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W Co ho’s mm wh un o in ica H tio K’ ns s
www.amcham.org.hk Journal of The American Chamber of Commerce in Hong Kong www.amcham.org.hk
January 2011
Rob Chipman
AmCham Chairman 2011
Building COVER SPONSOR
AMCHAM Means Business
Members Directory
MEMBERS DIRECTORY
w w w. a m c h a m . o r g . h k
2010/2011
www.amcham.org.hk
Over 500 pages in three major sections, including a complete guide to chamber services, corporate sponsors and AmCham Charitable Foundation. This directory lists nearly 1,900 members from over 700 companies and organizations. ISBN 978-962-7422-03-7
LC 98-645651
January 2011 Vol 43 No 01
Contents 10
Publisher
Richard R Vuylsteke
Editor-in-Chief Daniel Kwan
Assistant Editor Kenny Lau
COVER STORY While Hong Kong may still be the leading financial center in Asia, many are concerned whether the city will remain competitive amid the rise of other cities like Singapore and Shanghai. Rob Chipman, AmCham chairman for 2011, addresses theses concerns and outlines the Chamber’s priorities related to current issues battering Hong Kong
Advertising Sales Manager Regina Leung
biz.hk is a monthly magazine of news and views for management executives and members of the American Chamber of Commerce in Hong Kong. Its contents are independent and do not necessarily reflect the views of officers, governors or members of the Chamber. Advertising office 1904 Bank of America Tower, 12 Harcourt Rd, Central Hong Kong Tel: (852) 2530 6900 Fax: (852) 2537 1682 Email: amcham@amcham.org.hk Website: www.amcham.org.hk Printed by Green Production (overseas) Group 2A Sun Yip Street, Chai Wan, Hong Kong Designed by Overa Creative Co Rm A, 12/F, Sun Fai Comm Bldg, 576 Reclamation St, Mongkok
AMCHAM NEWS AND VIEWS 04 Chairman’s Memo Rob Chipman reflects on legacy of his predecessor Mike Brown, highlights Chamber achievements in 2010, and outlines priorities for the coming year
06 Chamber Officers
An introduction to AmCham’s Board of Governors and committee chairs
07 New Business Contacts 40 executives joined AmCham’s business network last month
37 Mark Your Calendar
COVER STORY
10 Building on Success AmCham is committed to build on Hong Kong’s success and play a role to help strengthen the city’s competitiveness, says Rob Chipman in his inaugural speech
©The American Chamber of Commerce in Hong Kong, 2011 Library of Congress: LC 98-645652 For comments, please send to biz.hk@amcham.org.hk Single copy price HK$50 Annual subscription HK$600/US$90
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ENVIRONMENT
REAL ESTATE
HUMAN RESOURCES
93 percent of the respondents in a recent AmCham survey say local air pollution remains a top issue of concern while 68 percent believe air quality has not improved or is “getting worse” in the past 12 months. What’s happening with our air?
The lack of adequate supply of Grade-A office space may sooner or later become an obstacle if Hong Kong is to remain an international finance center in Asia
Amid rising employment in the local job market, employers are facing pressure in staff retention and wage adjustment, according to a survey by Manpower
14 What’s Happening with Our Air? An in-depth report on the alarming effects of poor air quality on residents of Hong Kong as the issue has been identified as a major concern in an AmCham survey
18 Running Out of Space A lack of prime office space undermines Hong Kong’s status as an attractive location for international business in Asia Pacific
21 Buoyant Job Market Forecast for New Year Survey finds an expectation of higher wages among employees in local job market as companies continue to recover from the global financial crisis of 2008
23 Re-branding Our Consumer Experience Finance and real estate may keep the income wheels turning, but is Hong Kong doing enough to maintain the pleasure of shopping among tourists and residents alike?
CHINA BUSINESS
25 US Still the Favorite Destination for Mainland Capital Chinese companies consistently choose to make investment in a market that continues to benefit from high levels of per-capita spending in large volume
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28 Measures to Tame Mainland’s Inflation
Dr Liu Olin of China International Capital Corp shares her insight on the current state of the Chinese economy and what to expect from China’s 12th Five-Year Plan
BUSINESS NETWORK
29 Taking a Closer Look at Our Members
Interviews with members of the Chamber to learn more about what they do, their visions behind leading their respective organizations, and their experiences in Hong Kong
HEALTH & WELLNESS
34 Traveling Safely in Asia
The concept of travel risk management has yet to be adopted in Asia; Dr Philippe Guibert of International SOS offers some practical advice on how to manage mobile workforce
CHAMBER NEWS 36 Thanking Our Past Chairs
AmCham unveils a plaque to commemorate its past chairmen for their service and dedication to the Chamber throughout the years
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Chairman’s Memo Dear Fellow Members, Happy New Year! I am honored to be your Chairman for 2011 and I will work hard to help AmCham achieve its mission and priorities. I am very grateful to follow in the footsteps of Michael Brown, our immediate past chairman. Although Michael has moved on to a new assignment in London, he leaves behind a wonderful legacy of service and dedication to AmCham. Michael set out a clear agenda that will continue in large part to guide the Chamber in the coming year. Michael’s steady hand and sharp vision positioned AmCham to take advantage of improving economic and financial conditions. In 2010, AmCham put on more than 400 events and activities – many free of charge – and all aimed at serving our broad and diverse membership. Our total membership grew for the first time since the 2008 financial crisis and I’m happy to report that overall interest in AmCham is at very high levels. AmCham held a very successful Ball last year and was able to raise more than $160,000 for the AmCham Charitable Foundation. Plans are already underway for the 2011 Ball on April 16th at the sumptuous Four Seasons Hotel. This year’s theme is Moonlight Masquerade and I know it will be a wonderful event. I encourage you to make plans now to attend, and even consider further support through a variety of Ball sponsorship programs. It has long been an AmCham’s strategy to maintain close and constructive ties with government officials of the US, the Hong Kong SAR and Mainland China. I am happy to report that our work with the US Consulate General and their wonderfully supportive staff continued apace this past year. In 2010, AmCham leadership met with over 30 senior Hong Kong government officials to exchange view on a wide variety of topics identified as high priorities by our members and member companies. Last April, AmCham re-launched our Beijing Doorknock after a seven-year hiatus. Our
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Rob Chipman Chairman
vice-chairman for 2011, James Sun, is busy working with the China Affairs Group to organize our 2011 Beijing Doorknock to be held in late March. Late last year, the Chamber conducted its annual survey which focused on how effective the Chamber is serving you, the business outlook for 2011, and your views on the environment. Thank you – we had a very good response rate. We studied your feedback closely and a summary is published in this issue (see page 13). Based the survey results, the Chamber leadership has identified three main priorities: the environment, especially air quality; developing our China Agenda; and maintaining Hong Kong’s overall competitiveness as a place to do business. We feel that these priorities pertain to all 27 AmCham committees and thus allow the Chamber to tap into the considerable talent and expertise of our membership. In fact, one of the main lessons that I have learned during my time as AmCham treasurer and then vice-chairman was the need to identify and focus on core priorities. AmCham does so much for its membership, and is so responsive to the needs of its large and diverse base, that the challenge is deciding where to focus our finite resources. One high priority area for the past few years has been to
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Chamber Officers
Members of 2011 Board of Governors of The American Chamber of Commerce in Hong Kong:
Chairman
Robert Chipman Asian Tigers K C Dat
Vice Chairman
James Sun Charles Schwab Hong Kong Ltd
Treasurer
John Sigalos PepsiCo Asia-Pacific Region
Executive Committee
Frank Lavin Edelman Public Relations Worldwide (HK) Anita Leung Jones Day Belinda Lui Time Warner Inc Charles Wellins CEVA Logistics (Hong Kong) Ltd
Governors
Brian Brenner Jones Lang LaSalle Tom Burns Intel Semiconductor Ltd Jacob Cefolia United Airlines Janet De Silva Richard Ivey School of Business Rob Glucksman Witgang Far East Ltd Peter Levesque Modern Terminals Ltd Charles Ma China Construction Bank (Asia) Toby Marion Golden Gate Wine Co Ltd Ross Matthews Starr Underwriting Agents (Asia) Ltd Andrea Richey Catherine Scown Four Seasons Hotel Hong Kong
Leland Sun Pan Asian Mortgage Co Ltd Colin Tam AEI Asia Ltd Elizabeth L Thomson ICS Trust (Asia) Ltd Richard Weisman Baker & McKenzie Frank Wong Scholastic Asia Shengman Zhang Citi
Ex-Officio Governor David L Cunningham Jr FedEx Express
President
Richard R Vuylsteke The American Chamber of Commerce in Hong Kong
COMMITTEES conduct most of the creative, non-administrative work of the Chamber, the strength of which relies on the active and voluntary participation of its members in the committee system. The 2011 Chamber committee chairs are: AmCham Ball
Food & Beverage
Senior Financial Forum
Apparel & Footwear
Health & Wellness
Senior HR Forum
Kay Kutt Asian Tigers K C Dat Andre Leroy Modern Testing Services (Global) Ltd
Business Briefing
Don Meyer Concepts 2 Results Ltd
China Business Wendy De Cruz Dow Jones & Co
Communications & Marketing Susan Reingold Grey Group (Asia Pacific)
Corporate Responsibility To be announced
Energy
Sean Purdie Independent Power Producers Forum
Entrepreneurs/SME Donald Austin Austin Pacific Ltd
Environment
Bradley Punu JPMorgan Chase Bank
Financial Services
Kuresh Sarjan Bank of America NA Catherine Simmons State Street Bank & Trust Co
Peter Johnston Hutchison Whampoa Limited Hanif Kanji Sinophi Healthcare Partners Limited Ross Matthews Starr Underwriting Agents (Asia) Ltd
Hospitality & Tourism
Noble Coker Hong Kong International Theme Parks Ltd
Human Resources
Peter Liu AsiaNet Consultants (HK) Ltd
Information Technology & Telecom Rex Engelking Telstra International
Intellectual Property Alvin Lee Time Warner Inc
Law
Alvin Miyasato Intel Semiconductor Ltd MaryAnn Vale RS Components Ltd
Sports & Entertainment Ray Roessel
Taxation
Evan Blanco Deloitte Touche Tohmatsu
Trade & Investment
Patrick Wu American Appraisal China Ltd
Transportation & Logistics Brian Miller Damco Hong Kong Ltd
Women of Influence Jennifer Van Dale Baker & McKenzie
Eric Szweda Troutman Sanders Solicitors
Lee Georgs
Pharmaceutical
Roger Ngo Talent2
Stephen Leung Pfizer Corporation Hong Kong Ltd
Young Professionals
Real Estate
Brian Brenner Jones Lang LaSalle
AmCham has an international membership, comprised of business people from some 50 different nationalities. One need not be American or work for an American firm to join the Chamber. Membership is open to all who are concerned with trade and/or investment between the US, Hong Kong and China, or in the Asia Pacific region, and who subscribe to the objectives of the Chamber. These objectives emanate from five principles or “core values” of the Chamber, which are: Private Enterprise, Free Trade, Rule of Law, Ethical and Responsible Business Practices, Transparency and Free Flow of Information. Established in 1969, AmCham today represents over 1,800 individual members and around 700 companies in Hong Kong. AmCham organizes member action on a continuous basis, around a number of specifically targeted advocacy campaigns supportive of American business interests. These are achieved via annual delegations to Beijing and Washington, DC and in private briefing sessions with senior civil servants and political leaders of Hong Kong, organized by its Government Relations Committee.
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New
Business Contacts The following people are new AmCham members: A Force Holdings Ltd
Harman Newsweek LLC
Morgan Stanley
Aedas Limited
Heidrick & Struggles Hong Kong Ltd
MRI Worldwide Hong Kong Ltd
Aon Hong Kong Limited
Hewitt Associates LLC
Charles Lok Director
Andrew Bromberg International Design Director
Andrew Bisconte Director
Avery Dennison Hong Kong B V
Richard Evans VP, Finance, Global Sourcing Regions & Supply Chain
CIGNA Worldwide Life Insurance Co Ltd Susan Stevenson CEO
Claren Mui Regional Advertising Director Seth Peterson Principal, Industrial and Consumer Durables Practice
Tzeitel Fernandes Consulting Leader
ICS Trust (Asia) Ltd
Jason Weatherhead Senior Manager, Sales & Marketing Pierre Boulanger Manager, Sales & Marketing Sherry Lin Business Development Executive
Intel Semiconductor Ltd Clorox Hong Kong Ltd
Mike Rytokoski Vice President & General Manager
Liam Keating IT Director, APAC & China IT Country Manager
Columbia Sportswear Company (HK) Ltd
InterContinental Hong Kong
Abel Navarrete Director of Corporate Responsibility
Marita Marcos Director of Marketing
Conference Board Inc, The
Levi Strauss (Hong Kong) Ltd
Arbnesha Hashani Regional Director, Asia Pacific
Stella Mak Finance and Compliance Director
Deloitte Touche Tohmatsu
Maersk Hong Kong Ltd
Brian Norman Associate Director
Hans Bean General Manager
Du Pont China Ltd
Major, Lindsey & Africa Hong Kong Ltd
Gissel Liu Public Affairs Specialist - Hong Kong
BrandonVidal-Lubin Regional Manager - Asia
Eli Lilly Asia, Inc
Marriott International, Inc
Roee Shahar General Manager
Four Seasons Hotel Hong Kong Makie Chu Regional Director of Sales, Four Seasons Hotels & Resorts
Graduate Management Admission Council (GMAC) Julia Herries Regional Director, APAC
John Toomey Regional Director - Global Sales, Greater China
MetLife
Rajesh Sethi Chief Executive Officer
Scott Gaynor Chief Operating Officer, Asia Christine Raynaud CEO
Peonrich Industries Ltd Carlie Mo Director
Polo Ralph Lauren Sourcing Co Ltd Raymond Cheng Vice President
PricewaterhouseCoopers Gregory Profeta Senior Manager
Rackspace Hosting
Cecilia Lau Senior Marketing Manager Tim Klaver Sales Manager
Riverbed Technologies Michael Mudd Major Account Manager
Ruder Finn Asia Ltd Elsie Leung Account Director
ThreeSixty Sourcing Ltd Christopher Laurence CEO
Transamerica Life Insurance Company Douglas Henck Chairman & CEO, AEGON Asia
UniGroup Worldwide - Hong Kong Ltd Romain Busque Corporate Sales Executive
Visa Hong Kong Limited
Corbin Sun Acting Country Manager, Hong Kong and Macau
Microsoft Hong Kong Ltd Amy Lee IP Attorney
View our other members at:
http://www.amcham.org.hk/index.php/AmChamMembers.html
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COVER SPONSOR
review and improve our corporate governance. I am pleased that Professor Steve DeKrey, our chairman in 2008, has agreed to stay on and lead our Committee on Nominations and Governance. Late last year, the Chamber conducted our second Board self-evaluation survey. The results were encouraging but still point to some areas for improvement. Under Steve’s guiding hand, I am confident that we will move forward with this important initiative. Last year, the Chamber bid a fond farewell to governors C T Hew and Peter Liu, both of whom served very well during their full terms on the board. At the same time, we welcome Sara Yang Bosco, Janet DeSilva, and Peter Levesque. We look forward to working with each of these talented individuals. Lastly, I’d like to once again thank our outstanding Board of Governors, and the dedicated staff at the Chamber led by our president Richard Vuylsteke. I am also grateful for the energetic work of our 27 committee chairs that together enables us to continue in our preeminent position as the largest foreign Chamber of Commerce in Hong Kong. I look forward to serving the Chamber, and to working with all of you in 2011.
Rob Chipman Chairman
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Competitiveness Hong Kong is a beautiful city, which attracts businessmen, tourists, and adventureres from afar. The city has faced many crises over the years - lack of confidence among residents over the future of Hong Kong prior to the 1997 turnover of sovereignty, the Asian financial crisis that followed, and SARS in 2003 - but has managed to get through them all. Despite the sluggish markets in the US and Europe, Hong Kong benefits from the economic boom in Mainland China and has achieved brisk growth in the past two years. The economic momentum is expected to continue in 2011, but the city is not free from issues that could potentially halt its growth. Many questions have been raised over Hong Kong's ability to build on its strength and to continue to be the success story it is. As the Chinese proverb says: “Prepare for rainy days.� Improvement in certain aspects of Hong Kong are overdue: Poor air quality and rising costs of doing business are weakening Hong Kong's position as a leading international financial center. Competing cities like Singapore are wasting no time in their pursue to become Asia's ultimate economic powerhouse. Photo: Getty Images
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COVER STORY
Hong Kong is often compared to cities such as Singapore and Shanghai in any discussions of international competitiveness. While Hong Kong may still be credited as the leading financial center in Asia, concerns have been raised if our city is losing out to competition given our high costs of doing business and poor air quality. Rob Chipman, CEO of Asian Tigers KC Dat and the new Chairman of AmCham for 2011, addresses these concerns in his recent inaugural speech and outlines the priorities for the Chamber in the coming year
Rob Chipman CEO of Asian Tigers KC Dat
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By Kenny Lau
A
mCham is committed to build on Hong Kong’s success and play the role of honest broker to help strengthen the city’s competitiveness, says Rob Chipman, AmCham Chairman for the year 2011, in his inaugural address. “We want to play a helpful and constructive role, to speak out on positions of interest to our members, and to be strong advocates for a better Hong Kong,” says Chipman, who is CEO of Asian Tigers KC Dat, an executive relocation firm. “We feel we can play a useful role as an honest broker to engage with and provide constructive feedback to the relevant government policymakers.” While Hong Kong has an unparalleled ability to adjust and reinvent itself to face new and challenging circumstances, there are challengers in the region aiming to surpass the city, he cautions. “We cannot be complacent, and we certainly cannot rest on our laurels.” “We have Singapore with its clean environment; we have Shanghai with its aspiration to become a financial hub; and we even face tremendous competition from up and coming ports in the Pearl River Delta,” he says. “We have our own challenges including serious air pollution, lack of school spaces, and high cost of rents in both residential and commercial sectors.” But with all of these challenges comes opportunities, Chipman points out. And Hong Kong has an uncanny ability to reposition itself, build on its core competencies, and maintain its leading position. As AmCham enters its 42nd year of serving the American business community in Hong Kong, constructive interaction with US, Hong Kong, and Mainland China government leaders will continue in 2011. In his address, Chipman emphasizes a number of Chamber
priorities that are critical and of timely significance in helping to maintain and enhance Hong Kong’s status as an international business center. These include addressing on-going environmental issues such as air quality, and building a strong China agenda that will facilitate investment into and out of the Mainland.
Environment AmCham has been at the forefront in raising awareness and bringing focus to the environmental challenges that Hong Kong faces. Over 93 percent of respondents to AmCham’s recent annual survey pointed out that air pollution remains a top concern, a problem which they believe has deteriorated in the past year. Despite the efforts of the Hong Kong government, two perceptions still prevail in our community, Chipman points out. Firstly, it is that the government has not done enough. Secondly, it is that the problems are beyond our control and that the main source of air pollution is from the PRD. “I do believe we are hearing less of this kind of talk and the idea that it is beyond our control resonates less and less,” he says. “And that is because statistics and science – the measurements of roadside pollution, for example indicate that much of our air pollution is homegrown. “I am confident the Hong Kong government is tackling environmental issues hand in hand with the government officials in Guangdong province, but AmCham is also focused on how we can influence today, and to mobilize the business expertise within our broad membership to help address these problems.” AmCham seeks to work with the government on the environment through advocacy and by emphasizing business solutions, Chipman points out. The Chamber has established an Environ-
“I am confident the Hong Kong government is tackling environmental issues hand in hand with the government officials in Guangdong province, but AmCham is also focused on how we can influence today, and to mobilize the business expertise within our broad membership to help address these problems.”
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mental Steering Group with a panel of members who represent expertise across different industries, and has recently submitted to the government a response to the consultation on Hong Kong’s Climate Change Strategy. Key recommendations in the paper include: (1) Improved fuel mix for electric generation, (2) Green mode of public transportation; and (3) Energy efficient buildings. “Remarkable strides were made to improve air quality in Taipei, Seoul and Tokyo through investing in cleaner energy, clean fuels and better urban planning. So, it can be done, we can do it, and we should not wait further,” he stresses. “We in the Chamber feel strongly that Hong Kong needs to seek dramatic rather than incremental improvements in air quality.”
China Agenda The most important trade and investment relationship for Hong Kong is with Mainland China. AmCham over the years has served as a platform for investment into China through a wide variety of business support activities, trade delegations, and publications. The Chamber is also expanding to be a platform for outward investment from China for Mainland Chinese companies looking to go global. Hong Kong has developed into a world-class professional services center with a vast pool of talent and expertise, and is renowned for its rule of law, stable currency, low and simple tax rates, and free flow of capital, Chipman notes, saying AmCham is promoting the Hong Kong advantage with Mainland companies. The China agenda, he adds, is partly designed to serve Chamber members by matching their professional services offerings with Mainland companies in need of those services. “We are in an excellent position to play a key role here.” The China Business Briefing Program as part of the China agenda is aimed at Mainland executives seeking to invest in the US. The program consists of a series of meetings emphasizing different topics to help Chinese companies go global. “We have already begun to offer more materials and run more and more programs in dual languages or in Mandarin,” Chipman points out, adding that the Chamber will continue to lead delegations into the Mainland, including the 2011 Beijing Doorknock in late March.
To ease the pressure in the property market in Hong Kong, the committee recommends making more transparent what property sites are in the pipeline to allow the market to be aware of when and what land will be made available, upgrading the building codes to ensure that the private sector delivers on key government and community objectives, and setting new global benchmarks for environmentally friendly construction and management. For several years, education has been one of AmCham’s top priorities and will continue to be a priority. It is important because it lays the foundation of providing a continuing source of highly trained, talented, and skilled human resources, Chipman says. “Compared with our nearest rival Singapore, we are concerned with the lack of talent in Hong Kong,” he says, noting some members have voiced their dissatisfaction with the level and quality of business English in Hong Kong. In the annual survey, one member wrote: “The local education system is way behind what the business community needs – general knowledge, independent thinking, and English language skills are lacking.” Another respondent said: “The local school system is not producing graduates ready to enter the global work force, so we have to look abroad.” Hong Kong could and should be a world center for advanced education for students and branches of the world’s top institutions as the city has a robust free press and vigorous intellectual climate, Chipman believes. “We are concerned because where Hong Kong has fallen short is where our competitors are strong,” he says. “We certainly don’t need to be reminded that Singapore has better air and a pool of talent with strong English skills.” “It is true that these challenges are not new: AmCham has spoken out on air quality issues for years. Hong Kong has never been cheap as far as rent is concerned. And for many years, business leaders have expressed their worry over the shortage of talent,” Chipman says in his remarks. “This only highlights the urgency of these problems. Let’s not forget we are competing in a rapidly changing world.”
Hong Kong competitiveness As Singapore and Shanghai continue to offer unique advantages conducive to businesses, Hong Kong has to work harder to maintain its favored position, Chipman believes. In his address, he points out challenges highlighted by AmCham members in the annual survey. In addition to the environment and air quality, the high cost of doing business and concerns over the English-language skills of local students have detracted from Hong Kong’s competitiveness in being an attractive place for companies to conduct commercial activities. “The high cost of office and residential space is a challenge,” he says. “Indeed, Hong Kong consistently ranks among the world’s most expensive cities in terms of office rents.” Although 63 percent of members surveyed said they plan to expand their business in the coming three years, the supply of new Grade A offices in Hong Kong will be limited during the same period. The lack of good office space will sooner or later become an obstacle if Hong Kong is to enhance and strengthen its competitiveness, Chipman says. AmCham, and its Real Estate Committee in particular, is addressing the concern of skyrocketing rents. The Committee has recently held a panel discussion and made several concrete suggestions.
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Our members say: In the last quarter of 2010, AmCham conducted an annual survey among members to find out their views in three principal areas: how effectively AmCham itself is serving its membership, their view of the overall business outlook for 2011, and their views on the environment. On the business outlook for the coming year, the results were encouraging. 81 percent consider business climate in the next 12 months will be “Good” or “Very good.” Meanwhile, 63 percent indicate that they plan to expand their business in Hong Kong in the coming three years. In reviewing Hong Kong’s business environment in the past 12 months by rating 20 factors that are critical to doing business in Hong Kong, members in the survey were either “Satisfied” or “Very Satisfied” with the local infrastructure (83 percent), taxation system (89 percent), and transportation links (93 percent). However, members highlighted three specific areas that they found to be unsatisfactory: housing cost (59 percent); office rent (45 percent); and availability of international school space (38 percent). Availability of high quality talents (12 percent) and English language proficiency (20 percent) were also found to be constraints among business executives in Hong Kong. On Hong Kong’s environment, members overwhelmingly identified the following issues which they are “very concerned” or “concerned” about: air quality (93 percent); waste treatment/ recycling (81 percent); and marine water quality/polluted ecosystem (87 percent). Members were also asked to rate whether Hong Kong’s environment in different areas had improved in the past year. Overall, it is an area where 75 percent of the respondents believe things have not improved or gotten worse. The worst performing categories in the environmental aspect in which respondents say have not improved or gotten worse are: • Reorganization of bus routes to reduce exhaust emissions (85 percent) • Access/availability of green space and bicycle routes (82 percent) • Use of toll pricing to ease traffic congestion at the three crossharbor tunnels (81 percent) Two of the above worst performers are directly related to air quality, which 68 percent of those surveyed say has not improved or has gotten worst in the past 12 months. 24 percent of surveyed members say they have experienced difficulties in recruitment from overseas for local assignments because of concern over Hong Kong’s environment, while 48 percent know of professionals and their families and children leaving Hong Kong for the same reason. “We are seeing more and more examples of senior business executives, especially those with families and with young children, leaving Hong Kong for Singapore; and they often cite air pollution as a major factor behind their decision,” says Rob Chipman, AmCham Chairman, who is in the executive relocation business. “Just recently I received a routine request for information on moving to Singapore, and I asked the individual why they were moving. Their answer was ‘…my son gets bad coughs here. We are in a small flat and want more space, and cleaner air. When a position came up in Singapore, I was keen to take it.’”
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How do you rate Hong Kong's business environment in the past 12 months in terms of the following? Very satisfied
Satisfied
Fair
Not satisfied
Infrastructure
71 30%
125 53%
34 14%
7 3%
Legal and regulatory system
69 29%
133 56%
30 13%
4 2%
Taxation
100 42%
112 47%
22 9%
3 1%
Cost of doing business (i.e. wages, government levies)
30 13%
107 46%
74 32%
23 10%
Office rent
2 1%
43 18%
84 36%
104 45%
Housing cost
1 0%
22 9%
74 31%
141 59%
Availability of international school space
7 3%
51 23%
78 36%
83 38%
Availability of high quality personnel
16 7%
113 48%
78 33%
27 12%
English language proficiency
12 5%
95 40%
82 35%
46 20%
Intellectual property rights protection
27 12%
145 62%
55 24%
6 3%
Transportation links
123 52%
97 41%
11 5%
4 2%
Top number is the count of respondents selecting the option. Bottom % is percent of the total respondents selecting the option.
Which of following environmental issues you are most concerned about?
80 % 65
60 % 47
40 %
45
45
40
39 37
40 36
28
30
29 23
24
18
20 %
17 11
6
0%
7
6 2
0 Air quality / pollution
Amount of green space/parks for public use
Very concerned
Marine water quality/polluted ecosystem
2 Noise pollution
Concerned
Neutral
2 Light pollution
Waste treatment/ recycling
Not concerned
How would you rate Hong Kong's status/progress in each of the following areas in the past 12 months? Improved Slightly improved No improvement Getting worse
Overall air quality
7 3%
72 30%
107 44%
58 24%
Phasing out of old diesel vehicles
8 3%
84 35%
123 51%
26 11%
Use of toll pricing to ease traffic congestion at the three cross-harbor tunnels
2 1%
42 18%
128 54%
65 27%
Reorganization of public bus routes to reduce exhaust emissions
1 0%
34 15%
170 73%
29 12%
Adoption of environmentally friendly construction codes
3 1%
47 20%
157 68%
24 10%
Cooperation with the PRD to reduce cross-border pollution
3 1%
43 19%
137 60%
46 20%
Top number is the count of respondents selecting the option. Bottom % is percent of the total respondents selecting the option.
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By Daniel Kwan When AmCham conducted its annual survey on the environment late last year, findings were alarming. Ninety-three percent of the respondents say air pollution remains their top issue of concern, and 68 percent believe air quality has not improved or has been “getting worse” in the past 12 months. What’s happening with our air?
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hese results should surprise neither Michael Kilburn of Civic Exchange or Bruce Kelsh of Hong Kong International School. Kelsh, Upper Primary Principal at HKIS, has in fact experienced Hong Kong’s air pollution problem “up-close and personal.” In November, 75 students – from lower and upper primary sections – were put on the school’s “API list,” meaning they had to stay in-door to reduce exposure to bad air when the API index is over 100 on Hong Kong Island. Kelsh says the real number of students who might have suffered from bad air should be higher since some parents took their children off the list because they wanted them to stay active.
Extremely troubled The real bombshell was dropped when Kelsh received an email from a couple of candidates who he had wanted to hire as teachers. Politely, the candidates declined the school’s offer and explained that the decision was made because they were concerned about Hong Kong’s air quality. “We have decided, after long conversations and much soul searching, that we need to pursue options other than Hong Kong. We have researched a number of sources and are extremely troubled by the air pollution level in Hong Kong; while we wish it wasn’t a factor, it is and we need to be honest about that,” the email reads. “We are simply too concerned about the potential long-term effects on our children (and ourselves), and have concluded that, while there will certainly be air quality issues in any major city, those of Hong Kong are too great to ignore. We felt it best to inform you of this conclusion as soon as possible, to ensure that you are able to move on with your recruitment process.” According to Kelsh, air quality – not issues like salary or teaching environment – is the sole factor. “We don’t cross their threshold as
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an acceptable place to consider based on the air quality,” he says. “So the other factors (wages, teaching environment) don’t even come into play. You can’t compete if you can’t get passed the environmental factor.”
“Less Talk, More Action” If Kelsh isn’t surprised about the results, then the figures would look even familiar to Kilburn. Last summer, the Hong Kong Transition Project conducted a survey on behalf of Civic Exchange on public experience of, and reactions to, air pollution. The survey interviewed 600 randomly selected members of the public aged 18 and over, and 415 randomly selected professional drivers. A key finding of the survey – the report of which is titled “Less Talk, More Action” – is that one in four Hong Kong residents is considering emigrating because of air pollution, up from “one in five” in 2008. “If you look into the details (of the survey), the people who are talking Bruce Kelsh about leaving (Hong Kong) are the professionals and the wealthy,” Kilburn says. “They are the ones who are most active and the people who support Hong Kong’s knowledge-based society and hold a lot of its wealth.” Kilburn says he can share Kelsh’s frustration that good talents are either leaving or simply refuse to come to Hong Kong because of our bad air.
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1 • 2011
“How do you respond to someone who says, ‘I want to protect my health.’ There is nothing you can say,” Kilburn says. “(You just) can’t pay people enough. Because however wealthy you are, whether you have filters at your home, ultimately most of the time you’ve got to suck up what we have.” “Are people really leaving? It’s very hard to know without the numbers and probably all I can honestly say is that the trends are not good and the trends are especially not good on the people who have the wealth and the education,” Kilburn says. “We are a knowledge-based society and we are losing our competitiveness not just because Singapore is attracting people ahead of Hong Kong but because people are actively leaving.” Although there is no solid scientific evidence of how many people have left Hong Kong because of poor air quality, the public perception seems to be that we are losing talents and that the government is dragging its feet to address the issue. Critics have made their voices heard loud and clear that they wanted more actions and less talk from the government. Top on the “To Do” list are to make greater efforts to phase out old and polluting vehicles, and adopt a new set of Air Quality Objectives that will bring Hong Kong’s air quality standards on par with that of the World Health Organization.
Keenly aware So far, residents are dissatisfied with the government’s response which critics say is “too little, too late”. The Environment Bureau says that the government is keenly aware of the importance of air quality and is taking every step to clean up the air (see box). “The government is keenly aware of the need to improve air quality,” a spokesman says. “The fight to clean up our air is a long battle, and we have seen some positive result from the initiatives we rolled out over the past years.” “On the ambience, our focus was to work with Guangdong under the jointly agreed Pearl River Delta Regional Air Quality Management Plan to improve the air quality of the region as a whole,” the spokesman adds. “The average annual concentration of sulphur dioxide, nitrogen dioxide and respirable suspended particulates in the PRD region decreased by 38 percent, 9 percent and 7 percent respectively in 2009 as compared to the 2006 levels amidst continuing growth of the economy in the region.” Contrary to the public perception that the government hasn’t done enough, the spokesman says measures are in the pipeline. Recently announced was a mandate for the two power companies to reduce their emission allowances by 2015 to a range of 50 to 66 percent of the 2010 levels.
In addition, the Chief Executive announced in his 2010 Policy Address the introduction of a trial scheme to retrofit Euro II and Euro III franchised buses with “selective catalytic reduction” devices to achieve comparable emission performance of buses at Euro IV level, in addition to efforts to promote the use of hybrid or cleaner buses in Hong Kong.
Who’s to blame Kilburn of Civic Exchange says that it isn’t fair to lay the blame entirely on the government for our air quality problems. “We’ve thought quite hard about the reasons why this (problem of air quality) is not being fixed,” he says. “I think part of which has to do with the Legco really cutting down what the Environmental Protection Department has tried to do in terms of regulatory measures.” “(The Legco) is so willing to support incentives but not the sticks. There is a carrot but no stick. Even when the EPD wants to use the stick – and it’s not often that they do – the Legco Michael Kilburn won’t let them do that. So we can’t blame EPD or the government necessarily and we have to also look at the legislative framework.” Professor Chan Chak-keung, director of the Institute for the Environment at the University of Science and Technology, agrees that the government also deserves credit for negotiating new energy supply from the Mainland for the power companies and also putting pressure on the utilities to adopt greener fuel while keeping the electricity charges low. Chan who has spent years on researching Hong Kong’s air quality problems says there are no quick fix available but the government can make greater efforts to push for the rationalization of bus routes, expand the proposed low-emission zones to districts beyond Central, Mongkok, and Causeway Bay, and accelerate the replacement of the older, more polluting vehicles. However, Kilburn says that the government still needs to face up to a more deep-rooted issue – the lack of sense of urgency. “For me, it’s a critical issue,” Kilburn says. “It’s that they don’t appreciate air pollution as a crisis and they perceive that because the overall level is dropping slowly and the overall number of deaths and hospital visits is dropping slowly, they are kind of doing ok.” Another stumbling block is that the legislative process is often hijacked by irrational and vested interest groups, and the government
“We are a knowledge-based society and we are losing our competitiveness not just because Singapore is attracting people ahead of Hong Kong but because people are actively leaving.”
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has to waste huge amount of political capital to overcome their resistance for change. Take the recent Motor Vehicle Idling (Fixed Penalty) Bill as an example. The bill requires drivers to switch off their engines while their vehicles are stationary on roads or in a car park. Green groups believe the effect of turning off engines on air quality is minimal but still – generally speaking – support it. Nevertheless, Kilburn says officials bent over and backward in Legco to try to get the legislators to approve the bill and at the end essentially achieved nothing. “I have been in Legco watching the debate about air pollution with the mini bus drivers and taxi drivers. The drivers are not the problem but they are making the noise. Officials and Legco members hear their concerns about being too hot (because the proposed bill will require them to turn off the engines). Without any evidence and any data, they dismiss the evidence that the air pollution they generate is making you guys sick,” he says. Apart from politics, the government also seems going nowhere in getting its message across to the public. It is widely perceived of doing little and showing no leadership. The media has shown little interest in defending its records in environmental efforts or in strengthening Hong Kong’s competitiveness as far as the quality of life is concerned. It’s getting so much bad press that in two Gallup polls published last year, Hong Kong was rated together with countries like Iraq and Chad on issues of immigration and satisfaction of air quality.
Imagine It is highly unlikely that Hong Kong’s political landscape will change for the better quickly. Meanwhile, the Government’s plate is full. It is racing against time to address the issue of solid waste disposal after losing its first fight with legislators to expand the landfills in Tseung Kwan O. It is also pushing for clean fuel for marine vehicles, green building codes, and trial and introduction of new low-carbon transport technology which may include electric buses. In the meantime, Kelsh probably will have to contend with making wishes as air quality is concerned. The principal who came to Hong Kong 11 years ago says his number one wish for 2011 is that air in Hong Kong reaches acceptable quality and the government will actively pursue policies that can make a significant difference. “I know it’s a difficult task and very complicated,” Kelsh says. “We understand and appreciate that but one has to actively set policies that can make a difference for Hong Kong.” “Also for us in the south side of the island, a monitoring station of some kind will give us a more accurate picture of what the air quality really is so that we can make accurate decisions.” His last wish is that Hong Kong will adopt air quality standards that are comparable to those recommended by the WHO. Everyone wants to breathe clean air. Just imagine how attractive Hong Kong can be if our air is clean.
Initiatives and Progress: Ambience Cross-boundary cooperation with Guangdong to clean up the air in the Pearl River Delta, with reduction targets of 20 – 55 percent for SO2, NOx, RSP and VOC by 2010 using 1997 as the base year. (Progress: near completion. New joint agreement for 2011-2020 being discussed.) Tighten control on emission by power companies by statutory means. (Progress: First Technical Memorandum has been in place since 2010 to stipulate reduction of SO2, NOx and RSP by 67 percent, 13 percent and 46 percent from 2007 levels respectively. Second TM will see emission for the pollutants cut by a further 50 percent, 35 percent and 34 percent respectively of 2010 levels when it comes into effect in 2015. Updating the Air Quality Objectives (Progress: Considering the relevant policy aspects and implementation details with an aim to find the best way forward that are acceptable to the community for updating the Air Quality Objectives and implementing the air quality improvement measures. In the meantime, endeavoring to introduce those improvement measures that are already supported or are likely supported by the community, including maximizing the use of the existing natural gas-fired generation units by the power companies.)
Roadside Grants for replacement of pre-Euro, Euro I and Euro II diesel commercial vehicles (Progress: scheme for pre-Euro and Euro I vehicles closed. A $540 million one-off grant scheme to encourage early replacement of Euro II diesel commercial vehicles was launched on July 1, 2010 to provide grants of $17,000 - $203,000 to owners who replace their Euro II diesel commercial.) Launching of a trial of retrofitting Euro II and III franchised buses with “selective catalytic reduction” devices to upgrade their emission performance to Euro IV levels. (Progress: details of the trial being worked out in consultation with the bus companies. Subject to satisfactory trial results, the Government will fully fund the retrofit of the devices on all Euro II and Euro III buses.) Designating pilot Low Emission Zones in Causeway Bay, Central and Mong Kok with an aim to increase as far as possible the ratio of low-emission franchised buses in these zones from 2011 and to 100 percent by 2015. Funding the franchised bus companies to procure six hybrid buses for use along busy corridors to test out their operational efficiency and performance. If the bus companies wish to test other greener buses such as electric buses, the Government will be ready to provide them with the same financial support. (Progress: in discussion with the bus companies.) Legislation to ban idling vehicles with running engines being examined by the Legislative Council. Setting up of up a $300 million Pilot Green Transport Fund to test out green and low-carbon transport technology. (Progress: details being worked out in consultation with the trade and relevant stakeholders. Programme to be rolled out upon securing the funding approval by the Legislative Council Finance Committee.) Promotion of electric vehicles (Progress: several car manufacturers have identified Hong Kong as one of their first markets in launching their EV products. The Government is actively promoting the installation of charging infrastructure, in collaboration with private developers and carpark operators.) Source: Environment Bureau
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1 • 2011
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Running Out of Space?
Hong Kong is now the leading financial center in Asia. A lack of prime office space however may undermine the city’s efforts to attract multinationals who want to expand in this part of the world. Wilson Lau talks to Ben Dickinson of Jones Lang LaSalle and files this report
A
s developed economies in the West continue their slow climb out of the recession, multinationals see opportunities in the East. With their respective infrastructures and different pools of specialized talents, cities like Hong Kong, Singapore and Shanghai have attracted an increasing number of MNCs to set up their regional offices. However, the situation may not bode well for Hong Kong in the short to medium terms because the city lacks an adequate supply of Grade-A offices with specific provisions that can meet the needs of large MNCs. Hong Kong barely met the strong demand for Grade-A office space from 2000 to 2009. The average annual net take-up of Grade-A offices over this period is 1.9 million square feet (net floor area) while the average new supply in the same period is 1.8 million square feet per annum, according to data compiled by global real estate service specialist Jones Lang LaSalle. The situation is expected to worsen because the average fresh supply of Grade-A office spaces is estimated to be around 700,000 square feet per annum within the coming four years, much lower than the average demand of 1.9 million square feet, which is expected to continue due to the vibrant economy.
Unsatisfied demand “If the demand [from major Grade-A office occupiers] is not satisfied, two things may happen,” says Ben Dickinson, Regi-
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onal Director – Head of Tenant Representation Markets at Jones Lang LaSalle. “First, rents may climb aggressively and potentially make Hong Kong uncompetitive.” “Second, tenants have to look elsewhere if the space is not available and once they begin doing so, it is potentially difficult to get them back because they spend a lot of money on office expansion in such areas as fitting out and human resources. This is long-term investment.” Shanghai and Singapore are expanding their prime business districts and both cities are expected to surpass Hong Kong in terms of areas of prime office space available. Shanghai has announced that it plans to become an international financial, shipping and trading center by 2020. Meanwhile, Singapore is doubling the area of its Financial District with the development of Marina Bay. When completed, the combined area of the Marina Bay and the Financial District will reach 2.82 million square meters (around 30.35 million square feet) – equivalent to the total office space available in Hong Kong’s Central district. To examine the potential for Hong Kong’s development and the changing requirements of major international high-end occupiers looking to expand their operations in Asia, Jones Lang LaSalle compiled and released a White Paper titled “Leading Asia to Dominance – How a Contemporary Commercial Real Estate Platform Will Consolidate Hong Kong’s Regional Position” last October. The White Paper includes findings from a survey with some of the largest
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Commercial
Grade A Office Future Supply
8
6
4
million sq ft (net)
MNCs in Hong Kong in four key sectors: finance, insurance, accounting, and legal. These corporations are considered the major “high-end” occupiers of Grade-A offices in the city. And because of their sizes, they are usually the price setters in a tight market. Generally MNCs in the four key sectors all seek Grade-A office blocks with larger floor plates (over 30,000 square feet). Large floor plates provide higher efficiency and businesses benefit from the enhanced synergies with more employees working together. Initial fit-outs and subsequent rearrangement are also relatively easier. Large MNCs also prefer landmark towers associated with the city. Green-building features and sustainability accreditation will become an increasingly important factor for MNCs in selecting where to set up shop, according to Dickinson (see box). “Tenants with offices up to 100,000 square feet will generally keep their offices together in the same building,” he says. “Once their offices hit the 100,000 square feet threshold, they tend to split operations into front and back offices.” “In terms of locations, Central, Admiralty and the area between Kowloon Station and Tsim Sha Tsui (referred to herein as Kowloon Station) are the preferred front office locations generally,” Dickinson adds. “These large companies are more flexible with the locations for their back offices, though they still prefer established districts with good transport links and amenities.”
2
0
2011
2012
Hong Kong
Shanghai
2013 Singapore
Source: Jones Lang LaSalle
“First, rents may climb aggressively and potentially make Hong Kong uncompetitive.”
Where do we stand?
New York, London and Tokyo are established in the provision of Grade-A commercial real estate featuring large floor plates and central core designs (which means the designs of these buildings use the structural core of the building to house the key mechanical and engineering facilities including lifts and elevators, air-conditioning equipment, and electricity systems). Hong Kong faces intensifying competition from Shanghai and Singapore in the provision of this type of commercial properties. Hong Kong has a total net floor area of around 2.39 million square feet of large floor-plate offices in the Central Business District but fresh supply is severely limited in the coming few years. By contrast, Shanghai has 251,735 square feet of large floor plate office supply in its CBD and 565,902 square feet in non-CBD. The city is expected to add another 1.77 million square feet of large floor-plate office space in its CBD in the next several years, according to Jones Lang LaSalle. The recently concluded Shanghai World Expo 2010 is expected to have long-term
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benefits and strengthen the city’s status as the commercial hub of the Yangtze River Delta. Substantial investment in Shanghai’s infrastructure was part of the city’s initiative in upgrading urban engineering and planning, which was in part spurred on by the Expo. At the national level, the Shanghai’s experience showcases how a city’s real estate market can be transformed by major infrastructure investment and sophisticated urban redevelopment. Singapore currently has a total net floor area of 1.18 million square feet of large floor-plate offices in CBD and 872,951 in non-CBD. Its future supply of large floor-plate office in CBD will grow by a whopping 3.66 million square feet in the next few years, Jones Lang LaSalle projects. Singapore never hides its ambition that it wants to displace Hong Kong and become the financial hub of Asia. The city state is already Southeast Asia’s regional banking center and the doubling of the size of its
Ben Dickinson
Financial District is likely to cast a long shadow over Hong Kong given the latter’s tight supply in the coming few years. “Singapore has earmarked a line of sites for future development that can be released and built on for the next five to 10 years,” Dickinson explains. “The city also has a coherent city plan for future commercial development.” “Hong Kong does not have the same planning process,” he adds. “There is not necessarily a transparent plan in place for future commercial development and when this will be released to the market.”
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What can we do? Hong Kong needs a steady supply of CBD commercial properties with large floor plate design to meet the demand from major MNCs who want to do business here and use the city as a regional hub. Soaring rents hurt MNCs and small and mediumsized enterprises alike. Hong Kong has sites of commercial properties for future development but it needs to address the issue of availability in the short term. West Kowloon can provide commercial properties meeting new global standards, including larger floor plates and green building features. The development of a new core business district in West Kowloon is certainly one option being considered by the Hong Kong government. The district is favored by large tenants of the key sectors. With the successful International Commerce Centre as an example, Hong Kong can develop a new fully integrated business district stretching from the Kowloon Station to Tsim Sha Tsui. “It can be modeled after the Canary Wharf development in London,” Dickinson suggests. “Canary Wharf is a successful ‘bespoke’ office district where occupiers can specify their premises’ requirements and have the office blocks built to meet their specific needs.” On Hong Kong Island, the Govern
ment has proposed to redevelop the West Wing of the Central Government Office in Central but there are strong voices of reservation in the community. Meanwhile the core business district can be expanded towards Wanchai/Causeway Bay through the refurbishment and redevelopment of existing locations in a district that is in close proximity to Central. There are new projects under construction in the area, including Hysan Place – a pre-certified Platinum LEED building. LEED – which stands for Leadership in Energy and Environmental Design (LEED) – is an internationally recognized green building certification system. Meanwhile, the real estate market in Hong Kong needs to be cost competitive when compared with the other major centers in the region. Rents of overall Grade-A office in the city in the first 11 months of 2010 surged by 27.5 percent compared with the same period in 2009. Rents of Grade-A offices in Central rose by 33.3 percent. Given the strong economic conditions, rents are expected to continue their upward trend and grow by 30 to 35 percent in the overall market in 2011, Jones Lang LaSalle believes. “By comparison, Singapore is generally around 50 percent of Hong Kong’s level in the equivalent core of CBD locations,” Dickinson says.
“Second, tenants have to look elsewhere if the space is not available and once they begin doing so, it is potentially difficult to get them back.”
What bankers, insurers, accountants and lawyers want… Among the financial institutions surveyed in the White Paper by Jones Lang LaSalle, investment and retail banks require floor plates for general office use to be at least 25,000 square feet and preferably up to 50,000 square feet. All have a preference for even larger floor plates for trading as they have in business hubs such as New York and London. “They prefer to set up front offices in Central, Admiralty and Kowloon Station,” the White Paper says. “Locations for back offices can be more flexible although investment banks still seek more established areas, including Hong Kong East, Tsim Sha Tsui and Kowloon Station. Retail banks are more open to decentralized areas, such as Kowloon East.”
Insurance firms are generally satisfied with sub-25,000 square feet floor plates and prefer high-rise “landmark” towers for branding effect. This sector prefers to split office locations from 100,000 square feet and above and has further needs for multiple locations for their agency teams. Other “acceptable” locations are Tsim Sha Tsui, Wanchai/Causeway Bay and Hong Kong East, the report says.
Accountancy firms meanwhile would prefer large floor plates over 25,000 square feet for both front and back offices to maximize efficiency. They are after high-rise buildings and will likely split offices from 100,000 square feet and above. They strongly prefer their front offices to be in Central and Admiralty and back offices can be in established districts such as Hong Kong East, Tsim Sha Tsui and Wanchai/ Causeway Bay.
The legal firms surveyed have varied ideas about floor plate size and types of buildings. They prefer to keep their offices together in one building and strongly prefer Central and Admiralty although they will consider Kowloon Station.
20
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Buoyant Job Market Forecast for New Year
By Daniel Kwan
T
he local job market has improved and employees will be able to bargain for higher wages in a tight market in the coming year, according to a survey by the international consultancy firm Manpower. The latest Manpower employment outlook survey, which interviewed 809 companies on their hiring expectation for the first quarter of 2011, found a buoyant job market for 2011 and a general expectation of higher wages. “In our survey, we interviewed 809 companies, 21 percent indicated that they will increase hiring and this represents an increase of 2 percentage points compared with the same period in the previous year,” says Lancy Chui, managing director of Manpower Hong Kong, Macau and Vietnam operations. “By contrast, only 1 percent said that they might cut back on headcounts and that’s also lower than the 2 percent response we got in the previous survey,” she says. Chui says one of the reasons behind the accelerated hiring is to restore cuts made by companies during the retrenchment in 2009. The fact that the economy has improved also encourages companies to increase headcounts. “The pick-up actually began in the second quarter of 2009,” she explains. “If you looked at GDP, the increase reached 6.8 percent in the 3rd quarter.” “Also, the unemployment rate was 4.2 percent – the lowest fourth-quarter figure since 2008. Keeping track of the market situations, we can say that the job market has improved steadily,” she says in an interview with biz.hk in December. The Census and Statistics Department published the latest unemployment figures in January and they confirmed the jobless situation has improved. According to the
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government, unemployment rate dropped from 4.1 percent in the SeptemberNovember period to 4 percent in OctoberDecember 2010.
Hot demand In the interview, Chui says competition for talents in areas such as finance, insurance, retail and services will be most acute this year and employers will have to pay more to get the right talents. “High potential talents are really in hot demand,” she says. “In the financial sector, we’ve seen cases where people are offered sign-on bonus – and in fact this happens quite often in the insurance industry – for employers to lure individuals to change jobs.” She reckons that employers will face real pressure on wages and the market has changed from a client-market to a candidate-market. “Wage pressure on employers is quite real now,” she says. “Inflation, rent, and wage are all real issues employers face today.” “Wage increases from two to five percent are within the general expectation and the average increase will range from three to three-and-a-half percent.” For individual sectors such as banking and insurance, the increase can be as high as five to 10 percent, she adds. In face of the pressure on wages, Chui suggests small and medium enterprises to be flexible in their hiring arrangement to balance the needs of quality staff and keeping
costs down. For example, she says that instead of trying to match wages offered by multinationals, SMEs can achieve staff retention through better career development programs and training. Moreover, SMEs can use more contract staff and structure their workforce based on their business cycles.
Cross-border flow Meanwhile, Hong Kong employers also face competition from markets such as Mainland China where businesses are not shy to offer generous packages to attract high-performing individuals as long as they have the right expertise and skill sets. In particular, professionals with China experience are in hot demand and it’s common for firms to position their key management personnel in different cities depending on their business needs. “Most in demand are professionals such as lawyers and accountants who have IPO experience and know the China market,” Chui believes. “Demand for these professionals is strong and companies are willing to pay start-up bonus to get these people. Money is not a concern for people in this category.” Although demand outstrips supply, Chui says she has not found an obvious inflow of Lancy Chui expatriates into Hong Kong. She suggests that companies may have switched to local talents in filling key positions which used to be held by expatriates.
21
Also, some expatriates have chosen Singapore over Hong Kong due to concerns such as costs of education for their children and air quality. Citing one of her clients as an example, Chui says it is not surprising that some expatriates will find Singapore more
attractive than Hong Kong. “We had one case that we suggested to one of our clients to host the position either in Singapore or in Hong Kong. The candidate who is an expatriate at the end chose Singapore over Hong Kong.” “He told us the reason was that air
quality and the environment in Singapore are better than in Hong Kong, and he is concerned about his children,” Chui says. “Although schools in Hong Kong are great, he is worried about the costs of education here as the competition for school space is intense.”
Finance, Insurance & Real Estate
23% 24% 16% 17%
Manufacturing
“Wage pressure on employers is quite real now. Inflation, rent, and wage are all real issues employers face today.”
17%
Mining & Construction
20% 25%
Services
26% 15%
Transportation & Utilities
20% 16%
Wholesale & Retail Trade
17%
0
5
10
15
Net Employment Outlook
20
25
30
Seasonally Adjusted Outlook
Wage Pressure on Businesses
A
separate survey by the consultancy firm Mercer also finds that ensuring competitive levels of salaries will be a key concern for multinationals in Hong Kong in order to retain their best talent. The Mercer’s Q4 Market Flash Survey conducted in November finds that pay increase for 2011 is forecast to reach 3.8 percent – higher than the previously projected 3.4 percent according to Mercer’s Total Remuneration Survey 2010. The latest survey finds that employees in pharmaceutical and healthcare industry will see the biggest pay rise – forecast at 4.4 percent. Employees in high-tech industries however are expected to receive a lower pay increase of 3.5 percent. The survey covers 84 multinational
22
companies which spread across industries such as pharmaceutical and healthcare, consumer goods, chemical, and high-tech. “Some industries faced a relatively difficult business environment during the financial crisis, but they are now recovering with the economic upswing. Therefore, employers need to provide salary increments comparable to the overall market competitive rates in order to keep their best talent,” Connie Leung, Hong Kong Business Leader for Mercer’s Information Product Solutions business, was quoted saying in a press release. The Mercer survey also finds that 45 percent of the surveyed companies plan to increase headcount this year and 54 percent say they will maintain the same level of headcount. Only one percent indicates they
may reduce the number of employees. Overall staff turnover is reported at 9.6 percent for the first three quarters of 2011. Pharmaceutical and healthcare will suffer the highest turnover at 12.7 percent while the chemical industry expects a much lower turnover rate of 5.3 percent. “We expect employers in Hong Kong to face a lot of pressure in terms of salary spend in 2011,”Leung says. “Increasing inflation causes employees to raise salary expectations.” “With an even higher turnover forecast for 2011, we predict compensation would once again be a key focus for employers in order to keep their talent and ensure business success in recovering economic conditions.”
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Our Consumer Experience By Jerry Gelsomino
R
eal estate and finance may keep the income wheels turning, but shopping is what tourists and residents alike do best in Hong Kong. Pick up any city guide to Hong Kong and flip to the prominently positioned chapter on shopping. Here you will probably find descriptions such as insatiable shopping appetite, national pastime, and the home of temples of consumption. Indeed government-backed initiatives like the Business of Design Week held in December, are desperately trying to focus attention on other activities for which Hong Kong strives to be known, such as becoming the Creative hub of Asia. But while it's difficult for government programs to introduce a new, public perception of a city, or its brand, conversely, reputations can easily slip away if they are not regularly freshened and reinforced. This is the current situation between Hong Kong and the pleasure of shopping. PricewaterhouseCoopers predicts retail growth in Hong Kong is expected to slow to 1.3 percent for this year while the wider Asia-Pacific market will grow an average of six percent from 2010 through 2014. It means certain attributes of Hong Kong's shopping experience are retreating,
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while a new personality is emerging: what customers expect and how they are being treated may actually be affecting sales.
Look closer Let's look closer at conditions that may begin to illustrate the dire need for change in the broader shopping landscape of Hong Kong, and with it, a new customer experience. Has Hong Kong lost its traditional edge as the best place to treasure hunt for retail bargains? Some city guides identify that most retail districts have turned into fixed prices markets, with luxury retailers steadfastly leading the way. Visitors looking forward to trying out their bargaining skills are left to use these talents for purchasing cheap copies or souvenirs. New residents quickly realize there are few “deals” in Hong Kong. For quality goods, prices are equal to or slightly above international market rates. Interestingly, as Chinese Customs announced a RMB1,000 tax on incoming iPads and iPhones from Hong Kong, a free marketing bonanza fell into the hands of local retailers. The newspapers gave testimony that at least one product category was sold cheaper here than in Mainland China.
Retail likes good press and if the opposite happens, it's a marketing nightmare. With seven million residents, Hong Kong relies on its tourist trade; 16.8 million in the first half of 2010. So the exposure of “Bus Auntie” became of a grave concern. She was so nicknamed when she was shown in a video berating a busload of tourists for not spending enough in local Hong Kong stores. Afterward, the authorities enacted measures meant to discourage this behavior by tour guides. Interestingly though, neither the retail industry nor its organizational bodies did little locally to publicize their “no-pressure retail” policies to shoppers.
Too crowded?
With the number of stores here, it is impossible to completely control these tactics. And that brings us to the next concern, is Hong Kong being over-stored? There isn’t an MTR station or major street intersection which doesn’t have a significant retail store offering. And while there are many established shopping districts and centers which take full advantage of a large footprint of valuable Hong Kong land, many new entries of late have gone vertical. Shoppers in these buildings are required to
23
travel numerous escalators, wait for an available elevator, or get some exercise by taking the stairs. Hong Kong has an excellent mass transit system, but developers and retailers alike seem to be determined to position a shopping destination; a favorite jewelry store, fashion boutique or coffee shop, in the immediate neighborhood. No need to travel. You decide; is this a good thing or bad for Hong Kong? With so many similar stores and restaurants blanketing the city, is the diversity of Hong Kong still recognized? Encouraged? In the US, zones have developed over the years where retail innovators and entrepreneurs with a great idea have launched and grown. In Chicago, it's Wrigleyville in the shadows of the famous ballpark, while in Los Angeles, Melrose Avenue has always been the home of the wacky, wonderful and inspiring retail concepts. New York's SoHo has long been celebrated by independents as a departure from the more conservative and traditional retail markets found further North in Manhattan. Similarly is Seattle, its Pikes market that tourist flock to, not only for the sensations sights and sounds of the seafront, but also to shop with independents and see where that little coffee shop idea, Starbucks, was born. When you think about it, what each of these zones and Hong Kong have in common is they offer an option to the modern view of shopping; vibrant storefront shopping streets, outside of the climate controlled, carefully orchestrated shopping malls that developers are so anxious to build. These strips of vibrant, eclectic retailers add spice to any urban shopping scene and should be encouraged, not bulldozed over.
Living the brand Finally, let's talk about retail advertising. It's darn hard to get visibility here, amid all the brands and storefront shouting at you. Does anyone really notice? One advertisement that caught my attention in December was promoting Hong Kong. “Love Christmas. Love Hong Kong.” The slogan was punctuated with images of happy people (expats) shopping and dining. My response as a local consumer is to ask, “Hong Kong, what have you done to prove your love of me?” So now that uniqueness is gone, and if we’ve lost a little of the savings advantages we once had, and the friendly shopping atmosphere is being tainted by over-anxious tour guides and sellers, what
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can Hong Kong do to keep the shoppers interested, maintaining our prominent role as “the place to shop?” How can Hong Kong compete with the growth and development of the exciting retail districts in Shanghai and Singapore? I suggest that Hong Kong develops programs and events which demonstrate it is “Living the Brand” that it promotes. If Hong Kong desires to be a Shoppers’ Paradise, it must respond by delivering what customers want to experience when shopping.
Tactical strategy This initiative could have a two-part tactical strategy. First, merchant groups should launch initiatives to bring all stores – small independents and large multinationals – into similar operating limits, like hours of operations and customer service policies. Secondly, the government would be useful to offer benefits of participation by all retailers. Suggestions for this new, customer-focused strategy would include the following: • A Citywide Frequent-buyers/Loyalty Club Card – Locals connect and qualify through their Hong Kong ID. Tourist receive cards when they arrive, loaded with points and free benefits • Accumulated shopping “points” earn discounted noontime lunch break • Free transportation to get purchases home or citywide free delivery • Promotion of Super Saver deals between retailers and hotels • Establish destination retail zones around Hong Kong by product category. This idea is not new as Hong Kong has always had its neighborhood markets specializing in flowers, tropical fish, jade, etc. These regions should be better promoted, including architectural, iconic elements which establish a “sense of arrival” • Become a city of retail flagships stores • Promote with pride native Hong Kongbased retailers like Bookazine and Pacific Coffee • Encourage innovation of other start-ups and retail entrepreneurs, providing funding and advice from organizations such as Create Hong Kong • Launch a Government-run chain of stores selling quality-designed Hong Kong branded products at the airport and major tourist attractions. Profits go to assisting future retail start-ups or retail education • Special Shopping dates, Longer Hours, “Hong Kong on sale” event, etc • Taxi and mass transit rebates for shoppers who buy too much; the more
you buy, the less your travel costs • Government-managed Mystery Shopper program offering instant awards for excellent customer service • With the help of local universities; establish retail studies to make Hong Kong Asia's home of merchandising, operations, and business strategies for retail • In all ways and manners, Hong Kong retailers, employees, suppliers, and support organizations must think innovatively about making shopping here as most desirable, from the customers’ point of view Strategizing and promoting Hong Kong as a mega-mall could unite the city under a single retail mission, working together for the advantages of a leadership position that has always been Hong Kong's history and legacy. And if Hong Kong moves to action quickly, it can still leverage its many advantages while competitive cities are still establishing theirs. Why would you shop anywhere else?
About the Author
Jerry Gelsomino, principal of FutureBest, a respected design critic and visionary who makes it his business to track emerging consumer behavior in search of the next big trend. While bringing to his clients extensive brand development experience as well as the ability to interpret successful techniques across product, merchandise and service categories, in all his endeavors, he is focused on creating the very best experience for shoppers, visitors, tenants and guests.
biz.hk
1 • 2011
CHINA BUSINESS
Still the Favorite Destination for
Mainland Capital By Kenny Lau
T
he US remains the number one market to which Mainland Chinese investors consistently turn to make foreign direct investment (FDI). “If you look at the history of FDIs, you will see that the US has been the top country attracting the most foreign investment, and it is still number one,” says Lili Zheng, Co-leader of Deloitte Asia Pacific International Core of Excellence (AP ICE). “China surpassed the US in this category for a short while in 2006 but quickly fell back.”
US advantages Many Chinese companies, public or private, are keen to invest in the US because the US has a large consumer market and high per-capita spending, Zheng notes. And it is the vast US market that investors find attractive. “Spending in the US is still on the top of the chart, while China is still behind,” she says. “Although China has much disposable income and consumer spending continues to rise, it only applies to a few percent of the 1.3 billion population.” In other words, it makes economic sense to further tap into the US consumer market by investing in the country, particularly with high-end products. China is a country that is trying to move up the supply chain, and investing in the US can be a great opportunity. “If Chinese companies can improve their products and focus more on the North America market, they are likely to gain higher margins than they would selling the same things in China,” Zheng says. “They would also have access to some very new technology that they wouldn’t otherwise find in China.” “A lot of Chinese companies would
biz.hk
1 • 2011
nototherwise be able to supply in China because the market has not adopted yet, and they are making great profits by selling to the US markets.” China, for instance, is currently a global manufacturer of green technology equipment such as solar panels, but it is producing in volume more than what China’s local markets demand. And a large number of the equipment is sold to markets in Europe and North America, where manufacturers benefit from tax credits and other incentives in places like California. In many cases, state and city governments provide some kind of support or incentive to attract investors and businesses. Plus, products made in the US for local consumption are not subject to import tariffs, Zheng points out, adding that manufacturing locally can lead to tremendous savings in time and logistics. Interestingly, 45 percent of FDIs into the US is manufacturing-based, she notes. Despite a service-based, domestic consumption-driven economy, the US continues to be an important manufacturing country. “But it is not something you often read about in the newspaper.” The cost of doing business in the US varies from one industry to another but can also be very cost-effective, especially in industries that are not labor intensive. “China has lower labor cost. But when everything is automated, you don’t use that much labor,” Zheng says. “As long as you are in a business that uses a lot of automation and not a lot of labor, the US can be a great place for your business.” “The ‘Made is USA’ brand is still very strong for both the domestic and overseas markets, and you get to be right there in the market by making products within the US,” she adds.
One reason Chinese companies are intensely looking to US companies is that China wants to create global brands of its own. “Right now, everybody thinks of China as a manufacturing base only. It is very much like what Japan was many years ago until big brands like Sony emerged as a global brand,” Zheng says. “China is going through a similar process and is trying to establish ties with US companies through Mergers & Acquisitions (M&A).” Outbound investment from China is at a stage where investors have established ties in the Asia Pacific region and are gradually turning to markets in the US and Europe. “This is just the beginning of the outbound investment from China to North America and Europe,” Zheng notes. “I expect it will be heating up quite a bit in the next 10 to 15
Zheng Lili
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years, more or less like what Japan did in the late 1970s and early 1980s.”
Different environment
Contrary to the perception that Chinese foreign investments have difficulty entering the US market, many of them are approved, Zheng points out. “One could easily conclude that US investment environment is actually not bad because it is supported by statistics.” “Otherwise, how could the US continue to be the number one country for FDI for all these years,” she says. It is, however, easy to overlook the regulatory environment, Zheng cautions. “The US is a very developed market and has rules so developed and specialized that no one person or even professional firm will be able to do everything,” she says. “It is very different than what you would see in China.” “The legal system and regulatory approval process are often more rigid and constantly changing,” she adds. The need to hire legal and accounting experts as well as other professional advisories is critical because the process involves a number of very specialized fields. Otherwise, you may end up having to pay the price in harder ways.” Tax issues are equally important, Zheng says. Because China has a very different tax system, mistakes are often made unknowingly. “There is a lot of compliance that
AmCham Seminars to Facilitate Investment AmCham is hosting a series of seminars on “Investing in the US.” The program, conducted in Mandarin, has six informational sessions aiming to help Chinese companies looking to invest in the US understand fundamental issues in legal, acco- unting and tax, human capital, public relations, and government relationship aspects. The program is supported by Deloitte Asia Pacific Core of Excellence (AP ICE), which was established in June 2010 to provide international tax consulting services to Asia-based companies investing abroad and overseas companies investing in Asia Pacific, and O'Melveny & Myers, a leading multinational law firm specializing in corporate finance, M&A, investment funds and commercial matters relating to China, Hong Kong and throughout Asia. “This is designed as an educational series for beginners. Topics include some basic understanding and gradually move
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companies need to follow, even when they are not making any money. And some of them end up having to pay a heavy penalty for failing to comply.” The US tax system is complex but is also somewhat easier to maneuver, when compared to China, she believes, saying tax issues in China are harder to maneuver because there are so many unsaid rules. The language barrier can be a problem for non-English speaking executives when they go overseas to make investment. “If you invest in a country, it is important to understand the language of that country, otherwise, it will hamper the investment efficiency,” Zheng warns. “But it is an issue that can easily be dealt with by hiring the right people.” And there is a pool of talented bilingual speakers whom companies could hire for their needs. More of a challenge is the post-merger
integration of companies. “The question is how do you integrate different cultural backgrounds when you buy a company and make it successful,” Zheng says. “It underlines the risk of sending a management team that people don’t understand or don’t necessarily follow.” “Buying a company is easy, but integrating it effectively is hard,” she says. “Unless you could make an effective integration, you would not be able to get the best results for the acquiring other companies.” “Just buying a patent doesn’t mean a whole lot,” she adds. “If you are buying an IP-based company, the asset is actually in the heads of these people. When these people quit, the point of acquiring becomes less apparent.” Nevertheless, investing in the US can be a smooth process “as long as you get the appropriate advice. It is not that hard.”
“The question is how do you integrate different cultural backgrounds when you buy a company and make it successful.” towards things that are more complex,” says Lili Zheng, Co-leader of Deloitte AP ICE, who has 22 years of experience in international tax planning for MNCs. She has extensive knowledge in IPO positioning, inversion structuring, establishing offshore IP holding companies, and implementing cost-sharing arrangements, and advising on entry and exit strategies for cross-border investments. The AmCham program is based on the vision to provide support to companies here in Hong Kong, where many companies have regional headquarters. “Hong Kong is a very developed financial center. From all logistics standpoint, we are right in the center of the region,” Zheng says. “It is very centrally located and remains a gateway to China.” “As Mainland companies invest in many parts of world, having to deal with the language issue and time zone can be difficult,” she adds. “At Deloitte, we have a dedicated team of 21 senior tax professionals from 15 jurisdictions right here in Hong Kong. Having all the experts in one shop really helps the efficiency.”
The program is geared towards Chinese companies that have already set up in Hong Kong and are planning to invest in other parts of the world and companies that are investing in the US. Companies that have made investment in the US for a long time could also benefit because the law keeps changing, Zheng points out. “We will also cover the lifecycle of an investment, meaning that how do you enter, how do you do M&A, how do you finance your operation, then how do you manage your operation, and eventually how do you exit and repatriate the profits,” she adds. “And we will cover more than tax. That is why we have six sessions. It will take the participants one step at a time to go through different parts of the cycle.” Most companies are still at the stage of initial investment, and it is important for them to find out the process of repatriating profits or exiting from their investments,” Zheng stresses. “You always plan your exit before you plan your entry and make sure you know how to get out before you get in.”
biz.hk
1 • 2011
香港美國商會中國商務專題研討會
赴美投資系列
隨著中國經濟迅速發展，中國企業赴美投資的態勢不斷增強，中國第一能源、尚德電力、比亞迪、鞍鋼等大型企業都先後走出去，在美國設廠 投資。為了更有效的利用美商會會員之長，幫助中國有條件的中小企業瞭解和策劃如何“走出去”進行對外投資，美商會中國事務核心小組與 會員公司德勤國際稅務中心（亞太區）以及其法律夥伴合作，舉辦首個以普通話作為主要交流語言的赴美投資系列研討會，為有意赴美投資的 公司提供條件分析和投資前的基礎知識，當中包括赴美投資考慮、法律、財務和稅務、人力資源、公共關係、政府關係以及進退策略等。
2010年12月15日
赴美投資考慮綜述
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美國併購
2011年3月中
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赴美經營
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http://www.amcham.org.hk/index.php/China-Affairs.html 香港美國商會中國事務主任 張先生 電話：2530-6928 電郵：lcheong@amcham.org.hk
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Combination of Measures to
Tame Mainland’s
Inf lation
Dr Liu Olin
By Daniel Kwan
With inflation hovering around four percent in 2010, will Mainland’s economy overheat and bubbles burst? Dr Liu Olin of China International Capital Corporation shares her views on the Chinese economy for the coming year and the country’s new five-year plan
T
aming inflation will be Beijing’s priority concern in 2011, says Dr Liu Olin, Executive Director of Research Department, China International Capital Corporation Ltd. Speaking to biz.hk after a presentation at the Chamber in December, Dr Liu says the biggest issue China faces now is to find a “balanced way” to fine-tune the economy.
A Balance Liu says by “balance” she means that the Chinese government cannot rely on a single set of policies but a “package” of tools including interest rates, currency adjustment, and administrative measures to tame inflation in order to achieve a soft-landing of the economy. “We believe that inflation (in the Mainland) is likely to rise in the first half of the year but the rise will abate in the second half,” Liu says. “For the whole year, it will average out at between four to four-and-a-half percent. Such view is also shared by some other investment companies.” Mainland’s consumer price index (CPI) of November rose by 5.1 percent year-on-year, the fastest increase in 28 months. For the whole year, the figure is projected to reach about four percent. Accelerated price hikes in recent months have given rise to greater concern over tightening measures by authorities from both consumers and analysts. Chinese leaders including President Hu Jintao have said on a number of occasions that appreciation of renminbi is only one of the many ways to address the issue of inflation. US politicians have put pressure on China to accelerate the pace of appreciation of its currency against the US dollar and threatened to impose sanctions if Beijing fails to respond. Prior to President Hu’s recent state visit to the US, US Treasury Secretary Timothy Geithner has reportedly said that the Chinese currency has in fact undergone a “substantial and meaningful shift” against the US dollar since last summer. “The exchange rate’s now appreciating in real terms, which is what
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matters, at roughly a pace of about 10 percent a year,” Geithner was quoted saying in January.
policies without weighing their impact on its exporters.
Closely linked
Key ingredients
Liu says China cannot rely on currency adjustments alone to tackle the problem. “We should say that China’s exchange rate policy, interest rate policy and administrative policies have now become a package,” she says. The economist who was Deputy Chief of the Asia Pacific Division at the International Monetary Fund prior to joining CICC in 2008 points out that the Chinese economy is already closely linked with those of trading partners and that it would not help to analyze Mainland China’s economic issues in isolation. “The issue is that not only China faces the inflation problem but our trading partners also face the same problem,” she explains. “If China manages to achieve a soft landing – not too hot and not too cold - but some of the emerging markets which are our trading partners got it half-right and ended up in a hard landing, it will also affect the Mainland economy.” Furthermore, issues like inflation, exchanges rates, and trade imbalance are inter-related and cannot be dealt with separately. In addition, Beijing cannot address the currency issue as if it is a bilateral issue between China and the US without taking into account the effect on other currencies. Liu emphasizes that reforms take time and China would proceed cautiously after weighing all options. “At the end, it is a national policy of how to protect your own economy to achieve a soft landing,” she says. “The US already did its own (soft landing) and now the ball has been kicked into our court.” “Now, almost every economy around China is doing the same thing. So, what can China do? China can only take one step at a time,” she adds. She says China needs to consider carefully the elasticity of individual industries in evaluating the impact of currency adjustment on the sector and cannot afford to bulldoze over
The 12th Five-Year Plan will lay out a few very important ingredients, Liu says. “For example, how China will develop a middleincome class. How China will have a better tax system so that the transfer of wealth can be handled better?” “How can housing development in the future be more sustainable? How China will push forward and fund its urbanization? Internationalization of renminbi, and development of the bond market – many of these important structural issues will be included,” she adds. The Five-Year Plan is expected to be unveiled in March when China holds its annual meeting of the National People’s Congress. Official reports say the new plan will address issues such as China’s transition of its economic model of growth.
Hong Kong’s roles Liu says Hong Kong’s “unique position” is well established and the city is blessed with a large pool of talents especially those in the financial industry. The issue is whether Hong Kong can make better use of its talents including expatriates as Mainland opens up its financial sector. “Hong Kong’s unique position is there because as China reforms its financial industry, it needs a window,” she says. “Hong Kong has accumulated a great number of (financial) professionals and the majority of them are from overseas.” She suggests that Hong Kong can take adva- ntage of its “wealth of knowledge” and bring more Mainland banks and financial instit- utions to the city. However, she adds that the city’s role should not be limited to the physical presence of the financial firms but to serve as a bridge for Mainland institutions to connect with the international financial market.
biz.hk
1 • 2011
BUSINESS NETWORK
Taking a Closer Look at
Our Members
In an attempt to get to know members of the Chamber and their stories, biz.hk has embarked on a journey learning what they do and why they do it. Kenny Lau speaks with three of them, all from different walks of life, to find out firsthand what their businesses in Hong Kong are like, their vision behind what they do, and what it means to be an AmCham member
Ready to change: Hélène
H
Liu
élène Liu founded The MasterMinds Group in 2003 as a result of a decade-long observation that most issues plaguing corporations in the 21st century have their source in one of the most intangible dimension of the human element: thought. “If there was one sentence that could sum up our core value, it is one coined by Rachel Carson, the visionary environmentalist, who in the early 1960s said: ‘The human race is challenged more than ever before to demonstrate our mastery, not of nature, but of ourselves’,” Liu says. “So I chose this name ‘The MasterMinds’ because the essence of self-mastery is the mastery of our mind.” A French national based in Hong Kong for the past 20 years, Liu was introduced to ancient Chinese philosophy and practices at an early age through her musician father, who is a long-time practitioner of Tai Chi and Qi Gong. “Since I was little, I knew I would come and live in China” she confesses. After graduating from the Institut d’Etudes Politiques de Paris majoring in Economics & Finance, and the Paris Institute of Oriental Languages & Civilisations majoring in Mandarin, she left on a trip to discover Asia, thinking at the time she would settle in Beijing but eventually made her home in Hong Kong, where she got married and started a family.
Changing mindset Since arriving in Hong Kong, Liu has created and managed a portfolio of businesses in different sectors (from the financial industry to fashion and cosmetics) across three continents. Throughout those years, she met a number of truly exceptional people, people she used to describe as “fish in water.” “There was this truly unique thing about them: a limpid sense of purpose and direction, a deep-seated congruence that naturally made them successful in their endeavors, and born-leaders,” she says. “I used to wonder what it was that made those people so excellent.” This question marked the beginning of a journey of intense self-study and research as well as some in-house experimentation in her businesses, then with teams and leaders in other organizations. Hélène Liu “I realized that one of the shared significant quality that, ultimately, set those people apart was an uncommon ability to observe and change the structure and the
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1 • 2011
processes of their own thought patterns,” Liu says, calling the phenomenal quality “self-mastery of a faculty to interact with their environment, or the ‘engagement factor.’” Those years of intensive exploration eventually led to the creation of The MasterMinds in 2003. The MasterMinds is thought as an international community of highly experienced catalysts and trainers who support companies and individuals to break beyond their limitations, release their creative potential, and maximize results through the development and mastery of the human element, Liu points out. “In our industry, to be effective, you want to be flexible, so from the start we have thought of ourselves as a highly adaptable community” she says, noting the company has formed strategic alliances with partners to function as a think-tank and deliver workshops globally. Although she sometimes describes herself as The MasterMinds’ lead trainer, Liu sees herself more as a catalyst whose role is to assist individuals and organizations in transition by facilitating mindset transformation and collaborating to clarify directions, expand knowledge and self-expertise, foster sustainability for long-term growth, and “maximize results through the development and mastery of human element.” “The substratum of all our work is a blend of two components: how we think and how we interact with each other,” she says. “The pillars that drive our processes are: transforming personal mental maps, expanding personal mastery to break through internal barriers, developing system thinking, bonding team creatively and growing engagement through authentic shared vision.” “What interests me is how outside reality is created from inside without us even knowing it” she adds. “We think we perceive the reality, but in fact, we filter, sift and sieve to crea- te our own version of it. Two years ago, in the midst of one of the gloomiest period of the economic crisis, I met an entrepreneur who genuinely thought this was the best time in his business life.”
Creative potential Creativity and building cultures of innovation is one of the most crucial challenge corporations of all sizes encounter nowadays, Liu remarks. “It is because the milieu most organiza
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tions operate in was virtually inexistent just 15 or even 10 years ago. “And if you look beyond the business world at the issues that our planet is now facing, it is fair to say that those are for the least complex. We cannot solve nowadays problems with Stone Age tools, or, as Einstein said: we cannot solve problems with the same mind that created them in the first place.” “So in our workshops, we set contexts for participants to co-create new cognitive frameworks that bring about an exponential increase in behavioral effectiveness, a transformation of the underlying culture and fundamentally innovative ways to function together,” Liu explains. One example of this is what Liu calls ‘cross-industry co-creative workshops’ where company leaders from several organizations within a same value chain (including a manufacturer, a wholesaler and a retailer) bring their teams together to engage in a co-creative “roller coaster” that will ultimately bring about a complete breakthrough from which congruent cooperative mechanisms and flow of information emerge that have a direct positive collective impact on the bottom line.
Beyond the possible The programs have a double dimension as intellectual learning is incorporated experientially. “This is what creates true congruence,” Liu says. One of the most dramatic signature tools of The MasterMinds are ‘The Glasswalk Experience,’ which incorporates walking bare feet over pieces of broken glass, and ‘The Fires Of Excellence,’ which is a walk over embers. “We have been taught since we were young not to go near broken glass or fire,” Liu notes. “There is absolutely no positive anchor in our mind with broken glass or playing with fire. This is what makes the experience so powerful. “To do this, you have to go against everything that you have learned, all the wired neuronal pathways,” she says. “The whole experience is only a metaphor to get participants in contact with an inner untapped resource. This is an example of going beyond what you thought was possible.” “When you are there, standing in the circle, wondering whether you are going to come out and walk, and you see your colleague, your secretary or a person from an overseas branch whom you have never seen before step out, you tend to see them under a very different light” Liu points out.
Passionate business: Lois
L
On AmCham: One of the reasons Hélène Liu decided initially to join AmCham was the networking opportunity she believed the Chamber could offer. “AmCham is very active. It is one of the largest chambers in Hong Kong,” she says. “I joined a number of committees in fields related to mine, but what I did not expect was to learn so much from committees and events that have no direct relation to what I do.” “I really appreciate AmCham’s wide member base, both in terms of nationalities and business sectors representation. You meet many different people from different backgrounds,” she adds. “Even though it is the American Chamber of Commerce, it is very international. In the end, AmCham represents what Hong Kong is all about: a very creative cross-cultural mind-broadening exchange.” “It has certainly helped my business, and that is not only in terms of revenue,” Liu says. “In our industry, people like myself need to keep expanding and continue learning. You always need to open yourself to what you don’t know and become acquainted with what you are not familiar with. “Richard Vuylsteke, the President of AmCham, once told me that being a member of AmCham is like taking a mini MBA, and this has certainly been my experience of it.”
Zaprzalka Sherr
ois Zaprzalka Sherr always designed and made her own handbags throughout her high school and college years. An interest in art, creative design and fashion in the early years drove her to obtain a degree in fine arts and led to a career in handbag and luggage design and later consulting. It was at her college graduation that her talent as designer was first discovered when a classmate’s father, who was working in the handbag business at the time, spotted a handbag Sherr was carrying, which she had designed and made herself. It was an encounter that marked the beginning of a lifetime career in the handbag and luggage industry. Sherr’s passion in design and business remains a driving force that has enabled her career to flourish. Sherr started her career in the handbag business in New York as assistant designer, where many years later, she began her luggage design consulting service on Madison Avenue, at the turn of the 21st century. “I went from being an assistant designer to designer, design director, then VP,” she says in recalling her years
30
“As a team, you share in ways you don’t usually share in a corporate setting,” she adds. “It becomes an extraordinarily powerful team-bonding exercise.” It seems to be so for Liu’s family as well as her own children, now 13 and 16, who have been involved in the Glasswalking and Firewalking workshops since they were young. When asked about her adoptive hometown, Liu says, “I really can’t find a better place to be than Hong Kong. It is a place of opportunities. The underlying mentality here is that everything is possible. And that is really what brings Hong Kong forward.” “Hong Kong is also superbly located, next to (I probably should say ‘in’) China, and genuinely opened on the world. It is easy to go anywhere from here. It is one of the only truly international cities in the world while at the same time retaining an authentic Chinese flavor.”
in the industry. “I have always loved the bag business, and it is something I have always been fascinated with.” Besides her passion in creative design, Sherr has always had a strong interest in Asia as a region. “Asia caught my interest in high school; I remember taking a Chinese history course in those days,” she says. Throughout her career, Sherr has traveled extensively in Asia for many different design and product development projects. Only six months into her very first job in New York, Sherr was on a plane to Taiwan on a company assignment. That was in the early 1980’s, a period when handbag and luggage manufacturing was most prominent in countries like Taiwan and Korea. It was 1983 when Sherr first set foot in Hong Kong, to work with the handbag factories in Kwun Tong. By the late 1980’s she started traveling for business to other places such as Thailand, Sri Lanka, Vietnam, and China as production moved from one country to another following lower manufacturing costs. In the late 1980s, Sherr began to shift her focus from
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1 • 2011
handbags to luggage design. She was able to utilize some of the fashion knowledge from the handbag industry and inject it into designs for the luggage industry. “I liken designing luggage to designing a cross between a handbag and a refrigerator,” Sherr says. “It has to hold a lot of things, function properly and withstand abuse. But people expect more…they want luggage to look great as well. They want it to be fashionable… something that reflects their personal taste, like a handbag does.” “That is what I prefer about the luggage industry,” she says, referring to the evolution of technology and material used in wheels, handles and frames of luggage design. “The handbag business is largely about fashion. The luggage industry is an interesting combination of fashion and technology, melded together to create a functional item.” In recent years, sales of luggage have been weakened due to reduced travel demand as a result of the global financial crisis in 2008. The global crisis of 2008 and 2009 has had a deeper impact on the overall travel industry than the terrorist attacks in 2001, Sherr points out. “The industry had a very rough couple of years.” Although business is now on a rising trend, the industry faces new challenges, with rising labor costs in China, less capacity in China as a result of factory closures during downtimes, and rising prices of raw material. “Even though business is improving, other factors are still affecting the bottom line. And companies are still very cost-conscious,” Sherr points out. Sherr became a full-time resident of Hong Kong in 2007 on a company assignment for United States Luggage. She was then Vice President of Design and Product Development and was subsequently promoted to General Manager for Asia shortly thereafter. At the time, she oversaw the set up of business entities in Hong Kong and China and ran day-to-day product development. She also managed supply chain operations and was instrumental in helping to land notable new clients such as Best Buy and Lenovo during her time at USL. In January 2010 Sherr incorporated her own consultancy LZS Hong Kong Ltd, in order to provide services to clients in the bag industry, wishing to enhance their design or product development capabilities, help change their business set-up or strategy in Asia, or explore the China market. “I was eager to get back to a position where I could be involved again in the creative side,” she says, explaining the vision behind her business. “I was looking to remain in Hong Kong, to be back in something I love doing and to assist businesses with my experience in the field.” In the current environment with such an emphasis on saving money, companies are particularly concerned about high cost of design and product development, Sherr points out. Outsourcing, she adds, provides an alternative that could lead to considerable cost savings. “By more closely combining design with product development at the factory level, we can finish new product very quickly and efficiently,” she says. “As we work directly with the factories on projects, we can increase a company’s product offerings without taxing their in-house design and product development staff, or we can help start-ups navigate in Asia. “Combining these functions Lois Zaprzalka Sherr with the ability to explore new markets in China firsthand,
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we feel is an especially advantageous position for us as industry consultants in Hong Kong.” “I also see this as an opportunity to hire local people and to help Hong Kong move towards the creative and intellectual property side, once I get rolling and am able to expand,” she adds. “My intention is to create some jobs here and utilize local creative talent.” Indeed, Sherr has already made contact with the recently opened Hong Kong campus of the Savannah College of Art and Design to explore ways to collaborate in nurturing a new generation of local creative artists. She is also working with HKU to offer design internships. “I feel this is where Hong Kong can shine and standout, ahead of China,” she says. The newly established consulting firm will offer services based on what Sherr calls the “Multi-faceted Asia Skill Set” that combines creative problem solving with industry business knowledge, plus decades of hands-on experience in creating successful new products. “It will be a one-stop shop for the bag business in terms of product development and manufacturing,” she says. And the “one-stop shop” is unique as there are few executives who have experience in both the supply chain and creative aspect of the business. “Most people are either on the sourcing/business side or on the design side when it comes to product manufacturing. But we can offer management who can steer both sides and bridge that gap,” Sherr points out. “The focus is to listen to clients’ needs, then tailor projects accordingly,” Sherr says of her work as a consultant. “It’s about knowing where to go, what to do, who to contact, how to speed things up or fine-tune the process in order to deliver great results in the shortest amount of time possible.” Unlike the early days when luggage and travel bags were made mostly in Taiwan and Korea, China has become a strategic base of cost-effective manufacturing. Nevertheless, Sherr chooses to remain in Hong Kong. “In reality, I could live in Shanghai for my business,” she says. “But I can fly to Shanghai from Hong Kong on very short notice, and Hong Kong is such a fun place to live. Also importantly, Hong Kong seems to be a place to better foster creativity.”
On AmCham: Upon setting up the business, one of the first things Sherr did was to join AmCham. Her experience as a member of the ChamCham ber has been helpful to her business. “It seems like I can get business information on almost anything,” she says. “When I turn to someone at the Chamber, if they can’t help me they steer me to someone else, who eventually leads me to the answer. I haven’t found better networking anywhere, really.” Sherr is now an active participant in a variety of AmCham events, where she not only has made contact with people from all industries but has also found the informational sessions to be interesting and helpful. “I come to AmCham activities quite often and I am interested in almost anything that has to do with China business and trade,” she points out. “The people at AmCham are here to network; they’re eager to share information and help each other,” she adds. “That’s what is going to make me keep coming back; it’s important for me to keep current with Asia business information.”
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Serving others: Ray
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ay Purvis has only been in Hong Kong for a short time since he resumed duty as General Secretary and CEO of YMCA Hong Kong last August. But Purvis has had a professional background in management of ministry missions and other non-profit organizations for over 25 years. Prior to his current position, he spent over seven years with YMCA in the US State of Florida and another seven years with the Salvation Army in the US, and was involved for a number of years with mission groups and an international school in Seoul, Korea. “I have devoted myself to a professional calling to serve others,” says Purvis. “I have been dedicated to providing services and support in a variety of means to people. Staying with the YMCA and coming to Hong Kong would carry my passion to help others realize their full potential, enjoy equality of access to things like education, social and family services as well as health and wellness.” “To join into a legacy of caring and community-oriented service in Hong Kong is a dream come true in many ways. I am thrilled to be part of the Hong Kong community,” he adds. “It is a dynamic city, a gateway to Asia and one of the few truly global cities in the world. Anyone who comes through Hong Kong knows it is truly a diverse, eclectic, and inclusive community.” To help one another with compassion has been the guiding philosophy in what Purvis does over the years. The belief opens up a broad array of opportunities to serve and help others have better lives. And to be able to continue the mission within the auspice of the YMCA of Hong Kong is a significant opportunity, Purvis says. “It is a natural connection that the vision and mission of the YMCA would incorporate the sense of compassion and service to others, all within the framework of building community.”
Nonprofit opportunities “Our mission has always been to serve the people of Hong Kong,” he says. “The goal is to be a transformative force for positive outcome and social improvement through helping families and individuals become global citizens with access to quality of life services such as education, economic empowerment, and social programs for families intended to improve a person’s opportunities in life.” Hong Kong is perhaps the most business-oriented city in the world, Purvis believes. And it means there are tremendous opportunities for NGOs and the for-profit community to collaborate on projects and programs for the benefits of the community. “Organizations like the YMCA Ray Purvis have been espousing corporate social responsibility on a grand scale for a long time,” he says. “That puts us as a willing partner in helping corporate
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groups achieve their CSR goals.” As YMCA of Hong Kong celebrates its 110 anniversary, the challenge is how to move forward boldly into a new future while learning, respecting and growing from the legacy of more than a century in Hong Kong, Purvis says. “We recognize the region is perhaps the fastest growing, most radically changing region on the planet and we want to be an integral part of the changes that occur as a compassionate agency focused on improving the lives of the people of Hong Kong.” An area of growth will be in the arena of family services by further defining the educational mission, and understanding the dynamics of wellness of spirit, mind and body, Purvis points out. The idea is to go beyond physical fitness and help families to be more emotionally and psychologically healthy through development of programs within all the facets that go into improving the health of a community, a family and a person.
Education focus A channel through which to achieve the goal of building a better community is education. The YMCA as part of the social fabric seeks to give young people different opportunities to grow and develop different values and perspectives. The organization works with over 57 high schools in Hong Kong and students are constantly engaged in programs aimed to help develop their leadership skills. Ultimately, education for the individual and family is the building block of a successful society, Purvis believes. “Education is the key for accessibility and the avenue to equality. The lack of access to quality education puts you in generational poverty and lowers the expectaexpecta tion for what you are going to be able to provide for your family. “It is a way in which schools, and NGOs like the YMCA can effect the most powerful change,” he adds. “It is not just about education for young people but also about continuing education opportunities for adults.” Roles Purvis has played in leading various non-profits include community development, financial development, human resources management, and relationship building with government groups at multiple levels, as well as with other NGOs and corporate sponsors.
Efficiency and effectiveness In his current role, Purvis is responsible for the overall management of all facets of the YMCA HK, including the Salisbury Hotel and YMCA programs and functions that occur at centers scattered throughout Hong Kong. “Non-profits in general are very much attuned to the rigor of financial and business management that most for-profit companies have been dealing for a number of years,” he points out. “We have the same level of financial accountability. Resources have to be managed well to allow us to approach excellence in what we do.”
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HEALTH AND WELLNESS
Companies now pay great emphasis on workplace safety. Management takes compliance seriously and well-executed health policies often make a big difference in boosting staff retention and loyalty. But in Asia, the concept of travel risk management has yet to gain wide acceptance. Daniel Kwan talks to Dr Philippe Guibert of International SOS who offers some practical advices for executives and companies on how to manage their mobile workforce
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lthough Asia has been the manufacturing base for the global supply chain for decades and business executives travel extensively in the region to seek out new markets and to keep manufacturing costs low, the importance of travel risk management is not yet widely recognized among senior managers. Dr Philippe Guibert, Regional Medical Director, Consulting Services, International SOS, Singapore, says Asia is lagging behind because employers and employees underestimate the risks involved in business travel. Compared with their counterparts in Europe and North America, there is a gap in the “level of maturity” between businesses in Asia, Europe, and North America as far as travel risk management is concerned, he says. While employers don’t seem to attach the same level of importance to workplace safety and business travel, employees are generally not fully aware of the issues involved and are less vigilant in complying with travel risk policy. Moreover, there is a general perception that Asia is safer compared with other dangerous hotspots in the world. In addition, the issue is relatively new to Asian businesses and it is often shared among different departments within the same organization that may not have the same underunder standing and viewpoints Philippe Guibert on the topic. The relatively low level of awareness in Asia can also be attributed
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to the fact that the risk profiles of countries change continuously and it represents a challenge to many businesses to keep up-to-date.
Learning curve Guibert says there is a gap between the levels of concern among organizations in Asia and those in Europe. “There can be several reasons for that and the first one would be the regulatory environment, which is far more stringent in Europe,” he says. “It’s a question of maturity because today they (companies in Asia) are probably less inclined to consider it as a real issue,” he adds. “There is probably a learning curve and I can foresee in the near future that most of these companies – at least the international exporters – will more or less align to what’s being done in Europe or North America.” Another factor is related to demographic. Majority of the business travelers are middle-age executives who often suffer from pre-existing health conditions such as high cholesterol and heart diseases. Guibert says the executives are aware of their health conditions but fail to link them to their travel assignments. “I would not say people ignore their chronic conditions or their pre-existing conditions,” he says. “They are aware of it but they don’t consider it – that being a traveler can be an additional risk.”
“Bring me back home” Executives are often unprepared when they fall ill while on business trips and the quality and standard of services they received may not measure up to their expectation. Suddenly, they find themselves exposed to the local healthcare systems and are shaken when they discover issues such as cultural differences, privacy and confidentiality of information are not addressed in the same way as they are used to in their home countries. “Things are handled differently in different countries and the way information is shared between the doctors is different … and
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putting aside the fact that the quality of healthcare is different from what people usually expect,” he says. “So when something happens, the first thing people say is ‘bring me back home’.” He says if such issues are explained carefully beforehand and the executives understand proper treatment is available locally, then companies can avoid the trouble of sending the employees home. “The very first thing that happens is ‘sending me home’,” he says. “The cultural element is actually very important and probably the most important one in many circumstances.” Interestingly, Guibert believes that women executives may be better in-tuned on the issue of travel risk management than their male counterparts. “When you ask people who are frequent fliers how they prepare for their traveling, female are probably more conscious of the exposure of risks and are better in anticipating how to react should something happens when they are abroad,” he says. “They (women) are more aware of the risks involved and their limitations and they are probably trying to get exposed less (to risk) than male … I would say female are probably better anticipating.”
Useful advices What should companies do in designing their travel risk management policies? What principles businesses can follow in advising their business travelers? Guibert who has years of experience in consulting firms on healthcare-related issues says companies should study the potential risks their executives face and formulate guidelines accordingly. “The first one is to map their risk exposure – to know where the risks are,” he says. “Mapping of the risks related to their mobile workforce is the first prerequisite.” For example, sourcing companies should think twice if they should send managers who are critical to their business into potentially unsafe countries together. In addition, companies which have branched out into different lines of business should work out policies for their different units independently. Managers who oversee a manufacturing unit face issues that are different from those their colleagues in a mining environment may encounter. Guibert says it is important to educate people so that the managers would fully understand the risks they face. The “education” should go beyond the essential health topics but also basics such as communications and security issues. Moreover, companies should make sure that executives are trained properly before they are sent to travel abroad and they have access to the latest information when they are on the road. “Training can be through peer training because sometimes the best trainers are the other senior employees or travelers themselves,” Guibert says. “They would know exactly what to do based on their experience.” According to him, companies can do a lot in terms of sharing information and best practices in preparing their executives for business travel. All these can be achieved through better planning and communications. In addition to mapping risk exposure to their workforce and education, Guibert suggests that companies can manage travel risks by better tracking their travelers. “Keeping track of where the execu-
tives are … so that should something happen, the companies can communicate to them, locate them, and implement follow-up actions.”
Don’t take things for granted Guibert points out that a common mistake for business executives is that they often feel “common sense” is enough. “Of course, common sense is a very good guide but it needs to be shaped in a right way through training,” he says. “People most of the time think they will be able to handle their medical issues when they are traveling in another country in exactly the same way as if they are at home but in reality it is really different.” “They need to be trained on how to behave and to navigate the local healthcare system and environment.” Based on his experience, Guibert cautions managers not to over rely on general information about a country because the health situations can differ from city to city and executives should bear in mind that situations in developing economies often change rapidly. “To me, the question is engaging with the healthcare providers which can be different from one city to another,” he says. “You may find in one city very good public hospitals while it is the other way round in another city.” “The issue is to be aware of the latest information. Within six months, you can be exposed to a totally different set of health risks in the same place,” he adds. “The main point is ‘don’t take things for granted’,” Guibert cautions. “Because you travel regularly to the same place and you assume you are aware of everything – that may change.”
“They are aware of it but they don’t consider it – that being a traveler can be an additional risk.”
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CHAMBER NEWS
Thank You,
Past Chairs By Kenny Lau
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The American Chamber of Commerce in Hong Kong has unveiled a plaque to commemorate its past chairmen for their service and dedication to the Chamber throughout the years. Listing all past chairs (who served on a yearly basis since 1969), the plaque is permanently on display at the AmCham office and reflects the 42-year history of the Chamber, recognizing the continued mission to foster commerce among the US, Hong Kong and Mainland China and to enhance the city’s stature as an international business center. “Reward and recognition is important in any organization,” AmCham President Richard Vuylsteke says. “AmCham chairs don’t receive any financial reward for the dedication and long hours they contribute as chairs, so this plaque is an elegant and enduring way of extending a sincere thank you to each of them.” “The American Club has on display a handsome plaque with the names of its past presidents, and for some time I had been thinking of doing the same thing for our past chairs,” he notes. “Last year I received a note from Past Chair Tom Gorman, who raised the idea, and that was the real impetus to turning thought into action.” “The plaque is handsomely designed and very well located in our office,” Vuylsteke says. “We have received only compliments about it from members and past chairs alike.” “I take special pleasure in seeing those names each day because I have had the very good fortune of knowing 22 of the 42 chairs listed, many of whom have become good friends and counselors,” he adds. More than a dozen past chairs currently reside in Hong Kong and actively contribute to the Chamber through their continuing service to AmCham’s Charitable Foundation as well as through sponsorships, attendance at events, participation in government roundtables and briefings. They also provide excellent advice and counsel to the current Chamber leadership. “The contributions of our past chairs are really immeasurable,” Vuylsteke stresses. “They have done – and continue to do – so much in support of the Chamber, its members, and its mission.”
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1969 -2010
e McAfee, ephen Hunt, Gag St t): lef om (fr airmen Thompson, AmCham past ch k Martin, Mark Michelson, Jim an Fr Paula DeLisle, eve DeKrey. Jon Zinke, and St
AmCham chai rman Rob Chipm an, left, and pres unveil a plaque de ident Richard Vu addition to anot dicated to current Leadership Forum membe ylsteke her plaque com rs memorating pa st chairmen of th , in e Chamber.
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Myths and Realities
K O Chia, President
Hong Kong Venture Capital & Private Equity Association (HKVCA) The private equity industry is perhaps one of most misunderstood industries. This talk attempts to give an insider glimpse of the industry, including: • What is private equity, its myths and realities, and the risk-return profile? • Is it just a financial investment instrument in the alternative asset class? • How could it play a strategic role and be one of the pillars for accelerated economic development in building the next generation of industries in a country? • What role does it play within the business eco-system to ensure success? • Beyond money, what does private equity bring to the table? • What role does it plays in helping entrepreneurs fulfill their dreams? K O Chia is the President of the HKVCA. He has 30-plus years of experience as an international corporate executive, and was part of an entrepreneurial team that built a US$1B market capitalization company from scratch before a career change into the US -Asia private equity-venture capital investment in managing US$1.8B in funds.
Feb Hong Kong’s MPF:
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Where Do We Stand and What’s in Store?
As Hong Kong’s Mandatory Provident Fund (MPF) celebrates its 10th anniversary, many are contemplating the merits of the retirement framework for Hong Kong. Some argue that while the MPF has raised general awareness of the importance of saving for retirement among Hong Kong residents, the low mandatory contribution amounts and the lack of choice for individuals do not provide adequate income for a functional retirement in Hong Kong. This panel discussion will provide new and thought-provoking perspectives on a sustainable retirement framework for Hong Kong, as well as its implications for employers, providers and the regulator.
Apr AmCham Ball 2011
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Moonlight Masquerade
AmCham’s 2011 Ball is the perfect way to host a memorable evening for your clients and to show appreciation for their support of your business during the mystique of the Moonlight Masquerade. The AmCham Ball promises to be better than ever in 2011 with fine dining and great entertainment. Get ready to celebrate with AmCham on Saturday, April 16, 2011 at the glamorous Four Seasons Hotel. Corporate sponsorships for AmCham’s ‘must-attend’ annual ball are available with Exclusive VIP tables and VIP tables depending on your wish to enjoy a cozy evening with close friends, entertain business clients/colleagues or thank associates and partners for their support over the past year. In addition, you can choose to promote your company with a Pre-Dinner Cocktail or Lounge Hour. There is also a range of other Grand Draw Prizes, Raffle Prizes and Advertising opportunities so that each sponsor can be assured of broad coverage and publicity through AmCham’s integrated marketing and public relations campaign. For more information and guidance on your choice of sponsorship, please contact Ms. Jin-ah Lee, Senior Manager, Membership & Chamber Services. You can reach Ms. Lee directly at (852) 2530-6924 or at jlee@amcham.org.hk. We are looking forward to seeing you on April 16, 2011!
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Venue: AmCham Office Conference Room 1904 Bank of America Tower, 12 Harcourt Road, Central Time: 12:00-2:00pm (light lunch included) Fee(s): Member Fee: HK$250 Non Member Fee: HK$350 MEDIA WELCOME
Fee(s): Member Fee: HK$450 Non Member Fee: HK$560 Corporate Table Fee (10-12pax): HK$5,600 MEDIA WELCOME
Venue: Four Seasons Hotel 8 Finance Street, Central Time: 6:45pm - 1:00am
For information, see website: www.amcham.org.hk Tel: (852) 2530 6900 Fax: (852) 2537 8824 Email: cli@amcham.org.hk
2011 February
Ka Shi Lau, Chief Executive of Bank Consortium Trust Co, and Chairman of the Hong Kong Retirement Schemes Association Gary Tok, Principal, Mercer, and Greater China Market Leader, Mercer’s Outsourcing business Alan Oates, Principal, Mercer and Hong Kong Business Leader, Mercer’s Risk, Retirement and Finance business Moderated by: Peter Liu, Managing Director of AsiaNet and Chair of AmCham’s Human Resources Committee
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2011 January
Jan The Private Equity Industry:
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Aigburth · Tavistock Branksome Crest · Branksome Grande
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Tregunter Path Since the early days of Hong Kong, an address in the Mid-Levels has been symbolic of prestige, sophistication and success. This exclusive residential neighbourhood became known as “The Dress Circle” for the similarities between the preferred dress circle section in a majestic theatre and the privileged location enjoyed at these Kerry Properties addresses.
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