Hong Kong Circle
Hong Kong Economic and Trade Office in Washington D.C. Newsletter (Text Only Version)
Spring 2008
Secretary for Financial Services and the Treasury Visits Washington, D.C.
Government Moves to Strength Copyright Protection in the Digital Environment
Combined Forces Protect Brands in the Mainland of China
Government Wi-Fi Program Officially Launched
Traders Cheer as Wine Business Booms
High-end Design Shapes City Skyline
American Software Provider Uses Hong Kong as Regional Base
Creating Extra Supply and Demand Chain Services
Exclusive Member Clubs a Measure of Success
Entertainment Expo Pulses with Action
Dear friends,
The month of April was quite active as I travelled from the southwest to the northeast and points in between. Given my travel log, I will attempt to consolidate my visits as best as possible.
Beginning in Santa Fe, New Mexico, I called on Governor Bill Richardson.
Having visited Hong Kong, Governor Richardson shared with me his high regard for Hong Kong people's hospitality and the city's vitality.
I took the opportunity to update the Governor on the city's status as a business and financial center, highlighting its simple and low tax regime.
In an effort to further entice overseas talents and businesses, the Financial Secretary announced the lowering of the maximum salaries tax rate to 15 percent and profits tax to 16.5 percent.
The Governor and I discussed Hong Kong's attractiveness as an international convention and exhibition capital. This year, Hong Kong won the Best MICE (meeting, incentive, convention and exhibition) City Award in the 2008 Industry Awards organized by CEI Asia Pacific Magazine.
I also shared with the Governor Hong Kong's efforts to pursue wider use of renewable energy. As a metropolitan city with a population of almost seven million and no indigenous energy resources, Hong Kong has relied on imported fuels to meet its energy requirements.
The government has dedicated considerable efforts to promote energy efficiency and renewable energy to manage energy demand and improve the environment.
While in New Mexico, I met with Fred Mondragon, Cabinet Secretary of the Economic Development Department.
Secretary Mondragon expressed interest in Hong Kong's record of protecting intellectual property rights (IPR). I informed him that Hong Kong maintained a stringent regime that adhered to the highest international standards and protected IPR by various means, including legislation, law enforcement and public education.
During a trip to Santa Fe, a rich and faithfully preserved cultural landscape, I had the opportunity to meet with Stuart Ashman, Secretary of the Department of Cultural Affairs.
We discussed efforts to develop our cities into international cultural centers, with special emphasis on heritage conservation.
Secretary Ashman expressed interest in introducing Santa Fe's unique and proud Native-American heritage to Hong Kong people. Hong Kong welcomes the cross-fertilization of ideas and sharing of cultural experiences, which are conducive to the development of a diverse and vibrant arts and cultural scene.
Travelling to historic Boston, I called on Massachusetts Lieutenant Governor Timothy Murray and Secretary of Housing and Economic Development, Dan O'Connell.
I updated them on Hong Kong's robust economic performance and outlined the advantages for the Bay State's businesses in utilizing Hong Kong to tap the regional and Greater China markets.
I shared with them Hong Kong's many growth industries, such as life science and Chinese medicine, financial services, healthcare, venture capital and alternative energy.
Both the Lieutenant Governor and Secretary O'Connell noted that these were also emergent niche sectors within the state and expressed interest in exploring mutual business opportunities.
Secretary O'Connell was upbeat on Hong Kong as a gateway to Greater China and the region, as well as a facilitator for businesses, especially small and medium-size enterprises (SMEs) exploring emerging markets.
Small and medium-size enterprises constitute over 98 percent of Hong Kong's business establishments and employ about 50 percent of its workforce in the private sector. They are crucial to the development of the city's economy. As such, the Hong Kong government and a number of industry bodies and trade organizations provide a wide range of services to enhance their competitiveness.
While visiting Connecticut, I met with R. Nelson Griebel, President and CEO of the MetroHartford Alliance, a union of the MetroHartford Chamber of Commerce and MetroHartford Economic Growth Council which spearheads economic development.
I discussed with Mr. Griebel the investment benefits Hong Kong offered Alliance members, specifically those brought by Hong Kong's free trade agreement with the Mainland of China, the Closer Economic Partnership Arrangement (CEPA), which opens up huge markets for Hong Kong goods and services.
The CEPA serves as springboard for foreign investors to establish businesses in Hong Kong and leverage the city's core strengths to tap the vast potential of the Mainland market.
In New Haven, I spoke to students at Yale University on the successful implementation of the "One Country, Two Systems" principle which grants Hong Kong its high-degree of autonomy, as well as Hong Kong's rule of law tradition and civil and political rights.
There are numerous exchange programs between Yale University and Hong Kong, including the Yale-New Asia College Student Exchange which has become an enduring avenue of cultural and academic interchange.
In New Jersey, I met with Gary Rose, Chief of the Office of Economic Growth. Mr. Rose explained that a 10-year capital plan had been set out for the New York/New Jersey Ports to enhance handling capacity.
I shared with Mr. Rose Hong Kong's experience as one of the world's busiest container terminals and our own plans to enhance the competitiveness of port assets.
I also spoke to students at Princeton University, which enjoys close ties with Hong Kong universities.
Through an agreement between Princeton University and The Chinese University of Hong Kong (CUHK), Princeton students may study at CUHK as associate undergraduates. In addition, this year Princeton University will launch, in conjunction with the University of Hong Kong, a "Live and Learn" exchange program.
To augment Hong Kong's appeal as a higher education and research destination, the government announced that it would create an additional 800 research postgraduate places and set up a US$2.3 billion Research Endowment Fund.
The Fund aims to nurture an academic research culture, develop a knowledge-based economy and strengthen the city's international competitiveness.
During a visit to America's fabled Heartland, I hosted a dinner for Wichita Mayor Carl Brewer and members of the Kansas World Trade Center and shared with them the trade and investment opportunities for the State of Kansas and Hong Kong.
Travelling to the state capital, I met with Ron Thornburgh, Secretary of State of Kansas, during which we discussed promotion of Kansas agricultural produce in Hong Kong.
Secretary Thornburgh remarked that Sprint, a Kansas-based company, was doing well in Hong Kong's telecommunications market.
I noted that Hong Kong had one of the most sophisticated telecommunications markets in the world, an important factor in the city's development as a leading business and financial center.
Hong Kong's mobile subscriber penetration rate is 152 percent, with 100 percent broadband coverage for all commercial and residential buildings. In addition, all sectors of Hong Kong's telecommunications market have been liberalized with no foreign ownership restrictions.
I also met with David Kerr, Secretary for Commerce. Secretary Kerr said that apart from the state's traditional strengths of agriculture and aircraft manufacturing, Kansas was cultivating emerging industries, such as animal health and applied science.
I encouraged collaboration with Hong Kong, which had made substantial investment in science and research with the establishment of the Hong Kong Science and Technology Parks Corporation (HKSTP) and the Hong Kong Applied Science and Technology Research Institute Company Limited (ASTRI).
The HKSTP plays a leading role in developing Hong Kong into an international center of innovation and technology by providing laboratories and production facilities to enable scientists and entrepreneurs to reach the market in a cost-effective and timely way.
In 2001, the Hong Kong government founded ASTRI to capture the potential of technological advances through applied research and deliver real-world applications to customers.
With Hong Kong co-hosting the Equestrian Events of the 2008 Olympic Games and Paralympic Games, it seemed fitting to visit Kentucky, home of America's famed equine tradition, where I called on Governor Steve Beshear.
While visiting Lexington, my colleagues and I attended the prestigious Rolex Kentucky Three-Day Event, which was co-sponsored by the Hong Kong Economic and Trade Office in New York.
The annual event which features dressage, cross-country, and jumping offers an opportunity for horse and rider combinations to compete at a championship level ahead of international competitions.
Hong Kong also has a cherished history of equine excellence that is nurtured and promoted by the Hong Kong Jockey Club, the Hong Kong Equestrian Federation and the Riding for the Disabled Association Limited.
Given Hong Kong's world-class quarantine and vaccination programs, and the Hong Kong Jockey Club's extensive experience with the import of thoroughbred racehorses, Hong Kong is well-prepared to accommodate seasoned riders and championship horses at the Olympic Equestrian Events and Paralympic Equestrian Events.
The opportunity allows Hong Kong to join the league of Olympic cities to promote the Olympic Spirit at home and to visitors from around the world.
Secretary for Financial Services and the Treasury Visits Washington, D.C.
Spectacular economic growth on the Mainland of China meant considerable business opportunities for Hong Kong, the Secretary for Financial Services and the Treasury Professor K.C. Chan said, concluding a two-day visit to Washington, D.C.
Addressing a luncheon at the Carnegie Endowment for International Peace on May 14, Prof. Chan said the Mainland of China's remarkable growth resulted in quick and massive accumulation of wealth, which translated into huge demand for sophisticated financial products not yet available in the country. At the same time, Mainland enterprises were scouring for funds to grow their businesses.
Prof. Chan remarked that Hong Kong had become the darling of Mainland enterprises wishing to list in another jurisdiction as the city was a trusted relative to manage Mainland money. "Since 1993, when the first Mainland company was listed on our stock exchange, more than 440 Mainland enterprises have done so, raising a total of more than US$240 billion," he said.
Mainland authorities have progressively allowed the country's banks, securities and fund management companies and insurance companies to invest overseas through the Qualified Domestic Institutional Investors, or QDII.
Hong Kong was likely to be the principal beneficiary of QDII because it was a market Mainlanders knew well culturally and financially.
Prof. Chan said that when Mainland authorities wanted to utilize untested means of financial transactions, Hong Kong was the favored outlet giving the city an enormous advantage.
Illustrating Hong Kong's attractiveness, Prof. Chan noted that the city was third worldwide behind London and New York in terms of financial center competitiveness as ranked by the City of London in its March 2008 "Global Financial Centres" index.
He stated that Hong Kong's savvy financial professionals possessed intimate knowledge of the Mainland market which helped investors, particularly overseas investors, avoid costly mistakes.
"Fund managers can leverage on Hong Kong's strengths to tap the huge domestic savings of China. We are already Asia's leading wealth management center with 80 fund management houses currently operating in Hong Kong "
Investors could capitalize on the Mainland of China's economic growth by investing in Chinese enterprise shares listed on the Hong Kong Stock Exchange.
Prof. Chan also noted that the city was increasingly attractive due to the steady growth of Renminbi business. Hong Kong is the first place outside the Mainland of China with a Renminbi bond market.
In strengthening financial cooperation with the Mainland economy, Prof. Chan said Hong Kong was developing a complementary and interactive relationship with the Mainland financial system by the following measures:
* Encouraging Hong Kong financial institutions to expand their presence on the Mainland of China;
* Encouraging Mainland funds, investors and financial institutions to go overseas through Hong Kong;
* Strengthening the links between the financial markets in Hong Kong and the Mainland of China;
* Getting Hong Kong financial instruments to be traded on the Mainland of China; and
* Continuing to expand the Renminbi business in Hong Kong.
Prof. Chan said Hong Kong would continue to review its regulatory model to ensure that it would not hamper financial innovation or stifle further development of Hong Kong's financial services sector.
He reported that the Securities and Futures Commission announced a set of initiatives to streamline the licensing procedures for overseas fund managers wishing to operate in Hong Kong.
While in Washington, Prof. Chan called on Ben Bernanke, Chairman of the Federal Reserve System; Christopher Cox, Chairman of the Securities and Exchange Commission; and David McCormick, Under Secretary of the Treasury for International Affairs.
Professor K.C. Chan's speech at the Carnegie Endowment for International Peace: http://www.hketowashington.gov.hk/dc/speeches/speeches08/051408.htm
Financial Services and the Treasury Bureau: http://www.fstb.gov.hk/
Government Moves to Strength Copyright Protection in the Digital Environment
On April 15, the Hong Kong government released preliminary proposals for strengthening copyright protection in the digital environment to further consult the public before firming up legislative proposals.
Speaking at the meeting of the Legislative Council Panel on Commerce and Industry, the Secretary for Commerce and Economic Development, Frederick Ma, reiterated the government's commitment to ensuring the efficacy of the copyright protection regime amid advances in technology.
"In formulating the preliminary proposals, the government has taken into account the results of a public consultation exercise in 2007. The government is mindful of the need to balance competing interests, including the need to provide an environment conducive to the sustainable development of creative industries in Hong Kong, protection of personal data privacy, and the development of Hong Kong as an Internet service hub," Mr. Ma said.
"The preliminary proposals will form the basis of our next round of engagement with stakeholders and the public for building consensus on the way forward. Subject to the outcome of further public consultation, we intend to firm up the legislative package in late 2008 or early 2009."
The government's preliminary proposals include:
* Introducing a right of communication covering all modes of electronic transmission for copyright works, with related criminal sanctions against the breach of this right in specific circumstances.
* Introducing a copyright exemption for temporary reproduction of copyright works by online service providers (OSPs), which is technically required for (or enables) the transmission process to function efficiently. This exemption will cover the "caching" activities undertaken by OSPs, which help save bandwidth and are indispensable for efficient transmission of information on the Internet.
* Facilitating the drawing up of a voluntary code of practice for OSPs in combating Internet infringements.
* Prescribing in law additional factors to assist the court in considering the award of additional damages, in recognition of the fact that the process of proving the extent of actual loss, particularly in the digital environment, is often fraught with difficulties.
Furthermore, in launching the next round of public engagement, the government proposed to take the opportunity to consult the public on the possible introduction of a media shifting exception, which would provide greater flexibility and convenience for the private use of copyright works to general users.
"The government welcomes views from stakeholders and members of the public on the preliminary proposals. We hope that following full and informed discussions, we could build a broad consensus within the community that helps us strike a reasonable balance between competing interests," Mr. Ma said.
The preliminary proposals can be found on the Web site of the Commerce, Industry and Tourism Branch (CITB) of the Commerce and Economic Development Bureau: www.cedb.gov.hk/citb.
Combined Forces Protect Brands in the Mainland of China
Hong Kong and international brands are offered more stringent protection of their intellectual property in the Mainland of China following the alignment of two Hong Kong-based anti-piracy powerhouses.
Intellectual property rights (IPR) and brand protection firm International Risk, a unit of New York-listed FTI Consulting and one of the largest risk mitigation firms in Asia, has further bolstered its strength by acquiring Thompson Market Services (TMS), with an operational platform across 19 Mainland cities.
"The threat to global brands is huge recent statistics estimate the loss to U.S. and other international businesses at over US$600 billion," said Stephen Vickers, President & CEO, International Risk Ltd. "I'm bringing TMS and International Risk together to combat that risk."
International Risk has been doing strategic brand consulting for years, but Mr. Vickers said that "it's all about execution."
"Increasingly, we realize the necessity for a group that is on the ground with experienced people in key locations on the Mainland, and TMS delivers exactly that to our program."
The two have combined their services to protect local and international brands with investigation, enforcement and other consulting functions. Mr. Vickers sees the combination opening up new and more effective ways to protect brands and intellectual property.
Patents and trademarks
"Western brands largely produce almost everything on the ground in China. It's critical we are in a position to support them in protecting their brands," he said. "If you're not in China with operational capability all over the Mainland, it is very difficult to do a professional job."
Bill Thompson, Vice President, Brand Protection, International Risk Ltd., said IP problems were no longer single country or single market problems. "It was time to align ourselves with a provider who had a larger regional and global presence to better serve our clients," he said.
Mr. Thompson described IPR and brand protection in the Mainland of China as "a work in progress." He said a great number of resources had been devoted to the process, and great strides had been made in enforcement and amendment of laws. "It is an evolutionary process that Taiwan and Hong Kong have gone through in the past now it's China's turn," Mr. Thompson said.
He added that it's a common misconception to think multinational brands are the only ones that are hit in China. "The Chinese are working very hard to develop nationally famous and globally famous brands of their own." He commented that counterfeiters don't discriminate if they can make a small margin then the brand is at risk.
Base for expansion
Going forward, Stephen Vickers expects International Risk will continue to grow into regional markets from its corporate base in Hong Kong.
"Hong Kong is critical its rule of law, transparent business systems and the rest make it much easier for our multinational clients to do business with us through Hong Kong," he said.
"As a transportation hub, it is easy to fly in and out. The bulk of our core clients would much rather come here, sign a contract here and have confidence that what they've done in Hong Kong will stand."
International Risk: http://www.intl-risk.com/
Government Wi-Fi Program Officially Launched
On March 27, Hong Kong residents began to enjoy the convenience of accessing wireless Internet service for free at more than 30 government premises with the official launch of the Government Wi-Fi (GovWiFi) Program.
Speaking at the launching ceremony, the Secretary for Commerce and Economic Development, Frederick Ma, said the implementation of GovWiFi would put in place around 2,000 Wi-Fi hotspots covering some 350 government locations by the middle of next year.
"The provision of public Wi-Fi services will continue to expand, maintaining Hong Kong's position among the leading cities in the world," he said.
The GovWiFi program is being introduced in phases, with the first batch of hotspots at more than 30 locations launched today covering some government offices and major public libraries.
By mid-2008, the number of sites providing Wi-Fi hotspots will increase to 120 with an additional 230 premises ready by mid-2009. Apart from libraries and government offices, the locations will cover job centers, public enquiry service centers, sports centers, key cultural and recreation centers, community halls/centers and large parks.
Mr. Ma said that the provision of public Wi-Fi services was booming in Hong Kong and that there was a surge of more than 1,000 new public Wi-Fi hotspots installed in just the first two months of 2008, amounting to more than 6,400 covering more than 4,100 locations.
"Our lives are now tightly coupled with information and communications technology (ICT), which also helps build our digital economy and enhance the competitiveness of Hong Kong. Wireless and mobile services and technology are, in particular, applied in the pillar industries in Hong Kong," said Mr. Ma.
Noting that mobile financial services recorded a nearly 60 percent year-on-year growth in 2007, Mr. Ma said he hoped the ICT industry would ride on the expanding user base to develop more mobile financial and banking services that were both secure and customer-centric.
"To consolidate Hong Kong's position as a leader in tourism and logistics, industry players are encouraged to make use of wireless and mobile technologies to provide tourists and logistics management with more useful electronic information."
Mr. Ma stressed that the government would continue to adopt a market-led, technology-neutral and facilitating approach in introducing new and innovative services for driving commerce and economic development in Hong Kong, as well as improving the quality of living of the people.
Details of the GovWiFi program and hotspot locations are found online at http://www.gov.hk/en/theme/wifi/program/index.htm
Traders Cheer as Wine Business Booms
Wine buyers, distributors and collectors are toasting the end of Hong Kong's wine tax, saying the initiative will promote trade and further elevate the city as an international wine hub.
Within days of Financial Secretary John Tsang's budget announcement that the 40 percent duty would be scrapped, effective immediately, traders were bringing back fine wine they had previously stored overseas.
Gregory De'eb who runs Crown Wine Cellars, a professional wine storage facility and private clubhouse, said six cargo containers of fine wine were repatriated by members to his cellar alone. "They are celebrating the fact that Hong Kong is now the only destination in the world that has no VAT and no wine tax," he said.
Mr. De'eb said Hong Kong was seizing its rightful role as the region's wine hub.
Fine wine hub
"We already are Asia's fine wine hub this initiative is merely an acceleration of an existing fact," he said. "Hong Kong has four decades of fine wine trading as background, it is by far the most knowledgeable, and the city currently controls 20 percent to 25 percent of fine wine auctions worldwide."
Hong Kong collectors control one million cases of fine wine, a quarter of the world's total, Mr. De'eb said.
"Add to this the fact that we are on the edge of one of the greatest (potential) fine wine buyers in the world, being the Chinese Mainland, and it becomes incredibly logical to bring fine wines to Hong Kong."
Boris de Vroomen, Managing Director of Moet Hennessy Diageo Hong Kong Limited and Chairman of the Wine and Spirits Industry Coalition, said the move would "send a strong message that Hong Kong is determined to become an international fine wine hub" alongside London and New York.
He added that 40 percent of wines traded in London and New York, the world's biggest trading markets, are owned by Greater China consumers predominantly in Hong Kong. With the duty obstacle removed and wine flowing back to Hong Kong, the potential revenue shift is enormous.
Inaugural auction
Other businesses quick to react to the news include auction house Bonhams, scheduling the first wine auction to be held in Hong Kong in a decade. Frank Martell, Bonhams' International Director of Fine & Rare Wines, said the wine duty exemption had opened up a new dimension in the trade, investment and enjoyment of wine as a culture.
"I feel strongly that Hong Kong will prove to be the centre of trade for fine and rare wines in the east," he said. "Given the sophistication and advanced appreciation for the best goods in the world, it is easy to see that Hong Kong will soon join London and the United States as a major player on the global wine scene."
U.S. wine merchant Acker Merrall & Condit will hold what it claims to be Asia's largest ever wine auction. The May 31 auction in Hong Kong will include "cream of the crop" wines estimated to fetch more than US$5 million.
"Hong Kong is ready to run on the fast track to becoming a global wine hub, alongside New York and London," said John Kapon, President of Acker Merrall & Condit.
Sales at Berry Bros. & Rudd boomed following the announcement. "I don't think I can recall a busier day in 11 years," said Sales Director Simon Staples.
Nicholas Pegna, the firm's Hong Kong Managing Director, said the tax cut had lowered wine prices by an average of 22 percent. "A bottle of wine will now be cheaper in Hong Kong than anywhere else in Asia," he said.
Platform for trade
In order to provide a platform for trade, the Hong Kong Trade Development Council (HKTDC) announced it would hold the city's first wine expo. The Hong Kong International Wine Expo will be held from August 14 16 at the Hong Kong Convention and Exhibition Centre.
The expo will host wine dealers, cellars, producers and suppliers of related services from Hong Kong, Asia and the rest of the world. Exhibit categories will include liquor and beverage products, equipment and services required for wine production, and wine accessories.
"By organizing the expo, we hope to create a one-stop platform for exhibitors and buyers to meet and explore business opportunties in the booming markets of Asia and the Chinese mainland," said HKTDC's Assistant Executive Director Raymond Yip.
Asia's wine market is expected to grow between 10 percent to 20 percent per annum over the next five years with the Mainland of China and Hong Kong, Taiwan, Singapore and Korea leading the charge. The consumption value in Asia (excluding Japan) is expected to double, reaching US$17 billion in 2012 and jumping to US$27 billion in 2017.
The Mainland of China is expected to be the key driving force for Asia's growth. By 2017, it is expected that the Mainland alone will import HK$7 billion worth of wine which tops all other Asian countries.
Acker Merrall & Condit 2008 Wine Auction: http://www.ackerasia.com/
High-end Design Shapes City Skyline
Renowned London architect Zaha Hadid will make her mark in Hong Kong by building a futuristic Design School for Hong Kong Polytechnic University (PolyU).
Ms. Hadid, who was awarded the commission from a field of international contenders, is one of the most influential figures in the world of modern architecture. In 2004, she became the first female recipient of the prestigious Pritzker Architecture Prize, architecture's equivalent of the Nobel Prize.
Having built a global reputation for revolutionary design, the architect credits Hong Kong with the place "where it all started."
In 1983, Ms Hadid's design won an international competition for The Peak Club, a residential and sports facility in the city's most prestigious neighborhood. The project was never built, but the award was one of the first public acknowledgements of her work and a key early boost to her career.
More recently, Ms. Hadid designed the Mobile Art traveling museum for French luxury brand Chanel, which in February this year kicked off its world tour in Hong Kong.
Design boosts commerce
The PolyU project, called Innovation Tower, reflects a growing recognition of the connection between high-end design and commerce. When top names lend themselves to major projects it becomes an effective marketing tool hence, much has been made of Lord Norman Foster's designs which shape the Hong Kong skyline, including the HSBC headquarters in Central and Hong Kong International Airport.
Victor Lo Chung-wing, Chairman of PolyU Council, said the new Innovation Tower would serve as a driving force in the development of Hong Kong as a design hub in Asia. The new tower will also provide additional space to facilitate inter-disciplinary research and education in the field of design.
Ms. Hadid, in Hong Kong recently to launch the project, described her design as bringing together concepts of strata, landscape and layering.
Due to open in 2011, Innovation Tower will house the School of Design and support the development of its specialisms, namely Environmental Design, Industrial and Product Design, Visual Communication, Advertising and Digital Design. It will also include a museum to showcase local and international design classics, as well as a public gallery to exhibit works by staff, design students and local talents.
Important design hub
In Hong Kong, PolyU is the sole provider of design tertiary education and the city's most important hub of design education and development. Its School of Design director, Prof. Lorraine Justice, was named among the world's top 40 influential designers by ID magazine in the U.S.
For two consecutive years since 2006, PolyU's School of Design has been named by Business Week as one of the top 60 design schools in the world. Design talents groomed by PolyU have won worldwide recognition and achieved astounding successes with their creativity and innovations. Famous graduates include Oscar-winner Raman Hui, supervising animator for Shrek, Qeelin jewellery brand founder Dennis Chan, and Freeman Lau, Partner of Kan & Lau Design Consultants.
PolyU: http://www.polyu.edu.hk/cpa/polyu/main/main_e.php
Zaha Hadid: http://www.zaha-hadid.com/
American Software Provider Uses Hong Kong as Regional Base
Kenexa Corporation, a leading end-to-end provider of software, proprietary content, services and process outsourcing that enables organizations to recruit and retain a productive workforce, has expanded its operations to Hong Kong.
The Pennsylvania company uses Hong Kong as a base to support its clients in Asia Pacific and for expansion in the region.
"As Kenexa continues to intensify its presence throughout the Asia Pacific region, we're selecting key locations that will enable us to best support our clients," said Rudy Karsan, Kenexa's CEO.
"We chose Hong Kong for its well-established infrastructure, talented workforce and stable economic forecast. It is also the preferred destination for many of our customers, which include industry leading multinational corporations."
The company has offices in Singapore, Taipei, Hyderabad and Melbourne.
Associate Director-General of Investment Promotion at Invest Hong Kong, Simon Galpin, said Hong Kong is a "natural fit for Kenexa" as it is a base for regional operations.
Headquartered in Wayne, PA, Kenexa began operations in 1987 as a provider of recruitment services to a wide variety of industries. By 1997, the company had expanded to supply employee research, employee performance management technology and consulting services. Then, responding to growing demand from its customers, Kenexa embarked on a strategy to provide comprehensive human capital management services integrated with on-demand software.
Kenexa: http://www.kenexa.com/
Creating Extra Value with Supply and Demand Chain Services
Building on its origins as a Hong Kong-based trading company, EXTRA International Group Ltd., provides integrated supply-demand chain management services that create product value for customers worldwide.
American entrepreneur Paul Bartels, who founded EXTRA in 1992, believes that few businesses today can survive for long by simply sourcing low and selling higher.
"You have to create additional value, managing both the supply chain and the demand chain, and linking the two."
"We're not just dealing with products anymore; we also deal in services that are critical to creating additional value in products. EXTRA can provide our customers a whole package of services from product development, design, sourcing and production management, all the way forward to retail concepts, packaging, displays, market testing, distribution alternatives, print catalogues and Web-based promotion. For some customers, we've even developed complete IT solutions for inventory management and ordering."
Innovative design and marketing
EXTRA's customers include leading mail-order catalogues, retailers, e-retailers and wholesalers in the U.S., UK, Canada and Australia markets. Product items are diverse, generally within the categories of home accessories, gifts, fashion accessories and timepieces, and home health. "The unifying theme is that our products sell well because there are elements of design, innovation, practical solution, and quality."
There is constant pressure on EXTRA's customers to find new products especially with consumer product cycles getting shorter. In addition to working on original design manufacturing (ODM) items, EXTRA is able to test-market new product concepts selectively through its network of marketing affiliates and partners. This helps to streamline product development, as well as reduce the time, money and risk for customers trying to determine if the new is also hot. Regular market feedback becomes a springboard for the next round of product ideas, once more linking the demand chain back to the supply chain.
EXTRA helps create value on the demand chain side by managing the design and production of 20-30 print catalogues and 30-40 ad inserts a year for mail-order customers. "Typically, a catalogue may have 200-300 items. We know each product intimately. Once we understand our customers' marketing requirements, our in-house photography studio and graphic designers can create the best product shots, layout and advertisements. We can also use our IT capabilities to help customers develop their Web sites or Web-based sales media. The cost factors for our customers are compelling, with additional savings from our scaleable operations."
For retailer customers, EXTRA uses its capabilities to develop new retail concepts, packaging and sales displays, and brands. "These three elements are critical for enhancing product retail value, especially for gift and fashion items. Retailers are thrilled we have the savvy and skills to work with them on these aspects."
SME business platform
Like most small and medium-size enterprises (SMEs), EXTRA keeps lean and mean with a total team of around 90 worldwide: 35 in Hong Kong; 45 in Shenzhen, Shanghai, Ningbo and Fuzhou and other Mainland of China sites; and 10 overseas.
Mr. Bartels prefers to keep the Hong Kong office as the hub for design, creative and IT work, sales, marketing and distribution, while his mainland offices focus on sourcing, merchandising and quality control.
Hong Kong provides a business platform from which EXTRA can effectively and efficiently link with international customers and marketing networks, while coordinating its supply chain in China and the rest of Asia. "Our Hong Kong team has the tools, skills and understanding to conduct demand chain work with our customers and partners. We must be in Hong Kong to get new ideas and new information for our partners and for the websites. Our Mainland teams then do the merchandising and the sourcing. It works very well."
Mr. Bartels added: "For an SME like us, there is really no place like Hong Kong with its clear regulatory system, low tax structure, rule of law, and safety in doing business. If anything goes awry with a business dealing, there are clear procedures and mechanisms to deal with it. The city is efficient and you get things done much faster than anywhere else in Asia. And all our customers like to visit Hong Kong for both convenience and comfort.
"We provide products plus services that create additional value in products, so Hong Kong's advantage of easy accessibility for information and travel is critical. Our business requires us to be plugged in to news and market intelligence in various time zones and this we can do easily from Hong Kong. With Hong Kong's proximity to China, if there is a supply chain issue that requires my attention, I can be there the same day or the next. And as China gets more expensive, our customers are more interested in sourcing elsewhere in Asia. Hong Kong is just five hours away from any place in Asia."
Exclusive Member Clubs a Measure of Success
One of the privileges of executive life in Hong Kong is the opportunity for membership at an exclusive private club.
The city has no less than 30 prestigious clubs catering for just about anything a hard working executive's heart could desire. From family-oriented to adults only, from formal to relaxed, from action-packed to total relaxation, Hong Kong clubs have something for everyone.
Bill Henderson, senior partner at Egon Zehnder International, the world's leading privately owned management consultancy focused on leadership resourcing and evaluation, says club membership is an important drawcard attracting top executive talent to Hong Kong.
"The top players know that senior executives here routinely have one or more memberships, and they ask for it," he says. "Club membership helps a family to assimilate. When the breadwinner is working long hours, it's a place where the spouse and children can come to form social relationships.
"As Hong Kong is the regional center for business, clubs also offer them a wealth of opportunity for networking in a social context. Overseas clients love to be entertained at a member's club it feels far more privileged than a hotel or restaurant, and shows them another side of Hong Kong."
Diverse choice
Mr. Henderson believes no other city in Asia has such a diverse choice of private clubs. As a Briton and long-term Hong Kong resident, he personally has memberships at the Hong Kong Country Club at Deep Water Bay, the Foreign Correspondents Club in Central, and recently relinquished his corporate debenture at Hong Kong Cricket Club to a colleague because he "couldn't find enough time to do justice to two clubs, let alone three."
All of Hong Kong's clubs have individual characteristics. Hong Kong Country Club, on the picturesque waterfront at Deep Water Bay, is a relaxed club with a reputation for serving the finest cuisine and providing the best sports and recreational facilities for members.
The Foreign Correspondents Club (FCC), which began in 1943 as an association of journalists fighting for freedom of the press, evolved into a social club for foreign media, business and diplomatic community. FCC's Main Bar is a famous meeting place for some of the city's most colorful characters, renowned for its lively conversations and debates.
The American Club, one of Hong Kong's largest private clubs, has a focus on family recreational facilities. In addition to both town and country clubhouse facilities, the club has a box at Happy Valley Racecourse and over 80 reciprocal club agreements worldwide. Its combination of services, facilities and reputation make The American Club a preeminent social club populated by an international and affluent membership.
Privileged haven
Many clubs cater to the sporting-minded. The Aberdeen Marina Club positions itself as a privileged haven - a unique private community where members and their families enjoy superb facilities and services while enriching their lives with friendships and traditions. In addition to a full service marina, club facilities include tennis courts, squash courts, swimming pools, fitness center and ice skating rink. All kinds of activities are on offer, from classes in Pilates, yoga and dance, to ball games and martial arts.
Golfers can play a round in the scenic Clearwater Bay Golf and Country Club, featuring resort-style golf, marina and spa facilities with unsurpassed sea views. Excellent restaurants and family activities provide welcome respite from city stress.
Apart from offering an enviable lifestyle, membership is also increasingly viewed as an investment. With long waiting lists for many of Hong Kong's clubs, it's a concept broker Tony Chan, sales director of Everfine Services, believes is gaining momentum. "Everyone is looking for a good investment, and membership rates keep rising," he told South China Morning Post.
Entertainment Expo Pulses with Action
When actor Tony Leung Chiu-wai spoke about returning for the fourth year as the Entertainment Expo (EE) Ambassador, he saw the role as both an honor and a challenge.
The honor was a reflection of his personal standing in the Hong Kong film and entertainment industry, he said. The challenge was that the industry has been through some hard times and part of his role was to use his international profile to propel it towards better days.
Looking back on a month full of EE activities, the award-winning actor can consider the job well done.
At the opening night's gala Asian Film Awards which boasted a gathering of the region's top stars Mr. Leung walked away with the Best Actor award for his role in the Ang Lee-directed Lust, Caution.
And as far as the bigger picture goes, the figures speak for themselves. A record number of industry professionals attended this year's FILMART, organized by the Hong Kong Trade Development Council (HKTDC). It was expanded to include 60 events covering screenings of film premieres, seminars, international press conferences, a music and digital entertainment fair, while giving the world's filmmakers a platform to meet and do business.
Positive results
The reaction from the participants was undeniably positive.
"I'm very happy with FILMART," said Darrin Ramage, the Los Angeles-based president of Maxim Media International, who specializes in low budget horror films.
"I was at the first FILMART. What I like about it is that they have it right. They treat the exhibitors well and they get the buyers here. That's the bottom line because we come to meet other buyers. I make more contacts here in two days than I do in a week at the big Los Angeles markets."
Mr. Ramage was among more than 2,000 overseas visitors at FILMART, a contingent that made up about 50 percent of total attendees. Visitors from the Mainland of China topped the list followed by those from Taiwan, Japan, South Korea and the United States.
San Francisco-based producer Roger Garcia said there was a positive mood around the exhibition venue, fuelled by impressive start-of-year box office figures in the region and some healthy sales at the market.
"There was a buzz around the place this year," he said. "People were talking about the fact the business was brisk and there were plenty of deals being lined up for the future."
Surge of buyers
The highest profile movie up for grabs this year was Universe Entertainment's The Stormriders II and perhaps urged on by the presence of Hong Kong stars Aaron Kwok and Ekin Chen buyers from the Mainland of China, Singapore, Indonesia and Thailand snapped up rights on the first day.
The big American players were in attendance with Disney expressing interest in the US$15 million Mandarin language Painted Skin, while international action stars Jackie Chan and Jet Li added extra glamour for the release of the co-production The Forbidden Kingdom, which was released in the U.S. by Lionsgate and in Hong Kong by Emperor Motion Pictures.
Hollywood mogul Harvey Weinstein was also in town to toast The Weinstein Company's latest move into the Asian film world an output deal with Hong Kong's Sundream Motion Pictures.
Industry insider were also talking about the strengthening of Hong Kong as a shooting venue for international productions, with two big budget Japanese features already having made use of the city's skyline this year.
Film hub of Asia
The positive mood around town was also reflected in an independent on-site survey conducted around FILMART and the Hong Kong-Asia Film Financing Forum.
More than 60 percent of the 338 respondents said they thought FILMART was the most important film market in Asia, while nearly 80 percent agreed that Hong Kong remained a major Asian content production, distribution, trading and film financing center.
"There is a lot of excitement, a lot of anticipation, and a lot of money coming from other parts of the world to the fair," explained Matthew OConnor, in town representing Canada's Reunion Pictures.
Mr. Garcia agreed, saying the Hong Kong event had carved a niche for itself before the Cannes Film Festival and after Berlinale which enabled film and entertainment industry heavyweights to plan their strategies for the following 12 months.
"It's known as a great place to catch up with people and even if deals are not actually finalized, you see the ground work being laid here in Hong Kong," he said.
FilmMart: http://www.hkfilmart.com/filmart/
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