biz.hk July 2012

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Re G sid UI en DE tia T lR O en tal

Journal of The American Chamber of Commerce in Hong Kong

www.amcham.org.hk

July 2012

COVER SPONSOR

Member’s Price

HK$200

ble a l i a v A

NOW

Your Best Guidebook for Settling in Hong Kong Living in Hong Kong is a compendium-style all-you-need-to-know guide for newcomers to

school, getting settled when arrived and enjoying life in Hong Kong. This consumeroriented book is designed as a sort of “hotline” with useful phone numbers and contacts to other sources of help.

Living in Hong Kong bookshops in Hong Kong. AmCham members often buy the book for their relatives and Americans), the book is one of the best-selling publications for AmCham.

Contact: AmCham Publication Department Advertising Manager: Regina Leung Direct Line: 2530 6942 Email: rleung@amcham.org.hk

July 2012 Vol 44 No 07

Contents 08

14

COVER STORY

WASHINGTON DOORKNOCK

BEST-IN-CLASS

Is a third runway ready for take-off? Kevin Poole, Airport Authority Hong Kong’s Deputy Director of Projects, discusses the issue, for which an assessment of environmental impact has begun, and other on-going development including a midfield terminal at the Hong Kong International Airport

AmCham President Richard Vuylsteke, a participant in more than 20 Washington Doorknock trips as a delegate of AmCham Hong Kong, AmCham Taipei, and APCAC, explains the purpose of knocking on the doors of government

Ryan Mai of Otis Elevator talks about innovative technology and progress of breakthroughs in the development of a “greener” generation of lifts bound to be more energy-efficient and reliable

Publisher

Richard R Vuylsteke

Editor-in-Chief Daniel Kwan

Managing Editor Kenny Lau

Advertising Sales Manager

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24 CORPORATE SOCIAL RESPONSIBILITY

The story behind Feeding Hong Kong, a local food bank dedicated to collecting surplus food from businesses and donors and redistributing them to people in need amid tones of food waste going into landfills every day

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 Ease Max Ltd 2A Sum Lung Industrial Building, 11 Sun Yip St, Chai Wan, Hong Kong (Green Production Overseas Group) Designed by Overa Creative Co Unit 1613 16/F, Workingbond Commercial Centre, 162 Prince Edward Road West, Kowloon ©The American Chamber of Commerce in Hong Kong, 2012 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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AMCHAM NEWS AND VIEWS 04 Chairman’s Memo James Sun recaps AmCham’s delegation trip in June to Washington DC, and thanks delegates for their tremendous effort in raising concerns of AmCham members in their respective industry with US government officials during the four-day trip

07 New Business Contacts 41 executives joined AmCham’s business network last month

44 Mark Your Calendar

21 Model for Business An official meeting with US Secretary of Transportation Ray LaHood and Federal Maritime Commission Chairman Richard Lidinsky on issues concerning the logistic sector

22 Effective Channel A discussion with US Consumer Product Safety Commission Chairman Inez Tenenbaum and Commissioner Nancy Nord on latest testing requirements, standard harmonization and regulatory changes in the apparel, footwear and textile industry

23 APCAC Washington Doorknock

COVER STORY

08 Third Runway, Ready for Take-Off? Kevin Poole, Airport Authority Hong Kong’s Deputy Director of Projects, discusses on-going development including a midfield terminal and possibly an additional runway at the Hong Kong International Airport for which an assessment of environmental impact has begun

WASHINGTON DOORKNOCK

14 Knocking on the Doors of Government AmCham President Richard Vuylsteke, having participated in more than 20 Washington Doorknock trips as a delegate of AmCham Hong Kong, AmCham Taipei, and APCAC, explains the purpose of meeting with government officials

20 Taxing Issues A subgroup of AmCham’s delegation meets with representatives from IRS and Treasury Department as well as staffers of the House Ways and Means Committee, Senate Finance Committee, and Joint Committee on Taxation

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Nearly 40 delegates from a dozen AmChams across the Asia Pacific region (as participating members of the Asia Pacific Council of American Chambers) take part in conversations with government leaders from both the legislative and executive branches

BEST-IN-CLASS 24 Otis’ Way to Green Ryan Mai of Otis Elevator talks about innovative technology and progress of breakthroughs in the development of a “greener” generation of lifts bound to be more energy-efficient and reliable

CHARITABLE FOUNDATION 30 Foundation Awards Students for Excellence and Vision AmCham’s charitable arm continues to place great emphasis on providing philanthropic support to organizations and individual students as a way of giving back to the Hong Kong community

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ENTREPRENEURS/SME 34 Going Global – from Jacksonville, Florida A 20-staff billiard manufacturing company sets up a satellite office in Hong Kong to spearhead an expansion plan in Asia where China is currently the second largest sales market for its products

COMMUNICATIONS & MARKETING 36 The Digitally Powered, Incredible Human With the growth and proliferation of digital technology, the average consumers now have new found powers to make us smarter and safer everywhere we go

CORPORATE SOCIAL RESPONSIBILITY 38 A Banker who feeds the Hungry The story behind Feeding Hong Kong, a local food bank dedicated to collecting surplus food from businesses and donors and redistributing them to people in need

41 Photographing Poverty Malaysian photographer Stefen Chow documents stories of poverty across the region through his lens and discusses how the issue relates to distribution of resources

AMERICAN TOPICS 42 AmCham Celebrates “Fourth of July” A chamber-wide special lunch to celebrate the US Independence Day at the Hard Rock Café right here in Hong Kong’s Lan Kwai Fong featuring authentic American food and treats

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COVER SPONSOR

Chairman’s Memo

Board of Governors Chairman James Sun Vice Chairman Richard Weisman Treasurer Peter Levesque Executive Committee Janet De Silva, Frank Lavin, Anita Leung Philip Leung, Belinda Lui, Alan Turley Governors Evan Auyang, Sara Yang Bosco, Brian Brenner, Tom Burns, Nicholas de Boursac, Walter Dias, Rob Glucksman, Toby Marion, Thomas Nelson, Andrea Richey, John Sigalos, Colin Tam, Elizabeth L Thomson, Frank Wong, Shengman Zhang Ex-Officio Governor President

Robert Chipman Richard R Vuylsteke

Chamber Committees AmCham Ball Apparel & Footwear Business Briefing China Business Communications & Marketing Corporate Responsibility

Kay Kutt Andre Leroy Donald Meyer Frank Wong Susan Reingold Benjamin Grubbs Robert Grieves

Energy Dominic Yin Entrepreneurs/SME Donald Austin Environment Bradley Punu Financial Services Catherine Simmons Brock Wilson Food & Beverage Veronica Sze Hospitality & Tourism Damien Lee Human Capital Janet De Silva Peter Liu Information & Communications Technology Rex Engelking Insurance & Healthcare Owen Belman Hanif Kanji Intellectual Property Gabriela Kennedy Amy Lee Law Clara Ingen-Housz Pharmaceutical Stephen Leung Real Estate Alan Seigrist Senior Financial Forum Alvin Miyasato Senior HR Forum Jacqueline Algar Sports & Entertainment Raymond Roessel Taxation Evan Blanco Trade & Investment Patrick Wu Transportation & Logistics Brian Miller Women of Influence Jennifer Van Dale Young Professionals Sherry Lin

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Dear Fellow Members: As I put my thoughts down for this issue’s Memo, I am stunned by the view outside the window. It’s an amazing clear blue sky – sketching all the way from Lei Yue Mun on the east to Lantau Island on the west. I am sure you will share my wish: We just need more days like this for Hong Kong. Better air quality is one of the priorities I have set for the Chamber this year. Our Environmental Steering Group and Environment Committee have made submissions to the Government and organized meetings with officials this year to express our concern. This – I can assure you – will continue to be our focus and we will keep pressing it especially with the new administration on board now.

Our 2012 Washington Doorknock team made a report to the Board early this month. During the four days of the visit, our Doorknock team had had over 30 meetings with key US government

officials, Congressional staffers and major think-tanks. We had excellent access to senior US officials, including one Secretary, four Under Secretaries and four Assistant Secretaries. In particular, our Vice-chairman Richard Weisman met with senior officials from the Treasury Department and raised the issue of FATCA and other tax topics that are undermining the competitiveness of Americans abroad.

For details of our visit, I would urge you to read a full report of the visit in this issue of biz.hk. I will only highlight three of my observations here. First, it was clear that we had great access in Washington and all our discussions were substantial and productive. Many of our hosts were eager to hear our views on practical business issues in Hong Kong and China. At the same time, we were able to relay concerns to them on issues such as tax reform, business travel facilitation, and Chinese businesses investing abroad.

Second, our Doorknock team was backed by three subgroups this year and they were all led by our board members who are also on the frontline of the business. This greatly enriched our discussions and made our meetings especially productive. Thank you here to Weisman for his efforts on tax, to Peter Levesque for helping in shipping and logistics field, to Alan Turley on supplychains and security and transport, and to Tom Burns for technology and communications areas. Guys, a job well done!

Third, the four days in Washington confirmed one key fact to me. Good advocacy work is built on solid content, good strategy, and credibility. Through these meetings, we have established ourselves as a trustworthy partner – in good times and bad. What we’ve gained

biz.hk 7• 2012

in this regard through this visit may not be quantifiable but it is real and material.

In a nutshell, this was a wise investment decision.

Two more issues that I would like to bring to your attention. Beginning from this issue, the magazine will be wrapped in bio-degradable plastic bags instead of the regular ones. The new bag is certified to be more environmentally friendly as it takes a much shorter time to decompose. This is not yet a perfect solution in reducing waste and we will continue to look for better alternatives that are financially viable and technically feasible.

Last but not the least is a seminar jointly organized by the China Business and Financial Services Committee on August 8. We were able to invite officials from the Ministry of Commerce of the Central Government and the Trade and Industry Department of the HKSAR Government to give us an update on the CEPA (Closer Economic Partnership Arrangement). There are great interests (and questions) about the trade agreement since CEPA was first introduced in 2004. This is an event that you should not miss.

Summer is here with us now. If you are the sporty type, it’s time to get physical and your body tanned. Enjoy it.

James Sun Chairman

biz.hk 7 • 2012

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New

Business Contacts The following people are new AmCham members: Alabama China Partnership Raymond Cheng CEO

w w w. a m c h a m . o r g . h k

AllianceBernstein Hong Kong Limited Nelson Chow Associate Director, Sales & Marketing

Alvarez & Marsal Asia Limited James Dubow Managing Director & Co-Head of Asia

American Women's Association of Hong Kong, Ltd Eileen Glynn President

APL Co Pte Ltd

Coach International Limited

Mercer (Hong Kong) Ltd

Jasmine Karimi Director & Associate General Counsel Rene Frei Senior Vice President

William Dwyer Associate Director, Business Development

Crowne Plaza Hong Kong Kowloon East

Paola Crisi Sales and Marketing Manager

Chi Chung Ng Director of Sales & Marketing

Perception Digital

CST Tax Advisors (HK) Limited Patrick Trainor Managing Director

Global Leadership Network Karen Otazo Executive Director

Harbour School, The

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.

Milly Wong Director, Key Account Management, North Asia

ISBN 978-962-7422-03-7

Whitney Skala, Jr Consultant - Commercial Real Estate

Hong Kong Philharmonic Society Ltd

Avery Dennison Hong Kong B V

Hong Kong Sky Deck Limited

LC 98-645651

Asia Pacific Properties Ltd

Andre Leroy Global Supplier Compliance Manager

Baker Botts LLP Russell Wilkinson Partner

Belden Asia (Hong Kong) Limited Wolfgang Lirk Vice President, Human Resources, APAC Ashish Chand Vice President, Marketing & Business Development, APAC Roel Vestjens President, APAC

Children's Place (HK) Ltd, The Grace Yuen Vice President of Asian Operations

CLS Communication HK Ltd Raymond Mak Regional Financial Controller and General Manager Hong Kong

OM Log (Asia) Limited

Elizabeth Blurton Director

Michael MacLeod Chief Executive

Paula Lau Director, Sales & Distribution Marketing Josephine Lam Managing Director

Hongkong and Shanghai Banking Corporation Ltd, The

Jack Lau CEO

Performance Thinking Pty Ltd Phillip Campbell Managing Director

RS Components Limited Matt Haynes-Holyoake Head of Human Resources, Asia Pacific

Standard Chartered Bank Helen Hui Managing Director, Head of Transaction Banking, Hong Kong

Stanton Chase International Robin Adams Search Director & Regional Head of Diversity and Inclusion

SWIFT Jeff Wang Director, Government Affairs, Asia Pacific

Tanner De Witt

Olivier Maitre Head HR Strategic Projects Asia Pacific

Eddie Look Partner

Johnson & Johnson (HK) Ltd

Target Sourcing Services Hong Kong Ltd

Christopher Costigan Regional Communications Director

Elena de Ois Managing Director, Hong Kong Office

JPMorgan Chase Bank

Tree Islands Singapore Pte Ltd

Richard Mo Executive Director

Hirotsugu Kijima Managing Director

Kimberly-Clark

Williams Lea

David Tiang Chief Counsel, Asia Pacific Region Randy Jusuf Strategy Director, Asia Pacifc Juliana Chu Strategy Manager, Asia Pacific Region

Marcos Antunes COO, Asia Pacific

Withers Erik Wallace Registered Foreign Lawyer (New York)

View our other members at:

http://www.amcham.org.hk/index.php/AmChamMembers.html

biz.hk 7 • 2012

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Artist drawing of the interior of Midfield Concourse

COVER STORY

THIRD RUNWAY, READY FOR TAKE OFF?

“As always, we place great value on the feedback we collect as we explore all possible ways to avoid, minimize, mitigate and compensate for potential environmental impacts. We strive to make HKIA the greenest airport in the world and to contribute to the long-term sustainable development of Hong Kong,” Stanley Hui Hon-chung, Chief Executive Officer of Airport Authority Hong Kong (AAHK), May 2012

Midfield Concourse

The critical Environmental Impact Assessment for the proposed third runway at Chek Lap Kok has just begun. Daniel Kwan interviews Kevin Poole, Deputy Director of Projects of the Airport Authority Hong Kong, on the EIA exercise and other expansion plans

W

hen Sam Wong, Principal Environmental Protection Officer, wrote to the Airport Authority in early June, a quiet but critical step that will help shape Hong Kong’s future as international aviation hub has taken place.

The letter, which is publicly available on the Environmental Protection Department’s Website, concerns the application of a study brief for Environmental Impact Assessment by the Airport Authority – a statutory “must-have” in the planning of a third runway at Chek Lap Kok. The reply, which covers a wide

8

spectrum of issues ranging from the population of Chinese White Dolphin in nearby waters to potential health impact on local residents, is also posted on the Website for public views.

EIA An “open and transparent” exercise marks the beginning of a two-year long EIA process during which the Airport Authority will “access the likely impacts of a threerunway system on the environment and find ways to avoid mitigate and control such impacts.”

Kevin Poole, Deputy Director of Projects of Airport Authority, said in

an interview with biz.hk last month that AAHK is committed to “go through the [EIA] process” and “share the data and the methods of analysis” with different stakeholders and the public about the proposed third runway. Under a three-runway system, HKIA will be able to accommodate 620,000 flight movements a year, meeting demand projections up to and possibly beyond 2030. (See summary panel) In addition to reaching out to the local community, AAHK will set up technical briefing groups inviting representatives from environmental groups, academics and experts in the field to look at specific issues such as

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marine ecology, traffic, and noise, according to Poole.

“In the simplest term, we want to share information and to have some feedbacks on those studies as the EIA proceeds,” Poole said.

The proposed third runway is part of a long-term vision of the AAHK to strengthen Hong Kong’s status as an international hub. Other projects which have been commissioned (some already in service) include the North Satellite Concourse, SkyPier and West Apron. Another key new addition will be the Midfield Concourse which will come on stream by the end of 2015. (See box on page 11)

biz.hk 7 • 2012

Summary panel Project timeline Project planning

•EIA studies •Associated design details •Funding options

Project approval

• Environmental permit • Foreshore and seabed gazettal • Financial arrangement

Project implementation

Key facts of three-runway system: About 2 years

About 1 year

About • Land formation 8 years • Detailed designs • Construction of related facilities

• Land formation of about 650 hectares to the north of the existing airport island • Construction of a third runway, related taxiway systems and navigation aids, and airfield facilities • Upon completion, capable of accommodating 620,000 flight movements per year • Projected cost: $130 billion • Preparation and construction period: 11 years

9

New arrivals

Midfield Concourse Located to the west of Terminal 1 (T1) and between the two existing runways, the midfield is the last piece of land in Chek Lap Kok available for large-scale development. Designed to handle 10 million passengers annually, the HK$10.2 billion midfield project is tasked to handle rising aviation traffic by 2020 independent of the third runway option.

According to information published by HKIA, Midfield development includes: • The building of a five-level, 105,000-square-metre passenger concourse; • Over 35 green features to target possibly the BEAM Platinum Standard certification; • 20 parking stands, of which 19 are air-bridge served; and • Extension of the automated people mover (APM) connecting midfield with T1 and other passenger facilities.

Poole stressed that the design of the new concourse puts extra emphasis on energy efficiency and sustainability. This includes the use of eco-friendly materials and design features to maximize natural lighting, reduce heat gain, and cut down on cooling load. “We designed the building from the outset to be an environmentally responsible building … the building is truly as green as we can make it,” he said.

The Deputy Director said travelers will be struck by its “spaciousness.” The arched ceiling – built asymmetrically in order to maximize the effect of sunlight – will give people a sense of openness, ease and comfort.

“It will be quite a beautiful ceiling and it will give you comfort, space and without feeling closed-in at all,” he said.

Hub status Although the midfield development will help HKIA meet the air traffic needs in the medium term, additional

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North Satellite Concourse

Skypier

West apron

• Soft-launched on December 17, 2009 • Equipped with 10 bridge-served stands • Handled more than 5 million passengers annually at the initial stage of operations • Total gross floor area of 20,000 square meters • 10 retail and two food and beverage outlets

• Soft-opened in December 2009 • Four berths and 20 check-in counters • Up to 8 million passengers annually • Can handle an average of 85 daily trips between Chek Lap Kok and eight ports in Pearl River Delta • Nine airlines now offer upstream check-in services in PRD

• Scheduled for completion by the end of 2014 • Located at the western end of the airport island; 430,000 square meters in size • 16 parking stands including three that can cater for new types of aircraft with longer fuselages such as the B747-8F • A cross-runway vehicular tunnel linking it with the cargo area • $2.2 billion in cost

Layout plan of the proposed third runway. Image: courtesy of AAHK

More studies capacity such as a new runway is deemed necessary if Hong Kong is to meet the soaring demands in the longer term. As Mainland’s air traffic is expected to reach nearly 2.1 billion trips and 44 million tonnes by 2030, according to IATA Consulting, it is apparent that Hong Kong – the gateway’s to China – must invest in its infrastructure or risk losing its status as the region’s premium aviation hub.

“We are very lucky with the efficiency and the destinations that we see at the moment in Hong Kong Airport because it is currently a very strong hub and it is a hub that many other airports dearly love to be,” Poole said.

“To retain that, we need to expand that capacity because the demand will continue to grow and if we can’t meet that demand, people will have to find other routes and those other routes might mean a diminishing of our hub status,” he added.

While most green groups do not oppose the building of a new runway, they have voiced strong concern over its impact on the environment, air quality, noise and marine habitat. In April, the Legislative Council Environmental Affairs Panel passed a non-binding motion urging the AAHK to conduct more environmental

studies on the proposed third runway including Strategic Environment Assessment (SEA), Social Return on Investment (SROI) and Carbon Audit.

Kevin Poole, Deputy Director of Projects, HK Airport Authority

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Poole said the authority is looking into those studies and will decide how to proceed. The SEA, according to Poole, is more of a planning tool for the

government and the AAHK is committed to reduce carbon intensity – carbon emissions measured against economic output – by 25 percent by 2015.

“We are working with the Airports Council International as to what other

airports are doing regarding carbon audit and we are already ahead of the ACI’s plans in Asia for what should be audited,” Poole said.

“We are looking at how we could further audit some aspects about the

The Midfield Concourse will have plenty of retail space for travelers

aircraft movements – for example, the taxiing that aircraft actually do at airport – and whether we should add those to our accounts for audit,” he added.

On SROI, Poole indicated that AAHK needed to find out what the study entails before making a decision.

He pointed out that Heathrow in London conducted two SROIs and its proposal for building a third runway was rejected after a new SROI claimed substantial social and economic costs.

Pointing out that Hong Kong should consider its options carefully and Heathrow might have made a political decision regarding its runway option, Poole said Heathrow has now reached its capacity for its two-runway system.

“Heathrow now handles significantly less destinations than they did several years ago,” Poole said. “We’ve seen migration of flights that were going to Heathrow and some of those flights are being spread around

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Source: AAHK

airports such as Paris to the determent of the UK economy.”

Poole explained further: “Our current position is that we haven’t committed to doing a SROI yet because we aren’t quite sure what’s being required.”

“The more looking into it, the

more we see that it is very inexact about what it actually is, and it will be irresponsible for us to commit to doing something when we are not even sure what it is.”

“We hope as we get more information, we will be able to share that as to what our intentions are,” he added.

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biz.hk Month • Year biz.hk 7 • 2012

Page 13

WASHINGTON DOORKNOCK

AmCham President Richard Vuylsteke has participated in more than 20 Washington Doorknock trips with AmCham Hong Kong, AmCham Taipei, and APCAC (the Asia Pacific Council of American Chambers). Recently, biz.hk asked him to explain the attractions and purposes of these trips

By Richard R. Vuylsteke

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biz.hk 7 • 2012

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ON THE RECORD The AmCham delegation had packed 35 meetings in less than five days during this Doorknock trip. The following are some of the highlights:

Day 1

• Deborah A McCarthy, Principal Deputy Assistant Secretary of State for Economic and Business Affairs, • Kurt Campbell, Assistant Secretary of State for East Asia and Pacific Affairs • Doug Smith, Assistant Secretary for Private Sector, Department of Homeland Security • Donald Tong, Hong Kong Commissioner for Economic and Trade Affairs

Day 2

• Francisco J Sanchez, Under Secretary of Commerce for International Trade • Charles Ford, Acting Director General of the US Foreign Commercial Service • Richard A Lindinsky, Chairman of Federal Maritime Commission • Ray LaHood, Secretary of Transportation

Day 3

• Matt Murray, Special Assistant (East Asia Pacific) of Office of Undersecretary for Economic Growth, Energy, and the Environment • Darci Vetter, Deputy Under Secretary for Farm and Foreign Agriculture Service • Jesse Eggert, Associate International Tax Counsel, US Treasury Department • Hans Klemm, US Ambassador for APEC Affairs

Day 4

• Nancy Nord, Commissioner of Consumer Product Safety Commission • Inez Tenenbaum, Chairman of Consumer Product Safety Commission

In addition, the delegation also met with members of a number of influential think tanks in Washington including Center for Strategic & International Studies, Brookings Institute, Carnegie Endowment, Atlantic Council, and RAND Corporation. Specialists from the US Congressional Research Service also met with the group to update on some of the latest social and economic developments in Hong Kong and China.

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W

ashington is all about politics. You can feel it in the air, sense its intensity in pub and restaurant conversations, and see it reflected in the eager eyes of Congressional staffers. The city’s design and architecture help create the mood. Washington is a modern city rooted in ancient Greece, which was not only the birthplace of democracy but also of the architectural genius that created Doric, Ionic, and Corinthian columns to support edifices that gracefully declaim their importance to democratic politics.

Visiting Federal buildings is an exhilarating experience.

The Place Here is the heart of United States political activity, and here as well is a self-importance and confidence that Hong Kong visitors can relate to – “This place matters!” It’s Hong Kong with shorter work hours but no less interest in fine food, stimulating conversation, and “closing the deal.”

Just like business, it’s a place to watch your back because there are competitors breathing down your neck. Yet there’s a basic civility about it, despite the fog of political rhetoric that plagues TV and print media, and a genuine openness to visitors that Doorknock delegations never fail to notice.

Washington’s broad avenues and streets are designed to be people friendly – to be “democratic”. No building can be taller than the Capitol Building, which makes the city’s visual lines low and comfortable, a place for tourists. But, unlike Hong Kong, it’s a place for cultural and political tourism. Besides the magnetic draw of the magnificent Smithsonian museums, virtually every US government department sponsors lecture programs and cultural events.

Moreover, ordinary people have access to virtually all government buildings, albeit after thorough security checks.

And if one is lucky, Washington’s weather can also boost the spirits. This year’s AmCham HK Doorknock delegation was indeed fortunate, arriving for

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the last week of spring before summer heat and humidity smothered the city.

The weather helped invigorate this year’s delegation (see box), which had a HK-style agenda of 35 meetings in less than five days.

The Mission So why did the AmCham HK leadership take the time, spend the money, and fight the jet lag to spend a week in the US Capital jammed with appointments? Doorknock trips are an extension of the chamber’s daily mission to its members – to provide high quality information, networking, and advocacy. This is exactly what happens in Washington. Effectiveness comes from targeting the right offices and seeing the right people. In both, AmCham HK was fortunate to have excellent access and candid discussions.

Beyond the usual list of appointments with Executive Branch departments made by other APCAC chambers, AmCham also meets various China Hands, Think Tank scholars, and Asia Hands from the Congressional Research Service. Many of these interlocutors testify on the Hill and are in and out of appointive government positions. It’s an especially valuable network for continuing information exchanges on US policy developments and is a conduit for sending advocacy messages from Hong Kong – and having them read by the right people.

Meeting with Doug Smith (fourth from right), Assistant Secretary for Private Sector, Department of Homeland Security, and John Leyden, Policy Advisor, Cargo, Maritime & Trade Security, Office of Policy Development of DHS (second from right).

This year’s Doorknock team conveyed timely information “from the trenches” in Asia. Here’s an overview – State Department and Homeland Security • Urged a speedy implementation of the APEC business travel card (ABTC) by Homeland Security, asking removal of the bureaucratic hurdles currently slowing the process.

• Urged speeding up visa approvals for Chinese (and other Asian) investors wanting to invest in the USA by further speeding up visa interviewing processes and by streamlining border entry procedures.

• Encouraged cessation of a “one size fits all” approach to all inbound travelers to make potential investors, students, and tourists from Asia feel more welcome to the US. • Pointed out the huge opportunities on the horizon for growth in tourism from China, India, and Southeast Asia because of growing middle classes. Also highlighted the opportunities for US job creation as a result of tourism growth.

The Department of Treasury

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2012 Washington Doorknock delegation: James Sun, Charles Schwab Richard Weisman, Baker & McKenzie Peter Levesque, Modern Terminals Alan Turley, FedEx Tom Burns, Intel Semiconductor Thomas Nelson, VF Asia Richard Vuylsteke, AmCham

AmCham Staff Cheung Ming-lai Daniel Kwan

Kurt Campbell (centre), Assistant Secretary of State for East Asia and Pacific Affairs, takes time out to meet with the delegation despite his busy schedule.

• Praised the continuing work on negotiating the Trans-Pacific Partnership (TPP) trade agreement, especially the attention being paid to market access issues including “behind the border barriers” to the sale of US goods and services.

State Department, Commerce, Think Tanks, and on the Hill • Highlighted the business opportunities from Hong Kong’s inclusion in China’s 12th Five-Year Plan and the city’s expanded role as a gateway into and out of China.

• Explained the key role Hong Kong plays for business as both a regional and global hub, an importance that is growing because of diversification of manufacturing out of China and other business opportunities in Asia’s growing economies.

• Emphasized that China’s urging of businesses to “go global” afforded excellent opportunities for investment in the US and creation of US jobs.

• Highlighted Hong Kong’s robust

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•

•

•

economy and continued strength as a US trading partner.

Encouraged suspending or lifting Executive and Congressional sanctions on Myanmar.

Explained the growing interest in Hong Kong about business opportunities in Myanmar in the manufacturing, infrastructure, education and other service sectors.

Urged swift confirmation by the Senate of Derek Mitchell as US Ambassador to Burma. (Also encouraged the US to use “Myanmar,” not “Burma,” as the latter is seen as offensive in the country for various political and cultural reasons.)

Reported on movement of US and Chinese manufacturing operations into South and Southeast Asia and the implications for supply chain developments.

Reported on the cooperation among AmCham, Hong Kong Trade Development Council, and SelectUSA (Department of Com-

merce) in supporting the National Export Initiative.

Treasury and on the Hill • Urged further Congressional exploration of a US shift to territorial taxation – for businesses and

The Off the Record Bar at the Hay-Adams Hotel is one of the places in Washington where fine food, stimulating conversation and making deals are on offer.

biz.hk 7 • 2012

individuals – and explained the loss of US expatriate competitiveness for overseas jobs because of double taxation.

• Expressed relief that both parties planned to undertake substantial tax reform measures after the Presidential election to make the US more competitive vis-à-vis other OECD economies.

• Alerted Washington on the FATCA mess, including the huge compliance costs and negative impact on US investment.

Department of Transportation and Federal Maritime Commission • Focused on supply chain issues for air and maritime trade issues with Hong Kong and China, including concerns about air pollution from shipping in the PRD. • Raised concerns about the physical and personnel capabilities of airport border entry locations to effectively and efficiently handle the coming surge of Asian tourists and business travelers.

CPSC and the Hill • Discussed with the Consumer Product Safety Commission the mishmash surrounding product safety standards being set not only

biz.hk 7 • 2012

by Congress but also by US States, highly complicating compliance issues.

• Reported on AmCham HK’s support and involvement in GAFTI (the Global Apparel, Footwear, and Textile Initiative) which is striving to harmonize international standards in the industry and is working to coordinate with regulatory regimes worldwide in order to improve industry standards, cut costs, improve efficiencies, and upgrade the working experience of employees.

USDA • Reported to the US Department of Agriculture on the power of Hong Kong as a “demonstration market” for US consumer goods and packaged foods to 40 million tourists each year, 30-plus million from China.

• Urged more aggressive expansion of the US wine market to Hong Kong, and related trade development issues.

Do officials really care about Doorknock delegation visits? One midcareer Foreign Service Officer

expressed what seems to be a common assessment: “I feel it’s extremely useful to meet with American business people on Doorknock visits, because they can provide an unfiltered version of US business interests in the country in question. People in Washington want to hear about business climate and regulatory regimes straight from US executives.”

Successes?

Well, yes. AmCham had a strong Doorknock team of articulate senior executives. This always makes a difference in opening doors and keeping Hong Kong on Washington’s map.

Given the hundreds of lobbyists and advocacy groups who descend on Washington each week, it was heartening to experience such excellent access to senior officials. Based upon followup questions to the delegation, many delegation talking points stuck responsive chords. These included Hong Kong’s evolving dual role as a gateway into and out of China, FATCA and taxation of Americans overseas, the APEC business travel card, Myanmar sanctions, and the opportunities for US job creation from increased investment and tourism to the US. Information, networking, and advocacy: none of these is a one-shot affair. Doorknock trips don’t end with a week in the US. In coming months, AmCham expects to host “return Doorknock visits” from its Washington interlocutors in order to continue mutual ongoing interests in serving both the needs of the US business community in Asia and the strength of the US economy.

Opened in August 2011, the Martin Luther King Jr Memorial is a new tourist landmark.

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TAXING ISSUES

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ver the years, tax issues have always been a central focus for AmCham Doorknock meetings. US tax issues are of even greater concern this year with the looming shadow of FATCA, a massive array of compliance and reporting issues affecting American expatriates abroad, and an election year debate about taxation.

For this year’s Doorknock, a subgroup of the delegation focused in particular on tax issues. Leading this subgroup was Vice-chairman Richard Weisman who also heads up Baker & McKenzie’s Global Tax Practice Group.

Other members participating in meetings with a tax focus included Chairman James Sun and Treasurer Peter Levesque. They met with representatives of the Treasury Department and Internal Revenue Service, and with senior international tax staffers at the House Ways and Means Committee, Senate Finance Committee, and Joint Committee on Taxation.

“First, we raised the issue of taxation of US citizens working overseas, as well as related compliance obligations.

Second, we discussed taxation of US companies operating in Hong Kong and Asia. Third, we discussed a series of concerns related to FATCA.” Enacted in 2010, FATCA (Foreign Account Tax Compliance Act) aims to curb tax evasion by authorizing the IRS to obtain information on US persons’ income earned through foreign financial institutions. However, FFIs face immense challenges in order to comply with FATCA and serious questions have been raised over the related costs and complexities. (A full report on FATCA can be found in the June issue of biz.hk – Editor’s note) “The people at Treasury and the IRS with whom we discussed FATCA in details were very engaged and interested in having a genuine discussion with us,”

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says Weisman. “The tax specialists on the Hill were also genuinely interested in our input on FATCA.” “Our sense is that, beyond a fairly small group of specialists, most people in Washington have little if any sense of the concerns and compliance costs FATCA is creating internationally,” he adds.

Among other things, the team was able to bring to the officials’ attention serious concerns about the application of FATCA under proposed regulations to Hong Kong Mandatory Provident Funds

Weisman says.

On the issue of taxation of Americans who live overseas, Weisman admits it remains an uphill battle. “Taxation of US citizens overseas and related compliance issues do not have Washington’s attention. Because US citizens resident overseas are supposed to vote in their ‘home state’, our voices are spread too thin, and the Congress tends not to pay much attention to our issues,” he says.

“On this issue, my take is that we need to make greater efforts to organize

Meeting the Doorknockers: Matt Murray (third from left), Special Assistant, East Asia Pacific, US Department of State, Office of the Under Secretary for Economic Growth, Energy, and the Environment.

and other retirement funds mandated by foreign governments.

“In our FATCA discussions, we found the Treasury to be fully engaged and very interested in our concerns about the application of FATCA to MPF and government mandated retirement funds in general,” Weisman explains. “I felt our discussions had a positive impact. My sense – and hope – is that there will be greater flexibility in the final regulations, but they will retain protections against potential abuse.”

Although the officials were receptive, Weisman cautions that it would be too early to assume concessions with respect to any particular issue.

“My number one take away regarding FATCA is that we may be able to obtain some liberalization – and possibly a further delay in effective date – but the financial services industry in Hong Kong and elsewhere must prepare for FATCA with a sense of urgency,”

ourselves internationally. Unless and until we have a truly coordinated, well organized lobby to convey our concerns, we will continue to be politically weak and subject to worse and worse taxation and compliance obligations.”

Summing up the Doorknock visit this year, Weisman concludes: “Faceto-face meetings with key decision makers are absolutely invaluable. I feel that a number of our meetings in Washington this year had a real positive impact.” -Daniel Kwan On the point of voting, AmCham President Richard Vuylsteke only half-jokingly suggests that Americans overseas might consider all registering to vote in Wyoming or North Dakota.

“Then collectively we’d have enough votes to elect two Senators and a Congressman to office with a mandate to make our concerns heard,” he says.

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MODEL FOR BUSINESS

S

ecretary of Transportation Ray H LaHood and Chairman of the Federal Maritime Commission Richard A Lidinsky are no strangers to AmCham. They both spoke at the Chamber when they visited Hong Kong. It was only natural that AmCham paid them a return visit in Washington.

Peter Levesque of Modern Terminals led both the visits and the discussions.

“We discussed the Federal Maritime Commission’s support for reducing the bureaucracy and complexity involved with non-vessel operating common carrier contracts and tariff filing requirements in the transpacific trade lane,” says Levesque.

“The FMC has been proactive and supportive of making the current system easier for NVOCCs to do business, while maintaining safeguards to ensure that consumers of NVOCC services are protected against questionable business practices.”

According to Levesque, the exchanges were useful and productive. In addition, it was clear that both the FMC and DOT were up-to-date about industry trends and development.

“We have learned that the US Government is keenly aware of the issues around international transportation and logistics in the areas of supply chain security, infrastructure development, and supply chain sustainability,” he says.

“Moreover, they are also fully aware of the draft enhancements of harbors along the US East Coast that will be required as a result of the widening of the Panama Canal and the business that will generate,” he reports.

On Hong Kong, Levesque says he was impressed that the US officials have shown strong interest and knowledge about the city’s role as an international shipping centre.

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Richard A Lindinsky (fourth from left), Chairman of the Federal Maritime Commission, greets Peter Leversque of AmCham.

Secretary of Transportation, Ray LaHood (centre), with AmCham Chairman James Sun (fifth from left) and AmCham President Richard Vuylsteke (fourth from right).

“The government officials we met were all very supportive of Hong Kong.

They have all spent time here during their terms in office and have seen for themselves the advantages that Hong Kong has to offer the international business community with regard to rule of law, free port status, and as facilitator to and from the China market,” he observes.

“My takeaway is that US officials look to Hong Kong as the model for doing business in Asia-Pacific and they are keenly interested in what Americans living in Hong Kong have to say in the areas of transportation, logistics, and trade with the Mainland,” he says.

The Doorknock visit, Levesque

points out, is more than just industryspecific lobbying. Rather, it represents an opportunity to speak out on larger issues concerning Americans abroad.

“As an American living and working overseas, the ability to advocate on issues directly with officials from the US Government is invaluable to the mission of the American Chamber in Hong Kong,” Levesque says.

“Our goal is to educate government officials on what is happening in AsiaPacific, and to highlight the fact that Americans living overseas are a national asset. The Doorknock meetings help advance our issues and concerns in a constructive and mean-Daniel Kwan ingful way.”

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APCAC WASHINGTON

DOORKNOCK

Nearly 40 AmCham leaders from a dozen chambers in APCAC (the Asia Pacific Council of American Chambers) were in Washington the week following AmCham HK’s Doorknock.

By Daniel Kwan At CPSC, AmCham Doorknock team led by Thomas Nelson (fourth from right) with CPSC Chairman Inez Tenenbaum (third from right).

EFFECTIVE CHANNEL

By Cheung Ming-lai

F

or the past few years, product safety, testing and compliance have been major issues of concern to any major players in the apparel and textile industry. The AmCham Apparel, Footwear and Textile Committee has organized numerous talks and seminars to keep its members and industry practitioners up-to-date on the latest testing requirements, standard harmonization and regulatory changes. Nevertheless, keeping up with changes remains a challenge.

This year, a subgroup of the Doorknock team – led by Thomas Nelson, Vice-Chair of the A&F Committee and Board Liaison – spent a full day in Washington to present some of the industry initiatives and observations and discuss practical business issues with regulatory officials and the leadership of the Consumer Product Safety Commission.

The group was warmly received by CPSC Chairman Inez Tenenbaum and Commissioner Nancy Nord. They both

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expressed appreciation for the constructive working relationship with the Chamber which provides an effective channel for idea and information exchange between the CPSC and industry representatives.

Standardization of testing methods and GAFTI (Global Apparel, Footwear and Textile Initiative) were two of the top issues raised in the discussions.

GAFTI is an industry pioneering body formed in 2010 to be the “global voice” on issues such as setting standards, regulations and best practices.

Recently, GAFTI is pushing for standardization of testing methods among different labs to minimize confusion and reduce unnecessary testing costs.

(For a full report on GAFTI, see March 2012 issue of biz.hk – Editor’s note) The significance of GAFTI is that it is in the genuine interest of the industry parties including brands, retailers, manufacturers, sourcing agents, trim suppliers, testing labs, and compliance firms to take the lead in driving changes. Tenenbaum and Nord acknowledged the resources invested

and the quality scientific research produced by GAFTI and looked forward to continuous collaboration with the group.

The sub-group also met with Gib Mullan, Republic Counsel and Michelle Ash, Democrat Counsel for the House Subcommittee on Commerce, Manufacturing and Trade. Both Mullan and Ash agreed that establishing a global best practice in testing is a sensible approach for long term development of the industry which in turn will improve product safety, and save costs and headaches of compliance confusion.

Nelson who helped found GATFI commented on its relationship with AmCham: “We would not be where we are at with GAFTI without the help of AmCham, and the connections they provide to the Governments, especially in the United States, but also around the world.”

The meetings in Washington also covered other hot topics such as the growing trend of diversification of manufacturing operations from China to other Southeast Asian countries and standard harmonization. The A&F Committee is now collecting feedback from members on a Bangladesh delegation tentatively scheduled for November this year. Myanmar is in the pipeline for 2013. So stay tuned.

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his year’s APCAC Doorknock was held 18-20 June.

Richard Vuylsteke represented AmCham HK at more than 30 meetings.

The APCAC delegates spent their first day in Washington at the US Chamber of Commerce headquarters, a block away from the White House, to hear briefings from Administration officials, US Chamber executives, and other Washington-insiders.

Primary sessions concerned the TPP (Trans-Pacific Partnership) negotiations, implementation of the US-Korean FTA, US competitiveness and the need for comprehensive tax reform by the US Congress, a region-by-region survey by senior negotiators from the office of the US Trade Representative (USTR), and an especially spirited exchange with officials from State and the Department of Homeland Security concerning reasons for the delayed implementation of the APEC Business Travel Card.

“We heard mixed messages on the APEC card,” Vuylsteke says. “A senior official said ‘for sure by the end of the year,’ but

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middle-level officials were much less optimistic for reasons of ‘bureaucratic complications’ – a statement that prompted some strong expressions of disappointment.”

“Overshadowing the prospects of near-term progress on anything substantial in Washington was the stark fact of 2012 being a Presidential Election year,” Vuylsteke says. “In short, we were told repeatedly not to expect Congress to accomplish much, especially on trade and tax issues, until after the election.

Even then, many people cautioned us not to be overly optimistic about the lame-duck session of Congress early next year.”

Kurt Campbell, Assistant Secretary of State for East Asia & Pacific Affairs, as always brought great energy and focus to his annual briefing. Near the top of his list was “getting Burma right.” He urged the chamber leaders to convey clearly US business interests in removing sanctions on Burma so they could invest more freely there.

“This exhortation fell on receptive ears,” Vuylsteke says.

“Many chambers had already expressed similar views, and a few already had business delegation trips planned or completed to Myanmar. We certainly followed his advice during our meetings in the next two days.”

The APCAC delegates spent Tuesday and Wednesday on the Hill, with Vuylsteke leading one of the four teams meeting at Senate and House offices. He says that they had substantive discussions with staffers at the offices of Senators Rob Portman (R-OH), Chuck Grassley (R-IA), Max Baucus (D-MT), Mitch McConnell (R-KY), Jim DeMint (R-SC), Dick Durbin (D-IL), Chris Coons (D-DE), and Jeanne Shaheen (D-NH).

“Like AmCham HK’s talking points, APCAC focused on concerns with maintaining the global competitiveness of US business.” The hot topics were tax reform issues, including support for a form of territorial taxation; APEC Business Travel Card implementation; support for taking a tough stance on enforcing trade agreements; support for the TPP negotiations, including giving Trade Promotion Authority to the President; and lifting of sanctions on Myanmar and speedy confirmation of a US Ambassador (Derek Mitchell was confirmed by the Senate the following week). The team also met with Congressman Adrian Smith (R-NE) and at the office of Congressmen Peter Roskam (R-IL).

Vuylsteke was also one of six APCAC participants speaking to staffers at a Capitol luncheon and again in a late-afternoon roundtable discussion with six Members of Congress from the Asian Pacific Caucus. “We were grilled on a number of trade and tax issues, and had the opportunity to give our sense of business development opportunities in the region. Expanded Asian tourism to the US as a creator of jobs also came up,” he says.

“Because so many economies are represented in APCAC Doorknock visits, there is a tendency to stay at a high level of generalization on advocacy issues,” Vuylsteke says. “That said, the large number of Hill appointments possible with this large group – more than 50 in total – was effective in conveying timely information and clarifying misconceptions about US business interests and activities in Asia. It was well worth the time and effort.”

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BEST-IN-CLASS

Otis’ Way to Green Otis Elevator’s Ryan Mai talks to Helen Luk about the company’s green philosophy, innovative technology and its business outlook for Hong Kong and Macau Ryan Mai

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“Imagine if you are the owner of a building, you have 90 percent occupancy and your tenants are paying good rental rates. Then a new building is built next door with new comfort features and technologies… How would you compete to prevent the tenants from migrating to the newer building?”

Mai asks.

“One of the things that the existing building owners can do is to upgrade the old lift system with new technology… and that will make the traffic flow much more efficient and reliable, and they can likely command a higher rental rate. Additionally, they can save on operating costs from the energy savings,” he says.

Carbon footprint

O

tis Elevator, the world’s largest maker of lifts and escalators, is big on sustainability and safety – and its efforts have paid off.

One of Otis’ star products, the Gen2 elevator, just clinched the Merit Award for sustainable building products in June. The bi-annual competition, organized by the Hong Kong Green Building Council and the Professional Green Building Council, aims to promote and recognize sustainability in the design, construction and maintenance of buildings in Hong Kong.

“This Green Building Award is welcomed validation of Otis’ strategy and commitment toward the Way to Green. Together with the Hong Kong Green Building Council and the development community, we are embarking on a journey toward sustainable development,” says Mai, Otis’ Area Director of Hong Kong, Macau and Taiwan.

Innovative technology Since the company founder, Elisha Graves Otis, invented the world’s first safety brake system in 1853, Otis has achieved a series of technological breakthroughs throughout the decades, including the innovative Gen2 technology.

The secret of this technology lies in its use of flat, polyurethane-coated steel belts, which take up less space and are much more durable than the

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steel hoist ropes used in traditional lifts. The belts do not require any lubricants, thus eliminating the need for cleaning up and disposing of hazardous waste. The lift system is operated by gearless machines that are 70 percent smaller in size compared to traditional ones, which means there is no need for a bulky machinery storage room at the top of the lift shaft, further cutting down on construction costs.

Another key green feature, called recycling regenerative drive, which captures energy generated by the system’s operation and returns it to the building’s energy grid, helps reduce energy consumption by up to 75 percent compared to conventional elevators.

Mai says renovation and upgrades are a big part of Otis’ business and he expects to see at least a double digit year-on-year growth in this business segment because many buildings in Hong Kong will be in need of upgrades as they reach the 15- to 20-year-old mark. The Electrical and Mechanical Services Department estimated at the beginning of the year that Hong Kong has about 25,000 units of old lifts.

“We receive a lot of enquiries from customers with buildings in this age range,” he says, adding that Gen2 is the company’s best-selling product both in Hong Kong and worldwide because of its energy-saving and waste elimination features as well as its safety and reliability record.

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Mai says Hong Kong has made good progress in pushing for more sustainable practices in building designs and constructions, although there is room for improvement.

“There is strong political will for the region to progress with green initiatives. I think that for us, it is particularly encouraging,” he says. “Ultimately, we would like to see every developer put great emphasis on investing in green technologies to reduce the carbon footprint on their developments. Not all developers are involved in that vision at the moment, but I think it’s going in the right direction.”

Mai says Otis tries to reduce its carbon footprint in every aspect of its business, from cutting down the amount of energy used in its manufacturing facilities and streamlining its installation process, to reducing wastage by not using scaffolding and lubricants for its lift systems.

“Our goal is to partner with every customer who is looking to develop a property, and show them the Way to Green,” he says.

With about 60,000 employees worldwide, Otis has manufacturing facilities in locations spanning China, Japan, India, Brazil, the US, Germany and Spain. The company recorded revenues of US$12.4 billion last year and services more than 1.8 million elevators and escalators around the world.

(From left) Sam Cheng, chairman of the Green Building Awards 2012 organizing committee; Simon Lo, director, new equipment and the Contract Logistics Center, Otis Hong Kong; Kelvin Kwong, senior manager, marketing, Otis Hong Kong; Ryan Mai, area director, Otis Hong Kong, Macau and Taiwan; and Agnes Ng, chairwoman of Building Environmental Assessment Method (BEAM) Society Ltd.

In addition to Gen2, Otis has another innovative product called the super double-deck lift system, which saves 50 percent of shaft space by putting two cars that run together in one lift hoist way.

“The benefit to that is we can move twice as many people in the same amount of time and it saves the building the space needed for an extra lift,” Mai explains.

The technology also adopts a Compass Destination Management system that automatically groups people who are travelling to similar floors together, thereby cutting down on waiting time and improving efficiency.

Iconic skyscrapers such as the Two International Finance Centre in Hong Kong, the Shanghai World Financial Center, the Petronas Tower in Malaysia and the world’s tallest building, the Burj Khalifa in Dubai, the United Arab Emirates, all use Otis’ double-deck lift system. The Burj Khalifa’s double-deck lifts are the world’s fastest, running at 10 meters per second, according to Mai. In China, Otis built the world’s first green elevator factory in Tianjin, which achieves energy savings of at least 25 percent compared to

“When we do our job well, our customers are successful in maintaining happy tenants; and when our customers are successful, we are successful.”

biz.hk 7 • 2012

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traditional manufacturing facilities. The site was awarded the gold-level Leadership in Energy and Environmental Design (LEED) certification by the US Green Building Council in 2009.

Smart business Mai says the Hong Kong, Macau and China markets have survived the impact of the economic downturn brought on by the global financial crisis well, thanks to robust government investments on public infrastructure projects as well as private developments.

Mai says Otis achieved strong growth in Hong Kong last year, and is maintaining good growth momentum this year. Several major public projects are underway, including escalator modernization for the MTR, lift upgrades for the Hong Kong Jockey Club and installing elevators and escalators at the new Kai Tak Cruise Terminal, which is expected to be a landmark project for Hong Kong.

Macau is booming as well with planned new developments by most leading casinos, including Melco International Development Limited, Galaxy Entertainment Group and the territory’s first light rail system, etc., he says.

In other Asian countries, Otis has also won elevator contracts for the Kohinoor Square in Mumbai, India and the Lotte Super Tower in Seoul, South Korea.

While business growth in the region is buzzing, Mai says the company is keenly aware of how the growth demand may outpace the supply of qualified lift and escalator technicians and professionals.

“Whenever an area has robust growth with pent up demand, we often see cost pressures and market forces will drive higher prices. And we are seeing some of that now,” he says.

One of the ways that the company is addressing the skilled labor shortage issue is by enhancing its training program. “We are looking to hire about 50 to 60 apprentices and engineering graduates to be part of our training and development program… we are training the next generation of lift and escalator experts through our technical and engineering training programs. Not only is this smart business, it is the right thing to do.,” he says.

Partners for life Mai says Otis places great emphasis on Safety, Ethics, Quality Assurance, Integrity with Internal Controls as well as Employee Engagement. Globally, the company has 10 research centers, including in China, Japan and the US, performing rigor

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ous tests on its wide range of lift models before they are introduced to the market.

“Our’s is an industry with real safety hazards and risks. We have to make sure all of our employees are fully trained to work safely in everything that we do.

Our mission is to ensure that every one of our employees and the employees of our business partners go home safely to their families after each work day,” he says.

In Asia, in addition to boosting its staff’s technical competency and customer service focus through its Service Excellence program, Otis also conducts training to strengthen their business ethics. The company invites the anti-graft watchdog, the Independent Commission Against Corruption, to speak with its employees in Hong Kong every year, and training is even more rigorous for its staff in Macau.

Mai describes the relationship between Otis and its customers as a life-long commitment.

“I always think about our commitment this way: When a customer buys an Otis elevator, we become partners with them for life. The lift system is a primary artery of a building’s operation. It is our responsibility to help our customers provide safe and reliable lift service.”

“When we do our job well, our customers are successful in maintaining happy tenants; and when our customers are successful, we are successful.”

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CHARITABLE FOUNDATION

From left to right: Doug Henck, AmCham Chairman of 1997, Mark Michelson, AmCham Chairman of 1996, Josephine Chan who represents Tim Chan of Hong Kong University, Jon Zinke, AmCham Chairman of 2005, Venisa Chu of Hong Kong University of Science and Technology, Michelle Ko of St Paul Co-Educational College, Winky Ng of Chinese University of Hong Kong, and Rob Chipman, AmCham Chairman of 2011.

Foundation Awards Students for Excellence and Vision The AmCham Charitable Foundation aims to raise funds for and contribute to educational, training and other charitable projects. Since its establishment in 1985, the Foundation has placed great emphasis on providing financial support to charities and organizations which may otherwise be overlooked. In recent years, the Foundation has doubled its philanthropic efforts through providing educational scholarships to Hong Kong students. As such, two types of Scholarship Awards have been created – the US Studies Scholarship Award and the Charitable Foundation Scholar Award

By Nicole Tennant

T

his year, the Charitable Foundation received three nominations from the Institute of International Education (IEE) for the US Studies Scholarship Award, while the Hong Kong University, Hong Kong University of Science and Technology and Chinese University of Hong Kong have each nominated one of their MBA students for the Charita-

30

ble Foundation Scholar Award. This year’s nominees and awardees for both of the Awards are truly outstanding.

“The award recipients were some of the most outstanding students – not only in terms of academics but in so many other ways, for example, community service,” notes Rob Chipman, Chairman of the Charitable Foundation this year and AmCham Chairman in 2011.

On June 20th, an awards ceremony was held at the Renaissance Harbour View Hotel to honor this year’s scholars. The Foundation presented Michelle Ko (St Paul’s Co-Educational College) with the US Studies Scholarship Award, and Tim Chan (HKU), Venisa Chu (HKUST) and Winky Ng (CUHK) received the Charitable Foundation Scholar Award.

“The purpose of the Scholarship is

biz.hk 7 • 2012

to enable AmCham to reach out to future leaders of the Hong Kong community,” says Chipman. “It seeks to identify outstanding Hong Kong students, and to make it possible for them to further their education.”

One of AmCham’s goals is to support education in Hong Kong.

“Over the years, we have sponsored dozens of student scholars highlighting the importance of education to the development of society generally and to fostering multinational relationships and understanding generally,” says Doug Henck, AmCham chairman of 1997.

“The leadership of AmCham has always supported these efforts unequivocally, with no change in attitude or enthusiasm pre- and post1997,” Henck adds. This is made possible through the continued support and generosity of donors by means of personal donations and fund raising at events such as the annual AmCham Ball, which raised more than HK$282,000 this year.

US Studies Scholar Among the nominees for the US Studies Scholarship Award, Michelle Ko, the youngest student of the four awardees this year, piqued the interest of the AmCham Board of Trustees.

“Michelle’s impressive background and aspiration really stood out,” says Mark Michelson, AmCham chairman of 1996, “she comes across as a ‘globalist’ with a keen interest in international relations, politics and culture.”

Ko’s outstanding academic achievement, active participation in school activities and involvement with community service are what led her to win the US Studies Scholarship Award.

The Award, introduced in 2002, is a one-time scholarship award of HK$16,000 presented to a Hong Kong secondary school graduate who has secured admission into an undergraduate degree program at a US college or university. “When I found out that the scholarship was under AmCham and administered by the IEE, I immediately realized that the

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Scholarship was much more than a grant of money,” Ko tells biz.hk, adding: “it is the recognition of academic pursuit and commitment in giving back to our society.”

Ko, who will be studying Political Science at the University of California at Berkeley this fall, believes that the recognition and support from the Chamber will provide her with opportunities she might not have had otherwise, adding: “it will guide me in the right direction towards creating more accomplishments and contribution to our society.”

MBA high achievers Among the three winners of the Charitable Foundation Scholar Award, Chu is the “senior” one in her second year of the MBA program. The HK$10,000 Award recognizes outstanding full time Hong Kong students studying in MBA programs who have achieved exceptional academic results during the first year of their studies and excellence in other areas such as community services and leadership. Chu, who completed her undergraduate degree studying Electrical Engineering at the University of Toronto in Canada, says one of her biggest accomplishments during her time at HKUST was founding the Pharmaceutical and Healthcare Club.

“This was not an industry that received much focus in previous years but something of interest to a number of our classmates,” she explains, “I also initiated the participation of an international healthcare case competition in Milan, as well as getting some of us sponsored to attend the Healthcare in Asia Conference hosted by the Economist.”

Chu’s active involvement in school life and her numerous leadership responsibilities in the MBA program have equipped her with the qualities needed to reach her career goals – working with tangible products and creating market growth strategies.

Ng, who received a Bachelor of Applied Science degree in Mechanical Engineering at the University of British Columbia, says: “I was delighted to be recognized among the top MBA candidates and professionals. The hard work does get noticed and I am very happy about that.”

Ng chairs this year’s CUHK MBA Corporate Social Responsibility (CSR) conference and regularly participates in the prison ministry to care for the needs of international prisoners who struggle in society. On his future plans, he says: “I plan to enter into the venture capital industry to help fund projects for entrepreneurs as well as helping their companies grow. My background and skills built through the MBA program will help me with this.”

Chan has recently returned to Hong Kong after spending the past four months studying at the London Business School as part of a compulsory partnership with HKU. Prior to the MBA program, Chan received a Bachelor Degree of Science in Computing Mathematics from CUHK. During his time at HKU, he was elected class representative – bridging the gap in communication between students and faculty members.

“This award recognized my contributions to my fellow classmates and the community,” Chan explains, “I am now motivated to continue to do so in the future.” As for his career plan, he hopes to try the financial field and will look for opportunities in Greater China area.

“This award recognized my contributions to my fellow classmates and the community, I am now motivated to continue to do so in the future”

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The Prize Book Awards Introduced in 1986 and now in its 25th year, the Prize Book Award is awarded to students in their penultimate year of high school. It aims to recognize students with outstanding academic achievement, contribution to community service, leadership and other related fields. This year, 19 students received the award which includes a certificate of achievement, a check for HK$1,000 and the trilogy of The Americans, by Daniel J. Boorstin.

Originally only involving 11 universities and schools, the Prize Book Awards has over the years received popular recognition and is now supported by about 20 institutions in Hong Kong. Jon Zinke, AmCham chairman of 2005, notes that “the students (awardees) are all well rounded and deserve to be recognized for their excellence in their studies and leadership roles.”

2012 Prize Book Award winners with AmCham Broad of Trustees representatives. Front row: Gage McAfee, AmCham Chairman of 1985, Mark Michelson, AmCham Chairman of 1996, Rob Chipman, AmCham Chairman of 2011, Jon Zinke, AmCham Chairman of 2005, and AmCham President Richard Vuylsteke.

Aside from the Scholarships and Prize Book Awards, the Charitable Foundation also focuses on a number of outreach projects in Hong Kong such as the Ira Dan Kaye Community Award.

Gage McAfee, AmCham chairman of 1985, says the Foundation works along

The American Chamber of Commerce

Charitable Foundation

side the American Women’s Association in identifying charities which may need support in their worthy causes.

Some of the charities selected by the Charitable Foundation this year will be featured in an upcoming issue of biz.hk.

I would like to donate: HK$ Name: Title: Company:

AmCham Charitable Foundation is the philanthropic division of AmCham with a vision to contribute to the community leveraging from its influence within the international business community in Hong Kong.

Founded in 1985, the Foundation is governed by a Board of Trustees composed of Past Chairmen of AmCham resident in Hong Kong.

The Foundation emphasizes the importance of education, and presents scholarships to outstanding university and secondary students every year. The Foundation partners with the American Women’s Association (AWA), and provides financial assistance to smaller and lesser known charities helping children, elderly, and disadvantaged people with health and special needs. The Foundation also presents the Ira Dan Kaye Community Service Award recognizing committed volunteers who have served the community generously, and giving a donation to the charity of the person’s choice.

Giving back to the community is a vital value of AmCham and it is made possible through donations from AmCham members, and fundraising events such as the AmCham Ball, and the upcoming Charity Dinner.

Get involved!

Donate now

Tel: E-mail: Donations can be made by crossed check payable to "The American Chamber of Commerce Charitable Foundation" OR

By credit card (Please choose the appropriate credit card type below.)

AMERICAN EXPRESS

MASTERCARD

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Credit Card Number: Expiry Date:

Amount: HK$

Cardholder's Name (in full): Please send a receipt to email / address:

*The American Chamber of Commerce Charitable Foundation is an approved charity and tax exemptions for donations may be made under section 88 of the Hong Kong Inland Revenue Ordinance.

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Photo: iStockphoto / Thinkstock

ENTREPRENEURS/SME

GOING GLOBAL –

from Jacksonville, Florida

I

f you are not a billiard fan, you may not be familiar with the Predator brand. But in the land of pool, Predator is just as big as Porsche and Mercedes-Benz are in the luxury car market. Although it is small (it only has about 20 staff) and is based in Jacksonville, Florida, the billiard manufacturer is global. Unlike most SMEs in the US that focus almost exclusively on domestic sales, China is Predator’s second largest market after the US. Predator set up an office in Hong Kong early this year as part of its global strategy. CEO Karim Belhaj now spends much of his time in Asia and Hong Kong to spearhead the expansion plan. He talks to biz.hk about the billiard business, his China strategy, why Hong Kong was chosen for the new office, and the cancerous problem of counterfeiting in China

biz.hk: Can you first tell us about the Predator Group?

Belhaj: Our team is about 15-20 people spread between Jacksonville, Hong Kong and China. We have 13 to 14 in Jacksonville. In Hong Kong, it’s me and our international sales manager. We also have a support team in China.

Predator is a premium brand. More than 60 percent of the top pool players in the world today use our products. If you look at the top Chinese players, a lot of them use our products although they may be sponsored by other companies.

As of a year ago, we manufactured billiard cues only – shafts and the full cues. We also make cases and other accessories. In the high-end price range, we are number one. We have another brand called Poison. Predator’s price ranges from US$350 to $2,000. Poison is around $200 to $400 which is designed for the younger and next generation. biz.hk: Tell us about your China or global strategy.

Belhaj: China is a very important market to us and we have very good support from

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the Chinese players and consumers. It has been our fastest growing market in the last few years. It will become a very big part of our business although the problem of counterfeiting is serious.

We moved our production to China many years ago. In the past, we made a lot of products with a factory in Canada and we did some manufacturing in Jacksonville. The challenge we had at the time was that we really wanted to raise the quality of our products and have better performing products.

So we tried to partner with many North American companies but they were not up for the challenge. When I came to China, I was introduced to some factories and their owners and managers were so open and aggressive.

They gave us their production floor. So we were able to have our own production within [their] production.

That was a challenging decision for us because we are a premium brand.

But the benefit was that we were able to make products that was much better than what we used to make. People who see it and try them can see the

difference. biz.hk: Are you saying Chinese workers are better?

Belhaj: No, I would never say that. What I mean is that the overall offering that we get from the manufacturing partners in China is better than the offering that we get from potential American partners.

Labor cost is just one factor in the decision [of moving to China] and we are more concerned about the total cost.

Because you have to spend a lot more management time there if you are manufacturing in China. You have to take that into consideration. biz.hk: Aren’t you worried that your Chinese partners may copy your products?

Belhaj: There is a risk but this is a risk that you can have in other countries too.

The companies that we worked with are very well known and they have been in the business for a few decades now. They are owned by very respectable people. This is one of the reasons why we have selected them.

biz.hk 7 • 2012

Karim Belhaj

Please also keep in mind that part of the assembly [of our products] is made in China. We still have a lot of sourcing for critical items from North America. The fact that we control some of the critical sourcing makes a difference.

It is really a whole supply chain strategy that you will have to develop. We keep certain know-how and technology in North America. It’s challenging for a small business like ours and we have to be a little bit more creative in the sense that we don’t have the big budgets that a FORTUNE 500 company has. biz.hk: How serious is the problem of counterfeiting in China?

Belhaj: Counterfeiting is extremely bad in China. Outside of cues, we also make pool cue cases. China sold a hundred times more fake cases than real genuine Predator cases that are sold worldwide. It’s ridiculous. I walk into pool rooms in China and I can find pool cue cases with our logo but they are not designed or manufactured by us. It is very discouraging.

It’s a lot of business lost but what

biz.hk 7 • 2012

should I do? Focus on what I am losing or focus on what I am gaining and how I can take advantage of it?

These are two different attitudes. I can spend $100,000 in legal fees to sue everybody but I will have no chance [of success].

To make a fake cue case is easy. You may do that anywhere. Those shops in China can appear and disappear just like this. The cops show up and the counterfeiters [can close] but pop up somewhere else.

Cue manufacturing is a little more complex but there are still a lot of fake cues in China. There are two or three manufacturers [of counterfeit products] in China and most people know about. But power in China is decentralized and we get a flavor of that over the few times that we’ve decided to go after those manufacturers. Information travels very fast and there is a network of intelligence that counterfeiters in China have and they know their business very well. biz.hk: So there has not been much success in the battle against counterfeiting then?

Belhaj: We have only achieved limited success and there is still a lot of work to be done. It’s an ongoing battle and it will be a battle for a while. In fact, the counterfeiters have become our biggest competitors in the China market because they are taking advantage of people’s lack of knowledge about the products and brands and what they stand for. People may get a cue with our logo on it and it doesn’t play as great as it should, and that doesn’t do us justice. It’s the damage to our reputation and brand that is most serious. The challenge for us is how to educate the market efficiently.

It can be discouraging but I’ll try to look at it from a positive standpoint – it’s free marketing for the brand – as long as you have a strong educational or awareness program for people around it.

biz.hk: Why did you choose Hong Kong over other cities to set up your office?

Belhaj: We did think about going directly to China and to cities like Shanghai. Coming to Hong Kong is not just about China. Another product that we are developing and that’s very important for us in moving forward is the Carom cue which is for the French style billiard. Korea is the biggest market worldwide for Caram cues. We also have a strong presence in Southeast Asia and there are some opportunities for us there and also in India where we don’t have a strong presence yet.

So it’s regional. Although the leader is China now but there is also a lot of potential outside China.

Currently, more than half our revenue comes from outside of the US and a lot of our sourcing – more than 50 percent – is also from outside the US. So we are very global. Hong Kong seems to us – out of Asia – has a great mix of western and eastern cultures. It’s easy for westerners to adjust to when they come here and it’s easy to go anywhere from Hong Kong. In Hong Kong, I make many friends in a short period of time. I like Hong Kong’s vibe a lot. It is very easy to access everywhere – whether it’s Dongguan in Guangdong or somewhere else.

The other benefit of coming to Hong Kong is that we can develop a network to get better intelligence of what’s going on in China in protecting our intellectual property. biz.hk: Any immediate future plans?

Belhaj: We used to make billiard cues only. But we have just shipped our first batch of snooker cues to China early this year. I just had a meeting in Tianjin and I’ve got pretty good feedback about them. The idea was – from a strategy point – to make sure that people love the best of the best – that’s our Predator brand. If they love it, then we earn the right to launch a lower-price product.

You’ll see more Predator variations over the next six months in China. Before the end of the year, you’ll see a Poison snooker product.

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COMMUNICATIONS & MARKETING

New found powers

(Left to right) Jonathan Ross, Jeremy Renner and Robert Downey Jr attend the European premiere of Marvel's Photo: Getty Images “Avengers Ensemble” at The Vue Westfield on April 19, 2012 in London, England.

The Digitally-Powered, Incredible Human

By Jerry Gelsomino

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his past May witnessed the release of the most highly anticipated movie of the year, The Avengers. Marvel Studios brings together iconic Super Heroes Iron Man, The Incredible Hulk, Thor, Captain America, Hawkeye and Black Widow to answer the call to action from Nick Fury, director of the international peacekeeping agency known as S.H.I.E.L.D. In the film, a daring, globe-spanning recruitment effort is initiated to assemble The Avengers team to defeat an unexpected enemy threatening global safety and security.

The forces of evil are led by the demonic and dangerous Loki who gains access to the ‘Cosmic Cube,’ a device with unlimited power, which was previously guarded by S.H.I.E.L.D. With it, he is determined to accomplish his nefarious plot to conquer Earth.

This film is one of the latest super hero epics from Hollywood which brings to the big screen stories from the comic book world. Leading characters are either humans who experienced a physical metamorphosis, others who control leading edge technology, or beings

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from another planet. Through story evolution sequences, the audiences view how the hero discovered, learned to use and eventually gain mastery of their unique powers and talents – for the good, and often, the survival of earth.

Quite coincidently, this film's release occurred during the last weeks of a class I was teaching at Hong Kong Polytechnic University, “Marketing Management for Digital Entertainment.” The class was comprised of graduate students seeking a higher degree in animation, video gaming, applied design psychology or mobile app creation. I was brought in to help them strategize how to entice the public to buy their creations. Therefore to add tangible examples of successful new media marketing activity, I always concluded the evening classes with an exploration of interesting new business ideas, driven by technology. www.Springwise.com www.Trendwatching.com and www.Awesome.com are my usual sources of leading edge innovations as the sites provide a bountiful array of leading edge ideas for things that really improve the quality of someone's life.

biz.hk 7 • 2012

Now, how do these seemingly unrelated situations connect? Well after I accumulated a fair amount of these inspired fresh ideas, I began to think differently about what I was uncovering. More than just intriguing advances in technology, communication, and interactivity, I began to realize that these productivity enhancing utilities were actually endowing mere humans with portable, Super Hero Powers, for the price of a smart phone or digital tablet.

For example, every smart phone and tablet has been pre-installed with a GPS program or app to tell you where you are and help you find your way to where you're going. Grant your device permission to expose your location and you’ll be constantly kept aware of the nearest coffee shop of your choice or where an item on your wish list has gone on sale. Tony Stark/Iron Man’s heads up display can do that too, but probably cost him a lot more.

The creators of The Incredible Hulk endowed the creature with awesome strength that he regularly battles with internally to control. Conversely, he can never match the lifting strength any mobile device owner possesses and carries in their pocket, briefcase or shoulder bag. A 100-pound weakling can tote around huge volumes of information and access it instantly. For example, registered users can access and scan the archives of the Library of Congress, the largest storehouse of knowledge under one roof in the world, through a simple mobile app.

Or, while not actually an app, IKEA recently released a new store design that anybody can carry anywhere. The virtual structure, meant to be a green alternative to building one of their warehouse retail outlets, is being touted as the “smallest store in the world.” It fits into the space of a 10.5cm x 8.8cm web banner, but allows customers to browse and buy any of the 2,800 products just by moving their mouse over the mini store at www.smalleststoreintheworld.com/ banner/en/index.html

Every day use In The Avengers film, S.H.I.E.L.D.’s security protection of its headquarters was designed to be impenetrable, although Loki employed some spectacular efforts to break in and leads the agency’s best operatives on a thrilling chase as he leaves the underground base. Conversely, probably one of the world’s most secured homes, the White House, has now opened its doors, digitally, inviting anyone to take a 360° virtual tour of the famous residence at www.googleartproject.com/collection/the-whitehouse/museumview/. Currently the app is only available on the iPhone.

biz.hk 7 • 2012

Bullets bounce off of Captain America’s shield, but you and I have available for our protection, ‘Mosquito Repeller,’ an app that repels mosquitos using high frequency sounds. Want more sound solutions for you mobile device? Well there's ‘Baby Sleep,’ an app that recreates 12 sleep inducing sounds such as a laundry machine, hair dryer, or vacuum cleaner, to send your infant to slumber as quick as a lullaby. And there is ‘Air Horn,’ which does exactly what the name implies.

There are flashlights, mirrors, night vision imitations, a blower (an application that blows out candles), and rim shot (for the jokester, you know, that ‘badum-dish’ sound you make after you’ve got an audience laughing or moaning). Some of these seem pretty useless, but they do give the user a sense of invincible power. On the other extreme are driving fatigue sensors, testers for blood/alcohol content or simply bad breath, apps that send you an alert if you don’t arrive on time to a meeting and those that monitor users’ skin condition over time.

Look out, Thor

For me, any application that helps me translate a foreign language to English immediately becomes part of my Super Hero Power Belt. Using Google Chat and with TNT Creations ‘TransFire’ enabled, users can access real-time instant messaging translation service in more than 50 languages. Finally, the niftiest piece of translation I witnessed comes from ‘China Goggles.’ By simply pointing your mobile reader at a Chinese character sign, the app translates and the screen gives the viewer the posted message in English. Look out, Thor!

With all these examples, my point is this. With the growth and proliferation of digital technology that is robust, compact, and mobile, breakthrough inventions are now untethered from home or office. Without suffering the repercussions of over-exposure to Jerry Gelsomino, negative nuclear isotopes, principal of FutureBest, we have new found a respected design critic powers. We can use these and visionary who aids to make us smarter or makes it his business to track emerging safer everywhere we go. consumer behavior in search of the Soon with a snap of a next big trend. While bringing to his finger, or the wink of an clients extensive brand development eye, users will be able to experience as well as the ability to launch a specialized interpret successful techniques across program to entertain product, merchandise and service others, provide real-time categories, in all his endeavors, he is data, or ensure protection focused on creating the very best from harm. And all experience for shoppers, visitors, without donning a Mark tenants and guests.

VII suit of armor.

About The Author

37

CORPORATE SOCIAL RESPONSIBILITY

A Banker Who Feeds the Hungry

Hong Kong on average dumps 3,200 tonnes of food waste in our landfills every day. At the same time, a significant portion of the local population is not fed well. Gabrielle Kirstein of Feeding Hong Kong, a local food bank, has taken actions to move the mountain of food wastes and her hard work is paying off

By Daniel Kwan The Project Line project by Stefen Chow who asks what poverty means for a poor person in one day with his photographs. In China, you can buy six steamed buns with RMB3.28. Announced in November 2011, China’s national poverty line is defined as Rmb2,300. Photo courtesy: Stefen Chow + Lin Hui-yi/The Poverty Line

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abrielle Kirstein is a “banker” of a different sort. Her bank pays no interest and the “asset” in its vault has an “expiration” date.

Kirstein is Executive Director of Feeding Hong Kong – a local food bank dedicated to collecting surplus food items from businesses and donors and redistributing them to people in need.

FHK is currently the only local food bank to focus purely on donated surplus food. Instead of re-inventing its own wheels, it partners with 25 local welfare groups in re-distributing food collected and services more than 2,700 people across Hong Kong.

“We are about feeding the hungry and at the same time reducing the amount of food that’s going to landfills,” says Kirstein. “We are bridging that gap between hunger and food waste.”

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Unequal society That gap, unfortunately, is huge. By some estimates, there are over 1.27 million people in Hong Kong who are struggling every day to meet their basic needs. While the city prides itself being Asia’s world city, it is also consistently – according to the UN’s Gini Co-efficient which measures income inequality – rated as the most unequal society amongst all highly developed economies.

This fact, Kirstein says, still surprises a lot of people. Many people – expatriates especially – are plainly unaware of the problem of poverty in Hong Kong because it is too often “invisible” and far removed from their daily lives.

“It’s very easy to live in a bubble in Hong Kong.

I’ve been here for over nine years and was certainly guilty of that for the first few years. I lived in Midlevels and worked in Central and spent the best part of my

biz.hk 7 • 2012

time in that small radius. I would rarely go to Tsim Sha Shui, let alone to places like Sham Shui Po, Kwun Tong, Fanling and Yau Tong. When I finally ventured further afield, I saw a completely different side of Hong Kong. “ “Districts like Sham Shui Po are a world apart from life along the escalator. The first thing that always strikes me when we go on our charity deliveries there is the number of elderly people really struggling to get by.”

Although there have been more coverage in news media in In Hong Kong, you may get 20 apples for HK$45. Hong Kong does not have the past few years, Kirstein says an official poverty line but social welfare groups estimate roughly 18 the problem remains largely percent of the populations are struggling with their basic needs. Photo unknown to most people. “I still courtesy of Stefen Chow + Lin Hui-yi/The Poverty Line get the shock factor when I say [in meetings] that one in five people “Food rescue, typically involves picking up small live below poverty – that includes one in four amounts of perishable and prepared from multiple children and one in three seniors. outlets and dropping it off directly with individuals in need or charities running feeding programs,” she says.

Turning point

A former marketing and events executive, Kirstein came to Hong Kong from the United Kingdom in 2003. Her turning point came when she began volunteering for the charity, Green2Greener, whose founder Christina Dean opened her eyes to the problem of food waste in Hong Kong. She recalled how Dean described to her about “rescuing” a pallet of freshly baked bread dumped by staff of a local supermarket one night.

“I have grown up volunteering with my family at a homeless hostel in Manchester and frequently saw organizations like Pret a Manger, Marks & Spencer and Tesco donating their food,” she explains of her motivation behind Feeding Hong Kong. “I looked at all this bread on Christina’s dining table and thought that there must be a homeless shelter who we can call.”

She contacted Pret a Manger in the UK and was referred to its Managing Director in Hong Kong, Sarah Lee. “They were already donating from some of their stores but she told us that they wanted to do more. So we stepped in to help them to make sure every night their surplus food is being donated.

That’s really where it all got started,” she says.

Things began to change in 2009 when she was introduced to the Chicago-based Global Foodbanking Network, which jolted her to raise her game to a higher level – foodbanking. While “food rescue” helps mitigate the problem of food waste, it lacks scale and muscle.

biz.hk 7 • 2012

Gabrielle Kirstein

“A food bank meanwhile collects, stores and sorts dry stored goods, as well as fresh, frozen and refrigerated items. The storage is important – it means a food bank can handle big volume donations, ‘bank’ it and divide it into smaller donations to be shared with multiple charities, who in turn distribute to individuals.”

FHK was officially launched in 2011 when it scaled up from a programme under Green2Greener to an independent registered charity.

Green2Greener has also since evolved to focus solely on sustainability issues in the fashion industry, under the new name Redress.

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How to help According to Kirstein, FHK has three important founding supporters. Sino Group helps with the warehouse and office space, while DLA Piper offers support in legal matters. In addition, the Centre for Nutritional Studies of the Chinese University of Hong Kong advises them on the nutrition of the food products they collect.

Similar to other start-ups, FHK remains a lean organization and works with volunteers to operate and carry out quality checks of the donations it receives. Luckily, support has been steady and it has started to work with companies keen to organize volunteer opportunities for their staff.

“What particularly appeals to many people is that Feeding Hong Kong is about both the social and environmental,” Kirstein says. “Apart from volunteering in our warehouse and helping with deliveries, we are encouraging people to support us within their own companies, schools and organizations by holding food drives.”

“Because we deal with donated surplus stocks, we never know from one week to the next what we might be donated to us but there are certain foods that always needed by our charity partners: rice, noodles, cooking oil and canned foods.”

“Food drives allow us to get targeted donations of these staples items and also allow us to promote more nutritious choices. For example, if you are going to buy a can of food for us, go and choose a low-salt, low-sugar or low-fat one – choose wholesome and healthy foods rather than sweets, snacks or desserts.”

Protecting the Good Samaritan

Hong Kong does not have a “Good Samaritan” law like in the US. Signed into law by President Bill Clinton in 1996, the Federal Bill Emerson Good Samaritan Food Donation Act protects the donor and the recipient agency against liability, excepting only gross negligence and/or intentional misconduct. In the absence of such protection, Feeding Hong Kong signs contracts with its donors and charity partners which outlines their respective responsibilities and commitment to the highest standards of food handling. In order to ensure safety, Feeding Hong Kong works with volunteers to check all donated food making sure no expired or damaged items distributed to their partner charities.

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What is a food bank?

A food bank is a charitable organization that collects, sorts, stores and distributes donated food within a community. Traditionally, a food bank does not distribute food directly to those in need.

Instead, it serves a network of local charities, who in turn feed the hungry. The world’s first food bank was the St. Mary’s Food Bank Alliance, which was established in 1967 in Arizona.

Food waste in Hong Kong Hong Kong dumps approximately 3,200 tonnes of food waste in its landfills every day. One third of them originate from commercial and industry (C&I) sector, and the remaining comes from households, representing 9 percent and 26 percent respectively of the municipal solid waste generated in Hong Kong. In recent years, the amount of disposal food waste from C&I sectors has been increasing, from 400 tonnes in 2002 to 840 tonnes in 2010.

Poverty line in Hong Kong Hong Kong does not have an official poverty line. However, groups such as the Hong Kong Council of Social Services (HKCSS) often refer to HK$3,275 as the reference figure in defining poverty in the SAR. That figure – taken from the Census and Statistics Department in 2010 – is half of the median monthly domestic income of a one-person household. Based on that figure, about 1.26 million people lived below the poverty line in Hong Kong in 2010.

Useful glossaries What do the dates on food labels mean?

Use-by Food can be eaten up to the end of the ‘use by’ date, but not after even if it looks and smells fine.

Best Before These dates refer to quality rather than food safety.

When the date is passed, the food won’t be unsafe but it might begin to lose its flavor or texture.

Display Until This is a date for shop staff not shoppers.

For all Food Always follow on pack storage guidance and instructions such as “eat within three days of opening.”

biz.hk 7 • 2012

Photographing poverty Stefen Chow is a Malaysian photographer who supports Feeding Hong Kong through his lens.

Currently based in Beijing, Chow tells biz.hk how he sees poverty across the region and The Poverty Line, a project he launched with his wife Lin Hui-yi two years ago

biz.hk: In The Poverty Line, you ask the question: “What Does It Mean to Be Poor” with your photographs. What have you discovered?

Chow: We have found some interesting answers and at the same time opened up a lot more questions. I understand now that you don’t need to be homeless or jobless to be defined as poor. You could be working hard for many years but life still doesn’t give you sufficient opportunities. Students who graduate from college but without a job can fall below the poverty line. Blue collar workers who earn a very low wage but have children and parents to feed can be living on the poverty line.

In Malaysia, the average size of a poor household is 6.4. In the US, the poverty rate was 15.1 percent, meaning there are 46.2 million people who live below the poverty line. This is the highest since the US began releasing estimates of its poverty situation 52 years ago. Our Poverty Line project is built based on statistics but it is about people who live around us. This project opens my eyes and my mind. biz.hk: What can individuals in affluent societies like Hong Kong do to deal with problems such as food wastes?

Chow: Individuals should understand that distribution of resources is always a problem and the system is never perfect. Feeding Hong Kong is a brilliant and admirable concept that addresses the problem and tries to improve the system. You minimize wastage so that more people especially those who need it are fed. It is a simple idea but takes a lot of efforts to do it well. Gabrielle Kirstein

Stefen Chow

has done an amazing job to put this together. biz.hk: Does Beijing also have a serious problem of food wastes?

Chow: Beijing has a serious problem of food wastes. Beijing is now an affluent city and people are consuming on a big scale. In China, people don’t just order three dishes for a table, most likely it will be 20 dishes. The more food on the table and more leftovers, the more face the host gives his guests. The problem of food waste is a serious one in Beijing and other Chinese cities. Simply put, this can’t go on for too long.

“Individuals should understand that distribution of resources is always a problem and the system is never perfect. Feeding Hong Kong is a brilliant and admirable concept that addresses the problem and tries to improve the system.”

biz.hk 7 • 2012

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AMERICAN TOPICS

AmCham Celebrates

“Fourth of July”

On June 30, AmCham hosted a special lunch to celebrate the July 4 Independence Day at the Hard Rock Café in Lan Kwai Fang. Despite the weather (Typhoon Doksuri was at Hong Kong’s doorstep the night before), about 40 guests joined the party and enjoyed a delicious buffet of authentic American food. Treats for kids included a special screening of the movie Night at the Museum and a drawing contest.

And no July 4th party would be complete without lucky draws. Fantastic prizes were given to half-a-dozen lucky winners. It was all about fun, good food and games. Special thanks to our sponsors: Renaissance Harbour View, Hong Kong Disneyland, ExxonMobil and David Yurman.

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biz.hk 7 • 2012

biz.hk 7 • 2012

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2012 Aug

Mark Your Calendar Aug How Can CEPA Benefit Your Business?

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Du Zijun, Director of General Affairs Group, Commercial Office of Economic Affairs Department, Liaison Office of the Central People's Government Winsome Au, Assistant Director-General, Trade and Industry Department, HKSAR Government (Please note that seminar will mainly be carried out in Mandarin.)

To help members understand the development background of CEPA Supplements and how their business can benefit from the CEPA measures, AmCham Hong Kong is honored to invite officials from the Trade and Industry Department of HKSAR Government and Commercial Office (Hong Kong Office of Ministry of Commerce PRC).

Du Zijun is the Director of General Affairs Group of the Commercial Office of Economic Affairs Department in the Liaison Office of the Central People’s Government in Hong Kong. He has served in different positions in the China Ministry of Commerce as Director of the Department of Taiwan, Hong Kong & Macao Affairs, and deputy director of the Department of Electronic Commerce and Informationization.

Winsome Au is the Assistant Director-General in the Trade and Industry Department in the HKSAR Government. Before joining the Trade and Industry Department, she was on secondment to Secretariat of Asia Pacific Economic Cooperation as the Finance Director. She had also served in a number of bureaus and departments in the HKSAR Government, including Civil Service Bureau and the Leisure and Cultural Services Department.

Aug Reforming China's Juvenile Justice System

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John Kamm, Executive Director, Dui Hua Over the last several years, the Chinese government has made a priority of reforming its juvenile justice system. Reflecting the breakneck speed of economic and social development, juvenile crime has been soaring, by one estimate doubling every five years. China’s Supreme People's Court has taken the lead in sending delegations abroad to study "best practices" in this critically important area.

The Dui Hua Foundation, founded by former AmCham President John Kamm, hosted the Supreme People's Court in the United States in 2008, and sent a delegation of experts to China in 2010. As a result of the work of the Supreme People's Court a section on juvenile crime was included in China's amended Criminal Procedure Law to take effect on January 1, 2013.

In this luncheon talk, Dui Hua Executive Director John Kamm will introduce the foundation's next project in the field of juvenile justice, a visit by another Supreme People's Court delegation to California's Bay Area in September 2012, and will describe the goals of the delegation.

John Kamm is an American businessman and human rights campaigner active in China since 1972. He was awarded the Department of Commerce’s Best Global Practices Award by President Bill Clinton in 1997 and the Eleanor Roosevelt Award for Human Rights by President George W Bush in 2001. In September 2004, Kamm received a MacArthur Fellowship for “designing and implementing an original approach to freeing prisoners of conscience in China.”

Aug Emerging Trends in Multimedia

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Tony Reno, Regional Support Manager, Multimedia Solutions, Asia Thomson Reuters As internet access has grown through mobile 3G/4G networks and publically available WiFi connections so has the demand for mobile devices (large and small) and the need for any company’s internet presence to be natively replicated for a smaller, mobile experience. As clients, partners and competitors demand every business to adopt a “mobile presence” it has become increasingly difficult for companies to choose which mobile areas to participate in and how to participate in those they have chosen.

Focus topics will include: • Smartphone and Tablet use in Asia • QR codes, what are they?

• Mobile Media Best Practices • Best Practices of Webcasting and ROI Tony Reno is experienced in online media delivery, media development, and IT support and training. Recent work has been focused in managing cloud services integration, project management/communication, and business development. He believes in a future where media is instant, meaningful and interactive. His specialties are Multimedia, Mobile, Team Management, New Business Development, AaaS, SaaS and other Cloud Management and Integration.

For information, see website: www.amcham.org.hk

Tel: (852) 2530 6900

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MEDIA WELCOME

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