Ventures Dialogue

“Southeast Asia has emerged resilient in the midst of the global economic crisis. Many of the region’s countries are fertile ground for new investment, whether in infrastructure, retail or as an alternative production base.”

Read further and find out what  how Loretta Wan, Hong Kong Trade Development Council’s Regional Director for Southeast Asia sums up this region and more, in six questions in the latest release: ASEAN’s Rising Stars.

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.

Olympic stadium in Beijing, China, for the 2008 summer olympics, so-called "the nest" made of steel; architectural designed by Herzog & deMeuron

China and Brazil announced the signing of trade deals aimed at enhancing trade and energy cooperation.  This comes out of the recent BRIC summit held in Yekateringburg, Russia.  While the summit was shortened due to the earthquake in Western China, this agreement is slated to be  China’s biggest investment in Brazil and also China’s biggest foreign investment in the steel industry. 

The deal is estimated to include a $5 billion steel plant in Brazil, and it hinted that China will bid on the rights to construct Brazil’s high speed rail link between Rio De Janeiro and Sao Paulo.  All of this is part of five year action plan which builds on Brazil becoming China’s top trade partner in 2009.

Also stemming from the meeting, the BRIC countries, Brazil, Russia, India and China called for their group to have greater influence in the World Bank, International Monetary Fund and other such global financial institutions.  They stressed that together BRIC has about 40 per cent of the world’s population along with noting the significance of emerging markets during the financial crisis, they should have more say in global financial matters. 

To read more about the summit check out these articles:

China, Brazil sign deals at shortened BRIC summit
China and Brazil sign trade deals at Bric summit

Photo by nozoomii

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

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%.

Hong Kong and the Mainland recently  signed a co-operation agreement on customs facilitation measures for wine entering the Mainland market through Hong Kong.

Hong Kong’s  Financial Secretary, Mr John C Tsang, the Secretary for Commerce and Economic Development, Mrs Rita Lau, and the Permanent Secretary for Commerce and Economic Development (Commerce, Industry and Tourism), Miss Yvonne Choi, witnessed the signing of the co-operation agreement by the Commissioner of Customs and Excise, Mr Richard Yuen, and the Vice Minister of the General Administration of Customs, Mr Sun Yibiao.

Speaking at the signing ceremony, Mrs Rita Lau said that against the backdrop of growing demand for wine on the Mainland, Hong Kong’s zero wine duty policy and favourable business environment helped create room for wine traders in the territory to tap the Mainland market.  She also made reference to the large number of Mainland tourists visiting the city, who might buy in Hong Kong fine wines from different parts of the world.

She said that the signing of the agreement would enhance co-operation between the Hong Kong and Mainland Customs on wine-related matters, and fortify Hong Kong’s position as a regional wine trading and distribution hub. Continue reading ‘Hong Kong and Mainland sign agreement on customs facilitation measures for wine’

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’

Russian aluminum company Rusal has raised US$2.24 billion (HK$17.4 billion) from its initial public offering (IPO) in Hong Kong, making it the first Russian company to list in the city. It is not only the largest new listing in Hong Kong by an issuer from outside Greater China, but also the largest IPO globally year-to-date.

The Rusal offering was priced at HK$10.80 per share, which was the mid-point of the original price range, but the bottom of the slightly tighter guidance range of HK$10.80 to HK$12 that the bookrunners went out with towards the end of the bookbuilding. It was reported that more than 350 institutional investors had came into the deal, which was more than two times covered.

Meanwhile, Mongolia-based coal miner SouthGobi Energy Resources has also raised HK$2.89 billion (US$373 million) from a separate share sale that was very well received. While SouthGobi has all its mining operations in Mongolia, the company is Canadian and it is already listed in Toronto. The Hong Kong stock exchange has worked hard in recent years to broaden the line-up of new listings beyond companies from Greater China.