Hong Kong Canada Business Association posted an articleAsia's World City see more
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.
BLOG: Hong Kong in 12 hours - What to do when your conference ends at lunch and your flight leaves at midnightA few off the beaten track ideas for your free time in Hong Kong. see more
Hong Kong in 12 hours - What to do when your conference ends at lunch and your flight leaves at midnight
Written by Raymond Lowe, Hong Kong Fast Facts
After traveling halfway around the globe from Canada to Hong Kong, you won't want to miss the chance to get some sightseeing and cultural experiences packed into your trip before you return. But what to do if you have only a few hours before your flight leaves, and want to avoid the great-but-done-too-many-times activities like the Peak Tram?
Here is a half day plan that hits both some well-known highlights and some obscurities.
Before starting, make sure you checked out of your hotel and deposited your luggage with the Airport Express In Town Checking early in the morning, that way you'll have your whole afternoon and evening worry-free from your flight with your boarding pass already in hand!
Let's start in Wanchai which is were the Exhibition and Convention Centre is, as well as a lot of major hotels so you may well be staying in this district. As an HK regular you'll know that the sleazy "Suzie Wong" image of Wanchai is outdated but you might have missed out on some of the unusual spots in the area.
If you have kids back home then you mustn't miss this one! Even if you don't have kids there is plenty to see in this street market to keep anybody interested. It is properly called Tai Yue Street and leads south from Johnston Road just across the road from Southorn Stadium (named after Thomas Southorn, colonial secretary in 1934).
Use MTR Exit A3 of the Wanchai station to get to there if you are not walking from elsewhere in Wanchai. The street, more like an alleyway, is between the bakery and the Bonjour cosmetic store. The KFC and signs for Pizza Hut are other good landmarks to place yourself here.
Street market stalls line the road and the first few are a miscellany of plants, goldfish, electrical gadgets and more. But make your way a little more down the street and you'll find the toy shops. Overflowing with dolls, games, flashing toys that go "whirr" and nostalgic favourites you'll find plenty for the 5 to 10-year-olds here, and if an adult of your acquaintance likes plastic kits to make models of cars, jets and trains they may well enjoy this street as well! As it is coming up to Christmas there will also be plenty of tinsel and tree decorations on offer, though at other times of the year the displays are suitably seasonal.
Walk along this road all the way to the end, which will take you past a lot of street vendors selling basic ladies' and children's clothes as well as household essentials. There are plenty of cafes and hole-in-the-wall takeaways where you can grab a sandwich and some fruit or a lunch box of steaming hot rice. If you need lunch then grab something here as there is a good place to sit in a park and eat coming up soon!
The street market itself ends when you get to Cross Street but keep on going for another block to the main road which is Queen's Road East.
Looking across Queen's Road you'll see something very rare in Hong Kong, a historic building in a traditional Chinese style from more than 100 years ago. With whitewashed walls, green shutters and a tiled roof with molded gables it certainly stands out from the rest of the skyscrapers in the district. First built in 1912, this served as a post office for the district for 77 years and is now maintained as an environmental resource centre. Take a look inside to see the ranks of red painted post boxes! Don't forget to look up at the ceiling to see the wooden timbers that support the tiled roof. This was a style common at the time but is now hard to find anywhere. The Centre is open 10:00 a.m. to 5:00 p.m. every day except Tuesday but it is interesting to see the outside of the building even when it is closed.
After leaving walk east, that is with the post office on your right, one block along the main road to Stone Null Lane, and take this uphill until you reach the garden.
Stone Nullah Lane Garden
The garden is a great sitting out place, an oasis of trees and a quiet green space in the middle of the city. Although small the sensation of peace is probably encouraged by the Wan Chai Pak Tai Temple that is located beside the garden.
This is an old but well-maintained temple to Pak Tai, the Taoist god of the sea, who is also known as the Supreme Emperor of the Northern Heaven. It mixes the traditional with the modern in a typically pragmatic Hong Kong fashion. Ask the temple keeper to tell your fortune and he is often seen using an iPad tablet to consult the books of learning to interpret your future!
After insuring that Pak Tai is going to have your back with a few well placed Joss Sticks retrace your route down to Queen's Road and the Wanchai MTR station. It's time to cross the harbour!
On the MTR, take the Island line towards Kennedy Town but change trains after one stop at Admiralty. Take the Tsuen Wan line towards Tsuen Wan two stops to Jordan.
Alternatively, if you have plenty of time, catch a tram outside Southorn Stadium. Any tram going towards Western will do. Make sure to sit upstairs at the front for the best view! Get off outside World Wide House, go up the steps beside the Fanda Pharmacy store onto the walkway to the Central Piers. There you can catch the Star Ferry from Pier 8 across the harbour to Tsimshatsui (TST). Leave the ferry pier in TST, turn left and walk along to the bus stop. Any bus going north along Nathan road will do, try the 1A or the 271 and ride it until Jordan. It will take a lot longer but you do get to see many more sights than on the MTR!
At the junction of Nathan Road and Jordan Road turn left onto Jordan Road and walk four blocks to Temple Street. You'll see the giant red ornate Chinese style gateway on the right leading to the night market.
It should be time for dinner by now and the last of the big night markets of Hong Kong lets you combine shopping with dining and more. Walk along the road browsing all the way to the Tin Hau Temple after which the road is named. Try eating outside at one of the many restaurants along the way, the Spicy Crab is famous but there are plenty of other choices. Check out the nostalgic Mido Cafe just past the temple, make sure to sit upstairs for the full 1950's experience.
Once it is dark don't miss the chance for that iconic night shot of the market from the air. You don't need a drone, all you have to do is walk into the multi-storey public car park next to the temple and go up several floors. The view lines up so perfectly with the road that you can't help but wonder if the architect designed it just for this view!
If you'd like a second opinion on the fortune you got at the Pak Tai temple then don't miss the fortune tellers outside the car park building. And just across from them, if you are late enough, you'll find the Chinese singers in the streets doing everything from Chinese operatic standards to modern pieces. It is said that some HK singing stars started their careers right here!
When you have had your fill of shopping, crabs and singing make your way back to Nathan Road and take a taxi down to the Star Ferry Pier.
In the dark, the wide expanse of the promenade along the TST waterfront embodies everything you have seen in a picture postcard view of Hong Kong. This the view of Victoria Peak, instead of from the peak, which is the real emblem of Hong Kong. Walk along and enjoy the views.
Finally take the Star Ferry back to Hong Kong Island. From the ferry pier you are just a 5 minute walk from the Airport Express terminal that will take you back to the airport in just 24 minutes. This drops you directly into the Departures area of Chek Lap Kok airport!
Have a great time in Hong Kong!
For more information on things to see and do in Hong Kong be sure to check out https://www.hkfastfacts.com/
Hong Kong Canada Business Association posted an articleChris Patten will go down in history as the last gatekeeper of the last major British colony see more
Article can be found at http://www.sbrchina.com/dialogue-with-the-last-governor/
Chris Patten will go down in history as the last gatekeeper of the last major British colony and his work in Hong Kong is a legacy to China’s “One Country, Two System” success.
For those watching the rain-drenched Hong Kong Handover ceremony two decades ago on the misty shores of Victoria Harbor, Central’s skyscrapers looming ominously in the background and the Royal Yacht Britannia waiting in the wings to whisk away Prince Charles and his entourage, a few select images remain forever fixed. One is that of the Prince and Lord Patten of Barnes, the Governor of Hong Kong, sitting side by side with hard set faces looking out over the mass of dignitaries and honor guard taking in the full meaning of the last moments
of the colony.
Twenty years later, Chris Patten remembers this day well and fondly speaks of his time in Hong Kong. “Those years were the most interesting and happiest of my life, and my family would say the same,” Patten recalls on the eve of publishing his autobiography First Confession: A Sort of Memoir. “I can honestly say since I first saw China in 1979, and have gone on seeing it regularly, I never had any doubt its reemergence was the most important economic event of my lifetime after the fall of the Berlin Wall. I knew this event would lift hundreds of millions out of poverty. It is in no one’s interest that this economic marvel ends. It is good for China and for humanity.”
Shanghai Business Review met with Lord Patten on a stormy spring day in London on the banks of River Thames, a stone’s throw from the Parliament in which he has sat as a member for so many years. In an exclusive interview with SBR, the former Chairman of the Conservative Party who served three Prime Ministers – Edward Heath, Margaret Thatcher and John Major – reflected on the importance of Hong Kong to China and shared his views on the shaping of the world’s economic dynamo.
“There is a reason why I say re-emergence, rather than emergence,” adds Patten. “It really is important for all to have a sense of history. We must understand that until the 1820s China was a third of the world economy and China and India represented over 50% of world GDP. Their collapse in the 19th and early 20th centuries was partly due to depredations of Western imperialism, partly due to the Industrial Revolution and partly due to decisions Chinese and Indians made for themselves. The balance between different economies can shift
For Chris Patten – known in China as Peng Ding-kong – that July 1997 day was the end of a five-year stint that many consider one of the most important in the long diplomatic history of a nation that once ruled the Seven Seas. It was the exclamation point on a saga that began in 1842 when Queen Victoria assumed the helm of a small trading colony on the southern shores of the Middle Kingdom. It was the end of an era that set the stage for 20 years of growth under the “One Country, Two System” vision forged by Paramount Leader Deng Xiaoping, architect of China’s Open Door Policy.
“In 1979 I visited Hong Kong Governor Murray Maclehose with three other young Members of Parliament,” remembers Patten, who was 35 years old at the time. “We were taken to the border of Lo Wu to look over the rice paddies that would one day become Shenzhen.”
During that trip Patten stopped in Shanghai. A jazz lover, Patten wanted to hear the band at the Peace Hotel. Of that pilgrimage Patten remembers, “We walked up the Bund from one dim street lamp to another. Things changed, and changed dramatically, just consider the development of Pudong. By the time I left, had a career in British politics and came back to Hong Kong there was an economic explosion, a bit Adam Smith, a bit Wild East or Wild West. What has and is happening is incredible.”
When Patten took on the challenging assignment to be the Last Governor of Hong Kong in 1992 he was an energetic politician in his 50s that had held some of the most important posts in the Conservative Party. Now in his 70s, Patten is in a more reflective mood as the Chancellor of Oxford University and likes to consider the historic perspective when contemplating the past, present and future of the Middle Kingdom. “China is one of the world’s extraordinary civilization,” notes Patten.
This reflective mood of the Last Governor, as well as his appreciation of Chinese philosophy, is mirrored in the first lines of the new First Confessions autobiography. “A Chinese anthem, written in 1100 BC, warned against three foolish things: first, deep sleep in an unknown house; second, setting out to sea in a borrowed junk; third, not to lag behind when the elephant approaches a new bridge. To which sound advice, over 3,000 years later, one might add a fourth foolish thing – writing a political
In typical modest fashion, Patten goes on to downplay the contribution of his many years of public service in Britain and Hong Kong in an offhand manner when speaking of those who publish autobiographies, “The author poses as the person she or he wanted to appear to be: a somebody, not too dreary, right about everything or, if not absolutely right, then heroically wrong. The more honest examples of the genre may concede some surprise at the public heights to which the author has been lifted by what he or she knows better than anyone else are pretty modest talents.”
In a wide-ranging discussion on China’s international evolution, Patten discussed key historic events. There was the legendary launch of Admiral Zheng He’s treasure fleet in the 1400s. After touring most of Southeast, South and West Asia as well as East Africa from 1405 to 1433, the fleet returned to China to be destroyed by an emperor that decided there was nothing much to gain from the outside world. Then there was that 1793 meeting between the Qianlong Emperor and Lord Macartney, the first envoy from Britain to China, which met with protocol difficulties.
Finally, Patten mused over the first Handover of Hong Kong to Queen Victoria in 1842. When asked what Queen Victoria would have thought of relations between China and the UK today, where Chinese enterprises are building the nation’s nuclear industry, investing in its financial institutions and buying its football teams, Patten responded, “Who knows, she might have had the same views as Napoleon. You recall Napoleon took the view that once China awoke the rest of the world better watch out.”
In terms of his own place in modern Chinese history, Patten had an important role to play in the One Country, Two Systems dynamic. Deng Xiaoping believed there could be only one China, but distinct regions, such as Hong Kong and Macau, could retain their economic, legal and financial systems while the rest of China operated under the “socialist market economy”. It was left to Prime Minister Margaret Thatcher and Foreign Secretary Douglas Hurd, with Governor Patten on the front lines, to deal with what the first iteration of the unique One Country, Two System vision meant
“There is a question about what China’s current market approach means and it is legitimate for the leadership to tell us what it means for them of course,” comments Patten. “China is certainly entitled to say that, ‘We found a system which suits us.’ The only questions we can ask are rather existential.”
Patten’s wider perspective is that in every country there is an argument between those who think if government gives up its hold over the economy it will sooner or later lose economic control, so you cannot continue to privatize companies whatever the figures tell you. On the other hand, private sector defendants say unless government steps back from managing large parts of the economy it will lose control as the country cannot grow fast enough to create enough jobs. “We must appreciate China’s position as both propositions are true and plotting a way through is not easy,” he adds.
Two decades on, despite inevitable bumps in the road, the One Country, Two System vision Patten helped cement over long discussions with Chinese counterparts, repartees he remembers with a certain fondness, was instrumental in making China the economic superpower it is today. After all, without the Hong Kong experiment to steer in the right direction, it is likely China would have faced more issues in forming the market-based economic model now admired worldwide.
When looking at the role of Hong Kong within China, Patten refers to the statistics. “There are 7 million in Hong Kong and over 1.3 billion in China,” he notes. “When I left HK the city was worth about 17% of China’s GDP, today I hear the figure is closer to 3%. It always stood to reason that as China became prosperous the figures would shift significantly. That is not because HK is doing badly, though the growth rate has slowed a bit, the reason for that change is the same as for China overtaking the US in Purchasing Power Parity terms – the nation’s size.”
Despite this change in economic balance since the Handover, Patten believes Hong Kong provides an economic model that works. “The great thing about being the Hong Kong Governor after being a British politician was the ability to get things done,” explains Patten. “Because of human vanity you like to see things from intellectual creation to completion and normally in politics that does not happen, either because it takes so long in Europe and America to get things done or because you are moved from the post before completion. So you always have to make hard choices.”
In his five years in Hong Kong Patten does not recall having to make a difficult choice. Patten assumed the helm of an economy growing for almost 30 years. During his governorship public spending rose, borrowing was cut, taxes reduced and the city built its new airport entirely out of revenue. As disability and health services improved people streamed out of private hospitals back to public ones to benefit from higher standards.
“I used to be criticized by Mainland officials for being a socialist, for spending too much, but we could do it because of that impressive economic growth,” remembers Patten. “The efficiency of the Hong Kong economic model is one reason for success. Another is the rule of law and how this law promotes business in a fair and equitable manner.”
Patten recalls when he first went to China for talks with his opposite number Lu Ping, a man whom he appreciates for his intelligence and demeanor. Patten explained to Lu that when he was Britain’s Environment Secretary, in charge of the biggest domestic department responsible for everything from finance to housing, he was faced with many court claims from those against his policies. Sometimes Patten won and other times not. “I tried to make the point the rule of law applied to me as well everyone else,” Patten adds. “That is the basis of Hong Kong’s success.”
Patten’s governorship of Hong Kong coincided with a curious time in the capital markets experiment of China. Those were the days of the Red Chips, China companies incorporated outside the Mainland and listed in Hong Kong, H-Shares, state-owned companies incorporated in China that traded on the Hong Kong Stock Exchange, and window holding companies like Shanghai Industrial and Beijing Enterprises.
In these early days of the capital markets experiment, overseen by the likes of economic czar Zhu Rongji, a man who Patten holds in the highest regard, it was not clear how the world investment community would perceive the commercialization of Chinese enterprise. The subsequent roll call of public listings of enterprises has since driven the HKE to become one of the world’s leading capital markets, and supported the drive for PRC listings in markets such as New York, Singapore, London and Frankfurt, not to mention the rise of the Shanghai and Shenzhen exchanges.
This amazing capital markets story has had its ups and down over the years. For instance, after a spate of financial and corporate governance scandals around 2010, Chinese enterprises watched in dismay as PE ratios on US and Canadian markets fell to an average of 1 as investors sold positions. This was followed by numerous privatizations where enterprises delisted from global exchanges only to relist in Hong Kong and China at multiples many times the overseas trading value.
On the eve of the Asian Crisis back in 1997, Governor Patten did not see that China could become the world’s second largest economy. Patten wrote in his bestselling book East and West that China’s economic model was unproven, as the economies of France, Germany and the UK were still much bigger at the time. Now that is not the case. China is the second largest economy and aims to surpass the US in due time.
Today, Patten is impressed by the development and globalization of Chinese enterprise, but notes the capital markets experiment must come back to improving the lot of the people. “If you were a Chinese official the thing that would most concern you is the rate of change in per capita income not the total,” adds Patten. “With 1.3 billion people, if you grow at the spectacular rates China did for three decades, doubling the economy every eight years, inevitably you overtake everyone due to population size.”
When asked where Hong Kong is headed in the next 20 years, and whether it will be eclipsed by Shanghai, Patten feels the city will thrive due to qualities that in his view provide advantages that can overcome the competition with much larger communities. As to where China is headed, the answer is not as forthcoming, “I don’t know. In 20 years it will pay for a huge increase in the number of elderly,” he says. “By then the largest population group in the world will be Indian. The second largest will be China. Probably the third largest will be Chinese pensioners – that is the reality.”
Due to this demographic quandary, China is moving faster than any country ever from a labor surplus to a shortage. Patten also looks closely at the words of men like Larry Sommers, former Chief Economist of the World Bank, who speak of what happens to the fastest growing economies, the ones that enjoyed real growth spurts. Sommers argues these economies fall on average by 4% to 4.5% in terms of overall growth.
“I think to myself that I hope that does not happen to China,” notes Patten. “It would be a disaster for us all. Today, you can see the rise of the China middle class, but what you need to see is a narrowing in social equity.” Patten compares the rise of the China middle class to that of America in the 1950s and 1960s. At that time America’s gini coefficient (measure of distribution of income level) was the lowest in US modern history. “If you were a boss in a big US company then maybe you got 30 times the average wage,” he adds. “Now bosses get 300, 400, 500 times that.”
For that reason, one of Patten’s most admired US presidents is Dwight Eisenhower (1953-1961), “who baked into the economy the best bits of Rousseau, the highway building program and defense industry investment that produced breakthroughs in academia and research, including the Internet. It was the high point for the white middle class. The I Love Lucy middle class was in
Patten would like to see China publish its gini coefficient to show figures on social equity, but he notes this issue is well understood inside the country. Patten points out that former Premier Wen Jiabao regularly made speeches about the four “uns” (unbalanced, unstable, uncoordinated and unsustainable) and one of these “uns” was the imbalance in wealth and earnings between the best and least well off.
Since handing over the keys to Hong Kong, Patten has not sat idle. Moving from one hot spot to another, Patten chaired the Independent Commission on Policing for Northern Ireland, better known as the Patten Commission. In 1999, Patten was appointed as the UK member to the EU as Commissioner for External Relations, where he dealt with crises in foreign policy, the most notable of which was the failure to come up with a unified policy on the 2003 Iraq War. After a fiery period as BBC Chairman, today Patten sits as the Chancellor of prestigious Oxford
Inevitably, Patten’s thoughts turn to the economic systems that drive world economies. In his writing, Patten states time and again that the Western market approach is the best economic alternative. Yet, he acknowledges Asia has followed a different model, one that is centrally led by governments. He remembers well the running argument with Lee Kuan Yew, the first Prime Minister of Singapore who governed for 30 years, known for his opinions on the contribution of Asian values to economic growth.
The question of how to best achieve rapid growth is essential. For instance, China has achieved impressive economic growth based on its ability to deliver infrastructure and other projects in a timely manner. Take the high-speed rail initiative. Due to its ability to push through projects, China built an impressive high-speed rail network, one that would have taken other nations much longer to complete. This begs the question as to what is indeed the system that betters the lot of the most people.
“I don’t think there is a better way than to involve people in shaping their own destiny,” Patten concludes. “What I totally accept philosophically is that life is not a journey, like a wagon train in which you go across the Prairies to find paradise, running streams, leaping salmon and your lucky coin. Life is a series of predicaments and the older I get the more than I believe that. So I am very alive to the argument that trying to find and impose the perfect system is crazy. To argue against China’s system by constructing one’s own makes no sense. A system that seeks to assert primacy over another system has all the demerits of the first system.”
Prosperity for All
Patten looks at Western developments and acknowledges that systems in that part of the world are far from perfect. “In the UK you see a bizarre decision to vote for taking ourselves out of the EU. Look at America. You see an election where the winner gets three million fewer votes than the loser and a President wins who has limited abilities to do the job or understand the niceties that go along side constitutional arrangements.”
However, Patten does believe the Western system has served other nations to find solutions to deal with the problems they face. “That just happened in France. Monsieur Macron will have a terribly difficult time ahead, but he is a response to his society’s problems. Germany, which after a terrible period in the first half of the last century, has turned itself around and emerged from the economic and moral rubble.”
Patten notes another issue that will arise is the need to satisfy a population used to economic prosperity. This is an issue already identified by today’s Chinese leaders as a challenge. Patten points to China’s current interest in a historic book by Alexis de Toqueville, The Old Regime and the Revolution. Patten is familiar with de Toqueville’s work as he studied it in his first term in university, read it in French and wrote essays on it.
“De Toqueville warns that it is wrong to assume when people get better off they are easier to govern,” adds Patten. “In the run-up to the French Revolution the rural population and even people in the cities were getting better off. What affect did that have? It made them more aware of how much better off they wanted to be and how much better off others were. What I feel is the management of change in China is incredibly difficult, but it is in all our interest that the leadership gets it right.”
Education is an important part of managing that transition. Over the last two decades, thousands upon thousands of Chinese students have gone abroad to study, and many have taken jobs at the foremost Western corporations and institutes. Some have returned to China to play an important role in shaping the new economy with their gained
Patten has closely studied this evolution in education. “The China Education Ministry points out from time to time that many of their post-graduates don’t come back,” noted Patten. “China is not the only country in that position. I am sensitive about the drain of talent from Europe to America, and I run a university so I would be. Fortunately, until now the UK has attracted students and we hope to be able to do so into the future.”
Oxford has over 1000 Chinese studentson its campus, of which about 150 of those students are from Hong Kong. “I am aware of the incredible amount of talent China has and I will be interested to see how much of that talent remains outside and how much goes back,” concludes Patten. “After all, it is important for the future course of China that the brightest minds are available to lead the way forward.”
ArticleCanadian Chamber of Commerce and HKCBA joint event showcases Hong Kong's entrepreneurial spirit see more
Summary by Zachary Rowswell, The Canadian Chamber of Commerce in Hong Kong
On November 30th, 2015, the Entrepreneur and Small Business Committee (the “ESBC”) of the Chamber and the Hong Kong Canada Business Association (the “HKCBA”) jointly presented the second annual Transpacific Entrepreneurial Conference. The Conference featured a wide variety of topics focusing on how Canadian companies had set up and succeeded in Hong Kong, and what sort of resources were available to help these companies do business in Hong Kong. Similarly to last year’s conference, the objective was to continue developing Kong Kong’s entrepreneurial spirit while encouraging Canadians to set up in Hong Kong to expand into Asia Pacific.
Panel 1 - Hong Kong: Canada’s Gateway to Half the World
Panel Discussion Chair: Douglas Betts (McMillan LLP International Limited)
Speakers: Simon Galpin (Invest HK), Jeff Kwok (Neverblue, Globalwide Media), and Irene Chu (KPMG)
Douglas opened up the event touching on Hong Kong’s historic evolution as a manufacturing hub to a services hub and as a gateway to China. There was a need for Hong Kong to evolve further due to globalization and China’s rapid development. As such, the panel was to address the issue of how entrepreneurs could successfully launch and maintain new businesses in Hong Kong.
Simon commented on recent changes in Hong Kong’s economic infrastructure. While the backbone of Hong Kong’s business sector consisted of local small-medium enterprises, there had been a recent increase of globally focused start-ups. Hong Kong was set to become a global centre in innovation and business start-ups, which was influenced by the high net worth of investing individuals, proximity to manufacturers in Shenzhen, and Hong Kong’s excellent service environment. Simon further recommended an online resource for start-ups called startmeup.hk.
Jeff shared his experience with his company on how it recently expanded into Asia Pacific with its regional centre based in Hong Kong. Jeff enumerated the various reasons to consider setting up a globally focused business in Hong Kong, well emphasizing that using Hong Kong as a gateway to mainland China should not be a major motivator. Advice was also given to have a practical reason for setting up in Hong Kong and to understand the competitive advantage of employing proper talent.
Irene talked about the issues that larger corporations in Hong Kong dealt with when faced with competition from start-ups entering the market. Size no longer equaled power and it was important for businesses to collaborate with each other to drive innovation. Irene also touched on the megatrends driving innovation, the drivers for collaboration between businesses, and the role of accelerator and incubator companies in stimulating innovation for big business. She concluded with the idea that big businesses and small start-ups should seek to create mutually beneficial relationships and learn from each other’s experience.
Panel 2 – “How I Started: How I Made it” Entrepreneur Experience Sharing Session
Panel Discussion Chair: David Armitage (Velocity Solutions Ltd)
Speakers: Christian Yan (Nanoleaf), Allan Matheson (Blue Umbrella), Wayne Bewick (Trowbridge)
David began the discussion by noting how business in Hong Kong could be seen as a hobby rather than a simple occupation and how Hong Kong was an ideal environment for such a hobby due to access to a variety of exciting groups.
Christian provided insight from his experience with his company, which recently expanded into Hong Kong and looked to provide solutions for efficient lighting. Christian stated that business should be seen as harmony of cultures that came together to create a final product, with his own business being half Canadian and half Chinese. He also talked about the importance that his company attached to combining aesthetics and functionality in a product to affect the world beneficially. He acknowledged that there existed a challenge for his company to drive sales and that his company had a need for guidance provided from experienced companies. In conclusion, the practical reasons for setting up the company in Hong Kong and Shenzhen were that it was able to leverage its cultural strengths, and the location was close to all of the company’s suppliers.
Allan gave advice to businesses to strengthen weaknesses and not just focus on existing strengths, highlighting that his company’s mandate was to always make sure it was learning and growing. Allan attributed importance to having a focused product and high sales in order to maintain a strong market share. It was also key to studiously study one’s competition with indifference, meaning that it was important to understand the competition, but not to get caught up in it. Allan asserted that business was a form of binary where one either had or did not have the skill to get things done.
Wayne began by discussing how Trowbridge was able to find a niche in the Hong Kong market by providing expats with financial services that were previously unavailable and how successful networking was key to market expansion. Emphasis was given to the importance of having good people in a company with a diverse skill set, and that the key challenge was always finding the right talent. Wayne also noted that success was to be found in failure, and that business expansion was always a learning experience.
Panel 3 - Growth through Partnership
Panel Discussion Chair: Alexandria Sham (HKCBA)
Speakers: Lawrence Nutting (The Canadian Chamber of Commerce in Hong Kong), Colin Hansen (Advantage BC), Michael Wong (University of Waterloo), Tytus Michalski (Fresco Capital)
Alexandria began by introducing HKCBA as one of the largest bilateral business associations in Canada. She also mentioned that the association will be hosting its 2016 national conference in Calgary.
Lawrence reiterated the trend in the increasing amount of start-ups in Hong Kong and the focus in innovation that existed even in big businesses. He also talked about how companies could achieve growth through partnership with the Chamber and HKCBA by leveraging bridging opportunities and understanding the value of networking to other members. He concluded that individuals made a difference in business and that the mission of organizations such as the Chamber and HKCBA was to support members and future members in order to create value and develop talent.
Colin discussed how the government of British Columbia was looking to continue bridging to Asia with economic agreements. British Columbia’s vision is to become the most Reminbi (“RMB”) friendly market in Asia, with the recent establishment of “dim sum” bonds and the potential of issuing “panda” bonds in Vancouver. Canada had also recently been declared the world’s tenth RMB settlement hub, serving to further promote Canada as a financial gateway from China to the Americas.
Michael talked about the University of Waterloo (“UWaterloo”) and the benefits that its students received in participating in Co-Op education. The UWaterloo Co-Op Program allowed students to gain practical business experience while studying so that they could find their niche in the business world more easily. UWaterloo students partaking in the Program had demonstrated their potential for business innovation on many occasions, and the university is looking to increase partnerships in Asia to allow for more opportunities for this body of talent to grow.
Tytus provided eight lessons to learn in conducting successful business partnerships based on his experience. This advice included forgetting “or” and finding “and”, learning to look for opportunities that might not seem obvious, finding great talent, and remembering to stay open to new ideas as part of the learning process of business.
Panel 4 - Hong Kong: A Super Connector Between Asia and Canada
Panel Discussion Chair: Parker Robinson (The Word Factory)
Speakers: Jenny Too (HKTDC), Amanda Casgar (Lululemon), Albert Tam (Intercontinental Group), Arnold Leung (Appnovation Technologies Inc.)
Parker described Hong Kong as having evolved from a bridge to a gateway to a super connector between Asia and Canada. Its role as a super connector meant that Hong Kong was the ideal place for Canadian businesses to set up to enhance links with the mainland and expand across East Asia.
Jenny noted that Hong Kong and China had bucked recent global trends and seen an increase in foreign direct investment (“FDI’) flows over the past few years. Despite increasing globalization in mainland China, Hong Kong still played an important role there in facilitating FDI flows. There had also been growth in Guangdong enterprises operating in Canada and the HKTDC continued to play an important role in bringing such mainland businesses and investors to Canada while operating out of Hong Kong.
Amanda shared her company’s ideas in expanding to Hong Kong. The decision to do so was purposely led with the realization that Asia needed to be taken into account in the company’s world view. The company sought to motivate employees through the idea of the choice to love what you do. It practiced a decentralized business model that helped foster a culture of entrepreneurship and hard work. Concerning marketing, Amanda stated that the company relied largely on word of mouth through community connectors for organic brand growth.
Albert talked about his experience in accountancy and consulting and how he used it to help Canadians integrate comfortably into Hong Kong and use the region as a base for expanding into mainland China. He recommended Hong Kong as a good place to connect with the mainland and the Shanghai Equity Exchange as a useful resource to get into the market there.
Arnold explained the reasons for choosing Hong Kong as the location of choice in Asia Pacific due to not only its proximity to China, but also the ability to conveniently provide service to Asia. He also listed several other benefits including the excellent legal system and the straightforward business culture.
Panel 5: How We Are Helping Canadian Companies Expand Their business into Hong Kong (and China)
Speakers: Lynn McDonald (Consulate General of Canada), Henri Arslanian (APrivacy)
Lynn focused on the role of Canada’s federal government in Hong Kong. The government operated through embassies and consulates not only to negotiate agreements with other governments, but also provide consular services to Canadian expats. Trade commissions were also located at the embassies and consulates, as well as in regional offices across Canada, operating with a vision for excellence in facilitating partnerships, deal flow and FDI to Canada provide a range of services to Canadian businesses abroad, such as market assessment and recommendation of qualified contacts.
Henri built on Lynn’s presentation by asserting how Global Affairs Canada had been positively affecting businesses abroad through the embassies and consulates. He gave an overview of his company as providing electronic email security to diplomats, militaries, and financial service providers. The Consulate General in Hong Kong was pivotal in facilitating the company’s expansion to Hong Kong through providing the contacts and networking needed to do so.
Interesting facts and finer points of doing business, and living, in Hong Kong. see more
By Josh Steimle, Forbes
Since moving to Hong Kong one year ago, I’ve fielded many questions from friends, associates, and strangers regarding this world city of 7 million. What follows are some interesting facts and finer points of doing business, and living, in this magnificent city. I have included a few items which you might not think of immediately as directly related to doing business here, but if doing business in Hong Kong also means living here, these are factors you’ll want to be aware of.
Hong Kong is Not China
Technically, Hong Kong is a “Special Administrative Region” (SAR) of China, operating under the slogan “One country, two systems.” But for all intents and purposes the Chinese government is invisible, and likely to remain so. There is plenty of socialism to go around in the forms of public health care and public schools, as you would find in many other countries around the world, but Hong Kong is first and foremost concerned with maintaining a calm, status quo, and that means making sure the wheels of business continued to run smoothly.
Everyone Speaks English
Ok, not absolutely everyone, but if you’re coming here for business it might as well be, because everyone you need to do business with will likely speak English as well as you do. And what phrases of Cantonese you might find useful on a day to day basis you can pick up with a few weeks of listening to Pimsleur audio programs and some focused practice. Those who are inclined to dive a bit deeper can hire a Cantonese tutor. Either way, don’t expect the locals to be very helpful. If you try to speak Cantonese, they’ll almost always respond in English. And if you tell them you want to learn Cantonese, they’ll tell you that you’re wasting your time and should be studying Mandarin.
Finding Housing is Messy
Although companies like Spacious and Okay are revolutionizing the process of buying or renting a home in Hong Kong, for the most part finding a place can be confusing due to fundamental flaws in the Hong Kong real estate industry. The two things you’ll want to know is that first, each realtor covers a very small, limited area. If you hire a realtor to guide you through one neighborhood, you would assume she covers the neighborhood right next to it, but she probably doesn’t. You’ll have to get a separate realtor to show you around each area. Second, there is no Multiple Listing Service (MLS) system, as exists in the U.S., that puts every residence within easy reach of every realtor. Realtors only show you the properties people list with their agency. So if there are two agencies next to each other, covering the same area, you can’t assume that both agencies will show you the same properties. They may have entirely different portfolios to show you. And by the way, it’s not uncommon for people to look at 40 to 50 properties before they find the one they rent.
Everything is Small
Don’t plan on bringing much with you, because your housing likely won’t have the space for it. We moved here with only our luggage, then bought furniture at IKEA, of which there are three very popular locations in Hong Kong. For a modest additional fee that is well worth it, they’ll deliver and assemble your furniture. Stairs in Hong Kong are also smaller (don’t trip!) than in the U.S., offices are smaller, and just about everything else makes efficient use of space. It can be inconvenient on occasion, but for the most part it’s a simple adjustment.
Housing is Not Necessarily Expensive
If you want to live in the middle of the city, then you can expect to pay an outrageous amount of rent. But if you’re willing to have a 30 to 45 minute commute, you can live quite comfortably. Our family lives on a separate island from the main city of Hong Kong and we pay less in rent than we did in Salt Lake City, Utah. Granted, it’s smaller quarters and lacks some of the amenities we once enjoyed, like a full size oven, but it’s perfectly workable and affordable.
Schooling is Expensive
If you want to send your children to the “finest” international schools in Hong Kong, you can expect to pay as much as $22,000 USD per year, per child. That’s if you’re lucky enough to get your child into a school at all. The education system enjoys spectacular demand and dwindling supply which has forced prices into the stratosphere. But there are other options, such as the International Montessori School, local schools (if you want your children to learn Cantonese), or in our case, we’ve chosen to homeschool which, by the way, is not illegal in Hong Kong, despite reports to the contrary.
Office Space is Very Expensive
The expense of having an office in the business district of Hong Kong is such that many businesses are foregoing having a “real” office, instead opting to house their employees in co-work spaces or virtual offices. Or you can just work from Starbucks. Everyone else is doing it.
Don’t Cheat on Your Wife
In Hong Kong a woman may kill her husband if she discovers he has been unfaithful. It’s completely legal–as long as she kills him with her bare hands.
It Gets Cold In Hong Kong
Having lived in truly cold places like Rexburg, Idaho, and knowing that Hong Kong sits at about the same latitude as Hawaii and the Bahamas, the warmest clothing I brought with me was a windbreaker. I learned my lesson. I have never been colder in my life than I’ve been in Hong Kong where buildings have no insulation and no central heating. Although temperatures rarely dip below 40 degrees fahrenheit, if it’s 40 degrees outside, it’s also 40 degrees inside, and that makes for a chilly day at the office if you have nothing on but a suit coat.
There is No Amazon Prime
If you love Amazon and its two-day free delivery service through Amazon Prime membership, you’re out of luck. Ecommerce is in its infancy in Hong Kong, and making a purchase often means picking it up and hauling it home with a level of effort anyone in the U.S. would find almost unimaginable. Buying a computer printer was a five hour process for me, and a good workout. The good news is you can still order from Amazon. It takes a bit longer than it would stateside, and the shipping costs aren’t cheap, but they aren’t outrageous either. In some cases the shipping costs merely make the product equal in cost to what you would pay in Hong Kong anyway.
Hong Kong is the Freest Economy in the World, Sort of
The Heritage Foundation has ranked Hong Kong as the freest economy in the world for 20 years. But that doesn’t mean it’s a libertarian paradise. A handful of wealthy families effectively run the city, with their holdings primarily in real estate and commerce. As long as you don’t compete against their business interests, you enjoy great freedom. If you want to come here and start a new grocery store chain, forget about it. Hence, there is no Walmart in Hong Kong, although there is a few minutes away across the border in mainland China.
Safety and Life Expectancy
Hong Kong is both the safest city in the world, and the city with the longest life expectancy. I’m convinced it has something to do with people eating smaller portions of food (as mentioned before, everything here is small) and walking a lot. I lost 10 lbs the first two months we lived here, without trying. Make sure you bring comfortable shoes.
Hong Kong is a great city to live in, and to do business in. Have you done business here before? What would you share that people might not know?
Joshua Steimle is the CEO of MWI, a digital marketing agency with offices in the U.S. and Hong Kong.
The Belt and Road Initiative aims to promote connectivity in infrastructure, resources development, see more
- See more at: http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/One-Belt-One-Road-Initiative-The-Implications-for-Hong-Kong/rp/en/1/1X000000/1X0A23WV.htm#sthash.PB5jo5Rg.dpuf
Hong Kong offers Canadian firms talented workers, the rule of law, modern infrastructure, low taxes see more
By Ken Mark, Special to Financial Post
Bitten by the “Asia is now” bug, three young, Canadian high-tech firms — GuestLogix Inc., Vision Critical Communications Inc. and Neverblue Media Inc. — recently set up regional offices in Hong Kong with a common objective: To leverage Hong Kong’s position as the gateway to Asia’s burgeoning marketplace.
Dominic Barton the global managing director of McKinsey & Co., recently concluded: “By 2025, the Asian consuming class will swell to more than two billion people and spend an estimated US$22-trillion – nearly one-third of global consumption.”
Hong Kong is located five hours’ flying time from half the world’s population. Together with New York and London it is ranked as a global financial and business services centre, a lofty perch decided by its rule of law, independent legal system, well-educated talent pool, modern infrastructure, low taxes and light regulation topped off with an “open for business” culture.
“Hong Kong is a city built by entrepreneurs for entrepreneurs,” says Bruce Wells, Vision Critical’s Hong Kong-based president and managing director, Asia.
All three businesses say they chose Hong Kong for its central location and ease of doing business. But equally important was the mix of languages. “To sell into China, we needed Cantonese, Mandarin and English,” says Brett Proud, co-founder and chief executive of Toronto-based GuestLogix. “Hong Kong is about the only place we could find them all in one place.”
Vancouver-based Vision Critical says its goal is to transform market research into an engine for eliciting timely consumer insights. Since 2002, the company has built branded, online insight communities for corporate clients. They invite targeted participants to respond digitally to a wide range of topics on which firms seek to quickly analyze in-depth consumer perspectives and thoughts.
These include Banana Republic, Yahoo!, Discovery Communications, Molson Coors and Jet Blue. The solution delivers 40% to 45% response rates compared with single-digit levels from traditional research approaches.
Vision Critical’s proprietary technology enables market research firms to abandon outdated face-to-face, phone or online encounters for real-time feedback from a community of targeted consumers.
Consequently, businesses can dig into a continuing, more nuanced flow of consumer insights over a longer time. That replaces previous, one-time snapshots from randomly approached respondents.
Mr. Wells compares this approach to having a customer advisory board providing input on an ever-widening range of topics. In the hands of astute marketers, such rich consumer data leads to more sharply focused offerings and campaigns.
“We try to make them feel special as a member of a select community and that their contributions and suggestions are valued,” he says of the interaction with respondents.
Vision Critical says the signing of Cathay Pacific Airways as a client among other notable global brands operating in Asia validates its decision to set up in Hong Kong. About 10% of its business is conducted in the Asia Pacific region. In 2012, the company had about $80-million in revenue, and in 2013, it is poised to reach $100-million with much of the expected growth attributed to international expansion, including in Asia.
Cathay Pacific has also embraced GuestLogix Inc.’s technology, which expands in-flight sales items far beyond duty-free standbys of alcohol, tobacco, perfume etc. For example, passengers on some Ryanair flights to London can now buy and pay for subway tickets from Heathrow Airport to Paddington Station.
Mr. Proud describes GuestLogix as a revenue enabler. Its technology boosts carrier ancillary income by transforming international flights into specialty, e-commerce outlets. Sales are no longer limited to what can be physically carried on the plane. Around GuestLogix’s head office, the motto is “the sky’s the limit.”
“Passengers can buy items such as cases of wine to be delivered to their home addresses,” Mr. Proud says.
GuestLogix technological advantage rests on its ability to deal quickly and securely with all global payment systems. “Our system captures the transaction and sends it to the most suitable, global ‘pipe’ for the fastest, most secure and lowest cost way to process it,” he says.
“Banks are all onside because we meet all security encryption and safety compliance regulations and certifications.
“Once passengers can order on their own smart phones, airlines will offer higher priced items,” Mr. Proud says. “That will be possible because of real-time purchase confirmation. Now, we can only confirm after the plane lands.”
Potential users are also attracted by its pay-on-performance revenue model. In other words, deploying GuestLogix technology is a variable cost — no sale, no fees.
That’s also part of the appeal of Neverblue, a Victoria-based company specializing in lead generation, client acquisition and mobile advertising. It provides a digital link between online advertisers (product and service vendors and distributors) and consumers
“At the end of each month, an audit reveals the number of hits, transactions and sales,” says Jeff Kwok, Neverblue’s Hong Kong-based director of business development, Asia. “But clients pay only for actual sales.”
Neverblue’s technology serves as an aggregator or funnel for websites of affiliates, i.e., firms and individuals that have bought advertising space on social media sites. The barrier to entry is the speed, scale and power of its technology to track traffic that Mr. Kwok estimates at millions and millions of hits a day.
Neverblue allows consumers to bypass distracting banner ads and control e-mail blasts from unwanted sellers, to access more efficiently websites offering products items and services they want.
Its affiliates include major travel service providers such as Grand Hyatt, the Macau-based Venetian Hotels & Resorts and online travel agents including Priceline and Expedia. Fashion retailers targeting younger buyers such as Quicksilver for clothing and Gilt for bags and accessories are a growing category.
Neverblue reached break even after six months in Hong Kong. “We have to be the most productive link to optimize traffic to our affiliates’ websites,” Mr. Kwok says. “We need to grow revenue, expand our office staff and boost scale to maintain our market dominance.
“Our goal is to get big fast, keep operations efficient and do it properly.”
All three firms relied on Invest Hong Kong in setting up their operations in the city.
— Ken Mark is a 2013-2014 Asia Pacific Foundation of Canada Media Fellow supported in part by Cathay Pacific Airways.
Selling your product in China can be tricky, unless you have the right intel and a good distributor. see more
By Quentin Casey, Financial Post
Stephen Jones has only sold three units in China thus far. But he’s convinced the country represents his company’s biggest market.
The Halifax-based company, Resolution Optics Inc., produces 3D microscopes, some of which are submersible in water. With China spending billions to monitor and restore its lakes and rivers, many of which are “massively polluted,” Mr. Jones sees huge potential for this equipment.
Although he’s only sold a few of the $35,000-microscopes in China, he contends that a recent agreement with one of China’s State Key Laboratories could boost sales significantly — perhaps up to 300 units in the next five years.
Mr. Jones is not walking blindly into the Chinese market, having previously developed Chinese sales for a medical research equipment company. That experience gave him an introduction to the nuances of Chinese business culture, which helped him secure a local distributor to sell his company’s microscopes. “It’s almost impossible to sell a product in China without having a Chinese distributor to represent you,” he said.
But one distributor is not enough. For reasons he does not fully grasp, customers in Hong Kong are reluctant to purchase from distributors in Mainland China. So he is teamed with two distributors: one in Hong Kong and one on the Mainland.
Mr. Jones’s previous China experience also exposed him to the weight Chinese business leaders place on personal relationships. “It’s expected for me to make multiple trips over there, and it’s expected for me to give a guest lecture,” said Mr. Jones, who holds a PhD in physiology and biophysics. “It’s expected that the relationship is about more than a financial transaction.”
Gerry Pond, one of Canada’s top angel investors, says that many Canadian companies lack the international sales expertise to properly crack international markets, including China.
His Saint John, N.B.-based software company, Mariner Partners, now has sales offices in Paris, Istanbul, London and Dallas. But it wasn’t until recently that the company broke into international markets. The key move involved hiring five Canadian ex-pats who had worked in sales departments at big U.S. software firms.
“We struggled hard with international sales — until last year,” Mr. Pond said. “It’s meant a huge jump in customers… Our revenues this year are going to be the best ever.”
Mr. Pond, a prolific investor in East Coast startups, found that many of his investment companies were in need of international sales help. To help bridge the gap, he brought in a consultant. He is also trying to remedy the situation more broadly, by setting up an institute dedicated to training international sales and marketing specialists. Universities, at least in Atlantic Canada, have largely overlooked international sales training. So he’s willing to help fund an institute to fix the situation.
“I have to put money where my mouth is,” he said. “It would be the best investment I’ve made.”
Meantime, Frank Pho, vice-president of global expansion at the Business Development Bank of Canada in Vancouver, says Canadian companies must commit time and money to understanding the countries they want to enter. That’s particularly true in China, he added, where a “paradigm shift” has changed how foreign companies must approach that market.
The old Chinese sales model involved taking an established North American product and adapting it to the Chinese market, often by lowering the quality to make it less expensive.
Now, successful companies are tailoring their products for the Chinese middle class, which totals 300 million people. “That is 10 times the population in Canada. So why would I start by developing a product for 35 million people and then reinvent it to address a 300-million person market?” Mr. Pho says.
“That’s the paradigm shift. If you can take advantage of that, then you can become a powerhouse.”
He pointed to Samsung Electronics’s growing share of global mobile phone sales. The South Korean manufacturer is stealing market share from Apple, in part, by succeeding in foreign markets such as China.
“It’s a fundamental shift,” he says. “The Japanese and the Koreans understand that. But we are still behind that reality.”
Mr. Pho also notes that large-scale urbanization in China offers opportunity for clean tech companies, such as those focused on drinking water and wastewater.
That’s exactly what Mr. Jones is hoping for. “China will probably turn out to be our largest market,” says the Resolution Optics chief executive. “If we can prove our worth and if we can get on the right side of the government, then we have a pretty good chance.”
ArticleCanada and Hong Kong sign investment agreement see more
February 10, 2016 - Toronto, Ontario - Global Affairs Canada
The Honourable Chrystia Freeland, Minister of International Trade, and Gregory So, Secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region, today signed a Canada-Hong Kong foreign investment promotion and protection agreement (FIPA) in Toronto, Ontario.
In an increasingly interconnected global economy, Canada’s diversity and connections to the world are among our greatest economic assets. Hong Kong offers many investment opportunities for Canadian businesses. Areas of potential growth for Canadian investment include financial services, sustainable technologies, professional services, agricultural products and processed food, transportation, information and communications technology, and education.
“With our strong trade ties and established trade and investment links, Hong Kong is a natural partner for Canadian businesses. Hong Kong offers a dynamic economy, and today’s investment agreement will help Canadian businesses more easily access this reliable entry point into the larger Asia-Pacific region. Together, we are focused on enhancing the prosperity of Canadians at home and connecting them to opportunities abroad.”
- Hon. Chrystia Freeland, P.C., M.P., Minister of International Trade
“Hong Kong is the key trade and investment centre of Asia and an ideal gateway for Canadian businesses to tap into the vast market potential in the region, particularly the Mainland of China. The signing of the investment agreement will give additional assurance to investors, expand investment flows between Hong Kong and Canada and further strengthen our existing strong economic and trade ties.”
- Gregory So, Secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region
- There are approximately 300,000 Canadians in Hong Kong and some 500,000 people from Hong Kong living in Canada.
- Canadian investment in Hong Kong reached $6.1 billion in 2014.
- According to data supplied by Hong Kong, Hong Kong’s foreign direct investment in Canada reached HK$73.9 billion ($11.1 billion) in 2014.
- Canadian merchandise exports to Hong Kong totalled $3.9 billion in 2015, making Hong Kong Canada’s eighth-largest export market for goods; in 2014, Hong Kong was Canada’s seventh-largest market for services.
- Canada’s foreign investment promotion and protection agreements
- Hong Kong’s investment promotion and protection agreements
For more information: http://www.international.gc.ca/media/comm/news-communiques/2016/02/10a.aspx?lang=eng
ArticleHong Kong demonstrates the highest rate of FinTech adoption among all analyzed markets see more
BY POLINA CHERNYKH ON WEDNESDAY, DECEMBER 30TH, 2015 7:39AM EDT
Hong Kong is the globe’s leading region in terms of fintech adoption, says the UK consulting company Ernst & Young.
The survey, conducted among 10,000 digitally active people in Hong Kong, the UK, Australia, the US and Canada, revealed that 29.1% of Hong Kong citizens have utilized at least two fintech services products over the past month.
Meantime, the US is ranked the second in terms of fintech adoption. According to the study, 16.5% of digitally active people in the country have used at least two fintech services within the last six months.
The US is followed by Singapore, the UK and Canada, which accounted for 14.7%, 14.3% and 8.2%, respectively. Meanwhile, the average rate of fintech products use in all these countries amounted to 15.5%.
Hong Kong currently offers the most favorable conditions for fintech companies, including low taxes, governmental support and widespread internet and mobile usage.
While the UK and the US take lead in the global fintech investment, China is considered to be one of the most favorable environments for fintech startups. The country’s government is open to new technologies and encourages innovations in the industry.
Chinese P2P lending platform Lufax earlier announced its plans to raise $1 billion in a funding round that is projected to be closed next year. Once completed, the investment would bring the company’s valuation to $15-20 billion.
The overall fintech adoption rate is forecast to more than double during the next year, given the growing awareness of new services.
Fintech startups could become serious competitors to established banks and financial organizations, due to their innovative solutions. This explains the growing investment in the industry. The globe’s leading financial companies are investing huge sums of money in new companies, acknowledging their potential to transform the industry.
“FinTechs are moving in on the traditional financial services landscape and their products and services are catching on. For traditional financial services companies, including banks, insurers and wealth and asset management companies, the risk of disruption is real,” the study reads.
According to the annual report, developed by the world’s major payment company Visa, the fintech sector showed tremendous growth in 2015. Besides, the company stressed the importance of blockchain’s role in the fintech industry. The distributed ledger has turned into one of the most promising technologies in 2015.
The fintech is also gaining popularity among the most prominent entrepreneurs on Wall Street. Such influential bankers as former JPMorgan’s executive, Blythe Masters, ex-CEO of Citigroup, Vikram Pandit, and former head of Morgan Stanley, John Mack, embrace the fintech in an attempt to modernize traditional financial services.
Earlier this month, H2 Ventures and KPMG issued a list of 100 companies dominating the fintech industry. The report underlined international nature of fintech, as the featured companies are located all over the world.