Ventures Dialogue

In what seems like movement to a closer relationship between Canada and China, China’s President Hu Jintau arrived in Ottawa ahead of the G20 summit in Toronto and got to work signing deals that will hopefully improve the trading, tourism and economic relationship between the two countries; and in effect be advantageous to Canadian firms.

One of the most important things accomplished is the signing of a co-operative agreement whereby China will again begin to import Canadian beef and beef products.  The opening of the Chinese market is estimated, in an article from the Toronto Sun, to be worth $100 million to Canada’s farmers.  China banned Canadian beef in 2003 after the first Canadian case of mad cow disease (Bovine Spongiform Encephalopathy – BSE) was discovered.

Another important move stemming from the visit is that China will allow its tourists to visit Canada more freely.  Presently, Chinese tourists were only allowed to travel to countries with approved destination status (ADS).  ADS was previously not applied to Canada, but will now be.  The Toronto Sun further comments that ADS was first discussed in 2005 by the then Canadian Prime Minister Paul Martin.

There were other deals signed as well, touching on fighting crime and setting up a working group on environmental protection and energy.

To read more about the Canada-China relationship and the G20 summit you can also read this article by the Globe and Mail and also view this YouTube video Harper Says China Move May Temper Canada Dollar Rise from Bloomberg.

Imports from Asian Pacific countries accounted for more than 20 per cent of total Canadian imports in 2009.  An article from the Asia Pacific Foundation of Canada notes that this is a decrease from the previous year.  However, the foundation attributes this to the decrease of imports from China and Japan. This in turn can also be linked to the global credit crunch.  Nevertheless, China was by far the leader with 10.9 per cent of Canada’s total imports. Japan and South Korea rounded off the top three spots with 3.4 per cent and 1.6 per cent, respectively.

East Asian countries garnered 15.9 per cent of Canada’s imports. This is a bit higher than the imports from Europe with 15.6 per cent in 2009. To see where China and the 16 other counties fits, take a look at the article from the Foundation.

A Framework Agreement on Hong Kong-Guangdong co-operation was signed earlier in April in Beijing. The Framework Agreement, which builds on years of close co-operation between Hong Kong and Guangdong Province, is a significant embodiment of the principle of “One Country, Two Systems”. It represents a deepening of the co-operation between the two places. It sets clear targets and development positioning for Hong Kong/Guangdong co-operation, and outlines specific polices and measures, including:

• to promote joint socio-economic development in Hong Kong and Guangdong;
• to enhance Hong Kong’s position as an international financial centre and expedite the development of financial-services industries in Guangdong;
• to capitalize on the competitiveness of Hong Kong’s service industries and Guangdong’s manufacturing industries to build an advanced global manufacturing and modern services base;
• to facilitate the flow of key factors such as people, goods, information and capital across the boundary, with a view to building an international aviation, shipping and logistics hub and a world-class modern economic circulation sphere;
• to implement a regional ecology and environment protection regime operating at a leading level by the national standards; and
• to promote collaborative development among Hong Kong and the Pearl River Delta cities to form a world-class metropolis cluster.

To achieve the objectives, Hong Kong and Guangdong have put forward specific policies and measures, and set out major initiatives for 2010.

China’s high speed trains have caught the eye of reports everywhere. In a recent posting on Gulliver from The Economist, it discusses not only of the existing rail line, but reported plans that China wants to build a high speed rail system stretching across 17 countries by 2025 (ambitious indeed).

To read further, head over to the post.

Photo by by dcmaster

Over 45 per cent, that’s the latest figure released from China’s General Administration of Customs (GAC) about the February year-over-year increase in China’s trade. Exports lead the way with $94.52 billion for a 45.7 per cent upswing. Imports as well posted a gain with a 44.7 increase at $86.91 billion.

The European Union and the US remain China’s top trading partners with the EU capturing $65.53 billion, which is up 34.5 per cent in the first two months of 2010. The US had $49.32 billion in Chinese trade, which as well posted an increase, up 25.1 per cent.

One other relationship that was noted was trade with the Association of Southeast Asian Nations (ASEAN). Chinese trade with ASEAN was up 66 per cent in January and February, with $39.12 billion. This increase moves ASEAN ahead of Japan in terms of trade. This surge is most likely attributed to the free trade area that was established between China and ASEAN countries in January.

While these numbers are positive, there is caution as some believe this “could bring pressure of yuan appreciation and possible trade disputes,” as quoted from an article from an official news release.   

Photo bY by jiazi

China is gaining increasing influence on the global economy and it is time for Hong Kong and Canada to strengthen co-operation by collaborating and complementing each other to make the most of these opportunities, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, Professor K C Chan, said in Toronto on March 8 at a mining convention.

Speaking at a seminar on “Listing and Capital Raising in Hong Kong for Mining and Natural Resources Companies” of the Prospectors and Developers Association of Canada Convention (PDAC 2010), Professor Chan said Hong Kong could serve as the financial gateway for Canadian companies to reach the Asian market in the same way that Canada served as a gateway for Hong Kong companies to invest in the North American market.
 
He called on Canadian companies to consider listing in Hong Kong to tap the local liquidity pool, quoting the examples of British Columbia and Ontario of Canada which are overseas jurisdictions already accepted by the Hong Kong Exchanges and Clearing Limited (HKEx).

“At the same time, companies listed in Hong Kong and other Asian markets can also consider a listing on the Canadian exchange to tap the liquidity there. We would also welcome Canadian fund management companies to market their services to Asia through Hong Kong,” he added.
     
Turning to market regulation, he said Hong Kong believed in being predictable and consistent in regulation, and had been careful in striking a balance between the goals of having a quality market and being market friendly.

Using the HKEx as an illustration, he said listing decisions were made by a committee of market professionals who applied their expertise in reviewing listing applications in a dual filing system overseen by the securities regulator.

He described such regulatory environment in the listing process as  working well.  “The HKEx has full control over its development strategy, and it has responded to market needs. The efficiency and quality of the listing process are further ensured with the regulatory oversight,” he added.

In 2009, Hong Kong was the most active market for IPO funds raised globally.  Hong Kong ranked number one globally in IPO fund raised for 2009 (US$31.3 billion), and number four in the world in 2009 in terms of total fund raised (including post-IPO) of US$81.4 billion.  A total of 73 companies were newly listed on HKEx and they included overseas companies which have listed their Greater China related business operations in Hong Kong.

“Earlier this year, we saw the first Russian company listed on our stock market, and I am confident that more foreign based companies will be looking to list on the Hong Kong stock exchange in the near future,” he added.

In the afternoon, Professor Chan also spoke at the Rotman School of Management, University of Toronto, on “China’s Rise as an Economic Power – Implications for HK, Canada and the Rest of the World”.

He told his audience that the new wave of financial globalisation has brought a new wave of financial talent to Asia, and to Hong Kong, and that as countries in the West continued to grapple with the aftermath of the financial tsunami, Asia was rebuilding, refocusing and rebounding. 

He said financial and trade experts not only looked to Hong Kong for future growth potential these days, they were also based right in Hong Kong which was a vantage point and actually the best available platform for seeking out the best opportunities in China and throughout Asia.

In the 2010-11 Budget, the Financial Secretary of the Hong Kong Special Administrative Region Government announced a wide range of initiatives with a view to consolidating the economic recovery, developing the economy and building a caring society.  On the economic front, measures are introduced to ensure a stable and healthy development of the property market, develop the four pillar industries, promote the six new economic areas, and enhance regional integration.  A relief package worth roughly HK$20 billion was announced to help support the recovery and relieve the burden of the community. 

The economy improved further and resumed year-on-year growth of 2.6% in the fourth quarter, led by strong domestic demand and improving external sector.  For 2009 as a whole, GDP fell by 2.7%.  The outlook for 2010 is cautiously optimistic.  GDP is forecast to grow by 4% to 5% in 2010, with headline and underlying consumer price inflation forecast at 2.3% and 1.5% respectively.

The economy continued to recover on entering 2010.  Merchandise exports rose notably further in January by 18.4% in value terms over a year earlier, while headline inflation remained modest at 1.0%.

Invest Hong Kong, department of the Hong Kong Special Administrative Region (HKSAR) Government responsible for Foreign Direct Investment, supporting overseas, Mainland and Taiwanese businesses to set up and expand in Hong Kong, announced that  the department assisted 265 overseas, Mainland and Taiwanese companies in setting up or expanding their business presence in Hong Kong in 2009. This achievement marked a record for the Hong Kong Government’s investment promotion arm in attracting Foreign Direct Investment (FDI) into the city. It also signified external investors’ strong vote of confidence in Hong Kong despite the challenging global economic environment.

Director-General of Investment Promotion at Invest Hong Kong, Mr Simon Galpin, said, “In the face of the global economic downturn, 2009 was a challenging year for Invest Hong Kong. The positive investment promotion results last year demonstrate that Hong Kong remains the base in Asia from which overseas, Mainland and Taiwanese companies prefer to expand their business.

“In these times of economic uncertainty, the enduring advantages of Hong Kong such as its rule of law, low and simple taxes, level playing field, free economy, world-class communications and transportation infrastructure, and available talent pool, have become increasingly important. They continue to enable the city to act as a stable and secure platform for companies looking to do business in the region and beyond,” Mr Galpin said.

Highlights of 2009
In total, the 265 companies that Invest Hong Kong helped last year planned to create more than 6,000 new jobs within the first two years of their operation or expansion in Hong Kong. Continue reading ‘Invest Hong Kong sets record in 2009 for completed investment projects’

The ground breaking ceremony of the site formation for Hong Kong’s Kai Tak Cruise Terminal was held December 23, marking a significant milestone in developing the city into a premier regional cruise hub.

Upon the commissioning of the new cruise terminal, together with the Ocean Terminal in Tsim Sha Tsui, Hong Kong will have a total of four berths for cruise vessels. Conveniently located, these terminal facilities can berth cruise vessels of different types and sizes, providing high quality infrastructure for the long-term development of the cruise industry in Hong Kong and in the region.

The Hong Kong Special Administrative Region Government (HKSARG) will fund, design and build the cruise terminal, and lease the terminal to a cruise terminal operator for a rent, while retaining the ownership of the site and the terminal. The new cruise terminal will have two alongside berths with no air draft limit. Upon completion, it will be able to berth the world’s largest cruise vessel with a gross tonnage of 220 000 tonnes.
 
The HKSARG is developing the Kai Tak Cruise Terminal through two works contracts. The first one is the site formation works contract, which involves the construction of berthing facilities. The second contract is for the design and build of the cruise terminal building. Continue reading ‘Ground breaking of Kai Tak Cruise Terminal marks a milestone in the development of Hong Kong’s cruise tourism’

Hong Kong’s strategies and measures to cope with climate change by reducing carbon emissions and at the same time creating business opportunities, were explained to political and business leaders in Copenhagen by the Secretary for the Environment, Mr Edward Yau.

In a panel discussion of the Copenhagen Climate Summit for Mayors held December 16, Mr Yau gave an account of what Hong Kong was doing in promoting a low carbon economy, particularly in engaging the private sector, in tackling the climate change.

Joining the panel discussion, with “Public-Private Partnerships” as the theme, were international leaders of various economies including World Bank President Mr Robert Zoellick, Governor of California Mr Arnold Schwarzenegger and mayors of major cities. It presented leading examples of innovative partnerships between cities and private partners in fighting the climate change.

Fielding questions from the participants, Mr Yau said Hong Kong adopted a multi-pronged strategy to tackle sources of greenhouse gas (GHG) emissions with building energy efficiency as the core action as buildings accounted for about 55 per cent of our GHG emissions. Other measures included the promotion of green transport including the use of electric vehicles (EV) as well as strategic waste treatment program.

Mr Yau added that the discussion was a valuable opportunity for Hong Kong to share with participants its efforts in combating climate change and to draw references from others’ experiences in reducing GHG emissions.

On behalf of Hong Kong, Mr Yau also took part in the C40’s announcement on EV in Copenhagen. Eleven member cities of C40, including Hong Kong, were committed to actions in areas critical to the successful introduction of EVs with a view to accelerating its deployment.