 117 美元,日本簽證 44 美元,俄羅斯簽證 29 美元,歐洲簽證 73 美元。

在成本方面,平均
53夜的夏威夷觀光團,包含機票、住宿及交通等的團費為 2,924 美元。與之相比,馬來西亞7日遊只需 548 美元。

November 2 2010

Hong Kong US$5.16 billion Cultural Vision

“Iconic, world class and for everyone – that is our mission,” said Sir Norman Foster, acclaimed architect, chairman and founder Foster + Partners, of his vision for Hong Kong’s groundbreaking West Kowloon Cultural District (WKCD).

Described as the world’s most ambitious cultural project, the plan to transform 40 hectares of prime waterfront land on Hong Kong’s iconic harbor to an arts and leisure precinct housing a modern art museum, theatres, concert halls and other performance venues, has gained worldwide attention.

Following an open tender process, three firms were commissioned in July 2009 as conceptual plan consultants:

Foster + Partners of London, led by Sir Norman; Dutch firm Office for Metropolitan Architecture (OMA), led by principal Rem Koolhaas; and Hong Kong firm Rocco Design Architects Ltd, led by Rocco Yim.

Graham Sheffield, CEO, West Kowloon Cultural District Authority

With their conceptual plans now open for public comment, Graham Sheffield, formerly of London’s Barbican Centre, has taken up his new position at the West Kowloon Cultural District Authority. As CEO, Mr Sheffield will lead and manage the artistic and operational initiatives related to the development of the WKCD.

The scale of the three firms’ involvement is immense. In addition to a 30-plus strong team in Hong Kong and London, Foster + Partners set up a 25-member advisory board especially for this project, made up of leading practitioners and thinkers from the world of art and culture, including visual and performance artists, curators, film-makers, academics, media and management experts. “Together with the project team, the advisory board provides informed and independent judgement, critical to a project of this scale and ambition,” said Colin Ward, Architect and Partner, Foster + Partners.

OMA dedicated a team of 20 members in Hong Kong, led by David Gianotten, General Manager, OMA Asia. Rem Koolhaas was in Hong Kong one week each month during the design process, assisted by a team member working from the Rotterdam headquarters. “But next to the OMA team, we had a large team of sub-consultants of expert cultural, financial, technical and political advisors, with more than 60 people in total,” said Mr Gianotten.

Benchmark for Asia

Rocco Design’s concept comprises three integrated layers: Green Terrain, City Link, Cultural Core

The architects said the project will lift Hong Kong’s international profile and set a new benchmark as the cultural hub of Asia.

“West Kowloon Cultural District is the world’s most ambitious cultural project,” said Mr Ward of Foster + Partners. “International visitors will experience unrivalled cultural venues as Hong Kong is projected onto the global stage, reaffirming its unique culture and position as Asia’s World City. Importantly, it will also provide Hong Kong with an unprecedented opportunity to enhance home-grown talents in the arts by nurturing the artists of tomorrow and inspiring a new generation of arts managers and performers.”

The OMA’s Mr Gianotten agreed.

David Gianotten, General Manager, OMA Asia “West Kowloon Cultural District is a unique project of its kind in the world, in terms of both size and amount of investment by the government,” he said. “The project provides an opportunity for Hong Kong to recognise the city’s local arts and culture, and to elevate the public’s appreciation towards arts and culture.”

The scale and scope of the project also highlights opportunities for Hong Kong-based and overseas firms to contribute a wide range of specialized expertise.

Opportunities Across the Board

OMA’s plan is for three villages nurturing all aspects of the creative process

Mr Gianotten said that the two major components of the project – 40 per cent cultural facilities and 60 per cent commercial – opened business opportunities not only related to arts and culture, but in urban planning , design, construction, green energy, curatorship, art administration, education, art production, retail dining and entertainment, tourism and transport. “These opportunities will be local, regional and international,” he said, adding that the project would play a key role in the city’s economy.

“It is foreseeable that a large number of experts from both local and overseas are needed. Since everything on this 40-hectare site will be new, it needs a collective effort from around the world to realise all the ambitions. It is a good time to get as much expertise as possible involved now, in the early stages of the project.”

Colin Ward, Architect and Partner, Foster + Partners

Mr Ward said the Foster + Partner project team illustrates the diverse range of disciplines required for a project of this magnitude; namely architecture, engineering, landscape design, town planning, retail design, property management, financial management, theatre design, arts and cultural advisory, public relations and marketing. “Another key area – because our City Park will be the world’s first carbon neutral cultural district – is green energy and environmental technology for renewal energy waste and water,” he said, adding that the WKCD will be “an example to the world on how a cultural district should be created.”

“It is vast on every scale, including opportunities for overseas firms with the right skills, technology and expertise. From the hardware: design, construction, infrastructure – to the software: arts programming, education, management – the HK$21.6 billion cultural district is one of the most ambitious projects in the world,” he said.

Public Consultation

The three conceptual plans are open for public opinion until 20 November 2010. One of the three plans will be selected by the West Kowloon Cultural District Authority, taking into account the public’s feedback, and potentially incorporating components of the other two plans. The selected plan will form the basis for the preparation of a detailed master plan, tentatively scheduled to be unveiled in 2011.

Following further public consultation, the detailed master plan will be fine-tuned and submitted to the Town Planning Board for consideration.

October 27 2010

Tracking Corporate Sustainability - Hong Kong Launching the Hang Seng Corporate Sustainability Index Series

(Left to right) Vincent Kwan, Director and General Manager of Hang Seng Indexes Company Ltd; Hong Kong Financial Secretary John Tsang; Margaret Leung, Hang Seng Bank Vice Chairman and Chairman of the Hang Seng Indexes Advisory Committee; Peter Wong, Chairman of RepuTex (HK) Ltd

The Hang Seng Corporate Sustainability Index Series joins the FTSE4Good Index and the Dow Jones Sustainability Index in tracking the stock price and ethical performance of Hong Kong and Chinese mainland stocks.

“With the launch of the Corporate Sustainability Index Series, we are providing an objective and highly visible platform to be used by the investment community to promote socially responsible investment products,” said Vincent Kwan, Director and General Manager of Hang Seng Indexes Company Ltd, a wholly owned subsidiary of Hang Seng Bank.

The Hang Seng Corporate Sustainability Index Series comprises three indexes: the Hang Seng Corporate Sustainability Index (HSSUS), Hang Seng (China A) Corporate Sustainability Index (HSCASUS), and Hang Seng (mainland and Hong Kong) Corporate Sustainability Index (HSMHSUS).

The HSSUS and HSCASUS indexes are made up of the top 30 high-performing environmental, social and governance (ESG) companies in Hong Kong and the top 15 mainland companies. A total of 538 companies – 274 Hong Kong firms and 264 mainland A-share companies – were analysed by RepuTex Hong Kong Ltd, an independent analytics and advisory firm that specialises in sustainable risk analysis, from December 2009 to April 2010.

Hugh Grossman, Executive Director, RepuTex

Hugh Grossman, Executive Director of RepuTex, an Australian company headquartered in Hong Kong, said only the top ESG companies and those that met the Hang Seng Indexes (HSI) market capitalisation, turnover and listing history criteria were eligible. Stringent assessment was also carried out in the four key categories of corporate governance, environmental impact, social impact and workplace practice.

“The selection criteria of identifying the best sustainability performers based on the environment, social and governance factors is on par with the Dow Jones Sustainability Index and the FTSE4Good constituent companies, while providing the market with highly liquid exposure to Hong Kong and China markets,” said Mr Grossman.

He added that companies with good corporate governance are likely to have better risk processes in place and a more effective management. “These proactive companies are best positioned to take advantage of new market opportunities and generate more positive returns for their stakeholders with lower risk.”

Sustainable Shipping

Global shipping giant Orient Overseas (International) Ltd - (OOIL) is one of the 30 constituents in the Hang Seng Corporate Sustainability Index

Orient Overseas (International) Ltd (OOIL) is one of the 30 constituents in the HSSUS Index. It owns one of the world’s largest international integrated container transport business, which trades under the name OOCL. OOIL’s Chief Financial Officer, Ken Cambie, said the Group has always performed well in ESG issues. “OOIL’s corporate social responsibility (CSR) policy states that we recognise that businesses must take responsibility for their industry’s effects on the environment.”

“As we are a shipping and transportation company,” Mr Cambie added, “we believe that saving fuel is the best way to save both money and emissions.”

CSR, he said, is very important for any company’s bottom line. “Some of our customers only choose environmentally friendly carriers, so carriers like OOCL, with good environmental performance strategies, will benefit in the long term.”

While it’s early days yet to predict on the success of the new socially responsible investment (SRI) funds, Mr Grossman predicted that they will catch on just as they have in Western financial markets.

“The reality is that this is a new investment concept in Asia,” he said. “The FTSE4Good and Dow Jones Sustainability Indexes were launched in 2001 and 1999 respectively, and it has taken a decade to take off. But local Asian investors are very astute in their desire to identify a good risk/returns story, so no doubt, funds will grow as performance builds.”

SRI funds have expanded over time with expectation and have reached almost US$7 trillion, according to the Eurosif SRI Survey 2008. “The sustainability concept will surely grow in Asia, so Hong Kong and China must get their feet in the door first,” Mr Grossman said. “Already, we have 30 companies in HSSUS with global best practices from an investment point of view and that is a great start.”

Ken Cambie, Chief Financial Officer, Orient Overseas (International) Ltd

Mr Cambie agreed. “Hong Kong, New York and London are likely to remain powerful financial centres in the foreseeable future. We believe the number of constituents in HSSUS will expand further and Hong Kong can develop to a level on par with New York and London.”

Fund managers are expected to be cautious with the new index, at least initially. “It would take time to come up with new financial products, and investors would have to see how these companies perform or out-perform in HSSUS over a period of time,” said Mr Kwan.

Sally Wong, CEO, Hong Kong Investment Funds Association, pointed out that in Asia, particularly in the retail sector, the uptake of SRI products is “relatively muted.” In Hong Kong, there have not been many green funds launched. “A possible reason is that investors traditionally don’t associate the two,” Ms Wong said. “People may readily take up ethical or socially responsible causes, but instead of doing through investments, they tend to go down the route of charity initiatives or other channels. They tend to see these not in keeping with investments.”

Caring Investors

According to the Association for Sustainable & Responsible Investment in Asia, many people fit the profile of SRI investors. “US and European market experience indicates that SRI investors are often caring professionals, NGO workers and charity foundations,” Mr Cambie said. “In Hong Kong, there is a sizeable pool of potential SRI investors.”

Ms Wong said it’s an area where more investors, especially pension funds and institutional investors, are attaching greater importance. “The approach has evolved from a negative one to a positive one. In the past, the focus had been primarily to screen out companies that are pollution-related or associated with sweatshops or weaponry. But increasingly, the industry has moved on to one of ‘engagement overlay,’ that is, to proactively engage the company to factor in social and ecological needs, such as a more eco-friendly approach in purchasing and waste disposal, or implement policies for a better work-life balance.”

Ms Wong believes that more data should be available to show the causal relationships between the ethical activity and the financial outcome. “As more cases illustrate how these causes and outcomes are correlated, investors will appreciate the value and warm to the idea. But, it probably takes time,” she said.

Education, it appears, is the key. Hang Seng Indexes Company Ltd is taking part in seminars in Hong Kong and around the region to raise greater awareness.

Mr Kwan said he is encouraged by the number of smaller firms that have been enquiring about how they could be considered for inclusion in the HSSUS Index. “I tell them to embrace the standards set up by the Index. RepuTex will do an annual review of participating companies and if there is a chance, we might include more companies,” he said.

October 13 2010

Blueprint for a New China

Urbanization on the Chinese mainland is advancing at an annual rate of one per cent, which means that about 13 million people move from rural areas to cities each year. The enormous changes to the country’s urban blueprint in the years ahead are expected to create huge demand in the construction and engineering sectors.

With more than 10 million people settling into mainland cities every year, the demand for housing will be pressing. Based on an average family of four, about 3.2 million mainly low-cost housing units will be required every year.

Of the Rmb4 trillion economic stimulus rolled out by the Central Government at the end of 2008, Rmb400 billion was earmarked for housing and the reconstruction of shanty towns. The development of small- and medium-sized cities is intended to strengthen the larger cities’ economic hinterland, spurring demand for high-end consumption, housing, hotels and office buildings in smaller satellite communities.

Fixed-asset investments in the mainland’s transport infrastructure and real estate sectors by Hong Kong, Macau, Taiwan and foreign companies have more than doubled in the four years to 2008

Hong Kong architectural firms, which excel at projects requiring advanced technical requirements and complexity, are very much involved in the construction boom, designing landmark buildings and multi-purpose complexes in major cities. They’ve also drawn up blueprints for upmarket residential developments and green buildings in smaller cities. One example is Hong Kong’s Ronald Lu & Partners, which is working on Lake Dragon, a plush ranch-style apartment and villa complex in Guangzhou, as well as luxury, residential houses in Chengdu’s Splendid City and Dalian’s Maritime.

Transport Network Boost

Rural and urban differences, the mobility of rural migrant workers and urban traffic congestion already pose big problems in mainland cities. Communities have to upgrade their transportation networks to meet the needs of the Central Government’s plan for coordinated urban and rural development, particularly since the migration of the rural population to the cities is expected to aggravate transportation demands.

Ministry of Transport data reveals that urban residents make eight to nine times more trips than their rural counterparts. This makes planning for sound road and railway networks vital for the development of small- and medium-sized cities and wider strategic aims.

As greater numbers of people migrate to the cities, there’s a corresponding increase in demand for public utilities such as power, sewage treatment and garbage disposal

Several Hong Kong companies are currently participating in mainland transport projects. Most notably, Hopewell Highway Infrastructure Ltd, a unit of Hong Kong’s Hopewell Holdings, built and is now operating the Guangzhou-Shenzhen Superhighway and phases one and two of the Western Delta Route. Hong Kong’s Mass Transit Railway Corp is participating in the construction of the Shenzhen Metro Line 4 and the Beijing Metro Line 4.

Utilities Surge

With the increasing numbers migrating to cities, there’s a corresponding rise in demand for public utilities, including power, sewage treatment and garbage disposal.

China’s urbanization looks set to advance rapidly in the next few years, exerting enormous pressure on public utilities. To meet demand, the Central Government issued a set of opinions in 2002 aimed at accelerating municipal public utility programmes and introducing capital-market financing to assist the construction and operational effort.

Hong Kong Link

Hong Kong’s construction and engineering sectors have been participating in the mainland market since the 1980s, bringing huge profits, particularly with the continued growth in infrastructure and real estate investments.

Hong Kong players have evolved with the demands of the market: they have both an international perspective and an intimate knowledge of the mainland. These are key advantages when it comes to vying for projects financed by either Hong Kong or foreign capital.

The mainland’s urbanisation programme is sure to attract more investment from Hong Kong, Macau, Taiwan and overseas. In fact, in the four years to 2008, fixed-asset investment in the mainland’s transport infrastructure and real-estate sectors by Hong Kong, Macau, Taiwan and foreign companies more than doubled, hitting Rmb10.9 billion and Rmb416.1 billion respectively. Fixed-asset investment in public facilities also grew almost 30 per cent.

Projects in small- and medium-sized cities generally don’t feature high technical requirements, but the Central Government has said that there should be “rational layout” and “intensive development” among cities. In other words, the development of these smaller cities will also drive the development of large cities, forming hubs linking regions to the international arena. In turn, this is expected to boost demand for upmarket commercial and residential projects by people from the mega cities, offering new business opportunities for Hong Kong companies.

Most Hong Kong firms, particularly SMEs, are concentrated in first-tier coastal cities like Guangzhou, Shenzhen, Shanghai and Beijing. But lately, Hong Kong players have undertaken more projects in second-tier cities such as Chongqing, Tianjin, Wuhan, Nanjing and Chengdu.

Where competition is concerned, there are going to be stiff challenges from mainland and overseas firms. Since China’s accession to the World Trade Organization, there have been increased exchanges between mainland and foreign firms. With decades of experience, mainland companies are now more technologically advanced, while their costs remain considerably lower than Hong Kong’s.

The huge size of the mainland market has also attracted plenty of top international construction and engineering firms, all competing at the high end of the market. Hong Kong firms face competitive pressures from all sides.

Some Hong Kong firms emphasise localization, setting up subsidiaries on the mainland and sub-contracting work to these subsidiaries to reduce costs. Hong Kong companies are also actively pursuing higher professional standards and offering premium-value services targeting clients at the upper end of the market. For example, Hong Kong firms are able to apply environmental concepts to projects and help clients cut costs through suitable design and planning.

The massive urbanization underway on the mainland will reward Hong Kong construction and engineering firms that can offer the best concepts, technology and management. Liberalization measures under the Closer Economic Partnership Arrangement (CEPA) allow Hong Kong firms to capitalize on their relative strengths to secure mainland contracts amid the country’s ongoing urban development.

Hong Kong SAR Updated on Oct 1 2010 - Tax Information : Hotel Accommodation Tax "waived" Effective July 1 2008

By virtue of the Hotel Accommodation Tax Ordinance, Cap 348 (“HATO”), Hotel Accommodation Tax (“HAT”) is imposed on hotel and guest house accommodation.

"Hotel" means any establishment, the proprietor of which holds out to the extent of his accommodation that he will provide, accommodation to any person presenting himself who is able and willing to pay a reasonable sum for the services and facilities provided and is in a fit state to be received.

"Accommodation" means any furnished room or suite of rooms hired by the proprietor of the hotel to guests, or for the use of guests, for lodging and includes such furnishings, appliances and fittings as are normally provided therein.

"Accommodation charge" means the sum payable by or on behalf of guests for accommodation received.

Effective from 1 July 2008, the Government waives the charge of HAT. The rate of tax is reduced to 0% (the tax rate was at 3% for the period up to 30 June 2008) on all accommodation charges paid by the guests.

For the period during which the rate of HAT is 0%, hotels and guesthouses are not required to impose HAT on accommodations hired by the guests and they do not need to file the HAT return to the Collector.

Additional information please visit http://www.ird.gov.hk/eng/tax/hat.htm

October 6 2010

Small is Big

Economic development zones across the Chinese mainland have risen rapidly over the past 20 years, as has the migration of people to cities looking for work. The pace of urbanization itself has accelerated the growth and number of medium- and small-scale cities. Just two years ago there were 264 cities with populations under 200,000, and the number is still rising. In 2008, there were also 41 cities with populations of more than two million. This interdependent urban network evolution is likely to precipitate the world’s fastest-growing urban consumer market. Economic interaction among cities has increased because of industrial division and extended industrial chains. In places where cities are clustered, areas in which people can travel within an hour have emerged, thanks to improvements in intercity railway networks and highways.

City density for retail has far to go

Currently, there are three extended urban areas that deserve the “megalopolis” epithet: Beijing-Tianjin-Hebei in the northeast of the country, the Yangtze River Delta in the east and the Pearl River Delta in the southeast.

There are also what could be described as smaller “city clusters,” such as central-southern Liaoning (encompassing Shenyang, Dalian and Anshan), the pairing of Chengdu and Chongqing in Sichuan Province, the Shandong peninsula, the central China plain, which brings together Zhengzhou, Luoyang and Kaifeng, as well as Changsha-Zhuzhou-Xiangtan in Hunan Province and Wuhan in Hubei Province.

Spurring Regional Distribution

Urban consumer spending is on the rise

One of the factors limiting growth in the mainland’s distribution industry has been the marked disparities in economic development between cities and towns, and between first-tier, second- and third-tier cities.

There are wide differences in consumer income and spending; the degree of market homogeneity is low, and retail enterprises within the same region struggle to expand and develop chain-store networks and franchises.

Retail chain Parkson, for example, has 40 mainland outlets, the largest number nationally among department-store groups. Compared with European and American department stores such as M&S, with more than 600 stores in the United Kingdom, and JC Penney, with more than 1,100 stores in the US, mainland department stores fall short in overall size and regional development density.

When it comes to large-scale supermarkets, Wal-Mart has the most outlets among foreign-invested enterprises on the mainland, but even it counts only 180 stores. That’s very different in scale to the 4,364 Wal-Mart stores in the US.

Intense market competition has prompted more retail enterprises to expand into second-and third-tier cities

Similarly, there are 2,270 Carrefour stores in France and 2,482 Tesco outlets in the UK. In terms of size or development density, their mainland presence is only at the starting line.
Granted, some mainland-invested small-and mid-sized supermarkets have seen significant growth in store numbers and density, but the operational scale of these enterprises remains relatively small compared to mature markets in Europe and the US. Since the operational scale and purchasing volume of retail enterprises are not high, their purchasing costs and gross-profit margins can’t compare to those of large-scale chain stores in Europe, the US and Japan.

By the end of 2009, Wal-Mart’s US market operation had 1.4 million employees working in 4,364 stores, with a turnover of US$255.7 billion and a gross profit of 23.7 per cent. In comparison, Lianhua Supermarket, China’s largest local retailer, has 4,930 stores across the country, with about 53,000 employees; yet turnover was about US$3.5 billion in 2009 on gross profits of 13.1 per cent.

Spending on the Rise

Nevertheless, consumer spending is on the rise, led by the development of areas surrounding first-tier cities as well as second- and third-tier cities. Expansion towards district-level commercial centers is now more feasible for chain store and franchise operations, including supermarkets, convenience stores and household appliance stores. For the three mainland megalopolis, for example, the 2008 per capita GDP in cities at and above the prefecture level stood at Rmb37,494, Rmb56,566 and Rmb56,000 respectively, showing robust spending power.

The non-agricultural populations in cities under the jurisdiction of the three major megalopolis were, respectively, 20.3 million for Beijing-Tianjin-Hebei, 30.9 million for the Yangtze River Delta and 18 million for the Pearl River Delta in 2008.

Government initiatives such as the “thousands of villages’ market project,” the “appliances to the countryside” and the “connecting farms with supermarkets” campaigns have also created huge development opportunities for some large retail enterprises and their suppliers.

Retail Enterprise Expansion

Urbanization has enabled megalopolis circles and city clusters to break free from regional administrative restrictions, forming huge economic zones. These, in turn, promote close collaboration between urban and rural areas.

Retail enterprises have been opening chain stores and franchises in peripheral locations in recent years. Such groups and wholesale distributors are fast expanding across geographic regions and in greater scale.

Carrefour is a case in point. In 2004, the French retail giant opened two stores in Beijing, located on the Third Ring Road and Fourth Ring Road respectively. Since 2006, Carrefour has expanded its business reach in Beijing towards large, distant residential areas such as Tongzhou and Tiantongyuan.

New World Shopping Mall is another example. The retailer saw the saturation of department stores in Beijing’s city centre and decided to expand operations into the neighboring areas of Beijing – at the Apple Community on East Third Ring Road, to attract new customers.

Intense market competition has also prompted more retail enterprises to expand into second- and third-tier cities. According to data from the China General Chamber of Commerce, trends for mergers and acquisitions on a regional basis and expansion towards second- and third-tier cities were well defined among the top 100 retail enterprises in 2009.

 For retail enterprises intending to expand within a region, chain store and franchise operations boost operational efficiencies of scale, but also raise cost efficiencies in logistical support as the number and density of stores continue to grow.

Most retailers use centralized purchasing, which helps boost operational scale, market coverage and the capacity of regional wholesale distributors. Although there are only a few nationwide wholesale distributors on the mainland, regional wholesale distributors show tremendous potential. Compared to nationwide wholesale distributors, regional distributors are more knowledgeable about local markets and have better relations with them. This is particularly useful for further development and expansion.

Urbanization Promotes Consumerism

As the economy continues to grow rapidly, so, too, does the development of tertiary industries, particularly services, in cities.

The value-added ratio of primary, secondary and tertiary industries in cities above prefecture-level stood at 3.2:50.6:46.2 respectively in 2008. Compared to 1990, the ratio of tertiary industry has shown a 13.2 percentage point increase.

Increased work opportunities in the cities translate to tremendous income rise for salaried workers. The per-capita disposable income of urban households rose to Rmb15,781 in 2008, 9.5 times greater than 1990; even after adjusting for inflation, the increase was eight-fold.

The theory of 19th century economist Ernst Engel comes into play when analysing living standards on the mainland. Engel’s Law states that, with a given set of tastes and preferences, as income rises, the proportion spent on food falls even if the actual expenditure on food rises, propounding income elasticity of demand.

This reflects the higher living standards of urban households, as supported by Engel’s Coefficient, which falls as living standards rise, showing a drop on the mainland, from 54.2 per cent in 1990 to 37.9 per cent in 2008.

Engel’s Coefficient for rural households also dropped, from 58.8 per cent in 1990 to 43.7 per cent in 2008. This shows an increase in income for the rural labour workforce as it migrated towards non-agricultural sectors in the cities, sparking a rise in rural living standards to a “moderately well-off standard of living.”

Although there’s been continual growth in the actual expenditure on food, including dining out, there’s also been a noticeable drop in average personal expenditure. In contrast to the cost of food, expenditure on clothing and essential daily supplies has shown a downward trend in households where total incomes or total expenditure continued to rise.

September 20 2010

Hong Kong SAR September 20 2010 - Hong Kong remains the world’s freest economy according to the findings of the Economic Freedom of the World: 2010 Annual Report released on September 20, 2010 by the Cato Institute. This marks the 14th consecutive year Hong Kong has topped the ranking.

Hong Kong Commissioner to the United States, Donald Tong, welcomed the findings of the report, saying: “I am delighted that the Cato Institute, in conjunction with other prominent research institutions, once again recognizes Hong Kong’s staunch commitment to free trade and the rule of law.

“Our adherence to the free-market philosophy has enabled us to weather the global economic crisis and better position the city as an international financial, business and logistics center.”

The Economic Freedom of the World report uses 42 different measures to create an index ranking economies around the world based on policies that encourage economic freedom.

Economic freedom is measured in five different areas: (1) size of government; (2) legal structure and security of property rights; (3) access to sound money; (4) freedom to trade internationally; and (5) regulation of credit, labor and business.

The 2010 report ranks 141 economies using data from 2008, the most recent year for which comprehensive data was available.

According to the report, Hong Kong’s rating for economic freedom is 9.05 out of 10, followed by Singapore with a rating of 8.70. The United States is the sixth-freest economy in the world with a rating of 7.96.

The first Economic Freedom of the World report, published in 1996, was the result of a decade of research by a team which included several Nobel Laureates and over 60 other leading scholars in a broad range of fields, from economics to political science, and from law to philosophy.

The Economic Freedom of the World report measures the degree to which the policies and institutions of economies are supportive of economic freedom. The annual report is published in conjunction with the Economic Freedom Network, a group of independent research and educational institutes in over 80 nations.

For more information on the Economic Freedom Network, data sets, and previous Economic Freedom of the World reports, please visit http://www.freetheworld.com/index.html

September 19 2010

Hong Kong’s New-Look Hotels

The rooftop swimming pool at Traders Hotel, Western District, operated by the Shangri-La group

Recent industry surveys show 2010 as a year of revival for business travel, a sector hit badly in 2009. American Express data reveal that more than half of executives surveyed globally planned to maintain or increase business-travel spending this year. They were more prepared to loosen travel policies to meet with new clients or for business development and more likely to attend conferences and events this year.

But business travellers have also become more budget-conscious. Travel agents say that, in addition to prioritising their travel needs, companies are expecting value-for-money out of every business trip. To cater to demand, Hong Kong-based Shangri-La Hotels and Resorts has brought its mid-market brand, Traders Hotel, to Hong Kong. Traders Hotel Hong Kong opened in the Western District in August. According to General Manager Andrea Mastellone, the city is “a perfect fit” for the brand, which matches the profile of today’s business traveller.
Four Stars in Demand

Andrea Mastellone, General Manager, Traders Hong Kong

He noted what he calls “the new breed” of corporate travelers, those who tasted a value-for-money experience during the economic downturn and liked it. “Companies looking to cut back on expenses would allow their representatives fewer travelling days or demand a lower rate,” Mr Mastellone said. “The frequency of travel has increased this year, but recovery is not yet evident in the room rate. Hospitality business is back on track, but guests are still very conscious about price. During the downturn, they were able to negotiate a dramatic rate cut – even five-star rooms at four-star prices. But that was never going to be sustainable. A reliable brand at the four-star end can deliver what they really need.”

What business travellers want, Mr Mastellone said, are convenient locations, quiet, clean and comfortable rooms of intelligent design, with suitable working desk and good lighting, fast service, easy accessibility via all distribution channels, and reliability of meeting guests preferences. He said Traders Hotel, the mid-range arm of a brand best known for its five-star hotels and resorts, meets those expectations.
A Traveller’s Essential Needs

Mid-range EAST hotel in Taikoo Shing, a Swire property

Mr Mastellone added that he’s delighted by the brand’s debut performance in Hong Kong. “We are already seeing excellent results with many business travellers, including corporate accounts embracing the brand. We have definitely tapped a niche market and are very excited about our prospects in Hong Kong.”

Swire Hotels has also entered the business hotel market, with EAST in Taikoo Shing, its third hotel property. Managing Director Brian Williams said EAST responds to the “essential needs” of modern business travellers. “It has been designed to rejuvenate when you are tired, energise when you’re in search of fun, and support you when it’s time for business.” The brand’s first Hong Kong hotel, The Upper House, opened at Pacific Place in 2009.

Brian Williams, Managing Director, EAST

Another newcomer, L'Hotel Island South in Aberdeen, pitches itself at value-for-money, young-at heart travellers, who don’t mind staying outside of Hong Kong’s prime business districts. Developed by the Chinachem Group of Hong Kong, the hotel is close to the city’s other main attractions: great beaches, beautiful natural attractions, rustic heritage sites and cultural trails.

MICE Travel Soars

Data from the Hong Kong Tourism Board (HKTB) show a 29.7 per cent increase in the MICE (meetings, incentives, conventions and exhibitions) segment in the first half of 2010, with 657,951 overseas arrivals. Increases in MICE traffic were seen from around the world, with 37.7 per cent from the Americas, 17.4 per cent from Europe, Africa and the Middle East, 18.1 per cent from Australia, New Zealand and Pacific, 25.8 per cent from North Asia, 55 per cent from South and Southeast Asia, and 27.8 per cent from the Chinese mainland.

HKTB Chairman James Tien said he expects this upward trend in MICE travel to continue during the rest of the year. In 2009, the Meetings and Exhibitions Hong Kong office successfully secured hundreds of MICE events. These are expected to bring in more than 150,000 additional MICE visitors between 2010 and 2013.

Trade Fairs Shine

Reflecting a boom in MICE travel, the Hong Kong Jewellery & Gem Fair in September drew a record 3,205 exhibitors from 45 countries

A boom in business travel to Hong Kong is also reflected in a record year for the Hong Kong Convention and Exhibition Centre (HKCEC). The fiscal year ended 30 June 2010 was the busiest in the HKCEC’s 21-year history. Operating revenue for the first time exceeded HK$1 billion (US$130 million), increasing 21 per cent over the previous fiscal year. The total number of events increased to 1,185, from 1,076.

“We continue to benefit from the HKCEC's extraordinary client base, plus an experienced and enthusiastic staff, and have achieved a 21-year history of successes servicing some 38,000 events,” said HKCEC Managing Director Cliff Wallace. “The HKCEC continues to be a benchmark that venues strive for throughout Asia."

September 20 2010

  San Francisco California - September 20 2010 - More than 200 distinguished guests, consuls general, senior government officials and business leaders gathered at the "Meet the Many Faces of Hong Kong" reception at the de Young Museum, San Francisco, on September 20.

At the reception, the Director of the Hong Kong Economic and Trade Office, San Francisco, Mr Jeff Leung, updated the guests on the revitalized Brand Hong Kong (BrandHK), a communications platform to promote Hong Kong as Asia's world city.

Addressing the guests, Mr Leung said that the core values and attributes of BrandHK were updated to reflect the attitudes and aspirations of Hong Kong people regarding their city and the unique characteristics that make the city distinctive. "The five core values are free, enterprising, excellence, innovative and quality living. And the five attributes, which describe Hong Kong's perceived characteristics are cosmopolitan, secure, connected, diverse and dynamic," Mr Leung said.

The vitality of BrandHK comes from the people of Hong Kong. Each face tells a story and together, the people of Hong Kong make it Asia's world city, he added.

The "Faces of Hong Kong" video was shown at the reception. "We invite people around the world to get to know more about Hong Kong through these real stories," Mr Leung said. "While Hong Kong has gained international recognition for its efficiency and vibrancy, many may not be aware of its soft power - the beauty of its natural landscape, the diversity of its culture and the warmth of the people.

"Hong Kong may be small in size, but our people have an open and diverse culture; we have busy urban areas, but we also have serene and quiet villages. Those who have worked or lived in Hong Kong might agree with me that the hard work and expertise of Hong Kong people have enabled the city to scale new heights in many areas, turning it into an ideal place to work, live, study and enjoy life; a place where there are interesting things to do and discover," he said.

Hong Kong is a free and dynamic society where creativity and entrepreneurship converge; a city with unlimited potential. This is also the theme used at the Hong Kong Pavilion at the Expo 2010 Shanghai China to showcase the city's unique qualities.

September 16 2010

San Francisco California - September 16 2010 - To further promote Hong Kong as a wine trading and distribution hub, a luncheon was organized by Invest Hong Kong in Lodi, a major winegrape and wine producing region in California.

Addressing the 50 industry leaders and senior executives from the region’s vineyards and wineries, Mr. Jeff Leung, Director of the Hong Kong Economic and Trade Office, San Francisco highlighted the zero wine import duty policy of Hong Kong.

“Hong Kong has totally eliminated wine import duty in 2008. Hong Kong never has any VAT or GST. This makes Hong Kong the first free wine port among major economies. Since the scrapping of wine duties, the growth of wine business in Hong Kong has been more than spectacular. So far, import of U.S. wine has already increased by five-fold. We are now one of the world’s fastest growing markets for wine, and we aim to be one of the world’s great wine trading and distribution centers.

“This past May, Secretary of Commerce of the United States, Mr. Gary Locke, led a trade mission to Asia. The Secretary made a stop in Hong Kong and signed a Memorandum of Understanding (MOU) between Hong Kong and the U.S. on Co-operation in Wine-related Business,” said Mr. Leung.

“The MOU marks an important milestone in our closer bilateral ties and business co-operation with the U.S. It also underlines Hong Kong’s commitment to succeed as the wine trading hub in the region. We will further strengthen our efforts in the U.S. on promoting wine-related trading, tourism, investment and education,” he added.

Also speaking at the luncheon was Mr. Andrew Davis, Associate Director-General at Invest Hong Kong. He highlighted the customs facilitation measures for wines entering the Mainland China market through Hong Kong and the wine market profile.

Representatives of the Lodi-Woodbridge Winegrape Commission, Lodi Chamber of Commerce, Export-Import Bank of the United States and Sacramento Regional Center for International Trade Development also attended the luncheon on September 16.

September 8 2010

Chinese Bank with China Connection Helping a Hawaii Company - Hoku Corp

China Construction Bank is one of the three large Chinese lenders to open a branch in New York in the past two years.

Hoku Corp is a typical customer. The Honolulu-based clean-energy company received a US$28.3 million loan from CCB in June for the construction of a polysilicon production plant in Idaho. The agreement was arranged through Chengdu-based Tianwei New Energy, a majority owner of Hoku and a previous client of the bank.

"It's tough to get money," Darryl Nakamoto, Hoku's chief financial officer, said. "So to have Tianwei as a supporter and having access to Chinese banks gives us access to capital we probably wouldn't have otherwise accessed."

The Manhattan branch made moving funds easier, he added.  As the US tilted towards fears of a double-dip recession last week, one Midtown Manhattan office exuded calm. "The financial crisis is a chance for us as newcomers," said Li Wei, the general manager of China Construction Bank (SEHK: 0939) Corp's New York branch, a tranquil office overlooking Bryant Park.

CCB is one of the three large Chinese state-controlled banks to open a branch in New York in the past two years. The banks are quietly overcoming local regulatory hurdles as they move tentatively into the US market in a bumpy global economy. With lending still slow among US banks, Li said, there was little customer loyalty to institutions with a longer history here.

"To the extent that they don't have a legacy portfolio of bad loans that the US banks do," said Henry Fields, a partner at law firm Morrison & Foerster, which has advised foreign banks operating here, "they have a competitive advantage."

Since opening in June last year, CCB's New York branch has brought in assets of US$560 million. The branch has hired 35 employees, most of them locals, and primarily serves corporate clients who are involved in US-China trade and investment.

Industrial and Commercial Bank of China (SEHK: 1398)'s New York branch has brought in assets of more than US$1 billion since opening in October 2008.

The same month, China Merchants Bank (SEHK: 3968) opened its New York branch; it recently reported assets of US$260 million.

Two other Chinese banks - Bank of China and Bank of Communications (SEHK: 3328) - have a longer history in the US, and are also expanding their activities here.

Because of foreign banking restrictions in the US, Chinese banks are not authorised to accept retail deposits. Only Bank of China, which enjoys an exemption, has retail branches.

Regulatory hurdles have been a source of frustration for the banks in the past. In 2007, CCB chairman Guo Shuqing told reporters the US was "unfair" in its treatment of Chinese banks.

Li, the bank's general manager in New York, said their complaints faded after regulators granted the foreign branch licence last year. He added that the branch was focusing its efforts in the first year on ensuring compliance with US anti-money-laundering regulations and other legal requirements before thinking of further growth.

In a brief e-mailed statement, a spokesman for the Federal Reserve said it "evaluates the application of any firm, foreign or domestic, in consideration of the financial and managerial facts presented by each case".

Several lawyers who specialise in commercial banking operations here said they expected the US to grant Chinese banks the regulatory status they needed to expand into retail operations.

"It's clear that Chinese banks and the whole Chinese regulatory system have improved markedly in the past several years," Rodgin Cohen, chairman of law firm Sullivan & Cromwell, said.

He added that he thought it was a question of when - and not whether - Chinese banks would receive the nod from the regulators. "It's difficult to hazard a guess but I'd say within the next 12 to 24 months."

Whether the banks will want to expand into the retail market is another question, though. The shaky condition of many community lenders in the US - natural targets for expansion - might have also slowed Chinese banks' efforts to acquire them, said Fields, the Morrison & Foerster attorney.

"I think they were poised to move more quickly before things fell apart in 2007 and 2008," Fields said. "I still think this is going to happen, it's just a little hard to predict the timing."

China Minsheng Banking Corp became a pioneer - and had its fingers burned - by acquiring a sizeable minority stake in UCBH Holdings, the holding company of San Francisco-based United Commercial Bank. That bank failed late last year.

Li said it was not his job to determine CCB's future in the US - that was up to the head office. But he expects the bank to move with caution. "I think we will expand our business gradually," he said. "We won't jump into a market we don't know."

By Kristin Jones in New York

August 8 2011

APEC 2011 "Hawaii" Host committee members named - Security paramount for conference - Federal agencies will join city and state authorities in preparing for protesters



WHAT IS APEC Source: www.apec.org?

The Asia-Pacific Economic Cooperation, based in Singapore, was established in 1989 as a forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. Unlike the other multilateral trade bodies, APEC has no treaty obligations required of the countries that participate. Decisions made within APEC are reached by consensus and commitments are undertaken on a voluntary basis.

APEC has 21 members, referred to as "member economies," which account for about 40.5 percent of the world's population, about 54.2 percent of the world's gross domestic product and about 43.7 percent of world trade.

The Asia Pacific Economic Cooperation Hawaii Host Committee members have been named for the Nov. 12-13, 2011, event in Honolulu. President Barack Obama will host 21 leaders from the Asia-Pacific region at the event. Here are the committee members:

» CEO: Gregg Yamanaka, president of Green Era Corp. and of LearningBiz
» Chairman: Peter Ho, chairman, president and CEO, Bank of Hawaii
» Vice chairman: Timothy E. Johns, president and CEO, Bishop Museum
» Gov. Linda Lingle
» Mufi Hannemann, former Honolulu mayor
» Adm. Robert Willard, commander, U.S. Pacific Command
» David Carey, president and CEO, Outrigger Enterprises Group
» Greg Dickhens, executive vice president, Kyo-ya Management Co.
» Mark Dunkerley, president and CEO, Hawaiian Airlines
» Adm. Thomas Fargo, U.S. Navy (retired)
» Gerard Gibson, area vice president, Hilton Hawaii
» M.R.C. Greenwood, president, University of Hawaii
» Corbett Kalama, executive vice president, First Hawaiian Bank
» Bert "BJ" A. Kobayashi Jr., president and CEO, Kobayashi Group LLC
» Stanley Kuriyama, president and CEO, Alexander & Baldwin Inc.
» David Lewin, general manager, Hyatt Regency Waikiki Beach Resort and Spa
» Patricia Loui, chairman, OmniTrak Group Inc.
» Mike McCartney, president, Hawaii Tourism Authority
» Ambassador Lauren Kahea Moriarty (retired), educator and former U.S. ambassador to APEC
» Randy Perreira, executive director, HGEA
» Barry Taniguchi, president, KTA Super Stores
» Chris Tatum, vice president for North Asia, Hawaii and South Pacific Marriott International
» James Tollefson, president and CEO, Chamber of Commerce of Hawaii
» Eric Yeaman, president and CEO, Hawaiian Telcom

EX-OFFICIO MEMBERS:
» U.S. Sen. Daniel Inouye
» U.S. Sen. Daniel Akaka
» U.S. Rep. Mazie Hirono
» Charles Morrison, president, East-West Center

More than 600 protesters were arrested in June at the G-20 summit in Toronto, where clashes with police led to burning squad cars and shattered store windows -- a situation local authorities are already working to avoid at the Asia-Pacific Economic Cooperation conference here next year.

APEC will meet in Honolulu in November 2011, and security is paramount when the leaders of 21 countries and their entourages descend on the Hawai'i Convention Center.

About 20,000 visitors are expected in all.

While business leaders are hopeful that the weeklong conference will create an opportunity for the state to promote itself as a business-class tourism destination, security is already a focus of federal, state and city law enforcement leaders. Global conferences can be a magnet for protests. There were no reports of serious injuries to either demonstrators or police in Toronto, but such gatherings can on occasion turn ugly.

Maj. Gen. Robert G.F. Lee, who as adjutant general heads the state Department of Defense, said he doesn't expect that to happen here. "We are going to have enough security for APEC 2011," Lee said. Federal enforcement agencies will provide resources to help Honolulu police, and more than 5,500 Army and Air National Guard troops will also be available to help if necessary, he said.

That's not to say demonstrators won't be welcome.

"Certainly, there's opportunity for protest," said Peter Ho, chairman of the private, nonprofit APEC Hawaii Host Committee set up to help support the conference. "That's part of the fiber of our country."

Josh Cooper, one of the local leaders of protests that took place when the Asian Development Bank held its 2001 conference in Honolulu, said people should expect similar demonstrations.

Lee said demonstrators should and will have a right to free speech as long as they don't try to disrupt the conference itself. "I wouldn't be encouraging any organizations that would be disruptive of APEC 2011," he said.

Cooper said protests can be expected at any global summit that fails to earnestly discuss the environment and human rights. "If the heads of state keep their heads in the sand of Waikiki, talking only trade and tariffs without including important issues of trafficking and the trees in the Asia-Pacific region, people will demand more from the meeting," he said. Expect "strong representation of indigenous peoples, climate change campaigners, women's rights activists and global justice advocates," Cooper said.

Local officials said they are optimistic that a repeat of Toronto won't happen, for several reasons.

First, APEC conferences typically have not been a lightning rod for protests, Ho said. "If you look at the history of APEC, it's not really been subject to the types of situations that you see with some of the other organizations," he said.

Second, Lee said, Hawaii's remote location works to its advantage. "It's certainly helpful that protesters would need to pay a lot of money to fly in on an airline to come to this -- much more difficult than driving into Los Angeles or San Francisco," he said.

When nearly 3,000 people from 60 countries attended the Asian Development Bank's conference at the Hawaii Convention Center in 2001, the state had estimated as many as 5,000 protesters would accompany them. Instead, only about 500 turned out and there were no arrests.

The additional state and city security cost about $3.3 million. Congress voted to reimburse half that amount.

But that was pre-9/11.

This time around, obtaining federal support isn't expected to be as difficult. Janet Napolitano, secretary of homeland security, is expected soon to designate the 2011 APEC conference a National Special Security Event, or NSSE, making Hawaii eligible to tap federal resources, including cash and law enforcement personnel.

The designation is typically given to U.S. events attended by a large number of dignitaries and which hold "national significance," thus requiring larger-scale security coordination. Previous NSSEs have included national political conventions, Super Bowls and the Academy Awards.

Exactly how much the state and city will be reimbursed for security of the event still is to be determined.

Ho is optimistic. "The intent is to get our community reimbursed for all of the expenditures we lay out," he said.

Marsha Weinert, the state's tourism liaison, said one key thing to watch is if Napolitano designates the entire week's worth of activities as an NSSE, or just the Nov. 12-13 weekend, when the so-called "leaders' meeting" takes place.

Once the gathering is declared an NSSE, the U.S. Secret Service becomes the lead federal agency for design and implementation of an operational security plan with the help of local law enforcement officers, said Max Milien, a spokesman for the Secret Service.

Meanwhile, the Federal Bureau of Investigation is put in charge of any "crisis management" issues, while the Federal Emergency Management Agency is tasked with "consequence management," Milien said.

Local law enforcement agencies have also begun preparing. The Honolulu Police Commission recently got a briefing from members of HPD's Special Field Operations Bureau/APEC Planning Group on their trip to the June G-20 summit in Toronto. The presentation was held behind closed doors due to security reasons. They also will attend this fall's APEC conference in Yokohama, Japan. Asked what HPD officials learned in Toronto, police Maj. Clayton Kau said: "We learned that the law enforcement agencies involved in the G-20 conference did an excellent job planning for the event. We learned how much time and resources are needed to plan for a successful event." HPD has begun to identify special training and equipment it might need to employ "to address crowd control (illegal protests), venue security and dignitary protection," Kau said. HPD will need to purchase bicycles, protective equipment and uniforms, as well as pay for specialized training and the rental of vans, he said.

The city has allocated $28 million over two years for APEC-related costs, about $22 million of that for HPD.

The state also has a tentative budget, Lee said, but he declined to say how much.

By Gordon Y.K. Pang

June 9 2010

Practical Idea for American Business Executive Traveling Abroad

For many years, the people of the world have had a love affair with America. They have admired our culture, our products, and our optimistic, can-do personalities. In recent years, however, there has been a significant shift in those feelings. Research studies show that for a number of reasons, "favorability" ratings for America are declining around the world (In other countries, you are more than just an American. you are America).

While it is true that the rise in negative feelings towards us may result more from perceptions than reality, you know that perceptions are powerful opinion makers. You, and the some 60 other million other Americans who travel abroad each year, have a unique opporutnity to change at least some impressions of us from negative to positive. By following the simple suggestions described here, you can have a better personal experience abroad, while showing America's best face to others including those with whom you do business (The small things you do can make a big difference in America's standing in the world - Being a better citizen of the world is good for your company and your country).

16 Simple Suggestions.

1. YOU WILL NEVER GO WRONG WITH A SMILE - A smile, even if you have got a problem, is always welcome. It is the one worldwide equalizer. Anger, impatience, and rudeness are universal turnoffs.

2. SHOW YOUR PRIDE, BUT RESPECT THEIRS - People all around the world are fascinated by the U. S. and the lives we Americans live. They admire our openness, our optimism, our creativity, and our independent spirit. But that does not mean they feel less proud of their own country and culture. Be proud of the American way, but remember, it is not the only way.

3. THINK AS BIG AS YOU LIKE, BUT TALK AND ACT SMALL - In many countries, any form of boasting is considered very rude. Talking about wealth, power, or status - corporate or personal - can create resentment. When Americans meet each other for the first time, our job (and its implied status) is a key of who we are and how we introduce ourselves. This is less important elsewhere and can be perceived as just boasting (In Japan, it is considered rude to look a person directly in the eye for than a few seconds).

4. IT MAY BE GREEK TO YOU, BUT THEY WILL LOVE IT - Try to speak a little of the language, even if it is only "hello" and "thank you". It is not insulting to mispronounce a word or make a mistake. The effort will be appreciated.

5. IT IS OKAY TO TALK WITH YOUR HANDS IF YOU KNOW WHAT THEY ARE SAYING - Gestures are powerful communications in any culture and are obviously easier to learn than language. A combination of both can help you communicate better and more quickly. But be aware that some gestures don't mean the same thing in different culture (In most European countries, the correct way to wave hello and good-bye is palm out, hand and arm stationary, finger wagging up and down. Common American waving means "no" except in Greece, where it is an insult).

6. LEAVE THE SLANG AT HOME - Our colloquial or slang expressions mean little or nothing in other culture. Using them can make you seem insensitive. They are difficult to translate and may come across as gibberish or something stupid. And even casual profanity is unacceptable.

7. LISTEN AT LEAST AS MUCH AS YOU TALK - by all means, talk about America and your life in our country. But also ask people you are visiting about themselves and their way of life. Listen, and show your interest in how they compare their experiences with yorus.

8. SERVE THE LECTURES FOR YOUR KIDS - Whatever your subject of discussion, let it be a discussion, not a lecture, and try to leave right and wrong out of it. Justified or not, the U. S. is seen as imposing its will on the world. Try to show a willingness to understood other viewpoints.

9. THINK A LITTLE LOCALLY - Try to find a few topics that are important in the local popular culture. Lean a few names of pop singers, actors, TV personalities, sports heroes. Remember, most people in the world have little or no interest in the World Series or the Super Bowl. Show some interest in local sports, even if only to ask questions (What we call "soccer" is football everywhere else in the world. And it is the most popular sport on the planet).

10. SLOW DOWN - We talk fast, eat fast, move fast, live fast. Many cultures do not. In fact, time is understood very differently around the world. Instant solutions, immediate satisfaction, and short-term thinking are often unimportant and not respected.

11. SPEAK LOWER AND SLOWER - In conversation, match your voice level and tonality to the environment and other people. A loud voice is often perceived as bragging. A fast talker can be seen as aggressive and threatening (Mandarin, English, Hindi, Spanish, Arabic, Bengali, Portuguese and Russian-if you can say "hello" in these languages, you can greet over half of the people in the world).

12. REMEMBER THAT YOUR RELIGION IS YOUR RELIGION AND AND NOT NECESSARILY THEIRS - Religious worship and beliefs differ greatly around the world. Most non-Western cultures have little knowledge of the Bible and will not understand references to it. And in most other countries, religion is usually considered deeply personal, not a subject for public discussion.

13. IF YOU TALK POLITICS, TALK-BUT DO NOT ARGUE - Make yourself aware of the political environment of the region,but avoid expressing opinions about local issues. Steer clear of arguments about American politics, even if someone is attacking U. S. Politicians or Policies. Agree to disagree (Politics among friends is not easy - among strangers if is even harder).

14. READ A MAP - You may not believe that anyone could confuse "Australia" with "Austria", but it happens. Everyone's country is important to them. Familiarize yourself with the local geography to avoid making insulting mistakes.

15. DRESS UP - YOU CAN ALWAYS STRIP DOWN - In some countries, casual dress is a sign of disrespect. Check out what is expected. When in doubt, err on the side of attire that is more formal than casual. You can remove a jacket and tie if you are overdressed, but you can't make up for being too casual.

16. A FEW EXTRA HOURS IN THEIR COUNTRY WILL DO A LOT FOR YOURS - Few things will make a bigger impression in another country than your interest in that country. Try to carve out a few hours to tour the city or area you are visiting. And let yoru hosts suggest what you should see,so they will feel your interest firsthand.

Prepared by NBTA - National Business Travel Association - connecting the business travel world "Building For Diplomatic Action" Building New Bridges to the World.

Think about it - In 2003, 2.48% American out of the population of 294,043,000 carry a USA Passport. In other words, 97.52% of the American did not travel outside of North America....think about the implication on a nation and why we continue to stumble!

April 27 2010

Designed to Shine

Beijing-based computer giant Lenovo is tapping Hong Kong's design and innovation expertise

Computer giant Lenovo began capitalising on Hong Kong’s design and innovation expertise by opening an Innovation Design Centre in the city last October. The centre supports the brand’s Beijing operation in designing its existing product portfolio, as well as developing new product concepts for the consumer PC market and researching design and consumer trends.

Yao Yingjia, General Manager of the Lenovo Innovation Design Centre and company Vice President, said the aim was to take advantage of the city’s diversity and multicultural environment. “Not only does Hong Kong have a sophisticated consumer group, it also has world-class design talents and is the ideal place for design innovation. The establishment of our Innovation Design Centre in Hong Kong will help further advance Lenovo’s innovative design competitiveness.”

Hong Kong, he said, is strategically positioned as the gateway to the Chinese mainland and other Asian countries, especially to various emerging markets that are a strategic focus of Lenovo.

“The closeness to local organisations will also help us immerse ourselves in their design culture and strengthen our understanding of consumer preferences, including fast-changing consumer markets,” Mr Yao said.

Best of the British

British designer Michael Young followed his instinct and came to Hong Kong

It’s not just multinationals that are tapping Hong Kong’s creative energy. Some of the world’s hottest designers have also set up in Hong Kong. Acclaimed British designer Michael Young followed his intuition by choosing the city for his global headquarters in 2006.

“I set up here because my instinct told me that, from the outset, I would be surrounded by positive business energy combined with simple access to industry,” said Mr Young. “The impact has been massive – it’s a synergy that is unique to this city.”

He added that Hong Kong’s market differentiator is its focus on the economy, “which is the true meaning for design.”

His eponymous design company, Michael Young, started out with four staff and has since expanded to 11, including three interns from overseas. He plans to open a gallery next year in Brussels that will act as a European base.

Global Portfolio

Among the prominent global clients that seek out Michael Young in Hong Kong are Giant Bicycle of Taiwan, US electronics design company EOps Technology, and Hong Kong brands Ostbahn, an aluminium manufacturer, and Zixag, an up-and-coming laptop accessories and travel-bag brand. He also works on projects worldwide including new furniture collections for US brand Emeco and Swedish brand Swedese, kitchens for Scavolini of Italy, and glassware for Hennessy of France.

Mr Young was appointed Creative Director of 100% Design Tokyo 2007-08, Asian Aerospace 2009 and 100% Design Shanghai 2010. Products he developed in Hong Kong were showcased at an exhibition called “Works in China” at Vienna Design Week last October. He is also producing a book about his time and work in Hong Kong in collaboration with Hong Kong Polytechnic University Professor John Heskett. The book will be launched at 100% Design Shanghai in November.

Mr Young said his Hong Kong experience “has been amazing. I work for global clients and they can all tap into the resources we have developed, so my love of industrial process is satisfied, as is the volume of brands we are helping now. Business is very good.”

New Zealand native Neil Pryde says Hong Kong can lead by design

He has also noticed a stream of designers who are likewise drawn to Hong Kong. “I get three job or intern applications a day.” Mr Young said. “My project ‘Works in China’ is responsible for communicating that there is hope outside of Europe to be a designer. Hong Kong is an amazing place to learn and grow as long as you can hit the ground running. This is a city that stops for no one.”

The Pryde of Hong Kong

Neil Pryde’s design career began with his love of water sports. He came to Hong Kong from New Zealand in 1963 and started Neil Pryde Ltd in 1970. He said that 47 years on, “Hong Kong still excites me” and that Hong Kong’s dynamism and energy attract talent and stimulate the creative juices. “With a booming retail economy, this sets the scene for Hong Kong to become a design centre for the world.”

NeilPryde's Lucifer, the first drysuit for cold climate kitesurfing, won the top Red Dot award

The NeilPryde brand is an industry standard and an official sponsor of Olympics events. In its latest design coup, NeilPryde won three of the prestigious Red Dot awards for design from Design Zentrum Nordrhein Westfalen. One was the lofty Red Dot: Best of the Best Award, for NeilPryde's Lucifer, the industry’s first snowboard-style drysuit intended for kitesurfing in extremely cold climates. The brand also won for its windsurfing sails and windsurfing boom.

Mr Pryde said the awards are a credit to the skills of his designers.

American fashion designer Diane Freis is a Hong Kong success story

“I am particularly proud of the fact that we are a home-grown Hong Kong company, and these latest awards underline once again the depth of design expertise and innovation that exists in Hong Kong.”

He hopes his company’s recognition will inspire more Hong Kong companies to invest in research and development (R&D), so that more products will be design-driven. “Hong Kong can become an international centre for design excellence capable of supporting the widespread manufacturing operations that Hong Kong industrialists have in China and around the world.”

Fashion Inspiration

Flowing, feminine styles have made Diane Freis a household name

Internationally acclaimed fashion designer Diane Freis is another Hong Kong success story. California-born Ms Freis came to Asia looking for exotic new materials and skilled embroiderers, and found the fabrics and workmanship that contributed to her distinctive fashion identity in Hong Kong.

When she opened her first boutique in the city in 1978, Ms Freis had “just a handful of dedicated seamstresses and bolts and bolts of ideas.” She went on to establish her own design and manufacturing studio and launch her own label. Today she heads a multinational corporation with boutiques in Hong Kong and Australia’s Gold Coast; franchised stores in Cairo and Riyadh, and an online business in the United States.

Hong Kong remains “a very special place,” said Ms Freis. While the days of having her own production plant on site are over due to increasing costs, the city still hosts the brand’s R&D, quality control and export functions, and offers convenient access to the factories the company works with on the mainland.

“I can’t think of anywhere else I would rather locate,” Ms Freis said. “For me, Hong Kong is ideal.”

April 20 2010

Creating an Innovation Ecosystem for Hong Kong Share

Cheung Nim Kwan, CEO of Hong Kong Applied Science and Technology Research Institute Co Ltd

Hong Kong offers plenty of opportunity to make big money in a short time. But as global competition intensifies, the government wants to diversify Hong Kong’s economy so it relies less on sectors such as finance and property development.

That’s why it’s targeting six new economic areas for long-term growth, including innovation and technology. And one element of that is to make the field a more attractive career path for young people.

We need to do that,” says Dr Cheung Nim Kwan, CEO of Hong Kong Applied Science and Technology Research Institute Co Ltd (ASTRI), based in Hong Kong Science Park. “We need to set a good example – Science Park is a good starting point – to create a lot of high-paying jobs to attract young people. And excitement is very important. Besides well-paying, they should be cool jobs.”

 From Wi-Fi to MRI

There are already some cool jobs – about 8,000 of them – with more than 310 companies working at Hong Kong Science Parks’ seaside campus in Sha Tin. Some involve research with multinationals such as DuPont Apollo and Philips. Many others are with small and medium-sized enterprises such as Altai Technologies Ltd, a Hong Kong start-up incorporated in 2006 after exclusively licensing ASTRI technology. ASTRI also helped it obtain US$10 million in venture-capital funding. Today, Altai is a leading supplier of outdoor Wi-Fi cellular base stations.

This next-generation MRI technology was developed by Time Medical, a company founded by scientists from Columbia University, Harvard Medical School and the University of Hong Kong

Another successful ASTRI spin-off was its photonic technology unit, which it sold to SAE Magnetics (HK) Ltd for HK$109 million plus royalties in 2004, two years after the Hong Kong Government invested about HK$40 million in it. Seventeen ASTRI staff joined the new company, which now has 30 design engineers in Science Park, more than 1,000 production workers in Dongguan and sales estimated at HK$70 million. SAE, a subsidiary of TDK Corporation, is the largest independent manufacturer of magnetic recording heads for hard disk drives.

Then there’s Time Medical. The company, founded by scientists from Columbia University, Harvard Medical School and the University of Hong Kong, collaborated with ASTRI to develop next-generation magnetic resonance imaging (MRI) technology. The result is a smaller MRI device that delivers high-quality images at a low cost – ideal, for example, for use in hospitals in rural China.

“We would like to encourage these kinds of industries because they employ a lot of highly trained people in physics, mathematics and engineering,” says Dr Cheung.

ASTRI, set up by the government in 2000 to boost Hong Kong’s technological competitiveness by commercialising research and development, does leading-edge R&D for technology transfer to industry, developing the necessary human resources and bringing together industry and university R&D assets. It focuses on five key areas: communications technology; enterprise and consumer electronics; integrated circuit design; material and packaging technology; and biomedical electronics. Reaching into the Chinese mainland market, it established a wholly owned subsidiary in Shenzhen in 2008.

Innovation on display at Electronics, ICT and Lighting events in Hong Kong http://www.youtube.com/watch?v=R3dYEOkhZbE&feature=player_embedded

Jobs for Grads

In terms of luring young talent into the technology sector, “the government has already taken a small step, which is the creation of the Intern Program,” says Dr Cheung. “ASTRI is actually the biggest employer of interns in Hong Kong. We have almost 50 interns, and our target for this financial year is to hire 60 of them. It pays HK$10,000 or $12,000 a month. Actually, the government wants us to hire double that amount, 120, if we can get our hands on that many youngsters.”

The interns are recent local university graduates with bachelor’s or master’s degrees in science or engineering; some even have PhDs. “Last year we invited five universities to a career day. It was a full house.”

The Intern Program, in its first year, engages the graduates in full-time work with a research group. “Our goal is that by the end of one or two years, they have a good training in different phases of R&D and design, says Dr Cheung. “After two years, I hope they’ll get good jobs in the local industry.”

Science Park

Creating an “ecosystem” for innovation and technology to flourish: HKSTP CEO Anthony Tan

ASTRI is just one of the nurturing facilities at Hong Kong Science Park. In addition to Science Park, Hong Kong Science and Technology Parks Corporation (HKSTPC) manages the InnoCentre and three industrial estates.

Hong Kong Science Park provides infrastructure and support services for commercialization of research targeting five areas: electronics, information technology and telecommunications (ICT), precision engineering, biotechnology and green technology.

HKSTPC CEO Anthony Tan says the Park has embraced the green concept in its master plan, in the form of roof gardens, integrated photovoltaic technology systems, recycled paving and automated refuse collection.

The Park’s Green 18 building, targeted for completion next year, will employ environmental features such as natural ventilation and “total energy management,” while Hong Kong Science Park Phase 3, given the go-ahead in the 2010-11 budget, will comprise 10 buildings with energy-efficient technology.

Among its offerings, Science Park provides 10 state-of-the-art laboratories and technical centres, along with teams of engineers and experts. They provide technical assistance to companies using the labs, and an incubation programme, which helps fledgling technology entrepreneurs with rental subsidies and other financial aid, along with mentorship and advice on their business plans.

Mr Tan says HKSTPC has identified six niche areas in which Hong Kong has the potential to build a sustainable, world-class technology advantage: radio-frequency identification; integrated circuit design for mobile devices; energy management for buildings; environmental engineering; thin-film photovoltaic solar cells; and light-emitting diode (LED) lamps.

Building the Ecosystem

Hong Kong Science Park provides infrastructure and support services for commercialization of research

As for making Hong Kong a regional innovation and technology hub, Mr Tan cites Hong Kong’s many advantages, including its proximity to the mainland, low taxes, rule of law, intellectual property protection, free flow of information, world-class university research and a skilled workforce.

To accomplish the goal, he says, Hong Kong needs a flourishing “ecosystem” for innovation and technology bringing together academic research, institutions such as Science Park and ASTRI to apply and commercialise the research, a large talent pool, and financial support from “angels” and venture capital funds. The latter is “really rather embryonic at this point,” but Mr Tan sees possibilities among Hong Kong’s many successful, semi-retired industrialists, with their wealth, resources and understanding of manufacturing technology. “I think there’s potential for Hong Kong to create some angel-funding networks,” he says.

“With innovation and technology, it’s important that academia, the government, the business sector and the community work together to build this ecosystem,” Mr Tan says. “And we need to educate people about how innovation and technology is important to the future sustainable economic development of Hong Kong, because Hong Kong has got to diversify beyond just finance and real-estate development.”

March 3 2010

Hawaii Needs to Better Promote Itself as a Meetings Destination - By Kevin Iwamoto, VP, Enterprise Strategy, StarCite, Inc.

Is it necessary for Hawaii’s travel industry to be suffering so?

As a meetings industry executive, it was tough for me to watch the nation’s hotels take their bruises last year. One survey reported that average hotel occupancy levels across America fell nearly 9% in 2009 to just above 55%. And as a Hawaii native, it was especially painful to witness my home state’s troubles with the travel industry – so vital to its economy.

Hawaii’s occupancy rate, at an average 66.5% last year, was enviable compared to the national figures. But the pain was and still is there: Hawaii’s hotel revenues in 2009 dropped by $741 million to $3.59 billion, driven by falling occupancies, room rates and other hospitality indicators.

The good news is that there’s a prescription for what ails Hawaii’s travel industry: a multi-front campaign by government and business to increase groups and meetings travel, complementing the state’s already strong identification with leisure tourism.

Hawaii’s Got it All for Meetings

Hawaii’s got much to offer for meetings travel: numerous flights (many of them direct) from around the world; the Hawaii Convention Center’s 200,000 square feet of exhibition space and nearly 150,000 square feet of total meeting space; more than 70,000 hotel rooms (10,000 within walking distance of the Convention Center); stunning natural beauty and an average year-round temperature (77 degrees) that many on the mainland U.S. only see in summer.
Yet, in 2008, the number of visitors staying overnight or longer on Hawaii’s six islands fell more than 10% from the year earlier, including a 12% drop among domestic visitors . This was partly due to consumers reining in spending on vacations. But, from where I sit, it can be traced to companies cutting back on meetings travel, under pressure to cut budgets. Also, unfortunately, it became somewhat risky for companies to have a meeting in a place like Hawaii. There were several high profile articles in the media criticizing companies – especially those who’d received federal government TARP assistance – if they held important meetings in destinations that were perceived to be luxurious or exotic.

And of course it doesn’t help that major airlines have been cutting capacity to Hawaii and raising fares. As a result, it makes sense for companies to meet closer to their home bases or conduct virtual events.

Government/Travel Industry Collaboration Needed

So how can Hawaii fight these trends? Hawaii’s government and travel sectors need to roll up their sleeves to create a campaign to get corporate and association meeting planners to see the value of hosting meetings and events. The messages should be that Hawaii is:

• A great place to do business (with plenty of meetings and convention facilities) – not just for surfing and beaches;
• Rich in people resources! Multi-lingual and multi-cultural residents, as well as an educated workforce of University of Hawaii graduates, can support business’ needs for successful meetings today and in the future;
I don’t mean to imply that Hawaii is giving up the fight for more meetings business. I applaud recent efforts by Hawaii’s travel industry to draw in more meetings business, such as the week-long “Hawaii Prospect Sales Blitz,” organized by the Hawaii Visitors and Convention Bureau’s (HVCB) Corporate Meetings and Incentives division, chapter bureaus and the Hawaii Convention Center. (In that effort, the partners called 10,000 leads to sell Hawaii as a business destination.)
But what I’m advocating is a collaborative effort involving multiple government agencies and the travel industry to help raise awareness levels that Hawaii is a superior meetings destination. Possible strategies would include:
• Funding and dedicated resources to hold a series of trade fairs showcasing Hawaii’s meetings attractions and infrastructure; downplaying the luxury and leisure themes and focusing on logistics information and data
• State tax breaks for companies, associations and other groups holding meetings in Hawaii;
• Forming partnerships with hotels and other suppliers to create new, more creative incentive packages for companies looking to hold meetings in the state;
Creating courses on strategic meetings management, internship and scholarship opportunities at the University of Hawaii’s School of Travel Industry Management to attract and keep more locals working in our industry; this is yet another reason to maintain the specialized autonomy of the TIM School.
• Reaching out to the many wonderful professional business travel and meetings associations, such as the National Business Travel Association, that can offer wisdom and best practices in this area.

The long term ramifications of not moving forward means Hawaii will continue to fall further behind in the business travel marketplace and will be forever regarded as a leisure destination or, by some, as a luxury-only meetings locale. Now is the time for Hawaii to broaden its horizons and attract a wider base of meetings and events business! The future of business travel to the state depends on a solid move-forward strategy.

Kevin Iwamoto, is a former resident of Honolulu and a University of Hawaii, School of Travel Industry Management (TIM) graduate. He earned his Masters Global Leadership Professional (GLP) designation from the Wharton School of Business. Mr. Iwamoto is currently VP of Enterprise Strategy at Philadelphia-based StarCite, Inc., which provides global Web-based solutions to help buyers and suppliers strategically manage corporate meetings and events. Iwamoto is a highly respected and recognized business travel industry leader with 20-plus years experience managing corporate travel and meetings programs. He was president & CEO of the National Business Travel Association (NBTA) from 2001-2003, where he founded the global Paragon Partnership organization, and forged a relationship between NBTA and Meeting Planners International and created the NBTA Groups and Meetings Committee. Kevin has also won every major travel industry award and recognition, culminating in 2009, when he received the NBTA's "Industry Icon Award," the association's highest honor. The award recognizes outstanding lifetime contributions to the managed travel and meetings industry. At StarCite, Iwamoto also writes the popular blog, Strategic Meetings Management http://blog.starcite.com/blog/strategic-meetings-management-2. He is highly sought after by the global media as a subject matter expert for business travel and strategic meetings management.

February 24 2010

Hong Kong Taxpayers will receive 1.29 billion of relief package

Hong Kong is smaller than the Island of Kauai with 7 million people. Like Hawaii, Hong Kong has no natural resources. Let us take a look at what the two (2) governments are doing for their people. Hong Kong under one-country-two systems of the People Republic of China and Hawaii of the United States of America.

There are more than 100,000 Americans working and living in Hong Kong, including many from Hawaii.

Let us take a look at the new budget proposed by the Hong Kong Government, what are they doing for the people and business there?

Why could we "not" do more for the People and Businesses in Hawaii?

Financial Secretary John Tsang Chun-wah is expected to dole out fresh sweeteners in his forthcoming budget, including a salaries
tax rebate of up to HK$6,000 (US$779) and a property rates waiver for two quarters.

Other relief measures likely to be announced by the finance chief in his budget on Wednesday include a one-off allowance for welfare recipients and the elderly as well as subsidies for children from low-income families to help them pay their internet access charges.

The relief package will be worth more than HK$10 billion (US$1.29 billion).

A person familiar with the government's financial position said the administration would only announce relief measures which had been implemented before.

The salaries tax rebate of up to HK$6,000 (US$779) per taxpayer would take about HK$4.1 billion (US$572 million) from the public coffers, while the rates waiver for two quarters will cost the government HK$4.2 billion (US$545 million).

The offer of these two sweeteners would be similar to those granted by the financial secretary in his budget last year.

He is also likely to provide a matching grant of at least
HK$1 billion (US$129 million) for applications by universities, to encourage them to seek private donations.

The government has handed out HK$87.6 billion (US$11.37 billion) since February 2008. Tsang's maiden budget included measures worth HK$44.11 billion (US$5.72 billion), which the financial secretary characterized as returning wealth to the people.

In July 2008, the government announced measures worth HK$11 billion (US$1.42 billion) to address inflation. Last year's budget, delivered in the wake of the global financial crisis, included measures worth HK$10 billion (US$1.29 billion) targeting jobs, competitiveness and economic development.

In May last year the government announced further measures, largely extensions or reruns of those delivered in one or more of the three previous packages.

Hong Kong's economy will expand 4-5 percent this year, Financial Secretary John Tsang said in his annual budget speech on Wednesday, February 24 2010, adding the government will increase land supply and raise its transaction tax on luxury homes to curb rising property prices.

Following are further highlights from Financial Secretary John Tsang's address to the Legislator on Feb 24 2010:

OTHER MAJOR ECON DATA AND MEASURES:
-- Forecast inflation of 2.3 percent in 2010.
-- To raise stamp duties on transactions for property worth over HK$20 million (US$2.58 million) to 4.25 percent from 3.75 percent with effect from April 1.
-- The government will quicken the pace of approving new flat supply in coming few years and will explore means to revitalise the government's Home Ownership Scheme to increase home supply.
-- The number of private residential units completed in 2010 will increase to 14,300 and there will be about 53,000 private residential units coming onto the market in the coming three to four years.
-- The government will put up more urban residential sites for sale by auction or tender in the coming two years, depending on market conditions.
-- The full (unlimited) bank deposit guarantee, introduced in 2008 during the global financial crisis, will remain in force until the end of this year.
-- The estimated capital works expenditure for 2010/11 will increase to HK$49.6 billion (US$6.5 billion), from HK$45.1 billion in 2009/10. Major projects include the Kai Tak Cruise Terminal Building and ancillary facilities, and boundary crossings for the Hong Kong-Zhuhai-Macao Bridge.
-- Will continue to study refinements to yuan trade settlement services, to promote the expanded use of yuan outside China, and to develop the yuan clearing platform in Hong Kong.
-- Will further promote the development of yuan bond business in Hong Kong, expand the issuance size of bonds and increase the types of bond issuers. The amount of yuan bonds issued in Hong Kong reached 16 billion yuan last year, including 6 billion yuan of sovereign bonds launched in Hong Kong for the first time.
-- In addition to the current waiving of stamp duty for trading of exchange traded funds (ETFs) with no Hong Kong stocks in their portfolio, the government proposes to extend the stamp duty concession to cover ETFs that track indices comprising not more than 40 percent of Hong Kong stocks, in an effort to reduce the trading cost and promote healthy growth of the ETF market.
-- Proposes to reduce 75 percent of salaries tax and tax under personal assessment for 2009-10, subject to a ceiling of HK$6,000. It will cost the government about HK$4.5 billion (US$584 million).
-- Hong Kong posted a provisional HK$13.8 billion (US$1.79 billion) consolidated surplus for 2009/10

BACKGROUND
-- The government had expected the economy to shrink by 3.3 percent last year. Hong Kong's third-quarter data was weaker than expected, though retail sales and exports have picked up, along with private consumption as the unemployment rate continues to stabilize and a surge in the city's stock and property markets has created a wealth effect.
-- Hong Kong pulled out of recession in the second quarter. Consumer spending is expected to improve in coming months as confidence in economic recovery grows, although it will be capped by weak wage growth as a recovery in corporate earnings is expected to be slow, analysts have said.
-- The government has expressed concern about the risk of an asset bubble developing although it is not apparent yet. Property prices in the city have surged 30 percent this year, and price gains for luxury property have topped 40 percent, as the city has attracted excess global liquidity and wealthy mainland Chinese have been snapping up luxury apartments.

Key points in the budget

One-off relief measures

* Salaries tax reduction of 75 per cent, capped at HK$6,000
* Property rates, capped at HK$1,500 per quarter, waived for a year
* Rent for public housing tenants waived for two months
* An extra month of CSSA payment, Old Age Allowance and Disability Allowance
* Business registration fee waived for a year
* Students receiving CSSA or student financial assistance will be given HK$1,000 allowance

Property

* Stamp duty on transactions over HK$20 million increased from 3.75 per cent to 4.25 per cent; buyers cannot defer stamp duty payment
* Several urban residential sites on Land Application List put up for sale by auction or tender in the coming two years if they have not been triggered, if needed
* Housing Authority to explore ways to revitalize secondary market of Home Ownership Scheme flats

Economic development

* Stamp duty concession in trading of exchange traded funds extended
* Concessionary profits tax rate extended to cover qualifying debt instruments
* Profits tax deductions for purchase of registered trademarks, copyrights and registered designs
* Phase three development of Hong Kong Science Park started
* Construction Industry Council will receive HK$100 million for training and related work

Medical

* Hospital Authority will receive additional HK$1.24 billion for the training of nurses and providing services for cataract, renal and cancer patients and expand the usage of nine drugs already in use
* About HK$600 million allocated in the next three years to strengthen primary care services
* HK$104 million allocated to vaccinations, including a new Vaccination Office
* Additional HK$40 million to enhance drug safety monitoring

Tobacco Control

* Duty-free concessions on tobacco for incoming passengers abolished

Building maintenance and redevelopment

* Additional HK$500 million for Operation Building Bright to help owners maintain their buildings
* Urban Renewal Authority to launch redevelopment project near collapsed building in Ma Tau Wai Road
* Government will consider relocating its offices and facilities to old industrial buildings

Environment

* A HK$300 million Pilot Green Transport Fund to encourage buses, taxis and ferries that use green technology
* Subsidies totalling HK$540 million to replace Euro II diesel commercial vehicles

Education

* About 300,000 low-income families will receive a subsidy of HK$1,300 or HK$650 a year for their children's internet access fees
* Site at the former Queens Hill Camp in the New Territories will be reserved for establishing a self-financing tertiary institution, which is expected to provide 8,000 degree places
* HK$1 billion allocated for the Matching Grant Scheme for tertiary institutions
* The Language Fund will get a HK$500 million injection to upgrade proficiency in English and Chinese

Employment

* A two-year Pilot Employment Navigator Program launched, which will offer job seekers a HK$5,000 cash incentive
* A 12-month training and internship program to allow 500 young people with poor qualifications to work at NGOs. Government will sponsor each intern HK$4,500 a month, plus giving them HK$4,000 for job training during the program

Welfare

* Over 1,000 additional nursing home places for the elderly will be offered after raising recurrent funding by HK$160 million
* Lotteries Fund will earmark HK$282 million for pilot schemes on home care for the elderly and disabled and a pilot Bought Place Scheme for the disabled
* Nearly HK$200 million to enhance medical and community support for mental patients
* Partnership Fund for the Disadvantaged will receive HK$200 million

Culture and sports

* Extra HK$486 million for art program development in the next five financial years, including HK$69 million for Cantonese Opera Development Fund
* Injection of HK$3 billion into the Arts and Sport Development Fund as seed money
* Beat Drugs Fund will receive HK$3 billion and an additional HK$52 million will be allocated for anti-drug initiatives in 2010-2011

http://www.budget.gov.hk/2010/eng/speech.html 

February 20 2010

Wok of ages - A tycoon has brought under one roof some of Malaysia's best street food in the hope of preserving traditional family recipes
By Sean Yoong

Food bloggers have expressed their delight at the variety of good food on offer at Hutong, which attracted an estimated 250,000 customers in December alone

Before you glimpse the roast duck on skewers, before you hear the clanging Chinese woks, the first hint that you're approaching a melting pot of generations-old family recipes is the sizzling smell of charcoal-fired noodles.

The place is Malaysia's newest food court, whose modern sleekness in a bustling mall belies the rich history of its offerings: many outlets here are run by families who have hawked their food for decades in pushcarts on the streets of Kuala Lumpur, surrounded by traffic fumes, noise and heat.

Now, these masters of classic cooking - once scattered across the city - have come under one air-conditioned roof at the Hutong food court, keeping alive a heritage that some feared would be gobbled up by fast-food chains.

"We have a legacy of 60 years," says Herbert Wong, whose grandfather pioneered a back-alley rice porridge business in Kuala Lumpur's Chinatown in 1949.

Food bloggers have expressed their delight at the variety of good food on offer at Hutong, which attracted an estimated 250,000 customers in December alone

"The recipe is the same - since my grandfather's time, we did not change anything," Wong says while watching his employees prepare piping-hot bowls of creamy porridge topped with raw fish, pork intestines and handmade meatballs.

Like Wong's locally famed Hon Kee Porridge business, the most prominent tenants at Hutong are ethnic-Chinese Malaysians who have whipped up a culinary storm for decades, earning immense popularity because their recipes handed down over generations were known to be the best in town.

The recipes were brought by Chinese immigrants to the country during the British colonial era of the 19th and early 20th centuries. Most of it is cheap, hearty and fast to cook. But the vendors are ageing and some of their children are reluctant to take over the business because of the long, exhausting hours in hot, humid conditions. Also, most of the children are better educated - Wong is a Singapore-trained mechanical engineer - and can secure more professional jobs.

Fearing these signature recipes might some day be lost forever, Malaysian tycoon Francis Yeoh persuaded selected hawkers to open stalls in a food court in Lot 10 - one of Yeoh's shopping malls - overseen by their own family members who control how the dishes are prepared.

"It's good because you can see all these famous brands in one place and you can make sure that they stay alive," says 62-year-old Lee Ah Sang, who started selling bak kut teh, a herbal broth made with pork ribs, nearly 40 years ago.

Yeoh, a self-avowed foodie and savvy entrepreneur who runs the property and utility empire YTL, hand-picked the vendors for Hutong, which he dubbed a "gourmet heritage village".

Vendors prepare their dishes. There are more than 20 stalls in the sprawling but cluttered food hall.

Hutong - Mandarin for courtyard neighborhoods traditionally found in Beijing - fits the look of this place. It's a sprawling but cluttered area where 20-odd stalls seem to spill over to one another. Customers jostle for space during lunch hour, when the mall benefits from being at the intersection of the downtown commercial and tourist district.

Yeoh's spokesman estimates 250,000 people visited Hutong in December, its first full month - an impressive figure because most of Hutong's stalls serve pork, which is off-limits for the ethnic-Malay Muslims who comprise nearly two-thirds of Malaysia's 28 million people. Customers are mainly from the ethnic-Chinese minority.

Food bloggers have raved about being able to sample such a vast variety without having to travel to each of the businesses' original stalls. Hutong's success is gratifying for vendors such as David Low, one of the few non-Malaysians whom Yeoh invited. Low, a Singaporean, has been preparing variations of Malaysian Chinese food, including oyster omelette and stir-fried noodles with prawns, in the neighbouring city state since 1972.

"For the older generation, they loved these kinds of dishes. But now, the younger people go for McDonald's, Western food, Japanese food. Slowly this kind of food might die out," says Low, whose children work as accountants and bankers, and declined to join him in the venture.

Even so, the booming business at Hutong indicates people aren't ready to let these foods go. Despite the proliferation of sushi bars and burger franchises nearby, young office workers and families with teenagers are among the customers.

Yeoh's plan to preserve the recipes for many years to come also seems to be working because some of the vendors' children have shown increased interest in working in Hutong's clean, comfortable environment.

"Each generation will reap what the former generation has sown," says Tan Kai Yong, Yeoh's mother, who helped launch Hutong. "It is my joy that we are able to share the good food that we have enjoyed - not only with my children, but with my grandchildren and their children's children. With Lot 10 Hutong, we are preserving a cultural and culinary legacy."

February 9, 2010

Tourism school should be separate (UH TIM School)

As a 30-year travel industry executive, including a tenure as president and COO of Hawaiian Airlines and a former Travel Industry Management School advisory board member, I am deeply concerned about the loss of the TIM School's independence.

As someone who strongly believes in the need for a premier travel industry school in Hawai'i, I find it extremely disturbing that your editorial staff and the relatively new university administration appear to be rushing to judgment over the future of TIM.

TIM has not only remained a relevant part of the university, the Hawaiian community and the worldwide travel industry, it has actually excelled. Year after year, TIM, its students and faculty are the recipients of numerous academic and industry awards and certifications.

Through those achievements and its innovative programs, TIM has long held a leadership position in the global travel and tourism industry. Its graduates, students and faculty have not only served as a unique resource in Hawai'i, but are often at the forefront for identifying, addressing and providing innovative solutions for a variety of travel industry issues.

TIM needs to be strengthened, not subjected to the bureaucratic ways of the business school, serving so many different academic disciplines.

It is my opinion that a merger as contemplated will diminish the TIM mission and organization, lay aside the almost 50-year history of academic and individual accomplishments, tarnish a hard-earned world-class reputation and quickly lead to the marginalization of what should be the leading travel industry and tourism education and knowledge-creation program in Hawai'i and the Asia-Pacific region.

Robert W. Zoller,
Honolulu, Hawaii USA

Robert W. Zoller has a distinguished and successful passenger, cargo and military aviation career with more than 30 years experience, highlighted by executive and Board of Director positions of increasing scope and responsibility. Mr. Zoller's management and consulting work includes service with: American Airlines, Hawaiian Airlines, Airtran Airways, USAIR, Saudi Arabian Airlines, other airlines and logistics companies, government regulatory authorities and numerous transportation industry organizations.

Mr. Zoller is currently President and Managing Partner for International Management Decisions (IMD) providing Middle East, Asia and U.S.-based investors and Boards of Director strategy and management services. Zoller has earned Master of International Business Administration (MIBA) and a Bachelor of Science (BS, Economics and Business Administration) degree from the University of Maryland, College Park, MD.

Jan 27, 2010

2010: The Year of Transformation

Asia has a crucial role to play as the world economy undergoes transformation, predicts IMF Chief Dominique Strauss-Kahn

The record attendance at the Asian Financial Forum (AFF) 2010 reflected keen interest in the Forum’s theme: “Asia in the New Economic Order.” As the world recovers from the financial crisis, the global economic landscape is changing, most noticeably in a shift of influence from the west to Asia.

Over the two days of the AFF, more than 1,500 bankers, institutional investors, fund managers, regulators, senior executives and journalists from around the world gathered at the Hong Kong Convention and Exhibition Centre to hear leading financial thinkers discuss Asia’s growing role in the post-crisis economy.

The consensus at the conference, held 20-21 January, was that the global economic recovery is in motion – with plenty of warnings about risks that could yet derail it – and that the rebound is being led by Asia, particularly the Chinese mainland. During the Forum, Beijing announced that the mainland’s GDP had grown a robust 8.7 per cent in 2009.

Asia’s New Status

“2008 was certainly a year of humility, where our confidence in markets, institutions and the status quo turned out to be complacency,” Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, told the Forum’s plenary session. “Now we know how fragile and interconnected we are.” He added that 2009 “was a year of unity, where everybody came together to avoid something which could happen such as the Great Depression.”

This year, he said, “has to be the year of transformation, not only the transformation in the balance of power between east and west, but also transformation in terms of global cooperation, and the fact to be aware that working together, we can build something that is different from the kind of economy we had before. From this point of view, Asia has certainly a crucial role to play.”

Strong Mainland Presence

The Forum, organized by the Hong Kong Government and the Hong Kong Trade Development Council (HKTDC), featured a number of senior mainland officials. These included Liu Mingkang, Chairman of the China Banking Regulatory Commission; Lou Jiwei, Chairman and CEO of China Investment Corporation (CIC), the country’s sovereign wealth fund; and Huang Huahua, Governor of Guangdong Province.

Mr Liu said credit played a primary role in the Central Government’s recovery stimulus package by supporting massive infrastructure investment. “This year, we will continue to control the pace and amount of the credit supply,” Mr Liu told the Forum, adding that he expects it to decline to Rmb7.5 trillion this year from a record Rmb9.5 trillion in 2009.

CIC’s Mr Lou noted the rapid growth of the world’s emerging markets. They have been “the major stabiliser in the global crisis,” he said, and with their growing reserves, they are increasingly looked to by developed economies for financing.

Governor Huang, a keynote speaker on the Forum’s first day, outlined the existing financial cooperation between Guangdong and Hong Kong and called for even greater collaboration among cities in the Pearl River Delta.

Marquee Speakers

Economist Nouriel Roubini warns of a possible slowdown in the US, Europe and Japan in the second half of the year

More than 60 distinguished speakers addressed the Forum, including such influential international figures as Nouriel Roubini, Professor of Economics at New York University’s Stern School of Business; Stephen Roach, Chairman of Morgan Stanley Asia; and E Gerald Corrigan, Managing Director of Goldman Sachs and former President of the Federal Reserve Bank of New York.

Professor Roubini, the keynote speaker at lunch on the second day, said the mainland’s challenge was to move from an export-led growth model to one of private consumption demand.

He also warned of a possible slowdown in the United States, Europe and Japan in the second half of this year. “I think that could be the beginning of a market correction,” he said, “because the macroeconomic news is going to surprise on the down side, because earnings news is going to surprise on the down side, because the ability of firms to cut costs is going to run its course.”

Still, he said, the world avoided a financial meltdown. “The recovery is certainly much more robust in Asia. It is a region that, because of its own financial macro and policy fundamentals, has a much better outlook for sustained long-run economic growth, as long as some of those policy challenges I discussed are going to be faced by the policymakers.”

During a panel discussion on China-focused topics, Dr Roach tried to rouse the gathering from its “complacency.”

“You’ve figured out that the west is in trouble because of the crisis and is likely to be in trouble for some time to come, so you presume that you will inherit the earth and the Asian century has arrived,” he said. “I’m an optimist on Asia. I moved out here nearly three years ago because I believe in the future of this region. But it’s not going to be that easy. It doesn’t happen quickly. It’s going to take a lot of heavy lifting for the region and for China.”

Mr Corrigan urged policymakers to stick with the recovery agenda. “Even though the darkest days of the crisis occurred more than a year ago, the legacy of the crisis in terms of swollen central bank balance sheets, large governmental capital interventions in both financial and non-financial institutions and virtually unprecedented budgetary deficits in the US, and elsewhere, remain,” he said.

Hong Kong’s Role

Record attendance at this year’s Asian Financial Forum

The AFF also featured leading government officials from Australia, Indonesia, Japan, Malaysia, South Korea, Thailand and Hong Kong.

Hong Kong Chief Executive Donald Tsang, in his opening address, said that the international community expected Asia – and Hong Kong – to play a larger part in the changing economic landscape.

“Through closer financial cooperation, we aim to play an exemplary role in promoting intra-Asia financial collaboration and integration,” Mr Tsang said. “In particular, we have the experience, the expertise and the motivation to better connect our nations and partners in the region and around the world.”

When to Exit?

One of the key debates at the Forum was when and how governments should wind down their stimulus programmes.

“Exiting the crisis is a real problem,” said Mr Strauss-Kahn. “Everybody came into the crisis almost at the same time. The recovery has different speeds, so different countries will exit from the crisis at different points in time.” He said coordination was essential to avoid spillover of negative effects. “If you wait too long, it’s a waste of resources. The longer you have a stimulus in place, the bigger the public debt, and obviously reducing the public debt will be the top priority for most countries in the coming years. But, on the other hand, if you exit too early, you have a risk of a double dip.”

“Dealing with these fiscal challenges in the near to long term is key to all advanced economies,” Professor Roubini said. “The trouble is if you contract fiscal policy too soon, you end up in recession. If you do it too late, you make another policy mistake that leads to stagflation and inflation.”

By the time the Forum wrapped up, such key topics had been thoroughly aired.

“The AFF is a really premier forum,” said Professor Roubini. “The most important economic, policy and financial issues that are facing Asia in general, China and Hong Kong specifically, are being discussed, and are being discussed at the highest level.”

Lee Jong-Wha: "V-shaped" Asian recovery in 2010 http://www.youtube.com/watch?v=xKd1kmdDM3Y

Jan 23, 2010

A tale of two cities and their abiding suspicions - Shirley Yam*

The Hong Kong-Shanghai relationship has always been handshakes and smiles in public and back-stabbing in private. This week there were more public embraces, and with an intensity that we haven't seen before.

On Tuesday, to the surprise of many, a Shanghai official delegation arrived in Hong Kong to sign a memorandum of understanding with Hong Kong pledging co-operation on all financial fronts. At the ceremony, Shanghai deputy mayor Tu Guangshao said: "Shanghai cannot prosper without Hong Kong's mentoring."

The day after, at the Asian Financial Forum attended by hundreds of foreigners, he spoke for the first time about the strategic importance of Hong Kong-Shanghai co-operation in the world's new financial order. "This is no zero-sum game," he said at the conclusion of his 15-minute talk.

Less than 24 hours later, at the same forum, the president of the Shanghai Stock Exchange, Zhang Yujun, told how much they had learned from Hong Kong.

"Market practitioners are a bit worried" [about the building of Shanghai into a financial centre], he said. "That is unnecessary. Hong Kong has always been our model and benchmark."

In the evening came the signing of an accord between the Hong Kong and Shanghai bourses, promising more collaboration on product and technology development as well as exchanges of talent.

In a rare press conference that followed, Zhang answered questions about the controversial plan to list international corporates in Shanghai.

"You should not be scared," he said. "The number [of foreign issuers] will be small. Our focus is always domestic corporate ... There are more than enough to be listed [both in Hong Kong and Shanghai] till the retirement of me and [HKEx (SEHK: 0388, announcements, news) chief executive Li] Xiaojia."

Then came the champagne toast led by deputy mayor Tu, who described the accord as "a very important consensus on very important issues reached by two very important institutions at a very important time".

"Co-operation will be the loudest key melody between Hong Kong and Shanghai in the time to come," Tu said.

Overwhelming, isn't it? Yet none of these speeches or agreements had been planned until late last month, according to various sources.

"There have been lots of undercurrents in the past few months ... There is an urgent need to do something about [the animosity between Hong Kong and Shanghai]," one insider said.

The rivalry between the two cities is nothing new. The tension, at least on the Hong Kong side, rose to a new level last spring when the State Council committed in a policy paper to make Shanghai a financial centre by 2020.

Two letters from the office of the Hong Kong chief executive subsequently arrived at the State Council, in September and November.

They expressed grave concern about the plan to allow the listing of international companies such as HSBC (SEHK: 0005, announcements, news) and NYSE Euronext in Shanghai, according to two informed sources. The letters said Shanghai's so-called international board would compete against the Hong Kong bourse, the success of which was vital to the prosperity (SEHK: 0803, announcements, news) and stability of the city.

This is not the first time the Hong Kong government has complained. In 2007 a similar petition was made against the listing of Hong Kong-listed red chips on the mainland market.

But the times are different now. The 2008 financial crisis exposed the weakness of United States-dominated financial mechanisms. It accelerated the rise of China and increased the country's determination to play a leading role in creating a new order. And this required the existence of a "national" financial industry that is vibrant, safe and sophisticated.

Just imagine the introduction of the yuan as a reserve currency or China having an important role in the international financial community without a mature onshore and offshore yuan market.

While the rest of the world will do their best to delay this process, internal bickering between Hong Kong and Shanghai is the last thing Beijing wants to see.

For Shanghai, the need to befriend Hong Kong - a city of huge political importance in the eyes of Beijing - is also getting obvious. The complaints from Hong Kong put a brake on the listing of international firms and red chips.

Therefore, in Tu's words, "with the will of the central government, the support of relevant central departments and the effort of both Hong Kong and Shanghai, we have improved our communication".

The result is this week's all-out campaign to woo Hong Kong, the pledge by the Shanghai bourse to encourage more locally listed firms to come, and the first open support of the international board by the Hong Kong exchange.

Yet response from the local community remains cold. The accords made no splash in newspapers. Some even called the effort "sleeping with the enemy".

That is not difficult to understand. First, the accords are no more than a collection of projects that have already been going on. Second, Hongkongers have seen similar initiatives many times before.

There was the 1994 initiative proposed by then-Shanghai mayor Xu Kuangdi. There was the 2003 initiative signed by then-Hong Kong chief executive Tung Chee-hwa and former Shanghai party boss Chen Liangyu, with the encouragement of state leader Zeng Qinghong.

Tung even assigned the financial secretary to head a joint working group with his Shanghai counterpart, giving it more significance than the current one, which is to be headed by the minister for financial services and the treasury.

Yet none of the past initiatives produced any results. In fact, no meeting was held after the 2003 inauguration.

"There's no incentive to push forward," a source involved in the 2003 initiative said.

The intention of state leaders to bring the two sides together should not be doubted. However, the suspicion between the two cities is simply too deeply rooted to be removed by a piece of official paper.

"There is an urgency to make it real this time," the insider said.

Let us hope so.

*Veteran journalist Shirley Yam brings you insights on financial issues and mainland policies affecting your investment and business

January 10 2010

Paradigm in Progress

As the world pulls out of its deepest recession in 80 years, a new economic paradigm is emerging, one that sees a fundamental correction addressing global imbalances. The savings rate in the United States is set to increase, and Chinese mainland domestic demand is expected to absorb excess production capacity growth.

Overall business in traditional markets is not expected to return to pre-crisis levels any time soon, so Hong Kong exporters will have to fix their sights on emerging markets if they want to achieve significant sales expansion. But at least they’re actually looking at expansion. How different that scenario is from just a year ago. Although the US subprime crisis precipitated the collapse of global markets in 2008, the underlying fuel for the crisis was over-spending in so-called rich countries and excessive savings in emerging economies. That was particularly so in developing Asia, led by the mainland.

Of the emerging markets, the most promising remain developing Asia (the mainland, India and emerging member countries of the Association of Southeast Asian Nations (ASEAN), with Taiwan and South Korea). And the mainland holds the largest potential, thanks to measures aimed at boosting incomes and consumption.

Within ASEAN, Vietnam is likely to post the fastest growth over the medium term; Malaysia and Indonesia are other bright spots. India is expected to grow faster due to its large domestic market and lesser reliance on trade.

Central and Eastern Europe could benefit from the EU’s recovery to an extent but are still suffering from the western European credit crunch, while Russia and the Middle East are on course to take advantage of reviving oil and commodity prices.

Buyers in emerging markets are more cost-conscious than they used to be, despite increasingly positive market news. They tend to place smaller orders than those in mature markets, but they are also more willing to accept simpler design – less functionality in electronics, for example – and are more receptive to new brands.

Indeed, the numbers of buyers in fledgling markets are due to increase given the emergence of new middle-income class members, modernizing retail practices and sustained trade liberalization.

Practical Trumps Luxury

Consumers will be looking for value and practical use. Recession-led trends in the mature markets will likely solidify into long-term structural changes. Spurred by household deleveraging, higher savings and cutbacks in spending, consumers in developed markets, not least the US, are generally inclined to prefer practical, durable, value-for-money products rather than luxury items.

Sales of competitively priced products that are stylish, safe and environmentally friendly have strengthened, while private labels are gaining popularity over branded products.

Consumers in traditional markets can also be expected to stick to discounters and hypermarkets. Increasing retail concentration will force closures of specialty and smaller stores, as well as the demise of smaller and inefficient players along the distribution chain. As the winners grow larger, they may have higher expectations of their suppliers, moving away from traditional sourcing channels.

Changes in Sourcing Habits

To streamline sourcing operations, overseas buyers will likely reconstruct their supply chains and reduce their suppliers. The mainland should remain the top sourcing destination, although the focus will extend beyond the Pearl River Delta (PRD) to the Yangtze River Delta and other parts of the mainland.

Products such as clothing, footwear and travel goods, which need fewer supporting industries, may face keener competition from Asian production centers such as Vietnam.

Sourcing channels used by overseas buyers are evolving, too. For now, trade fairs and exhibitions, existing suppliers/referrals and Internet websites and trade portals are the most preferred channels.

Over the short to medium term, it is expected that buyers will move further towards non-traditional channels, including electronic trade magazines and product catalogues. But trade fairs and exhibitions will likely remain an effective means of sourcing.

Value-added Strategy

Bigger, leaner suppliers have filled the gap left by the closure of less efficient producers. In many cases, surviving suppliers have scaled down production capacity, yet increased outsourcing to reduce overhead and to handle small, rush orders.

It is generally expected that the number of Hong Kong suppliers will rise again. These are unlikely to return to pre-crisis levels in the near term, however, as overseas demand is forecast to grow more slowly than before.

Many Hong Kong manufacturers, mainly family firms, are faced with succession problems, as their founders reach retirement but younger family members choose not to take over the reins.

Like their counterparts on the mainland, Hong Kong exporters and manufacturers operating in the post-recession era are expected to transform and upgrade themselves, adopting a high-value-added strategy to secure a foothold in the competitive business environment.

Tinkering in the World’s Factory

The Pearl River Delta has long been China’s manufacturing heartland. Yet rising production costs, coupled with a tougher business environment, have forced manufacturers to consider moving to lower-cost regions. Chinese government efforts to encourage industry relocation and upgrades provide another driving force.

Many plans have been on hold because of the global recession, but industry relocation is expected to pick up, with manufacturing bases increasingly extended to the Yangtze River Delta and inner regions. Enterprises are expected to explore lower-cost centres within regions. But China’s role as the world’s factory still appears secure. No other country possesses such huge production capacity, capability and sophisticated support industries.

The production supply chain will likely go abroad, with China remaining the region’s production hub. Mainland manufacturers are under mounting operational pressures, and a significant number have closed amid waning exports.

Large-scale manufacturers and those engaging in domestic business or benefiting from government support are less affected. Larger suppliers able to meet the stringent product safety standards of developed economies are likely to survive.

More significantly, industry consolidation seems to be irreversible. Surviving manufacturers will become bigger, buoyed by government initiatives to encourage industry upgrades and environmental protection, and rising foreign demand for safe, quality products.

Increasingly, they will be able to produce items ranging from high-tech finished goods to raw materials and semi-manufactured items. More large manufacturers will be able to develop their own brands, selling directly to overseas markets, while capturing a share of the lucrative domestic business.

Most probably, Hong Kong suppliers will continue to move up the value chain, undertaking product design and brand promotion, while relocating production bases away from the PRD to other parts of the mainland, or even to other countries.

They are also expected to further diversify into emerging markets. Even so, Hong Kong suppliers are now showing a keen interest in the mainland market, notwithstanding the operating hurdles.

Hong Kong’s role as a sourcing hub is expected to remain sustainable. According to a Hong Kong Trade Development Council survey last April on mega fairs, 96 per cent of overseas buyers said they would increase or maintain their sourcing with or through Hong Kong once the economy recovers.

Despite this promising finding, the challenges are intensifying for Hong Kong firms. With export demand from traditional markets unlikely to return to pre-crisis levels soon, consumers are expected to continue to look for discount and practical items, while retailers and importers hold the bargaining power over suppliers.

Hong Kong suppliers also face operating difficulties on the mainland, from rising labour costs to tougher environmental protection regulations, while confronting increasing competition from indigenous mainland enterprises.

Business Instincts

To enhance competitiveness, Hong Kong will have to build credibility, expertise and effectiveness as a marketing platform, especially sharpening skills in sales and marketing, product design, quality assurance and supply-chain management.

Hong Kong companies will have to make good on their grasp of evolving consumer trends, then formulate the right product and marketing strategies. They will also need to reach out to low-cost retailers, particularly discounters and hypermarkets.

To meet continuing demand for quick response and flexible delivery, traders also have to strengthen their supply-chain management. Hong Kong firms will have to establish themselves as value-for-money suppliers with a clear differentiation from other low-cost vendors in Asia.

Hong Kong exporters will have to revisit their business instincts for good deals, hunting for new business among the rising middle-class in emerging markets. Counter-intuitively, they may well do that by offering products with simpler design and less functionality than more sophisticated competitors, building their own brands and leveraging their sourcing capability on the mainland.

December 23 2009

Asia Rising

Asia, led by the Chinese mainland, is leading the global economic recovery

Whether or not you subscribe to the notion that this will be “the Asian century” – that China, India and the rest of developing Asia will dominate the 21st century economically, as Great Britain did the 19th and the United States did the 20th – there seems to be almost universal agreement that Asia’s star is on the rise.

So what role will the region play in the new world economic order? And what do Asian businesses and governments need to do to maintain their upward momentum?

Certainly Asia has made great progress since the dark days of the 1997-98 financial crisis, which forced banks and regulators to implement reforms to improve the health of the region’s banking sector. And strong economic growth is returning to the region in the wake of the global economic slowdown.

Taiwan appears to be coming out of recession, while the recovery in South Korea has picked up pace. The Chinese mainland economy grew 8.9 per cent in the third quarter of this year, and India’s expanded 7.9 per cent in the same period. The Asian Development Bank recently increased its growth forecast for regional developing economies as a whole to 4.5 per cent in 2009 and 6.6 per cent in 2010.

Dynamic Region

New York-based economist Professor Nouriel Roubini is bullish on Asia

Nouriel Roubini, Professor of Economics and International Business at New York University’s Stern School of Business, foresees an anaemic global economic recovery, but is more optimistic about Asia. “The Asia-Pacific region is one of the most dynamic regions of global economic growth,” he says. “While I’m concerned about advanced economies, I have a more bullish view of China and for the emerging markets, especially in Asia. And there’s a lot of attention on Asia because, in the next few years, as long as reforms continue, China and Asia’s growth is going to be one of the most significant components of global economic growth . . . The future belongs to Asia in many ways.”

Lee Jong-Wha, the Asian Development Bank’s Chief Economist and Head of its Office of Regional and Economic Integration, agrees that “Asia is leading the recovery from the global slowdown.” But, he cautions: “The crisis clearly showed the risks attendant to excessive and unbalanced openness. Globalisation must be matched with well-entrenched institutions and regulatory systems.”

Stephen Roach, Chairman of Morgan Stanley Asia, is upbeat about the long-term growth of Asian consumer markets. “But today’s Asia is still an export machine,” he says. “The internal private consumption share for developing Asia stands at a record low right now of about 45 per cent. The export share has moved up 10 percentage points alone since the financial crisis of the late ’90s. At that margin, this is a region that’s far more dependent on external than internal demand.”

Without external demand, exports can’t grow enough to absorb surplus labour and maintain stability, so Asian countries have to encourage greater internal consumption. In Malaysia, Thailand and Vietnam, exports represent more than half of the national GDP. The good news for these countries, at least in the short term, is that the strong mainland economy is offsetting weaker external demand in the west.

Intra-Asian Trade

James Adams, The World Bank’s Vice President of East Asia and Pacific Region, notes that the economic rebound in East Asia and the Pacific “has been surprisingly swift, but the challenge is to turn that rebound to longer-team recovery.” That means developing Asia needs to resist protectionism and become more economically integrated with the rest of the region and the world.

The Association of Southeast Asian Nations (ASEAN)-China Free Trade Area, starting next year, will be a step in that direction.

“One can only be optimistic that China has come in on that,” says Sir David Brewer, Chairman of the China-Britain Business Council. “With China being part of a free-trade area, and with investments from Hong Kong and Singapore in China, and China now investing outwards and getting more involved in companies in Asia, it could have more effect than ASEAN without China.”

For small and medium-sized enterprises (SMEs), growing intra-Asian trade and emerging consumer-driven markets in populous nations such as Indonesia, Vietnam, Thailand and the Philippines translate into business opportunities for SMEs – along with those presented by the burgeoning mainland market, of course.

Hong Kong’s Role

HSBC Executive Director Peter Wong: “Hong Kong has benefited because of the growth of China”

HSBC Executive Director Peter Wong: “Hong Kong has benefited because of the growth of China”
In the financial arena, as well, Asia is taking on a greater role. “The world economy is changing – more and more with Asia as its centre of gravity,” says Michael Smith, Chief Executive Officer of the Australia and New Zealand Banking Group Ltd. “This is creating major opportunities for Asia to continue expanding the influence of its major financial centres like Hong Kong.”

HSBC Executive Director Peter Wong says: “According to the City of London’s Global Financial Index, Hong Kong’s position has come up quite a bit, edging out Singapore. The index has also indicated that Hong Kong and Singapore are quite important financial centres. In the past, they were a distant third and fourth to New York and London, but now it’s getting very close. And it’s also indicated that Hong Kong is going to be one of the more important centres.

“Hong Kong has benefited because of the growth of China,” notes Mr Wong. “There are a lot more IPOs from China coming to Hong Kong, so you’ll see a lot more bankers from the UK, the US and Europe coming to Hong Kong to capitalise on these opportunities.”

Sovereign Wealth Funds

Also flexing their muscles are Asian sovereign wealth funds, such as the China Investment Corporation (CIC), buying stakes in Western companies – not taking them over so as to create a political backlash, but acquiring smaller stakes.

“We’re quietly seeing now a lot of investments taking place into the United Kingdom from the sovereign wealth funds, from CIC [and] from SAFE, the State Administration of Foreign Exchange,” says Sir David. “It may not be as headline-grabbing as takeovers, but, for example, CIC came in with substantial support when Canary Wharf needed rescuing by the Qataris. I think that’s rather the pattern now. They’re coming in with other reliable international partners and spreading their net quietly by taking substantial percentages in organisations, but not totally taking them over. I think that’s a healthy sign.”

James Adams, Sir David Brewer, Lee Jong-Wha, Stephen Roach, Nouriel Roubini and Michael Smith will be featured speakers at the Asian Financial Forum (AFF), 20-21 January 2010. Peter Wong is Chairman of the AFF Steering Committee.

October 9 2009

A call to action

Johnson --

This morning, Michelle and I awoke to some surprising and humbling news. At 6 a.m., we received word that I'd been awarded the Nobel Peace Prize for 2009.

To be honest, I do not feel that I deserve to be in the company of so many of the transformative figures who've been honored by this prize -- men and women who've inspired me and inspired the entire world through their courageous pursuit of peace.

But I also know that throughout history the Nobel Peace Prize has not just been used to honor specific achievement; it's also been used as a means to give momentum to a set of causes.

That is why I've said that I will accept this award as a call to action, a call for all nations and all peoples to confront the common challenges of the 21st century. These challenges won't all be met during my presidency, or even my lifetime. But I know these challenges can be met so long as it's recognized that they will not be met by one person or one nation alone.

This award -- and the call to action that comes with it -- does not belong simply to me or my administration; it belongs to all people around the world who have fought for justice and for peace. And most of all, it belongs to you, the men and women of America, who have dared to hope and have worked so hard to make our world a little better.

So today we humbly recommit to the important work that we've begun together. I'm grateful that you've stood with me thus far, and I'm honored to continue our vital work in the years to come.

Thank you,
President Barack Obama

July 25 2009

繼續強化拓展香港加州經貿合作 - 梁永恩履新在即先晤傳媒

候任香港駐三藩市經濟貿易辦事處處長梁永恩(左)首次會見傳媒,與將離任現任處長的張美珠合照。記者朱瑞良攝

候任香港駐三藩市經濟貿易辦事處處長梁永恩昨日首次會見傳媒,並強調上任後將繼續強化香港與本地各界溝通,而該處早前在那柏酒鄉的推廣亦成效顯著,兩地貿易增加。

六產業與加州息息相關


梁永恩上任後,將代表香港政府在美國西岸
19個州推廣香港的商機。他說,香港的六項開拓產業與加州息息相關,例如在加州發展蓬勃的環保產業,及以電影知名的文化創意。曾出任大學教育資助委員會秘書處副秘書長的梁永恩並表示,加州擁有受國際歡迎的大學教育,香港亦有數間學院擠身世界排名,兩者有互補的空間,因此他希望在未來日子加強推廣多方聯繫。

經貿處曾於本年
4月,安排香港財政司司長曾俊華參觀那柏酒鄉,推廣香港從40%葡萄酒稅減至完全豁免。

現任香港駐三藩市經貿處處長張美珠指出,推廣成效顯著,各地入口到香港的葡萄酒數目倍增,包括佔美國市場
9成的那柏酒鄉。不但收到本地酒商的查詢,到香港參加酒展的美國酒商亦有所增加。因為香港逐漸成為紅酒收藏中樞,業界更指香港將會很快取代倫敦成為全球第二大的紅酒拍賣城市。

梁永恩說,上任後將繼續強化香港與美國本地團體、政界人士及學術界人士溝通,令他們多認識香港來港發展或旅遊。

張美珠將短暫休假再出發

1993年加入香港政府的梁永恩曾於多個崗位工作。他指出,因一直與各層面從社區市民至專業人士接觸,這有助他上任經貿處處長後在聯絡及溝通方面的工作。過去曾到訪三藩市兩次的梁永恩表示,與三藩市有緣份,喜歡她的多元化、有魄力及溫和天氣。

即將離任的張美珠則表示,非常幸運可以在三藩市工作,
4年來多采多姿收穫豐富,亦有不少大型機會宣傳香港,包括經貿處分處20周年慶祝典禮等。她於下周六(1日)晚回港後將短暫休假,暫時未知道新工作崗位安排。

張美珠最後說,過去數年在工作認識不少朋友,希望回到香港繼續保持友誼,而候任處長梁永恩年輕有為及有衝勁,相信繼續當美國本地與香港的橋樑。

May 14 2009

NEW FOREIGN TRADE REGULATIONS TIGHTEN ENFORCEMENT, INCREASE PENALTIES

Census Rule Makes Significant Revisions to Automated Export System The Census Bureau published in the June 2 Federal Register its long-awaited final rule relating to the new Foreign Trade Regulations.

This rule represents a substantial overhaul of Census' export regulations and includes provisions that mandate the use of the Automated Export System, significantly increase penalties and allow for greater enforcement by the departments of Commerce and Homeland Security.

While the effective date of the FTR is July 2, the rule will not be formally implemented until Sept. 30 in order to give the export community time to bring their processes and activities in line with the new FTR requirements.

The final rule was issued after Census and the DHS resolved a three-year dispute over the sharing of confidential export data with foreign governments and the Option 4 program, which allows export data to be filed up to 10 days after vessel departure. Census had strongly opposed the DHS's push to share confidential export information with foreign governments for antiterrorism purposes, while the DHS sought to put an end to Option 4 because it believed this process creates an unacceptable loophole for illegal exports. In the end, the two agencies agreed to disagree on the confidentiality issue, and the final rule therefore retains the proposed rule's prohibition on sharing the data contained in AES submissions with foreign governments.

With respect to Option 4, the existing moratorium on new users will continue and only currently approved filers may use this procedure. Among the other key provisions of the FTR are the following. replaces the term SED (Shipper's Export Declaration) in the FTR with Electronic Export Information requires all export data to be filed electronically through the AES-paper SEDs will no longer be accepted describes the process for AES filing by U.S. principal parties in interest or their agents describes the data elements required for AES filing and when EEI must be transmitted via the AES specifies that only the internal transaction number will serve as proof of AES filing-the external transaction number will no longer be acceptable as proof of filing significantly increases civil penalties to $1,000 to $10,000 per violation and criminal penalties to a maximum of $10,000 per violation and/or 10 years' imprisonment creates new provisions for the filing of voluntary self-disclosures-Census will share the information contained in such disclosures with other exporting agencies, and the weight afforded to such disclosures as a mitigating factor in penalty cases is entirely within Census' discretion designates the Bureau of Industry and Security's Office of Export Enforcement and the DHS's U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement as the offices responsible for enforcement of the FTR Exporters Advised to Review Compliance Status Ahead of FTR Implementation As announced in late 2006, Census has begun auditing exporters who are not meeting their AES obligations; i.e., those who are not complying with their Option 4 filing requirements, have a high number of late AES filings or unresolved fatal errors, or fail to achieve a 95 percent compliance rate in the AES compliance reports issued monthly to AES filers. Penalties for violations have not generally been enforced by Census, but that will soon change with the implementation of the FTR. Further, because of the greater sharing of information among the U.S. government agencies responsible for the enforcement of export laws and regulations, exporters may find themselves in a position of having to file multiple, simultaneous voluntary disclosures with various agencies.

In light of the increased FTR enforcement initiatives of Census, CBP, OEE and ICE, the increased penalties under the new FTR and the sharing of information among export agencies, prudent exporters will move quickly to evaluate and improve their export compliance status. This is particularly vital for those exporters who rely on freight forwarders or other agents to submit their AES records, since AES compliance reports and fatal error reports are issued to the AES record filers and not necessarily to the exporters who ultimately have liability for the accuracy of those records. Reliance on freight forwarders is not a valid excuse for noncompliance with the FTR, as the exporter remains principally liable for its agent's mistakes.

February 18 2009

Dear Colleague & HKCHcc Members:

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009. This new legislation provides a one-time payment of $250 to Social Security and Supplemental Security Income beneficiaries.

Over 60 million beneficiaries will receive a one-time payment. We expect all payments to be delivered by late May 2009. To assist us in issuing these payments as quickly as possible, beneficiaries should not contact Social Security unless they do not receive their payment by June 4th. As we move to implement the new legislation, we will continue to provide updates to keep you informed of our efforts in this area.

You can learn more about these one-time payments at www.socialsecurity.gov

We ask that you share information about these efforts with members, colleagues and any parties who would find them of interest.

I look forward to the opportunity to discuss this important legislation with you.
Sincerely,
Cheri Arnott
Associate Commissioner
for External Affairs

February 13 2009

  http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20090213/OPINION03/902130331&template=printart

Collaboration key to improving economy - co-sponsored by Hong Kong.China.Hawaii Chamber of Commerce (HKCHcc)

Government, business and labor must form a necessary alliance

By Jim Tollefson and Melissa Pavlicek

As we enter 2009, the state of the national and local economy is the primary concern for us all. Under the threat of living in the worst economic times in recent history, it is imperative that we re-examine how we do things in growing and strengthening our economy.

All businesses and their employees are being impacted in one way or another. Not a day goes by when we do not hear about a local establishment closing its door, employees losing jobs and businesses cutting back on expenses. This uncertainty erodes our confidence, both individually and collectively, which in turn impacts our need for social services and our livelihood.

Perhaps the good news is that for the first time in a long time, we can all focus on a common goal of improving our economy. This will require an unusual but necessary alliance of government, business and labor to collectively sacrifice, commit and develop a game plan for us that will stimulate the economy. Although these economic challenges will not go away anytime soon, we believe this is an opportunity for the various stakeholders to collaborate and have the discipline to work toward a common purpose of restoring confidence in an economy that will promote job retention and creation in the most beneficial way.

In difficult times, it is easy to be focused only on the problems and potential solutions that impact you or your business. That's understandable when the kinds of problems we face are ones of economic survival.

But it is also in these difficult times that we must look beyond our individual wants and focus on the "greater good." With limited resources, and with time running out on many businesses, we need to focus on the economy. Retaining and creating jobs must be our priority. Without work, without jobs, we will find ourselves in a downward spiral that negatively impacts all aspects of our society.

And so while there are many problems and issues that are critically important to each of us, we believe now is the time to set aside those differences and focus on our immediate need of job retention and creation. Right now, today, we need to focus on keeping our economy going, our people working, our families in their homes and schools.

In Hawai'i, our strength is our commitment to each other, to our 'ohana. We have united in the past when faced with a common enemy, and today that common enemy is a recession. Let us unite again as a community and remain focused and steadfast in our search for solutions to the economic times. It is this expression of faith in our ability to work together that will enable us to overcome the trepidation and fear that we are experiencing.

The cornerstone of our state has always been its people and the willingness and commitment to step up in times of need. During the 2009 legislative session, we must approach legislative process with the singular goal of finding solutions to the economic downturn. We must focus on employment, on retaining and creating jobs, and collectively on achieving positive results for Hawai'i and our citizens.

Additional Facts

December 18, 2008

Creative openings - Hong Kong has played a vital role in the mainland's reform and opening up, and will continue to do so by Donald Tsang

This year, our country marks the 30th anniversary of the reform and opening-up process that has had a profound impact not just on the mainland, but also on the rest of the world and Hong Kong. On December 18, 1978, the third plenary session of the 11th Communist Party Central Committee was convened in Beijing, which resolved to shift the focus of work to modernization. Put simply, the long-held policy based on the principle of class struggle would give way to one that was geared towards economic construction.

This was a profound and historic decision. The reform and opening-up policy provided the Chinese people with an opportunity to innovate and give their best. Over the past 30 years, the mainland has enjoyed rapid economic growth, with average annual gross domestic product rises of 9.88 per cent. Hundreds of millions of people have been lifted out of poverty.

The reform and opening up has also brought China back into the international community and enabled it to contribute to global development.

In 1978, China's trade volume was less than 1 per cent of the world total. Today, it accounts for about 8 per cent. At the same time, China has been committed to maintaining peace and stability in the region and globally. In future, China will continue to fulfill its international obligations as a world power promoting the welfare of mankind and working with other countries to build a harmonious world.

The mainland's reform and opening up, and the rapid development of Hong Kong, are closely intertwined. While the tremendous changes in our country have had an enormous impact on Hong Kong, the city has also been a participant in the process and has made important contributions to our nation's development.

Hongkongers were the pioneers of investing in the mainland economy. We were the first to establish joint ventures across the border. Today, Hong Kong's realized direct investments on the mainland have reached almost US$320 billion - about 40 per cent of the mainland's total external direct investment. In Guangdong alone, some US$112 billion has been invested - almost two-thirds of all direct external investment in the province.

Capital investment aside, Hong Kong has also exported management experience, international business networks and market economy concepts to the mainland.

The contributions by Hong Kong entrepreneurs go far beyond their investments on the mainland. Many have devoted their knowledge, expertise, time and personal wealth to promote the development of education and welfare there.

The city's role will not diminish as our country continues to develop. Rather, it will become more crucial.

First, Hong Kong will continue to play a vital role as the mainland continues to enhance its economic structure and merge with the global economy. The city can help the mainland develop modern service industries including trading, logistics, hosting conventions and exhibitions, information technology, accounting, legal and engineering services.

We can also help mainland enterprises to fully use overseas markets to integrate into the world economy.

Second, almost every major economy has a world-class financial centre. Hong Kong is not only a fund-raising centre for mainland enterprises; it is also the only international financial centre in China.

Third, global competition today is among regional economies. By complementing each other's strengths, Hong Kong and Guangdong have set a successful example of regional co-operation over the past three decades. But there is still plenty more room for co-operation in the future.

We are working with Guangdong on a wide range of fronts to transform the Pearl River Delta region into a world-class economic zone, serving as our country's "flagship" as it competes globally.

Fourth, China's development requires good education and a vast pool of talent. Hong Kong has an excellent track record in attracting talent from around the world and providing a high standard of tertiary education.

Finally, given the strength of our legal system, market mechanisms, administrative efficiency, corporate governance, entrepreneurship and city administration, Hong Kong can help the mainland to refine its market economic system, formulate effective public policies and strengthen its city administration.

Although the world is in the grip of financial turmoil and facing a recession, co-operation between Hong Kong and the mainland will not falter. The central government has pledged to back Hong Kong and take effective measures to support us. These measures will not only help the city face the present challenges, but also aid the mainland's continued opening up and reform.

In addition, the 4 trillion yuan (HK$4.5 trillion) stimulus plan recently unveiled by Beijing will not only help sustain the mainland's economic growth; it will also provide a plethora of business opportunities for Hong Kong enterprises.

Hong Kong and Guangdong will continue to deepen co-operation in the financial and services sectors, as well as on cross-boundary infrastructure, to maximize our regional advantages as we tackle the economic crisis together.

The past 30 years of reform and opening up have been of singular importance to China and the world. It has changed the course of our nation's history and affected the economic development of the whole world.

Hong Kong should take great pride in its active, unique role in this process. As the reform and opening up continues, we will grasp every opportunity to deepen our integration with the mainland, and make the best use of our competitive strengths to contribute to the development of our country.

At the same time, Hong Kong will enter a new phase of development that holds even greater promise for our city and our people.

Donald Tsang Yam-kuen is the chief executive of Hong Kong

December 9, 2008

The corruption factor by JOSEPH CHENG

Chen Shui-bian is in custody; the "son of Taiwan" has become the "shame of Taiwan". His case has led Hong Kong people to question the democratic system. His allegedly corrupt behavior is, of course, a matter of personal conduct. But there are institutional factors behind such behavior. The hysterical accusations from his daughter, Chen Hsin-yu, that all Democratic Progressive Party leaders had received money from her father naturally reflect problems in the electoral system.

Taiwan's electoral campaigns are extremely costly; this is a political fact recognized by the people. Campaign funds of political parties and candidates come mainly from business groups; this is the root cause of collusion between businessmen and politicians. Business groups making major donations to electoral campaigns naturally expect returns. It is an open secret in Taiwan that public-sector infrastructure projects involve substantial kickbacks.

When electoral campaign expenditure exceeds the legal limits, there will be all kinds of shady deals. Since they go unreported, there is no accountability and party leaders responsible for fund-raising could be easily corrupted.

The vast confidential state funds at the Taiwanese president's personal disposal are a legacy of earlier authoritarian regimes. They are also related to Taiwan's difficult diplomatic and security situation. The authorities spend substantial funds on intelligence gathering (especially against the mainland), overseas united-front activities, bribery to secure diplomatic relations, and the like. Such expenditure cannot be in the open; it is therefore controlled by the president alone. This gives rise to opportunities for corruption.

In many democracies, secret operations of intelligence agencies are monitored by oversight bodes such as America's bipartisan Senate Select Committee on Intelligence. The monitoring process remains classified, but nonetheless it serves as an effective check-and-balance mechanism.

The US model may offer a useful point of reference for Taiwan. The key question is whether its political parties in the legislature have sufficient mutual trust and self-discipline to fairly monitor various types of covert activities on a confidential basis to create effective checks and balances. This is certainly an important test for a mature democratic system.

There is probably already adequate public support for the effective control of electoral campaign expenditure according to the law. The same conditions exist as in Hong Kong in the 1970s, when the Independent Commission Against Corruption was established.

If Taiwanese President Ma Ying-jeou is determined to combat corruption, setting up a high-level committee or working group headed by the premier is still inadequate. What is needed is bipartisan co-operation and determination to mobilize public opinion to reform the Central Election Commission and the judiciary.

On this basis, special units may then be set up within the commission and the police to monitor election campaign expenditure, together with a broad publicity campaign. This should ideally be supported by advisory committees consisting of respected anti-corruption community leaders.

The starting point may well be the local elections next year. Candidates from all political parties should be treated equally. The commission, police and judiciary will then gradually establish a strong image and style to run elections cleanly. Further institutional reforms are also needed. Rules on electoral expenditure must be clearly stipulated and loopholes closed.

Mr Ma is perceived to be very clean, politically. But his performance has been lackluster in recent months. Establishing a clean electoral system will certainly help him restore his appeal to the electorate.

Taiwan's democracy has been a major contribution to the Chinese nation. Clean elections and corruption-free politics will secure even greater respect from the international community.

Joseph Cheng Yu-shek is a professor of political science at City University of Hong Kong

November 20, 2008

United States is guarding China's nuclear 'secrets' by Alex Lo SCMP

It is frequently asserted without proof or evidence by top Pentagon officials and senior US politicians that China maintains extreme secrecy with its military development. The media then duly reports their complaints as if they were facts. The latest criticism comes from an interview with Rear Admiral Richard Wren, commander of the Japan-based USS George Washington carrier strike group. If you repeat the same thing over and over, and the media duly reports it, it must be true.

Again, Admiral Wren claimed China's military is opaque with its intentions and capabilities. "We all encourage China to become a responsible global participant. But the way they are growing their military is confusing," he said. "Why do you need a missile that can go thousands and thousands of kilometers if you are a defensive force? The total number of submarines they have, and their capabilities, sure doesn't point to a defensive or even an `active defence force', as they like to call it."

But, it remains unclear whether the Chinese military is any more secretive than, say, the US Defense Department. It may be safe to assume that a nation's nuclear arsenals and weapons development programmes are among its best-kept military secrets. But, on this, China has been remarkably open - to the US government.

A reader brought to my attention the September edition of the journal Physics Today. It contained an account of the history of China's nuclear weapons program by Tom Reed, a US nuclear weapons engineer and former secretary of the air force. He knows this because, in 1990, his associate, Danny Stillman, was given two full tours of China's key thermonuclear weapons research, development and testing facilities across the country. Dr Stillman made seven more visits between 1991 and 1999.

Dr Stillman was, at the time, director of the technical intelligence division at Los Alamos National Laboratory, where the world's first atom bombs were developed and subsequently dropped on Japan. The Chinese knew exactly who Dr Stillman was and what he was after. He asked for the tours and he was promptly granted them.

He was taken to research centers at Fudan University in Shanghai, a prime component of the Chinese nuclear weapons complex; Science City, the intellectual capital of the Chinese nuclear empire on the outskirts of Mianyang , in Sichuan province; and several hard-to-reach test sites. He was shown weapons designs, testing equipment and records of China's nuclear tests up to that time.

Why did the Chinese do it? "For one thing," Mr Reed wrote in the article, "the Chinese probably sought deterrence. An American awareness of Chinese nuclear capabilities should lead to a more cautious American military posture around Taiwan and in the Pacific Ocean."

Beijing has defined its national interests as nation-building; its domestic agenda requires a peaceful international environment. Its military is defensive by policy and design. By contrast, the US defines its national interests as global, which at times require military action to defend them. It is militarily the most offensive of all nations.

But why did Mr Reed publish the article now? I suspect it was because his friend, Dr Stillman, was having trouble publishing his book, Inside China's Nuclear Weapons Program, based on his experiences in China.

The US government banned it in 2000 because it contained classified material. He has unsuccessfully launched several lawsuits over the years. Last year, Dr Stillman lost another suit against the CIA, which allegedly kept delaying its review of the book, thereby preventing its publication.

So get this: the CIA and the Pentagon have successfully prevented the public from learning about Chinese nuclear weapons development from one of its foremost US experts. The US is guarding military secrets for the Chinese who have been perfectly happy to divulge them.

November 14, 2008

Immigrant-Owned Businesses Provide Important Contribution to U.S. Economy - Immigrants are 30 percent more likely to start businesses than non-immigrants

Washington, D.C. –The Minority Business Development Agency (MBDA) and the Small Business Administration (SBA) join together to share the report, “Estimating the Contribution of Immigrant Business Owners to the U.S. Economy” by Robert W. Fairlie, PhD, professor of economics at the University of California Santa Cruz at an event held at the Department of Commerce from 10:00 am through 12:00 pm. The study, funded by SBA’s Office of Advocacy, finds that immigrants are nearly 30 percent more likely to start a business than non-immigrants, representing 16.7 percent of all new business owners in the United States.

There are approximately 1.5 million immigrant business owners in the United States, representing 12.5 percent of all business owners. Immigrant business ownership is geographically concentrated in a few states, such as California, New York, New Jersey, Florida and Hawaii. Nearly 30 percent of all business owners in California are immigrants. One quarter of all business owners in New York are foreign-born and one-fifth of all business owners are foreign-born in New Jersey, Florida and Hawaii.

“U.S. Census figures predict that by 2050, the United States will be a majority-minority country. This growth will be fueled by immigrants-specifically people of color,” says Ronald N. Langston, National Director, MBDA. “Some fear this change and others complain about the burden and cost of immigration,” he adds. “But, this report illustrates the positive rewards of embracing inclusion, diversity and minority entrepreneurship.”

“This report is the first time that immigrant business ownership rates and immigrant-owned businesses contributions to the economy have been studied in detail,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. “These findings can make a significant contribution to public policy debates,” he added.

Although Mexican immigrants make up the largest percentage of immigrant business owners, the top five countries of origin also include Korea, India, China and Vietnam. Immigrants also own businesses that range from low-skill businesses such as retail and wholesale trade to high-skill jobs like technology and engineering. In fact, approximately 25 percent of engineering and technology jobs started in the past decade were founded by immigrants. These specific firms had more than $52 billion in sales and hired 450,000 workers, according to the report.

About the Minority Business Development Agency (MBDA)

MBDA, http://www.mbda.gov, an agency within the U.S. Department of Commerce, serves minority entrepreneurs across America who are building and growing enterprises. In doing so, minority-owned firms are better equipped to create jobs, impact local economies and compete successfully in domestic and global marketplaces. With a nationwide network of more than 40 business centers and strategic partners, MBDA assists minority entrepreneurs and business owners with consulting services, contract and financing opportunities, bonding and certification services, building business-to-business alliances and executive training.

About SBA’s Office of Advocacy

The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit www.sba.gov/advo, or call (202) 205-6533.

February 25, 2008

Hong Kong Manufacturers Enjoy Priority in PRD Power Supply Increase

Guangdong plans to increase its installed capacity by 8.35 million kw this year to ease the problem of power shortage, which has forced many factories to "open for three days and close for four days" a week. Hong Kong manufacturers in the PRD will enjoy priority in electricity distribution.

Guangdong's power shortage has been a major headache for enterprises, including Hong Kong manufacturers, who find the practice of "opening for three days and closing for four days" a week unacceptable because it affects their normal production process. In light of this, measures have been taken in recent years to give Hong Kong manufacturers priority in power supply. Under these measures, Hong Kong companies enjoy shorter power cutoff hours and more prompt service. In the event that their power supply is interrupted, they can notify the local foreign trade and economic cooperation department and their problem would be resolved promptly.

Demand for electricity in Guangdong will continue to grow rapidly and steadily this year. Total power consumption is expected to reach 333.9 billion kwh, an increase of 12% year-on-year. Maximum load demand will reach 56 million kw, up 13% year-on-year. Of this, 46.5 million kw are subject to overall planning, up 24% year-on-year. With the increase in installed capacity by 8.35 million kw this year, the problem of power shortage in the province could be eased.

Guangdong will see power generation projects going into operation in Guangzhou, Shenzhen, Zhuhai, Huizhou, Shanwei and other places this year. Three of these projects have 2 x 600,000 kw generating units. Each of them will increase installed capacity by 1.2 million kw and flue gas desulfurization capacity by 1.2 million kw. The three projects are: the installation of generating units Nos. 1 and 2 in the first phase of the Shanwei Power Plant at a cost of Rmb580 million; the installation of generating units Nos. 3 and 4 in the first phase of the Zhuhai Power Plant at a cost of Rmb500 million; and the installation of generating units Nos. 1 and 2 in the first phase of the Huilai Power Plant at a cost of Rmb600 million. Following the completion of these projects, except for the January-April dry season when a small power shortage is to be expected, power supply will be basically well-balanced for the rest of the year under normal circumstances. Overall, the year will see an easing of power shortage.

Proven Track Record Needed When Applying for Foreign-Invested Design Enterprise Qualifications

On 1 February, the Ministry of Construction and Ministry of Commerce jointly issued the Implementing Rules for Regulations on the Administration of Foreign-Invested Construction Engineering Design Enterprises. The new rules set strict standards for the application and verification of qualifications of foreign-invested construction engineering design enterprises.

Under the new rules, when applying for verification of qualifications, foreign-invested construction engineering design enterprises must not only meet the necessary professional requirements, but must also provide documents supporting their track record as foreign service suppliers outside China as well as qualification certificates of individual registered architects and engineers.

As required by the Ministry of Construction, foreign service suppliers should be enterprises engaged in construction engineering design or natural persons who have obtained relevant professional qualifications in their own countries or regions. While foreign enterprises must have proven track record as construction engineering design enterprises in their own countries or regions, natural persons must be registered architects or engineers engaged in construction engineering design in their own countries or regions.

When foreign-invested construction engineering design enterprises employing foreign registered architects or engineers as principal professional personnel apply for qualifications as a construction engineering design enterprise, the professional titles of these personnel will not be verified. Verification will only be conducted on their academic qualifications, number of years of service in engineering design, as well as their registered qualifications, track record and goodwill in engineering design abroad.

As for 2009, the outlook for Hong Kong's clothing exports will remain lacklustre, given the tentative prospects of a global economic revival. In addition, the impending elimination of US safeguard quotas on Chinese textiles and apparel is expected to lead to calls for increased protection for US and regional manufacturers. While US textile manufacturers are expected to seriously consider the possibility of filing anti-dumping and/or countervailing duty actions against Chinese products, the anti-dumping monitoring system in place on imports from Vietnam could possibly be extended to cover China as well. These will certainly pose challenges to Hong Kong's clothing exports, especially if the US economy cannot regain growth momentum by the end of 2008 or on entering 2009.

Toys

Hong Kong's toy exports expanded robustly by 20% in the first quarter of 2008 after the tremendous growth of 23% in 2007, with non-traditional toys, such as video games and electronic toys, being the main driver of the growth. In contrast, traditional toys, such as dolls, construction sets and wheeled toys, have experienced a period of stagnation. Among mature markets, sales to the EU, which has benefited from a strong euro, have outperformed the US and Japan. Emerging markets, such as the Chinese mainland and ASEAN, were also in good shape.

For the rest of 2008 and 2009, Hong Kong's toy exports should continue to expand, albeit at a slower pace. Growth will still be underpinned by non-traditional toys, given the sustained popularity of video games and electronic toys. However, the craze for the latest generation of video game consoles like Wii and PS3 should start to fade later this year, as they have been on the shelf for more than a year already. The outlook for traditional toys is less promising amid keen competition and a shift in consumer preference towards more sophisticated products.

With the global economy expected to enter a period of adjustment triggered by the US subprime loan crisis, demand from most developed economies should slow. But emerging markets, particularly the Chinese mainland, will be less affected because of a strong appetite for quality toys on the back of higher purchasing power. Meanwhile, the coming Beijing Summer Olympic Games 2008, which is expected to cheer up a buying spree for souvenirs, festive items and related goods, will provide added opportunities for Hong Kong exporters.

Increasing product safety awareness in overseas markets, on the other hand, will remain a major challenge for Hong Kong exporters. As a result of the high-profile toy recalls last year, Hong Kong's major toy exporting markets, especially the US and the EU, have tightened up the enforcement of their existing product safety regulations. While tougher regulatory regimes are in the pipeline, a number of retailers, notably Wal-Mart and Toys 'R' Us, have already responded to consumer demand for safer products by adopting more stringent sourcing requirements. In any event, Hong Kong companies, which excel in production experience and quality compliance, should be able to adjust to tighter testing and inspection imposed by overseas buyers, as well as increasingly stringent safety standards.

Watches and Clocks

On top of a 6% increase in 2007, Hong Kong's watches and clocks exports grew by 16% during January-March 2008. Sales to most major markets, including not only the EU, but also the US and Japan, managed to record increases, whereas those to the Chinese mainland exhibited even stronger expansion. In the medium term, however, exports are expected to become slower against the background of a slackening global demand for timepieces.

Not surprisingly, sales to the US will be affected by the sluggish consumer market. Given a deteriorating economy and subdued sentiment, demand for timepieces is expected to become uninspiring, especially for opening-price-point luxury watches, although the top-end segment will likely remain promising. Yet in view of growing consumer cautiousness, the appetite for competitively priced items will remain stable. Hong Kong's exports of low-priced timepieces will continue to be hampered by intensified competition from local Chinese companies, however.

The EU, for its part, is a fairly mature market characterized by a penchant for watches with fashionable designs for formal as well as casual occasions. In all likelihood, there will still be potential in the middle- to high-end segment, focusing on quality but value-for-money timepieces. In addition, the price competitiveness of Hong Kong's timepieces will continue to be facilitated by stronger European currencies. Spurred by the continued strength of the European currencies, sales to the EU would remain steady over the medium term.

As regards the Chinese mainland, sales of timepieces, apart from the positive effect of the imminent Beijing Summer Olympic Games 2008, will be well supported by its growing purchasing power. Now that mainland consumers are increasingly looking for higher quality items amid the improvement in income levels, watches bearing Hong Kong labels should enjoy a premium in the market. Regarding Japan, sales to the country will only remain steady, as the market is already saturated, although the stronger Japanese yen will enhance the price competitiveness of Hong Kong timepieces.

Jewellery

On top of a 17% rise last year, Hong Kong's exports of fine jewellery grew by 27% in value terms in January-March 2008. However, the surging prices of precious materials for jewellery fabrication, such as gold, silver and diamonds, have in fact hit jewellery sales. In volume terms, for example, after dropping by 14% in 2007, Hong Kong's exports of jewellery items of precious metals further declined by 6% in the first three months of 2008. Marketwise, supported by the appreciation of the euro, sales to the EU managed to register strong growth, while those to the US and Japan dropped on their weaker demand.

For the rest of 2008 and 2009, the overall business sentiment will be clouded by softer global demand brought by the US slowdown. In mature markets, notably the US, even better-off consumers are tightening their budgets. Consumers, in general, will tend to shift away from luxury jewellery articles towards lower-priced items, although very affluent customers tend to be less price-sensitive. Emerging markets, such as Russia and the Chinese mainland, should outpace the developed ones because of their higher purchasing power due to their stronger currencies or rising disposable incomes. Yet some of these exports may be semi-finished products for further processing.

With high global inflation and an expansionary monetary stance in most developed economies, the prices of precious materials, stones and diamonds will likely remain at high levels. Therefore, usage of karat gold and other metals, especially silver, is expected to increase. The industry is also tackling the rising precious metal costs through exploring new markets, developing innovative technologies, adjusting product designs and providing better services.

May 30, 2008

Airport eyes Shenzhen and Zhuhai

A third runway is not merely an option, said outgoing Airport Authority chairman Victor Fung Kwok-king - more are needed if there is full-fledged cooperation with Shenzhen Airport. He told Sing Tao Daily, sister publication of The Standard, the authority is currently developing a 20-year plan that includes ways to improve "the efficiency of the airport, the runways and airport capacity."

The key to maximizing efficiency at Hong Kong International Airport, he said, is cooperation with Shenzhen and Zhuhai airports in which Hong Kong's role is that of a "gateway for passengers coming from Shenzhen and Zhuhai" and they will serve as a gateway to other mainland cities in return." "If HKIA cooperates with Shenzhen, we would be needing fifth, sixth, and seventh runways," Fung said. Fung is not worried about such cooperation opening up a pandora's box of airlines preferring Shenzhen Airport.

"We are concerned more about capacity. Those passengers will still be HKIA customers," he said. Fung acknowledged the challenge posed by the increasing likelihood that there will be direct links across the Taiwan Strait amid a thaw in relations. The key to seeing off that challenge, Fung said, is with Hong Kong adopting an open-skies policy.

He said direct links may have an impact in the short term, but "it should not be a big problem ... it will eventually increase opportunities," Fung said. On budget carriers and the recent demise of Oasis Hong Kong Airlines, he said cooperation with Shenzhen and Zhuhai airports will create openings for budget airlines, as the flight time between these airports is less than an hour. "In the future, there may be more Oases," he quipped.

Fung - who steps down tomorrow - had pushed for HKIA's listing but the move has been postponed. He said: "When an enterprise reaches a certain maturity, it should be given a chance to become listed."

May 11, 2008

443 mainland enterprises got listed in Hong Kong

A total of 443 mainland enterprises have got listed on the Main Board and GEM of Hong Kong Stock Exchange by the end of April 2008, including 148 H shares, 93 red chips and 202 non-H-shares of the mainland private enterprises.

According to the latest statistics released from Hong Kong Stock Exchange, the mainland stock shares account for 58.6% of the total market value and 74.2% of the total market turnover of the Hong Kong stock market.

By the end of April, there were 1,244 listed companies with a total market value of about 18 trillion Hong Kong dollars. Only one Hong Kong company got listed during the first quarter this year. By the end of April, Hong Kong owned in total 4,808 derivative warrants, 260 callable bull/bear contracts, 26 trust funds, and 173 bonds.

April 11, 2008

French wine traders cheer Hong Kong's duty-less regime


Photo
Measures enhance prospects for French wine makers.

When the Hong Kong government eliminated all duties on wines and beer imports in February, winemakers and exporters across France raised a glass of their finest vintage to celebrate.

"Next year will be a big, big market," says Yves Lambert, owner of Domaine de Saint-Just and an agent for other French vineyards.

Asia, especially the Chinese mainland, was already becoming a major market, and this can only strengthen the trend, says Lambert. Alcohol sales to the Mainland in 2007 totaled Euros247 million, sparked by a growing middle class, and France has had a large share of the market.

Sales of French wines to the Chinese mainland grew 145% last year, according to the Fédération des Exportateurs de Vins et Spiritueux de France (FEVS). The trade association, which represents the interests of 550 French wine and spirit producing and exporting companies, says the Mainland was the 11th largest market by value for French wines and spirits in 2007.

Photo
Mainland is a developing market for French wines.

Sales of French cognac and other spirits grew 162% year-on-year by value, making the Chinese mainland the third largest market for the products, behind the US and Singapore (which tranships to the Mainland). Wine and liquor are France's second largest exports after Airbus aircraft.

Rising incomes, a growing interest in Western lifestyles and tastes, and better wine education, have driven the rise in consumption on the Chinese mainland.

Drinking wine has a strong social status in China, and French wines have that certain cachet. According to a recent MasterCard survey, 80% of Chinese consumers prefer it.

Photo
Bordeaux wines selling on the Chinese mainland.

So, French winemakers - both small and large - are looking to Asia for new markets. France mainly sells Bordeaux, Champagne and Vins de Pays (a regional wine, a step up from table wine).

French vineyards interested in Hong Kong

"We think the market [to Asia] will increase," says André Barlier, deputy director of Viniflhor, a public body based in Paris. Viniflhor promotes wine as well as gathering industry information, which it distributes through publications and on the Internet (www.frenchwines.com). 

Photo
Body promotes wines and information about them.

"A lot of French companies will be interested in Hong Kong," Barlier says. "Five years ago, the trend was through Hong Kong to [the Chinese mainland] but in the past two or three years, wine has been exported directly to [the Mainland]. Now this will change and Hong Kong traders will acquire a new position."

Wine producers and exporters say that French companies have had problems finding a suitable business partner on the Chinese mainland. "It is difficult for the French to get a good company to work with," Barlier says. Hong Kong partners know how to sell to the Mainland better than the French do, he believes.

Will Chinese mainland winegrowers cover the market, or will the country import, he asks. "They are planting a lot of grapes, but the imports are rapidly increasing."

Exporters say that if Hong Kong does realize its aspirations to become the wine hub of Asia, storage should pose no problems. Exports will be mainly bottles, delivered in containers, not bulk wine. The only storage needed is space, such as a warehouse, with temperatures controlled. As long as the wine is not left outside, and is kept cool, it can be stored safely.

Label development in Asia

Barlier mentions an opportunity for importers to create their own labels. They can buy wine in bulk and create a label in Europe, Hong Kong or on the Chinese mainland.

One concern for French dealers is that the Mainland may not respect trademark rules, he says, producing a bottle of cheap Chinese wine with the Eiffel Tower on a faux French label. "But the customer can tell it isn't authentic by the price."

Photo

Barlier: problems with labels.
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Unreal quality: fake French label.

Another problem is that many people on the Chinese mainland don't know about wine, or even how to open a bottle. "There is a lot to learn and producers should teach consumers how to buy and consume wine," says Barlier.

Yves Lambert, who represents an association of vineyards from Bordeaux, Languedoc and Côtes de Provence, agrees. "Wine is part of the social life; it is good for socialising and for health," he says. "Consumers start by buying cheaper wine; when they have more money, they buy more expensive wines," he says. "And rich people buy expensive wine because it is good for face. So there are two markets, for cheaper and more expensive wines."

Wine experts say that when their incomes increase, people prefer drinking wine rather than beer, and whenever taxes decrease, wine consumption increases. They see a market for well-off Chinese mainlanders interested in grand cru (the top growth of a region), but also another market for very cheap wines.

More attractive trade environment

The new Hong Kong law will make exporting to the territory more attractive, says Lambert, who is looking for a representative importer in Hong Kong. "I can sell 300,000 bottles of my own wine and one or two million other bottles," he says. "We have good wine and a good price, and our wines are getting better and better."

Photo
Lambert: looking for a representative in Hong Kong.

His initial efforts on the Chinese mainland last year were positive. "I sent a container to Shenzhen, and they have already asked for another," he says. "The importer sold 12,000 bottles in a month."

In February, Lambert added Chinese to his French and English web site (http://st-just.net/chine/index_chine.php). The company also has a new project on the Chinese mainland, designing special red and rose wines for weddings. "Young Chinese like this," he says.

The company sells a minimum per container, which is 12,000 bottles. "We sell 90% red wine," Lambert says. "White wine is only popular along the coast, in fish and seafood restaurants."

Lambert also expresses a sentiment common among French businessmen: it is easier to work in Hong Kong, as the law is not the same as on the Chinese mainland. "British law is better for us," he says. "For Europeans, it is easier to sell to Hong Kong, a major business centre, and let Hong Kong importers sell to [the Chinese mainland]."

Hong Kong tax change reduces currency fluctuations

A number of exporters point out that the Hong Kong tax change will help offset the high Euro, as its recent increases against the Chinese Yuan and the US dollar have hurt sales in two of the biggest markets for French wines.

Geneviève Chavignon, export assistant of Les Vins Jean-Pierre Teissèdre, says her company, which plans to sell to Hong Kong and China, also welcomes the recent change.

So far, the demand from the Chinese mainland for her company's wine has been for very low-priced wines, and for wine in bulk. However, Chavignon believes that Hong Kong buyers will want more expensive wines.

"We would certainly prefer to deal with Hong Kong importers, as selling directly to [the Chinese mainland] is not easy," she says, echoing comments from other exporters.

Photo
Fu with Teissèdre: handling wine business on the Mainland.

Managing director Jean-Pierre Teissèdre believes his Rhone Valley wines, such as the Côtes du Rhône, and the Vins de Pays from southern France will appeal to Chinese tastes, as will Beaujolais Crus such as the Chénas or Morgon.

The company has hired Youxia Fu, a young woman from Sichuan who has a master's diploma in business from Burgundy Business School in Dijon, to handle its wine business in China.

Larger companies already exporting to the Chinese mainland also anticipate an increase in sales. Étienne Godard, in charge of overseas exports for Vins Skalli, says dropping the duties will be good for premium wines bound for Hong Kong. The company, which sells 30 million bottles worth Euros85 million annually, also finds Hong Kong a useful gateway into the Mainland.

"The recent tax change will definitely help us develop our premium wines such as Domaine du Silène and Maison Bouachon, and especially Côtes Rôties, Hermitage, Gigondas and Châteauneuf du Pape," says Godard. "We are convinced that the market will trade up."

Photo
Hong Kong a window for French wines.

Thanks to this change, Hong Kong will remain a great window for wine in Asia, especially for premium wines, he says. Skalli exports to Hong Kong through the distributor Maxxium and to the Chinese mainland through ASC. The company sells just 10% of its production to Asia, but the region is its fastest growing market.

"The trend we have seen in recent years is for consumers' taste for rounder, easier to drink and more fruity wines," Godard says. "We have worked all our wines to meet consumers' expectations, with very fruity wines and silky tannins."

However, he adds, the company considers it's important to keep wines well-balanced. Fortant wine is now the number 10 imported brand in the Chinese mainland market, and the third largest French brand. "Once consumers are more educated, they go for more complex wines and move to premium varietals or AOC wines (Appellation d'Origine Contrôlée, the highest classification)," Godard explains.

Exporters in the more rarified market of spirits sales also greeted the tax change with enthusiasm. Florence Castarède, director of Armagnac Castarède, exporter of Armagnac (an exclusive brandy) and a newcomer to the Asian market, says the Hong Kong move to cut duties is great news. "Some new companies will be happy to be in Hong Kong," says Castarède. Her company began exporting to Hong Kong last year.

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Castarède: new companies happy to be in Hong Kong.

"It is an opportunity," she says. "[the Chinese mainland] is the future for the wines and spirits market, the biggest in the world by population."

However, she cautions that producers will have to adapt to the taste of the market. "For each market, we have to adapt packaging, taste and price."

Guillaume de Guitaut, director of public affairs for Moët Hennessy, says the company, as part of the Hong Kong Wines and Spirits Industry Coalition, pressured the government for the change, so it came as no surprise.

He agrees that Hong Kong could become a wine hub for Asia as there is a growing interest in wine. "It could be a place for tasting, for auctions," he says. However, importers must concentrate on quality wines.

"Volume is part of the equation, but value is more important," de Guitaut explains. "You do not want to have a lake of the worst wine in the world."

Hong Kong is not a market for cheap wine but for quality, as wine is an elite drink, he says.

"I think wine marketing and auction houses will set up in Hong Kong, and wine collectors will speculate," adds de Guitaut, noting that many Asian customers now attend London wine auctions.

He also does not anticipate problems with storage facilities in Hong Kong. "I think they will make the right investment in order to store wine," de Guitaut says. "The key is not to leave a container in the sun for a month, but rapidly put it in the right place."

Wine merchants, eagerly looking East, are certainly heartened by Hong Kong's new tax regime and the opportunities it represents.

 
Company/Association/Contact Person
Tel/Fax/Email/Web

Armagnac Castarède
Florence Castarède, Director Tel: (33) 1-44-05-15-81
Email:
florence.castarede@wanadoo.fr
Web:
http://www.armagnac-castarede.fr ASC Fine Wines Tel: (86) 20-8666-8683
Fax: (86) 20-3631-5005
Email:
allysonhu@asc-wines.com
Web:
http://www.asc-wines.com Domaine de Saint-Just
Yves Lambert, Managing Director Tel: (33) 2-41-51-62-01, (33) 6-07-27-07-78
Fax: (33) 2-41-67-94-51
Email:
infos@st-just.net
Web:
http://www.st-just.net

Fédération des Exportateurs de Vins et Spiritueux de France (FEVS)

Tel: (33) 1-45-22-75-73
Fax: (33) 1-45-22-94-16
Email:
contact@fevs.com

Les Vins Jean-Pierre Teissèdre SARL
Geneviève Chavignon, Managing Director

Tel: (33) 4-74-03-45-08
Fax: (33) 4-74-03-46-33
Email:
jp-teissedre.earl@wanadoo.fr
Web:
http://www.vins-teissedre.com MasterCard
Chris Monteiro Tel: (1) 914-249-5826
Fax: (1) 914-249-4207
Email:
chris_monteiro@mastercard.com
Web:
http://www.mastercard.com

Maxxium Hong Kong Limited

Tel: (852) 2891-8086
Fax: (852) 2838-4664
Web:
http://www.maxxium.com Moët Hennessy
Guillaume de Guitaut, Director of Public Affairs Tel: (32) 2-372-96-30
Fax: (32) 2-372-96-19
Email:
gguitaut@moet-hennessy.com
Web:
http://www.lvmh.fr

Skalli
Étienne Godard, Directeur Grand Export/International Manager

Tel: (33) 4-90-83-58-59
Email:
etienne.godard@skalli.com
Web:
http://www.skallifamilywines.com Viniflhor
André Barlier, Deputy Director Tel: (33) 1-42-86-32-00
Email:
andre.barlier@viniflhor.fr
Web:
http://www.viniflhor.fr

March 27, 2008

Hong Kong Trains 1,000 People from Jiangsu Each Year

Jiangsu's Personnel Department recently announced its decision to further expand the Jiangsu-Hong Kong Personnel Training Cooperation Program after a successful four-year run. In the six years between now and 2013, the province will be sending over 1,000 professionals to Hong Kong each year for training. By 2013, over 10,000 professionals from Jiangsu would have benefited from the most advanced professional and technical expertise that top-notch universities and training institutions in Hong Kong have to offer through the training program.

It is understood that the first batch of this year's trainees will leave for Hong Kong on 8 April. During the four years since the implementation of this training program, the biggest of its kind in the history of Jiangsu, 4,850 people have received training in Hong Kong in more than 70 professional fields, including major service sectors such as accounting, finance, securities and auditing. The trainees came from different trades and professions in Jiangsu.

The Jiangsu-Hong Kong Personnel Training Cooperation Program has been adopted by the government of Jiangsu as one of its priorities this year. This year, the scope of training has been extended from modern services to various sectors relating to economic and social development. More than 10 new professional fields have been added, including housing planning; airport operation, management and control; hotel management; corporate financing and listing; information services; construction engineering consultancy; and volunteer community work. The program currently covers over 100 fields, and the trainees range from personnel in the service sectors to specialized personnel of all kinds.

The New Media Olympics - Expectations High for New Technology at Beijing Olympics

Nothing short of a media frenzy is expected to converge on Beijing during this year’s Summer Olympic Games in the Chinese capital. Top-ranking Chinese media executives discussed the possibilities for the country’s new media industry at the 17 March FILMART (www.hkfilmart.com) International Forum on the Beijing Olympics – Media Convergence and Cooperation. President of the Chinese mainland’s Harun Media Group, Liu Yanming, said the international sporting event was much more than a chance to promote social harmony and China’s market prosperity. “It’s also a very important event for our media because, with this opportunity, our media can show their might and establish a well-known brand for themselves,” said Mr Liu.

Miracle Event - “With new technology, we will be able to keep improving in areas such as digital telecasting and production values,” said Mr Liu. “The Beijing Olympics is a miracle event for us. It’s a chance to apply the latest technology and bring about multi-functional media for our creative industries, so that we can develop a competitive edge over our rivals and make full use of digital technology.” Yang Zhen Hua, CEO of the Shanghai New Culture Media Investment Group, said that the Beijing Olympics was a rare opportunity to interact with global media and exchange views, experience and technological know-how. “It will be a convergence point for media all over the world, because they’re all concerned about how Beijing is going to present these Olympics,” said Mr Yang. “It is an unprecedented opportunity,” he added.

High Expectations - There is a lot of pressure, he said, because China will be broadcasting to the rest of the world, and expectations are high. “We have to keep raising our standards to satisfy their needs and aspirations. We’d like to have good cooperation with our friends overseas, particularly in Hong Kong, Taiwan and Southeast Asia, as well as Japan and Korea.” Mr Yang pointed out that not many Chinese productions are being seen in the western world, and that the globalization of economies doesn’t necessarily imply a globalization of culture. “Our cultural programs will have to satisfy the needs of those outside China, so as to arouse the interest of the western world,” he said. “We have produced a lot of Chinese programs in recent years but not many of them can do us proud.” Peter Lam, Vice President of the Hong Kong Televisioners Association, also raised the question of how to produce attractive programming for an overseas audience. Documentaries, he said, are an interesting and effective way to promote the achievements of China’s many athletes. “An overseas audience could be introduced to our training techniques and understand our athletes,” he said.

Chinese ESPN - Mr Lam pointed to the successful international career of basketball star Yao Ming, as well as track star Liu Xiang. These and other sports celebrities, he said, can be used to promote Chinese culture. “China has these international stars,” he said. “We want the world to know about their training and the spirit behind their hard work.” The proliferation of new media distribution channels provides an opportunity to discuss how they can converge with traditional media outlets, he added. “The Olympics has so many sporting events and activities. How are we going to make use of the multi-level broadcasting channels and media to provide immediate information for a sports-hungry audience? Given the global nature of the Olympics, Mr Lam wondered whether it might be time to promote a Chinese sports channel, “a Chinese ESPN that could broadcast different sporting activities.” Wang Chang Tian, President of mainland Enlight Media, cited a statistic about China’s cultural industries. He said the total market was about RMB500 million. Based on the cultural industries standard of developed countries, he said that “current market demand in China could be RMB2 trillion, but we are now only satisfying a quarter of the demand.

New Media Triumph - Mr Wang said that the mainland could not rely simply on imported songs and TV programs. “We have to have our own productions. The games will trigger this demand and release it. Somebody will have to light the detonator so that the industry will explode.” He warned, however, that the opportunity could create a crisis of sorts for such traditional media as television. “They may well have the broadcasting rights, but they’ll be affected by the convergence of the Internet and the fact that people will be able to read about the Olympics on blog sites or on their mobile phones,” he said. “New media will triumph over traditional media during these Olympics.”

March 22, 2008

International Accent Highlights 3rd Hong Kong Music Fair Fair's Musical Doors Open to Industry Professionals and Public

The 3rd Hong Kong Music Fair opened today and continues until 21 March. Officiating at the opening ceremony were (left to right): Hong Kong performers Joey Yung, Charlene Choi and Justin Lo; Ng Yu, Chairman, Working Committee, Hong Kong Music Fair; Fu Yanmei, Assistant Ombudswoman, Department of Cultural Market, Ministry of Culture, PRC; Esther Leung, Deputy Secretary for Home Affairs, HKSAR; Benjamin Chau, TDC Assistant Executive Director; Hung Tik, Chairman of IFPI (HK Group) Ltd; performers Denise Ho and Hins Cheung

The 3rd Hong Kong Music Fair opened today with about 70 exhibitors from Hong Kong, the Chinese mainland, Germany, Korea and Singapore. Record companies, new media content providers, music portals and mobile and hardware manufacturers, along with music industry artists and other professionals, are taking part in the three-day fair, which continues until 21 March at the Hong Kong Convention and Exhibition Centre.

Jointly organised by the Hong Kong Trade Development Council (TDC) and the IFPI (Hong Kong Group), the fair caters to business as well as public interests, promoting music products and raising awareness of legal downloads.

"Thanks to the 10 German companies joining us for the first time, our fair is more international than ever," said Benjamin Chau, TDC Assistant Executive Director, speaking at the opening ceremony. "With the development of new media, music's business model can no longer focus solely on the sales of CDs and other traditional music products. That makes artist management, including concert management and celebrity endorsements, an even more important aspect of the industry," he added.

As such, a series of star seminars will be staged on 20 March, with artist managers from all over Asia sharing their management secrets. Managers Virginia Lok, Paco Wong and Mani Fok, along with such local artists as Law Ka Leung, Jade Kwan and Eric Suen, are sure to shed new light on this hot topic.

For the first time, the IFPI Hong Kong Top Sales Award presentation ceremony and the Hong Kong Music Fair will be held at the same venue. To promote the public's awareness of intellectual property rights, visitors are free to download segments of the presentation ceremony at the fair's Cyberport booth, 20 March to 21 March. Among the other new features this year is the Talent Showcase, giving promising singers and composers from Hong Kong and the Chinese mainland a chance to be discovered by industry professionals. The showcase is a new initiative introduced by the IFPI (Hong Kong Group).

The music fair will open to public from 5pm to 9:30pm on 20 March, and from 10:30am to 9:30pm on 21 March. Exhibitor promotion sessions will be held on 21 March, with local singers Fiona Sit, Ivana Wong, Stephy Tang, Alex Fong, Kary Ng, Kay Tse, Chet Lam and others performing at various times. Visitors who purchase music products of at least HK$50 in value at the fair will be admitted free.

Also presiding at today's opening ceremony were: Esther Leung, Deputy Secretary for Home Affairs, HKSAR; Fu Yanmei, Assistant Ombudswoman, the Department of Cultural Market, Ministry of Culture, PRC; Ng Yu, Chairman, Working Committee, Hong Kong Music Fair; Hung Tik, Chairman of IFPI (HK Group) Ltd; and performers Joey Yung, Hins Cheung, Charlene Choi, Denise Ho and Justin Lo.

The Hong Kong Music Fair is one of the core events of Entertainment Expo Hong Kong. Other Expo events include: the Hong Kong International Film and Television Market; the Hong Kong International Film Festival; the Hong Kong Film Awards Presentation Ceremony; the Asian Film Awards; the Hong Kong - Asia Film Financing Forum; the IFPI Hong Kong Top Sales Music Award; the Digital Entertainment Leadership Forum; and the Hong Kong Independent Short Film and Video Awards.

March 12, 2008

HK will lead billion-dollar boom in region's wine trade, survey finds - Dennis Eng

Hong Kong will dominate the region's booming trade in wine after scrapping the 40 per cent wine duty and reap valued-added economic benefits expected to top HK$1 billion by 2012, a study has found. The economic benefits, including the creation of thousands of jobs, were projected to reach almost HK$3 billion by 2017, said Edward Leung Hoi-kwok, the Trade Development Council's chief economist.

The wine market in Asia was predicted to grow by between 10 per cent and 20 per cent annually over the next five years, with the mainland alone expected to import HK$7 billion worth of wine by 2017, the council's study said. The value of wines consumed in the region, excluding Japan, would reach HK$130 billion in 2012 and HK$210 billion by 2017. Since the government announced two weeks ago that wine duties would be abolished, excitement in the industry has been considerable. Fine-wine auctions are planned and various wine-related businesses intend to set up offices in Hong Kong.

"It's not going to give you the opportunity to become a world wine-trading centre, truly, because of the location of Hong Kong, but you're going to run Asia," said Gil Lempert-Schwarz, chairman of the Wine Institute of Las Vegas. On May 31, New York-based Acker Merrall & Condit, the oldest wine merchant in the US, will visit to auction fine wines worth more than US$6 million.

"This is going to be gigantic in terms of the wines that are involved and in terms of this potentially being one of the top 10 sales of all time," Mr Lempert-Schwarz said. "Somebody said that two or three of the big clients of Acker in Hong Kong, who were going to bid on stuff in New York this last weekend, are now holding back from that because they want to put all their effort into the sale here in Hong Kong."

Mr Lempert-Schwarz, a consultant for Acker Merrall, said he expected 85 per cent of the roughly 1,000 lots on sale to go to either local or mainland buyers, and maybe some Taiwanese collectors. The company will hold another auction in the city in November, with wines valued at US$4 million to US$5 million. According to Mr Lempert-Schwarz's brother, who runs a wine hedge fund for Merrill Lynch out of Japan, a number of major collectors in Japan are talking about storing wine in Hong Kong to capitalize on the zero duties, provided storage facilities are suitable.

Mr Lempert-Schwarz also said three of the top 10 wine collectors in the world were in Hong Kong, one of whom was looking to relocate a significant portion of his wines from London. It is estimated that at least 2 million cases of wine stored in London are owned by Asian collectors.

To capitalize on the market potential, the council will hold the first Hong Kong International Wine Expo from August 14 to 16.

March 8, 2008

Agreement reached on bridge link funding - Hong Kong-Zhuhai-Macau Bridge.

The new bridge will dramatically speed up connections between Hong Kong, Macau and Zhuhai Hong Kong, Zhuhai and Macau have reached a consensus on the financing of the Hong Kong-Zhuhai-Macau Bridge linking the three places. Once completed, the bridge is expected to be a major landmark which will enhance Hong Kong's connections with other cities and port facilities in the Pearl River Delta in southern China. The project would soon proceed to public tenders but arrangements have been made to cover any shortfall between construction costs and investment by the private developer that wins the bid to build the bridge. Hong Kong would cover 50.2 per cent, Guangdong 35.1 per cent and Macau 14.7 per cent.

Secretary for Transport & Housing Eva Cheng said: "The three sides agreed that the three governments would be responsible for the construction and operation of the boundary-crossing facilities and connecting roads to the bridge within their own territory. We agreed to share the amount of the subsidy under the cost-to-benefit ratio which takes into account the economic benefits to each side."

Improved cargo flows - Dr Billy Mak from the Department of Finance at Baptist University told South China Morning Post (February 29) the bridge was likely to lead to more cargo flow from western Guangdong and Guangxi region to Hong Kong container terminals and the airport. The bridge would also stimulate the development of North Lantau as a tourist zone.

The connecting roads are about 12.6km on the Hong Kong side and 13.9km on the mainland side. The main body of the bridge measuring 29.6km is expected to run from San Shek Wan in Lantau to Gongbei in Zhuhai and A Perola in Macau. Travelling time between Hong Kong and Macau and Zhuhai will be shortened from an hour to between 15 and 20 minutes.

The bridge was first proposed in 1982 by Hong Kong entrepreneur Gordon Wu whose company Hopewell Holdings is expected to be one of the bidders for the project.

Foreign and Domestic Banks Actively Build QDII Brands
 
Since the launch of the qualified domestic institutional investor (QDII) program on the mainland in 2006, various large foreign and domestic banks have rushed to build their own brands and launch different types of QDII financial products to meet the increasing demand for wealth management from mainlanders.
 
 As of the end of October 2007, a total of 154 QDII bank products had been launched by 16 foreign and domestic banks and the sales volume amounted to Rmb35.196 billion and US$1.012 billion. Of these 154 products, 64 were offered by 11 domestic banks capturing Rmb29.349 billion and US$0.317 billion in sales, while 90 were sold by five foreign banks raising Rmb5.848 billion and US$0.695 billion.
 
 Many of these QDII bank products have established a name in the market and have built a brand in wealth management. The Industrial and Commercial Bank of China launched the first wealth management product making offshore investment on behalf of clients on the mainland and built the "Pearl of the Orient" brand. Among this series, "Pearl of the Orient I" is the first QDII product investing in offshore stock markets following the liberalization policy and record-breaking sales have been attained. Other well-known investment product brands established by domestic banks include "Huideyin" and "Haiyin I" of the China Construction Bank, and "Delibao" and "Huijutong" of the Bank of Communications. Investment products offered by foreign banks include "Dynamic Return Investment" of the Standard Chartered Bank and "Jihuibao" of the Bank of East Asia.
 
 According to Li Fuan, director of the business innovation and supervision department under the China Banking Regulatory Commission (CBRC), banks offering offshore wealth management services are characterized by having a steady client base, good reputation, extensive operation network, flexible and diversified product designs, and rich product variety. The many offshore wealth management products offered by them can meet the various demands of clients.
 
 However, these products also have room for improvement. For instance, the sales channels and coverage are limited, the marketing effort is not strong enough, the brand advantage has yet to be formed, manpower support and backup system are inadequate, etc. Also, policy constraints such as restrictions on investment types, proportion and minimum amount have stifled the growth of QDII products.
 
 With respect to the demand for wealth management, the vigorous boom in the capital market in the last two years has greatly boosted the demand of mainland investors for wealth management. The wealth effect of the stock market has also caused saving deposits to flow in its direction. According to the statistics of the People's Bank of China, in October 2007 the level of savings of mainlanders dropped Rmb506.2 billion, the greatest drop ever in a single month. At the same time, the trend of mainlanders terminating their insurance policies and diverting the money to the stock market was obvious. The number of people investing in securities and fund has continued to rise.
 
 To meet the increasing demand for wealth management, CBRC will continue to strengthen its support for commercial banks in providing offshore wealth management services. Efforts will be made to create the conditions for further liberalizing the investment market, allowing investors to participate more in the international capital market. CBRC is also planning to extend the scope of offshore stock market beyond Hong Kong to include other mature stock markets so as to achieve a rational global distribution of assets for diversification of risks.
 
 According to Li, CBRC will conduct studies on the QDII business of commercial banks, collecting information on the banks' development strategies, product designs and marketing plans in relation to their QDII business. Meanwhile, CBRC will call on the commercial banks to strengthen their ability in risk and investment management, and will also continue with its efforts in enhancing investors' investment experience and risk awareness so as to safeguard their interests.
 
 It can be expected that the demand for offshore wealth management of mainlanders and the support of the central government will bring enormous business opportunities for Hong Kong's professional service sectors such as financial services, financial accounting, legal services and marketing.
 
 Amid the increasing demand of mainlanders for wealth management, foreign and domestic banks engaged in QDII business on the mainland have offered a large variety of financial products but none of them have emerged as the leading brand. Hong Kong financial institutions, with their rich experience in designing and marketing financial products, coupled with the fact that Hong Kong is the first stop of the mainland's QDII offshore wealth management business, have first-mover advantage in formulating relevant marketing strategies and developing QDII brands.
 
 QDII can also drive the development of Hong Kong's marketing, accounting and legal services sectors which can provide professional services for QDII business such as market consultation, financial and legal services.
 
 As China's QDII business is going to extend to international capital markets beyond Hong Kong, Hong Kong's financial and other professional services sectors stand to benefit by assisting the mainland to "go global" via Hong Kong.

February 24, 2008

Hong Kong retains mantle as world's freest economy

Chief Executive Donald Tsang receives his copy of the 2008 Index of Economic Freedom from Heritage Foundation President Dr Edwin Feulner

Hong Kong claimed the top spot as the world's freest economy for the 14th straight year in a study released by Washington-based think tank, the Heritage Foundation.

The 2008 Index of Economic Freedom covered 157 economies worldwide after assessing them on 10 economic freedom factors. Hong Kong scored top marks on four factors: trade freedom, investment freedom, financial freedom and property rights. The city also ranked among the top 10 in other areas such as freedom, government size, monetary freedom and labour freedom.

Second and third place went to Singapore and Ireland respectively.

Financial Secretary John Tsang said the government was determined to uphold Hong Kong's position as the freest economy in the world. "We see the role of the government as that of a facilitator. We provide a business-friendly environment where all the firms can compete on a level playing field and establish an appropriate regulatory regime to ensure the integrity and smooth functioning of a free market," he said.

The report also noted the city's simple business regulation and highly flexible labour market. Investment in Hong Kong was strongly encouraged with virtually no restrictions on foreign capital.

A separate report released recently showed that more Hong Kong people wanted to start their own businesses amid the rosy economic outlook. The 2007 entrepreneurship study showed one out of 10 Hong Kong people had tried starting their own businesses, up from 3 per cent in a 2004 similar study. It was also the second highest rate among so called "high income countries", following Iceland where the rate was 12.5 per cent. The United States came third with 9.6 per cent.

The findings coincided with the latest Hong Kong Company Registry figures, showing a record 22.9 per cent rise in newly registered companies in 2007.

The study was conducted by Global Entrepreneurship Monitor (GEM), a non-profit research oganisation led by Boston's Babson College and the London Business School. Last year's study was the fourth GEM Hong Kong report, in which 2,000 people were interviewed between May and October.

February 1, 2008

Hong Kong's World-class services a platform for growth

(From right) HKTDC Executive Director Fred Lam; HKSAR Chief Executive Donald Tsang; Ali M Thunayan Al-Ghanim, Chairman of the Kuwait Chamber of Commerce & Industry and H.E.Sheikh Dr Salem Jaber Al-Ahmad Al-Sabah, Adviser to the Kuwaiti Prime Minister.

Hong Kong is well placed to become a centre for Islamic finance in Asia, said Chief Executive Donald Tsang at a business luncheon organized by the Hong Kong Trade Development Council (HKTDC) and the Kuwait Chamber of Commerce. He invited Kuwaiti banks and financial services companies to extend and diversify their global reach through the city. Attended by more than 200 Kuwaiti business people, the luncheon held in late January was the first stop in a week-long business services sector trip to the Middle East which also covered Riyadh, the Saudi Arabian capital, along with Abu Dhabi and Dubai in the United Arab Emirates.

Mr Tsang said Hong Kong's sound financial services infrastructure and well-established system make it an attractive location for investments. The first Islamic retail fund launched recently in Hong Kong had attracted about US$45 million worth of orders by December. Noting Hong Kong is already a market of first choice for Middle Eastern companies, Mr Tsang said average annual bilateral trade with Kuwait grew 20.5 per cent from 2002-2006. In 2006, it was worth US$264 million.

Cepa good for business - "One way to further deepen the trading relationship is for Kuwaiti companies to capitalize on Hong Kong's special status within China," said Mr Tsang, adding that the Closer Economic Partnership Agreement (Cepa) is especially good for this purpose. "We welcome investments by sovereign wealth funds, which are becoming more prominent in financial markets and are a positive force for global markets."

Hong Kong Trade Development Council Executive Director Fred Lam added that Time magazine in its January 2008 cover story had called Hong Kong "China's Wall Street at the dawn of the Asian century", noting the city's world-class financial services sector and bustling stock market.

"We believe we can also become the Middle East's Wall Street," said Mr Lam. He added that there is much more to Hong Kong than finance. A delegation of more than 20 of Hong Kong's most senior players including international bankers, top property developers, architects, urban planners and interior designers as well as heads of major legal services and media companies accompanied Mr Tsang and Mr Lam for the Middle East mission to explore areas of cooperation with Middle East investors.

Asian filmmaking hub scores starring role

Wouter Barendrecht, pictured with actress Michelle Yeoh, says no other country apart from America has so many international stars

In 1991, Dutch-born Wouter Barendrecht founded Fortissimo Films with Hong Kong film director and distributor Shu Kei due to his passion for Asian films. Seventeen years later, with present business partner Michael J. Werner, he was honoured at the annual CineAsia convention in Macau for his "significant achievements in the development, financing, co-production, promotion and distribution of award-winning films globally".
Fortissimo is responsible for bringing to the world Hong Kong cinema classics such as director Wong Kar Wai's Chungking Express and In the Mood for Love. The latter film won Best Actor award for Hong Kong actor Tony Leung Chiu Wai at the 2000 Cannes Film Festival. But their presence is felt all around Asia. For example, they helped bring Thailand's booming film industry into the international limelight with hits like The Eye trilogy and The Iron Ladies.

"I have always loved Asian films," said Fortissimo's Co-Chairman. Mr Barendrecht had previously worked as a programmer for the Rotterdam Film Festival and as a press officer for the Berlin Film Festival.

"I think Asian films have more to offer than either European or American films. The film industry in Europe is subsidised and there is no business element. Sometimes, it is just art for art's sake. There is nothing wrong with that but Asian filmmaking is more interesting as there is more variety in the genre and overall, there are more auteur aspects," he said. "Asian films have entertainment and art. It proves that both elements can co-exist at the same time."

Quantum leap - Asian films have come a long way, according to Mr Barendrecht. "Back then when we were selling Asian films, people referred to it as Oriental films, which smacks of neo-colonialism. Now, everybody can differentiate between Japanese, Korean or Thai films."

He started Fortissimo Films as a hobby, with just a "fax machine in my bedroom in Amsterdam", while his partner Shu Kei was in Hong Kong doing film distribution. "We went to Cannes in 1991 and pitched ourselves as a new company involved with Asian films. At the beginning, we focused on Japanese and Korean films. We had no money then, only our passion and integrity and a firm belief that Asian films are artistic and exciting."

The turning point came with Hong Kong director Clara Law's Autumn Moon, which won the Golden Leopard award at Locarno Film Festival in 1992. Fortissimo distributed the film and things progressed from there and he moved to Hong Kong. "Hong Kong is my home now and it is good operating from here. There are now about 10 other companies in Hong Kong doing what we do but we are the only company distributing foreign films as well as Asian films." Fortissimo is also distributing a documentary on The Rolling Stones called Shine a Light which is scheduled to open in Hong Kong around March/April.

He said he couldn't find a better place in the world for his kind of business. "Hong Kong is really the heart of Asian filmmaking. With the exception of America, there is really no other place which has exported such talents as international stars Michelle Yeoh, Maggie Cheung, Tony Leung Chiu Wai, Andy Lau, Jackie Chan, Chow Yun Fat and directors like John Woo, Wong Kar Wai and Johnnie To."

Promising future - Mr Barendrecht said Hong Kong's film industry is doing well these days. In the past, the Chinese mainland regarded Hong Kong films as foreign films. But the good news is that Hong Kong filmmakers have discovered co-production which helps to spread the risks financially. "The film industry is a risky business so it is good to spread the risks around with all parties. It also guarantees that we can distribute the film to a wider audience. Best of all, depending on how we structure our films on a co-production basis, we can distribute to the huge mainland market." Any film over US$5 million has to be co-produced, he said, as the Hong Kong market is too small.

He cited the successful co-production example of Lust, Caution, produced by Hong Kong's Bill Kong, directed by Taiwan's Ang Lee (he won an Oscar for Brokeback Mountain), starred Hong Kong's Tony Leung Chiu Wai and Chinese mainland actress Tang Wei. The film won the Golden Lion for Best Film for Ang Lee at the recent Venice Film Festival and the Golden Horse Best Actor award for Tony Leung Chiu Wai at the Taiwan Golden Horse. "This film has everything - star power, an auteur script based on a famous novel and beautiful production. But can we repeat the success? There are no guarantees in the film making business."

Mr Barendrecht is also actively involved with Hong Kong Asian Film Financing Forum (HAF) which he founded in 2000 together with the Hong Kong Directors Guild. "It was a particularly trying time as Hong Kong and the rest of the Asia Pacific region were just coming out of the Asian financial crisis. A year later we were hit by Sars: nobody was going to the cinema, and China was not opening its market to Hong Kong films. We looked at the European business model, reached out to other countries, discovered co-production in Asia and we are now all working on a pan-Asian level. This is the model that the Asian film industry in Korea, Hong Kong, Thailand, Japan, China and Singapore are working on now."

Entertainment Expo shines - Mr Barendrecht had been lobbying, along with the entire Hong Kong film industry, for HAF and Filmart to come under one umbrella – Entertainment Expo – for some time and is very glad that it has taken off.

"People want to do business efficiently and the timing for the Entertainment Expo is great as it is held six weeks before the Cannes Film Festival. Entertainment Expo is a very compact event – everything takes place under one roof and it is an important event for buyers around the world. I meet a lot of people at the event and all my clients love to come to Hong Kong because of its great food and shopping…but of course, business is the most important, and they feel that they get a lot done here."

With five staff in its Hong Kong office and almost 20 in Amsterdam, Fortissimo handles around 20 films a year – two to three productions, five to six co-productions and the rest are acquisitions. Besides Hong Kong, Fortissimo Films has offices in Amsterdam, London, New York, Sydney and Paris and agents in the US, Europe, Tokyo, Beijing and the Middle East.

Footwear Design Competition Winners Announced Dazzling Footwear and Bags on Display at Awards Show

A dazzling array of footwear and bags were showcased at today's 8th Footwear Design Competition Hong Kong - Belle International and Lam Wing Yee were the big winners at today's 8th Footwear Design Competition Hong Kong awards show, held at the Hong Kong Convention and Exhibition Centre.

Ms Lam picked up the Staccato Award for Grand Champion, the Millie's Award for the Most Promising New Talent 2008, and the Ladies' Boots award for her Amphitrite design theme. Belle International swept all three corporate prizes, including the Shoemaster Award for Best Corporate Design and the Texon Award for Corporate Creativity, impressing the judges with her Flying Belle design theme. The company also received the Licheng Award for the Best Commercial Prospect.

Belle International swept all three corporate prizes, including the Shoemaster Award for Best Corporate Design and the Texon Award for Corporate Creativity

More than 1,100 entries were submitted, and Tang Yiu, Chairman of the Federation of Hong Kong Footwear Ltd, was impressed with the high design quality. "The competition is meant to develop young design talent and to enhance creativity and quality in the Hong Kong footwear industry. All these are vital to the growth of the industry," said Mr Tang, who chaired the organising committee for this year's Footwear Design Competition.

Ladies' Shoes and Bags was this year's new category, joining six others: Children; Sports; Men's Shoes; Ladies' Boots; Ladies' Sandals; and Ladies' Shoes. Judging was based on creativity, fashion aesthetics and ease of design production.

Prizes were awarded in each category. In addition, a number of special awards were presented: the Joy & Peace Award for Creativity; Fiorucci Award for Most Eye-catching Design; le saunda Award for Modern Chic; Amann Award for Intelligent Design; Y-NOT KiDS Award for the Most Smart Kid's Shoes; Classical Award for the Best Charismatic; APLF Global Market Award; and China Shoes for Best Fashion Sense Award.

The winning designs will be featured in Hong Kong Footwear, published by the Hong Kong Trade Development Council (TDC). They will also be displayed at several major fairs, including Style Hong Kong and Fashion Access.

Hong Kong footwear exports amounted to US$5.4 billion (HK$42.1 billion) in the first 11 months of 2007, with the United States, Japan and the Chinese mainland the top three markets. Exports to the Chinese mainland, Italy and Germany grew substantially over the same period last year, up 15 per cent, 16 per cent and 12 per cent respectively.

The competition was organized by the Federation of Hong Kong Footwear and the TDC (Hong Kong Trade Development Council).

January 30, 2008

Olympic torch relay set for May 2

Olympic spirit: Secretary for Home Affairs Tsang Tak-sing (third left) announces the Olympic torch relay will take place on May 2 in Hong Kong.

The Olympic flame will arrive in Hong Kong April 30 and the Olympic Torch Relay will be held May 2. The flame will be carried by 120 torchbearers across Hong Kong and the torch relay will last eight hours. Secretary for Home Affairs Tsang Tak-sing today said Hong Kong will be the first stop on Chinese soil after the Olympic flame is carried through 19 cities around the world.

A launch ceremony for the torch relay will be held at its starting point in the Cultural Centre Piazza in Tsim Sha Tsui. It will finish at Golden Bauhinia Square in Wan Chai followed by a closing celebration at Sha Tin Racecourse. Torchbearers will pass Tsing Ma Bridge, the Shing Mun River, the Olympic Equestrian Venue in Sha Tin, Sha Tin Racecourse, the Avenue of Stars, Victoria Harbour, the Legislative Council Building, Olympic Square in Hong Kong Park and the Convention & Exhibition Centre.

Students and residents' associations will be invited to cheer the torchbearers along the relay route, and people can witness the historical moment live on television. Roving exhibitions will be held in the 18 districts from March to May.

After Hong Kong the Olympic flame will head to Macau and major Mainland cities before arriving in Beijing on August 8 for the opening ceremony of the Beijing 2008 Olympic Games.

January 22, 2008

Hong Kong's Jewellery sparkles in upbeat Malaysia - Developing the Hong Kong brand.

Hong Kong's Chow Tai Fook, which has 750 retail outlets in the territory, Macau, Taiwan and on the Chinese mainland, has opened its first store in Kuala Lumpur. It's a move to take advantage of Malaysia's growing prosperity and higher-income consumers - and forge ahead of other foreign designers who may not take account of Malaysian tastes and jewellery requirements.

The new store was established in November 2007 in prestigious The Gardens in Mid Valley City, and is presenting a dragon-themed line of jewellery inspired by ancient Chinese craftsmanship. The work is aimed at modern-minded women who appreciate the richness of Chinese designs.

The Kuala Lumpur store is the first step by Chow Tai Fook into South East Asia, and the pieces are guided by design guru Yip Kam Tim. The firm says it chose the Malaysian capital as an opening to the region because Malaysian retail offers modern, dynamic appeal to an emerging consumer pool.

With a growing demographic for youthful, affluent shoppers, Kuala Lumpur offers plenty of potential for mid-priced and well-designed jewellery.

In fact, Hong Kong brands have an established reputation for stylish offerings, thanks to the popularity of the territory's movie stars, films, TV programmes and singers. Hong Kong's cachet is particularly strong among Chinese Malaysians.

The Malaysian jewellery sector has been opening to a wider range of jewellery and methods of retail in recent months. Jeweller Poh Kong Holdings Bhd recently opened franchise operations in Kelantan, Terengganu, Sabah, and Sarawak, aiming to draw on sales from greater prosperity in the provinces.

January 17, 2008

Lampposts to house Wi-Fi facilities

Wi-Fi facilities will be installed into 669 lampposts across Hong Kong. Secretary for Commerce & Economic Development Frederick Ma told legislators today the Office of the Telecommunications Authority supports the move and has provided detailed lamppost data to Wi-Fi service operators.

Three operators have applied for Wi-Fi installation on lampposts. One has already presented its technical proposal to the Highways Department.

The Housing Department has made 1,000 estate lobbies available to operators for Wi-Fi services. The Housing Authority also plans to reserve ducts between lampposts in new estates for the installation of Wi-Fi or other electronic services.

January 14, 2008

Hong Kong ranks world's freest economy again for 14 consecutive years by Heritage Foundation

Hong Kong has been ranked as the world's freest economy for the 14th consecutive year by the Heritage Foundation in the foundation's 2008 Index of Economic Freedom study released on Tuesday, a press release from the Hong Kong Special Administrative Region (HKSAR) government said.

According to the study report, Hong Kong scores exceptionally well in almost all areas of economic freedom.

Among the 10 individual areas assessed, Hong Kong ranks first in trade freedom, investment freedom, financial freedom and property rights. Hong Kong also ranks in the top 10 in another four areas - fiscal freedom, government size, monetary freedom and labor freedom.

The report noted that Hong Kong's income and corporate tax rates were very competitive, and overall taxation was relatively small as a percentage of gross domestic product (GDP).

It also said that Hong Kong's business regulation was simple, the labor market was highly flexible, and investment in Hong Kong was strongly encouraged with virtually no restrictions on foreign capital.

The foundation also complimented Hong Kong as one of the world's leading financial centers, with its regulation of banking and financial services both non-intrusive and transparent. The study noted that property rights were protected by an independent and virtually corruption-free judiciary.

Compared to Singapore, Hong Kong fares better in regard to trade freedom, fiscal freedom, investment freedom and financial freedom, while Singapore fares better in business freedom, government size, monetary freedom, freedom from corruption and labor freedom. Both Hong Kong and Singapore are ranked first in property rights.

"We are determined to uphold Hong Kong's position as the freest economy in the world," Hong Kong Financial Secretary John C Tsang said while welcoming the study report.

"We see the role of the HKSAR government as that of a facilitator. We provide a business-friendly environment where all firms can compete on a level-playing field and establish an appropriate regulatory regime to ensure the integrity and smooth functioning of a free market," Tsang said.

The study measured the degree of economic freedom of 157 economies worldwide by assessing 10 factors: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, labor freedom. Hong Kong retained its position as the freest economy in the world, followed by Singapore and Ireland.

Make HK top source of talent, urges new AmCham HK chief

Developing Hong Kong into a regional hub for top talent is key to maintaining its stature as an international business centre, according to Steven DeKrey, the new chairman of the American Chamber of Commerce. Dr DeKrey, an associate dean and director of MBA programs at the Hong Kong University of Science and Technology, said yesterday he was aware of the region's growing need for talent.

In his first speech in his new role - "Face to Face with AmCham: 40 Years in Asia's Business Capital" - made at an AmCham luncheon at the Ritz-Carlton Hotel, Dr DeKrey urged the government to put more effort into becoming a source of talent for Asia.

"Much progress has been made on educational fronts and visa policies, but more can be done," said the new chairman, who succeeds Gary Clinton.

He said the chamber would continue to pursue the provision of quality education for expatriate children - especially the availability of school places, which had become a significant concern for its members.

"It has made it difficult for many incoming executives to find school places for their children, which affects the ability of companies to bring their top talent to the city," Dr DeKrey said.

Another top priority would be to work closely with the other seven AmChams in Greater China, including those in Macau, Taiwan, Beijing and Shanghai.

Referring to a survey conducted by the chamber, he said he was optimistic about this year's economic outlook. "Firms are very satisfied being in Hong Kong. Regional headquarters are also staying," he said.

Dr DeKrey said he believed the mortgage crisis in the US was not over.

"It is still not clear for the future, and its impact has not been fully reflected in the market," he said.

January 13, 2008

Invesco chief economist John Greenwood, also dubbed the `architect of the dollar peg,' says local currency appreciation is not an effective measure to alleviate inflationary pressure in the long run. "Let's say the dollar peg appreciated from 7.8 to 7.6, inflation will temporarily decline but the inflation rate will resume to its previous course later," Greenwood told The Standard, warning that currency appreciation would have more of a downside as it would invite more speculation activity. Under the currency peg, the Hong Kong dollar is fixed at 7.8 to the US dollar, though the widening of the trading band in May 2005 allowed it to be traded between 7.75 and 7.85. On January 2, the China Securities Journal published a report suggesting the Hong Kong dollar should appreciate from its current 7.8 to 7.5, to help ease inflationary pressure and avoid an asset bubble. Greenwood, who has been on the Hong Kong Monetary Authority's currency board committee since 1988, said he does not see an asset bubble in the local economy, stressing that the HKMA has an effective mechanism to maintain stocks of the Hong Kong dollar. A strong advocate of the currency peg since the 1980s, Greenwood also insists the current peg system is the best for Hong Kong. "Hong Kong's business cycle is determined by the global business cycle, not that of China. When you talk about the global economy, the United States is still the most influential." Greenwood said the Hong Kong dollar cannot be pegged to the Chinese yuan as it is not freely convertible. "It will take more than 15 years for the yuan to become fully convertible. "If the yuan is freely convertible then the Chinese government will lose control over it. Do you think the Chinese government will abandon its control?"

January 11, 2008

Delicate Balance of Creativity and Functionality - Hong Kong Product Shines in China Red Star Award

Yip states with Hong Kong celebrating the 10th anniversary of the reunification with its mother country, local product designers have to re-position themselves accordingly.

Yip Chi Wing was awarded the China Red Star Award with his "Li Ning Power-pack" camping backpack (top) and "Life-power LP6500" massage chair (bottom).

"China Red Star Design Award" is one of the most distinguished awards in the Chinese Mainland's design industry. The Award aims to promote the development of Chinese design industry, and enhance international competitiveness of Chinese products by encouraging Mainland enterprises to carry on independent innovation and brand building. Among over 1,500 entries for this year, the renowned Hong Kong product designer Alan Yip Chi Wing snatched highest awards with his "Li Ning Power-pack" camping backpack and "Life-power LP6500" massage chair. This reiterates the prominent presence and reputation of Hong Kong product designers in the international design world.
Broadening Horizons through Expos and Competitions

Alan Yip has been a product designer for over 20 years. He graduated from Dept of Industrial Design of Hong Kong Polytechnic University in 1987. After winning a working scholarship in 1986, he worked as an intern for Frog Design Inc. in California, USA. Upon his graduation he was hired at the Philips Eindhoven, the Netherlands. Yip returned to Hong Kong in 1990 and founded his own Yip Design Ltd. He comments, "For a relatively small market like Hong Kong, it is paramount for product designers to participate in different kinds of expositions and competitions, so as to strive for room for better development and opportunities. For instance, I have been participating promotional activities organized by Hong Kong Trade Development Council (HKTDC) continuously; that is not for awards or benefits but the experiences I gain. Joining expos and competitions offers a great opportunity for me to appreciate the excellent works from designers around the world, helping me cultivate an international perspective about design. In additional, meeting Mainland and overseas industry players is also crucial for business development in the long run. "

Leverage on Hong Kong's Competitive Advantages

Alan Yip's awarded products are for him merited by their bold embrace of creativity. He explains, "Li Ning Power pack is quite a breakthrough design-wise. Apart from its swift flowing outer shell, it is made of hi-tech plastic materials. The strength of cushioning is also ergonomically fine-tuned befitting different parts of the wearer's body. It could be said an innovation of its kind in the leisure product market in China. Life-power LP6500, on the other hand, resembles first class in-flight seating in its design. It offers a luxuriant comfort and comes in a vibrant, spray-painted outlook. As of purchasing a car, the buyers can also select their favourite colour of paints when they place their order for the chair. Such customized service proves successful in appealing to the younger market, generating 'talking points' as well as sales."

Yip furthers that with Hong Kong celebrating the 10th anniversary of the reunification with its mother country, local product designers have to re-position themselves accordingly. He adds, "As Hong Kong product designers, our competitive advantages are highlighted: there is much room for creativity in Hong Kong and we are backed by the huge Mainland market. It is high time we moved forward with a globalized point of view, and leveraged our unique position to explore new business opportunities for our design industry."

January 10, 2008

Hong Kong and Macau Doctors Allowed to Open Private Clinics on Mainland

The Ministry of Health has recently issued a circular on the implementation of Supplement IV to the Mainland-Hong Kong and Mainland-Macau Closer Economic Partnership Arrangement (CEPA) with regard to medical services. According to this circular, qualified Hong Kong and Macau service providers who are holders of the mainland Certificate of Practicing Physician (for clinical treatment, traditional Chinese medicine and oral care) may apply to open private clinics in mainland cities after 1 January 2008.

The applicants must be licensed to practice medicine in Hong Kong and Macau and must have a medical license for over five years in either Hong Kong or Macau, have practiced continuously in both Hong Kong and Macau for a total of five years, or have served in clinical posts in the same field on the mainland for over five years.

Each Hong Kong or Macau service provider may only open one private clinic. He or she must be the sole proprietor and responsible person of the clinic.

In principle, a private clinic may not employ other physicians. However, if circumstances so require, the Hong Kong or Macau service provider may employ one to two practicing physicians (mainland residents) in the same area of practice to meet the needs for medical services. A suitable number of mainland registered nurses may also be employed based on medical service needs.

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 *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

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