biz.hk Mar 2014 by The American Chamber of Commerce in Hong Kong

20 14 â&#x20AC;&#x2122;s

W HO IN T E & EL DI S, NE

March 2014

March 2014 Vol 46 No 3

Contents

Richard R Vuylsteke

Editor-in-Chief Daniel Kwan

Managing Editor Kenny Lau

Advertising Sales Manager

Publisher

COVER STORY

ROADSIDE POLLUTION

RESEARCH & DEVELOPMENT

CHINA BUSINESS

Arthur Bowring, Managing Director of Hong Kong Shipowners Association, has played a key role over the past decade in addressing the problem of emissions from burning not-so-clean marine fuel worldwide. Reflecting on a timeline of progressive policy, he tells of what Hong Kong has achieved and why we should be proud of our achievements so far

A team of City University scientists in a study of air pollution concentrations, traffic volume and composition along three congested roads in Central District showcase how vehicle management and urban design are keys in curbing emission of deadly fumes

Allen Ma, CEO of HKSTPC, speaks about the mandate of “facilitating a dynamic environment where companies can innovate” and “transforming innovation and technological advancement into value creation”

AmCham President Richard R Vuylsteke in a conversation explains the mission behind a recent delegation to Dongguan and Shenzhen for a visit of the headquarters and R&D center of China’s largest residential and real estate firm

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.

04 A Breath of Fresh Air

Advertising office 1904 Bank of America Tower 12 Harcourt Rd, Central, Hong Kong Tel: (852) 2530 6900 Fax: (852) 3753 1206 Email: amcham@amcham.org.hk Website: www.amcham.org.hk

07 New Business Contacts

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 Tel: (852) 3596 8466 Email: ray.chau@overa.com.hk Website: www.overacreative.com ©The American Chamber of Commerce in Hong Kong, 2014 Library of Congress: LC 98-645652 For comments, please send to biz.hk@amcham.org.hk Single copy price HK$50 Annual subscription HK$600/US$90

AMCHAM NEWS AND VIEWS

ROADSIDE POLLUTION 14 The Impact of Road Traffic on Air Quality

Hong Kong has finally introduced a series of regulations to improve the quality of our air, including a much tighter cap on the sulphur content of marine fuel in local waters; an Emission Control Area per rules of the International Maritime Organization, if implemented, will be most effective in reducing marine emissions across the entire PRD region

76 executives have joined AmCham’s business network in the last two months

40 Mark Your Calendar

20 Traffic Congestion: A Vicious Cycle of Immobility The effect of worsening traffic congestion is attributed to a number of causes, and one primary cause is the exponential growth of private cars – which has increased by 150,000 vehicles, accounting for nearly 90 percent of the total increase of all vehicles

RESEARCH & DEVELOPMENT

COVER STORY

TAXATION 32 Filing a US Tax Return: What’s New Erik Wallace, Partner at international law firm Withers in Hong Kong and a specialist in all aspects of taxation, addresses key aspects of filing a US tax return as a non-resident expatriate and latest updates in the US Tax Code

SOCIAL RESPONSIBILITY 36 The HUB – A Haven for Underprivileged Children The transformation of a 5,000-square-foot former church in Sham Shui Po into a spacious haven offering academic support and personal development for children of families living under the poverty line

22 A Catalyst of Innovation & Technology

08 Hong Kong as a World Leader of Clean Marine Fuel? Arthur Bowring, Managing Director of Hong Kong Shipowners Association, has played a key role over the past decade in addressing the problem of emissions from burning not-so-clean marine fuel worldwide. Reflecting on a timeline of progressive policy, he tells of what Hong Kong has achieved and why we should be proud of our achievements so far

12 A Proven Model in Curbing Emission David Pettit, an attorney with Natural Resources Defense Council (NRDC), examines how ports in the Pearl River Delta can learn from those in the United States in combating specific air pollutants such as particulate matter and nitrogen oxide

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CHINA BUSINESS 28 AmCham Visits Vanke AmCham President Richard R Vuylsteke in a conversation explains the mission behind a recent delegation to Dongguan and Shenzhen for a visit of the headquarters and R&D center of China’s largest residential and real estate firm

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AmCham_coverSponsor.output.pdf

COVER SPONSOR

Walter Dias

Treasurer

Tom Burns

Executive Committee Evan Auyang, Sara Yang Bosco Belinda Lui, Alan Turley, Richard Weisman Governors Donald Austin, Brian Brenner, Ewan Copeland Janet De Silva, Rob Glucksman, Robert Grieves John (Jack) E Lange, Ryan Mai, Jon Parker Catherine Simmons, Eric Szweda, Colin Tam Elizabeth L Thomson, Jennifer Van Dale Jay Walder, Frank Wong, Eden Woon James Sun Richard R Vuylsteke

Chamber Committees AmCham Ball Apparel & Footwear China Business Communications & Marketing Corporate Social Responsibility Energy Entrepreneurs/SME Environment

Walter Dias Colin Browne Seth Peterson Lili Zheng Charlie Pownall Oliver Rust Diana Tsui Rick Truscott Laurie Goldberg Jim Taylor

Financial Services Food & Beverage Hospitality & Tourism Human Capital

Brock Wilson Veronica Sze Damien Lee Peter Liu

Information & Communications Technology Insurance & Healthcare

Rex Engelking

Intellectual Property Law Pharmaceutical Real Estate Senior Financial Forum Senior HR Forum Sports & Entertainment Taxation Trade & Investment Transportation & Logistics Women of Influence Young Professionals

4:42 pm

Peter Levesque

Vice Chairman

Ex-Officio Governor President

6/3/14

biz.hk Editorial

Board of Governors Chairman

Owen Belman Hanif Kanji Gabriela Kennedy Amy Lee Clara Ingen-Housz Stephen Leung Charles Kelly

A BREATH OF FRESH AIR

n January, the Government gazetted the Air Pollution Control (Marine Light Diesel) Regulation. Under the regulation, the cap on sulfur content in locally supplied marine light diesel will be lowered from the current 0.5 percent to 0.05 percent. The regulation takes effect next month. According to a spokesman of the Environmental Protection Department, the cleaner fuel will have noticeable effect on air quality and help reduce health risks for people who live near the harbor. “Marine vessels operating on 0.05 per cent sulfur diesel emit about 90 percent less sulfur dioxide (SO2) and 30 percent less respirable suspended particulates (RSPs) than those operating on 0.5 percent sulfur diesel. Implementing the Regulation will reduce emissions of SO2 and RSPs from the marine sector by 19 percent and 10 percent respectively.” The regulation is one of the few measures to be launched by the Government to deal with marine emissions, which are the largest sources of nitrogen oxide (NOx), particulate matter (PM10) emissions, and SO2 in

Hong Kong. Also in the pipeline are proposed legislative changes to take effect starting from next January requiring all ocean-going vessels (OGVs) such as container ships, cruises and tankers calling at Hong Kong to switch to low sulfur fuel. Similar to the local vessel regulation, the OGV rules also carry heavy financial penalty as well as prison terms as a deterrence. These changes are remarkable for several reasons. First, these regulatory changes are the results of years of painstaking efforts by both the government and the industry. While there were differences of opinions and debates over the years, both sides shared common objectives – promoting the use of cleaner fuel (lower emissions) and enforcing changes through legislation (to ensure a level playing field). We applaud these regulatory changes for another reason – leadership. Although it lags behind in other areas, Hong Kong will be the first Asian city to mandate fuel switch at berth. By taking the lead in promoting the use of cleaner marine fuel, Hong Kong has finally taken the right steps to clean up the air. It is important not just for the 7

million local population but for China as well. Why? For the Hong Kong rules to be truly effective and sustainable, the establishment of an Emission Control Area (ECA) covering the Pearl River Delta is critical. Such a move can only be undertaken by the Chinese Government. According to press reports, Hong Kong is in fact working actively with the Chinese Government on the ECA, and it is hopeful that Beijing will soon make a submission to the International Maritime Organization. According to research by Civic Exchange, the introduction of the ECA would reduce SO2 emissions from OGVs by 82.5 percent in Hong Kong waters and particulate emissions would drop by 73 percent. Its effects on the entire PRD region are even more substantial: SO2 emissions from OGVs can be lowered by 95 percent and particulate emissions down by 85 percent. There has been considerable talk over the role of Hong Kong in China’s modernization. This is an excellent example of how Hong Kong can make a difference.

CMY

Al Miyasato Bianca Wong Ian Stirling David Weisner Patrick Wu Jared Zerbe Anne-Marie Balfe Anna-Marie C Slot Alison Carroll Michael Harrington

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New

Business Contacts The following people are new AmCham members: Agile-1 Derek Banker Regional Director

Debevoise & Plimpton LLP Brian McKenna International Counsel

NetSuite Natalie Forsyth Marketing Director

AGN International - Asia Pacific Ltd Stephen Leung Asia Pacific Regional Director

Dechert LLP Kareena Teh Partner

pentahotel Hong Kong, Kowloon Kevin Lam Director of Sales

Aids Concern Foundation Ltd Daisy Wong Director of Fundraising American Airlines Inc Victor Lee Commercial Director, Hong Kong & Macau

DFA Macau Ltd Yvelisse Diaz Controller Cecily Ho Director of Operations Jerome Falic Chief Executive Officer

APL Co Pte Ltd Billy Yen Head of Commercial, South China/HK Cluster

DFS Group Ltd Mark James Chief Financial Officer

Asia Pacific Properties Ltd Natalie Tong Corporate Account Manager - Business Development

Dow Jones & Co Evan Blank Director, Integrated Solutions

Asia Securities Industry and Financial Markets Association Ltd Rebecca Terner Executive Director, Head of Policy & Reg Affairs

Fung Global Institute Ltd William Overholt President

Avery Dennison Hong Kong B V Stephen Keller Vice President Finance North Asia, Retail Branding and Information Solutions

GlaxoSmithKline Ltd Margaret Rumpf General Manager

Bal Seal Asia Ltd Shawn Noh Managing Director Boardroom Corporate Services (HK) Ltd Kellie Chan Associate Director BSI Pacific Limited Coleman Tse Sales and Marketing Director Calvin Klein Asia Pacific Jeffrey Hui COO, Asia Pacific Joseph Chegia VP, Human Resources, Asia Pacific Frank Cancelloni President, Asia Pacific

Hang Lung Properties Ltd Michelle Mak Manager - Special Projects Harney Westwood & Riegels Chai Ridgers Of Counsel Ian Mann Partner Hong Kong Trade Development Council Parker Robinson Head of Corporate Communication Hongkong and Shanghai Banking Corp Ltd Deborah Leerhsen Managing Director, Banking, HK, GBM Richard Ward Senior Manager, Asia Pacific Metals and Mining

Philip Morris Asia Limited Cecilia So Manager Corporate Affairs Philips Electronics Hong Kong Ltd Thomas Chi Senior Director, Philips Healthcare (Greater China) Karen Jo Shum Senior Director & General Manager, Philips Lighting Hong Kong & Macau Jason Wong General Manager Rowena Lee Country CEO - Hong Kong PRA Global Carmen Chan Country Manager Progress-U Ltd Stephen Kao Managing Director, Hong Kong Quiksilver Asia Sourcing Ltd Bart De Meirsman Managing Director RR Donnelley Renee Paik Country Director Christy Ma Sales Director Sears Holdings Global Sourcing Ltd Kelly Pantuso Chief of Staff

International Automobiles Limited Luis Chein General Manager - Passenger Cars

Solar Plus (HK) Limited Walmond Chong Senior Accountant Eleni Nassopoulou Managing Director

Iyer Practice Ltd Sanjay Iyer Director

SOW Asia Foundation Scott Lawson Chief Executive Officer

Le Meridien Cyberport Stephane Masse General Manager

Telstra International Group Gurpreet Kaur Grewal Head of Human Resources, APAC

Children's Place (HK) Ltd Peggy Tung Director, Product Technology and Quality Assurance

LinkedIn Nate Taylor Enterprise Sales Manager Eric Yee Head of Talent Solutions, Hong Kong & Taiwan

Traxon Technologies Ltd Terry O'Neal CEO

Chubb Group of Insurance Companies Cecilia So Regional Manager - Human Resources, Greater China

Livinism Branding Solutions and Retail Design Mickey Woo Director

Citibank NA Sophia Zhu Audit Director

M Moser Associates Ltd Eric Chak Associate Director Regional Business Development

Campbell Soup Asia Ltd Heidi Nam General Manager, HK & Taiwan Cathay Pacific Airways Ltd Kwok-Leung Chu Chief Executive Officer Centre Testing International (HK) Ltd Janet Yip Operation Manager Britney Lam Sales Supervisor

Cognizant Technology Solutions (HK) Ltd Michael Chiu Client Partner Samir Yerawar Client Partner Felix Tsui Regional Business Strategy Manager

Marsh (Hong Kong) Ltd Paul Wilkins Greater China Chairman & CEO

Community Business Ltd Catherine Husted Board Director

MetLife Sunshine Farzan VP, Head of Digital/ E-Business Lennard Yong Chief Executive Officer

Dale Carnegie Training Kay Lam Director of Business Development

Microsoft Hong Kong Ltd Nicholas Mak Commercial Attorney

Turner Broadcasting System Asia Pacific Ricky Ow President - Asia Pacific Visteon Corporation George Yuen Board Member Wine Stash Christopher Seabolt Founding Partner Winterbotham Trust Co (HK) Ltd Devin Ehrig Vice President Worldwide ERC Karen Yuen Director, Asia Pacific Wynn Macau Gamal Aziz President, Wynn Macau, Limited

View our other members at: http://www.amcham.org.hk/index.php/AmChamMembers.html biz.hk 3 â&#x20AC;˘ 2014

COVER STORY

HONG KONG AS A WORLD LEADER OF CLEAN MARINE FUEL? YES, IT IS A REAL (BUT COMPLEX) STORY

Arthur Bowring, Managing Director of Hong Kong Shipowners Association, has played a key role over the past decade in addressing the problem of emissions from burning not-so-clean marine fuel worldwide. Reflecting on a timeline of progressive policy, he tells biz.hk of what Hong Kong has achieved and why we should be proud of our achievements so far

By Daniel Kwan

t is not unusual that Hong Kong is easily dismissed when it comes to environmental protection, let alone being a world leader who may have already been taking major steps to minimize the deadly effects of air pollution in association with marine traffic or a role model whose initiatives are convincing China to take similar remedial measures. Well, these are all true, despite a common notion that suggests otherwise. In fact, according to Arthur Bowring, who is Managing Director of the Hong Kong Shipowners Association, Hong Kong indeed has played no small parts in the revolution of bringing changes to international maritime regulations, setting cleaner fuel standards and introducing local legislations to regulate marine emissions – and

these may potentially provide a beacon for China as it puts up a nation-wide clean-up effort.

The early years The seed for change was sown more than a decade ago when Christine Loh, who was then CEO of Civic Exchange and is now Undersecretary for the Environment, invited Bowring to a dinner where he was “put on the spot” and asked to share in “a room full of environmentalists and NGOs” his views on the “low-hanging fruits” that the shipping industry had done in addressing air pollution in Hong Kong. A breakfast meeting organized by AmCham in 2009 also piqued the interest of some Hong Kong

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government officials over the issue of marine emissions. The night of that dinner years ago was the beginning of a watershed in the efforts of cleaning up the air, Bowring says. “It started a lot of things when Christine Loh brought up shipping as the low-hanging fruit,” he says. “I don’t think it would have worked if she hadn’t put me on the spot that night.” Bowring subsequently followed up by taking the issue of cleaner fuel to the shipping industry in Hong Kong for discussions, and together they came up with the idea of setting limits on the sulphur content of marine fuel – both globally and in Sulphur Emissions Control Areas. At the time, a global cap was set at 4.5 percent of sulphur content and 1.5 percent in SECAs under the international regulation called MARPOL ANNEX VI – a limit far too high in the views of Bowring and his colleagues. They agreed that Hong Kong should aim for a much tighter limit of 1-percent in the sulphur content for distillate. Bowring – on behalf of the Hong Kong Shipowners Association – tried to sell the idea at a number of meetings in London and other international forum, but few people had any interest to the extent that fuel suppliers simply showed a dislike for such a radical idea and called it “rubbish.” “One of my committee members said to me at the time, ‘Arthur, when you go to London and press this, don’t get emotional,’” Bowring remembers. “[After the meetings], I got back and told him, ‘I did not get emotional. I banged my head on the table and I cried, but I didn’t get emotional.’ “It was so frustrating trying to get them to listen to our ideas, and they were really struck with the 4.5-percent [limit in Annex VI].”

A turnaround Bowring got a helping hand when another member of his association took up the idea and presented it to

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Arthur Bowring

Intertanko – an industry body which represents tanker owners and operators – which in turn pressed for the idea as an international organization. Bowring and others in the meantime stepped up their lobbying effort and eventually achieved success in working with the International Maritime Organisation for amendments to ANNEX VI. “Because what we proposed had the ambitious targets, it wasn’t what the IMO decided to adopt in the amendment to ANNEX VI,” Bowring says. “It was still ambitious – going from 4.5 percent to 3.5 percent and further to 0.5 percent between 2020 and 2025, even lower than our 1 percent target. For the emission control areas, they decided to go from 1.5 percent to 1 percent and down to 0.1 percent.” “That’s quite a leap – from 1 percent to 0.1 percent and from 3.5 percent to 0.5 percent,” he adds. “We didn’t think it was sensible, but that’s what the IMO had decided to do, and that’s what we now have.” However, Bowring believed the new IMO standards were not good enough because the 0.5-percent limit would not apply for another decade. “We continued to push the Government and spoke at chambers of commerce on how we should press ahead in Hong Kong with our own solution

– whether it would be a low emission area in Hong Kong waters or whatever it might be.”

A local solution The Fair Winds Charter in 2010 – an industry-led voluntary scheme for carriers to switch to cleaner fuel while at berth in Hong Kong was an interim solution and the brainchild of the shipping industry and Civic Exchange which played an instrumental role in getting the stakeholders together. “The AmCham breakfast meeting didn’t make [the Charter] but it came at the right time. It certainly stirred the interest of the government – something we’d been trying to do for a long time,” Bowring explains. The Charter, which was extended for the third time early this year, is a first for Hong Kong and the world. “Hong Kong is the only place in the world to have a voluntary scheme,” Bowring notes. “Hong Kong has already taken major steps, and China – because of the air pollution problem there – would be very willing to take major steps as well.” Bowring believes Hong Kong should make use of its achievements to encourage China to take similar measures “Hong Kong must play a part. Environmental awareness is one of Hong Kong’s strength,” he says. “This is how Hong Kong can be relevant to Mainland China.”

Against all odds “The industry [in Hong Kong] and the way we got together to come up with a solution – quite honestly – is a breath of fresh air. Very few industries have done things the way we did,” Bowring says, expressing a sense of dismay that so few people find the overall achievement of the industry and the contribution of Hong Kong a matter of significance in the process. “It’s a very important message and one that we’ve tried to put across. I have given speeches at conventions and have spoken on CNN, Al Jazeera, BBC, and all the other news channels. Still, it is difficult – because it’s good news and people aren’t usually excited about good news.” Bowring recognizes that there are those who simply don’t

An oil tanker gets electric power from an on-shore supply while Photo: Getty Images at berth in Long Beach, California.

see the benefits of cleaner fuel and higher efficiency. “The pace of technological advancement in ships is absolutely incredible. The realization that we need to do something is there. People are moving ahead strongly with that.” “As far as the industry is concerned, we do have some very strong market leaders,” he says. “There are also people who resist any kind of change. But, they’ll find themselves being pushed ahead by market leaders.”

Up and coming Beginning in April, new legislations will come into effect in Hong Kong mandating the supply of distillate with a sulphur content of 0.05 percent or less for all marine vessels. Meanwhile, another piece of legislation on the use of ultra low sulphur fuel at berth in Hong Kong will be submitted to legislators for vetting this summer. Under the second regulation, sulphur content will be lowered to 0.5 percent or less for all ocean going vessels. Equally important is the active collaboration between Hong Kong and Mainland China on the proposal of setting up an Emission Control Area (ECA) in the Pearl River Delta region. It is hopeful that Beijing would apply to the IMO in the near future. All these measures would help significantly improve Hong Kong’s air quality, Bowring believes. “We are already seeing significant improvement in Kwai Chung as a result of the Fair Winds Charter. When we do 0.5 percent or less for every ocean going ships, there is going to be a major

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change in the air we breathe. Once we set up an Emission Control Area, there will be [reductions] in sulphur but also in nitrogen oxide.” Would a higher fuel cost put Hong Kong at a disadvantage vis-à-vis regional competition? Not likely because carriers would not be able to pass the extra costs because of the use of cleaner fuel on to the shippers, according to Bowning. In addition, the costs also represent a small part of the business. Once Guangdong and Macau get onboard, it will be a level playing field. A 200-mile ECA off the coast of China – just like what the US has imposed (see sidebar) – is even possible, Bowring points out. “Once this scheme is extended up to the Pearl River Delta, then carriers stand a better chance of getting a fuel sur-charge from the shippers. Then the entire Pearl River Delta is there. Then you are looking at perhaps the competitive nature of Shenzhen, Hong Kong, and Yantian against Xiamen, Qingdao, Dalian and Shanghai. That’s recognized by Central Government. What we might see is a possibility that the Central Government goes the way of the United States and has a 200-mile ECA off the coast of China – all the way up and down. Why not? The US has done it.” “It very much depends on Beijing. Beijing is the one who needs to apply to the IMO for an Emission Control Area. Beijing really likes our Fair Winds Charter. The fact that we’ve done it has given the government here in Hong Kong a major step into Beijing to say that something has got to be done and this is the way to do it.”

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Civic Exchange commends the shipping industry for extending the Fair Winds Charter to the end of 2014. This is a welcoming move from the industry, showing once again how committed they are in reducing ship emissions in Hong Kong, supporting government legislation for at-berth fuel switching, and promoting similar practices and regulations across the Pearl River Delt a (PRD) region. Ships are the major source of air pollu tion in Hong Kong, and the government is stepping up its effort to control ship emissions. In January 2014 , the government gazetted a new regulatio n to tighten the quality of marine light diesel for local vessels. Later this year, a new regulation on at-berth fuel switching for ocean-going vessels will be table d in the Legislative Council for negative vetting and approval. In the long term , the government has set the goal of designating an emission control area in the PRD waters. These measures, if implemented, will significantly reduce ship emissions and protect public health in this region. Facilitated by Civic Exchange and cham pioned by the Hong Kong Liner Shipping Association (HKLSA) and the Hong Kong Shipowners Association (HKSOA), the Fair winds Charter was first rolled out in 2011 for two years. This is the world’s first industry-led, voluntary at-berth fuel switching programme to reduce ship emissions. Subsequently, the Fair Winds Charter was extended to 2013, and now extended again to 2014 . It is estimated that the Fair Winds Charter contributed a reduction of 890 and 670 tonnes of sulphur dioxide in 2011 and 2012, respectively. “The announcement of the Fair Winds Charter extension is excellent! Since inception, the Fair Winds Charter has been lauded as a huge success both in terms of reducing ship emissions and fostering private-public partnership in emissions control. Civic Exchange is prou d to be part of that process, and I want to congratulate and thank the shipping industry for their relentless effort and commitment in this course. The Fair Winds Charter has attracted a lot of interests and praise from other parts of the world. Hong Kong should be extremely proud of this achievement”, said Simon Ng, Head of Transport and Sustainability Research at Civic Exchange . - Press release issued by Civic Exchange on February 13, 2014

HIGH E PRAIS

A PROVEN MODEL IN CURBING EMISSION By David Pettit, Senior Attorney, Natural Resources Defense Council (NRDC)

orts in the United States suffer from some of the same air pollution problems that afflict ports in the Pearl River Delta. The most harmful of these pollutants are diesel particulate matter, a known human carcinogen, and oxides of nitrogen (NOx), which are ozone (smog) precursors. Like Civic Exchange in Hong Kong, Natural Resources Defense Council (NRDC) is the leading NGO advocate for green ports in the US. We currently have over 400 scientists, policy experts, lawyers and other staff devoted to environmental law and policy. Our Los Angeles office has been involved for years in cleaning up pollution at the nearby ports of Los Angeles and Long Beach, collectively the largest port in the US. The Los Angeles air basin is one of the most polluted in the country, and the ports are major contributors to the particulate matter and NOx burden. To address the issue, NRDC worked with the local ports to develop a Clean Air Action Plan, which has become a model for other US ports. The basic idea of the Clean Air Action Plan in Los Angeles is to mitigate each set of pollution sources by setting specific goals and timelines. Accordingly, it addresses the overall problem by setting numerical emissions guidelines for each source of emission, including oceangoing vessels, drayage trucks, port-serving locomotives, cargo-handling and yard equipment as well as harbor tugs. Hong Kong’s situation is different from Los Angeles’ in a number of ways: Hong Kong’s port is heavy on trans-shipment of containerized cargo and doesn’t rely on diesel truck drayage or rail transport to anywhere near the same extent. Also, Los Angeles doesn’t have to contend with pollution sources from upstream neighbors – on the contrary, the Port of Los Angeles itself is a major source of air pollutants in the entire Los Angeles region. So, while the ports in Los Angeles (and adjacent Long Beach) can solve the problem of air pollution by – more or less – solely tackling their own sources of pollution to bring about much improvement, Hong Kong cannot and will require broader collaboration. Civic Exchange has published three research reports on marine transport pollution in Hong Kong and the Pearl River Delta, and describes its most recent report, A Price Worth Paying: The Case for Controlling Marine Emissions in the Pearl River Delta, this way: “This report represents a joint-effort by Civic Exchange, HKUST’s Atmospheric Research Center and HKU’s School of Public Health. In this report, HKUST laid the foundation by conducting the first ever activity-based inventory of ocean-going vessels’ emissions across the whole Pearl River Delta based on 4 emissions control scenarios. HKU built on this information and made the first ever assessment of the impacts of emissions from

ocean-going vessels on the health of the population in each prefecture of the PRD, Hong Kong and Macau.” The report suggests implementation of three control measures in anticipation of the imposition of an Emissions Control Area (ECA) in the Pearl River Delta – which itself can only be accomplished at the request of the Chinese government. Those control measures are: setting tighter standards for fuel used at David Pettit berth (0.5 percent sulphur content, or 5,000 ppm), setting ECA level fuel standards (0.1 percent sulphur content, or 1,000 ppm) for vessels in Hong Kong waters and out to 100 nautical miles (nm), and imposing speed restrictions on vessels in Hong Kong waters. Notably, very similar measures have been in place in the State of California for several years, with great success in reducing particulate matter and NOx emissions both near-shore and at dock. California also has a very aggressive schedule for requiring “cold ironing” when a ship is in port – using shore-side electrical power rather than running a ship’s auxiliary engines. The long-term solution to the bulk of the Pearl River Delta’s ship emissions problem is the establishment of an ECA under the auspices of the International Maritime Organization (IMO), an agency of the United Nations. An ECA permits a country to limit the sulphur content of fuel and the amount of NOx emissions out to 200 nautical miles from its coastline, and allows fuel sulphur restrictions down to 0.1 percent sulphur (1,000 ppm) – a huge gap to the 3.5-percent sulphur (35,000 ppm) bunker fuel used on many ships. The rationale of switching to ultra low-sulphur fuel is very simple: sulphur content in fuel is directly correlated to particulate matter in the ship’s exhaust, and particulate matter is by far the largest human health risk from ship emissions. Regulating NOx emissions can also help to reduce ozone, or smog. There is an ECA now in place in North America; the transition to 0.1 percent-sulphur fuel will occur in 2015. California, with its sulphur restrictions (out to 24 nautical miles), has not experienced any significant technical problems associated with the switch to low-sulphur fuel, and has not seen reports of fuel unavailability. Since many ships from the Pearl River Delta are destined for Los Angeles and Long Beach, where they must carry low-sulphur fuel to comply with California’s strict fuel rules, it will not seem to be too much of a stretch to require the same fuel use in the Pearl River Delta. NRDC is now working with government officials and stakeholders in the Pearl River Delta and in Beijing to try to accelerate the process of developing a regional approach to controlling shipping emissions. Our ultimate goal is the establishment of an ECA for the Pearl River Delta region, which – as of the current moment – would be the first in Asia and a model for the rest of China and elsewhere. Yes, low-sulphur fuel is more expensive, but it will lead to a significantly healthier environment and reduce cost in the long run. And, an ECA will create a level playing field requiring all Pearl River Delta ports to operate under the same rules. This, in turn, will become a win-win scenario for all.

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ROADSIDE POLLUTION

ir pollution is undoubtedly a major problem in Hong Kong, and it poses a significant risk to public health. According to a study by Clean Air Network (CAN), with data from Environmental Protection Department’s (EPD) 14 air-quality monitoring stations between January and June 2013, “Hong Kong’s air quality continues to be far from satisfactory,” as levels of air pollutants exceeded World Health Organization’s (WHO) guidelines at every single station, with only one exception. The cost is enormous: The Hedley Environmental Index – which tracks local air pollution – estimates that during the period 1,606 premature deaths, 76,361 hospitalizations, 3.61 million doctor visits and a loss of some HK$18 billion are attributable directly to air pollution. Vehicle emissions – particularly from diesel engines – are major sources of air pollution in Hong Kong; they are also closest to people in a city so confined and dense that dispersion is much harder to occur. It is a problem that the government is now trying to combat comprehensively with A Clean Air Plan for Hong Kong, most recently with an initiative (as announced in the Chief Executive’s Policy Address 2014) to phase out some 82,000 Euro III or earlier commercial diesel vehicles. The key to reducing roadside air pollution and, ultimately, lowering health risk, as proposed in the Clean Air Plan, are “aggressive tail-pipe control together with appropriate transport management and urban planning measures,” a conclusion scientifically proven in a recent experiment led by Ning Zhi , an assistant professor at City University (CityU) of Hong Kong’s School of Energy and Environment.

The Impact of Road Traffic on Air Quality A team of City University scientists in a study of concentrations of air pollutants as well as traffic volume and composition along three congested roads in Central District showcase how traffic and vehicle management and urban design are keys in curbing emission of deadly fumes in Hong Kong’s prime business and financial district

By Kenny Lau

The experiment Over a few days in late July/early August and one day in late October 2013, a team of (CityU) scientists set out to collect data on concentrations of air pollutants as well as traffic volume and composition along three congested

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roads in Central, Hong Kong’s prime business and financial district. These were Connaught Road, Des Voeux Road and Queen’s Road (all three parallel to each other), while sections of the roads included in the study were in the same area, each running about one kilometer in distance and covering most of Sheung Wan and Central District. To measure emission levels and pedestrian exposure to air pollution, repeated experiments were carried out on weekdays and during a weekend. Nine “measuring” points (three on each road in a different section) were set up for a traffic count; a car and an ordinary suitcase simulating a walking pedestrian, equipped with portable sensors and GPS receivers, rolled around to collect “on-road” and “roadside” measurements of Particulate Matter (PM) 2.5, Ultrafine PM, Nitrogen Oxide (NOx) and Black Carbon, all common air pollutants from vehicle exhausts. “In the experiment, we basically collected three sets of data: traffic volume and composition, ‘on-road’ as well as ‘roadside’ emission levels. It was done literally with a suitcase of advanced sensors and computers,” Ning notes. “The reason we measured both ‘on-road’ and ‘roadside’ emissions is that exposure could be different.”

Key Findings • Roadside exposure is directly linked to the emissions of on-road vehicles • Traffic volume is only one of many factors linked to roadside air pollution • Diesel-based vehicles are a dominant source of air pollutants geography, street • Urban layout and number of bus stops are active factors • Transport system design and urban planning are critical to achieve improvement

Ning Zhi

“We also wrote a computer program using smartphone and Bluetooth technology to get the time and location of the data we collected,” he adds. “We then combined all information to come up with a large set of data in order to help us better understand the impact of traffic volume and composition on air quality and human exposure.” The experiment, Ning points out, provides supplementary data to Hong Kong EPD’s 14 air quality monitoring stations by scientifically linking specific sources of emission to air pollution. “In the study, we tried to link vehicle emission to different factors such as the type of vehicle, engine size, different model year and, of course, fuel. “This is important because not all vehicles are created equal. For example, there may be a small group of vehicles that perhaps only accounts for less than 10 percent of all vehicles but is responsible for 50 percent or more of total emissions.” “In other words, it isn’t equal distribution,” he stresses. “We should not just look at the number of vehicles but also what kind of vehicles they are, how they are running on the road, and in what kind of environment, before we can come to any conclusion.”

The findings In terms of landscape, Connaught, Des Voeux and Queen’s are very different from each other. Connaught, which is closest to the waterfront, has the most and widest lanes; Des Voeux has fewer and narrower lanes and is also where the century-old Tram runs; Queen’s – one of Hong Kong’s oldest streets – is by far the narrowest among all three. Both Des Voeux and Queen’s suffer from the “street canyon” effect because of a wall of high-rise buildings left and right, while Connaught enjoys a constant channel of gusty wind. In terms of traffic volume, some 8,000 vehicles travel through Connaught Road on a weekday during peak hours, and about 800 vehicles make use of Des Voeux Road or Queen’s Road simultaneously (although the latter is somewhat less congested). Des Voeux Road has more bus stops along its sidewalks than the other two in comparison and has the highest pedestrian flow, at four to eight thousand people per hour. In terms of concentration of air pollutants, Connaught Road is found to have the lowest levels overall (with a slightly higher concentration of NOx in

Connaught Road Central Des Voeux Road Central Queen's Road Central

Data were collected in a scientific experiement along three major roads of vastly different characteristics in Central District for a comparison of traffic patterns and compositions, vehicle emission levels and pedestrian exposure to toxic air.

certain hours), despite having to handle 10 times the traffic of either Des Voeux Road or Queen’s Road. In fact, it is very comparable to the pollution levels on Queen’s Road. On the other hand, Des Voeux – particularly in the eastern section (closest to Admiralty) – appears to be the worst. “What it tells us is that traffic undoubtedly is a major source of pollution but traffic volume alone is not the whole story in explaining air pollution,” Ning says. “It’s also why we are working with EPD to identify different kinds of vehicles

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on Hong Kong’s streets and to understand what makes a certain group of vehicles dirtier than another.” The difference between weekdays and weekends are also stark: on a Sunday afternoon when traffic volume is only 4 percent less than that of a weekday and when there is a shift in traffic composition (14 percent more buses, 14 percent more cars, 3 percent more LPG vehicles, and 50 percent less commercial diesel vans and trucks), there is a decrease in the level of air pollutants by as much as 50 percent. “When you have the same traffic

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volume but a different make-up in terms of the number of buses or trucks, air pollution levels will be different,” Ning explains. “In our weekday-weekend comparison, we see a couple of patterns. “One is: there is a dramatic improvement in air quality when you have the same amount of vehicles on road but take 50 percent of the commercial trucks off the street. The other is: there is also a close correlation between the number of running buses and roadside pollution on Des Voeux Road and Queen’s Road.”

“What it means is: if you try to control only the total number of vehicles, you may not be able to bring out the most desirable outcome,” he continues. “It is more effective to cut down our reliance on older diesel technology and to target a comprehensive reroute of our bus networks.”

The Outlook “Back in the 1950s, there was an air pollution problem in Los Angeles, and people at the time had no idea vehicle

emissions were the major sources,” Ning recalls. “There was even an argument that emissions would dissipate too quickly to have a significant impact on public health.” “Of course, we now understand vehicles are a large part of it, and people on the roadside breathing the air are exposed to the pollution directly,” he says. “The relationship between traffic patterns and air pollution is very consistent. We see it again and again by different times of the day or month from our experiment.” The differences in layout and geography are one reason Connaught Road, Des Voeux Road and Queen’s Road were chosen for the experiment – such variables provide an understanding of how urban design can have an effect on air pollution, Ning points out. “We are, in fact, working with Hong Kong Institute of Planners and other NGOs to come up with a proposal to improve air quality.”

Number of Vehicles in Hong Kong (December 2013) Goods Vehicles

Private Cars

Motorcycles = 41,766 (6.2%) Private Cars = 475,752 (70.5%) Taxis = 18,083 (2.7%) Franchised Buses = 5,915 (0.9%) Non-franchised Buses = 7,438 (1.1%) Light (Mini) Buses = 7,103 (1%) Goods Vehicles = 116,996 (17.3%) Others = 1,556 (0.2%)

TOTAL VEHICLES = 674,609 Source: Transport Department, Hong Kong Government

“The question is how we should allow vehicles right where they are needed to keep mobility in place and keep air quality in check at the same time,” he says. “There are things we can do in terms of policy, not by taking all of the vehicles off the streets but rather by rerouting buses or redesigning traffic

pattern without sacrificing too much. “What we also need to ask ourselves is: are we willing to spend two extra minutes walking a hundred meters in order to breathe less pollution and live longer? It is actually a very simple question. Here we can prove that it will benefit you over the long run.”

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biz.hk 3 • 2014 EL] KN 0RQWK <HDU

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TRAFFIC CONGESTION: A VICIOUS CYCLE OF IMMOBILITY By Kenny Lau

t appears that traffic congestion in Hong Kong is getting worse and worse. Take a look at the average operating speeds of franchised buses – particularly in the busy corridors of the city’s most established districts – and it will become evidently convincing that commuters on a short hop are better off walking than wasting time getting stuck (and frustrated) in traffic jams. “If you take average bus operating speed as a metric for traffic congestion, we are beginning to fall behind any acceptable standards of other international cities,” says Evan Auyang, Deputy Managing Director of The Kowloon Motor Bus Company and Chair of AmCham’s Environment Steering Group. “Hong Kong is supposed to have a world-class public transport system, but it is now showing signs of cracking.” The average speed of buses in Kowloon has dropped from 15.3km/h to 12.9km/h, and it could be as low as 8km/h during “rush” hours, Auyang notes. Yet, there hasn’t been a drastic increase of population or demand for on-the-road public transport in the city, while Hong Kong’s railway system (MTR) has expanded its capacity by roughly 50 percent.

The effect of worsening traffic congestion is attributed to a number of causes, and one primary cause is the exponential growth of private cars – which in the past 10 years has increased by 150,000 vehicles, accounting for nearly 90 percent of the total increase of all vehicles. It is also a vicious cycle in which commuters are “induced” to buy a car when they find themselves spending more journey

time stuck in a bus or being swamped in an overcrowded rail station. Inherently, it means more vehicles on the road and a slowing down of all modes of public – and private – transport. This not only prevents Hong Kong’s public transport sector from functioning properly and efficiently but it simply slows down the mobility of every commuter – hence creating a daily traffic pattern in which everyone is barred from

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traveling at an optimal speed. “Hong Kong certainly needs – and has built – more highways connecting urban centers to more rural areas across the territory as a way to improve people’s mobility. But it is also in the urban centers where bottleneck issues were never properly addressed,” Auyang points out. “This problem comes in a full circle: when people aren’t happy with point-to-point public transport, more

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cars are purchased – which simply creates more congestion.” “In many respects, it is the right policy to make the railway system as our backbone, because Hong Kong is too dense and crowded that we simply can’t rely on our roads alone,” he adds. “What we need to do is to ensure different public transport modes work well to complement each other, and to continue with a policy to promote the use of public transport.

“The very fact that we are letting the number of private cars increase so uncontrollably in the past 10 years is a sign of complacency and not a sign of healthy growth.” Hong Kong is also behind just about any major international cities in traffic management, for which its solutions are merely on the “supply-side” of the equation. “Supply-side means more infrastructure such as railways and roads,” Auyang explains. “This is definitely one way to solve the problem, by making more room for traffic, but a well-developed city like ours can never build itself out of a congestion.” “All other cities rely heavily on traffic management to shape how roads are used in extremely congested areas through incentives to discourage the use of private cars and encourage higher utilization of buses and trains as well as technology for smart signals and IT-enabled traffic enforcement,” he adds. “We do some of these in Hong Kong, but overall we are far behind other international cities such as New York or London.” Many traffic management solutions are in fact very feasible, Auyang believes, citing measures such as prioritization of mass transport over private vehicles, more pedestrian-friendly junctions, an IT-enabled control system to adjust priorities according to traffic flow and to enforce traffic rules. “The key is to prioritize how roads are used – a priority which under normal circumstances should be given to pedestrians, mass public transport and private cars in a well-balanced way.” “Right now, our policy is implicitly favoring private cars before public transport and pedestrians,” he adds. “And it is very awkward that we place restrictions on the movement of buses in busy corridors but not on private cars. This is just not a great way to encourage people to make use of our public transport system, which under the right condition is the most efficient mode of mass mobility.” “Roads in a city are like blood vessels in a human body,” Auyang cautions. “We can’t wait until there’s a blockage and then seek a bypass surgery. We need to be much more proactive.”

RESEARCH & DEVELOPMENT

A Catalyst of Innovation & Technology Hong Kong Science and Technology Parks Corporation (HKSTPC), a statutory body set up in 2001, enables local and overseas tech companies to nurture their ideas through R&D and to commercialize their concepts in the form of a product. Allen Ma, CEO of HKSTPC, speaks about the mandate of “facilitating a dynamic environment where companies can innovate” and “transforming innovation and technological advancement into value creation”

By Kenny Lau

Photos and images courtesy of HKSTP

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ong Kong is a place where a unique combination of cultures, ideas and traditions – as well as a strong legal and economic system – stands out as one of a kind. It has a population of roughly 7 million in an area measuring slightly over 1,000 square kilometers, with an annual GDP per capita of US$36,667 (25th globally in 2012). It is also highly competitive, ranking top three along with the US and Switzerland in IMD’s 2013 World Competitiveness Yearbook and placing seventh in World Economic Forum’s latest Global Competitiveness Index. Surprisingly, Hong Kong also scores well in the Global Innovation Index (a ranking system by Cornell University, INSEAD and UN’s World Intellectual Property Organization), but it does so mostly because of the “infrastructure and market sophistication” of the local economy, whereas factors concerning capacity for scientific research, company spending on R&D and outputs of technology are not as strong – reasons leading to a common notion that Hong Kong as a breeding ground of innovation, particularly in technology, is simply far-fetched, if not outright impossible. Hong Kong’s technology sector may not receive much attention as some other high-profile sectors; yet, there are tens of thousands of people quietly working on the next innovation or a strategy to commercialize their ideas in a high-tech facility at Hong Kong Science Park (HKSP). As CEO of Hong Kong Science and Technology Parks Corporation (of which HKSP is a part), Allen Ma feels very strongly about the mandate of “facilitating a dynamic environment where companies can innovate” and “transforming innovation and technological advancement into value creation.” “It is essential to the future of Hong Kong that we establish a solid foundation for innovation, research and development in technology because this will be an important driver of Hong Kong’s economic transformation and competitiveness as a city,” Ma says passionately in an interview with biz.hk.

Allen Ma

“Can we become another Silicon Valley? That’s only one of the many questions, and what’s more immediate is how we continue to encourage the local development of technology to benefit Hong Kong and to support a city of 7 million people through a diversification of industry while also aligning to China’s ambition in R&D so that we can remain a relevant contributor regionally and globally.” “At the end of the day, it is always better to have a variety of pillar industries as a whole to support your economy than to rely on only one or two key sectors,” he adds. “It doesn’t mean we should forget about finance, logistics or any other services; it only means we want to upgrade and expand Hong Kong’s capabilities in today’s highly competitive world.”

Mission – critical Over a matter of decades, Hong Kong had emerged from being a mere entrepot to becoming a manufacturing center of textiles and consumer electronic products, and it is now a highly regarded center of international commerce and finance. Along the shift came a vision to expand Hong Kong’s industrial capabilities in order to remain competitive in the

world market, hence the founding of Hong Kong Industrial Technology Centre in 1993, a statutory body to “stimulate” growth of a high-tech industry. A few years later, in 2001, Hong Kong Science and Technology Parks Corporation was officially formed through a merger of three government entities, namely the Industrial Technology Centre Corp, Industrial Estates Corp and the provisional Hong Kong Science Park Co Ltd. The idea is to

have a single body “dedicated to advancing innovation and technology for Hong Kong” with proper R&D facilities, infrastructure, services, and support programs. Under the current structure of HKSTPC, there are five major facilities: three industrial estates (in Tai Po, Tseung Kwan O, and Yuen Long) as “output” centers for industrial processing, IT and telecom operation, and pharmaceutical manufacturing etc; an InnoCentre (in Kowloon

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Tong) for the purpose of commercial design; and a Science Park (near Chinese University of Hong Kong) to facilitate R&D. Together, they employ over 46,000 people and remain an important part of Hong Kong’s industrial and technological sectors. Moreover, these five facilities can complement each other in a supply chain of processes – from nurturing a concept to applying a new technology in the form of a product, Ma points out.

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“R&D is the stage where we see an advancement of technology, which can then be turned into a protocol or standard of some kind such as WIFI; but it also needs to be integrated into a sensible, user-friendly design that an end-user can enjoy.”

R&D at HKSP A key infrastructure of HKSTPC is Hong Kong Science Park (HKSP), a 2.3-million-square-feet waterfront site

with 3.5 million square feet of laboratories, offices and MICE venues among three phases dedicated to the purpose of R&D among MNCs as well as SMEs in five principal clusters – Biotechnology, Electronics, Green Technology, Information Technology & Telecommunications (IT&T), and Precision Engineering. Occupancy rate is well over 96 percent. Phases 1 and 2 are home to 440 local and overseas tech companies and a total staff of over 10,000 – including large US companies such as DuPont Apollo Ltd focusing on green technology. Of these companies, 138 are in an incubation program run by HKSTPC, which provides support and assistance to tech start-ups in their inception stages. “Our incubation program is here to help people realize their dreams, turn a great concept into a commercial product and create a business,” Ma says. “Within the program are a host of critical services that a start-up will find very useful,” he adds. “For example, we help them with financial assistance and access to government loans and angel funds, provide support on IP and patent issues, arrange media interviews, and match them to a pool of talent when they need to hire extra personnel as they expand…these are only a portion of all the services we provide. “The key here is to provide a comprehensive support network to innovators who might not have had much experience in all the other aspects of running a business.” The Tech-Incubation Program since its start has nurtured 300 “graduate” companies, of which 226 remain in business today. Achievements among them are impressive: 704 patents, 256 industry awards, 194 cases of government funding, 140 deals in “Angel” funding, 16 mergers & acquisitions, and 4 IPOs (three in Hong Kong and one in the US). One very creative innovation is the “Hand of Hope” – a mind-driven, sensor-laden therapeutic device to help patients regain hand mobility through muscle re-education.

“What Hong Kong Science Park provides is an overall infrastructure that enhances the ability of someone working to achieve the next technological breakthrough,” Ma says. “The park itself has become a mature eco-system where you’ll find people from a variety of tech industries. It is also a place where people can meet and engage in a stimulating conversation with one another for sparkling new ideas and concepts.”

Phase 3 – A green initiative The first three buildings of HKSP’s Phase 3 will be fully operational this year, with the remaining coming into place by 2016. Once completed, it will increase the overall capacity of the Park by roughly 50 percent and offer a new facility poised to become “one of the best R&D eco-systems in the region for technology start-ups and giants alike.” “There is a huge emphasis on sustainability in the design of Phase 3,” Ma points out. “Not only are there more green spaces in the area but many green features – including cost-effective energy-saving measures – are also incorporated into the buildings as a way to reduce the environmental impact of the development. In fact, it is designed to be carbon-neutral over its lifetime.” “With 39 fundamental and novel sustainable features, it is one of the largest showcases of sustainable construction practice in Hong Kong,” he adds. “More importantly, it will make the adoption of green practices as a lifestyle much easier – which can have a big impact on the way we as a population consume energy and resources.” In a clean-sheet architectural design, layout and orientation of buildings in Phase 3 are drawn to optimize the use of natural sources of energy

including solar and wind for lighting and air ventilation. Direct sunlight – a source of excessive heat that requires tremendous amount of air conditioning to offset – is either deflected with external shading devices and low thermal transmittance wall or simply absorbed using photovoltaic (PV) panels as an additional source of energy. In the interior, a network of sensors and real-time energy monitoring are at the heart of a sophisticated control system for vast improvement in energy efficiency and consumption reduction. Other initiatives include the use of ultra-efficient LEDs, integrated advanced air-conditioning systems, and thermal storage where cool air is absorbed and Hand of Hope – an innovation developed at Hong Kong Science Park

stored during nighttime and released in a building during daytime to minimize consumption of electricity for the purpose of air conditioning. The new complex has already received a number of recognitions and industrial awards for construction practices of a sustainable development, including the Grand Award (New Building category – Building Project under Design) of the Green Building Awards in 2012. Additionally, Ministry of Science and Technology of the People’s Republic of China has also designated HKSTPC in 2011 a “National High-Tech Industrialisation (Partner) Base for Green Technology.” “We are truly honored to be recognized for the development of Hong Kong Science Park, in particular Phase

3 of the Park,” Ma says. “It is a reflection of our commitment to a sustainable future.”

Future of local R&D “We believe Hong Kong definitely has a future role to play in technology R&D because of all the competitive edges that make it one of the greatest cities in the world,” Ma says. “It is very international, and it is also right next to China, a market where we can make our product offerings before any other market.” “In fact, we have a very close working relationship in R&D with different cities across Mainland China that mutually benefits each other,” he adds. “For example, we have a pilot scheme with Guangzhou Development Zone that allows human specimen including stem cell and blood samples to travel across border between Hong Kong and Guangdong’s Biotech research sites – which is a major step forward.” “We also want to attract foreign firms – including those from Mainland China – to establish their R&D work in Hong Kong where our students and young entrepreneurs can learn a great deal on the ground from the international companies here. One innovation breeds another.” “Why are we so keen on innovation and technology?” Ma continues. “It is because our development as people depends on innovation. From the steam engine to the personal computer and advanced medical devices, technology has made our lives much easier and has benefited humankind.” “Through all we’ve done, we hope to showcase the importance of innovation and technology and the beneficial impact they have on society and people,” he says. “And we very much hope that a policy be set up to continue supporting Hong Kong being an important part of the revolution in innovation and technology.”

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CHINA BUSINESS

biz.hk: AmCham has organized a number of visits to Mainland China’s “benchmark companies.” What are the purposes of these visits, how often do they occur, and who should participate? Vuylsteke: The visits to “benchmark companies” in China were the brainchild of William Lin, the director of AmCham’s China Affairs Department. The idea is to give our members a first-hand opportunity to see how top Chinese companies operate and to hear from company representatives about their business plans and related topics. AmCham can set up such visits much easier than can our members or their companies, so this is a special added membership benefit. Invariably, these visits have been eye-openers for all the participants! Our first delegation trip was in 2011, when we visited Gree Electrical Appliances. The next year we had two

AmCham Visits Vanke

trips to Shenzhen, visiting BYD, which makes electric vehicles and LED products, and Tencent. Last year we visited Huawei in Shenzhen and Xiaomi, which was part of our annual Beijing Doorknock trip. The Xiaomi mobile phone development story was truly amazing. William is already planning a visit to Alibaba, scheduled during a 2-4 April delegation trip to Shanghai and Hangzhou. Later in the year we’re thinking of a trip to Ping An Insurance in Shenzhen. We are open for suggestions about what companies our members would like to visit. Our delegations always have a good mix of people from different business sectors, which also makes the conversations and networking especially valuable.

biz.hk: What did you learn from the Vanke real estate company visit in February? Vuylsteke: Vanke’s Dongguan R&D facility occupies quite a large tract of land, much of which prefabs and tests various building materials. Everyone was impressed by the prefab residential housing, which was surprisingly attractive in design and used a metallic coating for some of the cement surfaces that substantially improved appearance and durability while reducing maintenance. The company is clearly dedicated to green technology and, for instance, had lab displays showing how company researchers had drawn upon “natural technology,” such as the formation and

On 20 February 2014, AmCham President Richard R Vuylsteke led a delegation of 28 Chamber members to Dongguan and Shenzhen to visit the Headquarters and R&D center of China’s largest residential real estate firm. He explains the benefits to members of this and similar delegation trips

By Daniel Kwan

Vanke Headquarters, Shenzhen

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A corner of Vanke's R&D facility

AmCham delegation to Vanke with Tim Feng (fourth from left, front row), Chairman’s assistant

cooling of African termite mounds, as well as traditional architectural principles for cooling and warming interiors in China and the South Seas Islands. Other research included effective placement and use of solar panels, grass surfaces, noise abatement design, natural and LED lighting, anti-seismic performance, and fire safety. The highlight of the day, however, was the visit to Vanke Headquarters – a truly astounding building. Take time to Google it – it was astounding inside and

out. Imagine a building the size of the Empire State Building built horizontally and elevated 20 meters or so above ground level to leave room for parks. This building visit demonstrated why actually going on a delegation trip is an experience apart. biz.hk: Chinese enterprises – stateowned and private – are expanding at a rapid pace. Do you expect some of these Chinese companies will become real global leaders in their respective fields in the future?

Pre-fab residental housing

Vuylsteke: I do indeed. This is another reason why our AmCham members, most of whom have regional and global responsibilities, can benefit so much from these site visits. Some very impressive thinking and implementation is going on in China, and these visits provide a deeper dive into details. biz.hk: How do all these delegation visits fit into our China program? Vuylsteke: AmCham has an ambitious China program led by our China Affairs Group, chaired by former

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AmCham Chairman James Sun of Charles Schwab, and the China Business Committee, chaired by Seth Peterson of Heidrick & Struggles and Lili Zheng of Deloitte Touche. The benchmark company trips are a small part of a large agenda that also includes our Annual China Conference (on May 9 at the Four Seasons Hotel), the Annual Beijing Doorknock delegation (in late fall this year), Chinese business briefings throughout the year, roundtable discussions with visiting Chinese officials (often

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from provinces and cities throughout the Mainland), and coordination activities and with PRC officials and Chinese chambers here in Hong Kong. We also work closely with the US Consulate with SelectUSA, offering to link our service provider members with Chinese companies seeking to invest abroad using Hong Kong as a base or springboard. Our “China play” has breadth and depth, and it’s all available to AmCham members.

Tim Feng

TAXATION

tax e m o US inucrns due ret

Filing US Tax Returns: What’s New Erik Wallace, Partner at international law firm Withers here in Hong Kong and a specialist in all aspects of taxation, trusts and estates and international probate including matters involving US persons or property, addresses key aspects of filing a US tax return as a non-resident expatriate and latest updates in the US Tax Code

for high-income households (for taxpayers earning more than US$400,000 a year and for married couples earning more than US$450,000) increases to 39.6 percent. If the 3.8-percent surtax is applicable, the highest marginal rate increases to 23.8 percent for long-term capital gains and qualified dividends, and 43.4 percent for ordinary income. Itemized deductions, including charitable deductions, are reduced for individuals earning US$250,000 or more and for married couples earning US$300,000 or more. Payroll tax cut ends – the 2-percent Social Security tax cut that has been in place for two years has not been extended. In 2013, personal exemptions are limited for individuals earning US$250,000 or more and for married couples earning US$300,000 or more. biz.hk: What are the differences in filing US tax as an expat? Wallace: If you are a US citizen or Green Card holder residing overseas, or are in the military on duty outside the US, you are allowed (on the regular

due date of your return) an automatic 2-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15. As an expat, you may qualify for a foreign earned income exclusion, which allows you – for the purpose of US tax filing – to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation (US$97,600 for 2013). And, if your “tax home” is in a foreign country and you qualify for the exclusion and deduction under either the bona fide residence test or the physical presence test, you can also claim a foreign housing exclusion or deduction from gross income for your housing amount. biz.hk: What is the current timeline of FATCA (Foreign Account Tax Compliance Act)? Wallace: The online FATCA registration portal opened on August 19, 2013. To ensure inclusion on the first list of FFIs (foreign financial institution) that will be electronically posted

Erik Wallace

by the IRS by June 2, 2014, an FFI must finalize its registration by April 25, 2014. The effective date of the FFI agreement of a participating FFI that registers

By Kenny Lau

Number of US citizens turning in their passport or ending long-term residence biz.hk: What’s new in the US Tax Code that may concern a US tax filer in 2014? Wallace: Same-sex couples are now allowed to file jointly and may wish to amend tax returns previously filed, if they were lawfully married in a state or foreign country where marriage of two individuals of the same sex is authorized by the law – even if the state or foreign country in which they now live does not recognize same-sex marriage. There are also “Healthcare” surtaxes: a 0.9-percent surtax on individuals who have compensation income of over US$200,000 (US$250,000 on married joint returns), and a 3.8-percent surtax on net investment income of certain trusts, estates and affluent individuals

– those with income over US$200,000 (US$250,000 on married joint returns). US shareholders of PFICs (Passive Foreign Investment Company), per Section 1298(f) and regulations, are now required to file a separate Form 8621 for each of their PFIC investment held either directly by them or indirectly through a foreign partnership (even if the US shareholder is not making any elections or recognizing any income with respect to the PFIC, unless exempted under the regulations). Effective July 1, 2013, US persons (US citizens and Green Card holders) must have their FBAR (Report of Foreign Bank and Financial Accounts) filed electronically by June 30.

biz.hk: Does the Healthcare surtax apply to US expats? Wallace: Non-resident aliens are exempt from the surtaxes, but an expat is subject to the surtaxes as long as the individual is a US citizen or Green Card holder. Strategies may be available to reduce the exposure to the 3.8-percent surtax. biz.hk: What are the updated tax rates as a result of the American Taxpayer Relief Act? Wallace: Capital gains and qualified dividends tax rate for high-income households (for taxpayers earning more than US$400,000 a year or married couples earning more than US$450,000) increases to 20 percent. Secondly, individual income tax rate

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2999

1781 1534

932

762 398

1998

434

1999

431

2000

491

503

571

742

631

470 278

2001

2002

2003

2004

2005

2006

231

2007

2008

2009

2010

2011

2012

2013

Source: US Treasury Department, Andrew Mitchel LLC

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with the IRS and receives its GIIN (global intermediary identification number) by June 30, 2014 will also be June 30, 2014. Withholding on “withholdable” payments other than gross proceeds from the sale of property will be required starting from July 1, 2014. The first deadline for participating FFIs to file FATCA information reports with the IRS is March 31, 2015. This information report will now cover 2014 only as a result of a change from prior guidance requiring the first FATCA information report filed by a participating FFI to cover both 2013 and 2014. Withholding on “withholdable” payments on such gross proceeds will be required commencing on January 1, 2017. biz.hk: What should an expat keep in mind when it comes to filing a US tax return? Wallace: You need to have proper recordkeeping (as records must generally be retained for five years under the Bank Secrecy Act) and file an FBAR (Report of Foreign Bank and Financial Accounts) by June 30 electronically (for which there is no extension). You may also be able to take either a foreign tax credit or an itemized deduction for your taxes paid to a foreign country on your foreign source income – which in most cases can be to your advantage. But, you have to remember that once you choose to exclude either foreign earned income or foreign housing costs, you can’t take a foreign tax credit for taxes on income you can exclude. With regards to requirements of FATCA, you need to identify all your foreign (non-US) assets, and you are required to file Form 8938, Statement of Specified Foreign Financial Assets, if you meet the applicable filing threshold. You as a customer can also expect more KYC (Know-YourCustomer) questions about your financial holdings from financial institutions. My suggestion would be: if you are not familiar with the US Tax Code, you need to hire an accountant who is

Taxpayers living in the United States

Taxpayers living outside the United States

Unmarried – total value of specified foreign financial assets is more than US$50,000 on the last day of the tax year or more than US$75,000 at any time during the tax year.

Unmarried – total value of specified foreign financial assets is more than US$200,000 on the last day of the tax year or more than US$300,000 at any time during the tax year.

Married filing joint – total value of specified foreign financial assets is more than US$100,000 on the last day of the tax year or more than US$150,000 at any time during the tax year.

Married filing joint – total value of specified foreign financial assets is more than US$400,000 on the last day of the tax year or more than US$600,000 at any time during the tax year.

Married filing separate – total value of specified foreign financial assets is more than US$50,000 on the last day of the tax year or more than US$75,000 at any time during the tax year.

Married filing separate – total value of specified foreign financial assets is more than US$200,000 on the last day of the tax year or more than US$300,000 at any time during the tax year.

Differences in exemption rate between a resident and non-resident US taxpayer (For Form 8938, Statement of Specified Foreign Financial Assets)

familiar with international issues for US taxpayers. biz.hk: What are the upcoming due dates for the purpose of US tax filing? Wallace: Assuming a calendar year, they are: March 15 – Form 3520-A for foreign trust with US owner; April 15 – US income tax returns; June 16 – US income tax returns for US citizens and Green Card holders residing overseas (Interest will be charged from original due date, April 15, on any unpaid tax); June 30 – FBAR; and October 15 – extended deadline for US income tax returns (Form 4868 must be filed and, again, interest will be charged from original due date, April 15, on any unpaid tax). biz.hk: What other US tax-related development has there been? Wallace: The IRS has a streamlined filing procedure for non-resident US

taxpayers effective September 1, 2012 in the Offshore Voluntary Disclosure Program – which initially ran in 2009 and 2011 to allow US persons to report their previously undisclosed assets from offshore accounts before detection by the IRS and possible criminal prosecution. It is made available for non-resident US taxpayers who have resided outside of the US since January 1, 2009, and who have not filed a US tax return during the same period. These taxpayers must present a low level of compliance risk, and it requires 3 years of back returns and 6 years of FBARs. Because of all the tax compliance requirements coming into place, about 3,000 Americans handed back their US passports or green cards to end their citizenship or long-term residency in 2013 alone, according to a list of names published quarterly by the US Treasury Department.

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Taxpayers living in the United States

Taxpayers living outside the United States

Unmarried – total value of specified foreign financial assets is more than US$50,000 on the last day of the tax year or more than US$75,000 at any time during the tax year.

Unmarried – total value of specified foreign financial assets is more than US$200,000 on the last day of the tax year or more than US$300,000 at any time during the tax year.

Married filing joint – total value of specified foreign financial assets is more than US$100,000 on the last day of the tax year or more than US$150,000 at any time during the tax year.

Married filing joint – total value of specified foreign financial assets is more than US$400,000 on the last day of the tax year or more than US$600,000 at any time during the tax year.

Married filing separate – total value of specified foreign financial assets is more than US$50,000 on the last day of the tax year or more than US$75,000 at any time during the tax year.

Married filing separate – total value of specified foreign financial assets is more than US$200,000 on the last day of the tax year or more than US$300,000 at any time during the tax year.

Differences in exemption rate between a resident and non-resident US taxpayer (For Form 8938, Statement of Specified Foreign Financial Assets)

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SOCIAL RESPONSIBILITY

been identified by the Hong Kong government as having the largest number of children living below the poverty line,” Boehm explains.

200,000 children below poverty Last year, the government announced that 1.3 million people, or 19.6 percent of the city’s population,

The HUB –

members. There are also 120 registered parents. “When we asked the parents what they most wanted for their children, they said education. They believe education can change their children’s lives. So we provide them with tuition and English classes,” Boehm says. But it is not just homework or study skills that Boehm and his team would like to help these children learn. “We also want

a Haven for Underprivileged Children By Mabel Sieh

Kevin O'Shaughnessy and Vancy Pang

ike many businessmen, David Boehm feels very fortunate about his own success. But at the same time, he is aware that many families and children in the city can barely make ends. That is the idea behind The HUB Hong Kong Children and Youth Centre, a local charity established in 2012 with the support of The Bill Crews Foundation and Rotary Club of Kowloon North. Together with Reverend Bill Crews, Chairman of the Exodus Foundation in Australia, and Bruce Stinson, another

businessman based in Hong Kong, the three Australian founders have transformed a 5,000-square-foot former church into a spacious haven for underprivileged children and their families in Sham Shui Po. “We want to create a safe environment where children can come to learn and play, and just be children again,” says Boehm, Chairman of The HUB Hong Kong and a permanent resident who has been living in Hong Kong for over 20 years. “I feel very fortunate of my success and I like Hong Kong and its people. I

want to give back to the community,” he says.

The HUB Hong Kong Officially launched in July last year, The HUB Hong Kong provides not just a huge space – a luxury for the underprivileged in Hong Kong, but also a variety of classes offering academic support, personal and leisure development for children aged between six and 18. Living on Hong Kong Island, Boehm was shocked how some families

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are struggling under appalling living conditions in some parts of the city. “We visited the families in the Sham Shui Po neighborhood in their subdivided flats,” he says. “In the tiny space, there is a bunk bed and a cooker on a small table. They have to share a dirty toilet with other people on the same floor. The children have no space to study, let alone play.” The founders have chosen Sham Shui Po as their first location for an establishment in Hong Kong for a reason. “We wanted to start where help is most needed, and Sham Shui Po has

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were officially living under the poverty line. It means one in three elderly people and one in five children, are poor. Under a 2012 guideline, a one-person household with an income of less than HK$3,600 per month is considered “poor.” For two- and fourperson households, the amounts are $7,700 and $14,300, respectively. “It’s hard to believe that more than 200,000 children are living in poverty in a developed, well-off city like Hong Kong,” says Boehm. “Children are being placed in [horrible] circumstances that they are not responsible for. It’s not their fault that they come from poor families.” Helping children – a cause close to the three founders’ hearts – is the key mission of The HUB Hong Kong. At present, The HUB has about 150 primary children and 30 teenagers as

to help them develop their confidence,” says Kevin O’Shaughnessy who is the finance director of the organization. “Poor children usually have low self-esteem because of their family background; they are shy due to lack of experience and exposure,” he adds. “We want to help them see their potential and to feel they are the same as other children.”

Education and exposure Service manager Vancy Pang agrees that confidence building is crucial in a child’s development. A registered social worker, she has previously worked with youth and families in NGOs for 10 years before joining the charity last year. “Many of the families we serve here are from the mainland. They don’t have

zŽƵƌ ƐƵƉƉŽƌƚ ŝƐ ŽƵƌ ƐƵĐĐĞƐƐ͊ the educational level to teach their children homework or the resources to send them to tuition classes,” Pang describes. “So their children aren’t doing well in school, but that doesn’t mean they aren’t good in other things. “In our art classes, I’ve seen some children can draw and they take pride in their artwork with a sense of achievement. We can certainly help them build their confidence through our interest groups like music and arts, and also sports.” Most of the classes are offered for free while some require a small fee. The homework assistance class – which runs five days a week – costs $300-400 per month. However, fees can be waived by half or totally for families with special financial needs. There are also nutrition programs such as a fruit scheme for children. Apart from three full-time staff, all the other instructors are volunteers.

The American Chamber of Commerce Charitable Foundation is the philanthropic arm of AmCham Hong Kong to contribute to the community leveraging from its influence within the international business community in Hong Kong.

'ŝǀŝŶŐ ďĂĐŬ ƚŽ ƚŚĞ ĐŽŵŵƵŶŝƚǇ is a vital value of AmCham. This is made possible through donations from AmCham members and non-members, and two annual fundraising events – AmCham Ball and the Charitable Foundation Dinner.

Exposing children to the outside world through regular outings including a visit to Hong Photo courtesy: The HUE Kong's Legislative Council.

Being able to see the outside world is an inspiration for these children, Boehm believes. “These kids have probably never been to anywhere outside Sham Shui Po,” he says. “By letting them meet someone who shares his job passion will inspire them to think about their future.”

How you can help

David Boehm

To expose children to the outside world and induce a sense of belonging in the city among them, Pang and her team have also organized regular outings for them. “During the Chinese New Year, we’ve taken some families and children to the flower market in Victoria Park in Causeway Bay,” Pang says. “We’ve also arranged a visit to the Legislative Council building in Central, while some others have been to a cooking class on pasta and learn from a chef in a Michelin-star restaurant in Wan Chai.”

This is also a reason that Boehm invites companies to support them not just through funding, but by offering their time and expertise. A company, for example, can send their technical staff to teach children how to use a computer or open up its factory for children to see how something is manufactured in a behind-the-scene tour. Another idea is to run vocational workshops for teenagers who could then benefit from learning to write a good resume or a job application letter. “If they can see the outside world more, they will be inspired and become ambitious,” Boehm stresses. “We want to give them a vision that they can be a productive member of the society.” Boehm is pleased with the feedback he has received so far. “A lot of companies in Hong Kong are keen to engage their staff in meaningful volunteer

work. It’s a rewarding experience for them to get to know these children and to help them,” he adds. Six months after the opening, things are settling in and operation has been smooth. On average, there are 20 to 30 children coming to the center and enjoying the facilities on the weekday, with more visiting children on the weekend. Next in the pipeline is to provide more services for parents, especially those with younger children. “We want them to come here to break away from their routines,” Boehm says. “They can also learn something useful by taking our classes. Some of them have even indicated an interest in learning English.” “We would also like to expand and set up more HUBs in other areas in Hong Kong,” he also says. “As for outside of Hong Kong, we already have a center in Bangkok and will be looking into opening another one in Cambodia and Myanmar. “And we will continue to listen to the needs of the poor families and children so that what we do can make a real impact on their lives.” Editor’s note: For more information, please visit: www.thehubhk.org or arrange a visit to the centre at 1st floor, Greenrich Mansion, 100 Castle Peak Road, Sham Shui Po.

Our Aim:

Our Annual Program: x Lyn Edinger U.S. Scholarships – For secondary school graduates in Hong Kong to pursue studies at a U.S. university x Scholar Awards ʹ For MBA students enrolled in Hong Kong universities acknowledging their academic achievements and leadership and community services x Prize Book Awards – For secondary school students recognizing their academic and extracurricular achievements x Ira Dan Kaye Community Service Award – For committed volunteers honoring their generous community service and giving a donation to the charity of the person’s choice x AWA Awards – A partnership with the American Women’s Association (AWA) to provide financial assistance to smaller and lesser known charities in Hong Kong

To raise funds for educational, training and other charitable projects which have a long-reaching and beneficial effect on the recipients.

“By recognizing the important work done with our students and families, the Ira Dan Kaye Community Service Award has brought the issue of special education needs (SEN) for our community into the spotlight and public conscience. The receipt of this award has fueled our passion to serve students and others with SEN.” Dr. Jeremy Greenberg, Director of The Children’s Institute, Recipient of the 2013 Ira Dan Kaye Community Service Award

dŚĂŶŬ ǇŽƵ͊ tĞ ĚŽ ŝƚ ǁŝƚŚ ƚŚĞ ŚĞůƉ ŽĨ ĨƌŝĞŶĚƐ ůŝŬĞ ǇŽƵ͊

Pledge Card ƶ HK$1,000

ƶ HK$2,000

YOUR DETAILS Name: __________________________________________________ Title: __________________________________________________ E-mail: __________________________________________________

ƶ HK$5,000

ƶ Other amount: HK$ ___________

Contact no.: _______________________________________________ Company: _______________________________________________

PAYMENT METHOD By crossed check payable to "The American Chamber of Commerce Charitable Foundation", or ƶ By credit card (Please choose appropriate) ƶ ƶ Master Card ƶ VISA ƶ American Express Credit card number: _____________________________________ Expiry date (mm/yy): ___________________________________ Cardholder’s name (in full): ______________________________________________________________________________________ Signature: ____________________________________________________________________________________________________ Please send a receipt to the following email / postal address*: ƶ ______________________________________________________________________________________________________________ Please return the completed card to: Ms. Ming-Lai Cheung, Charitable Foundation Secretariat, The American Chamber of Commerce in Hong Kong, 1904 Bank of America Tower, 12 Harcourt Road, Hong Kong (E-mail: mcheung@amcham.org.hk/ Tel: +852 2530 6927)

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

Mark Your Calendar Hong Kong's International Trade Policy Agenda:

Apr How it helps business

Kenneth Mak, Director-General of Trade and Industry, HKSAR Government Hong Kong is the ninth largest trading entity in the world with a sophisticated trading and logistics industry. In 2013, our trade in goods amounted to over $8.2 trillion, approaching four times of GDP. Hong Kong has been participating actively in international forums and numerous trade negotiations with a view to safeguarding existing market access and opening new markets for our goods and services. Kenneth Mak will give an overview on the work of the Government in achieving Hong Kong's trade policy objectives, especially focusing on the opportunities to the business sector. Kenneth Mak assumed the post of Director-General of Trade and Industry in July 2012. In that capacity, he heads the Trade and Industry Department and is responsible for fostering Hong Kong’s international trade relations, implementing trade policies and agreements, as well as supporting Hong Kong’s industries and small and medium enterprises. Since joining the Hong Kong Civil Service in 1986, Mak has served in various bureau and departments: Deputy Secretary for Trade and Industry from 2000 to 2003, Deputy Director of Housing from 2003 to 2007, and Private Secretary to the Chief Executive of HKSAR from 2007 to 2010. He was Permanent Secretary, Chief Executive's Office from 2010 to 2012.

CFIUS and US National Security: What You Need to

Apr Know About Investment in the United States

Chris Griner, Partner, Stroock & Stroock & Lavan LLP, Washington, DC Anne W Salladin, Special Counsel, Stroock & Stroock & Lavan LLP, Washington, DC Chinese investment into the United States is on the rise, as demonstrated by recent high profile transactions in the real estate, food and entertainment industries, and has put a spotlight on the Committee on Foreign Investment in the United States (CFIUS), a government committee that reviews inbound investment in the United States and can block deals for national security reasons. This event provides a unique opportunity to gain valuable insight of recent developments and trends in CFIUS matters as well as the actual CFIUS process, and strategies for managing a successful approach to the committee, in addition to how national security reviews may affect commercial transactions involving foreign investment in the United States. Chris Griner is a recognized leader in the field of national security and played a key role in the development of the FOCI mitigation arrangements used by the US government today. He represents major foreign and domestic companies with regard to CFIUS and other national security approval issues, including many of the largest transactions before CFIUS in the past two decades. Anne Salladin is a 20-year veteran in the Office of the Assistant General Counsel for International Affairs of the US Department of the Treasury, which chairs CFIUS. During her tenure, she had participated in the review and investigation of well over 500 CFIUS cases, including all of the major Chinese acquisitions of US businesses in recent years, as well as in the revision of the CFIUS regulations. She is currently one of the few attorneys in private practice with experience advising the chair of CFIUS.

APEC 2014:

Apr China, Hong Kong, Trade and Financial Services

Anthony Nightingale, CMG, SBS, JP, Chairman of The Hong Kong-APEC Trade Policy Study Group 2014 is an important year in which APEC Finance Ministers will present the first set of recommendations from the new Asia Pacific Financial Forum (APFF), a regional platform for enhanced public-private collaboration to accelerate the development of robust and integrated financial markets in Asia Pacific. Discussion in the luncheon will include insights from Anthony Nightingale, Hong Kong’s long-standing APEC Business Advisory Council member, about the APEC 2014 agenda, the leadership of China as chair of the meeting, and the role that Hong Kong is playing in APEC to encourage liberalization. Anthony Nightingale was Managing Director of the Jardine Matheson Group from 2006 to March 2012, having joined the Board of Jardine Matheson Holdings in 1994. After joining the Group in 1969, he held a number of senior positions until his retirement from executive office in March 2012. Today he is a non-executive director of Jardine Matheson Holdings and of other Jardine Matheson group companies, including Dairy Farm, Hongkong Land, Jardine Cycle & Carriage, Jardine Strategic and Mandarin Oriental, and a commissioner of Astra International. Nightingale is a Hong Kong representative to the APEC Business Advisory Council and chairman of The Hong Kong-APEC Trade Policy Study Group. He is a non-official member of the Commission on Strategic Development in Hong Kong, a member of the Securities and Futures Commission Committee on Real Estate Investment Trusts, a council member of the Employers’ Federation of Hong Kong and a member of the UK ASEAN Business Council Advisory Panel. For information, see website: www.amcham.org.hk

Tel: (852) 2530 6900

Fax: (852) 2810 1289

2014 Apr Venue: The American Chamber of Commerce in HK 1904 Bank of America Tower 12 Harcourt Road Central, Hong Kong

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Venue: The American Chamber of Commerce in HK 1904 Bank of America Tower 12 Harcourt Road Central, Hong Kong

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Time: 12:00 - 2:00pm (Sandwiches and beverages included)

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Fee(s): Member: HK$280 Non-member: HK$380

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Venue: Club Lusitano 27/F, 16 Ice House Street Central, Hong Kong Time: 12:00 - 2:00pm (Sandwiches and beverages included) Fee(s): Member: HK$450 Non-member: HK$550 Corporate table: HK$5,700

AmCham’s annual China Conference is structured to provide practical, near-term insights and assessments for effective business development in Hong Kong and China. After more than 30 years of rapid growth, China is a maturing economy. The business climate for foreign MNCs and SMEs operating in China – both old timers and new-to-market companies – face worrisome challenges from rising costs coupled with intensifying competition from domestic businesses. Nevertheless, China’s continuing urbanization, emerging middle class, aging population, and recent adjustments in various social policies offer huge potential for business growth. In this changing environment, how can foreign businesses maintain their competitiveness in China and adapt to the new market circumstances to win consumers? In addition, what role can Hong Kong play in this historic transformation of China’s business environment, particularly in services? Gain insights on these and related issues at this exceptional one-day event. Take the opportunity to learn from and interact with senior business executives, policy makers and other experts through two keynote speeches and five highly interactive panels. Panel Discussion Topics: Opening Keynote: Stephen Roach Senior Fellow, Jackson Institute of Global Affairs at Yale University Luncheon Keynote: Yafang Sun (Invited) Chairwoman, Huawei

1. China’s Mass Urbanization: Get with the Flow, or Fail 2. Government Hand-Outs or the Invisible Hand? 3. Lead or Follow? HK’s Role in PRD Integration 4. China E-Commerce: the Most Important Business Battleground in the World 5. China’s Financial Reforms: Over-hyped or the Real Thing?

May 9, 2014 8:00 am - 3:30 pm Four Seasons Hotel Hong Kong, Grand Ballroom For more details including panelists, program and sponsorship: http://www.amcham.org.hk/China-Conference.html

Email: byau@amcham.org.hk