HSBC has decided to relocate the group’s Chief Executive Michael Geoghegan’s principal office from London to Hong Kong.  The relocation is a  significant move for the bank, highlighting Hong Kong’s position as the focal point in Asia for global finance.

Hong Kong’s Chief Executive Donald Tsang welcomed HSBC’s decision, and described it as “a clear and timely ‘thumbs-up’ for Hong Kong as a stable, reliable and vibrant base for the banking industry in the wake of the global financial tsunami.” He said, “I am encouraged by HSBC’s commitment to Hong Kong and its confidence in our city as the best platform for tapping opportunities in emerging markets in Asia and, in particular, the Mainland.”

The relocation reflects the focus of HSBC towards emerging markets, and it also strengthens the unique and enduring bond between Hong Kong and HSBC.

The Hong Kong Special Administrative Region Government announced that a variety of electric vehicle (EV) models would be introduced into Hong Kong next year, reflecting the keen interest of overseas vehicle manufacturers in the Hong Kong market.

According to the city’s Secretary for the Environment, Mr Edward Yau, the Hong Kong Government has been pursuing collaboration with various EV manufacturers including Mitsubishi, Nissan and BYD. We also began the trial on Mitsubishi’s EV ‘i MiEV’ in May.

 ”So far the testing results have been positive. The first batch supply of ‘i MiEV’ will be launched progressively before April 2010. The Government will procure 10 units in this batch for deployment in different bureaus and departments. This will enable us to test the performance of EVs comprehensively under different operational environment,” Mr Yau said.

“Hong Kong is the first market in Asia, other than Japan, where ‘i MiEVs’ will be sold before April 2010. This is a good start. The supply will enable the extension of testing to the private sector. It will also help expose a wider section of the community to the EV driving experience. We hope that more EV manufacturers will follow the example in pitching Hong Kong as one of the priority markets for the introduction of EVs.” Mr Yau said.

Local expertise in providing high value-added services such as design of testing protocols and manufacturing processes positioned Hong Kong as a potential hub for testing and certification, the Deputy Commissioner for Innovation and Technology of the Hong Kong Special Administrative Region (HKSAR) Government, Mr Andrew Lai, said recently.

Speaking at the 30th anniversary dinner of the Gemmological Association of Hong Kong, Mr Lai said the local testing and certification industry for such things as jade, diamonds and other gemstones was well-established after a long history of development and possessed various advantages, including:

• a sound accreditation system;
• high international reputation;
• widely recognised services; and,
• the capability to win the confidence of overseas and local clients by acting as an independent third party in providing services to Mainland enterprises.

Mr Lai said the HKSAR Government would set up the Hong Kong Council for Testing and Certification in three months to enhance the professional standards and global recognition of local testing and certification services. The council will work with the industry in mapping out a three-year market-oriented development blueprint within six months after its establishment.

Last week I wrote a post on Coca-Cola’s efforts to gain a stronger presence in China with its bid for the 17 year-old China Huiyuan Juice Group (CHJG), the country’s largest juice company.  Coke is interested in CHJG because while Coke has captured a sizable portion of the carbonated beverage market, its fruit juice line is not as strong.  Last Wednesday, Chinese officials rejected Coke’s offer under its anti-monopoly law.  In a statement (in Chinese), the Ministry of Commerce cited the need to protect consumers and preserve competition as reasons for rejecting the bid.  Some are saying however, the new law allows the government to protect national brands.  It has been estimated, but not confirmed, that the two companies together would control around 20 per cent of the juice market. 

While the Ministry’s decision did come to some as a shock, the decision could have longer lasting effects on China.   The day after the deal’s rejection was announced and reports that Coke might abandon efforts all together, shares of CHJG dropped almost 23 per cent before trading was eventually halted.  The shares fell 42.2 per cent in total before regaining some ground, and ended the day at pre-offer, September 2008, levels. Continue reading ‘Coca-Cola’s deal falls flat as Chinese government rejects offer to buy China Huiyuan Juice Group’

The Baltic Dry Index may not be common knowledge but it is an important early indicator of possible signs of recovery in global trade according to Globe and Mail reporter Brent Jang.  The index surveys the price of transporting raw materials by sea. 

If the latest rally – four straight days – has staying power, then global trade appears headed for a modest improvement in the second half of 2009, and the shipping industry is poised to ride China’s economic stimulus package and recover from what’s still expected to be a turbulent first half.

Despite some contradictory signs of whether the ocean shipping sector has bottomed, there are enough bright spots to clear the way for a gradual rebound in everything from bulk commodity markets to dismantling old ships to building new ones, experts say.

A decline in commodity prices has coincided with dwindling stockpiles to spur China to renew selected purchases, helped by loosening short-term credit, said Oslo-based shipbroker RS Platou.

“This has especially been the case of iron ore, where Chinese steel mills have been very active securing high-quality ore at very attractive prices. In addition, exports of grains, soybeans and fertilizers have all increased in the same period of time,” said Platou’s analysis, titled A Sustainable Improvement?

Read the entire story.

What do you think?  Is this an early sign of recovery?  What are your experiences? 

Share your thoughts with other Ventures readers by posting a comment.

Without exception, the global economic crisis is hurting every economy.  Our Financial Secretary Mr. John Tsang announced in his Budget yesterday his strategies to revitalize HK’s economy.  I am pleased to highlight some of the measures that may be of interest to you and/or may generate opportunities for your companies.

Budget Highlights
HK Economic Performance and Outlook – Affected by the global downturn, HK’s GDP grew by 2.5% in 2008 and unemployment rate has risen to 4.6%.  

A two to three per cent decrease in GDP is expected for 2009.  For the medium term, the average growth rate is estimated at 3.5% in real terms for the period 2010-13. 

Despite the downturn, HK’s economic fundamentals remain strong.  We have a sizeable current account surplus that amounts to 13% of GDP, a strong net external international investment position, a sharp increase in productivity in the past few years, etc. – which are all clear indicators of the underlying strength of HK.  Continue reading ‘Message from Director of HKETO on Hong Kong 2009 Budget’

I’m not the only Canadian who has just returned from Hong Kong.  Gerry Ritz, Minister of Agriculture and Agri-Food and his staff were also on my flight home Saturday.  As I mentioned last week, the minister was speaking to a business audience in Hong Kong on Thursday about Canada’s exemplary food safety record.  Later he signed an agreement-in-principle with Hong Kong to expand Canada’s beef exports.

Duncan Mavin of the National Post attended the Minister’s speech last week and spoke to the head of the Canadian Cattlemen’s Association.  Here’s an excerpt from his story:

The cattle chief also scents opportunity here in Asia’s street markets, where vendors boil and fry parts of the cow most Canadians won’t touch and all manner of offal hangs from the hooks in the butchers’ stores.

“People think of beef as steak cuts, but there are a lot of beef products other than that, some that we [in Canada] don’t even eat,” he [Brad Wildeman, President of the Canadian Cattlemen's Association] said.

In addition to there being no domestic market for some cuts, there are also other products, such as beef tongue, that are eaten at home but that fetch a much higher price in Asia — as much as $22 rather than $1.50 for tongue in Canada.

In all, if Canadian farmers could sell in Asia some products that might otherwise be tossed away or into the grinder, it would add another $100 or 10% to the value of each animal, Mr. Wildeman estimates.

As I’ve explained in other stories, Canadian food products are generally considered high quality and safe in Hong Kong.  Already some Canadian beef is on the shelves.  Growth in the Hong Kong market will definitely benefit Canadian producers, and with any luck, it will then open doors to other larger markets in the region.

Canadian clean tech companies advised to use Hong Kong business platform

An executive at motum b2b, the Toronto-based business-to-business (b2b) marketing consulting firm, returns from a recent environmental trade mission to Asia, encouraging Canadians to look to Hong Kong for expansion prospects. Susan Sheehan, the Vice President,Client Business and Sustainability at motum b2b, provides strategic counsel and  tactical advice on b2b business growth and sustainability. Clients include BASF, BPA Worldwide, Honeywell, Toyota, Psion Teklogix and Tembec Inc. Susan is also a columnist for the magazine, Green Business, and says in the latest issue: “Hong Kong’s plan for an urban overhaul offers opportunities to Canadian clean tech companies.”

Susan’s clean tech case for Hong Kong is available from the magazine’s website:

Hong Kong has, for some time, been a platform for foreign firms expanding their markets into Mainland China and throughout Asia. Canada, however, has never had as substantial a foothold there as it should.

Currently, there are only about 150 Canadian firms using Hong Kong as their Asian base. Yet the strength of Canada-Hong Kong relations is indisputable, as evidenced by the Canadian Chamber of Commerce in Hong Kong. It’s the largest Canadian business association outside of Canada, and the second largest foreign Chamber in Hong Kong. Despite this, the Canadian Consulate in Hong Kong is unable to respond to frequent requests for new Canadian suppliers because Canadian companies aren’t seizing the opportunities available.

Read the rest here.

Photo by A. www.viajar24h.com.

China and Singapore are strengthening economic ties with a free trade agreement (FTA) that will come into effect January 1, 2009 and implemented in a two-phase process.  In this agreement, the first comprehensive bilateral agreement by China with another Asian country,  the two countries also agree to develop simplified customs processes.  The particulars of the FTA are:

• All goods Chinese imports to Singapore should not have customs duties applied to them as of January 1, 2009.
• More than 85 per cent of China’s imports from Singapore (complying with Origin criteria) should not have customs duties applied to them as of January 1, 2009. Some local excise duties will apply on certain goods.
• About 95% of China’s imports from Singapore (save for 260 products) should not have customs duties applied, “tariff-free”, by 2010.

Goods are eligible under the program if they are wholly obtained or produced in China or Singapore.  If they are not, then they must comply with one of three rules:  1) Regional Value Content Rule; 2) Cumulative Rule of Origin Rule; 3) Product Specific Rules. For more specifics about the rules and the FTA, check out briefing this from Deloitte, as well  the news release from the government of Singapore.

Last year, bilateral trade between China and Singapore hit a record of more than $76 billion.  China ranks as Singapore’s third largest trading partner and the major market for investment.  Singapore as well is China’s eighth largest trading partner and seventh largest investor.

Photo provided by toesoxluver

Foreign suppliers of financial information services in China can look forward to eased regulations in the coming year.  This is the outcome of a case formally requested for consultations at the World Trade Organization (WTO) by Canada, the United States, and the European Union, citing that the foreign suppliers of financial information services (e.g. Thomson Reuters, Dow Jones, Bloomberg, etc.) were experiencing market access restrictions and discriminatory requirements.

Among the concerns raised was that Chinese rulings require foreign financial information suppliers to use an agent chosen by the government news agency Xinhua News Agency of the China Economic Information Service (CEIS).  CEIS is one of Xinhua’s commercial enterprises and a direct competitor of foreign financial information suppliers. Chinese ruling also indicates that foreign financial information suppliers cannot obtain their own subscribers directly, but must use an intermediary.  Furthermore, to renew their licenses, foreign financial information suppliers must give financial information to a regulatory body within Xinhua, and also detailed and confidential information about their services and their customers.   Another concern also cited was that China appeared to prevent foreign financial information suppliers from developing a commercial presence in China other than limited representative offices.

Consultations were held in August and September resulting in the signing of Memorandum of Understanding in which China agrees that:

• A new, independent government body will be implemented to regulate the financial information services by January 31, 2009. The new regulator will not be a competitor for suppliers of financial information services.
• The new regulator will only require financial information when it is relevant to matters under the license.
• Foreign suppliers of financial information services will be able to supply those services without using an agent or intermediary.
• Financial information service providers will be treated in a non-discriminatory manner.

For more information about this WTO dispute settlement, please go here.