Hong Kong is Dead, Long Live Hong Kong 

Written by Callan Anderson, Executive Director, Hong Kong Corporate Services Group

In 1925, the Hong Kong Governor Sir Cecil Clementi announced in the Times of London that Hong Kong would be over in 72 years. 1995, Fortune Magazine announced the Death of Hong Kong. 2003, Western Media said Article 23 would be the death of Hong Kong.

I believe the Hong Kong Government’s slogan for our city is Asia’s World City, and as far as I can see, that is exactly what it is.

If China wanted to damage Hong Kong by the direct imposition of Article 23, then it would also damage itself in the process, and I don’t believe that was the purpose for its promulgation. Hong Kong went through a year of protests which resulted in the new subversion, succession and treason laws, which most other developed countries also adopt. The scaremongering by some Governments of “if you go to Hong Kong you could be arrested” is merely that, scaremongering. There are many other counties in Asia that where even eating chewing gum can get you into trouble and luckily our Western judges in Hong Kong didn’t all run for the hills, as they know English Common Law still works here.

Let’s look at the facts as to why Hong Kong is important globally, if not more so for Mainland China. You can deduce for yourself if you think Hong Kong’s future will be less or more important in the future.

Today, Hong Kong is the world’s third biggest global financial centre (after New York and London). The status in itself is an asset of incalculable value that no other city in the European Union can claim. It took Hong Kong forty years to gain this status, whereas London and New York took centuries to gain the market size and liquidity to function as a global financial hub.

Trust and confidence in the fairness of Hong Kong’s system, knowledge that legal contracts mean something and institutions of advisors and financiers that provide the long accumulated knowledge to support trade through Asia and into China have been key to our success.

Not only does Hong Kong mean a great deal to Western trade, but also to China as Hong Kong manages over 70% of international trade volume in RMB. Only 2% of China’s international trade is carried out in RMB, thus the USD and the Hong Kong Dollar Peg is critical to China and Hong Kong’s future. Let us not forget that Mainland China banks do much of their international business in US Dollars via Hong Kong. There is no other replacement to Hong Kong within Mainland China as of today as the rule of law and a currency that is exchangeable is vastly important when attracting investment.

Hong Kong remains central to China’s economy as it is the main interface with global capital markets with the connection for most foreign direct investment to China going through Hong Kong, accounting for 78% of all flow. Acting as a conduit, Hong Kong is vital to China’s growth and Western economic success.

It is of no surprise to me that Chinese companies have raised over USD$350b in Initial Public Offerings in Hong Kong since 1997. This is about as much as the same amount of money Chinese companies have raised in all the other exchanges around the world combined.

Even the USA assigning Hong Kong as being no different from the rest of China, (therefore removing the preferential tax exemption that Hong Kong benefited from) fails to impact Hong Kong or China, but significantly adds to the cost of buying grain that came through the port of Hong Kong on its way to the USA from China.

My conclusion is that China has no intention of harming Hong Kong’s place as an international financial hub or as banker to China. We are still the best platform and base camp to enter China or any other Asian city where laws in the developing countries around Hong Kong are not based on English Common Law as Hong Kong’s are.

The argument that Hong Kong no longer has a high degree of autonomy can be summed up in that we need to use our passports to cross into China (there is a fenced border), we have our own seat on the ASEAN group of nations at the same level as China and we are signatories to the various international Covenants on Civil, Political and Economic Rights. I need not point out we also drive on a different side of the road to China and have our own Air Traffic Control! (The list goes on and on)

We can guess the future of this great city, but I think I have given you enough of a taste to suggest that Hong Kong’s demise has been greatly exaggerated from 1925 onwards.

This city is my home, and in some strange way, no matter what is thrown at it, it continues with a few bruises and bumps, but it continues to be the heart and soul of trade.

Don’t let the international press dishearten you as to Hong Kong’s current status and future, listen to people who live here day in and day out.

Hong Kong Time Machine

Written by Callan Anderson, Executive Director, Hong Kong Corporate Services Group

The recent COVID-19 pandemic has dropped a significant cloud on the entire world, in many ways at the same time proving and disproving the merits of the global economy and trading routes we have all come to depend upon. From shortages of basic necessities to anger at countries for allowing the virus to spread so quickly and so far, it is sometimes difficult to see any light at the end of the tunnel.

For many in Canada, you are in a lockdown with the inability to go to your office let alone fly around the world for business and meetings that regularly filled the annual calendar of prospects, knowledge and sales. As I sit in Hong Kong where a lockdown, circuit breakers or quarantine have not been used, life is more or less the same despite everyone’s face being covered in surgical masks. Yes, the Hong Kong Government has won a high degree of praise from the international media in curtailing the epidemic in our city, mainly due to the very early closure of schools, kindergartens, universities and our borders with Mainland China. We also suffered, as did Canada from the SARS virus in the 2002, so our ability to handle a virus has been engrained in our medical services.

As of today, Hong Kong has one main border to China still operating via the Hong Kong-Zhuhai-Macau bridge, which is not only Hong Kong’s main food route but also China’s artery to shipping and logistics in Hong Kong from the Greater Bay Area.

I do not underestimate the problems for Canadians who are self-quarantined at home, but I would urge those who are engaged or looking at doing business around the world that this is the perfect time to look at opportunities once the virus has subsided. I have used the comparison of H.G. Wells  story of the Time Machine, where in our case we don’t know what button on the time machine we pressed, we don’t know where we will land and we don’t know when we will stop. In such a case, we need to be ready to jump into gear once the wheels of global trade restart, and based on all the economic indicators the starting point will be Asia.

Hong Kong has continued to be a dynamo of business where our office has not stopped since the outbreak in early January. China slowed dramatically, but has ramped up to almost 82% of industrial production levels in two weeks since Wuhan opened up. One of the biggest issues for China and Hong Kong is that most of the container ships or cargo planes are not in the right place globally since the pandemic started, but as a sign of the significance of goods coming in and out of China,  domestic-and foreign-owned international cargo flights in China and Hong Kong are expected to hit 4,445 this week, over three times higher than the 1,014 flights made before the outbreak.

We have to remember that China is not only a manufacturing Hub it is also a middle class of 450m people that want to spend money and spend money on international goods. The first day that Hermes opened its flagship store in Guangzhou this week, it made USD$2.7m in one day of sales.

My point is that just as one part of the world is in darkness before the sun rises, there is a large part of our planet waking up and doing business after a tough battle with the COVID 19 virus. There are opportunities in Asia already and Hong Kong is very much able to be the conduit for this despite travel being difficult to impossible at this time.

China is still a very important market for Canada, but even if China seems too difficult in this period, there is a vast population in the rest of Asia, Australia and New Zealand that are back to business at different stages as the virus dissipates, which it will do just as SARS and the Spanish flu in 1918 did! 

So my question is, when your time machine stops, are you ready and prepared?

Upcoming Webinar 

Join HKCBA for a complimentary webinar on May 4th, 2020 where Callan Anderson will share an update on China, Hong Kong and Asia, expanding on the emerging opportunities for Canadian businesses. 

Register Now!

Hong Kong Banks and HKMA announce Simple Bank Accounts 

As part of the joint effort of the Hong Kong Monetary Authority (HKMA) and the banking industry in addressing the issue of bank account opening and maintenance, the three note-issuing banks in Hong Kong have, with the support of the HKMA, introduced a new tier of accounts, namely – “Simple Bank Accounts” (or SBAs) for corporate customers to further enhance customer experience in opening bank accounts in Hong Kong. 

SBAs are in essence a new tier of accounts derived from traditional bank accounts which focus on provision of basic banking services such as deposits, withdrawals, local and cross-border fund transfers, etc.  With narrower scope of services compared to traditional accounts, the risks involved in SBAs would be relatively lower to banks, and hence less extensive customer due diligence (CDD) measures are required to be carried out at account opening.  For example, banks may require less detailed information and supporting documents from applicants.  The streamlined account opening process of SBAs aims to offer more choices and improve customer experience, particularly for small and medium-sized enterprises (SMEs), start-up companies and companies from outside Hong Kong which are seeking to establish a presence in Hong Kong, when they do not require the full range of banking services generally offered by traditional bank accounts, cannot readily furnish certain CDD information or documents required for traditional bank accounts, and yet do not require the full range of services at the initial stage of banking relationships.  SBA customers who require more comprehensive banking services in the future may upgrade their accounts to traditional bank accounts by completing the necessary CDD process. 

The HKMA attaches great importance to the promotion of financial inclusion in Hong Kong, including addressing the issue of opening bank accounts by the business community.  The HKMA has set up a dedicated email account (accountopening@hkma.gov.hk) and hotline (+852-28781133) to handle any comment and feedback from the business sector and the community at large with regard to issue on bank account opening and maintenance.  The business community are welcomed to send comments and specific cases to us, and all information received will be handled and followed up by our dedicated team.  

For details, click here for an article by Deputy Chief Executive of the HKMA.

Hong Kong Week - Connect and Excel

The Hong Kong Economic and Trade Office (Toronto) is pleased to launch "Hong Kong Week" in June 2019 in both Vancouver and Toronto. Its theme "Connect and Excel" embodies how Hong Kong’s connects globally, with Mainland China and the rest of Asia; and helps to propel both people and business to excellence. Hong Kong's strategic advantages relate not only to its physical connections, but also financial, legal, scientific and creative links as well as people-to-people network. 

HKETO will stage and support a series of activities to celebrate Hong Kong's strengths, advantages and aspirational qualities of Asia's world city.  
 

The 2019 HKCBA National Conference will be a highlight of the "Hong Kong Week" event to explore opportunities for Canadian businesses to connect and excel. Other activities include:

• “Connect and Excel – Past and Present” photo exhibitions

• “Connecting Hong Kong and Canada through Music” academic seminar

• “Voices of the World” Concert by the Hong Kong Oratario Society

• Hong Kong-themed drama

• Concord Pacific Dragon Boat Festival

Details of the Hong Kong program can be viewed here. You are welcome to join the Hong Kong week to experience what makes Hong Kong a first-choice location in Asia for business and leisure!

HKCBA Member Feature: Vivian Ching, Vancouver Section

In our first HKCBA Member Feature, we share Dr. Vivian Ching's success as an active member of the HKCBA Vancouver section. Read on to learn more about Vivian and how she has leveraged the HKCBA platform to build her business. 

Tell us a bit about yourself…

I am a full-time university professor for undergraduate and post-graduate level courses on organizational behaviour and business strategy in Vancouver, BC. Having worked and lived in New York City, Hong Kong and England; I have extensive work experience in business analyses and project management in a variety of Global Fortune 500 companies. I am also a professional artist who has held 11 exhibitions in Asia since 2012. Due to my unique blend of business and art experiences, I also partner with Fortune 500 industry leaders to conduct corporate training.

Your artwork has made a trip to space?

In 2014, I collaborated with Canon to become the first Canadian-Hong Kong artist to show artwork in space. My “Glasses” design was showcased 120,000 feet above the earth’s atmosphere via cutting edge aerial technology provided from Face in Space Ltd. The project gained extensive mainstream regional media recognition and significantly boosted my exposure in Hong Kong, China as well as Canada. In fact, I was recently interviewed on 2 popular television shows on Fairchild TV. City Chat【都市有約】was broadcasted last month, and Leisure Talk【大城小聚】will be coming today. In both shows, I chat more more about my unique career path.

So, what brought you to the Hong Kong-Canada Business Association (HKCBA)? 

I moved back to Vancouver from Hong Kong in November 2017, and was looking for a way to meet people in town. As a former active member of the Canadian Chamber of Commerce in Hong Kong, I realized that Hong Kong would be a great starting point to forge connections here in Canada. HKCBA popped up in my searches and joining as a member struck me as a great way to maintain my Hong Kong network in Canada, while having the opportunity to attend interesting events and getting to know local members. 

And how has the HKCBA platform helped to increase your profile?

By connecting with the local Board of Directors with the goal of expanding my network in Canada, I was able to integrate my artwork as a part of the HKCBA Vancouver Annual Spring Dinner festivities. For the last 2 years, I have auctioned off my paintings during the event which helped me to gain exposure to a unique audience in the Hong Kong-Canada business community. This even resulted in 2 additional commissioned pieces, which are now prominently displayed in Vancouver-based law practice. I appreciate that I have been able to develop new clientele while maintaining Hong Kong connections, and HKCBA does a great job in linking these two strong communities together. 

Finally, what’s up next for you? 

I look forward to continuing to stay active with HKCBA and leveraging the platform to meet new people, network and connect with clients. I will also continue to look for opportunities locally for my artwork, as well as growing my academic, consulting and corporate training presence in Canada. For more information, visit www.vivianching.com.

Demystifying the Belt and Road Initiative for Canadian Companies

Since China’s President Xi Jinping outlined the One Belt One Road Initiative in September 2013, a great deal have been discussed and done to “turn the vision into action”. However, to some Canadian companies, the Initiative has yet to be demystified for them. Some of the questions they have are:

• What is Belt and Road?
• Is it just a concept and nothing concrete has been achieved?
• Is it just about infrastructure projects?
• Is it relevant for Canada? If yes, what are the business opportunities for Canadian companies?
• How should Canadian companies devise their Belt and Road business plans?

Interested parties are invited to join the upcoming HKCBA National Conference in Montreal scheduled for May 25^th, 2018. At this event, there will be a panel session on the Belt and Road Initiative. The panelists would be delighted to exchange views and news with the audience on the above questions.

To register for this Conference, please visit  https://www.hkcba.com/cpages/hkcba-national-conference-2

iDiscover Hong Kong

by Craig Lindsay

As with many frequent business travellers to Hong Kong, I usually spend my days cloistered in the glass towers of Central and Wanchai, with occasional forays during my downtime to Bowen Road for an early morning run, a walk up to the Peak or very infrequent shopping trips to Stanley Village or Mongkok.  However, on a trip to Hong Kong this past December, I came across an amazing app called iDiscover Hong Kong which opened my eyes to a whole range of “off the beaten path” communities such as Lei Yue Mun, Sham Shui Po and Kennedy Town.  The app was developed by Urban Discovery, a not-for-profit group focused on assisting cities throughout China and Southeast Asia to better manage their heritage assets. 

Working with local residents, non-governmental organizations and universities in Hong Kong, the app’s creators have mapped various routes to discover some of Hong Kong’s overlooked backstreet gems.  The recommended walks range from 1 .5 hours to 9 hours (for Kwun Tong), and are displayed on interactive, downloadable maps that identify various points of interests. Because locals have been involved in the selection, creation and introduction of destinations and events, they highlight many roads less travelled by mainstream tourist guides.  

Visitors can explore, for instance, Kennedy Town, which for years was seen as a backwater of Hong Kong because it was so far away from Central and lacked subway access.  Many visitors will only know of Kennedy Town as they have seen the name on a tram running through Central.  Nowadays, K-Town (as it is now known) is well-known for its vibrant bars and restaurants, while its famous Sai Wan Estate apartment blocks have been spruced up with colorful playgrounds.  Sai Wan Estate, developed by the Hong Kong Housing Authority and dating back to 1958, is the second oldest public housing estate in Hong Kong in existence, making it a must-visit for visitors who want to take a close-up look at metropolitan history.

To experience traditional fishing villages, pay a visit to Aberdeen on southwest Hong Kong Island. Sai Kung, meanwhile, is known for its bay and islands where you can escape the crowds and noise and relax in a seaside resort vibe, enjoy fresh seafood and go hiking in the mountains. Sai Kung District’s Hoi Pong Street is filled with numerous cafes and little souvenir shops with both vintage styles and unique contemporary art.

Using the free app, visitors can connect directly to locals, stop by their businesses and living quarters or even get involved in everyday activities.  These family-run businesses and traditional craftsmen traditionally operate on the fringes of the city, and are normally invisible to tourists.  With the app, users can stop by veteran artisans who specialize in sewing or bamboo steamers used for Chinese dumplings, scavengers and recyclers of wood, generations-old family run restaurants or traditional handicraft workshops.  In Sai Ying Pun, for example, you can visit the shop of Yu Kwun Yick, a legendary family-run chili sauce brand since 1922.

Yes, Hong Kong is dynamic, modern and sophisticated.  But underneath this bustling metropolis lies a beating heart waiting to be discovered by a new generation of visitors.  The iDiscover app can be downloaded at https://i-discoverasia.com/neighbourhoods/hong-kong/ (where you’ll also find apps for several other destinations in Asia).