austcham news Issue 194 by The Australian Chamber of Commerce in Hong Kong

SUPER-CONNECTOR EDITION The Australian Chamber of Commerce Hong Kong and Macau 香港及澳門澳洲商會

ISSUE 194 | 2017

Australia’s ConsulGeneral Highlights AustCham’s Role in Influencing Regional Policy and Trade

P.10

Australia Focus Australia's Destiny is China, not America

P.12 Industry Insights

P.15 Corporate Australia Urgently Needs Asia Knowledge and Skills

Macau Focus Typhoon Lashes Macau www.austcham.com.hk

Contents

austcham news issue 194

03 Chamber Chatter 05 Events Update

in Influencing Regional Policy and Trade

Published By: The Australian Chamber of Commerce in Hong Kong and Macau Room 301-302, 3/F, Lucky Building 39 Wellington Street, Central, Hong Kong Tel: +852 2522 5054 Email: austcham@austcham.com.hk

10 Australia Focus Australia's Destiny is China, not America

Editorial Committee: Jacinta Reddan Karen Wu

12 Macau Focus

Advertising: Karen Wu Email: karen.wu@austcham.com.hk

27 October - AustCham 30th Anniversary Gala Dinner

06 Cover Story Australia’s Consul-General Highlights AustCham’s Role

13 Spotlight

14 Membership eCard Benefit

15 Industry Insights

17 Committees in Action

18 AustCham UOW Member Program

20 Corporate News

21 Corporate Profile

22 On the Scene

CONNEC T • ENGAGE • REPRESENT The Australian Chamber of Commerce in Hong Kong and Macau has more than 1,500 members from some 500 companies doing business here. It’s the largest international Australian Chamber and the second largest of 28 International Chambers of Commerce in Hong Kong. The AustCham mission is: To promote & represent Australian business & values while enabling members to connect, engage & grow bilateral relationships.

The Cityview

Disclaimer:

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austcham news Online version

The views expressed in this publication are not necessarily those of the Australian Chamber of Commerce in Hong Kong and Macau, its members or officers. The Australian Chamber of Commerce in Hong Kong and Macau takes no responsibility for the contents of any article or advertisement, makes no representation as to its accuracy or completeness, and expressly disclaims and liability for any loss however arising from or in reliance upon the whole or any part of this publication. Copyright © 2017 The Australian Chamber of Commerce in Hong Kong and Macau

Chamber Chatter

From your Chairman

ith the summer holiday season now officially behind us, I want to welcome everyone back to vibrant and energetic working life in Hong Kong as we look forward to celebrating AustCham’s 30th anniversary. A highlight of our year-long celebration will be our signature event, our 30th Anniversary Gala Dinner at the Island Shangri-La on Friday, October 27, featuring keynote speaker Federal Leadership of the Opposition Bill Shorten, who was just voted Australia's second most influential person by the Financial Review. Tables are selling fast for this highly sought-after event so we encourage you to book now. We are grateful to our sponsors ANZ and CLP. One of the key initiatives which has been gathering momentum during recent months is The Greater Bay Area. We see significant opportunities in this vision which brings together nine cities in Southern China and two Special Administrative Regions (Hong Kong and Macau) with a combined population of around 67 million and a GDP close to that of Australia. The ability to access this rapidly growing market will see Hong Kong – and companies based in Hong Kong – well-positioned to capture the opportunity. This will further cement Hong Kong’s role as the Super Connector between here and the Mainland and will play a role in strengthening ties between Australia, Hong Kong and the Greater Bay Area. Major new infrastructure projects under construction will bring this expansive market closer, making it more accessible to Hong Kong and businesses looking to access China. Such infrastructure projects are just one way you, our members, can commercialise the opportunity and share their best practice around core areas of expertise such as innovation, financing and project management across jurisdictions. A little closer to home, there is a lot happening in the Chamber with a number of new initiatives underway as well as an evolution of some of the very best AustCham has to offer. The Women and Business Network (WIBN) hosted their annual Summer Drinks at the Hong Kong Fringe Club which marked another successful event in support of local artists and Hong Kong culture. This was a celebration of an institution which is at the heart of Hong Kong’s creative centre and taps into the innovation the WIBN celebrates. We also recently formally welcomed our new Consul-General Michaela Browning at a sell-out luncheon event where she shared her vision and passion for the Australia–Hong Kong relationship (see cover story). We are truly fortunate to have such an inspirational and accomplished consul-general whose experience across a variety of areas has given her deep trade and investment experience. It is the support of the consulate, of Austrade and particularly, of our Platinum Patron sponsors, whom we celebrate this year as we mark our three decades in Hong Kong. It is a real honour to be working with these critical partners to advance Australia’s interests into the next three decades. Looking into the future, you can expect to see the Chamber increase its focus on advocacy – on engagement with Hong Kong and Australian Governments in the immediate term on matters of vital interest to you. It is essential that we work hard on your behalf to preserve all the positive elements that make Hong Kong a competitive and attractive place to do business and to call our home. Look out for our policy submission to the HKSAR Government here: www.austcham.com.hk/latestnews/82. Andrew Macintosh chairman@austcham.com.hk

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Chamber Chatter

Across My Desk As I write, we keenly await the Hong Kong Chief Executive Carrie Lam’s first policy address which has been brought forward by several months. As influential members of the international business community, we have an extraordinary opportunity to contribute to the prosperous future of this vibrant city to which we owe so much; Hong Kong has the largest concentration of Australian businsses in Asia, many of whom see the territory as the gateway to China. We thank you for the contribution many of you made through AustCham’s vibrant committee network to our submission to the new administration. This has now been lodged with the Hong Kong Government and we look forward to ongoing dialogue regarding key elements. This was circulated to you all last week and we encourage to read this. In particular, we are keen to see that persistent challenges regarding bank account management issues remain on the agenda – this is an issue which affects so many of you. As well, we want to better understand Hong Kong’s plans to become a data hub; we would like to get clarity around recent changes to data sharing provisions. And, of course, we remain committed to doing all we can to secure a Free Trade Agreement between Hong Kong and Australia in order to

preserve the current free flow of goods and services between the two. You would have heard our Consul General Michaela Browning speak passionately about the special relationship between Australia and Hong Kong during a lunch event last month (see cover story) which touched on the importance of the FTA. At the chamber, we also firmly believe that a Double Taxation Agreement - which has now been talked about for years - should be in place as the two are complementary. LESS than three weeks remain before our flagship event, our 30th anniversary gala dinner at the Island Shangri-la on Friday, October 27. This will be a memorable evening with a keynote address by the Federal Leader of the Opposition Bill Shorten, who will be joined by Chief Executive Carrie Lam and our Consul General Michaela Browning. We have a host of prizes and giveaways to be won that evening including a very special backstage meet and greet with Jimmy Barnes and an overnight stay at The Parisian in Macau, as well as very special holidays and flights to Australia. This will be one of the most talked-about events of the year. Don’t miss out on your ticket to this special event. Book now on: http://bit.ly/2xakHQ9 The AustCham team looks forward to seeing you there. Jacinta Reddan, Interim Chief Executive

Sai Kung Stray Friends Foundation

ai Kung Stray Friends Foundation (SKSFF) is a Hong Kong registered charity, which rescues stray, abandoned, sick and injured dogs to provide them with medical care and rehabilitation. They are a non-profit organisation that is supported by a group of volunteers and relies heavily on donations from the public. Every dog they rescued is health checked, de-sexed, vaccinated and given flea, tick and heart worm prevention. The shelter is the home to approximately 100 dogs, who are all waiting for their forever home.

Your support can make a huge difference in the life of one or more dogs. Have you ever thought about sponsoring a dog? You can sponsor a dog of your choice for as little as HK$100 per month, tax receipt available.

They believe that there is something for everyone at SKSFF. Whether individuals, families or friends would like to come and walk dogs to Corporates and Schools getting involved in the daily operations of their kennels as a “Company or Friends Away Day”, IB Community Care Project or HKDSE work experience.

If you are interested in helping, please email Narelle Pamuk at saikungstrayfriendshk@gmail.com

Their ultimate goal is to find a forever loving home for the beautiful dogs. They also look for short and long-term fosters. Fostering allows the dogs to have a break from kennel life as some have been with SKSFF for years, but most importantly, fostering allows them to help another stray dog who is in desperate need of their help.

SKSFF is also looking out for used towels, bedding and rattan furniture for their dogs to sleep on. If you are leaving Hong Kong, please consider donating your washing machine, tumble dryer and even your car to them.

Follow them on Facebook: Sai Kung Stray Friends Foundation Instagram: sksff_ LinkedIn: Sai Kung Stray Friends Foundation Don’t miss out the ‘Strays Go To Sunday Market’ at the Hong Kong Academy, Sai Kung on 1 October and 5 November!

Community Corner AustCham is a non-profit organisation and provides this space free of charge to other, selected non-profits or charities.

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A Letter from Canberra As home to world class educational institutions, the seat of government and the centre of a Capital Region brimming with quality seafood and primary produce, the Australia-Hong Kong Free Trade Agreement has the potential to open up a range of opportunities for our nation’s bush capital, Canberra. The Australian National University is Australia’s top university and among the top 20 universities in the world. The latest QS World University Rankings for 2018 places ANU among the great research and educational institutions in the world and in the top 0.1 percent of the 26,000 universities on the planet. The QS rankings are based on the expert opinion of more than 75,000 academics and 40,000 major employers around the world. They also analysed 12.3 million papers and more than 75 million research citations. With Hong Kong facing a skills shortage, demand for work ready employees is strong and vocational education – in which Australia is a world leader – is also on offer in Canberra through the Canberra Institute of Technology.

governance, procurement, ICT, medical and health services, public policy and financial and environmental management and scientific research and development at the Commonwealth Scientific and Industrial Research Organisation. But one of the real growth areas in our globalised world is in the abundant natural resources sourced from the Capital Region. Fresh oysters and fish from the South Coast. Award-winning wine from Murrumbateman, Bungendore and Lake George. Olive oil from Collector. Bacon and smoked salmon from Pialligo Estate. Truffles from Mt Majura and Tarago. With strong people to people connections through more than 100,000 Australians living in Hong Kong and 95,000 Hong Kong born living in Australia and complementary economies, the possibilities of even stronger links from the FTA are boundless. Gai Brodtmann MP, Federal Member for Canberra and Shadow Assistant Minister for Cyber Security and Defence

And as the centre of Commonwealth government in Australia, Canberra is home to international and national expertise in

OCTOBER AT A GLANCE…

* Tue, 10 October, 12:30pm – 2:00pm

Portfolio Opportunities in Australian Infrastructure, Healthcare, Agriculture and Property Stocks AustCham Business Centre, 3/F Lucky Building, 39 Wellington Street, Central

* Thur, 12 October, 12:30pm – 2:00pm

How to build your own Effortless Property Empire AustCham Business Centre, 3/F, Lucky Building, 39 Wellington Street, Central Fri, 13 October, 7:45am – 10:00am Port Adelaide Football Club’s Push into the Mainland How Hong Kong Helped Bring Power to the Middle Kingdom Victoria Suite, 1/F, The Hong Kong Club, 1 Jackson Road, Central

* Independent Event Delivered Through AustCham's Event Management Service

EVENTS UPDATE Tue, 17 October, 7:45am – 9:00am Non-Tariff Barriers (NTBs) to Australia’s Agricultural Exports Hong Kong Room, 1/F, The Hong Kong Club, 1 Jackson Road, Central Tue, 24 October, 6:30pm – 8:30pm AustCham Technology and Business Program - Series II Session #2: An Introduction to Artificial Intelligence Google, 1 Matheson Street, Causeway Bay Fri, 27 October, 6:30pm until late AustCham 30th Anniversary Gala Dinner The Ballroom, 5/F, Island Shangri-la Hong Kong, Supreme Court Road, Central Tue, 31 October, 11:50am – 2:00pm Joint Business Community Luncheon with Chief Executive of HKSAR, The Hon. Mrs. Carrie Lam Grand Hall, Hong Kong Convention and Exhibition Centre, 1 Harbour Road, Wan Chai

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Cover Story

Australia’s Consul-General Highlights AustCham’s Role in Influencing Regional Policy and Trade - Ingrid Piper

017 is proving to be quite a year of rejuvenation and renewal, not only within the Australian Chamber of Commerce Hong Kong and Macau as it celebrates its 30th anniversary, but also on the diplomatic front with the appointment of Michaela Browning as new Australian ConsulGeneral to Hong Kong and Macau. At the recent AustCham Women in Business Network (WIBN) lunch, new WIBN Chair Simone Wheeler described Ms Browning’s appointment as akin to winning the lottery for Australians doing business in Hong Kong and Macau. Ms Browning’s extensive career in foreign affairs and trade spans international policy, program management, trade negotiations, defence and security. Her previous diplomatic postings include Singapore and Thailand, as well as managing Australia’s aid programs in Afghanistan and Pakistan. Prior to taking on her current role in April 2017, she was Global Head of Investment at Austrade, special adviser to the CEO on Strategy and China policy and before that was General Manager of Austrade’s Established Markets (spanning North America, Europe, North East Asia, Turkey, Israel, New Zealand and the Pacific).

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“I wouldn’t change a thing about my Getting the message across Addressing a full house at the lunch, Ms Browning urged AustCham members and Australians doing business in the region to become actively involved in advising and informing Australian government policy making. She urged members to make sure their experiences, knowledge and advice was heard by those in Australia tasked with making decisions about business, trade and policy in Hong Kong, China and the region. Ms Browning stressed AustCham and its members have an enormous role when it comes to advising the Australian Consulate-General about regional opportunities such as those from China’s Belt and Road and Greater Bay Area initiatives, the Asian Infrastructure Investment Bank, smart cities and cyber security, as well as other trade and investment opportunities. “AustCham Hong Kong represents Australia’s largest resident commercial presence in Asia and is one of our most prestigious in the world,” she says.

career, it’s been quite an adventure…” Michaela Browning, Australian Consul-General Hong Kong and Macau

we need to lock-in the FTA. It’s important to lock-in the openness we provide to each other. “An FTA is about binding legal commitments into the future. It needs to be comprehensive and across the bulk of trade to meet the WTO rules and Australia has applied a high standard to its FTAs which should deliver more access than provided already by the World Trade Organisation commitments.”

Serving Australia Michaela Browning’s childhood ambitions of either becoming a diplomat or a war correspondent have, it seems, inevitably led to a career that includes negotiating trade agreements, expertise in counter terrorism, countering transnational crime, aid and development and foreign service. “I wouldn’t change a thing about my career, it’s been quite an adventure,” Browning says. To date, this adventure includes negotiating the Singapore Free Trade Agreement (FTA) and the Australian-US FTA. The AUSFTA, she points out, was the second longest debate in Federal Parliament Senate history, second only to a Senate debate that saw the passing of the Native Title Amendment Bill 19971. Despite the protracted debate and concerns, she says Australia and Australian business has benefited from this FTA’s positive results, with, for example, much more investment than initially predicted. Australia - Hong Kong FTA Current negotiations for an Australian-Hong Kong FTA seem particularly well-timed given Ms Browning’s appointment. She predicts an Australia-Hong Kong FTA could be signed within a year. “An FTA provides opportunities for services, e-commerce, new areas of innovation, collaboration and infrastructure partnerships – they do a lot more than just deal with tariffs and taxes,” she says. “We already have an FTA with China, Japan and Korea but trade and investment with and through Hong Kong is significant too, so

Opportunities ahead Ms Browning’s previous role involved engagement with Australian innovation and start-ups, areas where she sees lots of opportunity for more collaboration in Hong Kong. “Many here know Australia as an exporter of high quality and premium produce, but we want them to also see Australia as a world leader in innovation, some of our achievements in medtech and biotech are breathtaking. Australian capabilities and innovation have been extraordinary; from the application of big data analytics and artificial intelligence, for example, to driverless trucks and trains in the mining industry or in monitoring the effectiveness of our gas pipelines, as well as some of the savvy of our start-ups in fields like cyber security, which no pun intended, fly under the radar.”

1. Source: http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1314/AustPolRecords issue 194 | austcham news

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Cover Story She describes Australia’s focus on security, counter terrorism, transnational crime and human trafficking as transformative over the past decade. Australia’s current readiness to engage within the region was recently highlighted by Foreign Minister Julie Bishop’s offer of military training to support the Philippines in its efforts to counteract Islamic extremists. Other initiatives include an ongoing involvement with Indonesia and the Bali Process (human trafficking); and increased security dialogues with Japan, China, India, ASEAN and others. With New South Wales Minister for Trade and Industry Niall Blair and Hong Kong Secretary for Food and Health Professor Sophia Chan.

Australians are also using new technological solutions like blockchain to protect the integrity of their assets and reputation with, for example, wine and dairy exports to China. Belt and Road Ms Browning believes China’s Belt and Road initiative could create exciting opportunities for Australian infrastructure businesses but it’s too early to know how significant these will be as the strategy is still evolving and major projects are getting under way. But infrastructure has always been an important part of development, she says, and Australian business have been involved in infrastructure development in this part of the world for years, gathering knowledge and experience in delivering major projects as well as valuable insight into challenges posed by such projects. “So Australian companies have a lot to offer, but it’s up to companies to decide where their expertise is most valuable. For example, Australia pioneered Public-Private Partnerships (PPPs) and we learnt from our failures and our success,” she says. TPP and beyond Even without the US as a partner in Trans-Pacific Partnership (TPP) negotiations, Ms Browning describes Australia’s trade agenda as hugely ambitious, not just in Asia but also with the EU and South America.

However, Ms Browning describes North Korea’s recent actions as an unprecedented breach of international law. “This is a serious escalation and nobody would deny it. It requires everybody to make an effort to engage on North Korea and to try to reduce tensions.” Skills and learnings Michaela Browning’s foreign affairs career reflects a diverse range of interests. It hasn’t always been an easy path. “I’ve tried to deal with failure and setbacks with dignity and worked hard, and often that’s led to my next job offer. Being a woman, you’ve just got to trust that you can do things; to have confidence in yourself.” Browning says attitudes to women in foreign affairs have changed, becoming more inclusive over time. “Twenty years ago when I got pregnant on posting in Singapore, they threatened to send me back to Australia. Now it’s easier and more flexible and the foreign service has come a very long way indeed. But women still face much greater difficulties in the world. I worked on the development programs in Afghanistan and Pakistan which have been assessed by development agencies as the worst places in the world to be born female.

“We’re going ahead in discussions with other TPP countries and we’re looking forward to meeting in November to progress that, and we’ll be looking at what we can get out of that agreement,” she says. Regional Security Given current issues in the Philippines, Myanmar and North Korea, having a Consul-General with Ms Browning’s knowledge is certainly an asset.

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Michaela Browning at the Residence with Hong Kong Financial Secretary Paul Chan Mo-po.

“Trade goes through Hong Kong so we need to lock in the AUS-HK FTA…” “When I encounter difficult attitudes or issues, because I’m a woman and sometimes not what people expect, I would steel myself for this experience and not take too much offence. It’s an act of self-counsel, in trying to be the bigger person and to engage through your competency and ability, and also to use that experience as an insight into that person. I often find that with people who are the most dismissive from the outset, with a preformed view because I’m a woman, it’s often an indicator of something else.

Michaela Browning, Australian Consul-General Hong Kong and Macau

“In any job, whether you are male or female, you find out who your allies are, and who you can work with. You need to invest in those people, and as for others, you just hope your capabilities win out in the end. Often there’re ways around things, so you should look for creative ways to pursue an agenda,” Ms Browning says. The successful 5 September 2017 WIBN leadership lunch with Michaela Browning, Consul-General Hong Kong and Macau, was supported by network sponsors, Ambition and Telstra. Photos: Australian Consulate-General Hong Kong

At launch of Australia-Hong Kong FTA negotiations - with AustCham Immediate Past Chair Professor Richard Petty, Trade Tourism and Investment Minister Steve Ciobo, Hong Kong Commerce Secretary Greg So and Hong Kong General Chamber Chair Stephen Ng.

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Australia Focus

Australia's Destiny is China, not America - Professor James Laurenceson, Deputy Director of the AustraliaChina Relations Institute at the University of Technology Sydney

sk the average Australian whether China or the US is the country's most important economic partner and you'll likely get a bewildered look – it's China, of course. The Lowy Poll shows1 that by 2013, 76 percent of Australians were already convinced that China was No. 1, compared with just 16 per cent choosing the US. In fact, this year 43 percent of Australians said2 they regarded China as Australia's most important relationship overall. This was the same proportion nominating the US, our security ally. Over the past 12 months China snapped up $95 billion of Australian goods, eight times more than bought by the US. What's become apparent more recently is also China's voracious appetite for Australian services, worth another $11 billion. Yet earlier this week, a new report3 by the United States Studies Centre led with the punchline: "No single country plays a larger role in Australia's economy than the United States." The research rightly highlights the benefits of investment between Australia and the US. And as the report points out, the stock of US investment in Australia is $860 billion, 10 times more than that from China.

But it's quite a leap to conclude that the Australian public have got it wrong. Accumulated over decades Yes, the stock of US investment in Australia is much greater than China's. But that is a sum that has taken many decades to accumulate. As Australian National University economist Shiro Armstrong pointed out in 2014, a more sensible measure4 of relative economic importance would, in a given year, add investment flows to trade flows, not the entire accumulated investment stock. In 2016, trade5 and investment6 flows with China stood at $178 billion. Those with the US were not only less than with China, they were less than zero, -$27 billion. As usual, trade with China last year towered above that with the US. But US investors also pulled $66 billion more out of Australia than they put in, while Australian investors dialled back their US asset holdings by $25 billion. The last time the US outperformed China on the defensible metric was back in 2011.

1. https://www.lowyinstitute.org/sites/default/files/lowypoll2013_web_1_0.pdf 2. https://www.lowyinstitute.org/sites/default/files/documents/lowy-2017-pollreport-web.pdf 3. http://www.afr.com/news/economy/trade/why-the-united-states-is-australias-indispensable-economic-partner-20170810-gxtcg4?btis 4. http://www.eastasiaforum.org/2014/03/30/embracing-china-as-number-one/ 5. http://dfat.gov.au/trade/resources/trade-statistics/pages/trade-time-series-data.aspx 6. http://www.abs.gov.au/ausstats/abs@.nsf/mf/5352.0 7. http://www.afr.com/business/port-of-melbourne-tops-up-cics-local-infrastructure-real-estate-basket-20160920-grkf5m 8. http://www.australiachinarelations.org/content/malcolm-turnbull-and-china 9. http://www.smh.com.au/federal-politics/political-news/what-happens-if-china-stumbles-a-140-billion-doomsday-scenario-20170411-gvimlc.html 10. https://www.brookings.edu/wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf 11. http://unctad.org/en/PublicationsLibrary/wir2017_en.pdf

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In 2030, China is set to account for Aside from the scale of combined trade and investment flows, another key distinction is that there are often substitutes for US investment. Many of Australia's biggest corporations may regularly head to New York to raise capital. But London, Brussels, Tokyo, Hong Kong and Singapore would all welcome increased Australian business. Last year, a US-based fund manager took a 40 percent stake in Australia's busiest port, the Port of Melbourne. But half of its contribution was sourced from China's sovereign wealth fund, China Investment Corporation7. No substitutes for demand In contrast, there are frequently no substitutes for Chinese demand. Consider the predicament if Chinese steel makers no longer needed Australian iron ore. There is no prospect of any other country, or even group of countries, stepping up and absorbing the 650 million tonnes that China does. In 2014, then US secretary of state Hilary Clinton cautioned Australia8 not to put all its eggs in the China basket. Then communications minister Malcolm Turnbull quipped, "I'm sure that we'd love to export vast quantities of iron ore to the United States but they've never shown any enthusiasm in buying them".

22 percent of global middle class spending, three times greater than the US share.

The growing economic weight of China is remaking the strategic balance of our region. Australia's relationship with the US will be a valuable asset for both countries in navigating these shifts. But pursuing Australia's national interest means accepting that Australia's most important economic relationship is now with China. Note: This article was first appeared in The Australian Financial Review on August 17 2017. Source: Australia-China Relations Institute at The University of Technology Sydney.

Such scenarios help to explain why one recent, independent economic modelling exercise reported the sobering finding 9 that if China's growth rate slowed from the targeted 6.5 percent this year to less than 3 percent, up to 500,000 local jobs could be lost. China is also Australia's growth market, buying more Australian iron ore and other natural resources such as liquefied natural gas than ever before. And the North American and European middles classes are expected to be stagnant10 between 2009 and 2030, while China's will add an extraordinary 850 million. In 2030, China is set to account for 22 percent of global middle class spending, three times greater than the US share. And while there is a way to go, China has already overtaken Japan to become the world's secondlargest source country11 of new overseas direct investment.

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Macau Focus

Typhoon Lashes Macau - Andrew Scott, CEO at O Media Macau. Andrew is an AustCham’s Macau based member.

n 23 August 2017, Hong Kong and Macau were lashed by the strongest typhoon to hit the coast in 53 years. Typhoon Hato – the first T10 storm recorded in Macau since the handover from Portugal to China in 1999 – saw 11 people killed and around 250 others injured as streets flooded and buildings suffered serious damage. Property damage included a number of Macau’s casinos and resorts, including waterside property Ponte 16 where the entire main gaming floor was flooded at the height of the storm. Other properties had windows broken and exteriors damaged whilst cars were overturned and even dumped off bridges into the waters below. Thousands of trees, large and small, were uprooted and the power and water supplies were interrupted for days. In total, the Macau SAR Government has estimated the economic cost to Macau at around MOP$11.5 billion, not including losses to gaming revenue. Although the long-term impact is difficult to accurately assess, gross gaming revenue for the month of August came in at MOP$22.68 billion – a 20.4% increase on August 2016. Pre-typhoon estimates had estimated GGR growth for the month would be around 30%. Perhaps the most notable result of Typhoon Hato was the deployment of The People’s Liberation Army (PLA) to join relief efforts across the city – the first time ever it has taken action on the ground in either of China’s Special Administrative Regions of Macau and Hong Kong. Melco Resorts Chairman Lawrence Ho ordered workers on the

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company’s new luxury hotel tower Morpheus at City of Dreams to drop tools and aid in the city clean-up instead. In the days following Typhoon Hato, the Macao Government Tourism Office (MGTO) asked local travel agencies to suspend tour group operations and urged visitors to reconsider any upcoming trips to Macau, with operations effectively suspended for more than a week. The devastation also saw an investigation launched into the Macao Meteorological and Geophysical Bureau and its director Fong Soi-kun – who was promptly sacked – amid allegations it had failed to issue adequate storm warnings due to concerns over its potential impact on the city’s gaming industry. Those investigations are ongoing while the government looks into further measures to avoid a similar disaster in the future, which included the idea of a flood barrier system.

Spotlight

Australia: Open For Investment Participants were introduced to key aspects of the FIRB process, noting that the chief decision maker is the Australian Treasurer, who in turn is supported by independent advice from FIRB and Treasury as the responsible government department. The meeting also discussed the appointment of the new FIRB Chairperson, Mr David Irvine, who has extensive experience working in China as Australia’s Ambassador and in national security agencies.

ustCham’s Financial, Legal and Tax Committee recently met with Mr Adam McKissack from the Australian Treasury’s Foreign Investment Division for an overview of Australia’s foreign investment review regime. The session provided a useful opportunity to discuss the changing nature of foreign investment in Australia and how Australia’s foreign investment review regime has been operating over the past few years, especially after a major legislative update in late 2015. Mr McKissack’s key message is that Australia welcomes foreign investment and continues to adopt a tailored approach in its review process by considering major or more sensitive proposals on a ‘case-by-case’ basis, rather than using an approach that prohibits foreign investment in specific sectors (blacklists) or only allow it in certain sectors (whitelists). He also provided an update on the nature of foreign investment into Australia, such as the strong growth into areas like residential real estate (though slowing) and diversification into non-mining areas like agriculture, health and high technology. China is also now the biggest source of FIRB applications, despite having only a relatively small stock of foreign direct investment in Australia (at 5.7 per cent, compared to the United States with the largest share of almost 27 per cent). China is expected to remain a strong source of foreign investment, especially as the China-Australia Free Trade Agreement matures. Due to the changing nature of foreign investment in Australia and Australia’s own economic developments, the foreign investment regime has recently considered many significant proposals in the areas of critical infrastructure, agriculture and residential real estate. Mr McKissack noted that the Australian Government needed to ensure FIRB applications were assessed against a national interest test which includes the following: • The impact on the economy and the community • National security (Critical Infrastructure Centre process) • Competition • Consistency with Australian Government policies (including tax) • The character of the investor

Mr McKissack also spoke about the new Critical Infrastructure Centre and the role it will play in providing expert information to the Treasurer on FIRB applications in the areas of telecommunications, electricity, water and ports. While this new centre has been established to take a more forwardlooking approach to identifying and addressing the risks to Australia’s critical infrastructure, it does not change the way FIRB applications are lodged and FIRB remains the single entry point for applicants. Most importantly participants were encouraged to approach FIRB early, preferably before an application is lodged. Having early discussions will assist potential applicants to gain a better understanding of the FIRB process, how it applies to their business proposal and will also assist FIRB to learn more about the applicants. FIRB will keep all information discussed strictly confidential. The briefing concluded with a lively question and answer session and discussed some of the insights of the foreign investment climate in mainland China and Hong Kong, which is expected to remain strong but perhaps focussed on areas considered integral to the development of the Chinese economy or are seen as providing stable returns, such as infrastructure, health services or high-tech industries.

FIRB contact information: +61 2 6263 3795 or firbenquiries@treasury.gov.au. The Australian Embassy also has a Treasury office that can help with general FIRB enquiries. Contact David Woods (david.woods@treasury.gov.au or +86 10 5140 4289).

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Spotlight

An Update on Hong-Kong Australia FTA

he second round of negotiations on the Hong-Kong Australia FTA was held in Hong Kong from 1-5 August 2017. Australian and Hong Kong officials continued to make positive progress, building on the regular interaction between the two teams since talks began in mid-May.

with talks taking place earlier this month. DFAT continues to welcome written submissions from individuals and organisations on the potential opportunities and impacts of an FTA with Hong Kong. Submissions can be lodged via email to a-hkfta@dfat.gov.au. Submissions may also be lodged by mail to:

Substantial progress has been made on legal commitments that will be included in the Agreement, and discussions on market access for goods, services and investment, and government procurement are now underway after an initial exchange of offers in July. We expect to update these offers to reflect the priority requests that each side has made of the other later this month. The Australian government is continuing to focus on strong outcomes in government procurement and services market access, in particular.

Australia-Hong Kong Free Trade Agreement Office of Trade Negotiations Department of Foreign Affairs and Trade RG Casey Building John McEwen Crescent Barton ACT 0221 Further enquiries, please contact Ken Gordon, Deputy ConsulGeneral at the Australian Consulate-General, Hong Kong at Ken.Gordon@dfat.gov.au

The third round of negotiations were hosted by Australia

Roundtable with Minister for Trade and Industry

ew South Wales Minister for Trade and Industry, Primary Industries, Minister for Regional Water Niall Blair in Hong Kong speaking of his "paddock to port" portfolio today before travelling on to Shanghai. Minister Blair spoke of the State’s expertise in bio security, food safety and agribusiness and opportunities. Another Hong Kong – Australia FTA staunch advocate. CV865 AustCham ad-2op.pdf CV865 AustCham ad-2op.pdf

26/9/2017

12:36 PM

k Than ! ard You Membership eC

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Industry Insights

Corporate Australia Urgently Needs Asia Knowledge and Skills Andrew Parker, PwC Asia Practice Leader says: "While there are some pockets of strength, the overall lack of Asia readiness revealed by this study is troubling although perhaps not unsurprising given the relatively limited investment of Australia’s largest businesses in Asia.” "If the last 25 years have been about shipping our commodities to Asia, the coming decades will be a story of services and consumption fuelled by a rapidly expanding Asian middle-class. If we aspire to be more than casual observers, Australian businesses will need to be where the consumers are - and that is increasingly in Asia."

orporate Australia urgently needs business leaders that understand and are experienced with Asia if the nation’s top companies are to thrive in the future, groundbreaking new research undertaken by Asialink Business, with the support of PwC and the Institute of Managers and Leaders (IML), recently released reveals. With only 10% of the ASX 200, and just 18% of the BRW top 30 private companies demonstrating a high level of Asia skills and knowledge, Match fit: Shaping Asia capable leaders is a critical call to action to captains of industry and business leaders. Asialink Business CEO Mukund Narayanamurti says: “Having a long term growth strategy and the right capabilities is essential for succeeding in Asia, but many business leaders feel constrained by a lack of information, pressure to show short term results, negative public perceptions about Asian investment and analysts’ aversion to overseas investment.” “Asia is a competitive playing field. Just as we wouldn’t send our top athletes onto the field without ample training, we shouldn’t expect business leaders to kick winning goals in Asia until they are ‘match fit’.” The research found that on the ASX 200, only 19% of board members are Asia ready, when assessed against 6 key Asia capabilities. Senior executives performed even more poorly - only 14% were Asia capable. The study also revealed trends based on market capitalisation and industry: large public companies out-performed smaller ones. Energy and resources and financial services sectors were the best performing industries, while manufacturing and healthcare and pharmaceuticals were the least match-fit for Asia.

"From the boardroom to the shop floor, our business leaders urgently need to invest in developing the capabilities and the talent that are essential for success in the region. Future generations will not mark us kindly if we do not get this right.” While there is still significant room for improvement, non-listed companies proved more agile in Asia, often outperforming their ASX colleagues, especially at the senior executive level. Institute of Managers and Leaders Chief Executive, David Pich says: “A shift in industry mindset towards pursuing long-term growth instead of short-term returns is well overdue. “Boards regularly face questions from investors about the relative priority of short and long term results, which is fair, however, business leaders, analysts and investors need to realise the value decision-making processes that consider longer-term outlooks bring to a business.” “Asia offers businesses the chance to achieve double-digit growth but these returns are characteristically seen in the medium to long term, If you want results in Asia, it’s important to have the right frameworks in place to foster these capabilities.” The research calls for a shift in corporate mindset, to acknowledge the centrality of Asia to Australia’s economic prosperity, and to bust the myths surrounding Asian investment. It urges companies to adopt more detailed reporting practices to recognise market-specific returns within Asia, consider establishing an Asia capable advisory board, better utilise Australian expatriate talent, and build awareness in the wider community. Read the full report Match Fit by PwC: Shaping Asia capable leaders at https://pwc.to/2yAwOWK

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Industry Insights

Rental Hikes Hasten the Advent of Diversified Office Solutions A rental spike in the core-CBD area has put many traditional office tenants on the defensive. Whereas many have chosen to move away from Central to prevent rental costs from eating into their profits, Colliers’ recent Occupier Survey reveals that new office solutions will be the answer to the dilemma between business expansion and restrained office budget. - Zac Tang, Colliers International

ong Kong office rents hit a new record high in August with Grade A office rents have increased by 1.3% YTD. With every possible sign suggesting the continuance of this upward trajectory, Colliers has conducted the first Hong Kong focused Occupier Survey investigating the rental strategies across various industries in Hong Kong to cope with different disruptions from business environments, workplaces and technologies. Out of the 174 surveyed companies, 84% of them hold a positive outlook on their business prospects, with 38% of respondents expecting more hires in the coming years. However, the expansionary business sentiment conflicts with the anticipated flat office budget, companies are bound to explore various office strategies to rein in on soaring office rents. Rising Popularity of Fringe-CBD and Decentralised Locations Before the launch of the survey, the high rent condition in the CBD has already led to several prominent decentralisation cases. The relocation of Freshfields Bruckhaus Deringer, AllianceBernstein and BNP Paribas has put Quarry Bay under the spotlight. This traditional back-office destination is expected to garner more interests in the coming years as the new Central-Wanchai Bypass will greatly enhance its accessibility to Central. As revealed in the survey results, fringe-CBD (Sheung Wan, Wanchai and Causeway Bay) are the most popular relocation destinations in which 30% of the respondents consider it as the top choice. For instance, Lee Garden Three, a premium Grade A office building in Causeway Bay to be completed in Q3 2017, has secured pre-lease commitments from Maybank, Cathay United Bank and Bank SinoPac. With the majority of companies from the Banking and Finance sectors preferring to remain in Central, these companies serve as minority cases where location is regarded less important than rental consideration. Wong Chuk Hang remains another viable option for costconscious tenants who wish to remain on the Island, the commissioning of the South Island Line. The area has so far witnessed some notable transactions, including AXA Insurance, Insurance Authority, HOK (architecture firm) and Valentino (luxury retail brand). With the vacancy declines so rapidly it is expected to see rental hikes in the area in the near future.

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Alternative Office Solutions – the Emerging Real Estate Strategies Occupiers in Hong Kong haven’t realised that their offices are generally between 40 – 50% underutilised. While only 13% of respondents have adopted the Activity-Based Working (ABW) and Agile Workplace approach, the low adoption rate can be explained by the fact that 69% of the survey respondents have little idea about the utilisation rate of their offices. Minimal adoption of activity-based working approach indicates a huge missed opportunity for occupiers to achieve cost savings, and there is a huge potential to increase workspace utilisation rate, especially for offices in the CBD area. Flexible workspace including coworking space and serviced offices, meanwhile, provides a temporary swing-space under flexible lease terms for companies who are restacking their existing office space. Companies are beginning to accept and understand the values that flexible workspace providers bring in. Division or firms with a fluctuating headcount can access office space without any CAPEX requirement, as well as to have the opportunity to network and collaborate with other flexible workspace tenants. As the Occupier Survey points out that the core-CBD will still be considered as the premier location for the Banking and Finance industries, they will be expecting more rental hikes in the coming years as a result of the influx of PRC companies into the area. Fortunately, alternative workplace solutions will offer excellent cost-saving opportunities for these companies to maintain a flat rental budget while increasing their headcounts at the same time.

Committees in Action

AustCham Young Executive: 16th CEO Forum “Good leaders create and build family”

n inspiring morning session with senior leaders Matt Bennion of Arcadis Asia, Guy Parsonage of The Experience Centre, PwC and Mark Sims of SG Ventures, Stan Group (Holdings) Limited on the new era of organisational leadership. Moderated by Zela Chin of TVB Pearl, the three speakers shared some gems including the fact that millennials do not have a monopoly on a sense of purpose; as a society, we are all mobilised around a cause. So find your passion and play to your strengths (don’t obsess about your weaknesses)!

Construction, Property and Infrastructure Committee

ustCham’s CPI committee urges the Hong Kong Government to introduce much-needed productivity and best practice into its rapidly ageing construction industry, drawing on Australia’s experience and innovations. Led by Paul Scott and Peter Weiley, the committee met with the head of the Construction Industry Council Albert Cheng together with his senior innovation team to see how the chamber could support Hong Kong bring innovations to the industry to ensure it is well-equipped into the future. AustCham CPI Committee, AustCham Interim Chief Executive Jacinta Redden met with Albert Cheng, Head of construction Industry Council.

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AustCham UOW Mentor Program

he highly sought after 2017 AustCham UOW Mentor program held its first event after the summer break of August 2017, at venue sponsor KPMG. It was an evening full of learning, connection, laughs – and wine! We added an AustCham Mentor flavour to wine tasting, by incorporating key learning activities that enabled our ‘Mentor Circles’ to connect and get to know each other’s values, goals and backgrounds. The Mentor Circle has a number of benefits for our participants that go beyond traditional mentoring, including a greater support both Mentors and Mentees, deeper and more beneficial networking, and a higher level of accountability. Of course – being our first social event of the program, we had our wine partners, Wine Brothers introduce several wines – as we tasted, enjoyed and learnt the differences between the various grapes from McLaren Vale. And it didn’t stop there – we closed off with an AustCham Mentor Quiz. This tested our

Session 1 - Kick-off Speed Matching event

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Program Sponsor:

participants on their Australian and AustCham history… and even better… their listening skills! As the saying goes… 'Mentor Circles that Quiz together - Stay together’ – as the evening went off with exceptional energy, that has left us even more excited about the coming 9 months – if that was even possible.

Session 2 – Launching network drinks

Session 3 – Mentor Circle

Session 4 – Training workshops

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Corporate News

High-Tech and multimedia extravaganza in town A ustCham member Spinifex Group Hong Kong recently launched its first activation for Hong Kong Tourism Board that showcases the agency’s creative and technical expertise and delighted attendees of the 2017 Hong Kong Pulse Light Show. 4D experience that combines digital 3D projection mapping, advanced lighting, laser, and audio effects in conjunction with physical and interactive installations was on full display during August to early September at the Hong Kong Cultural Centre Open Piazza. The multimedia, immersive light show took the audience on a journey through Hong Kong as they join a cast of playful local characters. “Our creative approach focusses on strong, local cultural elements that make Hong Kong such a unique city. Our team of local and international talent put their imaginations in overdrive to highlight all that is great about the territory. We are very proud that we’ve produced this project with a core team of live show specialists and animation creatives all based in Hong Kong.

Showcasing not only a world class show, but emphasizing the depth of talent here on our doorstep.” said Spinifex HK Managing Director Jerome de Baecque. Spinifex Group specialises in audience engagement through the design and production of imaginative, interactive, and immersive media experiences. From the world’s largest building projection to Australia’s first facial-recognition billboard, Spinifex combines creativity, technology, and strategic thinking to help brands connect with audiences in more engaging ways.

MTR renews franchise to run Metro Trains in Melbourne M TR Corporation was recently award a new seven-year franchise to Metro Trains Melbourne (MTM) to operate and maintain the Melbourne train system by the Victorian State Government.

The new franchise will start from 30 November 2017 and includes up to a three-year extension option. Under the new operations and maintenance agreement, MTM is committed to delivering further enhancements to railway operations, asset maintenance and customer service. “We are very pleased that a new franchise has been awarded to MTM. This is a fitting recognition of the determined efforts and achievements by all colleagues and shareholders of MTM to uplift service performance over the past eight years. MTR, our partners, John Holland Group and UGL Rail, and the whole team at

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MTM look forward to continuing to work in close collaboration with the Victorian Government over the next seven years to meet Melbourne’s growing demand for high quality railway transport,” said Mr Lincoln Leong, Chief Executive Officer of MTR Corporation.

Corporate Profile

The Cityview 23 Waterloo Road, Kowloon, Hong Kong www.thecityview.com.hk Boasting a prestigious address in the heart of Yau Ma Tei – filled with unique cultural and urban charm – The Cityview sits adjacent to the bustling Nathan Road, the famous shopping and entertainment district renowned for its historical buildings and famous attractions. The Cityview achieves world-class green eco standards and provides the finest in healthy accommodation by means of initiatives such as: dedicated live plant walls in the lobby, plus in-room environmentally friendly facilities as well as a smoke free overall environment. Boasting Gold Certificate status from the globally respected Environmental Management Programme - EarthCheck, we are the prestige property at the forefront of eco-conscious hospitality in Hong Kong. What are the main skills of your job? Leading and working with our team to face the various challenges in the hospitality industry is what I do every day. Being clearminded enough in order to find solutions and open-minded enough to accept opinions as well as empowering the appropriate people are also the primary keys to success in this industry. What’s the most unusual thing you have had to do as part of your job? When I joined the company 10 years ago, it was just a hostel. I was responsible for the revamp and rebranding of what was to become today's deluxe 4-star property - The Cityview. I used to work in international chain hotels before, so it was a fulfilling experience for me to be able to transform a humble hostel into a highly respected, cutting-edge hotel that provides guests with a brand-new accommodation experience and attentive services. What does your company do really well? The Cityview has initiated a host of measures to help protect the environment, and we were the first independent hotel in Hong Kong to earn Gold Certification from ‘EarthCheck’, the world's leading certifier of travel and tourism organisations. We were chosen due to our outstanding efforts related to environmental protection. We were also honoured as the Silver Award winner at the 2015 and 2016 Hong Kong Awards for Environmental Excellence (HKAEE) - Hotels and Recreational Clubs sector, which reflects our excellent performance with respect to environmental management.

Alex Wu, General Manager What is the vision of your company in 10 years? Over the next 10 years we aim to widen our business mix with a substantial increase in guests from long-haul markets while attracting business clients and travellers who appreciate our green practices and share common concerns in protecting the environment. What’s something most people don’t know about your company? We strive for excellence in providing quality service to our guests, which maximises our revenues. However, all the income derived from the operation of The Cityview will be applied to the charitable activities of the Chinese YMCA of Hong Kong. What’s your company’s connection to Australia? The Cityview works with leading travel agents in Australia like Fight Centre and the Qantas airline programme from time to time. We have been a member of the EarthCheck environmental certification programme since 2011 which also has its origins from Australia. I have also learned about Australian management culture and style while studying for my master degree which was an Australia-based post-graduate program. How would you describe your workplace and colleagues? Dynamic employees are our core assets and also the keys to our success. We arrange relevant training as well as recreational activities for The Cityview staff throughout the year to develop a strong sense of belonging in the workplace. Last year, The Cityview won the "MD Grand Prize Award" under the "ERB Manpower Developer Award Scheme” in recognition of our commitment to corporate social responsibility in terms of manpower training and development. We have also been recognised by the Hong Kong Productivity Council as a "Happy Company" for two consecutive years. What’s your favourite place to go on the week-end? I love to meet with friends during weekends and always invite them to try our seasonal delicacies in City Café (International Buffet), The Balcony (Cantonese Cuisine) or Amazing (Thai Cuisine). Even on weekends, the outlets of The Cityview are definitely my favourite places to go. issue 194 | austcham news

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On The Scene AustCham's Women in Business Network (WIBN) hosted their annual Summer Drinks event themed 'Art and Champagne' at Hong Kong Fringe Club. Guest speaker Catherine Lau, Administrator at the Club, shared with attendees the role of Fringe Club in Hong Kongâ&#x20AC;&#x2122;s cultural life and how it supports local artists. Thanks WIBN Network Sponsors:

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Sustainability Series: Emerging Risks in Your Supply Chain

s corporate supply chains become more complex and influential in driving social, economic, and environmental impact, stakeholders of all types – from civil society organizations and NGOs to customers and consumers – are increasing their expectations of business to improve their efforts to build sustainable supply chains. AustCham recently lined up a panel discussion with industry experts to talk about some of the common supply chain risks to business; challenges

AustCham Sustainability Series Sponsor:

and opportunities associated with sustainable supply chain management; as well as measurement and suggestions on the improvement that company could consider taking action in future. A big thank you to panel speakers David Horlock of British Standards Institute, Natalie Chan of PIE Strategy, Paul Belcher of MadePartners and Moderator Jeremy Prepscius of BSR Hong Kong, co-hosting Chambers and all who attended the session.

Moderator Jeremy Prepscius, panel speakers David Horlock, Paul Belcher, Andrew Ross of event sponsor Baker Tilly and Natalie Chan.

Leadership Series: Luncheon with Australia’s Consul-General to Hong Kong and Macau

ustCham formally welcomes new Consul-General Michaela Browning who brings a powerful message about the importance of the Hong Kong-Australia relationship – particularly trade and investment ties.

ongratulations to former Chair of AustCham's Women In Business Network and Chamber Deputy-Chair Fiona Nott who has been appointed CEO of The Women's Foundation in Hong Kong. Simone Wheeler takes on the role of Chair of WIBN.

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