Hong Kong Circle: Hong Kong Economic and Trade Office in Washington D.C. Newsletter

Hong Kong began the New Year with welcome news as The Heritage Foundation and The Wall Street Journal once again ranked the city as the world's freest economy in the 2008 Index of Economic Freedom.

This marks the 14th consecutive year Hong Kong has topped the ranking as the "poster economy" for the world.

It is an acknowledgement of Hong Kong's observance of free-market principles and the rule of law, as well as testament of Hong Kong people's entrepreneurial spirit.

The basis for Hong Kong's economic achievements is a key part of my message as I travel across the United States.

I began the year with a three-day visit to Nevada where I called on Lieutenant Governor Brian Krolicki. During our meeting, we exchanged views on the development of convention and exhibition businesses as well as tourism promotion.

The Lt. Governor expressed particular interest in attracting more visitors from Hong Kong and the Mainland of China. As part of this effort, Nevada was planning to establish a new representative office in China to promote tourism.

I took the opportunity to share with him the advantages of establishing such an office in Hong Kong and invited him to visit the city to meet with key players in the industry.

I then moved on to Las Vegas attending the Consumer Electronics Show (CES), the largest show of its kind in the world, where the latest technological inventions and innovations were on display. I also met with representatives of the Consumer Electronics Association, the organiser of CES, and encouraged them to hold an Asia edition of CES in Hong Kong.

More recently, I returned from a visit to Arkansas where I met with Governor Mike Beebe and Lieutenant Governor Bill Halter to exchange views on trade relations between Hong Kong and Arkansas and discussed areas of collaboration.

I also called on U.S. Senators Blanche Lincoln and Mark Pryor while in Little Rock. I discussed with the Senators ways to augment Hong Kong's trade relationship with Arkansas, particularly in the areas of biotechnology and nanotechnology.

I was honoured to be invited to speak at the University of Arkansas Clinton School of Public Service on the topic, "Hong Kong-US: Partners in Trade and Beyond." I shared with the audience the intimate cultural ties and close partnership between Hong Kong and the U.S., in areas ranging from trade to education, to port security and public health.

No visit to Arkansas would be complete without a visit to Bentonville where I met with officials at Wal-Mart's corporate headquarters and spoke at a breakfast event hosted by the Arkansas World Trade Center.

If January is any indication, 2008 is shaping up to be a busy year as I continue to extend our circle of friends across the United States.

I wish you all the best for the New Year.

Margaret Fong

Hong Kong Commissioner, USA

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Hong Kong Ranked World's Freest Economy

Hong Kong has been ranked the world's freest economy for the 14th consecutive year in the 2008 Index of Economic Freedom, jointly published by The Heritage Foundation and The Wall Street Journal.

The 2008 Index of Economic Freedom measures the degree of economic freedom of 157 economies across 10 specific factors: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom.

Within the rankings, Hong Kong is followed by Singapore, Ireland, Australia and the United States.

Commenting on the index's findings, Hong Kong Commissioner to the United States, Margaret Fong, remarked: "I am delighted to hear that Hong Kong's staunch commitment to the rule of law and free-market principles has once again been affirmed by The Heritage Foundation and The Wall Street Journal.

"Hong Kong's 'poster economy' of the world status is an accolade that Hong Kong people cherish, but do not take lightly. We understand the increasingly competitive nature of the global economy and remain vigilant in bolstering our economic fundamentals in the tradition of the free-market philosophy."

According to the index, Hong Kong scores exceptionally well in almost all areas of economic freedom.

Among the 10 factors assessed, Hong Kong ranks first in trade freedom, investment freedom, financial freedom and property rights. Hong Kong ranks in the top 10 in fiscal freedom, government size, monetary freedom and labor freedom.

The index notes that Hong Kong's income and corporate tax rates are very competitive, and overall taxation is relatively small as a percentage of GDP. In addition, business regulation is simple, the labor market is highly flexible, and there are virtually no restrictions on foreign capital.

The index acknowledges that Hong Kong is one of the world's leading financial centers and that the regulation of banking and financial services is both non-intrusive and transparent.

The index also finds that property rights are protected by an independent and virtually corruption-free judiciary.

Welcoming the index, Financial Secretary John C. Tsang said: "We are 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 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."

2008 Index of Economic Freedom: http://www.heritage.org/index/

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Chief Executive Welcomes Progress Toward Universal Suffrage

On December 29, 2007, Chief Executive Donald Tsang welcomed the National People's Congress Standing Committee's (NPCSC) decision to take forward Hong Kong's political development by setting a clear timetable for electing the Chief Executive and the Legislative Council by universal suffrage.

The decision makes it clear that the election of the Chief Executive in 2017 and the election of all members of the Legislative Council in 2020 may be by universal suffrage.

The timetable was decided having taken into consideration the views of the general public, the legislature, District Councils, non-governmental organizations and other sectors of the community received during public consultations in which a consensus had yet to emerge on dual universal suffrage in 2012.

"The timetable for attaining universal suffrage has been set," Mr. Tsang said. "Hong Kong is entering a most important chapter in its constitutional history."

The decision to advance political reform was made after considering the report by the Chief Executive to the NPCSC which summarizes the views received during the three-month public consultation exercise on the models, roadmap and timetable for implementing universal suffrage for the Chief Executive and the Legislative Council.

The Hong Kong Special Administrative Region (HKSAR) government is now tasked with considering how to amend the electoral methods for selecting the fourth-term Chief Executive and for forming the fifth-term Legislative Council in 2012. This will enable progress to be made in 2012 for attaining universal suffrage for the Chief Executive in 2017 and the Legislative Council in 2020.

In this regard, Mr. Tsang will ask the Commission on Strategic Development to consider the most appropriate electoral methods. A task group on constitutional development under the Commission will be set up to study the issue.

The HKSAR government will formulate options for the two elections by the fourth quarter of 2008 and consult the public.

"Our aim is to settle the two electoral methods for 2012 within the tenure of the third-term HKSAR government," Mr. Tsang said. "We hope this will lay a solid foundation for attaining universal suffrage for the Chief Executive in 2017, and for the Legislative Council in 2020."

Constitutional and Mainland Affairs Bureau: http://www.cmab.gov.hk/

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Maurice Loo Joins the Hong Kong Economic and Trade Office

Maurice Loo has joined the Hong Kong Economic and Trade Office as Deputy Director-General. He takes over the post from Alex Wong who has returned to Hong Kong to work in the Home Affairs Department.

Mr. Loo was born and educated in Hong Kong. Upon graduation, he joined the Hong Kong Civil Service in 1996 as an Administrative Officer.

He began his career in the Transport Branch (1996-98) before moving to the Home Affairs Department (1998-99).

In 1999, Mr. Loo assumed the post of Assistant Secretary in the Planning, Lands and Environment Bureau (later renamed the Environment and Food Bureau). He was responsible for policy issues concerning the government's program to tackle water pollution and improve the marine environment.

In early 2002, he joined the Civil Service Bureau as Assistant Secretary and assisted in the management and development of the Administrative Officer Grade.

He then served as Senior Administrative Officer in the Innovation and Technology Commission from mid-2004 to mid-2005, where he was responsible for formulating Hong Kong's new innovation and technology framework strategy.

From mid-2005 to mid-2007, he was Administrative Assistant to Joseph W. P. Wong, who served as Secretary for the Civil Service and as Secretary for Commerce, Industry and Technology.

In November 2007, he assumed the post of Deputy Director-General of the Hong Kong Economic and Trade Office in Washington, D.C.

In his current position, he is responsible for Hong Kong's economic and trade relations with the United States, particularly multilateral and bilateral issues that affect both economies.

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Strong Year for Investment Promotion

Investment promotion in Hong Kong achieved encouraging results in 2007.

On January 10, Director-General of Investment Promotion, Mike Rowse, announced that both the number of companies assisted and jobs created by those companies reached all-time highs last year.

During 2007, Invest Hong Kong assisted 253 overseas, Mainland and Taiwan companies to set up or expand operations in Hong Kong.

These companies expect the projects to lead to the creation of over 8,100 jobs. This includes 3,130 jobs established initially, and an additional 5,004 jobs in the next two years as these companies expand. More than US$1.07 billion was invested by these companies.

"These results once again highlight Hong Kong's position as the leading international city in the region and reflect the hard work of our staff here and abroad," said Mr. Rowse.

"We have our challenges, such as pollution and the high cost of rent. But, as these figures demonstrate, our city still is able to attract the very best overseas and Mainland companies to our shores.

"All of this has a sizable impact on Hong Kong's economy, beyond the initial investment and job creation. Our professional service providers, restaurants, hotels, and shopping centers all benefit from this influx of new people. And these international companies help to retain Hong Kong’s vibrant, cosmopolitan business environment."

In 2007, Hong Kong successfully attracted investments from a variety of sectors, led by consumer products, retail and sourcing; business and professional services; and technology. Most of these companies came from the Mainland, Asia Pacific (Japan and Australasia), Western Europe and North America.

During the past year, Invest Hong Kong actively communicated to Mainland enterprises Hong Kong's unique advantages as a springboard to expand overseas. The Department's Nationwide Marketing Campaign, launched last June, promoted Hong Kong as a platform for privately-owned enterprises in high growth provinces to expand internationally. The campaign provides these companies with the information and tools to expand internationally using Hong Kong as their gateway.

In 2007, Invest Hong Kong assisted 47 Mainland companies in setting up or expanding operations in Hong Kong which is the highest number ever recorded. These companies brought over US$292.3 million to Hong Kong.

Mr. Rowse is optimistic about the outlook for inward investment in the coming year.

"Our target for this year is to achieve at least another 250 completed projects, he said. "We feel reasonably confident about this goal, since there are over 600 live projects in the pipeline – which is more than we’ve ever had before.

"Hong Kong’s role is well defined. The city serves China as a springboard to international markets and serves international markets as a gateway to China as well as to the region generally. It is a simple strategy and one that works well."

"At the same time, we cannot and will not be complacent. Competition is strong and the world economic outlook is uncertain. This means that we have to continue to work hard to improve our investment environment to attract and retain investors from all over the world," Mr. Rowse concluded.

Invest Hong Kong is the Hong Kong Special Administrative Region government department charged with encouraging and facilitating inward investment into the city by providing the support needed to establish or expand a business presence.

Invest Hong Kong: www.investhk.gov.hk

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Business Confidence Seals a Year of Growth

U.S. companies have given a strong vote of confidence to Hong Kong's business outlook, culminating another year of vibrant economic performance.

The annual American Chamber of Commerce in Hong Kong (AmCham) Business Outlook Survey, released in December 2007, revealed that many member companies are preparing for growth and further investments in Hong Kong.

The positive sentiment is largely credited to Hong Kong's ability to offer a business-friendly environment and remain competitive within the region.

The survey, conducted by Nielsen on behalf of AmCham, was held for the 18th consecutive year.

With positive outlooks for the economy and the business environment in Hong Kong over the next three years, most respondents felt that their annual business forecasts would improve.

Given the positive prospects, a number of companies reported plans to expand their businesses and hire additional staff. Those companies with regional headquarters in Hong Kong also plan to expand their presence.

AmCham: http://www.amcham.org.hk/

AmCham Business Outlook Survey: http://www.amcham.org.hk/content/view/5216/190/

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Hong Kong Government Announces 2008 Digital 21 Strategy

On December 21, 2007, the Hong Kong Special Administrative Region government announced the 2008 Digital 21 Strategy, the latest blueprint for the development of information and communications technology (ICT) in Hong Kong.

Speaking at a press briefing, the Secretary for Commerce and Economic Development, Frederick Ma, said: "The strategy sets out the vision of building on Hong Kong's position as a world digital city through advancing our achievements and seizing new opportunities."

Mr. Ma also announced the launching of his dedicated blog on the strategy, saying that the blog was a new platform to enable members of the public to exchange views with the government on the newly released strategy.

The blog features video clips of Mr. Ma sharing his views on ICT development and visiting various organizations which are using ICT to enhance the effectiveness of their business operations.

"The Digital 21 Strategy is a dynamic roadmap that is flexible and adaptive to take into account changes in the technological landscape and the evolving needs of society. I hope that my blog may help lay members of the public to better understand the strategy and the importance of ICT development in our everyday life," said Mr. Ma.

Under the new strategy, five action areas have been identified to achieve the vision of enhancing Hong Kong's status as a world digital city:

I. Facilitating a digital economy - Government continues to play a significant role as a user, supporter and facilitator of ICT and its applications.

II. Promoting advanced technology and innovation - Maintain Hong Kong's edge as a world digital city for technology adoption and innovation.

III. Developing Hong Kong as a hub for technological cooperation and trade - Harness Hong Kong's role as the two-way platform for Mainland enterprises to bring in foreign investment and participate in the global economy; foster a vibrant ICT industry with a knowledgeable and versatile workforce; and ensure the continued presence of an environment that is conducive to technological business.

IV. Enabling the next generation of public services - Use ICT to re-engineer process to improve public service delivery.

V. Building an inclusive, knowledge-based society - Ensure that the benefits of ICT adoption are widely available to different segments of the community, including disadvantaged groups.

"We will work with all stakeholders in the implementation of the strategy so as to accelerate Hong Kong's transition to a knowledge-based economy, and to bring economic benefits and improved standards of living to the society," Mr. Ma said.

"Members of the public are most welcome to visit my blog and leave me their comments. I value your views and will post my thinking through text or video clips on Hong Kong's ICT development in the next few months," he added.

The Digital 21 Strategy was first promulgated in 1998 with the aim of enhancing and promoting Hong Kong's information infrastructure and services to make Hong Kong a leading digital city in the globally connected world of the 21st century. The strategy was subsequently reviewed and updated in 2001 and 2004.

Secretary Frederick Ma's blog: http://blog.digital21.gov.hk

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Hong Kong Emerges as Transshipment Hub

An efficient container port and logistics strengths will be crucial components of Hong Kong's growth as a transshipment hub in Asia, industry executives say.

Although it is no longer the world's busiest, Hong Kong's container port remains one of the most effective.

According to Sean Kelly, Chief Executive of Modern Terminals Limited (MTL), the volumes of barge and transshipment cargo being handled in Hong Kong and south China are growing at a healthy pace.

Barge throughput at Kwai Chung has increased by an average of 15.6 percent a year since 2000, while transshipments cargo rose by an annual 15 percent.

"The equivalent figures for all of the south China ports were nearly 20 percent and 16.7 percent respectively," he said. "These segments will undoubtedly remain the key driving forces behind our future growth, and we must nurture them carefully."

However, Hong Kong terminal operators find it harder to tap into the potential of the region's most important cargo segment, the trucked exports from south China's the Pearl River Delta (PRD), because of the inefficiencies of cross-boundary trucking arrangements.

"These make it expensive to move cargo to Hong Kong by road from the eastern PRD, which has resulted in a declining volume in this sector," said Mr. Kelly.

"Hong Kong can grow with the market in the future if cross-boundary trucking inefficiencies can be resolved, because of our competitive advantages as a hub port, a free port, and a business-friendly port, that provides value for money," he said.

Mr. Kelly added that he is looking forward to the deregulation of cross-boundary trucking business that will open the network and level the playing field, facilitating the flow of cargo into Hong Kong via various customs checkpoints.

Hong Kong ideally positioned

Eric Ip, Managing Director of Hongkong International Terminals (HIT), said that to make up for the loss of trucked cargo from the Guangdong's hinterland to Shenzhen ports, Hong Kong port operators have been vigorously competing for transshipment cargoes from other Asian origins, including north China, to use Hong Kong as a transshipment hub.

"Supported by the shipping lines, the transshipment volume at Kwai Chung has increased by almost 50 percent over the past three years," Mr. Ip said.

"A natural deep-water port located on major international shipping routes, Hong Kong is favorably positioned to capture international transshipment cargoes. It is a free port, which ranks highly in the region for customs efficiency."

In view of the continuous deployment of mega vessels and rising bunker fuel costs, global shipping lines need to expedite turnaround times and minimize operating costs.

"With our port's strategic location, smooth customs process and cost-effective terminal operations, it will continue to be a preferred transshipment hub in Asia and gateway of south China," said Mr. Ip.

According to Sunny Ho, Executive Director of the Hong Kong Shippers' Council, a very distinct advantage comes from the fact that Hong Kong is a free port with no licensing requirements for importers and exporters, and no import tax, duties or quotas.

"This is in sharp contrast with the very complicated system in the Mainland," said Mr. Ho, adding that Hong Kong's port will continue to handle the bulk of PRD-bound cargoes.

He also dismissed suggestions that Guangzhou's New Baiyun International Airport, which opened in August 2004, poses a serious threat to Hong Kong International Airport (HKIA).

World's busiest airport

HKIA, ranked the busiest airport for international air cargo since 1996, handled 3.58 million tons of freight in 2006, while Baiyun managed only 653,000 tons.

Although air cargo made up just 1.3 percent of Hong Kong's total cargo throughput in 2006, it accounted for 34.5 percent of its total external trade value at $224 billion, which was up 11 percent over the 2005 figure.

"Baiyun is an up-and-coming facility but its cargo traffic growth rate is still in the single digits and it is long years away from posing any serious threat to HKIA," said a Hong Kong-based aviation analyst.

Liu Zijing, General Manager of the Guangdong Airport Management Corp, expects Baiyun airport to handle 2 million tons by 2010, and 4 million tons by 2020.

"By that time throughput at HKIA will have crossed the 6 million ton mark," the analyst said.

In its latest report, Business Monitor International (BMI) said airfreight capacity in Hong Kong will grow as a result of the expansion of the passenger business, driven by the proliferation of low-cost airlines. Although the number of dedicated freighters deployed by international airlines is increasing, about 60 percent of the cargo is still carried in the bellies of passenger aircraft.

Modern Terminals: http://www.modernterminals.com/

Hong Kong International Terminals: http://www.hit.com.hk/

The Hong Kong Shippers' Council: http://www.hkshippers.org.hk/eng/index.asp

Hong Kong International Airport: http://www.hongkongairport.com/eng/index.html

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Migrant Scheme Attracts Overseas Talent

Since the June 2006 launch of the Immigration Department's Quality Migrant Admission Scheme, successful applicants from around the world have brought a wealth of professional skills which contribute to diversifying Hong Kong's development.

Art therapist helps local profession grow

Jordan Potash began his career in Washington, D.C. where he used creative arts to help people express their feelings and overcome emotional difficulties for nearly seven years.

While art therapy as a profession has a 40-year history in the United States, it is relatively new in Hong Kong. Jordan relocated to Hong Kong because he saw a need for his skills and experience.

"Life here is so stressed. There is also a certain number of people who don't feel comfortable to talk about their problems due to their cultural values," Mr. Potash said. "Through an art-making process they can express their feelings but don't feel embarrassed."

Flexibility a big draw

Though the need may be great, there is no formal art-therapy training course in Hong Kong. Besides seeing patients through the St. John's Cathedral counseling service, Jordan's second mission is to help train local art therapists. He gives lectures at universities during his leisure time, works on a PhD program in art therapy at the University of Hong Kong and also does volunteer work.

Jordan says the admission scheme allows flexibility, which is attractive to talented overseas professionals.

"Most other places have you get a sponsor, a full-time job or full-time university sponsorships - but nothing that really gives the flexibility of being able to do a little here and a little bit there and then get a full sense of what life is like."

Soprano's teaching dream comes true

The renowned soprano Lan Rao also became a Hong Kong resident through the scheme in July 2007.

When Ms. Lan came to Hong Kong from Germany to be a judge in a music competition with over 130,000 participants two years ago, she was moved by Hong Kong people's passion for music.

"I had never imagined that there are so many kids here working so hard to learn music," Ms. Lan said. "According to my rough calculation, the proportion of professional singing teachers in the population is tens of times less than that in Germany, which made me think there's a great need for teaching talented youngsters here."

Born in China, the gifted soprano was awarded a scholarship and went to study music in Germany when she was 19. She earned a Masters degree at the Music School of Munich and then performed around the world.

Training tomorrow's performers

During two decades of singing for global audiences, Lan dreamed of the day she could return to China, to devote herself to promoting music there. The Quality Migrant Admission Scheme helped her dream come true.

"I have a dream. I want to teach as many people as possible, not only dozens of professional vocalists to win international competitions, but to teach thousands of students and let them know the joys of singing."

Ms. Lan became the first "in-house" artist at the University of Hong Kong's School of Professional & Continuing Education. She is mainly responsible for teaching Masters classes and courses for teachers.

School director Enoch Young said Ms. Lan helps to train local performing artists to cater for the future needs of the government's West Kowloon Cultural District.

Up to mid-September 2007, the Immigration Department had received 992 Quality migrant admission applications and approved 238 of them. The department will continue to promote the scheme overseas to attract more talented people to Hong Kong.

Quality Migrant Admission Scheme: http://www.immd.gov.hk/ehtml/QMAS.htm

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Business at a Premium

New Yorker Charles (Chuck) Monat arrived in Asia in 1970 via Thailand, where he had served in the U.S. Army.

In Bangkok, Mr. Monat met his mentor Reeve Hankins who ran insurance broker Rolibec International. Mr. Hankins hired him off the street to sell insurance to American expatriates living in Hong Kong.

The 26-year-old arrived in a city where he knew nobody. A year later, sensing immense opportunities in "China's Manhattan," he set up Charles Monat Associates Ltd.

Fast forward 35 years later, and Charles Monat Associates Ltd. is one of Asia's premier consultancies for wealth transfer and liquidity planning, and Hong Kong's largest independent provider of life insurance.

"I set up Charles Monat Associates Ltd. in 200 square feet of office space in Central with just me and another staff member," commented Mr. Monat.

More than three decades later, Mr. Monat is still in Central, but his company now occupies 4,250 square feet of office space and retains staff in Hong Kong and Singapore.

"Hong Kong has been good to me; in fact, the city is ideal for my kind of business," said Mr. Monat.

"As a worldwide financial center, the Hong Kong government permits insurance brokers like me to source from any insurers globally and sell to anyone interested in buying. I can't think of many places in the world where the government is so supportive and friendly."

When he first started, Mr. Monat was selling insurance mostly to Americans. Today, his roster of 8,000 clients spans the region.

Tax-friendly environment

In many cities around the world, estate taxes can be crippling -- draining the resources of affluent families. In Hong Kong, estate duties have been abolished since 2005, which makes the city more enticing.

Mr. Monat noted that increasingly it had become less of a taboo to talk about death, especially within the Chinese community. As such, he is seeing more affluent clients and businesses seeking advice on how to manage their estate liquidity to protect their families and businesses.

Mr. Monat said that more people in Hong Kong are buying life insurance and in larger amounts. He noted that over the years the products have become more sophisticated and the numbers and sizes of policies have grown substantially. The crowded field creates a buzz, raises the interest level and in turn, produces more capacity on underwriting.

Mr. Monat attributed his success to Hong Kong people's work ethic. "I feel very lucky to be in a city where there is a ready pool of talent, where the people are decent and industrious and work until the job gets done. Hong Kong people have big hearts and deep pockets and they are always ready to donate to good causes as well."

As to the future of Charles Monat Associates Ltd., Mr. Monat said: "I have hired a lot of top caliber people, including some former bankers. Many have been with me over ten years. That is part of my succession plan. When I check out, the company will continue to run smoothly."

Charles Monat Associates: http://www.charlesmonatassociates.com/

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Effective Business Hub Gets Deal Done

U.S. businessman Devon Rifkin is building a multi-million dollar company using Hong Kong as a bridge to the Mainland of China.

Mr. Rifkin is President and CEO of Miami-based The Great American Hanger Company. Using Hong Kong as his sourcing hub, Mr. Rifkin travels to Hong Kong several times each year to meet suppliers and view products. The ease with which Mainland suppliers can now visit Hong Kong makes doing business even more effective for an out-of-town executive, he explained.

"The air that we breathe, so to speak, has everything to do with our suppliers and our supply from China, and our relations through Hong Kong as the door that opens for us to the rest of our supply world," said Mr. Rifkin. "I give Hong Kong and China single-handedly the credit for allowing me the opportunity to grow my business as successfully as we have thus far."

Mr. Rifkin founded the company seven years ago, determined to stay focused on just one product – clothes hangers. Unlike others who diversify their product range, he believes that more becomes less, and that with "a mish mash of products", you "become known for nothing."

"I think we've been able to make a name for ourselves by excelling and being a leader specifically in hangers – all roads now lead to us in many different channels," he said.

Gateway to the Mainland of China

Hong Kong's gateway role has increased over the years, Mr. Rifkin says. Most of the company's Mainland suppliers are now permitted to travel to Hong Kong to meet with overseas businessmen prior to on-site factory visits, and many have offices or showrooms in the city for viewing products.

"This makes starting relations a lot easier than traveling 15 hours somewhere to see if you want to do business with somebody, and it's something we've taken a great advantage of."

Acknowledging price pressures of recent years, Mr. Rifkin said such instances had been localized and each example was different. Some suppliers might changes their prices five times in a year, while others remain unchanged for three years. He says the media tends to cast a negative blanket on what is perceived to occur in Hong Kong and China, while the realities "are a lot brighter than that."

As for product recalls of Chinese-made goods, Mr. Rifkin said that "these types of things happen in all countries." He anticipates such potential challenges by "choosing an ethical route." "From the beginning, we have only dealt with factories we have visited, where there is no child labor."

Expansion plans for Hong Kong

The company's growth strategy includes a newly launched mail order business and a different approach to its customer base by targeting residences rather than hotels and retail. There are "other moves coming up" and plans to open more offices.

When people tell Mr. Rifkin he should also look to other countries and not only Hong Kong and China, he is firm in his response.

"I can tell you that in the next three years we will strengthen our presence more permanently in Hong Kong, we will come here more, and look to expand our manufacturing base in China.

"If supply is the air that we breathe then we need to really further grow roots into the ground in China, and use that as a stepping stone to grow into the future. I will contend that in the next six to seven years we will be a US$100 million business."

The Great American Hanger Company: http://www.hangers.com/

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Will Smith Turns Spotlight on Hong Kong

It was the perfect Christmas present for the Hong Kong film industry.

When Hollywood superstar Will Smith was in Hong Kong in December 2007 for the launch of his latest blockbuster, the thriller I Am Legend, he first revealed to reporters that he had been in talks with Hong Kong actor and director Stephen Chow Sing-chi about the pair joining forces to make films.

Mr. Smith confessed to a fascination with all things offered by the Hong Kong film industry. "I'm always telling people I am interested in story telling," said Mr. Smith. "And the people here in Hong Kong have always been able to tell the most amazing stories. The more Hong Kong films I watch, the more I have wanted to get involved in the local film making process."

If Mr. Smith's stay in Hong Kong was brief, its impact might just linger. Mr. Smith left having asked Mr. Chow to direct a remake of the 1980s Hollywood hit The Karate Kid, while Mr. Chow in turn asked Mr. Smith to make a cameo in his next project – an adaptation of Journey to the West.

Film making talents shine

With Hong Kong set to figure prominently in both productions, the news capped off a year that saw a further resurgence of the city's film making talents.

Peter Chan Ho-sun's epic The Warlords was sweeping all before it in cinemas both in Hong Kong and on the Mainland of China as the year came to an end, while the Ang Lee helmed Lust, Caution – produced by Bill Kong of Hong Kong company Edko – swept almost all the major prizes given out at Taiwan's Golden Horse Awards. Included in those, were the best actor gong for Hong Kong's premiere star, Tony Leung Chiu-wai, and the award for best picture of the year.

Lust, Caution was also generating an enormous buzz at film festivals all over the world as we turned into 2008, and picked up a Golden Globe nomination for best foreign film as the Hollywood awards assembly lines crank into action.

Hong Kong also found itself used as a backdrop for the big-budgeted The Dark Knight – the second in Hollywood director Christopher Nolan's Batman series.

The city has grown as a center for computer-generated film-making with the release of TMNT (Teenage Mutant Ninja Turtles), the Imagi-produced CGI hit that went on to gross close to US$100 million in box office receipts worldwide.

FILMART plays a leading role

The premiere of TMNT was one of the highlights of last year's Hong Kong Trade Development Council-organized FILMART, which in turn was one of the featured events of Hong Kong Entertainment Expo.

According to Sophia Chong, HKTDC's Senior Service Promotions Manager, the forum that FILMART provides has played a vital role in helping to reinvigorate the local industry.

"In 2007, we had 453 exhibitors from 30 countries, up more than 11 percent from the previous year," she said. "This year, we have already topped that figure and filmmakers are finding the event a place where they can come together and discuss ideas. The most important role FILMART plays is to provide this forum – it is a place where they can open up a dialogue."

The 2008 Entertainment Expo will run from March 17 to April 14, with FILMART to be again staged at the Hong Kong Convention and Exhibition Centre from March 17-20.

The past 12 months have again seen some of Hong Kong's most exciting film talent step out on to the international stage, in particular the Pang brothers, Oxide and Danny. The pair made their English language bow with The Messengers in 2007 and are awaiting the release of the English-language remake of the 1999 hit Bangkok Dangerous, which stars Nicolas Cage.

As well as having two individual projects finished in the past 12 months – In Love With The Dead for Danny and The Detective for Oxide – the brothers announced they would team up for a sequel to the 1998 martial arts hit The Storm Riders for Universe Entertainment.

Blockbuster year forecast

Hong Kong filmmakers have also entered the New Year buoyed by the news that the influential Weinstein Co. – founded by former Miramax heads Bob and Harvey - have set up an Asian film fund. With a starting capital of some US$275 million, the fund will be administered by Goldman Sachs and has already helped Wong Kar-wai get his latest film, My Blueberry Nights, up on to the big screen.

And with Beijing hosting this year's Olympic Games, the local industry has thrown its support behind promoting the event throughout 2008.

Hong Kong Film Development Council Chairman Jack So told a gathering of 200 industry heavyweights that the next 12 months would be the perfect time for filmmakers to turn their lenses on the attractions of both Hong Kong and the mainland, while Hong Kong Chamber of Films Chairman, Peter Lam, revealed the chamber would help shoot a series of promotional videos to be shown in local cinemas.

Hong Kong FILMART: http://www.hkfilmart.com/default.asp?lang=en

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Hong Kong, Guangdong and Shenzhen Support Joint R&D Projects

The Hong Kong, Guangdong and Shenzhen governments will support eight applied research and development (R&D) projects under a new category introduced in 2007 under the Hong Kong/Guangdong Technology Co-operation Funding Scheme to enhance Hong Kong's technology collaboration with Guangdong and Shenzhen.

Under this category, projects are to be funded jointly by the Guangdong and Hong Kong authorities or the Shenzhen and Hong Kong authorities. A total of about US$8.14 million in funding has been requested by the eight supported projects.

A spokesman for the Innovation and Technology Commission said the new category of co-funded projects marks an important milestone in the co-operation of Hong Kong and Guangdong in undertaking applied research and development.

"Through closer cooperation and exchanges between the two sides, we hope to enhance the innovative and technological upgrading of Hong Kong and the Guangdong area more effectively," he said.

A total of 24 applications under this new category of co-funded projects were received when applications closed on October 22, 2007. These applications have been vetted by a joint vetting committee comprising officials from the Hong Kong and Guangdong/Shenzhen sides for joint funding support.

Among the eight projects supported, four are to be funded jointly by the Guangdong and Hong Kong authorities while the others are to be funded by the Shenzhen and Hong Kong authorities. The amount requested from the Hong Kong side is about US$4.87 million.

The supported projects are under the technology areas of energy-saving and new energy vehicles; white LED core technologies with high power efficiency; core technologies for RFID, and integrated circuits.

"These technology areas are relevant to the needs of the industry in the Greater Pearl River Delta region. The project applicants from the Hong Kong and Guangdong sides will leverage on their respective strengths and undertake the projects together," said the spokesman.

The funding program, first launched in 2004 by the Hong Kong/Guangdong Expert Group on Cooperation in Innovation and Technology, serves to enhance the collaboration between R&D institutions and industry between the two places, and to upgrade the technology level of the industry in the Greater Pearl River Delta region. In the past three years, the two governments have supported some 400 R&D projects with total funding of US$147.43 million.

Apart from the new category introduced this year, there are two categories under the funding scheme. One is for projects to be funded by the Innovation and Technology Fund of Hong Kong. This category is for projects with Hong Kong institutions as principal applicants and Guangdong institutions are encouraged to participate. Applications had to be submitted to the Hong Kong side and 50 applications were received this year. Assessments of the project proposals are underway.

The technology areas to be supported under this category are (1) textiles and clothing; (2) logistics and supply chain management enabling technologies; (3) automotive parts and accessory systems; (4) information and communications technology; (5) modernization of Chinese medicine, biopharmaceuticals and biomedical engineering, and (6) new energy, energy saving, resources monitoring and environmental technologies. Applications will be vetted either by an assessment panel of businessmen, technologists, academics and government officials or by the respective Research and Development Centres in accordance with their own guidelines and procedures.

The other category is for projects funded by the Guangdong provincial government. This category is for projects with Guangdong institutions as principal applicants but Hong Kong institutions are encouraged to participate. Applications had to be submitted to the Guangdong provincial government.

Details of the scheme can be found on the ITF Web site: www.itf.gov.hk

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Top Ranking for HKUST-Kellogg Program

For the first time, the Hong Kong University of Science and Technology (HKUST) topped an international ranking of executive MBA programs (EMBA).

The program, which is run in partnership with the Kellogg School of Management, was ranked first in the Financial Times' Global EMBA rankings.

It is listed as number one for "work experience" of its participants, number two in "international faculty" and number three in "international students."

Professor Leonard Cheng, Acting Dean of HKUST Business School, said: "This is an important milestone in Hong Kong as it is also the first time commercial education in Hong Kong has ranked globally as number one."

The program was launched in 1998 as a unique East-West partnership to offer the best managed education for international talent based in Asia.

HKUST's EMBA program first made it onto the Financial Times' global rankings in 2003, when it was placed ninth. It reached second place in 2005 and was ranked third in 2006.

The Financial Times rankings table includes 90 EMBA programs. Evaluation is based on the quality of alumni, school and program quality and the research capability of faculty.

Hong Kong University of Science and Technology: http://www.ust.hk/eng/index.htm

Financial Times' Global EMBA: http://rankings.ft.com/emba-rankings

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Design Innovation Earns Top Awards

Hong Kong design firm CL3 Architects Ltd. achieved international praise by winning two prestigious awards for hospitality design.

The awards propel Hong Kong and the city's talented young designers on to the global design stage.

CL3 beat over 150 entries from 17 countries to take the "Gold Key Award for Excellence in Hospitality Design," which was presented by the International Hotel/Motel & Restaurant Show and sponsored by Interior Design and Hotel magazines.

One of six design firms selected as grand prize winners, CL3 won the "restaurant" category for Nishinura Restaurant at the Shangri-la hotel in Beijing. For the same project the firm received the International Interior Design magazine's "Best of the Year" award, which drew 930 entries from around the world.

It won a Merit Award for another project, the Bamboo Ladder Installation for the Venice Biennale's International Architectural Exhibition.

Growing international recognition

Managing director William Lim said the awards demonstrated increasing international recognition of Hong Kong design.

Mr. Lim was a co-founder of CL3 and has helped drive the company's growth from a small Hong Kong studio in 1993 to a regional design firm with liaison offices in Beijing, Shanghai and Bangkok.

The company provides professional services in architecture and interior design to the hospitality, corporate and retail markets throughout the Asia Pacific region.

"When we started the company, China was having its first building boom and my partners had identified emerging opportunities," he said. "It was pre-'97 and as foreigners we could not set up the business in China, so Hong Kong seemed the natural base.

"Even now, I still feel that Hong Kong is an essential base for us. A lot of our Chinese clients regard Hong Kong designers as being more creative and service-driven than some of our colleagues in the Mainland, with more international exposure. This has definitely been a plus for us doing work in China."

Building a design hub

As Hong Kong designers become more widely recognized, Mr. Lim foresees the day when CL3 no longer needs to have liaison offices in different locations, but can manage all of its regional projects out of its Hong Kong studio.

CL3: http://www.cl3.com/

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