Ventures Dialogue

This week Carla Kearns is posting a series of observations made during her visit to both Hong Kong and the Hong Kong Forum.

The last 48 hours have been a whirlwind.  We spent Wednesday in the incredible Central district on Hong Kong island, involved in some serious consumer research.  This district is home to both Hong Kong’s vast financial sector and charming historical district, accented by shopping that ranges from Louis Vuitton and Armani to tiny alley stalls selling ornate bird cages.

Some Hong Kong shopping observations

There is an awareness of the importance of recycling and conserving energy.  The major difference from when I enjoyed quite a few trips here in the 1990s is that the air pollution has drastically increased.  It is clear that what Hong Kong experiences is for the most part not generated in Hong Kong but is coming from the manufacturing cities of Guangdong (Canton) province right across the Chinese border.   Here in Hong Kong you see recycling containers at Starbucks and select escalators that are shut down at non-peak hours in the metro system (which itself is cheap, fast and clean).

We saw billboards for Blackberry and sharp retail fronts for a Fruits and Passion store. There was some unusual examples of Canadian branding including Toronto Sports (selling sporting attire), The Keg in Lan Kwai Fong (a pub in Hong Kong’s upscale bar district) and an ad for Canadian buckwheat pillows. Continue reading ‘Hong Kong diary — the business of shopping’

Yesterday on VENTURES, we outlined the vision of Ontario’s new International Trade and Development Minister, Sandra Pupatello. This is part two of that series.

The rise of developing countries as trade partners was a key topic of discussion at the Ontario Economic Summit, held at White Oaks Resort in Niagara on the Lake from Sept 30 – October 2. Andrew Burns of the World Bank provided an eye-opening presentation about the increasing fortunes of developing countries and the trade opportunities they present for Canada.

Burns explained that all developing countries have been increasing their Gross Domestic Product (GDP) for over fifteen years (1980-2007). The rise of China as an economic power is well known, but it is not the only developing country that has increased its economic conditions; Africa, for instance, was referenced throughout Burns’ discussion.

Burns explained that by 2030 imports from developing countries will constitute roughly 42% of world trade or twenty trillion dollars. Burns pointed out that developing countries are growing twice as fast as the developed countries. Africa, for example, underwent tough economic times when numerous countries gained their independence and there were disruptions to government structures. However, since 2000, Africa’s GDP has been growing at over 5% per year, due in large part to policy reforms, a trend Burns does not expect to change in any way. Burns described the growing middle class as a large group of “young, dynamic, empowered people who are shaping global trends.”

On the other hand, Burns explained that Canada has not been progressive in pursuing the untapped trade opportunities in foreign countries outside of the United States.  About 80% of Canada’s exports are destined for the United States, but just 9% to developing countries.

Tomorrow, we’ll share the experience and advice of three successful businesspeople who have managed to make a global impact, proving Canadian companies can compete with the world.

The Honourable Sandra Pupatello, Minister of International Trade and Investment for Ontario, received a warm response at the Ontario Economic Summit earlier this month as she shared her vision for Ontario’s venture into world markets. Minister Pupatello enthusiastically endorsed the notion of business and government working together to bring trade and investment to the province.

The minister reminded the audience that the Ontario government has opened ten new international marketing centers; the most recent in Paris.  Ontario is also promoting the development of a new economic relationship between Canada and the European Union.

On the role of the business community in promoting growth in this province, Minister Pupatello appealed to the audience to call her personally with any leads on companies wishing to do business with Ontario. Providing her direct line to the delegates, Pupatello explained that she knows Ontario businesspeople are active ambassadors of the province, and already have connections in foreign markets that could assist Ontario.

Pupatello went on to discuss the untapped potential for Ontario in the international marketplace. As an example, she explained that in India average food consumption has increased from one to two meals a day. As a result, problems have arisen with transportation and the refrigeration of food.  Ontario firms could help to solve these problems, adds Pupatello, providing both increased economic activity for Ontario, and welcome solutions for India.

The minister is not alone in her identification of global opportunities for Ontario.  Tomorrow on VENTURES, a lead economist with the World Bank will reinforce this notion.

Capitalizing on business opportunities using the Hong Kong platform

More than 600 trade delegates from across Canada are in Hong Kong this week to capitalize on business opportunities emerging in Asia, and they do not go there without advance preparations. On the contrary, they’ve been making strategic preparations for months before their departure through the assistance of the Hong Kong-Canada Business Association (HKCBA), Hong Kong Trade Development Council (HKTDC), Hong Kong Economic & Trade Office (HKETO), Ontario Chamber of Commerce (OCC) and the Consulate General of Canada in Hong Kong.

Business opportunities emerge from every economic crisis.

Instead of retreating under the current financial crisis, these Canadian small and medium enterprises (SMEs) are in Hong Kong to expand their business diversification strategies. Some of these delegates want to address the growing demand for environmental technologies in the region. Co-hosted by the Canadian Consulate General in Hong Kong, Industry Canada and the HKTDC, an Environmental Partnering Seminar took place on October 27, 2008 for eleven Canadian companies to present their technologies and know-how on solutions that target air pollution protection, solid waste management, water and waste water treatment, odour control, energy saving technologies, greenhouse gas accounting and reporting as well as filtration systems for commercial kitchens and restaurants. These Canadian companies will also join the Canadian Stand at the Eco Expo Asia (environment trade show and conference) in Hong Kong from Oct 28 – 31, 2008.

Concurrently, a 145-member Team HKCBA Delegation — by far the largest from any economy — will be in Hong Kong for the Hong Kong Forum scheduled for October 30 – 31, 2008. These HKCBA delegates from across Canada will join 300 counterparts from other Hong Kong Associations in other parts of the world to obtain first-hand updates on the developments and business opportunities of Hong Kong, China and the region, to exchange views, establish contacts and discuss co-operation.

Continue reading ‘Attending Hong Kong trade fairs a strategic move by Canadian companies’

This week Carla Kearns is posting a series of observations made during her visit to both Hong Kong and the Hong Kong Forum.

Last night on the way into Hong Kong from the airport the impressive high-speed Airport Express passed an enormous port facility.  Perhaps my mind was addled from a lack of sleep, but it seemed to take a full 5 minutes to pass the docks packed with containers ready to ship.  If you recall the scene from the end of the original Raiders of the Lost Ark, where the ark is placed in a government facility stocked with a seemingly endless number of boxes, you’ll have an idea of the impression it made upon me: it is staggeringly large.  I also wonder what the future holds for this kind of export activity on a day when the financial markets are so much in turmoil – the Hong Kong stock exchange itself lost almost 13% of its value yesterday, and the Japanese stock exchange dropped the greatest amount that it has in 26 years.

I am pleasantly surprised by my hotel – The Eaton Hotel in the Jordon Valley area – small rooms but impeccably clean and updated.  An enormous change from my first trip here when, as a backpacker on my first solo trip abroad, I stayed at the notorious Chungking Mansions.  But in these days of global gentrification, it seems that even that dump has been cleaned up a little.

I spent the day doing typical tourist things – walking along Nathan Road, taking the amazing Star Ferry across the harbour (one of my favourite things in HK) and the double decker bus to Stanley Market on the beautiful southern side of the island.  Unfortunately, what I consider to be a thrilling ride — careening around blind corners and up and down the steep mountain ridge — made my extremely jet lagged travel companion nauseous.

Hong Kong is astoundingly international. Even in my hotel room, it seemed that every kind of electric converter in the world was pre-built into the wall.  However, I have not seen much of a Canadian presence yet, other than a Club Monaco prestigiously located in the Central District across from an enormous Gucci store (but also next to a McDonalds), and a Four Seasons Hotel.  However, I am committed to continuing my shopping quest and keep looking!

Photo by Chi King.

October 27, 2008

This week Carla Kearns will be posting a series of observations made during her visit to both Hong Kong and the Hong Kong Forum.

I’m writing to you from somewhere over the arctic on my first trip to Hong Kong in almost 3 years, and my first to participate in the Hong Kong Forum. A 3-year gap in visiting an Asia city is like a generation as they tend to change and grow extremely quickly.  I used to visit Hong Kong fairly frequently in the 1990s when I was working in Taiwan and it has always been one of my favourite cities: so incredibly dynamic, atmospheric, and breathtakingly beautiful.

I am looking forward to a few days to unwind, explore, and get caught up on jet lag before the Forum starts.  If you are doing business in Asia, you simply cannot be at your best if you fly in for a few meetings and then leave, especially when trying to establish business initially.   More than just getting over the jet lag, it makes a big difference to stay for a few extra days to get to know the place, the people, and the business game here.  Hong Kong can be disorienting on your first visit – China even more so – but when you take the time to catch your breath and observe the environment you are better prepared, no matter what sector you’re in.

Apart from reconnecting to this place I love, I do have some professional goals on this trip. At the Forum I am hoping to connect with global companies who are having breakdowns in both processes and success due to a lack of understanding in bridging cultural differences. My business, TLI-The Mandarin School, provides China business culture and intelligence training and consulting services.  Although we do a great deal of China business etiquette training, lately I have been working with internal teams who will never set foot in China but speak and correspond with clients there more and more and need to understand how to be effective communicators and how to modify their internal processes.  There are approximately 400 companies represented at the Forum from around the world and it should be a great opportunity to share and connect.  I’ve just brought in a French-speaking trainer (actually he is fluent in French, English and Mandarin) and it would be great to expand our market to French-speaking regions and countries.

Beyond those tangible business goals, I intend — in an existentialist sort of way — to just “be” in Hong Kong to get my finger on the pulse after a few years away.

For this blog I am looking forward to reporting back on what Canadian companies are doing in Hong Kong and China. What do Hong Kong consumers think of Canadian products?  Can we see them on the shelves?  What are Canadians known for?  What business opportunities in Hong Kong are hot? The general sentiment is that Canada is lagging behind other countries in doing business in Asia, so I intend to check out whether that is true, and if so, get a sense of why.  I do know, however, that Canada is the by far the best represented country at the Hong Kong Forum most years, so we’re doing a pretty fair job in that respect.

I encourage you to share your own stories in the comment section below, or ask specific question about what I’ve reported on. This is a discussion that sould be ongoing for Canadian companies.

Photo by dfbarrero.

Companies in Asia will soon have a new regional center to hear arbitration cases in Hong Kong.  The International Chamber of Commerce (ICC) is opening up a new branch of the ICC Court Secretariat next month to administer regional arbitration cases.  This Hong Kong branch, the first in Asia, will have a case management team to administer cases in the region under the ICC Rules of Arbitration.  A regional director, responsible for promoting ICC dispute resolution services in Asia, will also open in Singapore.

For some companies, arbitration is preferred over litigation as arbitration usually ensures confidentiality of the process and awards.  The involved parties may also hand pick their arbitrators, which can then conduct proceedings tailored to suit each party’s needs, this is not always so when cases go to litigation.  For those not familiar with the national court proceedings, arbitration is a good alterantive.  Arbitration rulings are also usually less time consuming and less expensive as litigation .

Indicative of the rise in trade and commerce in the region the ICC Court has seen an increase in the amount of commercial arbitration over the past 10 years.  It currently sits fourth behind mainland China, the US and Europe in case load.  Last year alone, 599 new cases were recorded, involving more than 1,600  parties from over 120 countries and 18 per cent of those in new arbitrations originated in Asia.  In 2006, 593 cases were filed, involving 1,613 parties from 125 countries.

Continue reading ‘International Chamber of Commerce comes to Hong Kong’

Business opportunities emerge from every financial crisis

The Asian Financial Forum (AFF) 2009 in Hong Kong is being designed to help participants from around the world gain insights into Asia’s changing financial landscape and to identify and seize opportunities. This is the second Asian Financial Forum and is once again co-organized by the Hong Kong Special Administrative Region Government and the Hong Kong Trade Development Council (HKTDC). It will take place on January 19 and 20, 2009 in Hong Kong.

AFF 2009 will feature some of the world’s most influential monetary minds and the region’s most dynamic business leaders. They will share their views on the opportunities and challenges arising from the region’s rapid changes and development, and on the management of the world financial framework. The Forum is a two-day event with a special focus on prospects in China and the rest of Asia. Topical issues will include sovereign wealth funds, Islamic finance, new financial products and investment vehicles.

Attending the conference will be key financial players including bankers, institutional investors and fund managers, business leaders as well as senior corporate executives. AFF 2009 is a timely platform to build new contacts, gather intelligence and explore business opportunities. Extensive documentation and webcasts of the 2007 event are available on the forum site as well.

For further information, interested parties please contact Andrew Yui, Director, Canada, Hong Kong Trade Development Council Toronto Office at Tel. No. (416) 366-3594 or email: andrew.yui at tdc.org.hk (remove the “at” and use “@”) or simply visit the forum website.

Photo by Francois Roche.

Maureen Siu, Director Hong Kong Economic Trade Office, Toronto

The following is a update on the Hong Kong business climate from Maureen Siu, director of the Hong Kong Economic and Trade Office (HKETO).

Dear Friends,

Greetings from Toronto!

In the face of the global financial storm and the looming economic downturn, and with our Chief Executive Mr. Donald Tsang having just delivered his new Policy Address entitled “Embracing New Challenges”, I would like to send this note to update you on the latest in Hong Kong and highlight some of the key points of the Policy Address.

• Hong Kong economy – We expect a rough ride ahead and are buckling up.  While some economic figures are still holding — retail sales in August grew by 3.9% in volume terms from a year earlier, and unemployment rate continued to stay at 3.2% in June-August — there have been clear signs that exports are shrinking and the credit crunch is hurting many businesses.  Economic growth has slowed to 4.2% in the second quarter.  The external environment is so uncertain and deteriorating so rapidly that we expect consumer sentiments, unemployment rate and many other areas to be impacted.
• Precautionary measures – In view of the intense stress in the global money market, the Hong Kong Monetary Authority has adopted five temporary measures to provide liquidity assistance to the licensed banks in HK on their request.  In addition, there will be full guarantee of deposits held with all authorized institutions in HK (until the end of 2010), and a Contingent Bank Capital Facility has been created to make available additional capital to locally incorporated licensed banks when needed.  These are precautionary and pre-emptive measures to further strengthen the confidence in the HK’s banking system which remains strong and robust, with capitalization well above international standards.  The measures should also promote monetary stability in HK.  The Linked Exchange Rate system, underpinned by strong disciplines of the Currency Board rules, will remain unchanged.
• Turning crisis into opportunities - A major focus of the Policy Address is to overcome the financial crisis and turn it into new business opportunities.  Mr. Donald Tsang will establish and chair a task force to develop strategies for the purpose.  At the same time, vigorous efforts will be made to promote creative industries, wine trade, scientific research, convention and exhibition services, and cross-boundary integration.
• Reinforcing HK’s position as a financial centre – As the economic development and reforms in Mainland China continue to present many new opportunities for a broader and deeper financial market, we will continue to reinforce HK’s position as a global financial centre.  Further development of the securities market such as developing the commodity futures market and an Islamic bond market are parts of the target. Continue reading ‘Hong Kong update from Maureen Siu, Director, HKETO Toronto’

Currently, if you wanted to get from Hong Kong to Shanghai or Beijing by train, it will take about 20 and 24 hours, respectively.  In about seven years, however, travel time will be cut down to eight and 10 hours, a definite improvement.

Scheduled for completion in 2014-2015, Hong Kong SAR’s Executive Council has given the go ahead for a HK$39.5 billion ($5.2 billion CAD), 26 km underground high-speed railway link.  It will fully connect with mainland China’s rail network.   Travel between Hong Kong and Guangzhou, on the mainland, will be halved to just under 50 minutes.  In essence, Guangzhou will become a regional railway hub, linking the express rail network, and billed as a gateway into mainland China.

The Hong Kong government will pay for the initial construction cost, but the Mass Transit Railway Corporation Limited (MTRCL) will operate the line for 50 years with annual concession fees under a build-operate-transfer arrangement.  A similar arrangement was reached for the Shatin to Central link (SCL).  Guangzhou already boasts the terminus at Shibi, one of the four biggest passenger transport centers in China.

Along with the new link and transportation hub in West Kowloon, Eva Cheng Yu-wah, Secretary for Transport and Housing said the area would also be built into a commercial center.  Expecting to facilitate 10 trains in both directions, Cheng expects that 37 percent of travelers would be new transit passengers and the other 63 percent would be from commuters who already using either the train, cross-boundary coaches or other means of transport.  Although funding approval from the Legislative Council is still required before any work can begin, the project is expected to break ground next year.  A total of 15,000 jobs, which includes 5,000 construction jobs are expected to be created.  It is estimated that the project will boast around 100,000 passengers a day in 2020 and 120,000 in 2030.  In the next 50 years, this is expected to bring a $83 billion ($10 billion CAD) economic benefit in terms of travel time saved.

The Executive Council approved planning for the previously mentioned SCL and the Kwun Tong Line Extension, also by MTRCL in March of this year.  The former will have nine stations linking existing railway lines, and thereby creating east-west and north-south train corridors.  It is expected to facilitate one million passengers a day by 2021 and produce $4 billion ($500 million CAD) in time saving economic benefit.  Construction costs for SCL is HK$37.4 billion ($4.9 billion CAD)