biz.hk Jan 2013

In W Co ho mm ’s W un ho ica tio ns

Journal of The American Chamber of Commerce in Hong Kong

CHAMBER PRIORITIES OF 2013 JAMES SUN

AmCham Chairman

www.amcham.org.hk

January 2013

ble a l i a v A h

Marc

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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

January 2013 Vol 45 No 1

Contents ANNUAL SURVEY 2013

Richard R Vuylsteke

Editor-in-Chief Daniel Kwan

Managing Editor Kenny Lau

Advertising Sales Manager

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Publisher

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COVER STORY

ANNUAL SURVEY

GOVERNMENT RELATIONS

REAL ESTATE

James Sun, Managing Director and Responsible Officer of Charles Schwab, Hong Kong, becomes the second chairman in over 40 years of AmCham’s history to serve a second term. He outlines his vision for the Chamber, his views on Hong Kong’s roles and competitiveness and the Chamber’s advocacy priorities in 2013

Members provide feedback on key issues directly related to Hong Kong’s overall competitiveness as a city of international status in three areas: business outlook, education, and quality of the natural environment

Secretary for Commerce and Economic Development Gregory So in a wide-ranging interview talks about doing business in Hong Kong, free trade and government initiatives designed to enhance competitiveness of local businesses

Chairman and CEO of The Executive Centre Paul Salnikow tells of a path to developing one of the largest global premium serviced office business and how property in Asia has evolved to become an investment-grade asset class

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, 2013 Library of Congress: LC 98-645652 For comments, please send to biz.hk@amcham.org.hk

AMCHAM NEWS AND VIEWS 04 Editorial

STATE OF THE CHAMBER 14 From Strength to Greater Strength

Having recently entered into free trade agreements (FTAs) with Chile, New Zealand, Iceland, Liechtenstein, Norway and Switzerland, Hong Kong should target the China-ASEAN Free Trade Area to boost trade and help benefit local businesses as well as thousands of foreign companies locally with an eye on Southeast Asian markets

AmCham President Richard Vuylsteke assesses current roles of the Chamber as a platform bringing individual and corporate members together for high-quality information, networking, advocacy and visibility

TRADE & INVESTMENT 26 Will Chinese Investment in the US Continue to Grow?

Daniel Rosen of New York-based Rhodium Group shares his forecasts for the coming year and insights on China’s “Go Global” efforts and what the US should do to facilitate more Chinese investment

16 Just to Say ‘Thank you’ 05 Chamber Officers AmCham’s 2013 Board of Governors and Committee Chairs

07 New Business Contacts 25 executives joined AmCham’s business network last month

More than 20 senior foreign service officers and staff of the US Consulate join the inaugural speech luncheon as AmCham expresses appreciation for a close working relationship

ANNUAL SURVEY 18 Annual Survey Shows Cautious Outlook for 2013 Members reflect on key issues directly related to Hong Kong’s overall competitiveness as a city of international status in three areas: business outlook, education, and quality of the natural environment

36 Mark Your Calendar

COVER STORY

GOVERNMENT RELATIONS

08 A Clear Vision in Changing Times Serving a second term as AmCham chairman, Managing Director and Responsible Officer of Charles Schwab, Hong Kong James Sun outlines his vision for the Chamber, his views on Hong Kong’s roles and competitiveness and the Chamber’s advocacy priorities in 2013

22 Hong Kong – Asia’s ‘Point Guard’ In a wide-ranging interview, Secretary for Commerce and Economic Development Gregory So talks about doing business in Hong Kong, free trade and government initiatives designed to enhance competitiveness of local businesses

REAL ESTATE 30 Riding the Asian Property Wave Chairman and CEO of The Executive Centre Paul Salnikow tells of a path to developing one of the largest global premium serviced office business and how property in Asia has evolved to become an investment-grade asset class

LAW 34 US Unfair Competition Law Applied against Thai Manufacturer A report on a settlement case in which attorney general of the US state of Massachusetts took unprecedented legal action against a Thai manufacturer and exporter accused of using stolen IT to unfairly lower operating cost and undercut competition

Single copy price HK$50 Annual subscription HK$600/US$90

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Chamber Officers BOARD OF GOVERNORS

biz.hk Editorial

Chairman

MODEL TRADER

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ne of the stated goals of the Hong Kong government is to enter into more free trade agreements with its trading partners. While Hong Kong has recently signed FTA deals with Chile, New Zealand, Iceland, Liechtenstein, Norway and Switzerland, a lucrative next target is ASEAN. Gaining access to the China-ASEAN Free Trade Area would not only benefit local businesses, but also help thousands of foreign companies that have established operations in Hong Kong with an eye on Southeast Asian markets.

Hong Kong could not only substantially boost its trade if it were admitted to the China-ASEAN Free Trade Area, it could also serve as a catalyst for a stronger free trade environment among the Zone’s member economies. Hong Kong has been a champion of free trade for decades, and many of its ways of doing business are examples of best practices in the region. Think of the quality of its customs, security, trade facilitation, legal and financial services. Thus, in addition to gaining greater market access for businesses, Hong Kong’s membership in the China-ASEAN Free Trade Area would mean adding a powerful voice for genuinely free trade to the regional grouping.

By “living” the gold standards of free trade, Hong Kong demonstrates that the best way to win the competition game in the 21st century – not just in Asia but globally – is by keeping the economy free. Maintaining appropriate regulatory control is paramount, of course, but no less important is a commitment to keeping trade doors open, insisting on a level playing field, and ensuring the free flow of uncensored information. Add Hong Kong’s rule of law, world class financial services, and efficient civil servants and it is clear why,

Alan Turley FedEx Express

Thomas Nelson VF Asia Ltd

Vice Chairman

Richard Weisman Baker & McKenzie

Catherine Simmons State Street Bank & Trust Co

Peter Levesque Modern Terminals Ltd

Governors

James Sun Charles Schwab HK Ltd

Treasurer

compared with its neighbors, these qualities put Hong Kong in an enviable position.

In other economies, FTAs are often used to drive changes. Companies are reminded – or forced – to adopt higher standards as trade barriers are lowered. Hong Kong, relatively speaking, has much less to worry about in that regard. Its economy is free and trade barriers low. But its businesses are not future proof, especially in a globalized marketplace. By promoting free trade, the message for businesses is clear: welcome competition, do your best, and reap handsome rewards.

Trade negotiators generally agree that since the Doha round negotiations are deadlocked (although not pronounced officially dead), regional FTAs and bilateral trade deals are the wave of the immediate future. Hong Kong has much to gain and little to lose if it were admitted to the China-ASEAN Free Trade Zone. While it’s likely that Hong Kong’s membership in the free trade club may not bring substantial immediate benefits, it would reinforce the Hong Kong “brand” of being the world’s freest economy – and one of the most vibrant.

Keeping that status, however, requires eternal vigilance. The Hong Kong brand was achieved by staying at the cutting edge, and staying unburdened by excessive government intervention. As Hong Kong faces its many domestic challenges and witnesses the often heavy-handed government approaches to domestic affairs taken by many other economies, it needs to carefully refine its regulatory environment in line with past principles. At the same time, it should seek admission to the China-ASEAN Free Trade Zone as a tactical move for selling its brand, as well as a reminder to stay worthy of emulation among its neighbors.

Tom Burns Intel Semiconductor (US) Ltd

Executive Committee Evan Auyang The Kowloon Motor Bus Co (1933) Ltd Janet De Silva Richard Ivey School of Business (Asia) Anita Leung Jones Day

Brian Brenner Jones Lang LaSalle

Elizabeth L Thomson Orangefield ICS Limited

Ewan Copeland Citi

Frank Wong Scholastic Asia

Walter Dias United Airlines

Eden Woon The HK University of Science & Technology

Rob Glucksman Witgang Far East Ltd

Ex-Officio Governor Robert Chipman Asian Tigers K C Dat

Toby Marion Golden Gate Wine Co Ltd

Belinda Lui Time Warner Inc

Jim Muschalik ExxonMobil Energy Ltd

Richard R Vuylsteke The American Chamber of Commerce in HK

Food & Beverage

Real Estate

Veronica Sze Pfizer Corp HK Ltd/Pfizer Nutrition

Neil Anderson Hongkong Land Ltd

Hospitality & Tourism

Alan Seigrist The Executive Centre

President

CHAMBER COMMITTEES AmCham Ball Rex Engelking Telstra International Group

Apparel & Footwear Andre Leroy Avery Dennison Hong Kong BV

China Business Seth Peterson Heidrick & Struggles Hong Kong Ltd

Damien Lee Hong Kong International Theme Parks Ltd

Human Capital Peter Liu AsiaNet Consultants (HK) Ltd

Lili Zheng Deloitte Touche Tohmatsu

Information & Communications Technology

Communications & Marketing

Rex Engelking Telstra International Group

Roxana Daver

Corporate Social Responsibility Robert Grieves Hamilton Advisors Ltd

Energy Rick Truscott CLP Power Hong Kong Ltd

Entrepreneurs/SME Donald Austin Austin Pacific Ltd Courtney Davies

Insurance & Healthcare Owen Belman Aon Hong Kong Ltd Hanif Kanji Sinophi Healthcare Partners Ltd

Intellectual Property Gabriela Kennedy Hogan Lovells Amy Lee Microsoft Hong Kong Ltd

Law

Corey Franklin

Clara Ingen-Housz Baker & McKenzie

Financial Services

Pharmaceutical

Brock Wilson Credit Suisse (Hong Kong) Ltd

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Colin Tam Crystal Vision Energy Ltd

Philip Leung Commence Technology Partners

Environment

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Sara Yang Bosco Emerson Electric Asia-Pacific

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Stephen Leung Pfizer Corporation Hong Kong Ltd

Senior Financial Forum Al Miyasato Intel Semiconductor (US) Ltd

Senior HR Forum Jacqueline Algar VF Asia Ltd

Sports & Entertainment Ian Stirling UBS AG

Taxation Evan Blanco Deloitte Touche Tohmatsu

Trade & Investment Patrick Wu American Appraisal China Ltd

Transportation & Logistics Jared Zerbe China Merchants Holdings Int’l

Women of Influence Anne-Marie Balfe Ernst & Young Anna-Marie C Slot White & Case

Young Professionals Sherry A Lin

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New

Business Contacts The following people are new AmCham members: AIMS International / HCP Executive Ltd

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

Nathalie Kleiber Head Strategic Relations

Alpha Institute Asia Ltd

Garrett Popcorn

American Express

Hong Kong Jockey Club, The

Daniel Cheung General Manager, Hong Kong

LC 98-645651

Mike Hall Acting Director of Career Development Office

Scott Schroeder Executive Vice President & CFO

Arkadin Hong Kong Ltd

ISBN 978-962-7422-18-1

University of Hong Kong, The

Steffi Chan Managing Director

Ian Huen Director

Sunshine Farzan Business Planning Manager

Over 500 pages in three major sections, including a complete guide to chamber services, corporate sponsors and AmCham Charitable Foundation. This directory lists over 1,800 members from over 700 companies and organizations.

First Glory Ltd

Bayer Group Hong Kong

Kiabi International Supply Services Ltd Alvin Cheung Regional Materials Director

Lan Kwai Fong Holdings Ltd Kam-Fai Chan Managing Director Lan Kwai Fong Entertainments

C & A Sourcing

Links International

Jackie Nixon Head of Global Operations & Merchandising

Deborah Matson Managing Director

Chevron Companies (Greater China) Ltd

Microsoft Hong Kong Ltd

Kitty Chan Finance Manager, Hong Kong

Horace Chow General Manager, Hong Kong and Macau

Datapipe Asia Limited

Oracle Systems Hong Kong Limited

Dechert LLP Karl Egbert Registered Foreign Lawyer

DHL ISC (Hong Kong) Ltd Steve Slaughter Regional Vice President, International Supply Chain, Asia Pacific

Jenny Li Acting General Manager

William Nader Executive Director, Racing

Noel Wan Chief Financial Officer

Edvan Chan Business Director - Asia Clive Leung Senior Solution Architect Colin Chan VP and General Manager

Yahoo! Hong Kong Limited

Sujith Abraham Vice President

SAS Institute Ltd Stanley Lam Managing Director

SJ Berwin Hong Kong George Pinkham Head of Office

Talent2 Hong Kong Ltd Susana Ng Manager, Banking and Financial Services

View our other members at:

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

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COVER STORY

L A Clear Vision

in Changing Times

By Daniel Kwan

James Sun

James Sun, Managing Director and Responsible Officer of Charles Schwab, Hong Kong is the 2013 Chairman of AmCham. In the following interview with biz.hk, Sun outlines his vision for the Chamber, his views on Hong Kong’s roles and competitiveness, and the Chamber’s advocacy priorities in 2013

ooking out from the window of his 16th floor Charles Schwab office in the ICBC Tower on a late afternoon in January, James Sun, AmCham’s Chairman for 2013, has an unobstructed view of Central and Victoria Harbor. The clear view of Hong Kong provides an appropriate backdrop to this interview as he explains where the Chamber will be heading in the coming year.

Unlike other AmCham chairs that are new to the job in January, Sun has a head start on handling the position’s responsibilities. He is the second only chairman over 40 years of the Chamber’s history to serve a second term. (James Thompson was the first one in 2002 and 2003). Considering the time commitment, Sun admits that there are sacrifices: “I am giving up my favorite pastime of golfing for another year.”

Sun says that AmCham’s agenda in 2013 is full, wide-ranging, and balanced.

“It’s definitely going to be another very busy year ahead,” he says. “The achievements made in 2012 will help our initiatives in 2013. The continuity with last year will make things easier.”

“Our Board is focused and structured, and our senior staff at the Chamber is experienced and capable – we have an excellent team,” he says. “I am actually looking forward to 2013 because we’ve got so much meaningful and interesting work to do.”

China initiative

Photos: Create Images

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Sun ticks off a number of successes in 2012. “We saw real progress last year in our ongoing China agenda, in advocacy activities – especially on environment and education issues – and in our government relations.”

“For instance, our annual China Conference, held in May last year, proved to be very successful,” Sun says. “It’s scheduled for May 10 this year, and our preliminary agenda is excellent. It should draw another sold-out crowd.”

Sun thinks that AmCham has a better formula for conferences. “We don’t string together a dozen speeches or have panel sessions with time for only a

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couple questions from the floor,” he says.

“We only have two or three keynote speakers over the whole conference, so most of the time is devoted to interactive panels. And our panels leave plenty of time for questions from the audience.

We’ve refined this approach in our annual Women of Influence conference, and it works for our China and our Human Capital conferences as well. You could say it’s an AmCham ‘signature’ approach.”

Sun is particularly pleased with the quality of AmCham’s annual Doorknock delegations to Beijing. “Last November we were fortunate to meet with an impressive list of senior officials, especially in the banking and financial services area,” he says. “We have established an ongoing dialogue between the Chamber and the Chinese leadership, focusing on Hong Kong-China topics, and we will continue in this direction in 2013,” Sun says.

Sun thinks this will be a particularly interesting year. “First, with the new leadership in place, China is reforming in many areas,” he says. “We have to understand Hong Kong’s appropriate roles in the next stage of China’s development, he says. “And then we will have to fine-tune the ways in which AmCham and our members can be actively engaged in this new environment.”

Sun points out that urbanization is expected to bring tremendous growth to China – and hence business opportunities. So Hong Kong businesses need to seriously consider their position and how to compete in China’s vast and growing consumer market.

“If China’s urbanization program proceeds as planned, it will stimulate tremendous new domestic demand across all sectors of the economy, especially from the service sectors,” he says. “That should present excellent market opportunities for Hong Kongbased service providers – and many of them already have years of experience doing business with China.”

Sun adds that securing greater market access to China will certainly be a top advocacy issue for the Chamber in the coming year. “We’ve made this argument before. We emphasize that

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greater access is actually good for both China and Hong Kong,” he says. “China should allow Hong Kong-based firms – including international firms – greater market access. By allowing them greater access, they can help local Chinese firms transition more smoothly to international standards.”

Hong Kong’s roles Sun, who has lived in Hong Kong for nine years now, says that constructively managing Hong Kong’s relationship with China will be crucial to the city’s success.

He warns that “resting on past accolades and relying on the old models of doing thing will not guarantee Hong Kong’s future prosperity.”

Specifically, he cautions that the city should not become too dependent on China’s “gifts” and be too comfortable with the status quo. The present artificially low interest environment which has helped create real estate bubbles (that indirectly translate into the high costs of doing business in Hong Kong) will not last indefinitely. The city already faces a host of deep-rooted social issues such as large income disparities.

“Clearly, Hong Kong must seriously think about how to improve – how we can more actively adapt to the evolving environment,” Sun says. “We need to do some serious soul-searching and ask ourselves what new core capabilities we need if we are to remain relevant to China. How can we remain competitive in the greater Asia region in the coming decade?”

Sun says there is competition close to home. “We need to ask ourselves how we are going to compete effectively with Singapore, Shanghai, and even Shenzhen as we go forward,” he adds.

Central to this discussion, Sun stresses, is how Hong Kong can leverage on its position as a true global city. Pointing out that more than 1,300 US firms operate in Hong Kong and that about 840 of them use the city as their headquarters, Sun believes that maximizing Hong Kong’s international character holds the key to the city’s future success.

“The international community in Hong Kong needs to stay aggressively

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relevant to the Asia Pacific region,” he says. “AmCham takes the slogan ‘Asia’s World City’ seriously.” Sun asks, “If Hong Kong doesn’t stay intensely international, it will just become another Chinese city – and a second tier one at that. We are unique in China, and we need to stay that way. At the same time, we need further economic and business integration between Hong

Kong and the mainland.”

Sun says that in 2013 the Chamber will be more active in engaging with Chinese companies which have set up offices in Hong Kong, especially those in the financial sector. Part of that will be facilitated by the new Financial Services Group. “The Chamber can become a platform for American firms to engage with Chinese firms who are established

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and operating here,” he says. “We also want to explore what we may do together.”

Advocacy On advocacy, Sun promises that this year AmCham will step up its efforts in two priority areas – environment and education. Both have long been

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AmCham’s “signature” issues. But according to Sun, the Chamber will make extra efforts to engage a broader spectrum of government officials and relevant stakeholders, and will seek to offer solid, constructive suggestions.

“The Chamber will remain a vocal proponent of cleaner air and reduced road-side pollution,” Sun says, “but in the area of education we are broadening

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our focus.”

“At AmCham our members are telling us that they want to hire more local talent, but that too many of them are not trained to the levels needed for 21st century positions. We want to hire locally, but the recruits need to be able to handle 21st century business standards,” he adds.

“Frankly, we see a decline in the quality of English and science education.

Moreover, we also see growing requirements for high fluency in putonghua [Mandarin] and well as English. So we will be developing advocacy positions on local educational developments this year.” Sun, who is fluent in English and Mandarin, speaks from personal experience as well.

AmCham’s focus on education and building a highly capable talent pool, he explains, ties in closely with Hong Kong’s strategic positioning with China. “Hong Kong is China’s international gateway city,” he says. “This naturally puts us in a great position to be a key source of internationally capable talent for a global China.” Sun expresses concern that Hong Kong needs to vigorously pursue long-term planning in order to ensure its talent pool is of high quality and internationally competitive. “We need to get focused on this issue now, or be significantly less competitive in the future,” he says.

For more than five years, AmCham has been warning about the growing shortage of spaces in Hong Kong’s international schools. Sun says that AmCham’s annual survey of its membership show that shortage of school space is genuinely hurting Hong Kong’s competitiveness in attracting global best talents.

“This issue is symptomatic of the lack of a planning model that takes into account the increased movement of international and Mainland families to Hong Kong,” he warns. “We’ve heard time and again from members that the lack of school space has made it difficult for them to recruit talents to Hong Kong. The government has taken some positive steps recently, but really needs to do more.”

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Honest broker Sun is pleased that strong teams of AmCham executives from different business sectors are now in place to help steer the Chamber’s strategies on environmental and education agendas in the coming year. “As I said in my inauguration speech a few weeks ago, you can expect even more intense action this year,” Sun says that AmCham will continue its “honest broker” role in lobbying governments in Hong Kong, the US, and China. Specifically, he highlights the two AmCham Doorknock delegations to Washington and Beijing as well as a “mini-Doorknock” to Bangladesh last November. “This year we will build on the momentum achieved through these visits last year,” he says.

“These Doorknocks put us in contacts with senior government officials and think tanks, and those relationships are critical in our advocacy work,” Sun says. He took part in both the Washington and Beijing Doorknocks last year, and will do so again in 2013. “For many years, we have played the role of ‘honest broker’ on trade and business issues between the US and China. We give our candid views, and they are appreciated.”

“We are seeing our responsibilities increase, partly as we organize and more actively take part in conferences, briefings and delegation visits in the region,” Sun says. “Like Hong Kong, AmCham doesn’t only reach out to the Mainland. A large number of our AmCham members have regional and global responsibilities – so if we do our job correctly, we have to assist them whenever possible.”

Sun seems poised for another full year, one that will also give AmCham members a full slate of activities and opportunities. “We offer about 350-400 events, meeting, and delegations each year,” Sun says. While we’re proud of those statistics, what really counts is the value these bring to our members. In this respect, we are always trying to improve. With the high quality of volunteer leaders we have, and our great Chamber staff, I am confident that 2013 will be a very good year.”

“Clearly, Hong Kong must seriously think about how to improve – how we can more actively adapt to the evolving environment...We need to ask ourselves what new core capabilities we need if we are to remain relevant to China.

How can we remain competitive in the greater Asia region in the coming decade?”

STATE OF THE CHAMBER

From Strength to Greater Strength AmCham President Richard Vuylsteke assesses the state of AmCham

W

hy is membership in AmCham such a good idea? We are all about providing high-quality information, networking, advocacy, and visibility. These four umbrellas cover most of what we do on behalf of our members and the Hong Kong community.

AmCham is a place to learn about the latest trends, best practices, and opportunities for your business. It’s a catalyst for bringing people together for constructive – and enjoyable – discussions. It provides access to and interaction with government in order to solve business issues. And it’s an opportunity to build valuable personal and corporate visibility through a variety of AmCham platforms.

Statistically, 2012 was a tremendous year. Overall, AmCham Hong Kong is the most active of the 28 AmChams in Asia Pacific, but one should expect that. After all, we’re in the fast-paced business hub of Hong Kong! They don’t call us Asia’s world city for nothing.

No question that AmCham has been extraordinary active – just look at the variety of opportunities in your email box!

But AmCham has also been productive as well, and we’ll be building on those strengths this year. Our goal is to serve our

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members and Hong Kong better than ever. Here’s a brief recap of 2012 and some indication of what is in store for 2013.

Information with muscle Something for everyone: In 2012, AmCham hosted 400 hundred events (open to non-members) and meetings (members only). We were again honored to have scores of senior managers and other business sector experts as speakers, panelists, and roundtable interlocutors for the benefit of our members. Even if you have a heavy travel schedule, when in town check our website – we always have something going on. Not only do our events provide high-quality content, they often give valuable visibility to our member companies and their experienced executives.

If you have an idea for a speaker or event topic, please contact the appropriate committee chair – or contact Events Director Mary Simpson at (msimpson@amcham.org.hk) to make your recommendation.

Gold standard: Perhaps the top networking opportunities during the year are found in our Signature Events. These include our Annual Gala Ball, the China

Conference, SME Forum, Women of Influence Conference, and Human Capital Conference. Networking is the icing on the cake – dedicated volunteers from our membership who have a professional handle on what Hong Kong-based business people need to know plan these events. Many of these sell out, so stay alert for when these are announced.

In 2012 our Annual Ball again maintained its status as one of Hong Kong’s premier events. It was a gala affair enjoyed by all. This year the venue will be the new Ritz-Carlton Ballroom in the ICC. Mark your calendar: Saturday, 20 April 2013.

Read all about it: As you may have noticed, our monthly magazine – biz.hk – gets better and better in covering topics of interest to our members, including the Chamber’s priority issues. We are proud that Hong Kong does not have any other comparable English-language business magazine. We are of course always open to story ideas – contact Editor in Chief Daniel Kwan (dkwan@amcham.org.hk).

Workshops: Based on requests from members, we will be increasing the number of workshops this year. Large companies and small say that our workshops offer a time-and-cost effective

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way of providing training for staff members. We do all the logistics; all you have to do is decide who should attend.

Need help? We already have more than a dozen workshops planned for 2013.

These are usually announced a month or so in advance. But if your company desires a special training topic, please let our events staff know and we’ll do our best to find appropriate speakers/trainers.

Likewise, let us know if your company is interested in running a workshop at AmCham.

Rental space: The AmCham conference room is a comfortable, flexible space for meetings. Note that we now rent the room out to members (if available), realizing that space is difficult to find in Central. Contact Pearly Mak (pmak@amcham.org.hk) if interested in making a booking.

Networking on steroids More than Americans: We are an American Chamber with international characteristics! Because roughly half of our members have non-US passports, every AmCham activity presents plenty of opportunities for networking with people from a broad spectrum of business

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sectors, ethnicity, nationality, and cultural background. This guarantees particularly interesting conversations as well as a pleasant way to generate business connections.

Start the month right: Last year we revamped our Monthly Networking Cocktail, usually held on the first Monday of the month, by having each one hosted by two of our 28 AmCham committees. A majority of the cocktails are held at the American Club in Central, but we also have “signature cocktails” hosted by member companies. Recent examples include COACH and Brooks Brothers. We have an average of 120 people at each event.

Eat & Learn: All of our breakfast and luncheon functions begin with 15 to 30 minutes for networking conversations, but we are also attentive to timing. We start and end each session at the time indicated on the announcement. We take your busy schedule seriously. That said, you have to eat. So why not learn at the same time, as well as generate some new business contacts?

China connection: Our China Affairs Department trips to China continue to build momentum, with delegation visits last year to several places in the Pearl River Delta Region. We also had scores of

meetings with Chinese government officials, business people, and business organizations both in Hong Kong and the Mainland as a way to build contacts. In 2013, watch for trips to Southwest or Central China, as well as the PRD. Interested in China activities? Contact China Affairs Director William Lin (wlin@amcham.org.hk).

Advocacy Doorknocks: AmCham advocacy became increasingly varied and complex in 2012. To our Beijing and Washington Doorknock trips to advocate with government officials on behalf of our business sectors, we added another Doorknock to Dhaka, Bangladesh to assist our global sourcing members in the Apparel, Footwear and Textile committee. In each case, members from our Board and selected committees helped generate talking points that had impact on government decision makers.

Watch for other Doorknock delegations to Myanmar and Cambodia in the first half of 2013. Interested? Contact Director of Government Relations & Public Affairs Ming-Lai Cheung (mcheung@amcham.org.hk).

In the trenches: Much of our advocacy

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work is in the trenches at home here in Hong Kong. Our Board’s Government Relations Group (GRG) engages selected officials in roundtable conversations throughout the year, and many of our committees also invite mid-level officials to speak at committee meetings. We enjoy long-term, solid relationships with many government officials and offices.

Paper chase: In support of business sectors, AmCham makes submissions to government on special topics. Examples in 2012: communications dealing with patent system review, the competition law, sustainable waste management, private equity, air quality objectives, and alfresco dining. Our committees are always looking for expertise, so let us know if you are interested in volunteering.

Strategic guidance: The Board has four strategic advocacy groups in support of AmCham’s overall lobbying priorities.

Participation in the groups is by invitation only. They are the China Affairs Group (CAG), Educational Affairs Group (EAG), Environmental Steering Group (ESG), and Financial Services Group (FSG).

Throughout the year biz.hk will be reporting more about their work in support of our overall priorities. Want to

be involved? Contact Richard Vuylsteke (rvuylsteke@amcham.org.hk).

New opportunities: In 2012, the Chamber expanded its sponsorship and advertising opportunities to members. For instance, more than 20 SME members took advantage of our moderately priced Thanksgiving Luncheon sponsorships.

Their assistance made it possible to host more than 20 guests from the Hong Kong government, who were honored that day for their constructive interactions with our committees over the past year.

Supplement your image: Our business magazine now carries a special supplement each month targeting specific business sectors. Again, a reasonably competitive price gives first-class visibility to service offerings. Scheduled for the first half of this year are supplements on Fine Dining, Education (international schools), and Relocation. In addition, we have developed eDM mailings as a member benefit.

Contact Regina Leung (rleung@amcham.org.hk) if you are interested in advertising or listings in the magazine, or in eDMs.

Information, networking, advocacy, and visibility – we are in the business of making your business successful. Our mission is to be a catalyst for your success.

That happens in large part because of a dedicated office staff of 24 and a super effective volunteer leadership group that includes 14 past chairs still in Hong Kong and active in the Chamber; 24 Board members; more than 60 Chairs and Vice Chairs of Committees; and other executive advisors part of our special strategic groups.

Hearty thanks as well to those companies in our special Leadership Forum membership category. They provide substantial help financially and otherwise in the achievement of our mission. Leadership Forum Plus members – HKUST Business Schools, Jones Lang LaSalle, and KPMG. Leadership Forum members – Charles Schwab, Leading Organizations, Lenovo, Otis, PepsiCo, and Zurich. Interested in more details on how to join this category?

Contact Membership Director Michael Tsang (mtsang@amcham.org.hk).

In short, 2012 was a terrific year for AmCham. We aim to make this year even better!

and productive working relationship.

“Each year the inaugural luncheon gives our members and the Consulate officers a chance to meet together for informal luncheon conversation,” says AmCham President Richard Vuylsteke. “It’s invariably a great way to start a new year.”

“AmCham is fortunate to have Consul General Steve Young and Deputy CG Matt Matthews in Hong

Kong,” he says. “These State Department professionals set an incredibly positive tone for all the Consulate’s interactions with AmCham – and we coordinate virtually every day on the committee and board leadership level.”

US Consulate staff work tirelessly with the Hong Kong government on trade, intellectual property rights, regulatory harmonization and a host of other issues on behalf of the American business community, Vuylsteke points out.

And, members benefit from the Consulate’s expertise and assistance in various functions including Foreign Commercial Service, Economic/Political, Consular and Public Affairs section, he adds.

“AmCham is more than willing to collaborate with consulate staff for any issues or concerns the business community might have.” – Kenny Lau

Visibility

Just to Say Thank you for a Job Well Done

A

t AmCham chairman’s inaugural speech luncheon this year, more than 20 senior foreign service officers and staff of the US Consulate joined as guests to hear first-hand what the Chamber’s priorities are for the year ahead. It was also an opportunity for Chamber leadership and members to express their appreciation for a close

16

biz.hk 1 • 2013

ANNUAL SURVEY

BUSINESS OUTLOOK

ANNUAL SURVEY SHOWS CAUTIOUS OUTLOOK FOR

2013

By Kenny Lau In the last quarter of 2012, AmCham conducted an annual survey (for which 189 responses were received out of 1677 questionnaires) to find out more about members’ views in three areas: business outlook, education, and quality of the environment. These are key issues directly related to Hong Kong’s overall competitiveness as a city of international status.

According to the survey, members in general are satisfied of the local business environment in 2012 and are confident about Hong Kong as place in which to continue doing business in 2013. There are, however, challenges ahead: uncertainty in the global economic outlook, inflation and rising cost in the region, a lack of international school places and looming talent shortages amid an expanding service sector in Mainland China, and poor quality of the local natural environment.

Generally, it was not a bad year for business, especially under a dampened US market, sovereign debt-besieged Euro zone as well as slower growth in China. Over half of all respondents say Hong Kong’s business environment in 2012 was “very good” (8 percent) or “good” (48 percent); about a quarter (27 percent) indicate little or no change in the year; and only a small percentage (16 percent) believe it was “unstable” or has gotten “worse.”

Nevertheless, people are less optimistic about the coming 12 months (a sentiment they had also shared a year ago), largely due to uncertain economic outlooks in the US and Europe. Less than half of the respondents anticipate that 2013 will be a “very good” (5 percent) or “good” (42 percent) year; others believe it will remain “unchanged” (37 percent) while some predict an “unstable/worse” (17 percent) business environment in Hong Kong.

Despite a volatile environment, survey respondents report that their companies over the next three years plan to “expand business” (45 percent) or continue “business as usual” (45 percent); only a small number (9 percent) will be “gradually reducing” their business operation in Hong Kong while a small minority (1 percent) anticipates an “exit.”

“Hong Kong seems to be doing all right but the global outlook is still uncertain,” says Donald Austin, chair of AmCham’s Entreprenuers/SME Committee. “People are definitely worried about the US/Europe economic situation because it affects trade, which Hong Kong and China are largely dependent on.”

“It seems like things are just bouncing along,

and it just doesn’t give you any confidence when you hear bad news about the US economy or about Europe’s debt crisis one day and then the next day is fine,” he says.

Collectively, businesses remain extremely cautious and are reluctant to make any significant investment at the moment because “they don’t see a very clear picture of the economy ahead,” a view shared by many in Asia as well, despite continued economic growth in the region where businesses are earning profits.

“It makes good business sense to hold steady or reduce expenses when revenues are not up,” Austin says. “But, it also means less money is available to generate activities in an economy when companies conserve their cash or use it to simply buy back more shares and pay out more in dividends as they have in the last couple of months.”

“This will likely continue in 2013,” he says. “But at some point it just doesn’t work anymore when there is no top-line growth. That’s a problem I see in the next year or two.”

In addition to an uncertain global economic environment, one local aspect about which survey respondents are most concerned is inflation and rising cost, particularly in real estate. Over 90 percent find soaring prices of housing and commercial office rentals to be highly unsatisfactory.

“Hong Kong is not a low-cost place to do business; even China is getting expensive,” Austin says, noting a higher cost of living here than most other major cities. “In a way, we are not nearly as competitive as we used to be.”

Overall assessment of Hong Kong’s business environment in the past 12 months

Outlook of the business environment in Hong Kong in the coming 12 months?

8.1%

4.8% 48.4%

41.7%

27.4%

36.9%

16.1%

18

biz.hk 1 • 2013

16.6%

Very good

Very good

Good

Good

Unchanged

Unchanged

Unstable/getting worse

Unstable/getting worse

biz.hk 1 • 2013

19

EDUCATION

ENVIRONMENT

The demand for talent remains very high in Hong Kong where many MNCs are regionally based and Chinese enterprises have established significant presence. However, business executives and professionals are increasingly unwilling to relocate to Hong Kong simply because they can’t get their kids in a school.

“It is getting harder to get qualified professionals with children to live and work in Hong Kong,” one survey respondent says.

The availability of international school places is a relevant issue to 79 percent of survey respondents, of which over 91 percent do not believe there are sufficient places in Hong Kong. Almost 60 percent of respondents who find a lack of international school places locally say it detrimentally affects their businesses because “it limits the talent we can bring in.”

“This has become a globally reported issue; and people are well aware that this is a problem,” says Janet De Silva, AmCham’s Education Affairs Group chair. “The situation remains in crisis, particularly in primary schools on Hong Kong Island where there simply aren’t enough places opening up.”

“What we are hearing from HR officers is that

people are not even considering coming to Hong Kong and that some are leaving after a year because they couldn’t get their kids in a school,” she points out. “That is really disruptive for companies.”

“The good news is that Hong Kong has really established for itself a reputation of having extremely high quality education available, particularly through the international schools,” she adds.

“The problem, however, is that there are simply not enough places in those schools.”

The situation is unlikely to ease any time soon as demand for highly skilled talent remains high in the marketplace. “In fact, we will see a real increase in talent requirement and a shortage in the workforce in the coming years as China continues to be a global growth engine over the next decade,” De Silva believes.

“This also comes at a time when China is shifting out of low-value manufacturing into a service-based economy that will require new skills.

And, the number of new entrants to China’s workforce is expected to decline as a result of changing demographics and China’s one-child policy,” she adds. “The gap between supply and demand of specific types of skills in our region will only widen.”

Are there sufficient numbers of international and ESF school places in Hong Kong?

Does a lack of international and ESF school space detrimentally affect your business (among those who claim an insufficient number of places)?

59.5%

The environmental issue – particularly of air pollution – remains dire and is having a direct and significant impact on Hong Kong’s ability to remain a competitive world city.

A large majority of survey respondents (over 95 percent) are either “very concerned” or “concerned” about Hong Kong’s overall air quality, an area upon which four-fifths perceive no improvement or to have worsened in the past 12 months; they are equally concerned about pollution of the local marine water and ecosystem.

Many believe Hong Kong’s regulation and enforcement on environmental protection are simply too lax and below standards. Over 92 percent of respondents in the survey believe the “new” Air Quality Objectives (AQOs) are not stringent enough to make a “meaningful” difference. One respondent even calls them “a complete and utter joke.”

“When AmCham members and businesses in general feel so strongly about the environment, it is telling you something,” says Evan Auyang, head of AmCham’s Environment Steering Group. “People care so much because the quality of our natural environment goes hand in hand with our competitiveness.”

“We are competing not only to be a strong financial hub but also to be an attractive place where people could enjoy living,” he adds. “The environment is

always important because it is in many ways a public health issue, especially when we are talking about children.”

As Hong Kong continues to grow as a service economy, talent including those coming from overseas are much needed; yet, professionals are “refusing job offers because of the local air quality,” which is “the most specified reason for not relocating to Hong Kong,” especially among those with families and children. About 30 percent of survey respondents have indeed experienced difficulties in recruitment in the past 12 months.

The attrition rate among those who are already here is also surprisingly high. Close to half (47 percent) in the survey report of knowing professionals and/or their families and children leaving or having already left Hong Kong as a direct result of the quality of the local environment, with which “people are now making a connection between Hong Kong assignments and rates of cancer, asthma and allergies,” one respondent points out.

“Poor air quality affects [our] health,” another respondent says. “Even persons from areas worse off than Hong Kong do not want to come here because they can find places cleaner with better remuneration [without worrying] about their own health or health of their family members.”

Do you know of any professionals and/or their families and children leaving (or already left) Hong Kong because of the quality of environment?

Are Hong Kong’s new AQO’s (Air Quality Objectives) stringent enough?

72.2%

Yes

40.5%

Yes

53.4%

No

53.4%

46.6%

20.8%

No

6.9%

7.5% Yes

20

No

N/A

Yes

No

biz.hk 1 • 2013

biz.hk 1 • 2013

21

GOVERNMENT RELATIONS

HONG KONG – THE POINT GUARD FOR ASIA

Interview with Secretary for Commerce and Economic Development Gregory So

In an article he wrote last August, Gregory So, Secretary for Commerce and Economic Development, linked Hong Kong with American basketball star Jeremy Lin who was visiting the city then. Hong Kong, the Secretary wrote, should be “Asia’s point guard.”

He wrote: “As a small and nimble economy on the global economic stage, Hong Kong is able to set itself apart as Asia’s ‘point guard’. With international vision, sharp market sense and quick reactions, Hong Kong can efficiently boost trade in goods and services in the region, which helps enhance the overall effectiveness of global production and supply chains, as well as enable small and medium-sized enterprises to make the best use of their competitive edge.”

Much has happened since then. Recently, the Government announced the establishment of the Economic Development Commission to work on Hong Kong’s long-term overall strategy and identify new growth sectors. Among other initiatives, a new working group will be set up to study the promotion of Hong Kong as an intellectual property (IP) trading hub – an area that has garnered much interest from businesses in the past few years.

Where is Hong Kong heading? How does Hong Kong fit into China’s grand reform agenda? Can Hong Kong maintain its competitiveness when the costs of doing business – especially rents and talent costs – are so high?

In a wide ranging interview with biz.hk in December, So shares his views on Hong Kong in the areas of free trade, regional competitiveness, and government’s support for businesses. First, let’s start with IP trading:

Gregory So

biz.hk: Tell us about your vision for Hong Kong to become an IP trading hub in Asia?

So: I am actually quite a frontrunner in introducing IP trading. IP trading already takes place in Hong Kong...just that people don’t identify it as such.

What we need is a structure that would facilitate the trading part. I am not saying there will be an IP exchange market like a stock exchange. I don’t think IP trading will become like that in the near terms.

But I do believe standardization of procedures could help reduce transactional costs. That is precisely the kind of things that would be needed for a very robust IP trading platform.

IP practitioners spend a lot of time on due diligence exercise – [they ask questions like] does this vendor really possess the right? How do I value this right? Is this [IP] what the market wants? How scalable is this IP right? Would I be able to expand it horizontally or vertically? These are all very pertinent questions and they need to be answered.

As a trading hub, we ought to be able to give more

certainty and in the process of doing so, add value to the whole IP trading market.

Our advantage is that we are right next door to the largest consumption and technology markets in the world. Over the next few decades, things are going to take off exponentially [in China]. With our rule-of-law, and our professionals’ ability in valuation, buy-and-sell, accounting, legal, arbitration and meditation, the potential cannot be underestimated. This is because a lot of technology companies and brands would like to move into [China’s] domestic market. One of the things that they are concerned about is how to protect their IP. I am very robust about the development. This is an industry that could link a lot of our core strengths together. Enhancing IP management is going to be one of the highlights for Hong Kong for the coming years. biz.hk: Are you hopeful about Hong Kong joining the China-ASEAN Free Trade Area?

Photos: Create Images

22

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23

Incubator programs The Hong Kong Science & Technology Parks incubator scheme provides subsidized office space, consultancy services, investment matching and a small financial aid package to support R&D. The DesignSmart Initiative provides up to HK$100,000 funding for SMEs to invest in design projects.

The Design Incubation Program (DIP) provides office space for design tenants and other professional support.

The incubation programs run by Hong Kong’s Cyberport help creative digital media SMEs and start-ups realize their ideas and build their business.

•

Loan guarantees The SME Loan Guarantee Scheme (SGS) secures loans of up to HK$12 million for companies that need working equipment or business capital.

The SME Export Marketing Fund (EMF) helps companies participate in overseas exhibitions and business missions and to place B2B advertising. It can fund up to 50 percent of approved expenditure, up to HK$50,000 per application.

•

•

•

•

•

•

24

biz.hk: What are some of the support programs available in Hong Kong for businesses?

So: Hong Kong is nationality neutral. You can set up a company here and enjoy all these benefits. In particular, we have the Closer Economic Partnership Arrangement (CEPA) and the BUD (Branding, Upgrading and Domestic Sales) Fund.

On CEPA, we have so far achieved quite satisfactory results. Currently, we are the largest exporter of services to China.

As a matter of fact, it should be pointed out that 93 percent of Hong Kong’s GDP comes from the service sector; whereas in China the figure is 43 percent. Under [China’s] 12th Five-Year Plan, it aims to reach 47 percent. But looking at the sheer size of that market – in accordance and in compliance with our national mandates – the potential for Hong Kong’s service providers is huge.

The BUD Fund is a HK$1 billion fund and our aim is to help companies in Hong Kong to tap into China’s domestic consumption market. China is buying and attracting a lot of investment in brands and Hong Kong businessmen are very good at

biz.hk: Will there be greater flexibility in applying the rules of origin under CEPA to enable more foreign products to be exported through Hong Kong to China with zero-tariffs?

So: Right now, we have 1,700 types of products which enjoy the zero-tariffs advantages of CEPA. Twice annually, we look into the kinds of products that satisfy the rule of origin requirement. Any products that would meet the definition of Hong Kong product would enjoy zero tariffs. For that to happen, you have to comply with the rule of origin – a simple mixing or diluting or repackaging however will not satisfy the rule and cannot be classified as a Hong Kong product.

For example, for wine to take advantage of CEPA, it has to be a Hong Kong product. So if the wine is already produced overseas and Hong Kong is simply doing the re-labeling, that would not satisfy the rule of origin. But if you have grapes which are fermented and the wine produced in Hong Kong, your wine can qualify as a Hong Kong product and enjoy zero-tariffs. There are companies which are set up precisely for that kind of operation. There is much room for further development in the future. I would encourage more companies to do that.

•

•

So: Traditionally Hong Kong is a strong believer of the multilateral trading system. That’s why we’ve devoted a significant amount of time and resources in the Doha round. But I don’t see that materializing in the near future. So in the past few years, we’ve been working on bilateral and regional free trade agreements.

We’ve applied to join the Free Trade Agreement between ASEAN and China and we are working very hard to engage the different parties. I have met with all the ASEAN trade ministers. My colleagues and I will continue to engage them to start the negotiation and to foster increased ties.

A good portion of the trade between China and ASEAN countries actually comes through Hong Kong. And Hong Kong’s service industry is really our main export [to ASEAN countries]. We don’t pose any threats in terms of [export of] goods to these countries but we add value. In fact, [we help] reduce the transactional costs and increase convenience [of trade]. Almost all of the economies that I’ve spoken to are very receptive [of Hong Kong’s joining CAFTA]; however, it’s still up for negotiation. I don’t see that as being a very quick thing. It will be a process that we

Source: InvestHK, Hong Kong Productivity Council

[branding]. Part of the mission of the BUD Fund is to do precisely that. One of the advantages of Hong Kong companies have is that we bring good value in making purchases of overseas brands – by partnership or entering into licensing arrangement – and we can lead these brands to the domestic market in China.

The second component is upgrading. We’ve been doing business with China for over three decades and we know the “ins” and “outs” of China. Our businessmen can tap into China’s drive for high-value added business and help in their upgrade. That’s the second element of the BUD Fund.

The third part is about domestic sales. The government has been assisting Hong Kong businesses to move into China’s domestic market through our Economic and Trade Offices in China and in collaboration with other agencies such as the Trade Development Council and the Hong Kong Productivity Council. I have been leading delegations into Mainland’s first and second tier markets. I am very impressed with the way Chinese consumers received our products and services. In Wuhan, for example, the products we brought in were sold out in just a couple of days. Our businessmen found themselves with no more inventories to sell – there is a huge appetite for our products.

Hong Kong offers financial and other support to help companies set up and expand. There are various programs designed to help overseas and local SMEs set up in Hong Kong. These include:

will devote more time and efforts. biz.hk: A common concern among businesses is that the cost of doing business in Hong Kong is too high, especially in terms of rents and talent costs. How is the government addressing these issues to strengthen Hong Kong’s competitiveness?

So: A lot of studies have shown that Hong Kong is still the most competitive market in the world. In terms of English speaking capability and productivity, we are ranked quite high and we continue to exceed a lot of the other economies in the region. And the latest statistics from InvestHK show that many foreign companies continue to use Hong Kong in setting up their regional offices.

Surely there is a shortage of land, and the government is doing everything we could to increase land supply. In the years to come, we will have more commercial properties and land made available. We are doing a lot in encouraging the development of commercial properties and we are encouraging some of the industrial buildings to be refurnished to become commercial properties. We are doing all that we could.

biz.hk 1 • 2013

•

•

The SME Financing Guarantee Scheme can provide guarantee coverage of 50–70 percent on loans up to HK$12 million.

Funds for marketing The CreateSmart Initiative provides financial support to SMEs in the creative industries, funding them to build their brand through participation in overseas exhibitions and competitions.

Technology and Innovation funding The Innovation and Technology Fund (ITF) supports companies to upgrade their technology and inject innovative ideas into their business.

The Small Entrepreneur Research Assistance Program (SERAP) provides funding for R&D of technologies that can be brought to market within two years.

BUD Fund (Branding, Upgrade and Domestic Sales) $1 billion fund offered by the government to support individual Hong Kong enterprises in undertaking projects to develop brands, upgrade and restructure their business operations and promote sales in the China market, so as to enhance their competitiveness and facilitate their business development.

biz.hk 1 • 2013

25

TRADE & INVESTMENT

Will Chinese Investment in the US

Tracking Chinese FDI (2000-2012)

Continue to Grow?

Despite a few unsuccessful cases, 2012 has been a record year for Chinese investment in the US. Will the same momentum continue in 2013? In an interview with biz.hk, Daniel Rosen of New York-based Rhodium Group shares his forecasts for the coming year and insights on China’s “Go Global” efforts and what the US should do to facilitate more Chinese investment

WA 20 MT OR

26

MN 8

6

WI 2

PA 7

IA 2

NE 4

NV 6

IL 40

Daniel Rosen

CO 6

CA 166

IN 8

KS 3

enough to keep up with global oil prices, Chinese firms that were extracting oil in places like Sudan didn’t bring it home to China even though the government insisted. Instead, they sold it to [buyers in] Japan. It shows that they are really trying to maximize their profitability – not just listen to orders from the government. biz.hk: Why is public perception so different from reality?

Rosen: Ultimately, there can be only one reason – it is that the SOEs are absolutely not transparent about how they operate and how they manage. [It’s] absolutely true that they are centrally controlled. The State-owned Assets Supervision and Administration Commission of the State Council controls the SOEs and their leadership is appointed by a party body.

That’s not a western fantasy but a reality.

Now, behind that non-transparent governance, I do see that they are not just about politics but also about making money. For people who are not like me who has spent 20 years studying China, I don’t blame them for having these kinds of question about Chinese enterprises. This is ultimately a governance and transparency problem that they are going to have to overcome. biz.hk: Your projection says that China’s investment outflows will amount to US$1 to $2 trillion by 2020 and of that amount, the US could receive $100 to $400 billion. What will be the top three conditions for that to happen?

Rosen: The first two conditions are that both the Chinese and US economy must continue to perform well. The third condition is that the US and China together will have to manage their relationship and make sure there is enough trust so that government bodies like CFIUS on the US side or others within the Chinese government don’t decide to block deals from happening. There is a real danger that even if the two underlying economies perform well, the political

biz.hk 1 • 2013

OK 2

NM 1

OH 19

DE 1 DC 1 VA 17 MD 13

KY 1

MO 3

NH 2 MA 13 RI 2 CT 1 NJ 20

NY 45

MI 46

AZ 2

biz.hk: There is a perception that Chinese investment abroad is politically driven and that Chinese State-owned Enterprises are agents of the Communist Party, hence some say the US should reject Chinese investment. What’s your view on that?

Rosen: If we look at Chinese investment in total – all the way through, it started to increase in early 2000 and almost all of that increases were in natural resources.

That’s when China realized that it has a demand at home that was outstripping domestic supply and wanted its companies to be more involved in [acquisition]. Definitely it was mostly SOE buyers.

If we look at the cases in the US and Europe, the big growth of direct investment into those geographies really only started in 2008 and 2009 – at a later era. At that stage, we are seeing a different pattern. In fact, in the US only about two-thirds of the total value is by SOEs. Fully one-third is by private [firms]. And if counting by the number of investment in America, about 75 percent are private firms – not SOE firms.

That’s the first point that I want to make – the pattern is changing as China matures beyond just buying raw materials abroad.

Also, I am not sure it’s sufficient to say that SOEs are only motivated by political consideration. Almost all of them have very serious concerns and a focus on profitability and commercial operation even in China.

It is all the more so when they go abroad. Many of them are overseas listed subsidiaries of Chinese parents. They have shareholders and they have to show that their governance is becoming more normal and that they are trying to maximize profits. The governance around SOEs is different depending on whether we are talking about their parents at home or the subsidiaries listed and operate abroad.

The final factor is that even for the most stateoriented SOEs such as the oil companies, for example, if we look at what they do abroad, it turns out that they are more following a commercial motivation than a political motivation. I’ll give you one example: When domestic prices of gasoline did not increase fast

2

NC 36

TN 6 AR 2

SC 9 AL 6

GA 22

TX 55 LA 1

AK 2 2

FL 10

Deal Value (in Smil)

0 - 10

100 - 500

10 - 50

500 - 1000

50 - 100

1500 +

X = Number of Deals

environment deteriorates and makes it very difficult for large firms to invest bilaterally. biz.hk: Now both the US and China have settled their leadership issues. Do you expect to see a more stable executive-to-executive relationship between the two countries?

Rosen: I have to say that President Barack Obama started his first term not really knowing anything about foreign policy and started off with a very openhand strategy with China, and then actually came around taking a slightly more hawkish view on what the challenges would be in the US-China relationship.

He starts his second term of office now already knowing everything he needs to know. What I mean is that his period of becoming more sophisticated about what the issues are is done. There will be more continuity on the US side.

The US doesn’t have a new president but China does. China has a new General Secretary. And that’s what’s most important in China. We don’t know what he will want to do with Chinese foreign policy but we have gotten a very clear idea of what he intends to do in terms of economic reforms in China. Just in a few days since taking office, General Secretary Xi Jinping has signaled a surprisingly bold attitude towards the importance of economic reform, and that’s helpful.

But it also means that China will go through more adjustment pressure at home. As it goes through adjustment pressure at home, naturally there will be

biz.hk 1 • 2013

Source: Rhodium Group

inclination to make things easier at home by having more trade surplus and taking a harder line with foreign enterprises. But the larger point is a positive one: China is now proceeding with reforms. It may take a while to achieve its goals but ultimately it’s very good news for the US. biz.hk: How can Hong Kong maximize its role in facilitating Chinese investment going abroad?

Rosen: What makes it hardest for Hong Kong to do a better job is that it’s already doing a very good job. A very high percentage of Chinese outbound investment is going through Hong Kong today, for the reasons that Chinese firms really don’t know how to do it directly themselves and that Qianhai financial centre [in Shenzhen] isn’t yet capable of intermediating Chinese investment to the world; Hong Kong today is playing probably a larger role than it can expect to play in the future.

As Chinese firms become more comfortable operating globally, they will become less dependent on Hong Kong intermediaries to help them structure their investment abroad. It should not be considered a sign of underperformance in Hong Kong. But Hong Kong needs to think about the absolute value of its compensation for helping China to do this rather than a relative share of how much it’s in the mix. biz.hk: What do you mean by compensation?

Rosen: Hong Kong isn’t doing this as a public service

27

to the Mainland economy. It’s doing it as an industry and as a way to make money, to profit, and to show [its] value. When I say compensation, I mean as China evolves, what will Hong Kong’s next era be in terms of helping finance China’s global story?

In terms of servicing China’s global operational needs such as having international standard for accounting etc, hopefully Hong Kong can show a superior ability to manage, comply and interpret, and handle international accounting standard, financial standard and compliance standard. These are things that Chinese firms frankly don’t really understand or know how to deal with the associated risks. biz.hk: So Hong Kong can up the game by working towards higher standards?

Rosen: No doubt about it, especially in an era after the global financial crisis. Hong Kong [should strive to become] the place which can efficiently maintain the highest standard of regulatory oversight for capital intermediation. There’s going to be hedge funds that prefer to go elsewhere with less scrutiny, but those are higher-risk segments of the world economy. Considering the incredible risks entailed with China’s financing in the years ahead, Hong Kong has to avoid the temptation of having laxer standards. Instead, Hong Kong should go the other way and have a reputation of having the most predictable and most well-administered capital standards anywhere in Asia. biz.hk: What are your thoughts on the recent failures of investment attempts in the US by Chinese companies like Huawei and ZTE? Rosen: The first thing that I’d say is that the tiny numbers of deals that have problems are the ones that get 100 percent of attention. 99.999 percent of investment don’t have problems and they don’t get any attention. So we have a selection bias of what we read in the papers.

With that said, it’s understandable why certain firms or industries have gotten a lot of attention. Take telecommunications as an example – many are concerned about cyber espionage between China and the US, so Chinese telecommunications companies are going to face a higher degree of scrutiny. In the wind-farm case, the problem is one of proximity to sensitive US military facilities, a reason also for a number of rejected deals and an issue no matter what industry the company is from.

The issue can often be addressed before it becomes a big loss of money for the parties involved with the deal by working with a law firm to check on these things, and it is not too difficult to figure out where there might be a military facility in the US. This is one consideration about investing [in the US] which I think firms on both sides should act more

28

Chinese Direct Investment in US, 2000-2012

Source: Rhodium Group

pro-actively to make sure that they don’t happen to be right next-door to a US military facility.

If a Chinese firm has a particular reason to be in a certain place, there are ways to address that, but it shouldn’t start out thinking that it will not be a problem whatsoever, especially when there are going to be issues in the overall China-US relationship for some time to come as a result of China’s success. biz.hk: What will be your advice to the US government – the Commercial Service in particular – to attract more Chinese investment?

Rosen: The first thing is to do a better job of communicating to Chinese people – not just companies but the broader public – of how many successful cases and sectors [of Chinese investment] there currently are.

It’s because Chinese companies are affected by what the public in China thinks. They certainly don’t want to be embarrassed back home for problems abroad.

Number one: That’s something the US government should be proud of. They should be pointing to the deal flows and the hundreds and hundreds of deals that are going ahead successfully without problem, rather than making apologies for the deals which have got bogged down.

Number two: In areas where the there are concerns and questions about the appropriateness of investment, the US government has to do a better job at explaining what the reasons are. Traditionally, we don’t do that because it’s treated as a sensitive national security subject for fear that we will be giving something away. That’s not going to be sufficient going forward.

Number three: The US government should do more to compare and contrast between the investment environment in the US and in China. The US is actually a far easier place to do business than China is. That’s not surprising, given China is a developing country and the US is a very mature OECD economy. But we sometimes forget, however much of a bureaucratic headache it is to set up in Ohio, Texas or California, that it’s really ten times more challenging in many ways to set up in Hubei or Liaoning.

biz.hk 1 • 2013

REAL ESTATE

Riding the Asian Property Wave

Staying ahead of the curve Paul Salnikow, Chairman and Chief Executive Officer of The Executive Centre, talks to Helen Luk about how he built a serviced office company into a multimillion-dollar business

Paul Salnikow

P

aul Salnikow has a knack for staying ahead of the curve. He was posted to Hong Kong in 1991, but soon afterwards his employer, a Japanese company, was hit

by Japan’s economic depression and decided to close down the operation.

They offered to relocate him back to his hometown, New York, but sensing that Asia would offer him a more interesting career path, Salnikow seized the opportunity to stay on and became one of the first property fund managers in Hong Kong.

Back in those days, property funds

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were not the trillion-dollar business that they are now. “Property was not considered an investment-grade asset: It was illiquid, difficult to sell and difficult to value – badly understood,” Salnikow tells biz.hk in an interview at his Exchange Square office.

But soon, he was riding on a boom in Asian property prices. “Over the last 25 years, anybody who has bought into real estate almost in any class, almost anywhere [in Asia] would have made money,” he says.

New market While managing the property funds, Salnikow saw the potential to develop a premium serviced office

business as such offices were non-existent in Asia at the time and it was difficult for companies to set up shop in new markets quickly and flexibly. He therefore proposed to his company, an investment group backed by the National Commercial Bank of Saudi Arabia, to create such a business in 1994.

“From a landlord’s perspective, I was making a super yield – I was making my market rent and the profit of the business. So instead of getting a three percent yield, I was getting a 10 percent yield,” he says.

That was the founding of The Executive Centre, which began first with a serviced office in the Bank of America Tower in Hong Kong and then two more in the Prudential Tower in Singapore and the Sampoerna Strategic Square in Jakarta.

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From its humble beginning with just three centers, the company has since undergone phenomenal growth, benefitting from the robust economic expansion of Hong Kong, China and other Asian markets over the past two decades. It now boasts 50 centers in 18 cities across Australia, China, India, Indonesia, Japan, Korea, Singapore and Taiwan.

Taking the leap Amid a management change in 2000, Salnikow took the next step and bought out the serviced office business from his employer with two other investors – Simon Murray, founder of independent investment company GEMS, and one of the Rothschild funds.

“I left the fund management

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business in part because I was a little bit bored with it. What I realize in property fund management, particularly when assets are just rising, is that basically I am just a professional shopper,” he says.

Running The Executive Centre, however, was not all smooth sailing.

Soon after Salnikow took over the business, he was faced with a prolonged economic downturn brought on by a succession of crises, including the collapse of the energy giant Enron, the September 11 terrorist attacks and the bursting of the dotcom bubble.

“With those crises, our business was challenged. In the first 12 months, we were very focused on expanding and we opened seven centers. But what we were not focused on was communicating with clients, listening to them and

Photos: Create Images

solving their problem, be it timing, cost, view or prestige.

“I realized that to be successful in serviced offices, you have to understand that we are not providing office space but ‘office occupancy solutions.’

Every client has a different problem and solution,” he says.

His efforts have clearly paid off.

The Executive Centre now operates more than a million square feet of office space and its yearly revenues have exceeded US$100 million.

“We have now become the thirdlargest serviced office company in Asia and the fifth-largest in the world and we are still growing,” Salnikow says.

“Our ambition is clearly to become the number one premium serviced office in the world … If we have 50 centers now, an appropriate size for us on a global basis may be 200 centers.”

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Salnikow’s eyes, however, are not just focused on the sheer number of serviced office centers. He says the management team fine-tuned The Executive Centre’s positioning in 2003, targeting it to be the equivalent of the Grand Hyatts and the Four Seasons – a top-of-the-line brand that provides premium, tailor-made serviced offices to clients.

Sea change Over the past two decades, Salnikow has witnessed a sea change in the business operation of serviced offices.Corporations used to demand spacious offices, whereas cost and efficiency are now their prime concerns.

The top executive says he was able to charge HK$40,000 per desk a month when the Bank of America Tower office opened in 1994. The price of a desk has since fallen dramatically to around HK$15,000 in the company’s Exchange Square office, but the density of desks have increased several fold. Technological advances have also enabled corporations to keep smaller offices as they can now store their filings electronically.

“The same space that we were giving in 1994 to one client for one desk, nowadays it’s maybe three desks. They are focused on making money with what they do, and not on the building of stage sets, which is what offices used to be about,” Salnikow says.

Today, The Executive Centre makes 40 percent of its revenue from providing business services, such as secretarial, planning, meeting room facilities, payroll and banking, to clients – a business stream that didn’t exist back when the company was launched. Two-thirds of its clients are long-term and their average length of stay is more than 30 months.

The rise of technology corporations such as Facebook, Google and

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Twitter means that they now make up 35 percent of The Executive Centre’s client base.

“These companies grew up over the past 20 years and they grew fast.

They are moving way too fast to be designing breakout areas and receptions, so they are heavy users of our serviced offices,” Salnikow explains.

Financial services is the traditional stronghold of The Executive Centre, and although the company has recorded an increase in the actual number of such clients, the sector makes up just 30 percent of its client base these days.

Another 20 percent of its clients are small private equity firms, hedge funds and investment groups, while the remaining 15 percent are businesses that offer support services to the big corporations.

Banking fragmentation According to Salnikow, the big banks have been downsizing and shedding their private equity and other departments over the past 18 months, pushing the vacancy rate in Central offices to more than five percent, doubling the figure from two and a half years ago.

The trend, however, has increased demand for premium serviced offices and created new businesses for The Executive Centre.

“The banks are downsizing and they are giving up space. But the bankers who are in that space are not leaving Hong Kong. They are taking their departments and – with the operation and agreement of the banks – leaving the big banks and becoming their own entities,” he explains. “In some instances, they are buying out their groups; in other instances, the banks take a minority share in the new entities. This way, the banks are shedding headcounts and costs.”

Salnikow says a majority of the banking clients that the company has signed on in the past year and a half

are such new entities – a drastic change from before the financial crisis, when most of the clients were financial institutions from New York and London trying to establish their presence in Asia for the first time.

As these new, smaller entities become more successful, he predicts that they will either merge or be acquired by bigger corporations – that’s why they need flexible leasing arrangements and they are not the only ones.

Flexible leases Companies nowadays have evolving business needs, whether it is to expand, merge or relocate their staff out of underperforming markets to brighter spots in the region. Flexibility is therefore the game plan for serviced offices going forward.

“Our clients want short-leases.

One of our selling points is that you can come and go. Yet, we manage that flow of traffic so successfully that our occupancy is consistently over 90 percent across 50 centers,” he says.

Salesforce, for example, has a fixed-monthly-pay arrangement that allows it to take up space in The Executive Centre’s different offices across Asia with short notices.

“Last year, they had 70 work stations with us in Delhi in India.

They completed their project and downsized that office to a much smaller one, but they have now taken space with us in Sydney and Seoul,” Salnikow explains. “It works for us because we are 90 percent full, not 100 percent full… there’s always somebody leaving every month in every location.”

Looking ahead, Salnikow says Hong Kong provides limited expansion opportunities as there are very few top-grade office buildings coming onto the market.

China, on the other hand, is a different story. About 35 percent of The Executive Centre’s office centers are now in China, spreading across

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Beijing, Chengdu, Guangzhou, Shanghai, Shenzhen and Tianjin.

“For Hong Kong, over the next three years, we are likely to expand by two centers, from six to eight. In China, we are adding five centers per year. Our China growth rate is 20 percent per annum and our Hong Kong growth rate is much less, around five percent – not because the demand isn’t there in Hong Kong, but just the supply of buildings isn’t there,” he says.

The business landscape, Salnikow observes, has also evolved for the once-emerging markets of Beijing and Shanghai, which are now taking on characteristics of matured cities.

“Just providing the space for companies coming into China was the game plan between 2000 and 2010.

But the game plan nowadays is to serve the clients that are already in China,” he says. “More than 50 percent of our client base is domestic Chinese companies. They are again groupings of people who used to work for the big corporates but have now set up their own human resources, advertising and private equity [companies] within the marketplace of China.”

In addition to China, Salnikow says the company will focus on expanding within Asia in the near term, but breaking into North America and Europe as well as other emerging markets such as the Gulf States, Africa and Latin America is at the back of his mind.

Salnikow says the global financial crisis has had a positive impact on The Executive Centre as investors are now showing much greater interest in cash-rich businesses.

“We now have corporate borrowing available to us. Whereas 12 years ago, people said we were a boring business. Post-global financial crisis, being able to generate cash month in and month out and having a good margin is what people are really interested in,” he says. “Suddenly, we are not a boring business anymore.”

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LAW

US UNFAIR COMPETITION LAW LAW APPLIED AGAINST

THAI MANUFACTURER A settlement in Massachusetts over the use of stolen IT could have serious implications over businesses which trade with the US. Stacy Baird, a intellectual property and trade expert and an active AmCham member, reports on the case and how it may affect your business

By Stacy Baird

M

arking a milestone in the global fight against unfair competition, an attorney general in the United States has taken unprecedented legal action against a Thai manufacturer that produced and exported products while using stolen IT to unfairly lower its operating costs and undercut competition.

Last October, Massachusetts AG Martha Coakley exercised her authority to enforce state competition law by requiring a Thai seafood processor to use licensed IT in its business operations. She announced a landmark settlement with the company (see box). The company, Narong Seafood, is a major exporter to the US and competes with Massachusetts’s seafood processors.

The Massachusetts settlement marks the first time an attorney general has exercised enforcement authority to stop a foreign company from competing unfairly through the use of illegal IT. The case illustrates the momentum in the US to level the playing field for manufacturers around the world and preserve jobs in the US. Unfair competition means the business success of one company comes at an unfair cost to a competitor. Use of illegal IT may substantially reduce a company’s overhead costs, illegally disadvantaging a company that pays for licensed, legal IT. This enforcement action was foreseeable.

In 2011, Washington and Louisiana passed

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unfair competition laws that require manufacturers whose products are sold in their respective states to ensure that they use legal IT (both hardware and software) in their business operations or risk having sale of their products barred in the respective state – regardless of where the Stacy Baird manufacturing took place or the IT theft occurred.

And then in November 2011, 39 attorneys general,the top law enforcement officers for 36 US states (including Massachusetts) and three US territories, signed a letter to the Federal Trade Commission and head of the Unfair Competition Bureau, announcing their commitment to use their powers to step up enforcement against manufacturers that use stolen IT. They urged that existing anti-competition laws, the Federal Trade Commission Act (and state laws based on it), provide the authority to address the use of illegal IT as a tool of unfair competition – and that the FTC should exercise that authority. The letter outlined the enormous cost of the use of illegal IT to businesses in their states, and ultimately to their states and the US economies sending a signal that enforcement in this area was of great economic importance.

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Only months later, in April 2012, 16 members of the US Senate Small Business Committee issued their own letter to the FTC, urging it to promote manufacturing competitiveness around the world and work with state attorneys general to fight the growing problem of IT theft.

In May, the state of Missouri passed a resolution calling on the FTC and state attorney general to address unfair competition; and in June the state of New York adopted a similar measure. Last August, 19 members of the US House Small Business Committee followed suit with their own letter to the FTC asking it to work with the states and federal agencies to address illegal IT. Many Asian manufacturers supply or sell directly into the US. It is widely known that many of these companies use illegal IT in their business operations and manufacturing. Government and business leaders in Asia should be aware of the growing momentum for enforcement of US competition laws against these companies and those that rely on them for manufacturing. They should also take more proactive measures to implement stronger IPR policies and legalize their own IT. Recent government initiatives in Greater China have emphasized the importance of using licensed software. At this point, many private enterprises understand the benefits of doing so.

However, a recent survey by the market research firm IDC and the Business Software Alliance indicates that nearly half of the enterprises surveyed lack sufficient corporate policies to ensure the use of licensed software.

Given the attention this issue is receiving, it is foreseeable that the Massachusetts case could prompt similar enforcement actions in the US. While some in Greater China’s manufacturing industry may see this as bad news, like it or not, it is also an opportunity for businesses to ensure they are using legal IT.There is also an opportunity to create a competitive advantage for Hong Kong. Hong Kong has the capacity to implement a certification program and supply chain controls and the ability in many cases to take an end-toend approach, with Hong Kong-based manufacturers working with the major brands that are situated here.

If you are in the business of manufacturing goods that may end up for sale in the US, you should take a close look at the laws in Washington and Louisiana and consider the implications of the Massachusetts case and the trends in this area of US anti-competition law. It may change your IT practices. If you buy from manufacturers that may be using stolen IT, you’ll want to review the law, take a look at the manufacturers in your supply chain and consider implementing a 'code of conduct' that proscribes using stolen IT for your suppliers. If you are a manufacturer competing against a company that uses stolen IT, you might consider the merits of using the US law to restore fairness to competition in your industry.

Editor’s note: Stacy Baird is an intellectual property and trade expert and former policy advisor to members of the US Senate and US House of Representatives. He is based in Hong Kong.

Company Fined for Using Pirated Software to Gain Unfair Advantage over Massachusetts Businesses Thailand-Based Company Agrees to Stop Using Unlicensed Software

93A and its prohibition on unfair competition.

“Businesses using unlicensed software should not gain an unfair cost advantage over rivals who play by the rules,” AG Coakley said. “We are committed to ensuring that companies doing business in Massachusetts compete on a level playing field.”

By avoiding the cost of obtaining legitimate licenses to software used in its business activities, the AG’s Office alleged that Narong was able to reduce its costs and gain an unfair advantage over local companies that paid for the right to use such software products.

The agreement with Narong was filed today in Suffolk Superior Court. Under the terms of the Assurance of Discontinuance, Narong has agreed not to illegally use unlicensed copyrighted software programs in connection with the production or manufacturing of goods that enter Massachusetts. Narong will also pay a $10,000 civil penalty to Massachusetts.

BOSTON – A Thailand-based seafood company has agreed to pay US$10,000 resolving allegations that its use of unlicensed software provided an unfair competitive advantage over Massachusetts businesses, Attorney General Martha Coakley announced today (October 18, 2012).

The AG’s Office alleged that Narong Seafood Company, Ltd, a Thai fish processor, unfairly sold and delivered products into the state by illegally using pirated software products without paying the appropriate licensing fees – a violation of M.G.L. Chapter

Source: Press release by the Office of AG Martha Coakley

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2013 Feb

Mark Your Calendar My First Trip to China - Three China Hands Describe

Feb Their Formative First Visits

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Orville Schell, Arthur Ross Director of the Center on US-China Relations, Asia Society, NY Leo F Goodstadt, Adjunct Professor, School of Business Studies, Trinity College, University of Dublin Tom Gorman, Chairman and Editor-in-Chief, FORTUNE China magazine and CCI Asia-Pacific Ltd (Moderator) Orville Schell, Leo Goodstadt and Tom Gorman are contributors to the new book, My First Trip to China: Scholars, Diplomats and Journalists Reflect on their First Encounters with China. At the event, they will recount their own maiden journeys to China and describe how their initial experiences helped shape their subsequent careers and opinions.

Orville Schell is a former professor and Dean at the University of California, Berkeley’s Graduate School of Journalism. He worked for the Ford Foundation in Indonesia, covered the war in Indochina as a journalist, and has traveled widely in China since the mid-1970s.

Leo F Goodstadt arrived at Hong Kong University in 1962, later became deputy editor at Far Eastern Economic Review and worked for publications including Asiabanking, Euromoney and London Times. He spent 1989 to 1997 as head of Hong Kong Government’s Central Policy Unit.

Tom Gorman has been a consultant on business strategy in China to various Fortune 500 companies. He is a member of CUHK’s EMBA Advisory Group, China Economic Quarterly’s Editorial Advisory Board, and Indiana University’s Advisory Board of the Research Center for Chinese Politics and Business.

How Legislative Developments in Hong Kong

Feb Are Affecting You and Your Business

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Dennis Kwok, Member, Legislative Council Dennis Kwok will explain the legislative process in Hong Kong and give his observations on recent and likely upcoming enactments in the Legislature noteworthy to AmCham members.

Dennis Kwok is a member of the Legislative Council representing the legal functional constituency in Hong Kong. He graduated from King's College London where he received his LLB in 1999 and was admitted as a solicitor in the High Court of Hong Kong in 2002 and to the Roll of Solicitors of England and Wales in 2003. He worked as a solicitor at international law firm Herbert Smith for 5 years, and was called to the Hong Kong Bar in 2006.

Dennis is a founding member of both the Civic Party and The Professional Commons (a think-tank on public policies). He is also a core member of the Citizens’ Commission for Constitutional Development headed by the former Chief Secretary Anson Chan. He is currently the pro bono legal advisor for the Hong Kong Blind Union and the general secretary and spokesperson for Clear The Air.

APEC 2013: How APEC Can Support Your

Feb Business Objectives

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Anthony Nightingale, CMG, SBS, JP David Dodwell, Executive Director, HK-APEC Trade Policy Group Mark Lanning, Consul, Economic Affairs, US Consulate Hong Kong APEC maintains strong ties with the business community through the APEC Business Advisory Council (ABAC), to which each member economy appoints three representatives. This roundtable presentation will describe the APEC process in general and ABAC’s specific objectives.

Anthony Nightingale was Managing Director of the Jardine Matheson Group. He is a Hong Kong representative to the APEC Business Advisory Council and is active in SFC’s Committee on Real Estate Investment Trusts, The Real Estate Developers Association of Hong Kong, Employers’ Federation of Hong Kong and UK ASEAN Business Council Advisory Panel.

David Dodwell is a veteran Financial Times journalist and expert on international business, global trade and economic and political developments. He has served on a number of government advisory committees, and was in 2001 awarded the Bronze Bauhinia Star for his contribution.

Mark Lanning has previously served foreign service assignments in Guangzhou (2006-2008) and in London (2008-2010). He is a Pickering Fellow with US Department of State, and as part of the fellowship program he interned at the US Embassy in Tashkent and on the staff of former Secretary of State Colin Powell.

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

Tel: (852) 2530 6900

Fax: (852) 2810 1289

Venue: Venue: The American Club, 49/F Floors 48-49, Exchange Square Two Central, Hong Kong

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Venue: The American Club, 49/F Floors 48-49, Exchange Square Two Central, Hong Kong Time: 8:00am-9:30am (breakfast included) Fee(s): Member Fee: HK$260 Non Member Fee: HK$380 Corporate Table Fee (10-12pax): HK$4,000

Fee(s): Member Fee: HK$420 Non Member Fee: HK$520 Corporate Table Fee (10-12pax): HK$5,300

Email: kalau@amcham.org.hk