|
Newsletter
Seminar Material
Biz:
China
Hong
Kong Hawaii
What people
said about us
China
Earthquake Relief
Tax &
Government
Hawaii Voter Registration
Biz-Video
Hawaii's
China Connection
CDP#1780962
Doing Business in
Hong Kong & China
| |
Bauhinia News© &
Newsletter©
Bauhinia News©
For Current Information,
Please Visit our EVENT,
HK & CHINA BIZ
and PHOTO ALBUM
PAGES
Do you know our dues
paying members attend events sponsored by our collaboration partners worldwide
at their membership rates - go to our event page to find out more!
After
attended a China/Hong Kong Business/Trade Seminar in Hawaii...still unsure what
to do next, contact us, our Officers, Directors and Founding Members are
actively engaged in China/Hong Kong/Asia trade - we can help!
Are you ready to export your product or
service? You will find out in 3 minutes with resources to help you -
enter
to give it a try 
December 30, 2005
Taiwan, Hong Kong and Macau Residents
Working in Shanghai are Considered Locals
Shanghai has implemented the Regulations for the Administration of the
Employment in the Mainland of Residents from Taiwan, Hong Kong and Macau. This
means Taiwan, Hong Kong and Macau residents without working experience will also
be allowed to seek employment in Shanghai. Detailed provisions for social
security protection they are entitled to are being formulated. According to
experts, the implication of these new regulations is that Taiwan, Hong Kong and
Macau residents will enjoy equal employment rights as mainland residents.
However, Taiwan, Hong Kong and Macau residents working in the mainland will
still have to apply for a work permit, which is subject to administrative
permission and will be registered and filed for the record. The registration of
work permit replaces the previous practices of extension of stay and annual
inspection. Employing units must also sign labor contracts with the Taiwan,
Hong Kong and Macau personnel employed and make contributions to social
insurance in accordance with regulations. The Shanghai municipal labor and
social security department is losing no time in finalizing details of the labor
contracts and social insurance provisions for the employment of Taiwan, Hong
Kong and Macau residents.
While making it easy for employing units to recruit Taiwan, Hong Kong and Macau
personnel, the new regulations also entail harsher penalties for violations. Any
employing unit that fails to help the Taiwan, Hong Kong and Macau personnel it
employs to apply for work permits or complete filing procedures, or fails to
cancel the work permits of Taiwan, Hong Kong and Macau personnel after
terminating their labor contracts or after the departure of these personnel at
the end of contract, will be ordered by the labor and social security
administrative department to make rectifications and fined Rmb1,000. Any
employing unit that falsifies, alters, falsely uses or transfers work permits
will be ordered by the labor and social security administrative department to
make rectifications and fined Rmb1,000. In addition, it will also be prohibited
from employing Taiwan, Hong Kong and Macau residents for one year.
Impact of 11th Five-Year Plan on Hong Kong Companies
The 11th Five-Year Plan adopted on 11 October 2005 will be submitted to the
National People's Congress to be held next March for approval. The proposal put
forward six priorities: bringing about a change in the mode of economic growth;
readjusting and optimising the industrial structure; addressing the three
agricultural issues; promoting the sound development of urbanisation; bringing
about coordinated regional development; and intensifying the building of a
harmonious society.
It is understood that the 11th Five-Year Plan is very different from previous
five-year plans and marks an important phase of transformation in the Chinese
economy. In the process of transformation, domestic and foreign enterprises will
find opportunities as well as challenges. As economic ties between Hong Kong and
the mainland become increasing close, the 11th Five-Year Plan is expected to
have far-reaching impacts on Hong Kong's economy and enterprises. The plan
covers a wide range of issues. The following are issues with a close bearing on
Hong Kong:
1. Change in Mode of Economic Growth
The Chinese economy has seen rapid growth for more than 20 years, but it has
also paid a heavy price. The main manifestations are serious environmental
pollution and heavy consumption of resources. The impact of economic growth on
the environment has wasted 7% of the GDP generated, and the amount of resources
consumed per unit GDP in China is higher than the world average. Environmental
pollution and shortage of resources have become serious problems holding back
China's sustainable development.
The plan clearly points out that it is imperative to change the mode of economic
growth, make resource conservation a basic national policy, build a
resource-efficient and environmentally friendly society, promote economic
development in harmony with population, resources and the environment, and
achieve sustainable development. In this connection, the government is bound to
introduce new industry standards; impose stricter environmental and energy
consumption standards; develop and promote energy-saving, substitution and
recycling technologies; and implement a system for the mandatory elimination of
high-consumption, high-pollution and technologically backward techniques and
products.
Hong Kong is the largest source of foreign investment in the mainland.
Investment mainly goes to the real estate, garment, toy, electronic, watch and
clock and other manufacturing sectors. During the 11th Five-Year Plan period,
Hong Kong enterprises should avoid investing in high-pollution and
high-consumption projects while companies with investment in this type of
projects should undergo transformation or make use of new technologies to lower
energy consumption and reduce pollution. Compared with their mainland
counterparts, Hong Kong companies have a head start in green production
techniques. Enterprises with a good grasp of advanced environmental protection,
energy conservation and recycling technologies should be able to find great
opportunities on the mainland.
2. Optimization of Industrial Structure
The plan points out that developing advanced manufacturing industries, raising
the proportion of service industries and strengthening the building of basic
industries are important tasks for industrial restructuring. It is imperative to
draw up and perfect policies and measures for promoting the development of
service industries; vigorously develop such modern service sectors as finance,
insurance, logistics, information and legal services; develop industries with
strong potential demand such as culture, tourism and community services;
transform and upgrade traditional service industries through the application of
modern management methods and information technology; and raise the proportion
and standard of service industries. It is also necessary to promote trade in
services, continue to open up service markets and take over relocated
international modern service industries in an orderly manner.
The plan can be seen as good news for Hong Kong's service industries. Logistics,
real estate, legal service and banking are strong and well-developed sectors in
Hong Kong. The signing of CEPA has lowered the threshold for 18 service sectors,
giving Hong Kong's service industries and advantage over their foreign
counterparts. The rapid growth of the service sectors in the mainland during the
11th Five-Year Plan is bound to bring infinite opportunities to Hong Kong
service providers.
3. Promotion of Healthy Development of Urbanization
The proposal pointed out that the Pearl River Delta, Yangtze River Delta and
Bohai Rim area should continue to perform their functions in stimulating the
economic development of their hinterlands. It is also necessary to continue to
bring into play the roles of special economic zones and the Shanghai Pudong New
Area, and promote the development and opening up of the Tianjin Binhai New Area
and other regions with fairly good conditions in order to fuel regional economic
development.
4. Maintenance of Long-Term Prosperity and Stability in Hong Kong and Macau
According to the proposal, it is necessary to strengthen and promote exchanges
and cooperation with Hong Kong and Macau in trade and economy, science,
education, culture, health, sports and other fields; continue to implement CEPA
agreements with Hong Kong and Macau; and strengthen cooperation with Hong Kong
and Macau in infrastructure construction, industrial development, resource
utilization and environmental protection. Hong Kong should be supported in its
efforts to develop such service industries as finance, shipping, tourism and
information in order to maintain its status as an international financial, trade
and shipping centre.
As an important window and bridge for the mainland, Hong Kong has made important
contributions to China's economic and social development over the years. Hong
Kong enterprises have also been able to find tremendous room for development in
the process. The mainland has become Hong Kong's largest trading partner while
Hong Kong is the biggest investor on the mainland. Hong Kong's role as a bridge
has diminished following the opening of the mainland in recent years. However,
Hong Kong remains an international financial, trading and shipping centre and
its advantages in the service sectors remain strong. The central authorities
also hope to further strengthen cooperation and exchanges with Hong Kong and
achieve complementarity and common prosperity during the 11th Five-Year Plan
period.
December 23, 2005
China's status as the sixth-largest
economy in the world
Results of the first national economic census confirmed China's status as the
sixth-largest economy in the world, and indications are that it will soon be in
fourth place. More accurate analysis of the services sector showed that China
has been underreporting its economic output to the annual tune of US$284
billion. Some who had predicted that China would dethrone the US as number one
by the year 2040 moved the date to 2035.
In the nearer future, 3G licenses are expected to be issued as early as the
first quarter of 2006. The wireless communications technology is expected to
have as many as 23 million China users by end-2006, and over 100 million by the
time the Olympic flame reaches Beijing in 2008.
A senior official said developing futures markets to control prices for bulk
commodities such as metals was essential for competitiveness. With China's
seemingly insatiable appetite for raw materials, especially in the energy and
construction sectors, the government is embracing futures markets as a means of
keeping prices down. Copper has been a case in point, though a botched one.
Earlier this year, a government trader shorted a large amount of copper in hopes
that the price would drop. Instead, the value of copper continued to rise; now
those contracts are being called in, and the whereabouts of the trader are
unknown.
Finally, Christmas is coming in China. The officially atheist nation, which
nonetheless acknowledges several million Christians among its population, has
increasingly embraced the holiday as a means of boosting retail sales. Malls and
restaurants across the country are strewn with lights, Christmas trees, and
Santas. But in a way, China has been doing Christmas for years: it leads the
world in the production and export of many yuletide necessities, including
decorations, toys, and fake Christmas trees. Only now, lots more of these items
are selling at home as well.
December 14 - 19, 2005
World Trade Organization (WTO) Meeting - Hong Kong Police has shown high degree of restraint and
professionalism without using any deadly force to safeguard WTO delegates, to
protect life and properties. Many has worked 36 hours without rest. The demonstrators were well organized and well
trained to achieve maximum news coverage - Photo Highlights, please click on
the small picture for full view
December 1, 2005
 High
growth, low inflation underpin regional edge
Robust exports of goods and services coupled with strong consumer spending
propelled Hong Kong to a spectacular performance in the third quarter of 2005,
with GDP growth of 8.2 per cent year-on-year. The economy grew for the ninth
successive quarter, the longest growth cycle since the early 1990s. "The
stronger-than-expected expansion was characterised by a continued surge in
exports of goods and services, re-acceleration in consumer spending growth, and
sustained growth in machinery and equipment investment," explained the
Government economist K.C Kwok.
Total exports of goods recorded 12.8 per cent, marked by distinct growth in the
mainland and European Union markets, steady growth in the US and pick-up growth
in Japan, Taiwan, South Korea and Malaysia. External trade strong despite
external uncertainties such as high oil prices, rising US interest rates and
exchange rate movements, Hong Kong's external trade continued to be good.
"We have a situation of high growth and low inflation. Barring unforeseen
adverse developments, Hong Kong's external trade is likely to attain solid
growth through to the end of the year," added Mr Kwok.
Positive figures were also recorded at the Hong Kong International Airport (HKIA).
Boosted by strong inter/intra-region traffics, cargo throughput rose nearly 7
per cent year-on-year in October. Passenger numbers and aircraft movements grew
6.5 per cent and 12.2 per cent respectively over corresponding months of last
year.
The commercial director of Airport Authority Hong Kong, Hans Bakker, attributed
the strong performance to "Asia's buoyant economy and the continued strong
demand for exports from the Chinese mainland".
Trade fair advantage ending the year on a high note is the December 21 opening
of the AsiaWorld-Expo (AWE), which will further enhance the trade fair industry
in Hong Kong. The HK$2.35 billion (US$302 million), 70,000 square metre
exhibition centre is expected to complement the existing Hong Kong Convention
and Exhibition Centre (HKCEC) in Wanchai.
Both AWE and HKCEC have agreed to co-operate to maintain the edge in a highly
competitive business, where buyers would only go for the biggest and best shows
for a particular sector. Most would agree that despite regional competition,
Hong Kong can still leverage its brand and infrastructure.
Already, the Asiaworld-Expo calendar over the next year is packed with 32 events
starting in January. Nasdaq-listed trade facilitator Global Sources is
relocating two of its biggest fairs from Shanghai to AWE Hong Kong next year due
to space constraints.
Multilateral trade paves the way for SMEs worldwide
Li & Fung chairman Dr Victor K. Fung urges ministers to strengthen the WTO's
multilateral approach to trade regulation. The future of the global production
system, along with the gains it creates for consumers and everyone in the supply
chain, rests on the shoulders of negotiators at this month's Hong Kong
Ministerial Conference of the World Trade Organisation (WTO). That is the view
of Hong Kong business leader Dr Victor K. Fung, group chairman of Li& Fung, a
leading international trading, distribution and retailing group based in Hong
Kong.
At a recent UNESCAP conference in Macau, Dr Fung urged ministers to strengthen
the WTO's multilateral approach to trade regulation when they meet in Hong Kong
from December 13 -18. He said this was the only way to ensure the health of the
global production system and promote global prosperity.
Wide ranging benefits - Dr Fung, who is also chairman of the Airport Authority
Hong Kong, said the benefits of the modern global production system stem from
several factors:
* it disperses production across different factories in different countries
* developed countries can focus on design, branding, understanding the needs of
consumers and specialised activities that are knowledge-intensive
* developing countries can get into the game by performing just one or two
pieces of the chain
* consumers get higher quality, greater variety and lower prices because it is
possible to draw from the entire world as a production base
"The modern global production system lowers the barriers for entry for
developing countries, especially for small and medium-sized enterprises (SMEs)
worldwide. This has obvious implications for employment and economic
development", Dr Fung said.
"It is the multilateral system that enables each location around the world to
contribute according to its skills and capabilities, and to develop its own
competitive advantages."
World trade's 'best hope'. He voiced concern that proliferating bilateral
agreements would undermine the multilateral approach. He added that a
multilateral world trade system was the best hope of addressing the trade
liberalisation issues on the Doha agenda (named after the city in Qatar where
the current round of WTO talks started in 2001).
"With respect to market access and tariffs, multilateral solutions will help us
optimise the efficiency of the complex cross-border flows generated by dispersed
manufacturing. "Multilateralism democratises the global economy. There is indeed
a place for everyone."
 Shopper's
paradise now a haven for luxury
Louis Vuitton will open a state-of-the-art emporium in Central, adding to Hong
Kong's long list of luxury brand flagship stores. Hong Kong has a bright future
as a magnet for Chinese shoppers seeking the best of the world's luxury brands.
Sales of luxury branded goods are growing as fast as 20-30 per cent annually in
Hong Kong and China, estimates Carrie Yu, a partner and retail and consumer
leader for accountants PricewaterhouseCoopers (PwC).
"It is clear the Chinese elite are very luxury brand conscious and they like
travelling. Hong Kong is the number one destination for both business and
pleasure. I don't think this trend will change," she said. "Hong Kong is like
the Milan, Paris or New York of China. Shoppers are coming here for the bigger
collections, because the goods are obviously authentic, and the pricing is
better."
China has already become the world's third-largest market for luxury goods with
US$631 million in sales, driven by the emergence of a 100-million strong middle
class, according to PwC research. Last year, mainland visitors to Hong Kong
surged 44.6 per cent to over 12 million and accounted for 12 per cent of the
city's retail sales, said Conway Lee, an Ernst & Young China partner and
industry leader for retail and consumer products.
Leading brands increase presence - Mainland visitors buy 12 per cent of luxury
branded products sold in Hong Kong, says Conway Lee, an Ernst & Young partner
The tremendous growth opportunities are recognised by the world's leading luxury
brands, which have been quick to open or expand their stores in Hong Kong as
well as pushing into China. "In the past couple of years most of these flagship
stores in Hong Kong have had a facelift," said PwC's Ms Yu. "The flagship stores
are to attract consumers and also showcase their brands to China as a whole."
Louis Vuitton (LVMH) is the latest of the big names to undergo a store revamp in
Hong Kong. The French giant plans to open a state-of-the-art, two-storey
emporium as a leading attraction in Central's swanky Landmark complex. The
Landmark's roster of top names, which includes Gucci, Fendi and Dior, was given
another big boost with the September opening of a HK$100 million (US$12.8
million) Harvey Nichols store, the British luxury brand retailer's first in Hong
Kong. Also stepping into the Landmark this year was French luxury shoe brand
Roger Vivier, which opened its first store outside Paris in the Hong Kong mall
this year.
Meanwhile, Italian fashion house Roberto Cavalli opened a flagship store in
Central's ifc mall in June, and Italian men's personal care products maker Acca
Kappa set up in Times Square, Causeway Bay, in July. There's no sign that Hong
Kong's growth as a luxury brand hub is running out of steam, said Ernst &
Young's Mr Lee.
Leveraging the Hong Kong image - "Hong Kong is an international financial centre
and an advanced, business-minded, materialistic city. It provides a distinct
image to luxury brand companies setting up shop in Hong Kong and it signals to
mainland Chinese that they are purchasing a world renowned luxury brand," he
said.
The luxury sector has also been investing heavily in China, but it would be a
mistake to think that longer term Hong Kong is going to lose out to China in the
sector, says Annie Bingham, a vice-president of executive search firm AT
Kearney.
"Hong Kong will always be the jewel in China's crown," said Ms Bingham who
specialises in the luxury goods sector and is herself a former senior manager
for names like Laura Ashley, Chanel and Yves Saint Laurent. "I think there is
enough business to go around. There's this voracious desire for luxury today."
Hong Kong also has the edge in terms of its world-class service quality. How
Hong Kong treats its VIPs is "way above other countries," said Paris-based Ms
Bingham.
During a recent trip to Hong Kong she was particularly impressed by Lane
Crawford's new HK$200 million (US$25.7 million) 7,600 sq metre flagship store at
Two ifc in Central, which features a host of apparel collections from leading
brand names like Paco Rabanne and Lanvin.
The Hong Kong and China stories are "all interrelated", says PwC's Ms Yu. Many
Chinese consumers only go window shopping at luxury brand stores on the
mainland, which has a 30 per cent luxury goods tax. They wait to make their
actual purchases in Hong Kong which is a duty-free port.
Hong Kong's status as a regional aviation hub means it is ideally placed to also
capitalise on the strong demand growth elsewhere in Asia for luxury products.
Indeed, Hong Kong International Airport has become a haven for luxury shoppers,
many of them Chinese travelers transiting through Hong Kong to take flights to
the West. "Most of the luxury brands have stores there -- it is unique in the
world and has a lot of traffic," said Ms Yu.
Rising Gold Price Fuels Sales of Gold
Products
Demand for gold products has rocketed in recent weeks on the mainland, according
to TDC's Beijing office. All kinds of gold products are selling hot. Gold bars,
gold coins, gold ornaments, and solid and karat gold jewellery all have their
followings. The market is red hot.
Gold price has recently surged to nearly US$500 an ounce, a 24-year high. Gold
bars, coins and ornaments are sold in large quantities mainly as investment
products, and soaring gold price in the past few years has given investors
handsome returns and increased their confidence in the precious metal. Gold as a
rare commodity is an excellent tool for fighting inflation and is also a safety
haven for investment funds.
Pure gold jewellery has always carried weight in the mainland market. Product
innovation has given solid gold jewellery new perspectives and provided a
greater choice for consumers who mainly make purchases to hedge against
inflation and accumulate wealth. Chinese animal horoscope gold bars, Olympic
gold bars and Shenzhou 6 gold bars are keenly sought after by consumers and
investors. The current market price is Rmb138.00/g for solid gold and
Rmb142.00/g for 999 gold.
The market share of karat gold is steadily growing. The reason is that karat
gold has many strong points, such as malleability, hardness and variety of
colours, which can be turned to good account in the creation of beautiful and
complicated mesh, petal, tassel, lace and other designs.
Apart from unique shapes and designs, the beautiful colours of karat gold, such
as rose gold, pink gold, blue gold and purple gold, made by mixing solid gold
with alloy metals are also attractive to consumers. Personalised consumption has
fueled the sale of karat gold jewellery although the efforts of the World Gold
Council in promoting karat gold are not to be ignored. The prices of karat gold
jewellery itsms are dependent on the technology involved and may vary between
Rmb100 and Rmb50,000.
The popularity of gold products deserves the attention of jewellers.
October 29, 2005
By invitation of the United States Pacific
Fleet, we have participated in the daylight embark aboard USS Nimitz Aircraft
Carrier cruising 300+ miles outside of the Hawaiian island via C-2 Greyhound. It
is an exception experience meeting with Captain Ted Branch of USS Nimitz (the
size of more than 3 football field) and 1,000s of professional crews. The
following is the note of interest of USS Nimitz - NIMITZ reaches over 18
stories high from to keel to the top of the mast, Eight steam turbine generators
each produce 8,000 kilowatts of electrical power, enough to serve a small city,
NIMITZ` Food Services Department provides 18000 - 20000 meals a day, NIMITZ can
stock at least 90 days of refrigerated and dry storage goods, NIMITZ` two barber
shops trim over 1,500 heads each week, The Post Office processes more than one
million pounds of mail each year, The ship has a fully equipped dental facility,
staffed by five dentists, The Medical Department is manned by six doctors
including a surgeon, who provide everything from surgery to hydro-therapy. The
ship also features an 80 - bed hospital ward and Four destilling units enable
NIMITZ engineers to make over 400,000 gallons of fresh water a day, for use by
the propulsion plants, catapults and crew (more go to the Photo Album Page)
October 3, 2005
 Hong
Kong Booming economy abuzz with opportunity
Hong Kong Disneyland is opened to much excitement and a forecast of 5.6 million
visitors in the first year. (From right) Walt Disney's Bob Iger and Michael
Eisner with China's Vice-President Zeng Qinghong and HKSAR Chief Executive
Donald Tsang. The second half of the year promises exciting times ahead for Hong
Kong's already humming economy. Hong Kong Disneyland opened to much fanfare on
September 12; two five star hotels opened in Central to surging visitor arrivals
and a booming convention business; while international brands and new department
stores scramble to get a slice of the sizzling hot retail pie.
No sooner had Disney's Magic Kingdom opened its gates, a second theme park for
Hong Kong was announced by its chairman George Mitchell. He was reported in The
Standard saying that the new addition would transform the site into a "true
multi-day destination resort". Much is expected from Disney's theme park, which
is forecast to attract 5.6 million visitors in the first year of business. As
one international fund manager noted: "Disneyland could be the catalyst that
drives the market higher." (Buckle up for a ride of a lifetime)
September saw the opening of two new luxury hotels in the Central financial
district - the six star Four Seasons and the hip Landmark Mandarin Hotel. The
hotel sector has not seen it this good since the peak in 1996. Occupancy rates
are over 80 per cent across all classes of hotels in the city so far this year,
and analysts are tipping even brisker business in the second half.
"There are so many good stories to tell," said James Lu, executive director of
the Hong Kong Hotels Association. (Luxury hotels rise to meet strong economic
growth) The influx of visitors to Hong Kong is one of the good news stories. A
record 2.07 million people visited Hong Kong in July, up nearly 4 per cent
compared to previous July.
Long haul travellers are driving the growth and filling up hotel rooms. There
has been a 20 per cent surge across all long haul markets from Europe, Africa
and the Middle East (up 27.5 per cent) and from the Americas (up 8 per cent).
HKTB anticipates over 23 million visitors to Hong Kong this year, a 7 per cent
growth from last year. The general feeling among hoteliers is that 2005 will be
the best time after the dizzying days of 1996. "There is a potential to do
better than 1996," said one hotelier.
Indeed, William Mackay from the waterfront Four Seasons - where corporate rates
start from HK$3,300 (US$424) for a 484 sq ft standard room - is confident of
heavy bookings as several trade shows and global conferences such as December's
World Trade Organization ministerial conference will be held in Hong Kong.
Hong Kong's retail sector rose faster than expected in July as the strong
economy buoyed consumer demand. Hong Kong's July retail sales volume grew 5.6
per cent from a year earlier to HK$17.4 billion (US$2.2 billion). Economists
said they expect the positive momentum to continue for the rest of the year
fuelled by the drop in unemployment, the ripple effect from the "feel good
factor" of the Disney launch, rising interest rates and the vibrant inbound
tourism.
Iconic London store Harvey Nichols took this opportunity to open its first Asian
store right in the heart of Central. Dickson Poon, chairman of Dickson Concepts
(International) which holds the exclusive rights to develop the "Harvey Nicks"
brand in Hong Kong, said the opening of the HK$100 million (US$12.8 million)
store was one month ahead of schedule.
Harvey Nichols, like New York fashion label Ira von Furstenberg and French
luxury footwear Roger Vivier which have just set up retail outlets in Central,
is hoping to capitalise on the influx of mainland visitors who will be visiting
Hong Kong Disneyland. Mr Poon is very optimistic about the retail market in Hong
Kong, citing double-digit growth since April in his stable of international
brand names that include Ralph Lauren, Bulgari, Chopard and Coach.
World's freest economy confirmed, With overwhelmingly positive upturns in almost
all sectors of the economy, it is no wonder that Hong Kong was once again voted
the world's freest economy in the Economic Freedom of the World: 2005 Annual
Report released by Canada's Fraser Institute and the US' Cato Institute.
Compared to 127 economies, Hong Kong came up tops in "freedom to trade
internationally" and "regulation of credit, labour and business", and second in
"size of government".
Hong Kong Luxury hotels rise to meet strong economic growth
Hong Kong is witnessing the splashy opening
of two new five-star hotels, part of a rapid build out of the sector to cater
for a surge in mainland tourists and strong growth in business travelers. The
new Landmark Mandarin Oriental and the Four Seasons will offer the ultimate in
high-end luxury in Hong Kong's Central district. But they are merely the
headline acts in a wider story of how Hong Kong has responded with remarkable
speed to a rising tide of mainland tourists following Beijing's easing of
restrictions on individual travel.
According to Hong Kong Tourism Board data, the number of hotels in Hong Kong
will jump from 101 with a total of 39,128 rooms at the end of 2004, to 131
hotels with 53,152 by end 2006. "The rising number of hotels is attributable to
the phenomenal spending power of the Chinese mainlanders coming to Hong Kong,"
said Tony Chan, a property analyst and executive director of Vigers Appraisal
and Consulting. Strong economic growth in Hong Kong and China in the past two
years has fuelled a boom in hotel building, which requires a large commitment of
capital and long payback times.
William Mackay, vice-president and general manager of Four Seasons Hotels and
Resorts, says Hong Kong's hotel industry is in full swing. "The industry in Hong
Kong was severely battered by the Asian financial crisis and then SARS. Now it
is in the process of making up for lost time in capital investment," said
William Mackay, vice-president and general manager of Four Seasons Hotels and
Resorts. "It has been 15 years since a major hotel was launched in Hong Kong.
The industry has recovered extraordinarily fast."
Chinese people love to shop on their holidays - and a growing number have the
desire and cash to do it in the myriad of classy malls that stud Hong Kong,
providing a ready-made client-base for hoteliers. Visitor arrivals in the city
are projected to rise from 23 million this year to 27 million next year, with
mainlanders accounting for much of the growth, said James Lu, executive director
of the Hong Kong Hotels Association. But there has also been strong growth in
business travelers coming to the city as the outsourcing-to-China story gathers
pace. This is the segment which Four Seasons is mainly aiming at, said Mr.
Mackay.
"Hong Kong is a major worldwide city. I think there is a very bright future
because of the extraordinary growth in China," he said. There are some concerns
that the rush of new hotels coming on stream could outpace the growth of visitor
arrivals. That could put pressure on room charges and occupancy rates, which
have been at a high 83 per cent across all classes of hotels in the city this
year. But there are plenty of future tourism growth drivers around, ranging from
the likely rise of Hong Kong as a hub for low cost airlines to nearby Macau's
meteoric rise as a centre for leisure and gaming.
"There are so many good stories to tell," Mr. Lu said. Most recently there has
been opening of Disneyland in September, which should spur the next leg of
growth in mainland tourist arrivals. The individual visitors' scheme has been
rapidly extended across the country since it was introduced two years ago but
"there are still more provinces asking for their people to be allowed to come
down here," said Mr. Chan. "Their spending power is very high. They are looking
for brand names, leather goods, jewellery and gold watches."
Visitors all need somewhere to stay the night and back in 2003, the government
was worried that the hotel sector would be overwhelmed by the influx of mainland
visitors. It even considered turning some government flats into guesthouses.
Private sector rallies. But, with government encouragement, there has been a
remarkable response from the private sector. Many of the new hotels are located
in non-prime areas in Kowloon and the New Territories, sometimes on sites which
are converted from disused industrial premises, underlining Hong Kong's move up
the value-added ladder from a manufacturing to a services economy.
The boom in building hotels which can take an average of 10 years to repay the
capital invested has surprised some analysts. "In terms of cash flow, investing
in a hotel is not an ideal choice for a developer," Mr. Chan said. "You can
build and sell offices and residential units quickly but hotels lock up your
upfront investment in land and building costs. Then you have to recoup your
investment slowly through room charges, food and beverage and shopping."
Some of the new hotels are as a result of incentives from Hong Kong's Town
Planning Board, which has encouraged developers to include hotels in residential
housing projects or industrial site conversions. Hong Kong's solid,
business-friendly legal structure and government machinery have also encouraged
the investment in hotels by keeping developers' options open in terms of selling
the project rather than a lengthy wait for payback.
Innovative business planning. Some innovative business planning has gone into
the Four Seasons and the Landmark Mandarin Oriental - both are trying the new
concept of attaching a hotel to a shopping mall packed with luxury brand name
stores. The proximity of the mall is expected to attract shopping-minded guests,
while the five-star hotel, in turn, adds a touch of extra class and draws more
shoppers to the mall.
The Landmark mall is charging rents of HK$200 to HK$400 (US$26 - $51) per square
foot per month for retail space but, if hotel is a success, Mr. Chan believes
that could double. "This is an experiment that will certainly work in the minds
of the operators," he said.
The Four Seasons Hotel is also tapping into a new trend among upper-end hotel
guests who are "blurring the lines" between business trips and vacations, added
Mr. Mackay. Guests on business are often adding some extra leisure time to their
trips while holiday makers nowadays do not want to completely lose touch with
the office. The trend explains why the Four Seasons in Hong Kong has gone to the
expense of including one of the most sophisticated urban spas in Asia, as well
as equipping rooms with top-line communications facilities, said Mr. Mackay.
October 1, 2005
 New China celebrates 56th founding
anniversary
On October 1, 2005, the People's Republic of China, or "New China" as it is
fondly referred to by the entire Chinese people, turns 56 years old.
With a population counted at 1.3 billion on the first day of this year and a
land mass of 9.6 million square kilometers, plus 4.73 million square kilometers
of territorial waters, China is the largest developing country in the world.
For China, which takes pride in its civilization that dates from 5,000 years
ago, October 1, 1949 marked the beginning of development in real sense. For the
Chinese people comprising 56 ethnic groups, the day meant freedom, once and for
all, from humiliation and starvation, the beginning of a historic long march
toward stability and prosperity.
For a whole century before the late Chairman Mao Zedong pronounced the birth of
New China, the Chinese nation was tormented by foreign invasions and wars fought
among warlords for supremacy over the country. The humiliation the nation
suffered was so bitter that Deji Cholga, a 7th grader at Beijing's Huaxia Girls'
School, says she hates to study that part of Chinese history.
The part of the nation's history the teenage girl feels unpleasant to learn
covered the Opium War (1840), in which the United Kingdom, with just 20,000
troops and 50 gunboats, defeated the antiquated armies of the Qing (1644-1911),
China's last feudal dynasty, which boasted 900,000 men. Though the victim of
this armed aggression, China was forced to pay the aggressor 21 million taels of
silver in "war reparation" and opened five trading ports. Hong Kong was ceded to
Britain, to be returned to China in 1997.
Even more bitter were memories of Japanese aggression against China. In 1931,
Japan seized the entire northeast China, an area of 800,000 square kilometers,
where it set up a puppet regime known as "Manchoukuo." And in late 1937,
Japanese troops massacred more than 300,000 disarmed Chinese soldiers and
civilians in Nanjing, then the national capital, in just a few weeks after the
city fell.
Foreign aggression went hand-in-hand with internal turmoil, making it impossible
for China to develop. "In the 200 years from 1750 to 1950," says Prof. Hu Angang
of the prestigious Tsinghua University in Beijing, "much of the world was
striving for industrialization, but the Chinese economy stood stagnant, and the
country was rated as one of the weakest in the world."
Prof. Hu is known for his study of China's national conditions. "Old China was
unable to industrialize because it did not have a strong enough government to
defend the country and keep society in order," he says. Stability, the
prerequisite for achievement of prosperity, was a long-cherished dream of the
Chinese people. The dream has come true in New China. That, in part, explains
why the Chinese people support the Communist Party of China, the ruling party
since 1949. Says Zhou Jun, an amateur historian and TV worker in Chengdu,
capital of Southwest China's Sichuan Province, "The Party has done what all
governments before 1949 failed to do."
Stability and prosperity can in no way be realized without democracy. By
proceeding from its own conditions, New China practices the "system of
multi-party cooperation under the leadership of the Communist Party of China,"
which has proved effective in getting all patriots and their political groupings
actively involved in national development.
How the name of New China, the People's Republic of China, was chosen highlights
the extent to which this "socialist democracy" has been practiced. It was
adopted in September 1949, on proposal from non-Communist delegates to a
conference called by the Communist Party to make preparations for the founding
of the new government.
"It was the outcome of democratic consultation," says Lu Guoqing, a historian.
Dai Huang, a retired journalist who witnessed the celebrations of the founding
of the People's Republic on October 1, 1949, says he loves the new name chosen
for the country. "After two millenniums of feudal rule and a whole century of
imperialist aggression, China finally made itself a republic of, and certainly
for and by, the people."
And democratic consultation and multi-party cooperation under the leadership of
the Communist Party have become institutionalized. Political consultation takes
the organization form of the Chinese People's Political Consultative Conference,
which gathers representatives of all the eight non-Communist political parties
and non-party figures aside from those from CPC.
The non-Communist political parities all have representation in the National
People's Congress, the supreme organ of state power, and local people's
congresses. Of the nearly 3,000 deputies to the current 10th NPC, deputies from
non-Communist parties and patriots without party affiliation account for 16.09%,
and workers and farmers take 18.46% of the seats.
All the 55 ethnic minorities have deputies to the NPC, who take 13.91% of the
seats, although their combined population account for less than 9% of the
national total. And their development and prosperity have always been high on
the agenda of the leaders of the People's Republic.
Before 1949, central governments of different periods each had their own
policies and systems in place for administering ethnic affairs. But none of
them, whether set up by the Han people or by ethnic minorities, secured any
measure of equality among ethnic groups, says Prof. Chen Liankai of the Central
Ethnicity University.
The founding of New China marked the beginning of a new era featuring equality,
unity and mutual assistance among all ethnic groups in the country. People of
ethnic minority groups have the legal right to self-government in areas where
they account for more than one-third of the local population. To date, China has
five provincial-level autonomous regions, 30 autonomous prefectures, 120
autonomous counties (or "banners" in areas with ethnic Mongolians living in
compact communities), and more than 1,500 autonomous townships. Among China's 55
ethnic minority groups, 45 have set up autonomous areas of their own.
Ethnic minority areas, mostly outlying with relatively difficult natural
conditions, are not as developed like areas where Han Chinese are the majority.
To promote their development, the central government has allowed a whole range
of policy privileges to help them stand on their own while providing them with
financial, technological and other assistance.
The policy has worked. One example is Inner Mongolia Autonomous Region. Since
1996, the region has reported faster growths than the national average in gross
domestic products (GDP), per capita disposable income for urban residents, per
capita net income for farmers and herders, and local government revenue.
Ensured by democracy, stability has ensured economic growth and social progress
nationwide. According to the National Bureau of Statistics, China's GDP has
grown at annual rate greater than 9% since 1979, reaching 13,651.5 billion yuan
(8.27 yuan against the U.S. dollar) in 2004, nearly double that of 1998. China
is producing enough to feed one fifth of the world's population though its
arable land accounts for only 7% of the world's total.
Thanks to increased government inputs and efforts of various social groups,
China has reduced its rural population living in absolute poverty - those with a
per capita income of less than 668 yuan - from 250 million in 1979 to 26.1
million in 2004.
The Chinese people have become richer, particularly in the past 25 years. In
2004, net incomes for rural residents averaged 2,936 yuan per capita, up from
133 yuan in 1978. Per capita disposable incomes for city people increased from
343 yuan to 9,422 yuan during the same 27-year period.
The country has won recognition as one of the fastest growing economies in the
world. It is now pressing ahead with implementation of what the central
government calls a "scientific outlook on development" - meaning an all-round,
well-balanced and sustainable development, a development that truly serves the
vital interests of the Chinese people.
Despite these achievements, the Chinese people know that many challenges lie
ahead. The Chinese economy has maintained strong growth momentum, but the
quality of economic operation needs improvement, says Li Deshui, director of the
National Bureau of Statistics. Living standards have kept improving, but the gap
in development is widening between the hinterland and coastal areas.
China's legal and social security systems need improvements to adapt to the
changing economic and social conditions. People are increasingly aware that on
no account must economic development be achieved at the expense of the
environment. Says Hu Angang, "China is doing something without precedence in
human history."
Meanwhile, the Chinese people and their leaders are more determined than ever to
build the country into a more prosperous, more democratic society on the basis
of what they have achieved since 1949. When New China celebrates its centenary
in the mid-21st century, as predicted by Professor Hu and other experts, it will
become as developed as an average developed country.
September 23, 2005
Hong Kong's High quality or low quality? by Bernard
Chan. Hong Kong SAR
Hello. One of the biggest events in the last few weeks here in Hong Kong has
been the opening of the new Disneyland. Most people seem to like it. But, as
always in Hong Kong, there are complaints. In particular, people have voiced
concerns about the behaviour of some of the Mainland visitors at the park.
People are asking whether we are lowering our standards in order to attract more
low-income tourists to our city.
Meanwhile, of course, our designer label shops, medicine outlets, jewellery
stores and many other retailers are doing a huge amount of business, thanks to
the large number of high-income tourists we have these days. And where are many
of them from? That's right they're also from the Mainland.
There is an interesting question here. Should Hong Kong go for quantity, or
quality? Should we aim for the mass market, or should we be more exclusive? This
is not simply about tourism. It's about our whole identity and our economic
role. What sort of businesses do we want here? What sort of work force will they
need? What sort of city will those workers want to live in?
If we want to decide what sort of place we want to be, then maybe we also have
to decide what sort of place we will not be. For example, if we want to be
high-quality, we can't be low-cost.
During the summer, I read an article in Time magazine in which a Hong Kong-based
journalist said we should look to Monte Carlo rather than Disney. He was saying
we should capitalize on our up-market, international, exclusive side. He
mentioned our low taxes, our unique physical environment and our international
population.
I think many people would agree that Hong Kong needs to go in the up-market
direction. We should aim to attract high-value service industries, and forget
about labour-intensive activities. We must aim to attract highly skilled people
from around the world, not the unskilled or uneducated. This is essentially what
we mean when we say we want to be a world city like New York or London.
However, we have a serious contradiction here. The Government also wants to
encourage the creation of jobs for the less-skilled. That is one of the reasons
we have welcomed large-scale Mainland tourism through Disney. And it is
considered one of the benefits of infrastructure projects and other development.
If we look at New York and London, we will see that in both cities in recent
decades, the population has become younger, better educated and more
international than the national average. The elderly and less-skilled have moved
to cheaper areas, while younger, qualified people especially foreigners have
come in. In Hong Kong, it¡¦s different. Over the last few decades, we have seen
many educated middle-class people leave, and more unskilled people arrive.
So how are we supposed to go up-market, while at the same time accommodating our
less skilled workers?
We cannot carry on building Disneylands or more and more infrastructure projects
in an attempt to create jobs for them. First of all, these things cost money.
Secondly, they impose other costs. More mass tourism means more traffic and more
crowds. More construction means more environmental damage. This is a recipe for
going down-market ¡V we would drive the high-value service industries away
through high taxes and poor quality of life.
I don't think there is a quick fix for this problem. But I do think that we will
solve it gradually in the longer term.
For example, we should slowly see the benefits of educational reform in the
coming years. This is an ongoing process, but there are already some early signs
that our children are doing better at school in key areas. At the same time, the
older, less-skilled workers are growing closer to retirement. So time will
gradually help to upgrade the skills of our work force.
Also, Mainland living standards are far higher than they used to be. There will
come a time when it will make sense for low income earners in Hong Kong to think
about moving somewhere more affordable, especially if they can take some of the
benefits of Hong Kong residency with them.
And there is a growing recognition that we need to actively attract skilled and
talented people from the Mainland and the rest of the world. We need to get the
message across that smart, energetic, creative and entrepreneurial people will
create jobs, not take them.
These are quite sensitive subjects, but we need to face them openly just as we
need to address other difficult issues if we want to be a more attractive place
to live in and to do business in.
We have to get to grips with the issue of food. We have been through a lot of
food scares recently. People are scared of eating pork, chicken and fish. We
need to source our food from places with good inspection systems. We need to
think about better consumer protection and things like food product labeling.
These might mean higher taxes or higher food prices. But if we want to keep
moving up, that's a price we have to pay.
The same applies to issues like pollution and overall quality of life. If we
want cleaner air, it will cost money. Our manufacturing base in the Pearl River
Delta is an extension of our economy. If we want to cut the emissions of those
factories, we will pay for it one way or another. The factories¡¦ profits might
go down, and so their head offices here might pay less tax. Or maybe they will
pay lower dividends into your Mandatory Provident Fund account.
If we want more green space and less crowding in our urban areas, we have to
accept that the Government will raise less revenue from land sales and land
premiums. That means all else being equal visible taxes might have to go up. We
will have to pay for a nicer environment.
The same applies to our education system, our health care and other public
facilities like law and order. For example, enforcing new laws against smoking
in public places, and therefore becoming China's first smoke-free city. If we
want more quality, it will cost us money.
All of this points to Hong Kong continuing to have a high cost base. Like New
York or London, this city is not going to be a cheap location. Some people claim
our cost base is too high. And of course, they are right. It is too high, if you
are trying to make a profit or make a living ¡V in low-value, labor-intensive
activities.
But for people who want premium service, premium skills and a premium living
environment, it will be good value. Many richer Mainlanders come to Hong Kong to
buy all sorts of products and services from babies milk powder to gold. They pay
more here, but they have confidence in the quality of what they are buying.
That's what Hong Kong as a whole needs to be like in the future.
The background to all this is the huge changes happening outside Hong Kong.
These changes are beyond our control. We are integrating with the Mainland at
the same time that China is integrating with the rest of the world. We have no
choice but to keep going up-market. It means continuing change for our economy
and our society.
If we think of Hong Kong as a complete, separate economy, this might seem like a
threat, or at least a terrible challenge. How will the unskilled make a living?
How can we stay competitive? But if we see Hong Kong as a wealthy neighborhood
of a larger and more varied region, then the way ahead seems clearer.
We will specialize in the things we do best, and do better than anywhere else.
We won't do the other things. As for the tourists coming to Disney, they will
probably still be coming but more of them will be going off to the designer
label shops afterwards.
September 21, 2005
A Trip of Assurance -
President Hu Jintao’s North American tour drives home the idea that China is
committed to peaceful development -
By ZHANG GUOQING, Institute of American Studies, Chinese Academy of Social
Sciences
Is China a “threat” or an “opportunity?” Is it a “partner” or a “rival?” These
are the questions that have not only been haunting Sino-U.S. relations, but also
casting a shadow that subtly affects other international relations as well as
the economic development of the entire world.
Evaluating China’s development in a historical light remains a thorny issue for
some economists. “The best comparison for what’s happening [in China] is
probably 19th-century America, rather than an East Asian nation like Japan or
South Korea that recently underwent a similar development,” said Arthur Kroeber,
Managing Editor of China Economics Quarterly. “Both are continental-size
economies with immense manufacturing capacities and vast pools of labor.”
Kroeber pointed out that the United States was the biggest recipient of global
capital a century ago and many complained that cheap U.S. labor threatened
Europe’s industries. “Now it is China’s turn,” he said. Obviously, to those who
approach development in a rational manner, China’s extraordinary development is
not a surprise, let alone a threat or a challenge.
In any case, China’s economic growth benefits most of its neighbors, rather than
undermining the development of its neighboring countries and regions. As noted
by some foreign experts, China’s diplomatic policies in recent years have been
increasingly geared toward shaping good neighborly relations with others, which
has paved the way for its peaceful development.
In fact, China’s neighbors have eagerly embraced this growth. While reiterating
its belief that China’s economic takeoff is good for the organization, the
Association for Southeast Asian Nations (ASEAN) is seeking to further boost
economic linkages with the prospering neighbor, though it regarded China as a
potential threat a few years ago.
As the Chinese saying goes, “the onlookers always have a better picture.” Bruce
Murray of the Asian Development Bank (ADB) believes that even Asian countries
worried about China’s skyrocketing exports have actually benefited a lot from
the country’s huge consumption capacity. Needless to say, China is a major
source of motivation for most Asian countries trying to rev up their economies.
It is playing an ever-greater role in promoting regional economic development
and expanding employment.
History tells us that China’s prosperity is conducive to stability in the
region. According to David W. Kearn, a U.S. scholar, it is quite unnecessary to
worry about China’s growth, as historical experience has shown that a strong
China constitutes the basis for Asian stability. It is his belief that a weak
China tends to result in turbulence in Asia, whereas the continent always
remains in good order when China is strong and stable. It has been widely noted
that China has generally maintained peace and good order while making great
strides forward in the economic field, a prominent feature of China’s peaceful
development.
As a matter of fact, China does not mean to ascend to supremacy in the world
through its development. Materializing development in a gradual manner, China
shares its growth and prosperity with all of its surrounding countries. Over the
past two decades, China resolved territory disputes with Afghanistan, Myanmar,
Kazakhstan, Kyrgyzstan, Mongolia, Nepal, Pakistan and Russia. It also normalized
the relationship with Viet Nam and demarcated the border between them.
What is worthy of serious thought is that further enhanced relations between
China and other Asia-Pacific nations have exerted subtle influence over the
Sino-U.S. relationship. Philippine President Gloria Arroyo once said that
Beijing is also an ally of the Philippines, like Washington. According to
Arroyo, this assertion is based on the decisive role that China has played in
economics and security affairs in the countries of the region, including the
Philippines. Given this, the Philippines must associate with China to influence
Beijing’s actions, thereby ensuring that China will become a friend rather than
an enemy of the international community. Despite the slew of people who
stubbornly hold onto the “China threat” view or are doubtful about China’s
peaceful development, Asian countries have chosen to take a balanced approach
toward China and the United States instead of constraining China’s development.
Furthermore, China’s peaceful development has delivered benefits to the world.
The economic boom in China has already helped Japan emerge from its
longest-lasting economic downturn since World War II. It has also been helpful
to the United States in its recovery from a recent economic slowdown. Consumers,
Asians and Americans alike, are all entitled to the tangible benefits brought
about by China’s development. Morgan Stanley, the large global financial
services firm, estimates that U.S. shoppers have saved $100 billion because of
low-priced clothes, shoes and home appliances imported from China.
There is no doubt that China’s peaceful development contributes positively to
the world’s economic growth through international trade. Being committed to its
opening-up policy, China has attracted huge amounts of foreign direct
investment. More significantly, it has set an example for the developing
countries eager to move on.
In terms of economic growth and poverty reduction, China has also made
remarkable contributions to the world. Its impressive development kindles hope
among the temporarily underdeveloped countries. The Canadian newspaper The Globe
and Mail reported that “since Deng Xiaoping executed China’s historic U-turn at
a session of the Eleventh Central Committee of the Communist Party [of China] in
1978, 270 million people have climbed out of poverty-the most successful
development project in history, and a slap in the face for those who say
globalization helps only the rich.”
Most importantly, China has evolved from a closed, mediocre country into one
that is among the most vigorous in the region in the past two decades. One of
its dramatic changes is that today’s China has demonstrated a genuine will to
join the international community. It is trying not only to adapt its domestic
economic regimes and laws to international norms, but also to become an active
participant in many international or transnational organizations. In the past
few years, China has played a pivotal role in promoting WTO negotiations and UN
reforms.
China will never undercut its neighboring countries or the United States in its
pursuit of development. It is a well-established fact that the international
economy is not a zero-sum game. All the other countries, including the United
States, can reap benefits from China’s economic development. It is interesting
to note that China, as the third largest trading partner of the United States
after Canada and Mexico, has dispelled the long-standing myth that the biggest
trading partners of the United States are all its close political and military
allies. “China is neither close ally nor confirmed adversary,” wrote Washington
Post columnist Robert J. Samuelson.
It is plain enough that China has mainly focused its attention on economic
development. It has no intention to compete with the United States for world
supremacy. The last thing that it will ever do is to pose a threat to other
countries. In a sense, a correct and rational perception of China’s peaceful
development not only bears on the sound development of Sino-U.S. relations, but
will also determine whether the United States can fully seize the opportunities
that China has brought along.
James Sasser, the former U.S. Ambassador to China, has some insightful ideas on
this point. It is his belief that the United States can manage China’s rise well
if it is willing to do so, and if it wants to treat China as an enemy, it will
become an enemy. Former U.S. President Bill Clinton also pointed out that
compared with a rich and democratic China, the United States has more to fear
from a poor and weak China. In other words, China’s peaceful development poses
no threat, but offers opportunities. It is a motive force, rather than a
headache, for the region and the world.
In light of this, President Hu Jintao’s visit to the United States, Canada and
Mexico helps solve problems, strengthens cooperation, and gives these countries
an in-depth and objective picture of China’s peaceful development.
For the politicians and entrepreneurs in the United States, it is irrational to
deal with China by military or improper political means. The healthy development
of Sino-U.S. relations will not only bring about a win-win result for all
trading partners, including China and the United States, but is also of
paramount significance to a global situation replete with uncertainties. Hu’s
visit to North America marks a new start in further strengthening Sino-U.S. ties
and in turning China’s peaceful development into a positive element of those
ties.
September 7, 2005
Kissinger: Stronger China
contributes to world peace, prosperity
Former US Secretary of State Henry Kissinger said on Tuesday that he disagreed
with the assertion that a stronger China could pose a threat to regional peace
and stability.
In a joint interview with Xinhua and China Central Television, Kissinger said he
does not agree with those who made the above presumption of "China threat."
"Fundamentally, China is making a contribution to international peace and
prosperity."
"China poses no challenges to the United States militarily, there are challenges
presented by its rapid economic development. But they can be dealt with on a
competitive basis," he noted.
Kissinger said that when he visited China in 1971, nobody would believe that
China could develop its industry so quickly and could become competitive on the
international export market.
"Inevitably, this produces some competition. On the other hand, it also produces
enormous opportunities," he said. "There are American companies that have
invested tens of billions of dollars in China. They would have not done that if
they also think this is not in their interests."
When asked to comment on China's acquisition of American companies, Kissinger
said there were some discussions in the United States about the acquisition, but
"that's not a key problem."
The key issue that the United States and China need to discuss is the supply of
energy and the growing demand for energy worldwide, he said, adding that the
United States, China, India and many other countries are major contributors to
the present supply challenge.
"I believe that China and the US should discuss issues like that in order to
contribute to an evolution of and to the understanding of the problem," he went
on to say.
As to the US-China relations, Kissinger said that fundamentally the relationship
is good although it has complications that are caused in large part by the fact
that the international situation is changing so rapidly.
"The fundamental problem is that the US is the most advanced developed country,
China is the most rapidly advancing developing country," he said. "Countries
with such different background sometimes don't come immediately to the same
point of view."
"Therefore," he continued, "contact between our leaders is essential and should
be even more regular than it has been."
Citing the six-party talks on the nuclear issue of the Korean Peninsula,
Kissinger said China and the United States have cooperated closely on some
international issues.
"There are issues like proliferation ... in which the two sides have very
important contacts. Contributions of the Chinese side from the American point of
view have been very constructive," he explained.
"Up to now, I have been in contact with eight American administrations. No
matter how they started, they would conclude with close relations with China
that are essential for the world peace, development and progress," he stressed.
Kissinger suggested that the internal debate in America on the US-China
relations should be looked at in perspective.
"You can always find different arguments that are put forward by others but they
are not the government and they are not decisive," he said. "But fundamentally
the need for close relations between our two countries is recognized and
supported by our top leaders."
August 29, 2005
China President Hu Jintao's
American visits will inspire mutual trust
In a few days President Hu Jintao will fly to the United States, Canada and
Mexico for two weeks of diplomacy. China's relationships with the three
countries and the world summit at the United Nations will top his agenda.
The visits will represent the culmination of Hu's active and realistic diplomacy
this year.
Hu has been busy with tours to foreign lands. In April he visited three
Southeast Asian countries - Indonesia, Brunei and the Philippines. In June and
July he traveled to Russia, the Kazakh capital Astana for a summit of the
Shanghai Co-operative Organization leaders and attended the G8 summit in
Scotland.
His upcoming autumn diplomatic endeavor shows China's desire to develop friendly
relations with the rest of the world.
Hu's visits come amid signs of warming relations between China and the three
countries.
This will be Hu's first tour to the United States since he took the helm of the
Chinese Communist Party in November 2002. He visited as vice-president earlier
that year.
China and the United States share plenty of common ground in the Asia-Pacific
region and the world at large. Still, big differences and suspicions remain
between the nations. China is very concerned about the US military and its
security co-operation with Taiwan. The United States misunderstands the
strategic purposes of a growing China. As a result, many politicians and
conservative scholars in the United States believe China is a strategic threat
to their country.
Exchanges of visits between top leaders of the two countries help clarify
policies and clear minds of doubts and misgivings. They are expected to expand
areas of common interests and co-operation to the full, and settle differences.
Leaders of the two countries have met every year. US President George W. Bush is
expected to visit China later this year. High hopes are pinned on such exchanges
of visits that will serve to deepen understanding and create more areas for
co-operation.
The two countries have built channels of contact at all levels, with a view to
enhancing mutual understanding and trust.
The more they interact, the better they will understand each other. This, in a
sense, helps remove doubts and avoid conflicts.
Hu will join more than 100 heads of states and governments at the summit of the
United Nations for celebrations of the 60th anniversary of the establishment of
the world body.
They are supposed to bring with them consensus on UN Secretary-General Kofi
Annan's reform proposals to give the world organization a much-needed facelift.
Loud voices from every corner of the world reflect the sense of urgency
regarding the organization's future. It needs to be refashioned to keep up with
changing circumstances.
The United Nations is the foremost embodiment of multilateralism. Reforms should
not change its fundamental values. Deliberations at the headquarters of the
world organization should chart the correct road for its future.
Hu's journeys next month epitomize China's diplomatic sophistication - a more
nuanced and constructive style.
The active approach shows the government's sincerity and efforts to inject new
momentum into relationships with the United States, Canada and Mexico.
Discussions will focus on where common interests overlap and co-operation is
possible.
Autumn is a season for harvesting fruit. Hu's tour has aroused expectations for
tangible rewards.
August 24, 2005
July 30, 2005
China's State Councilor
Tang Jiaxuan leaving Tapa Tower Ballroom after meeting with Chinese Business and
Community Leaders
China's State Councilor Tang Jiaxuan, Chinese Ambassador to the United States Zhou Wenzhong , Consul General Zhong Jianhua of Chinese Consulate Los Angels Met
with Chinese Business and Community Leaders in Hawaii on July 30, 2005.
China's State Councilor Tang Jiaxuan has met with President George Bush,
Secretary of State Condoleezza Rice, Treasury Secretary John Snow, Secretary of
Homeland Security Michael Chertoff and President Bush Senior in Washington DC
before going to Washington State with a one day stop over in Hawaii before
returning to Beijing tomorrow morning, July 31st.
During the hour long meeting Councilor Tang shared with the special guests the
importance of the U.S. China relationship. China President Hu Jintao is
planning a State visit to the USA during early September and a return visit by
President George Bush in November of this year.
Councilor Tang explain the challenge of Cross Strait relationship and China's
stand on the one China policy which is shared by President George Bush.
Councilor Tang said Hawaii played an important role in Modern China, Dr. Sun Yat
Sin, the founding father of the Modern China had his education in Hawaii, found
Xin Zhong Hui and The political philosophy "Three Principles of the People" (Sanmin
Doctrine). July 20, 2005
User-friendly arbitration
to benefit overseas firms
HKIArb head Sylvia Siu says overseas firms nominating Hong Kong as their
arbitration centre can proceed with confidence. The adoption of simplified,
user-friendly arbitration laws will make it easier than ever for overseas firms
to use Hong Kong for contractual dispute resolution, especially in dealings
involving the Chinese mainland.
The changes will further position Hong Kong - already recognised as a regional
arbitration hub - as a centre for international arbitration.
An amendment proposed by the Hong Kong Institute of Arbitrators (HKIArb) and the
Hong Kong International Arbitration Centre (HKIAC) would see current legislation
changed to eliminate court supervision, and create one set of laws to deal with
both domestic and international cases. This would make Hong Kong's arbitration
laws easier for overseas companies to understand - and therefore more
attractive, according to president of the HKIArb Sylvia Siu.
"It is hoped this move would entice more overseas companies, whether doing
business directly with the Chinese mainland or entering into joint ventures, to
use Hong Kong as their platform," Ms Siu said. "By putting a Hong Kong
arbitration clause into their contracts - specifying Hong Kong as the place and
the Hong Kong Arbitration Ordinance as the procedural law for arbitration - we
believe overseas firms can conduct their mainland business with greater
confidence."
Hong Kong is already a recognised regional centre for arbitration, with over
international 300 cases adjudicated at HKIAC last year - a number far exceeding
that of Singapore, Ms Siu said. It has a number of advantages, including
geographical proximity to China and other South East Asian countries.
Neutral venue with a pool of talent - "Hong Kong is a neutral venue for
arbitration of disputes between a mainland party and, say, a US or European
party, or two non-Hong Kong parties," Ms Siu said. "Hong Kong has a pool of
experienced, bi-lingual arbitrators. It has a wealth of experienced Hong Kong
lawyers specialising in common law, as well as many top overseas lawyers who
work in well regarded local and international law firms.
"Lawyers in Hong Kong are expert in many disciplines, and particularly well
versed in shipping, insurance and international commercial dispute resolution.
They are supported by multilingual translators and other arbitration supports as
such "live" notes. Overseas parties and their advisors have easy access to Hong
Kong, and there are no visa problems."
The ease with which awards made in Hong Kong can be enforced in other
jurisdictions is another important factor. This applies to all signatory
countries to the New York Convention, and in the Chinese mainland under an
agreement to enforce Hong Kong awards at the level of Intermediate People's
Court of China. Further, adds Ms Siu, there are many cases arbitrated in Hong
Kong using Hong Kong's Arbitration Ordinance as the procedural law and the law
of another jurisdiction as the substantive law of the contracts.
The changes were proposed following a review of the current arbitration system.
The government has agreed on the framework and will decide on the legislation's
ultimate form.
What is HKIArb and when was it founded?
Hong Kong Institute of Arbitrators (HKIArb) is a Hong Kong company limited by
guarantee established in September 1996. A group of Hong Kong professional
people interested in arbitration, mediation and other kinds of dispute
resolution got together to form Hong Kong's own arbitration institute. It has
charitable status and is non-profit making.
What are the objectives of HKIArb?
A main objective is to promote arbitration and other alternative methods of
dispute resolution (ADR) in Hong Kong which is a service centre for Asia and
gateway to China. HKIArb will be involved in the training of arbitrators and
mediators and the setting of appropriate standards of conduct for arbitrators
and mediators in Hong Kong. It is involved in law reform relevant both to
arbitration and mediation. It is working to develop ties with other
organisations involved in arbitration and ADR, particularly those within China
and in the Asia region.
Who is HKIAC?
HKIAC (Hong Kong International Arbitration Centre) was established in 1985 to
assist disputing parties to solve their disputes by arbitration and by other
means of dispute resolution. It was established by a group of the leading
business and professional people in Hong Kong to be the focus for Asia of
dispute resolution. It has been generously funded by the business community and
by the Hong Kong Government but it is totally independent of both and it is
financially self sufficient. HKIAC is a non-profit making company limited by
guarantee. It operates under a Council composed of business and professional
people of many different nationalities and with a wide diversity of skills and
experience. Administration of HKIAC arbitration activities is conducted by the
Council through the Centre's Secretary-General who is its chief executive and
registrar.
China
Post to be Split into Three Divisions
At a regular meeting of the State Council chaired by Premier Wen Jiabao on 20
July, a scheme to reform the postal system was discussed and passed. Under the
scheme, the State Postal Bureau will be restructured into a regulatory body for
the supervision of the sector, China Post Group Corp will be set up to run
various postal services, and postal savings banks will be set up to provide
regulated financial services.
The meeting gave the green light to the reform of the postal system. The reform
aims to separate government administration from business management, strengthen
government supervision, improve the market mechanism, ensure the provision of
general and special services, guarantee safe communications, and revamp the
management of postal services and postal savings in the direction of a modern
postal business.
Through the reform, a postal system with government supervision and autonomous
management will be established to ensure the healthy development of the sector.
The meeting stressed that since the reform touches on many aspects of people’s
life, it is necessary to adopt a positive and prudent policy, strengthen
leadership, and carefully implement all supporting measures to ensure the smooth
progress of reform.
July 1, 2005
CNOOC's merger with Unocal may help ease pressure on RMB
If China National Offshore Oil Corporation (CNOOC) Ltd. successfully merges with
the US oil company Unocal, the astronomical sum of loans in US dollars used by
CNOOC will alleviate the pressure on Chinese Yuan's appreciation, observers said
here Thursday.
CNOOC, China's largest offshore oil and gas producer, announced last week that
it had proposed a merger with Unocal, offering 67 US dollars in cash per Unocal
share.
The 18.5-billion-US dollar offer represents a premium for Unocal's shareholders
of about 1.5 billion US dollars over the value of Chevron Corporation's offer,
based on its closing price on the New York Stock Exchange (NYSE) at the time.
If CNOOC succeeds, the case will become the largest overseas merging transaction
of Chinese enterprises in history. According to the Beijing-based China Business
Times, CNOOC plans to borrow atotal of 16 billion US dollars of loans from
Chinese and foreign financial institutions.
Some 13 billion US dollars of loans will be provided by the Industrial and
Commercial Bank of China and its parent company China Offshore Oil group, with
only 3 billion US dollars of international commercial loans.
As China regulates its capital accounts, any overseas merging deals of Chinese
enterprises will be warranted by the State Administration of Foreign Exchange
(SAFE), so CNOOC, a typical state-owned enterprise, must have received support
from the SAFE for the merger proposal, the paper said.
CNOOC's borrowing of huge amounts of fund in US dollars from the Chinese side
will result in the abatement of 13 billion US dollars in China's official
foreign exchange reserve, analysts say.
In some sense this means the alleviation of current pressure demanding for the
Chinese yuan's appreciation, according to the newspaper.
China's forex reserve surged by as much as 206.7 billion US dollars in 2004 to
609.9 billion dollars by the year-end, second only to Japan, according to SAFE
figures.
The country's fast forex reserve increase has become an excuse of some countries
to demand the appreciation of the Chinese currency. The Chinese government,
however, insisted in keeping therenminbi (RMB) exchange rate basically stable at
a reasonable and balanced level.
The rocketing of China's foreign exchange reserve was attributed to the
increasing surplus in trade and capital flow. Some speculative funds betting on
the yuan's appreciation, or the so-called "hot money," have sneaked into China
under capital accounts or based on no real trade since last year, according to
sources with SAFE.
CNOOC's planned merger with Unocol was hailed because it would result in capital
outflows of 13 billion US dollars if it succeeds, which will help reduced
China's foreign exchange surplus.
The foreign exchange loans in enormous sums will also help reduce the risks for
Chinese financial organizations, because if China really appreciates its
currency, the outflow of US-dollar capital will reduce the losses of the Chinese
side for holding US-dollar assets, experts say.
March 23, 2005
AMCHAM'S POSITION ON CONSTITUTIONAL DEVELOPMENT IN HK
HONG KONG - The American Chamber of Commerce in Hong Kong issued today the
following paper on constitutional development in Hong Kong.
The Issue
The American Chamber of Commerce in Hong Kong supports adherence to the rule of
law, and the development of a process that results in universal suffrage for the
election of both the Chief Executive and the members of the Legislative Council
that is consistent with the Basic Law of the HKSAR.
American Chamber Position
The mission of the American Chamber is to foster commerce among the United
States of America, Hong Kong and Mainland China, and to enhance Hong Kong's
stature as an international business center. Among our core values are adherence
to the rule of law, transparency and the free flow of information.
Rationale
The Basic Law of the HKSAR enshrines the fundamental rules for implementing the
"one country, two systems" principle. Essential to the implementation of this
principle, and the specific authority that has been granted to the HKSAR to
"exercise a high degree of autonomy", are the provisions within the Basic Law
with respect to the Chief Executive and the Legislative Council. Articles 45 and
68 provide that the ultimate aim is the selection of the Chief Executive and
Legislative Council by universal suffrage. Article 46 of the Basic Law provides
that the term of office of the Chief Executive shall be five years.
Deliberations concerning how and when Hong Kong will achieve its aim of
universal suffrage have generated local and international interest. Also, a
question has arisen concerning the term of office of the Chief Executive to be
selected in July 2005.
It is of paramount importance that the HKSAR acts in accordance with the Basic
Law of the HKSAR. Faithful adherence to the rule of law is one of the
foundations upon which Hong Kong's success has been built. It is not merely a
matter of fairness and predictability for private commercial arrangements. It is
vitally important to Hong Kong's future that the rule of law be continuously
applied to all aspects of the constitutional development process. Where a
provision of the Basic Law is clear it should be followed, unless amended as
provided in the Basic Law. If a provision is not clear, the process by
which any ambiguity is resolved should be transparent and in accordance with the
Basic Law and the rule of law.
The American Chamber supports an inclusive and transparent process. Such a
process is good for Hong Kong, and for the confidence of those who invest in
Hong Kong. The American Chamber also supports elections for the Chief Executive
and for the Legislative Council in which the greatest number of eligible Hong
Kong voters participate.
February 4,
2005
Bush
Administration Expected to Pursue Dynamic Trade Agenda During its Second Term
Reinforced by a relatively comfortable victory at the polls in November 2004 and
significant Republican gains in both the House of Representatives and the
Senate, the Bush Administration is gearing up to pursue an active and widely
diverse trade agenda during its second term. President Bush has long affirmed
his commitment to trade liberalization and its importance to US prosperity, and
is expected to support a broad range of free trade policies in the next four
years. A few protectionist hiccoughs may emerge from time to time, however,
particularly in the area of textiles.
One of the
principal trade priorities of the Bush Administration during the second term
will be the advancement of economic integration in the western hemisphere. This
will be pursued in two fundamental ways, by achieving (i) Congressional passage
of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) and
(ii) the successful conclusion of FTA negotiations with Panama and four Andean
countries (Bolivia, Colombia, Ecuador, and Peru). Congressional consideration of
the DR-CAFTA will likely begin in the spring of 2005 and is expected to be a
very tough fight for the Administration. Proponents of the deal face stern
opposition from a coalition which includes labor and environmental groups, sugar
and textile interests, and an amalgamation of Democrats and Republicans that
tend to favor protectionist policies.
If the DR-CAFTA and the FTAs with the Andean region and Panama are ultimately
approved and implemented, this may convince the Brazilian government to expedite
the negotiation of the hemisphere-wide Free Trade Area of the Americas (FTAA),
which had originally been scheduled to be concluded by 1 January 2005. Although
not forgotten, it is undeniable that the FTAA has taken a back seat to bilateral
and multilateral (i.e., Doha Development Round (DDR)) trade negotiations in the
minds of US officials.
The Administration is expected to devote substantial time and human assets in
the next two years to ensure the successful conclusion of the DDR. The DDR
negotiations came to a halt after the acrimonious collapse of the September 2003
World Trade Organization (WTO) ministerial meeting held in Cancún, Mexico, but
have gradually gathered momentum ever since. Nonetheless, there are several
outstanding areas where progress in the coming months is imperative in order for
the DDR to be concluded by the end of 2006, which is the generally accepted
current deadline. For example, members have agreed to use a non-linear formula
to reduce tariffs in non-agricultural products, which would force countries with
higher tariff rates to implement larger cuts, but there is still no consensus on
the particulars of the formula itself. Some countries, including the US, are
also pushing for reciprocal duty elimination on a sectoral basis to complement
the formula cuts.
As regards trade in agricultural goods, perhaps the most politically sensitive
area in the entire DDR, negotiating chairman Tim Groser has stated that members
must produce a "first approximation" or rough draft of the negotiating
modalities for agricultural liberalization by August 2005. This working document
would be the basis to achieve a firm commitment on modalities at the Hong Kong
ministerial meeting planned for December 2005. Urgent progress is also needed in
other critical areas, most notably services.
The concept of "free and fair trade," which has traditionally been embraced more
by Democrats than Republicans, was featured prominently in the Republican
platform for the presidential elections and is expected to play a more visible
role in the Administration's trade policy. The Bush team has warned in the past
that it will not tolerate "foreign practices, rules, and subsidization that put
our exports and manufacturers on an unequal footing." Free and fair trade will
generally be advanced through bilateral/regional FTAs and, perhaps to a lesser
extent, the DDR. A judicious application of US trade remedy laws is also
expected from the Administration, which is also likely to seek resolution of
various disputes through the WTO dispute settlement mechanism. In this regard,
it is very possible that China will be the target of one or more dispute
settlement cases in the next four years.
Speaking of China, Sino-US trade relations will certainly remain a focal point
in the Administration's trade policy, and a number of outstanding bilateral
issues are likely to be resolved during President Bush's second term. An
increasingly larger number of legislators and domestic industry groups have
blamed the ever-growing trade deficit with China for the steady decline in US
manufacturing employment and have urged the Administration to be "tough on
China." The Administration has been relatively immune to these protectionist
cries and has managed to avoid thorny confrontations with China, developing a
rather fluid working relationship with Chinese officials instead. In fact, this
cooperative approach has produced concrete results in the areas of intellectual
property rights (IPR) and market access and is expected to yield more dividends
in the future.
The trade priorities of the Administration vis-?vis China are unlikely to change
during the second term. The US will seek to enhance IPR protections for US
products and copyrights in China and will closely monitor the commitments made
by the Chinese government within the framework of the US-China Joint Commission
on Commerce and Trade (JCCT), the WTO, and the US-China bilateral intellectual
property agreement of 1995. The US is particularly concerned with China's
enforcement efforts in this area. Other issues that will capture the spotlight
during 2005-2008 include the alleged undervaluation of the yuan, China's
compliance with its WTO commitments, and textile-related issues.
China has proclaimed its commitment to move towards a market-based system on
several occasions, most recently during last year's celebration of the 16th
US-China Joint Economic Committee meeting in Washington, DC. Some studies in the
US have suggested that the yuan may be undervalued by as much as 40%, and the
Administration has worked diligently with the Chinese government to achieve
greater exchange rate flexibility in the relatively near future. Most experts
agree, however, that China's banking system is far too fragile at the present
time to handle the demands of a floating exchange rate. The Bush Administration
understands that the introduction of a floating exchange rate should take place
only after the Chinese government has taken all the necessary steps to
strengthen its banks and bank supervision, so that these institutions can
withstand the demands of exchange rate flexibility. This careful treading on the
part of the Administration should not be mistaken for passivity, however. US
officials are expected to continue to urge their Chinese counterparts to
implement a market-based system as soon as possible.
As regards textile trade, a recent injunction by the US Court of International
Trade prevents the Bush Administration from taking any action on the
threat-based safeguard petitions filed in the fall and winter of 2004 against a
host of Chinese-origin textile and apparel products. The Administration has
taken a rather protectionist stance in textiles and it seems that this
injunction will only serve to delay what increasingly appears inevitable, that
is, the invocation of the textile safeguard on a broad range of products
sometime in 2005.
China is by no means the only priority in Asia for the Administration. The US is
currently negotiating an FTA with Thailand and may pursue FTA talks with such
countries as Malaysia and Sri Lanka. The Administration may also support a bill
to provide preferential duty treatment to certain developing countries stricken
by last December's tsunami. Such relief may include duty relief for textile and
apparel imports, as well as other key products not covered by the Generalized
System of Preferences. The US may also conceivably remove the anti-dumping
duties currently in place on such products as shrimp and canned pineapple from
Thailand.
The Bush Administration is also expected to conclude a WTO accession deal with
Vietnam as early as the spring or summer of this year. Although it is much too
early to tell at the present time, that agreement may ultimately include a
textile safeguard clause similar to the one included in China's Protocol of
Accession to the WTO. The EU struck an accession deal with Vietnam in October
2004 where it was able to secure significant market access commitments in
industrial goods, agricultural goods, financial and business services,
transportation, telecommunications, and tourism. Once all interested parties
have signed bilateral agreements with Vietnam, the WTO Working Party will
incorporate the various negotiated terms into Vietnam's Protocol of Accession.
Renewal of Trade Promotion Authority (TPA), which allows the President to
negotiate trade agreements that may not be amended by Congress, is scheduled to
take place during the first half of 2005. The President must request a renewal
by 1 March, which will be granted automatically unless the House or Senate
adopts a resolution of disapproval before 1 June. According to various sources,
any such resolution would be killed at the committee level (i.e., House Ways and
Means Committee and Senate Finance Committee) where trade proponents have strong
numbers. The renewal would extend TPA only for two years, until 2007.
There are a host of other issues that the Administration will consider during
2005-2008, including: (i) the successful conclusion of FTA negotiations with
Oman, the United Arab Emirates, the Southern African Customs Union, and possibly
Egypt, Kuwait, and New Zealand; and (ii) achieving a smoother trade relationship
with the EU and resolving outstanding disputes concerning anti-dumping relief in
the form of the Byrd Amendment, the subsidization of the commercial aircraft
sector, customs procedures, and the food-related provisions of the US
Bioterrorism Act.
November 17, 2004
Sino-American Trade Relations in A Second
Term for President Bush: An Outlook
On 3 November 2004, it became official that President George W. Bush had won a
second term in the Oval Office. Throughout the campaign there had been
speculation that a John Kerry presidency might result in protectionist trade
policies. Mr Bush's re-election should allay some of these concerns. There will
be continuity even though Commerce Secretary Donald Evans has already resigned
and US Trade Representative Robert Zoellick is widely expected to vacate his
post as well. That said, President Bush is unlikely to follow the same hands-off
approach where China trade is concerned that characterized his first term in
office. However, that should not be construed to mean that the White House will
do anything precipitous that could start a transpacific trade war with China.
Why is the Bush administration likely to be a bit more willing to confront China
in the coming months and years? For one thing, the ballooning US current account
and trade deficits will not go away anytime soon. Economists and policymakers
agree that neither is sustainable much longer, and Beijing plays a central role
in the domestic political equation though objectively speaking China has very
little to do with either of these deficits. After all, the rise in the current
account deficit over the past three decades is linked directly to a decline in
the US national savings rate.
Over time, chronic borrowing by the US federal government has resulted in large
debts owed to other countries. This year the US will borrow more than US$600
billion, or 5% of gross domestic product (GDP), from the rest of the world,
which means that other countries are in essence funding America's consumption
binge. The US current account deficit is paid for through direct lending and the
net sales of US assets, mostly to East Asia, including Japan, China, Taiwan and
Singapore. Japan's central bank has bought Treasury bonds for decades. More
recently, China has followed in its neighbors' footsteps, making it possible
for the US economy to hum along without making the necessary painful
adjustments.
In other words, the US needs the money that China and other countries provide so
that both the US government and individual Americans can keep spending at the
present clip, which is painless as long as interest rates remain low. And
despite the Federal Reserve's Federal Open Market Committee's decision on 10
November to raise the Federal Funds rate to 2%, US interest rates will remain
relatively low as long as foreigners keep buying US assets. Evidently, the US
dollar continues to be the world reserve currency, reinforced by the fact that
the US currency is tied to the biggest national market, with despite its
shortcomings the most efficient global capital market.
Consequently, there appears to be very little risk in the current US behavior,
particularly because America's trading partners, first and foremost Asia's
economic giants, have a vested interest in keeping the US economy stable.
Otherwise, if the US economy crashed, China and Japan would lose both their
investments and an important export market, and be pulled down with it. This
school of thought asserts that the US can keep doing what it is doing, but this
is built on the unrealistic assumption that the US current account deficit is
sustainable over the long run. Few economists believe that to be the case.
Something will have to be done, and since Americans are unlikely to push for the
necessary painful adjustments at home, they are likely to look abroad and force
their trading partners to modify their behavior.
Nevertheless, the growing US trade deficit with China is a convenient
explanation for all that ails America's economy. On 10 November the US
Department of Commerce's Census Bureau reported that the US goods and services
trade deficit fell to US$51.6 billion in September, down from a revised total of
US$53.5 billion in August, which was an all-time record. Meanwhile, the
politically sensitive trade deficit with China increased from US$15.39 billion
in August to US$15.52 billion in September, setting a new monthly record as US
imports from China rose to US$18.4 billion.
The September total brings the US trade deficit with China to US$114.31 billion
for the year, significantly up on the US$89.67 billion recorded in the first
nine months of 2003. It also means that the bilateral trade deficit is well on
its way to reach a new record of over US$150 billion in 2004, up from the
previous record of US$124.07 billion recorded last year.
Faced with this reality, even the Bush administration - as enthralled as it may
be with the potential of the Chinese market and thus unwilling to do anything to
offend Beijing too much - will have to act forcefully in dealing with such
issues as China's "currency manipulation". The stage has already been set for
this. Over the course of the past year, US Treasury Secretary John Snow and
other top-level American officials have stated that Washington's objective is to
have China float its currency.
Speaking at the conference "Policy Challenges of Global Payment Imbalances" on 4
November, John Taylor, US under secretary of the Treasury for international
affairs, stated that the Bush administration will continue to promote
market-based flexible exchange rates to smooth the path of global adjustment to
economic shocks. In this context, Taylor singled out China as a focal point for
such US efforts. He noted, "A flexible exchange rate is appropriate for China,
not only in light of its growing international role but also in order to better
manage domestic macroeconomic, particularly monetary, pressures".
In theory, senior Chinese government officials have agreed to float their
currency, simultaneously stressing that a stable yuan is a necessary
prerequisite for both economic stability and development in China, Asia and the
world. In other words, Beijing has agreed to float the yuan, but not now. Most
US policymakers recognize the wisdom of such caution, particularly in light of
the fragile state of China's banking system. Nevertheless, Washington will
likely increase its pressure to achieve a revaluation of the yuan in the near
term, aiming at a free float a few years down the road.
Americans in the state of Ohio may look askance at the readers of the British
newspaper The Guardian telling them how to vote, but the American people and its
government feel no such restraint when it comes to telling other nations how
they should handle their own affairs. That is to say, if the US manufacturing
sector continues to suffer substantial job losses, and there is no reason to
think that it will not, political pressure in the US will rise, forcing the Bush
administration to elevate the issue of China's currency peg to priority status.
One might justifiably ask why? After all, does the Republican Party not control
both the executive and legislative branches of government? The Republicans have
increased their margin over the Democrats to 55-45 (if one counts Senator Jim
Jeffords who is nominally an independent among the Democrats) in the Senate, and
to 233-201 in the House of Representatives. Traditionally, it was the Democratic
Party with its powerful organised labour constituency that called for
protectionist measures, and now with total control of both chambers of Congress,
the White House really is under no political pressure from the Democrats.
However, a quick look at the electoral map shows, John Kerry's victory in
Pennsylvania notwithstanding, that there is a substantial overlap between states
that voted for George Bush on 2 November, and those that have lost manufacturing
jobs. After all, for all intents and purposes the election was decided in Ohio,
a state that has lost more than 230,000 jobs over the course of the past three
years.
To a certain extent, the politically motivated impulse to protect US industries
at home, which was already on display in President Bush's first term when he
imposed steel tariffs and signed an overly generous farm bill, is balanced by
the Republican Party's traditional supporters in corporate America. US firms, if
they have manufacturing operations in China, are benefiting greatly from the
current state of affairs.
Yet, the Bush administration will have to get tough with China precisely because
the Republican Party has secured control of the White House and both chambers of
Congress. The president's political strategists, led by Vice President Richard
Cheney and Karl Rove, have every intention of tightening their party's grip on
the levers of power, and to attract ever more constituencies to their party.
Does that mean that the US and China find themselves on a path that will
inevitably lead to massive trade disputes, or even a trade war? Probably not.
For example, a more assertive Bush administration stance does not mean that
trade sanctions over China's "currency manipulation" are in the offing.
Having no need to placate organized labor with grandiose gestures, the Bush
administration will continue to press the US case vis-?vis the Chinese
leadership, but it will do so in a low-key manner, as opposed to the more openly
confrontational approach that Senator John Kerry might have taken. This process
is likely to begin when President Bush and Chinese President Hu Jintao meet
later this month at the 12th Informal Leadership Meeting of Asia-Pacific
Economic Co-operation (APEC) forum in Santiago, Chile.
In other words, Sino-American trade will remain fundamentally stable, despite
persistent irritants such as US textile and apparel safeguard actions (Please
see the related article in this issue located at our Trade Issues page) and a growing
number of anti-dumping actions targeting Chinese products.
November 16, 2004
Do’s and Don’t About Doing Business with China
– Johnson W. K. Choi, MBA, RFC.
Written for Chinese Chamber
of Commerce Honolulu Oct 2004 Lantern Newsletter -
Direct Link PDF format
Single page PDF
format
There is no one formula to do business successfully overseas including China.
China is one country but not one market. Doing business overseas including China
requires cultural knowledge, financial resources, time and commitments.
I
have been doing business with Asia including China since 1980. After 24 years,
Southeast Asia including China continued to be a developing region and emerging
market, it has presented both opportunities and challenges for American
Companies.
If
your product is not doing well domestically, DO NOT expects to use export to
bail you out.
DO
find out what kind/type of product/service China want through research in
advance.
DO
NOT expect any State or Federal agencies to provide you with all the answers.
DO
talk to people willing to share with you their practical experiences of doing
business in China.
DO
NOT expect obtaining the information for free, when it is free, it is usually no
good or useless.
DO
ask for references when you are paying the consultant for the services.
DO
NOT forget to call the references and ask as if you are hiring an employee and
more, the wrong consultant could bankrupt a small company.
DO
ask your consultant to share your risk.
DO
NOT pay your consultant a high upfront free, consider a performance based
contract.
DO
join a trade mission with State or Federal agency if you are visiting China for
the first time.
DO
NOT expect any of the trade missions will give you a contract.
DO
read trade deal in the newspaper for references only.
DO
NOT get too excited about the trade deals in the newspaper as most of them are
nothing more than MOUs (Memorandum of Understandings). It is a way when
government officials meet to produce a good-to-know-you public relationship
communication to the public.
DO
pay special attention when someone is being introduced as “China Expert” and
know all about China.
DO
NOT forget to find out the “China Expert” how he/she claimed to be a China
Expert that know everything about China, every industry and every region (there
is no such person exist). Be very careful when you are asked to give out any of
your trade contacts in Hawaii and in China to any anyone including public
sectors entities.
DO
work with China businesses to open door for you including meeting with
Government Official when needed.
DO
NOT use the 1980s business model expecting to bring government official with you
to open door for you in China. Shaking hands with Mayors or signing MOUs will
not bring you any tangible businesses. 100s of businesses in Hawaii have already
found out.
The
above information is not meant to be an exclusive list. Both you and your
company must first determine your China strategy. We have frequent discussions
with successful clients doing business in China both in China and North American
on the success and failure of businesses in China, while the normal business
risk is acceptable, many businesses failed in China were due to the executives
early on know China as a “fun” place and using the business to cover their
hidden agenda and not really serious about business for many reasons.
November 11, 2004
ADB: co-op with China very happy
Mr. Bruce Murray, Resident Representative of Asian Development Bank in China,
described ADB's cooperation with China so far as being very happy and put
forward suggestions for China's reform on its financial sector in an interview
with the People's Daily Overseas Edition.
Mr. Murray is responsible for the management of 13.5 billion USD investment in
China and preparation of the scheme for the 1 billion worth of annual loans to
China. He illustrated how ADB justifies its loans with a feasibility study
involving economic, technical, financial, environmental and social issues.
Loans extended by ADB to China mostly go to roads and railways construction,
water treatment, energy and agriculture with a term of 20 years normally at a
favorable rate. The projects are expected to improve the living standard of
local people. Mr. Murray has found China has very outstanding engineers. He
mentioned the Yangpu Bridge master plan designed by Chinese engineers which was
found flawless by a multinational experts' team.
Mr. Murray praised China for its perfect repayment record. Most ADB funded
projects in China have generated cash flow as scheduled which has made repayment
as promised possible. A very small fraction of the items, 5 percent, ended up
with repayment settlement by the Chinese government which acted as the
warrantor.
A careful assessment is always made by ADB on the impact of a proposed project
on the environment. As Mr. Murray stressed, ADB pays much attention to the
protection of the rights of local residents under the legal framework who have
to relocate to spare land for projects.
ADB's insistence on bidding invitation for every project guarantees the
transparency. Contractors, instead of the government, are payees of fund upon
the government's confirmation of the fulfillment of the contract by the
contractor.
Site supervision is conducted by representatives of ADB besides Chinese
engineers. The National Audit Office of China checks up these projects every
year which are also under the close watch of accountants' office commissioned by
ADB.
When it comes to the reform of the financial sector, Mr. Murray recognizes it as
the most difficult point in the transition from the planning economy to market
economy, as well as one of the biggest risks hat China is facing now. He made
seven suggestions on this issue.
His package includes the disposal of non-performing loans, diversified investors
and market-oriented risk management, reinforcement of the financial watchdog,
development of the equity and bond market, a push-start to the reform of
interest rate liberalization, opening of the capital account after improving
domestic institutions, and more flexible exchange rate system at a proper time.
He does not expect an overnight success of the reform. He thinks the right way
is to improve the corporate governance by changing the mindset, diversifying the
stakes structure, separating banks from the government, and establishing
efficient boards of directors.
He said it was a massive task to dispose the NPL. He noticed newly added NPL
after the disposal of enormous NPL by four asset management firms. Before that
the Chinese government injected capital reserves to two banks (China
Construction Bank and Bank of China).
He proposed a broader range in which banks would manoeuver the interest rates
according to their risk exposure assessment. He also highlighted the importance
of strengthening the legal framework which entitles banks with access to
pledges. He stressed it was necessary to set up institution overseeing credit
status to make sure defaults would be subject to high costs.
He was glad to see China's progress on beefing up its supervision on the banking
sector. he exchanged his ideas about this issue with Mr. Liu Mingkang, Chairman
of China Banking Regulatory Commission. But he called for patience toward
changes of people's mindset.
He didn't think it necessary to establish an institution like Federal Deposit
Insurance Corporation as it does in US. The possible influence of the shutdown
of state-owned banks would be so imaginable that this scenario was not in
consideration, he said. In his opinion, the problem of China's banking sector
lies in developing good customers instead of the liquidity.
He does not see the possibility of foreign banks controlling big Chinese banks.
He mentioned his experience of payment of his phone bill with bank cards and
remittance through bank transfer within a few seconds to prove the fast changes
and improved services of China's banking sector.
China needs small banks which target at niche market and are run efficiently.
With their prompt response to the market and various products, they are more
attractive than their bigger peers to foreign investors. There are successful
stories of this kind in foreign countries, Mr. Murray told the reporter.
October 8, 2004
Selling to the Billion Chinese Pacific
Business News Direct Link
PDF file
"Find a need
and fill it", was a key message from Mr. Thomas Conlon, President of
International Windmill
Supply Co who was the guest speaker at the JAIMS’ China Seminar series.
He presented his talk yesterday to JAIMS China Focus MBA students and a special
group of community and business leaders including Winfred Pong, President of
Chinese Chamber of Commerce, Michael Zhang of China Club, Johnson Choi,
President of Hong Kong China Hawaii Chamber of Commerce, Anthony Chang of
Pacific Resources LLC, Robert Cheng of STI, Chian Leng Chia, Professor of
University of Hawaii, Gloria Chong, Sandy Friedman of University of Phoenix,
Jeff Lau and Randolph Leong.
When I traveled to the
Mainland USA or to Asia to work with our Members (Hong Kong China Hawaii Chamber
of Commerce) and Clients of CMC Consulting Group on doing business with China,
it is not unusual to have people come up to us wanting help to sell to China. It
is rather typical that someone has a product, an idea or cultural theme (i.e.
music, art and etc, the intangibles). Sometime, to their dismayed, we have to
inform them that not the 1.3 billion Chinese, depending on the price range,
may be 10 – 100 million of the Chinese can afford to purchase their products,
the actual users or consumers may be a even smaller number.
Mr. Conlon discussed how
his Company is finding a need and filled it, providing the need for millions of
Chinese. Chinese Government is looking for products to improve the lives of the
people, especially the Chinese citizen lives outside the major metropolitan
centers.
It is not widely
reported in the Western press, China is slowly moving towards democratic
elections in the rural areas. Rural villages elect their representatives, these
representative elect the next level of representatives and so on. In order for
the representatives to have a chance to move to a higher level, must do things
benefiting and improving the life of the people he/she represented. Therefore
any Company has products at a reasonable price benefiting the Chinese outside
the Metropolitan centers of China is welcomed by the Chinese government at all
levels.
Mr. Conlon has also
provided the blue print on what it will take to know and understand China. Any
business wanting to enter the China market planning to take a few trips to China
each year without trusted local private sector representation or an office in
China will not work. According to Mr. Conlon, avoid any “know all” and “yes to
anything” people or entities in China.
Some of the best
employees are good people retired from State owned enterprises required to
retire at the young age of 50 or 55. Many of these people has the technical
skills and eager to work as their retirement income small to provide quality
retirement living standard, they want to work for foreign owned enterprises.
October 7, 2004
1. CIS InfoPass Appointment System is Now in
Use in Honolulu.
No more long waits just to ask a question or to submit an application or
petition at the local CIS District Office. CIS has implemented an online
appointment scheduling system. Simply go to the CIS website at www.uscis.gov and
look under InfoPass to conveniently set an appointment online. Generally, an
appointment may be set within two weeks. Make sure to bring the computer
printout of the confirmation notice to the appointment with you. A contact
representative may quickly serve you when you have an appointment scheduled in
advance.
2. Dept. of State has announced rules for DV-2006.
Nationals of Japan, Hong Kong SAR, Macau SAR, and Taiwan are again eligible this
coming year along with nationals of most countries to participate in the
Diversity Visa (DV) 2006 Lottery drawing. Annually, the United States makes
available 50,000 permanent resident visas (green cards) to persons from
countries with low rates of immigration into the US. DV 2006 applications may be
submitted electronically between November 5, 2004 and January 7, 2005. The
Department of State strongly recommends early submission of applications, as
last year many failed to timely submit their applications when the computer
system was jammed in the last week of the application period. DV is the easiest
easy way to get a green card. Each applicant may submit only one application.
3. Many US Employers are hurt from lack of H-1B Quotas.
With the sunset of several provisions in the H-1B visa program in2002, the total
number of H-1B visas issued for Specialty Occupation workers diminished to
65,000, a significant drop from 195,000. Before the beginning of the new fiscal
year of 2005 (commencing Oct. 1, 2004), all 65,000 quotas were fully subscribed.
CIS refused many petitions prepared by US employers once the quota was filled.
Other than those US employers filing for extensions for their H-1B workers,
employers may not file any new H1-B petitions until April 1, 2005 to obtain
quotas under the new fiscal year of 2006.
4. Significant Change of CIS Attitude Toward Immigrant Investor Program.
In a highly unusual move, CIS held a public meeting on September 17 2004, at a
hotel in Washington D.C. to explain the legal requirements of the Immigrant
Investor Program (commonly known as EB-5). The meeting, which attracted more
than 100 attendants, was seen by many as a major change of attitude by CIS after
it (under the former INS name) tightened the policy by making it very difficult
to apply for US lawful permanent residence based on the EB-5 investment. During
the meeting, CIS also covered much of the requirements for an investment project
including the geographic locations to be designated as a “Regional Center”.
Hawaii, to this date, is the only State that is entirely designated as a
Regional Center requiring creation of lesser number of jobs by an applicant to
qualify for an EB-5 immigrant visa.
For further information, please contact
Law Offices of Alan W. C. Ma *
1600 Kapiolani Blvd.,
Pan Am Building, Suite 1030
Honolulu, Hawaii 96814
Phone: 1-808-944-1188 Fax: 1-808-944-8877
Email: lawyer.ma@verizon.net
Website:
http://www.usimmigration-hawaii.com
* Attorney Ma is elected by peers and listed in “Best Lawyers in American” for
the past ten years consecutively.
September 30, 2004
US companies urged to adjust to world
changes - Bing Lan
United States' companies that are less competitive in global trade may need to
make adjustments to cope with "structural changes of the world economy that
follow China's development," said Robert Kapp, president of the US-China
Business Council, the principal organization for US companies engaged in
business with China.
Kapp said he believed it would be inevitable that there would be job losses in
the US because of exports of inexpensive Chinese products.
Sometimes when he heard accusations that Chinese products were making Americans
unemployed, he would remind them that Chinese workers had been laid off in the
process of the country's reform and opening up to the world.
"It is all about modernization," said Kapp, a former Yale professor on Chinese
history, in an interview with China Daily at the World Economic Forum's Beijing
meeting earlier this month.
Still, Kapp said the United States is now delicately balanced between supporting
free trade and supporting protectionism and that was a reality that people doing
business in China-US trade have to face.
But by and large, China-US trade is on a more predictable course than it used to
be, he said.
Kapp, who took up his present position in 1994, said the most stressful years
for US' companies doing business in China were 1994 to 2000, when they had to
lobby hard for Normal Trade Relations (NTR) with China.
During those six years, the US Congress would engage in with politically-charged
debate on NTR with China every year. Without NTR, the China-US trade would have
been subject to high trade barriers that would have hurt the commercial
interests of both sides.
In 2000, the US decided to have Permanent Normal Trade Relations (PNTR) with
China, which paved the way for the endorsement of bilateral negotiations for
China's joining of the World Trade Organization.
Kapp declined to tell in detail how US' business circles lobbied for the NTR and
PNTR with China, but he said they did put considerable efforts into mobilizing
forces in their favor.
"Our efforts are quietly effective," he said.
Now life seems more easy than those days.
There is no coalition in the US that fights for strong US-China trade relations
despite expanding business ties between the two.
According to statistics compiled by China's Ministry of Commerce, bilateral
trade volume reached US$126 billion last year. So far, US companies have
invested more than US$45 billion in China.
But Kapp said US' businesses in China trade did not have to worry about an
immediate crisis such as the NTR debate.
He said that in some US' businesspeople's minds, China was still stereotyped as
a mysterious oriental country.
But as China's market economy develops and US' companies' experiences grow, they
are seeing more familiar phenomena in the market and it is more
"comprehensible," Kapp said.
He said romantic imaginings about the enormous Chinese market were already over.
"Nobody is talking about selling to everyone of 1 billion people. They are now
more sophisticated in spotting which part of the Chinese population they should
target.
"However, as ever, new challenges keep emerging."
As China integrates into the global economy, the challenge now is that "every
company has to decide how China fits into its overall operations," he said.
Lots of US' companies have been in the Chinese market for years, but today they
still have to work out a new answer to the question about what they should do to
be able to succeed in China.
But they might need to do it again tomorrow because "China is not static... it
is moving."
September 17, 2004
UNITED STATES CITIZENS - REGISTER TO VOTE!
Attention all United States Citizens Residing Overseas for information regarding
a list of Primaries for the 2004 Elections and registering to vote visit the
Federal Voting Assistance Program (FVAP),
www.fvap.gov.
Voter Registration - Unregistered absentee voters should request their ballots
at least 60 days before the election and registered voters at least 45 days
before election. Remember, voter registration can be affected or cancelled for
several reasons: not voting for a period of time, changed residence since the
last registration or election, changed name since the last registration or
election, or changing political party preference (primary elections only) since
the last registration. Also, registering to vote at a new place of legal
residence will cancel your registration at your previous residence and might
cause you to incur state or local tax liabilities.
Notarizing Voting Materials - Always check your state instructions (Chapter 3 of
the current Voting Assistance Guide) to determine whether your state requires a
witness or notary on the FPCA and/or ballot return envelope. United States
citizens overseas are afforded full voting assistance at all U.S. Embassies and
Consulates.
Where To Send It - It is vitally important that when completing these federal
forms you follow the instructions for your state in Chapter 3, Section III of
the current Voting Assistance Guide, titled Where to Send it. Each state has its
own specific office for receiving absentee voting materials. The title of the
person receiving the voting materials is highlighted in magenta. Make sure this
title is entered on the first line of the addressee.
Postage for Mailing from Overseas - The FPCA is stamped "U.S. Postage Paid" and
may therefore be mailed through the U.S. Consulate's FPO at no charge. If you do
not have access to a U.S. Embassy/Consulate or an APO/FPO address, please affix
the proper postage necessary. The U.S. Consulate in Hong Kong has placed October
15th as the deadline for accepting forms.
September 4, 2004
Pacific Business News September 10, 2004
Foreign Retailers and Wholesalers have
long realized that China's "opening" did not include them. But new regulations
going into effect after December 2004 will allow fully foreign-owned enterprises
to establish wholesale and retail operations anywhere in the country, and
promise to dramatically change China's commercial landscape.
New Measures at a Glance
Rarely has a new set of regulations possessed
the potential to expand the businesses opportunities of so many foreign
enterprises in China. Below is a snapshot of the major changes introduced by the
Administration of Foreign Investment in the Commercial Sector (a.k.a. Commercial
Sector Measures) and the recently amended Foreign Trade Law.
What's new? Foreign investors will be able to
set up wholly-foreign-owned wholesale and retail companies from December 11,
2004. This will allow them to engage in wholesale and retail, import/export,
franchising (up to now this has been a gray area) and distribution.
Not on the Guest List
Just to make things interesting,
foreign-invested commercial enterprises are still restricted from wholesaling or
retailing certain categories of products.
They are as follow:
Restricted Temporarily
- Wholesaling of pharmaceuticals,
pesticides, and mulching films is restricted until December 11, 2004
- Wholesaling of chemical fertilizers,
processed oil, and crude oil is restricted until December 11, 2006
- Retailing of pharmaceuticals,
pesticides, mulching films and processed oil is restricted until December 11,
2004
- Retailing of chemical fertilizers is
restricted until December 11, 2006
Restricted Indefinitely
- Tobacco cannot be wholesaled or
retailed
- Salt cannot be wholesaled
More Regulations Coming
Wholesaling and retailing of the following
products are subject to additional (mostly as-of-yet-unwritten) legislation:
- Book and periodicals
- Processed oil (via gas stations)
- Pharmaceuticals
- automobiles
| Type of
Company |
Regulations
Before |
Regulation
After |
|
Wholly Foreign-owned Enterprises (WFOEs) |
Not
Permitted (only Joint Ventures (JVs) were allowed) |
As
of December 11, 2004: Foreign investors receive national treatment. Minimum
registered capital: RMB$500,000 (US$61,000) |
| Joint
Venture (JV) Wholesale Company |
Minimum registered capital: RMB80 million (US$9.76 million). Asset, turnover
requirements. |
As
of June 1, 2004: No minimum asset value. No annual turnover requirement.
Foreign investors receive national treatment. Minimum registered capital:
RMB$500,000 (US$61,000) |
| WFOE
Retail Company |
Not
permitted |
As
of December 11, 2004: Foreign investors receives received national
treatment. Minimum registered capital: RMB$300,000 (US$37,000) |
| JV
Retail Company |
Minimum registered capital: RMB$50 million (US$6,1 million). Asset turnover
requirements. |
As
of June 1, 2004: Foreign investor receive national treatment. No minimum
asset, no annual turnover requirement. Minimum registered capital:
RMB$300,000 (US$37,000). |
|
Manufacturing Enterprises |
Can
sell only products made by the company in China |
As
of December 11, 2004: Can sell self-manufactured products, sourced in China
and imported. |
August 16,
2004
 China
Business Open Doors for American Firms
Hong Kong China
Hawaii Chamber of Commerce (HKCHcc) is part of the International Business
Delegation from Hawaii, California, Oklahoma, Hong Kong and Guangzhou visited
Urumqi, Xinjiang China between Aug 10 - 15 to explore multi-million business
opportunities in Real Estates, Wine, Meat Operation and Water Park worth RMB$400
millions. This successful business mission was lead by private sectors business
leaders. There was no government official accompany the business delegation.
During the 5 days visit, we have met with Honorable Wang Lequan - Full Politburo
Members and Secretary of CCP Xinjiang Autonomous Region, Honorable Yang Gang -
Secretary of CCP Wulumuqi
City of Xinjiang Province, Honorable Shokrat Zakir - Mayor of Urumqi City of
Xinjiang Province and Honorable Ms. Wang Jian Ling - Vice Major Urumqi City of
Xinjiang Province. It was rare and exception for the top Officials from the
Provincial and City level to receive the small but powerful business
delegation to work on projects benefiting the City of Urumqi and the Province of
Xinjiang.
When we first
visited China to sign the Sister-City Agreement between the City of Honolulu and
the Hainan Island in 1984. The entire visit must be handled by the 2
governments including all business meetings. Businesses in Hawaii were playing a minor role
during the visit there. Increasingly the
1980 government/business model does not work for the modern China. More and more
businesses in China want to engage Western businesses on the front line, prefer
to have governments on both sides to play an important, but supportive role.
China Government does not want to be in the way of business. In fact China has
turned most of its State Owned Enterprises (SOE) into the hands of private
business owners. They have further encouraged business enterprises to contact
individual business directly.
Business
Executives in China has been instrumental to set up meetings with Government
Official when needed, rather than a requirement to do business there. Many
preferred no Government Official to tag along with a business delegation as they
must schedule meetings with local Governmental Officials even when there is no
need to do so, thus taking away valuable time on serious business dealings and
negotiations.
The Western
Regions of China has presented exceptional opportunities for Hawaii and Smaller
Companies. The impression by most Americans never visited Western China thought
the area to be backward and difficult to do business there. But many upon their
first visit were surprised on the ease to do business there
without facing fierce competitions from the big Enterprises around the world.
Most of the modern amenities are there. Internet and the tools of doing business
are readily available at a very reasonable price. If the business delegation
wish to schedule meetings with local government official, support letter from
your own Federal, City and State Government Official is more than sufficient
therefore saving the taxpayer 1,000s of dollars of travel expenses.
For a small
State like Hawaii, Hong Kong China Hawaii Chamber of Commerce (HKCHcc) has been
very successful working with businesses in Mainland USA and Asia to
increase Hawaiian Companies' financial resources and diversities.
We are expecting
to undertake more similar business mission and initiative in the future focusing
on tangible and measurable results.
July 7, 2004
Give Consideration to
Improving the Business Climate - By Lowell L. Kalapa, 7/5/2004 8:24:54 AM
In the past few weeks, we have reviewed the follies of the latest legislative
bacchanal and realized that despite all of their efforts, lawmakers truly do not
appear to understand what it will take to improve the economic outlook for the
state.
We have witnessed their dalliance with all sorts of gimmicks like tax credits
and deductions or check-offs to finance public programs for which lawmakers
could not find the extra money. While lawmakers profess that they adopt all of
these schemes to encourage economic development and create jobs, there is
absolutely no proof that any of these tax gimmicks have actually created the
plethora of jobs the advocates would like us to believe will be created.
True, there are some jobs that weren’t there before, but one truly has to
question the cost-benefit ratio of dollars lost to the state treasury and the
number of jobs and therefore incomes created. Then again, one also has to ask at
whose expense where those tax credits and exemptions afforded? Since the size of
government didn’t shrink, one has to assume that those tax benefits were paid by
all taxpayers who could not claim them. That means, we taxpayers who were not so
favored ended up continuing to pay for the cost of government albeit at rates
which continue to make it difficult to live and work in Hawaii.
And it is difficult to make ends meet where one often finds both parents holding
down two or more jobs to put food on the table and a roof over the heads of
their children. For business, it means making a smaller margin of profit in what
is a highly competitive environment. Advocates of the tax breaks argue that
workers will benefit from the new jobs created and other businesses will benefit
when workers in those new industries patronize those businesses or for that
matter if the new industry purchases goods and services from existing,
not-so-favored businesses.
And that may truly happen, but until the new industries get up and running and
actually produce products for sale, residents may be forced to leave Hawaii and
existing businesses may have to fold their tents because they cannot afford to
stay in business.
The point of the matter is that for all of the millions of dollars tossed to the
wind to lure this or that industry in Hawaii, what if lawmakers had taken the
same hit in revenues by lowering tax rates for all taxpayers -- both businesses
and individuals -- in Hawaii? Lawmakers might not only consider taxes but many
of the regulations and permitting processes they force individuals and
businesses to undertake to do just about anything in Hawaii.
From building permits to professional licensing, regulations to meet fire code
standards and licensing of child care facilities, each and every one of those
regulations should be reexamined for appropriateness and timeliness in granting
those permits or licenses. More often than not, it is a matter of moving paper
along faster or better coordinating inspections so that it is not a matter of
who came first before the second and third inspector can pass judgment.
Lawmakers need to review the growing cost of workers= compensation insurance and
the mandatory prepaid health care costs that continue to soar. While we may want
to afford workers a multitude of protections and benefits, the economy cannot
afford a Cadillac of coverage at the expense of jobs that may have to be reduced
or eliminated so that a business can stay in business. What good will it do to
sit and watch these costs soar because elected officials don=t want to be the
"bad guy" in calling for more modest benefits if people end up losing their jobs
because businesses can't afford the cost.
Two tenets that lawmakers should always remember as they mull future legislation
are: (1) time is money, and (2) businesses don't pay taxes. Apparently,
lawmakers have no idea that in the business world every second that passes or
stroke of the minute hand on the clock face is another dollar lost. Businesses
have to account for every minute that they are not selling their goods or
services as another dollar that is lost. So time consuming regulations and
government bureaucracy just add to the cost of doing business that must be
recovered in the sales of goods and services.
Finally, all elected officials should repeat over and over again: businesses
don't pay taxes, they must pass the cost of the tax on to their customers, if
they don't, they will soon go out of business. So let's make the business
climate better for all businesses, because in the end it makes for a brighter
economic future for all Hawaii.
Lowell L. Kalapa is the president of the Tax Foundation of Hawaii, a private,
non-profit educational organization. For more information, please call 536-4587
or log on to
http://www.tfhawaii.org
March 31,
2004
"China Hawaii Chamber of Commerce" and "China Chamber of
International Commerce Guangzhou Chamber of Commerce (CCPIT)" agree to enhance
the liaison and cooperation in the area of import and export, investment,
business information and other commerce related activities for the benefit of
the members of both organizations have decided to extend their agreement signed
on September 30, 2001 indefinitely. The business relationship has resulted in
more than US$10,000,000.00 of trade and business between Guangzhou, Hawaii and
California. We are expecting the agreement will take further advantage of the
CEPA arrangement between Hong Kong and Pearl Delta Region.
Click on the small picture for the full view
March 29, 2004
I. The (EB-5) Million Dollar
Investment Immigration program is alive and well.
Congress has liberalized the (EB-5) Million Dollar Investment law. Since 2002,
it already eliminated the “establishment” requirement for EB-5 investors.
Investors now need only show that they have “invested” in a new commercial
enterprise (an entity established after 1990). Pool fund investment may now
qualify for EB-5 visas. In 2003, Congress also extended the Immigrant Investor
Regional Center pilot program for another 5 years. Those who invest in projects
in the State of Hawaii, an approved Regional Center, may create lesser number of
jobs to qualify for EB-5 visas.
II. Major Reduction of Quota for Specialty Occupation (Professional) Workers.
With the sunset of several provisions in the H-1B visa program on October 31,
2003, (including the $1000 training fee), the total number of H-1B visas for
Specialty Occupation workers can be issued is only 65,000, a significant drop
from 195,000. In fact, since the beginning of the fiscal year (October 1) to
this date, all quotas have been subscribed. The new quotas for the next fiscal
year will be issued only after October 1 2004. The earliest date for a new H-1B
Petition to be accepted by Citizenship and Immigration Service is April 1, 2004.
III. Significant Delay in Visa Applications Abroad and in the US.
Visa security clearances have substantially increased in post 9/11 case
adjudications. It is mandatory for Consulates and Citizenship and Immigration
Service to enter names of (non-immigrant or immigrant) visa applicants into the
Interagency Border Inspection System for security clearance before issuance of
visas. Also, all nonimmigrant are expected to be fingerprinted at the time of
visa application. Certain consular posts are reported to cause delay in the
issuance of visas for up to weeks.
IV. Change of Address Notification is required by the Law
Every lawful permanent resident (green card holder) or non-immigrant (such as
student, professional worker, treaty investor and etc.) is required to report to
CIS the new address after his/her change of address within ten days. CIS is now
more strictly enforcing this requirement. Failure to report the change of
address may have severe immigration consequences. To report, please download
form AR-11 and instruction from CIS site:
www.uscis.gov.
Contact Information:
Law Offices of Alan W. C. Ma *
1600 Kapiolani Blvd.,
Pan Am Building, Suite 1030
Honolulu, Hawaii 96814
Phone: 1-808-944-1188 Fax: 1-808-944-8877
Email: lawyer.ma@verizon.net
Website:
http://www.usimmigration-hawaii.com
* Attorney Ma is elected by peers and listed in “Best Lawyers in American” for
the past ten years consecutively.
March 16, 2004
A Tale of Lan Kwai Fong, by Allan Zeman - Webcast
Founder and chairman of Lan Kwai Fong Holdings Allan Zeman
has played a pivotal role in turning Lan Kwai Fong into the coolest and most
fashionable entertainment, dining and tourist attraction in Hong Kong. He shares
with us the story of Lan Kwai Fong and his plans to export the brand to major
Chinese cities.
March 7, 2004
"Foreign Investment &
Dispute Resolution in China” - Based on a Presentation
made at JAIMS
by
Audrey Hong Li, Shu Jin Law Firm, Shanghai, China. Audrey is
a member of the Hong Kong China Hawaii Chamber of Commerce.
Part One: Foreign Investment
1. Overview
a. Achievements in Foreign Investment in China
Over the last 25 years China has sustained a growth rates in excess of 7% and is
becoming the world’s third largest economy. Foreign investment in 2002 reached a
record high of over 50 billion US. In 2003, American investment to China alone
has reached 4 billion US and over 4,000 American invested companies were
incorporated in China. More multinational corporations are adjusting their
investment structures by shifting not only manufacturing but also R&D centers
and regional headquarters to China.
To take Shanghai for example, now Shanghai has 106 R& D centers, 56 regional
headquarters and 90 foreign investment companies.
b. Legal Framework
China is now in the process of making its legal system increasingly streamlined,
transparent and predictable.
Laws and rules issued and promulgated from 1979 to March 2003:
Constitution Law of 1982 and three Amendments;
At the national level: 420 laws by the National People’s Congress;
900 administrative laws & regulations by the State Council;
50,000 implementing administrative rules by various ministries under the State
Council;
At the local level: 8,000 local rules and regulations by different provinces and
municipalities.
In 2004 further legislative improvements concerning investment transactions :
Amendment of Company Law and Securities Law;
Formulation of laws regarding Bankruptcy, Corporate Income Tax, Foreign Currency
and Foreign Trade as well as Anti-Trust, Anti-dumping and Anti- Unfair
Competition.
2. Brief History of Foreign Investment in China
Traditionally tools for foreign investments in China:
(i) Representative Office: not an entity, not allowed to generate local revenue
(ii) Branch: normally for foreign financial institutions only
(iii) Equity Joint Ventures: limited liability, but lack of control
(iv) Contractual Joint Ventures: more flexible
(v) Wholly Foreign Owned Enterprises (WOFE): full control, not available in all
industries
(vi) Foreign –Invested Joint Stock Company:
Basic Description of FIE:
(1) Limited liability within ratio of capital contribution;
(2) 25% minimum equity contribution required to qualify as “regular” FIE
entitled to preferential tax treatment and other benefits;
(3) Ultimate control is at board rather than shareholder level, Board Chairman
is LR of JV, General Manager wields day-to-day operational control.
(4) Regulatory approval required for any change in equity structure (eg. sale,
termination) makes exits complicated)
3. Key Legal Developments
a. M & A
Now: Under the new M&A rule and regulations in recent years, foreign companies
CAN:
i. Acquire existing shares or new shares of domestic enterprise;
ii Acquire operating assets from domestic enterprises
iii Acquire operating assets from domestic enterprises for contribution as
capital to establish new FIE
b. Other Acquisitions by Foreign Investors
i. Acquisition of assets, shares and creditor rights owned by State-owned
Enterprises (SOE)
ii. Acquisition of non-tradable shares (Legal Person Shares) in Chinese listed
companies
iii. Acquisition of A shares in Chinese listed companies (QFII)
iv. Acquisition of Equity in existing FIEs
c. Establishment of Companies with an investment nature by Foreign Investors
Foreign investors with multiple China investment projects CAN establish
companies with an investment nature to (1) provide services to one another, (2)
centralize purchasing or administration and (3) consolidate accounting WITHOUT
subject to the 50% net asset limitation on investment by the holding company.
4. Using Hong Kong as Entry Point: CEPA
Effective from 1 January 2004, “Closer Economic Partnership Arrangement” (CEPA)
can be used by foreign companies with Hong Kong based operations as entry point
to get access to Mainland China to (1) Trade in goods with zero tariff, (2) to
Trade in 18 service sectors ahead of WTO Commitment and with lower threshold.
5. Trends
To sum up the development of foreign investment in China:
a. WOFE is becoming an increasingly common vehicle for foreign investors;
b. Foreign operations in China will become more streamlined, and M & A, both
domestic and cross border, will become enormous;
c. Government regulatory approval is still critical, official discretion
sometime too broad and local regulations are not consistent, but government is
becoming more supportive of innovative transactions.
d. Now is an opportune time to enter China. It’s both an opportunity and a
challenge.
Part 2: Dispute resolution in China
There are normally 4 alternatives in resolving commercial disputes, i.e.
negotiation, conciliation, arbitration and litigation. Arbitration has become an
increasingly preferred because;
(1) Convenient, cost saving and efficient;
(2) Procedures flexible and confidential;
(3) Can apply foreign laws;
(4) Award is final and binding,
(5) Award can be enforced both in China and foreign countries.
1. Over view
China’s first Arbitration Law: implemented in 1995.
Independent domestic arbitration commissions at major cities: Mainly domestic
cases, some foreign related.
CIETAC (China International Economic & Trade Arbitration Commission): Major
venue for foreign related disputes; started to take domestic cases recently.
2. Domestic Arbitration
At present there are more than 170 domestic arbitration commissions throughout
the country. By 2001, over 12,000 cases have been heard and decided. In terms of
number of cases and amount of disputes involved, the top three largest and most
active ones are Guangzhou Arbitration Commission, Beijing Arbitration Commission
and Shenzhen Arbitration Commission.
3. CIETAC ( China International Economic and Trade Arbitration Commission)
(1) Organization:
The leading permanent international commercial arbitration institution in China
with its headquarters in Beijing.
Originally established in 1956 within CCPIT.
Over the years to suit China’ economic and trade development the organization
was re-organized and took on its current name in 1988. 1n 1989, CIETAC
established a Sub-Commission in SZ and in 1990 in SH and currently maintains 6
offices. They applied a uniform rule of arbitration and panel of arbitrators.
CIETAC no longer attached to CCPIT.
(2) Arbitration Rules and Panel of Arbitrators:
Arbitration rules amended 5 times.
Currently 3 set of rules are available:
(1) one for international economic and trade disputes;
(2) one for domestic disputes;
(3) a new one in May 2003 to do deal specifically with financial disputes.
Unique Panel System: the disputing parties CAN ONLY appoint arbitrators from
among the Panel of Arbitrators;
Panel of Arbitrators: 518 arbitrators in total, of whom 174 are foreign
arbitrators involving over 30 countries and regions around the worlds.
(3) Achievements
Up to now CIETAC has concluded 8,000 cases involving parties from 45 countries
and regions with a load of approximately 700-800 cases each year, and has become
one of the well-known international arbitration institutions in the world.
Since 1994, CIETAC has ranked FIRST among major international arbitration
institutions world wide, in terms of numbers of cases accepted, and has become
the busiest international arbitration in the world.
(4). Enforcement/ 1958 Convention/ Civil Procedural Law/
China acceded to 1958 New York Convention in 1987;
CIETAC’s awards have been able to be recognized and enforced outside China, now
in 149 countries;
CIETAC’s awards have been recognized and enforced in more than 40 countries.
(5). Key development
(1) CIETAC Domain Name Dispute Resolution Center: set up in December 2000 to
resolved domain name disputes in the areas of IP and information technology,
specifically on IP and internet domain names in cyberspaces. 108 cases in 2003
(2) Asian Domain Name Dispute Resolution Center: JV between CIETAC & Hong Kong
International Arbitration Center, it is one of the only 4 domain dispute
providers in the world, the first one and only one in Asia.
(3) CIETAC Financial Dispute Arbitration Rules and Arbitrators in May 2003: to
solve disputes arising from financial disputes’
6. Major issues to be considered for arbitrating before CIETAC
(1) First must have a Validity of Arbitration Agreement—challenge of
arbitrator’s jurisdiction
Clear Content: specify complete name, intent,
Can apply foreign laws and English languages if set forth in the contract.
(2) Second, before filing Application for Arbitration, take preservative
measures including Property Preservation and Evidence Protection to ensure
enforcement of awards..
(3) Third, Selection of arbitrators
Majority opinion prevails. Each party picks one with 3rd jointly selected or by
the Chairman of CIETAC. Avoid conflict of interest.
Ethical Rules of Arbitrators: professional code of ethics for arbitrators
(i) CAN”T give advice, accept gifts, Should withdraw if there is conflict of
interest. Should give parties ample opportunities to present the case;
(ii) will assume legal liability if committed Met privately, accepted bribes,
committed embezzlement shall be removed from the List.
(4) Fourth, Make sure there is no procedural violation, which can cause the
award to be set aside or not enforced.
(i) Grounds for refusing to recognize or enforcement of Foreign Related or
international awards:
1) No valid arbitration agreement;
2) Matters decided exceed scope of arbitration or beyond arbitral authority of
the arbitration institute;
3) Formation of arbitral tribunal or the arbitration procedure no in conformity
with the rules of arbitration;
4) The parties against whom the enforcement is sought was not properly notified
to appoint an arbitrator or to take part in the arbitration proceedings or was
unable to state his opinions due to reasons for which he is not responsible -
denial of right to properly present the case
5) Misconduct of arbitrators in arbitration, such as arbitrators committed
embezzlement, accepted bribes, practiced graft or made an award that perverted
the law--
6) The recognition or enforcement would be contrary to the public policy of that
country.
The above all restricted to procedural violations/irregularity and not touch on
the merits of an award
(ii) Grounds for refusing domestic awards:
1) Main evidence for ascertaining the facts was insufficient
2) Application of law truly incorrect
3) Directly relates to merits of the award
January 12, 2004
EB-5 Visa Could Cost Investors Millions!
Quoted from a prominent Attorney from San
Francisco today, " Great information release. I have seen a number of fraud
cases on these EB-5 scheme. Most of them prey on the intense interest of
immigrants to come to America. The business aspects must come first. However
potential immigrants are blind sided by the promise of permanent residency in
America."
We have received inquiries from Asia
regularly regarding to various legal ways to obtain permanent status in the
United States. According to all reputable attorneys we have spoken to, an
eligible investor should have no problem applying under the EB-5 visa. Most of
the problem came from the promoters of EB-5 visa using the EB-5 visa as a mean
to fund their projects. In the past many EB-5 investors have seen their
US$500,000 to US$1,000,000 investments turned into
multi-millions dollar loses.
Many States use EB-5 visa to attract investments with promoters NOT affiliated
with State agencies. It is the promoter, in many occasions using the State
agencies while working through the program to mislead investors as a State
sponsored investment scheme.
The legal fee to file for the EB-5 visa is
small (US$10,000 - $30,000) in comparison to the amount of investment
(US$500,000 - $1,000,000) under the program. You want to find out if there is
any financial arrangement between the attorney, the promoters and the States
(conflict of interest) to promote any particular EB-5 related investments.
You may also want to use a third party
consultant to investigate the feasibility of the proposed EB-5 investment
scheme.
We are hereby providing some basic
information about the EB-5
Visas for Immigrant Investors***
On November 12, 2003, the Senate passed by unanimous consent S.1685, a bill to extend
the employment eligibility pilot program for five years and to expand it to all
50 states. The bill would also require a report on how to resolve problems with
the program. On December 3, 2003, the President signed into law a bill extending and
expanding the employment eligibility verification pilot program. The law also
extends the EB-5 immigrant investor regional center pilot program.
Under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. §
1153(b)(5), 10,000 immigrant visas per year are available to qualified
individuals seeking permanent resident status on the basis of their engagement
in a new commercial enterprise.
Of the 10,000 investor visas (i.e., EB-5 visas) available annually, 5,000 are
set aside for those who apply under a pilot program involving an INS-designated
“Regional Center.”
Just because a visa is available or seems right for you, it doesn't mean it's
possible for you to get it. That's sometimes the case with the EB-5 visa, which
is designed for immigrant investors. Congress created this visa in 1990, but the
INS has taken a series of steps severely limiting its use.
In 1998, for instance, the INS restricted some methods of investing in US
businesses. What's more, the INS launched a series of investigations against
companies assisting people in establishing investments for the purpose of
immigrating to the US under the EB-5 visa. Given all this, is it possible to get
an EB-5 visa? It is, but only with careful planning.
Congress created the EB-5 visa category as part of the Immigration Act of 1990,
hoping to attract foreign capital to the US and create jobs for American
workers. Under the program, 10,000 visas are available each year, and 3,000 of
them are reserved for people who participate in a pilot program designed to
target low-employment areas.
Basic Requirements
Applicants must meet three basic requirements to obtain an EB-5 visa:
- Establishment of a business.
- Investment of at least $1 million in the business (though $500,000 is
acceptable in certain cases).
- Creation of full-time employment for at least 10 US workers.
- Ways to Establish a Business
To establish a business, you can create an original enterprise, purchase one and
restructure or reorganize it, or expand an existing business through investment.
You must be actively involved in the business, not just an investor.
Investment Essentials
As for the investment, it can be made in a number of forms, including cash,
equipment, inventory and other property. A $1 million investment is typically
required, but $500,000 is acceptable if the business is established in a
"targeted employment area." Targeted employment areas include rural areas and
regions with an unemployment rate that's 150 percent of the national average.
An individual may invest the required amount alone, create the business with
another immigrant investor, or even US citizens or others not seeking EB-5
visas. If the investment is being made with others, each person who is seeking
classification as an immigrant investor must have invested the required $500,000
or $1 million.
Job Creation
The investment must create at least 10 full-time jobs. Spouses or children may
not be included in calculating the job-creation requirement. What's more,
part-timers may not be used in the calculations.
Conditional Permanent Residence
In order to deter fraud, immigrant investors, their spouses and dependent
children are subject to "conditional" permanent residence for a two-year period.
After two years, the entrepreneur is eligible to file to end the conditional
status. To do that, the entrepreneur must have continuously maintained the
investment during the conditional residence period. The entrepreneur's residence
may be terminated if it is found the business was not established or was
established solely to evade immigration laws. The INS will examine the business
at the end of the two-year period to determine whether or not the individual has
complied with all of the EB-5 visa's requirements.
COURT DEALS BLOW TO EB-5 CASES
A federal district court in Hawaii has issued a decision severely limiting the
avenues of recourse for those who were denied immigrant investor visa status
when the INS policy on adjudication of such cases changed. Readers may be
familiar with the ongoing disputes about the immigrant investor visa program,
commonly known as the EB-5 visa.
This category allows a person to gain permanent residence through the investment
of at least million (500,000 if the investment is made in certain areas). After
the program was created in 1990, many enterprises sprang up designed to assist
those who were interested in the program. One of the most common investment
plans allowed the intending immigrant to collect interest on the amount
invested, and guaranteed that the investment could be returned after permanent
residency was granted. After a few years of approving petitions submitted by
such companies, the INS began to express concern that the investments were not
being made in a way that followed regulations. A hold on processing was
implemented while the INS investigated the matter.
During the summer of 1998, the INS issued four legally binding decisions
(referred to as precedent) on all future EB-5 applications. The important result
was a stricter attitude toward examining the nature of the investment.
Investment plans such as those described above were no longer sufficient for the
EB-5 program.
In the case that prompted this lawsuit, five people filed EB-5 applications
after investing in R.L. Investment Limited Partners. Each of these applications
was filed at the same time. Four were granted, but a fifth was delayed because
of the INS processing hold. When adjudication began again following the release
of the precedent decisions, this fifth application was denied.
Following an appeal to the Administrative Appeals Office, which was denied, the
fifth investor filed suit against the INS, alleging that the denial of his
application was an abuse of discretion, and that in adopting the new precedent
decisions the INS failed to follow required rules for creating new regulations.
The district court disagreed, and found for the INS.
On the first issue – whether the INS abused its discretion in denying a case
after approving four identical ones – the court found the answer was clearly no.
For a decision of the INS to be an abuse of discretion, it must be contrary to
the language of a statute or regulation, or impose an additional requirement not
found in the statute or regulation. According to the court, the definition of
“invest” found in the precedent decisions is not contrary to the statute or
regulations, in which investment is not defined. Although there may be other
reasonable definitions of investment, it is not the role of the court to make
such a policy decision.
The court also found that the INS did not violate rules for creating new
regulations. Under the Administrative Procedures Act, “legislative” rules, those
that create a change in policy, must be subject to a notice and comment period
during which the public can submit reactions to a proposed agency rule. Such
procedures are not required for interpretive rules, which are those that clarify
existing regulations. Prior to the 1998 precedent decisions, the INS had not
issued any official statement regarding its adjudication of EB-5 applications.
There were some unofficial guidance documents, many of which were available to
immigration practitioners, but none of them were official. Because these
unofficial documents had not been subjected to the notice and comment process,
they could not constitute regulations with the force of law. Therefore, the INS
was not required to have a notice and comment period before adopting its new
interpretation.
INS ISSUES RESTRICTIVE INTERPRETATION ON VALIDITY OF CERTAIN TYPES OF EB-5
INVESTOR GREEN CARD FINANCIAL TRANSACTIONS
INS General Counsel David Martin has issued a memorandum that will surely be a
major blow to a number of EB-5 Immigrant Investor Programs. Generally speaking,
EB-5 green cards are available to persons who invest a million dollars in a
commercial enterprise (or $500,000 in an enterprise in a high unemployment or
rural area) and create ten jobs. Martin reviewed a number of different EB-5
petitions and determined that some of the most common types of EB-5 investments
do not comply with the existing statute and regulations.
The plans reviewed by the INS involve some combination of the following:
1) the use of a down payment of cash with the remainder of the alien's
contribution in the form of a promissory note;
2) a multi-year installment payment plan on a promissory note with a substantial
balloon payment after the conditions on the alien's lawful permanent resident
status are removed;
3) an option given to the alien to sell his or her investment for a fixed price
that may be less than, equal to or greater than the alien's cash contribution
(usually exercisable before or at the same time as the balloon payment on the
promissory note is due);
4) an option given to the enterprise or limited partnership to buy the
investment at a fixed price (usually exercisable before or at the same time as
the balloon payment on the promissory note is due);
5) a provision that allows or requires the commercial enterprise to place
sufficient cash into a bank account to guarantee that funds will be available to
repay the alien if the alien exercises the sell option;
6) withholding of a portion of the alien's capital contribution for attorneys'
and finders' fees and other administrative costs; and
7) a guaranteed return on the cash portion of the alien's "investment."
Martin noted that the business plans in question typically involve the creation
of a limited partnership that pools the money of alien investors to invest in
either a new or troubled business in the United States, frequently in a
"regional center."
The first basic problem noted by Martin with these plans is that the new
commercial enterprise being established involves a partnership that is supposed
to serve as a conduit for placing the aliens' capital to start-up or existing
businesses that will create or sustain employment, but, because of various
provisions in the investment or limited partnership agreements, only a small
amount of the alien investor's money or other capital is actually able to reach
the operations of the employment-creating or preserving business. Furthermore,
the aliens appear to receive relatively risk-free debt interests rather than
equity interests in the new business.
Martin addressed seven legal questions and provided summary answers as well as
an extensive legal analysis. We will shortly be posting the entire memo in the
Documents Collection of our web page (http://www.visalaw.com/docs).
The following are Martin's summary comments:
1. Do investment plans that involve guaranteed interest payments, buy and sell
options at a fixed price other fair market value, and other debt features
comport with the statutory and regulatory requirements?
No. Such plans appear in fact to constitute "loans" or other debt agreements,
and therefore fail to meet the definition of "invest" in our regulations. The
regulations expressly prohibit the use of debt arrangements as part of
contributions of capital being invested.
2. Do investment plans involving different combinations of provisions designed
to reduce or eliminate the risk to the alien's capital by limiting the amount of
capital actually available for the operations of the job-creating enterprise
comport with the statutory and regulatory requirements?
No. Such plans impermissibly prevent the alien from placing the required amount
of capital at risk of loss in the employment-generating business. This is
equally true where the new commercial enterprise is in the business of lending
capital to job creating businesses and acting as a mere conduit between the
alien and the job-creating business. Such plans use a number provision to shield
the alien's capital from risk including the deposit of cash in bank accounts to
guarantee repayment of the alien's money, the use of promissory notes with large
final "balloon" payments combined with the option to "sell" the alien's
investment in the business at a fixed price and guaranteed returns on the
alien's cash outlays. Such plans appear to continue to allow the alien to
withdraw his or her capital prior to the time the balloon payment is due. In
addition, the use of promissory notes in such plans fails to meet the
requirement that an alien invest "capital" having a fair market value equal to
or greater than the amount required in the statute.
3. Do investment plans that allow an alien to earn a fixed return on his
investment at the same time that he or she continues to make installment
payments on a promissory note comport with statutory and regulatory
requirements?
No. These plans effectively permit the alien to reinvest his or her return on
the initial cash contribution in the new commercial enterprise. Therefore the
alien is not infusing new capital into the enterprise or the U.S. economy in the
statutorily required amount.
4. Should the Service request that the Department of State cease issuing visas
and return petitions for revocation based on investment plans involving these
terms.
Yes, for the reasons stated in summary conclusions 1, 2 and 3.
5. Do plans like those reviewed by our office comport with existing law?
No. Based on our review of a number of approved and pending petitions filed with
the Texas Service Center, we have concluded that they fail to meet the
requirements of the statute or the Service's regulations. Any plans which
involve similar terms would also fail to meet current statutory and regulatory
requirements.
6. Is the Service estopped or otherwise precluded from denying or revoking
petitions filed by aliens investing in the plans like those under review based
on past approval of petitions earlier policy statements, or informal statements
by Service officials?
No. Under the Administrative Procedure Act and relevant cases, the Service is
not bound by its pervious decisions in adjudicating visa petitions. We
recommend, however, that the Service issue a memorandum to the field consistent
with this memorandum and publish that memorandum in the Federal Register.
7. Is the Service estopped or otherwise precluded from terminating the status of
a conditional resident alien who has invested in plans like those under review
based on past approval of petitions, policy statements, or informal statements
by Service officials?
No. Under the Administrative Procedure Act and relevant case law, the Service is
not bound by its initial grant of a petition when terminating conditional
residence status based on a visa petition that was granted in error or based on
the fact that the alien is subject to termination under section 216A of the Act.
We recommend, however, that the Service issue a memorandum to the field
consistent with this memorandum and publish that
memorandum in the Federal Register.
The last two findings will be especially disturbing to persons who have already
come to the US with EB-5 visas covered in the memorandum. Whether the INS will,
in fact, actually go back and revoke previously approved green cards remains to
be seen.
The INS and State Department have already, however, circulated memos to the
field asking that EB-5 visas be reviewed using the General Counsel memorandum
for guidance.
In a related matter, the California Commissioner of Corporations Dale Bonner
announced that he ordered InterBank Immigration Services, Inc. of Herndon,
Virginia, one of the best known EB-5 investment firms, to stop offering
investments to non-US citizens. Bonner noted that while no fraud is alleged, the
firm is illegally selling securities in California. Bonner noted that the state
securities laws are intended ensure that investors are investing in something
real. According to Bonner, the protections are particularly important where the
offering is targeted to non-US citizens who may be desperate to find a legal way
to stay in this country.
***Material from the immigration law firm of Siskind, Susser, Haas & Devine was
used in this report. This information is provided as a public service and not
intended as legal advice or the establishment of an attorney-client
relationship.
January 6, 2004
A strategic alliance between KFC and Bubugao Supermarket of Hunan Province in
December 2003 is expected to make quite an impact on the province's catering and
supermarket sector.
Fortune 500 enterprise KFC has dominated China's fast food scene for many years,
while Bubugao is a local supermarket leader with outlets in 14 Hunan cities.
KFC already has over 900 outlets in China. Xiangtan Jijian KFC and Zhuzhou Guoan
KFC, which signed the contract with Bubugao, are the 22nd and 23rd KFC outlets
in Hunan.
These restaurants are located either in the provincial capital Changsha or in
district-level cities. The opening of five Bubugao stores at the county seats of
Qiziqiao, Xiangxiang, Liling, Qiyang and Nanxian at the end of 2003 will give
KFC access to the county-level market.
But Li Chuanzhang, general manager of Changsha KFC, stopped short of calling the
alliance Colonel Sanders' first shot in the countryside. Under the terms of the
agreement, the two parties will join hands to open up the market in cities
around Hunan, with the object of achieving a mutually beneficial synergy.
Li Chuanzhang admits that KFC will follow Bubugao wherever it goes provided that
the latter's choice of location for new stores meets its requirements for
consumer spending power, hygiene and convenience.
Strategic alliances are intended to capitalize on the brand advantages of
partners to achieve results and KFC has formed its first alliance with Bubugao
to take advantage of the latter's reputation and rapid expansion.
Wang Tian, chairman of Bubugao, also openly declares his ambition to expand in
Hunan. On the basis of its existing 225 stores nationwide, it plans to open 20
new stores in 2004, including 10 in county seats.
The deal saves KFC the trouble of looking around for suitable locations in its
expansion drive. This arrangement also gives KFC right of access to nearly 100
Bubugao stores over the next two years.
December 31, 2003
Prospects for Hong Kong's Clothing
Industry with CEPA - A Survey of Consumers in Eastern & Northern China
Executive Summary
This survey brings to light encouraging features about the mainland clothing
market for Hong Kong companies. The survey findings indicate that Hong Kong
clothing brands are considered competitive by mainland shoppers, particularly in
the mid- and high-end segments. The survey also finds that mainland shoppers are
receptive to new brands. As such, newcomers may not be overly concerned that
mainland consumers will stick to established brands without trying new brands
that are fashionable and cut well.
Meanwhile, the mainland's retailers are confident about prospects for Hong Kong
clothing brands, and they are interested in bringing in more non-local brands,
including those from Hong Kong. At the same time, many mainland retailers intend
to step up co-operation with franchised brands, including those from Hong Kong.
Beyond doubt, the conclusion of the Closer Economic Partnership Arrangement
(CEPA) between the mainland and Hong Kong offers new opportunities for the Hong
Kong clothing industry. According to the arrangement, a total of 36 Hong
Kong-made clothing items, subject to CEPA's rules of origin, will enjoy
duty-free access to the Chinese mainland from 1 January 2004. Under CEPA,
eligible Hong Kong clothing companies will be allowed additional market access
plus removal of specific restrictions in the mainland market. From 1 January
2004, eligible companies will be permitted to engage in commission agents'
services, wholesale, retail and external trade in the mainland on a wholly-owned
basis. Under CEPA, Hong Kong service suppliers are also allowed to engage, in
the form of wholly-owned operations, in franchising in the mainland. In
addition, Hong Kong permanent residents of Chinese nationality will be permitted
to set up individually owned retail stores in Guangdong Province when CEPA comes
into effect.
Conducted in June 2003, this survey study is devoted to examining the
characteristics of garment markets in six cities in Northern and Eastern China.
The six cities covered in this study are i/ Harbin (哈爾濱), Shenyang (瀋陽) and
Tianjin (天 津) in Northern China, and ii/ Hangzhou (杭州), Nanjing (南京) and Ningbo
(寧波) in Eastern China. In order to give readers a more comprehensive
understanding of clothing shoppers in Northern and Eastern China, this report
refers, where appropriate, to the corresponding findings of the garment
shoppers' survey in Beijing (北京), Dalian (大連) and Shanghai (上海) conducted by the
TDC in 2002.
This study was composed of two interlocking surveys. The first survey (survey on
shoppers) successfully interviewed a total 1,200 shoppers of garments in central
shopping locations of these six cities. The second survey (survey on retailers)
interviewed managers/officers-in-charge of major department stores and chain
stores in these six cities. The survey study analyses the mainland's garment
market in terms of consumer behaviour, competitiveness of Hong Kong brands,
consumer segments with the greatest spending power and the retail environment of
garment markets in these six cities. The main survey findings are as follows:
CONSUMER BEHAVIOR
Shopping Time
Visiting clothing stores is a habit, particularly among Nanjing consumers.
Shopping on the weekends is common. Major shopping occasions include Labour Day
(1st May), National Day (1st October), and Chinese New Year (Jan/Feb).
Shopping Locations
Department stores are the most preferred type of retailers, followed by clothing
chain stores and shopping malls.
Female executives are particularly interested in shopping in department stores.
Guaranteed quality, product variety, availability of brands and credibility are
the major reasons for visiting a clothing store.
Selection Criteria
Fashionable style stands out as the prime consideration for buying clothes,
followed by well-cut clothing and price. (However, respondents in Shanghai
heavily consider brand image.)
Purchasing Power
Average annual expenses on clothing equal RMB 2,727 in Eastern China and RMB
2,354 in Northern China.
Product Trends
White, black and blue are the most preferred colors.
Mainland fashion trends are most influential when shoppers consider the styles
of clothes, followed by the trends in Hong Kong.
Brand Preferences
Shoppers are highly receptive to new brands.
Well-cut clothing, guaranteed quality, style and image are top factors affecting
brand selection.
Poor quality, outdated styles and limited selection are major reasons causing
shoppers to switch brands.
Marketing Channels
TV commercials and advertisements in newspapers/magazines are the most popular
promotional and sales activities, followed by promotional stands in shopping
malls and clothing fairs.
CONSUMER SEGMENTS WITH THE BIGGEST SPENDING POWER
Students are and will be the strongest buyers of casual wear.
Office ladies (not necessarily executives) are and will be the strongest buyers
of female office wear.
Professionals and managers will be the biggest spenders on male office wear.
COMPETITIVENESS OF HONG KONG BRANDS
The competitiveness of Hong Kong brands mainly rests on style, quality and brand
image.
Hong Kong clothing brands are attractive in both quality and price in higher-end
and mid-range segments, but not in the low-end.
RETAIL ENVIRONMENT
Branded casual wear generates higher net profit margins.
Retailers offer major discounts on female office wear sooner than other types of
clothing. In other words, discount strategy is more common for office wear.
Mainland retailers are optimistic about the prospects for Hong Kong and
international brands. Local brands presently account for the lion's share of
retail clothing sales; this proportion will drop in the next three years given
the increases in Hong Kong and international brands.
The proportion of franchised brands will increase in the next three years,
particularly Hong Kong and international franchise brands.
SUMMARY OF DIFFERENCES AMONG CITIES/REGIONS
As can be expected, shoppers interviewed in central locations of these cities
tend to show certain common purchasing habits, which are consistent with their
higher, average incomes than other urban city dwellers. While recognizing their
similarities, there are in fact certain differences among garment shoppers of
different cities and regions. Results of garment shoppers in TDC's 2002 survey
will be highlighted in the main text when appropriate.
The survey shows that consumers of Eastern China are slightly more price
sensitive. Consumers of Nanjing pay attention to clothing prices. This is partly
because of the keen competition of clothing markets in Eastern China, and
consumers there have a wide variety of clothes for their selection.
In terms of types of clothing purchase, consumers in Eastern China tend to buy
more T-shirts, particularly those in Nanjing. Relatively speaking, Eastern China
is warmer than Northern China, so that consumers have more opportunities to wear
T-shirts.
Similarly, consumers in Shenyang purchase more trousers. This also shows the
importance of offering an appropriate product mix for consumers of different
regions.
Probably due to traditional preferences, consumers in Eastern China spend more
on clothes as gifts for others. In particular, consumers in Nanjing tend to use
more often clothes as gifts for others.
Consumers of Northern China, particularly those in Shenyang, show stronger
interest in Hong Kong brands. This may have something to do with the established
reputation of some Hong Kong brands in these markets, while brands of other
countries are still catching up. In comparison, consumers of Eastern China are
less aware of the attractiveness of Hong Kong brands. In view of the keen
competition in the region, Hong Kong companies have to enhance their efforts to
increase brand popularity.
Hong Kong brands are also more important for retailers in Northern China, taking
up higher proportions of their total sales. Similarly, franchising also commands
higher importance in sales in Northern China than in Eastern China.
RECOMMENDATIONS FOR HONG KONG COMPANIES
As reflected in the survey results, mainland consumers are generally receptive
to new brands. Hong Kong clothing companies should never hesitate to launch new
brands in the mainland market, though it is also necessary to step up efforts in
product design, quality and variety as well as brand promotion. When exploring
the mainland market, attention has to be paid to local fashion trends, which
exert the greatest influence over the tastes of mainland consumers. Given the
preferential treatments of CEPA, eligible Hong Kong clothing companies should
make efforts to establish wholesale and/or retail businesses in the mainland, as
mainland retailers are ready to bring in more non-local brands. Other specific
suggestions include:
Customers are well aware of clothing trends and prices. It is necessary to make
an effort to have differentiated products as well as to study market prices
carefully.
Be attentive to affordability in
setting price points for different clothing categories and in different cities.
Setting up counters in department stores may be a good starting point as they
are most attractive to clothing shoppers, especially female executives.
Provide better customer service and
product guarantee policies, as customers seriously value store credibility.
Keep abreast of market trends and use fabrics and materials that are in vogue.
Allocate sufficient resources for advertisements, including the use of movie/TV
stars as brand speakers.
Brand owners can consider developing a franchise business in the mainland.
Explore the opportunity of acting as an agent of foreign clothing brands to
develop franchising opportunities in the mainland.
Target students for the promotion of casual wear.
Project Hong Kong's key strengths in
style and quality when promoting brands.
Hong Kong brands stand a better
chance in the higher-end and mid-range market segments. Hong Kong companies have
to stay away from low-end segment as they are not competitive with mainland
competitors.
December 24, 2003
Revised Franchising Rules Soon to Come Out
According to the China Chainstore and Franchising Association (the Association),
the State Council's Legislative Affairs Office is expected to promulgate the
Regulations on the Administration of Franchising (the Regulations) in early
2004. Industry players should take note of the upcoming changes.
Fei Liang, Secretary-General of the Association, said the Regulations represent
the extension and enhancement of the Measures for the Administration of
Franchising released in 1997. The Regulations will cover four additional areas,
giving better protection to prospective franchisees.
First, the Regulations will carry more detailed stipulations regarding the
information disclosure requirements of franchising companies, especially
concerning the scope of information to be disclosed. At present, some
franchising companies make profit pledges to prospective franchisees without
offering a successful track record for the brand concerned. This practice will
be regulated.
Second, in terms of supervision, applications of franchising operations are
currently filed with the Association. In future, they have to register with the
respective industry departments instead. Mr. Fei pointed out that at present
franchising enterprises offer wildly varying standards of business
opportunities, with some even engaged in illegal acts under the disguise of
franchising. Stricter supervision is therefore necessary. Unqualified
enterprises will face restrictions in running franchise operations.
Third, the Regulations will clearly spell out the penalties. The existing rules
do not specify how and to what extent an enterprise will be punished for
breaking the rules. As a result, there is no legal basis for damages to be
claimed in the event of dispute. The Regulations will provide clear stipulation
in this respect.
Fourth, foreign brands operating franchise business in China will be more
clearly defined. As more foreign brands are entering the mainland market, the
Regulations will increase the number of approvals and procedures required for
their establishment. For those already operating in the market, they have to
undergo certain additional procedures under the Regulations.
December 11,
2003
From Bad to Worse?
What's Next for US-China Trade Relations?
In anticipation of Chinese Premier Wen Jiabao's visit to Washington, the central
question dominating bilateral trade relations is whether there is a danger that
trade frictions resulting from the ballooning US trade deficit with China could
get out of control and develop into a major trade spat, if not a trade war. It
is too early for a final verdict, but one thing is certain: Sino-American trade
relations have deteriorated in recent months, a trend that turned from bad to
worse on 18 November 2003, with Washington's decision to impose safeguards on
certain textile products from China.
China is the proverbial bête noire of the US manufacturing sector, and of the
American textile industry in particular, and the imposition of the safeguards
has given the domestic industry a boost. Additional Chinese product groups could
be targeted soon. Petitions on gloves and socks are said to be already in the
works.
Democratic presidential candidate Senator John Edwards (North Carolina) has
stated, "We cannot allow China to steal the world-wide textile industry through
abusive trading practices". He is not alone in holding this view. A growing
portion of the American electorate views trade with China as the root of all
evil. According to a CNN/USA Today/Gallup poll conducted in September, only 34%
of US respondents view China primarily as a large potential market, whereas 55%
view the country as source of unfair competition.
However, the Bush administration has steadfastly resisted the more extreme
protectionist calls, opting for publicity generating but strictly limited
actions that upon closer inspection do little to really stem Chinese imports. On
the other hand, if the Bush administration were to choose to escalate the spat
further, it will have plenty of opportunity to do so. The week before the
textile safeguards were announced the US imposed anti-dumping duties on
malleable iron pipe fittings, and on 28 November 2003 the Commerce Department
announced its decision to impose anti-dumping duties on color television sets
imported from China.
Yet in total the most recent US trade remedy actions--safeguard measures on
textiles as well as the anti-dumping duty actions targeting television sets and
iron pipe fittings--do not amount to much. They involve less than 1% of Chinese
exports to the US. In other words, while the recent US actions do hurt some
Chinese exporters, it is crucial to recognize that the target audience for much
of the tough talk emanating from the Bush administration and Congress is the
American voter. Presumably, that is the reason why President Bush got personally
involved in making the textile safeguard decision, which in turn illustrates
just how concerned the president's inner circle is about the China trade issue.
Thus the possibility of a full-fledged Sino-American trade war cannot be
dismissed. If Bush hopes to win next year's presidential election, he will have
to win some of the "rust belt" states, and he can do that only by demonstrating
to the American workers and small factory owners that he is determined to
address their plight. In turn this would mean that a worsening of trade
relations with China is all but pre-programmed, prompting US Federal Reserve
Chairman Alan Greenspan to warn against "clouds of emerging protectionism".
Various pieces of legislation in both houses of Congress, sponsored by Senator
Charles Schumer (Democrat-New York) and Congressman Philip English
(Republican-Pennsylvania) to name only two, seek to punish China unless Beijing
floats its currency. However, while those bills present an ideal vehicle for
lawmakers from both parties to polish their pro-labor credentials in the run-up
to next year's congressional elections, these efforts face determined opposition
from the White House. In other words, they are unlikely to result in any new
laws targeting China.
On the other hand, America's corporate giants are increasingly critical of
China's World Trade Organization (WTO) compliance efforts. This was reflected in
the annual report cards issued by various industry associations, including the
US Chamber of Commerce, in September. In addition, a more critical view shines
through in statements of Bush administration officials. For example, William
Lash, US assistant secretary of commerce for market access and compliance, said
on 18 November 2003 that China's WTO compliance record deserves a "gentleman's C
to a D plus".
Taken together, these factors, in their totality, suggest that China-bashing by
members of the US Congress and the Bush administration can be expected to
continue. In fact, it is likely to increase next year, as the presidential and
congressional elections approach. In all probability, this will be accompanied
by a steady stream of US trade remedy measures and possibly actions at the WTO
regarding semiconductors, IPR and agricultural trade.
November 15,
2003
By Alan Ma, Attorney at Law
United States
Immigration Law Update
I. No
Longer INS
Just in
case you don't know, the US Federal government has created the single largest
organization "Department of Home Land Security" (DHS) since March 1, 2003, in
response to the terrorists' attacks of Sept. 11, 2001. The former US Immigration
and Naturalization Service (INS) is now extinct. The functions of former INS are
now performed by 3 agencies under the management of DHS:
1.
Bureau of Citizenship of Immigration Service (BCIS);
2. Bureau of Immigration and Customs Enforcement (BICE); and
3. Bureau of Customs and Boarder Protection (BCBP).
II. DV 2005 Electronic Filing
The Diversity Immigrant Visa Lottery Program, commonly
known as the DV Lottery Program, for fiscal year 2005 will be conducted during
an application period of November 1, 2003 through December 30, 2003. This year
marks the first time that all applications must be submitted electronically.
Persons born in Japan; Hong Kong, SAR and Macau, SAR are also eligible to apply
for this once a year visa lottery program. For further details and assistance to
submit your application please visit our website
http://www.usimmigration-hawaii.com.
III. US Immigration E-Age
BCIS
has embarked on a 10-years effort to modernize immigration services. Part of the
effort is to provide e-filing of immigration and naturalization applications and
petitions. At the present BCIS are accepting electronically two types of filing:
I-90 (Application for Replacement of Green Card) and I-765 (Employment
Authorization Application). BCIS plans to accept e-filing of five different
applications (I-129, I-131, I-140, I-539 and I-821) after Oct 1, 2003.
IV. Re-elected as one of the Best
Our
principal attorney, Alan W.C. Ma, has been reelected this year by peers and
listed in the publication "Best Lawyers in America". In fact, Mr. Ma is one of
the only 5,000 lawyers nationwide being listed for 10 years consecutively as one
of the "Best Lawyers in America".
Contact
Information:
Law Offices of Alan W. C. Ma
1600 Kapiolani Blvd.,
Pan Am Building, Suite 1030
Honolulu, Hawaii 96814
Phone: 1-808-944-1188 Fax: 1-808-944-8877
Email:
lawyer.ma@verizon.net
Website:
http://www.usimmigration-hawaii.com
October 31,
2003
US report: China not manipulating exchange rates -
But it should move faster towards a more flexible currency
regime and break the yuan peg, says Treasury Secretary Snow
WASHINGTON - A US Treasury report yesterday concluded that China and other key
trade partners were not manipulating their currency exchange rates, but said
China must move to a more flexible currency regime. None of the major US trading
partners had met the requirements to be officially designated as unfairly
manipulating exchange rates, Treasury Secretary John Snow told the Senate
banking committee.
Mr Snow, presenting a semi-annual report
in which the administration must identify foreign exchange rate miscreants, said
a currency peg such as China's did not qualify under the rules as unfair
manipulation. But 'a pegged exchange rate is not appropriate for a major economy
like China and should be changed', said the report to Congress on foreign
exchange policy for the first half of this year. A senior US official said both
countries had agreed to appoint experts to a panel to study how Beijing could
move towards letting the markets set the yuan's value.
October 20,
2003
"China Hawaii Chamber of Commerce" and "China Council for the Promotion of
International Trade (CCPIT) Hebei Sub-Council" agree to enhance the liaison and
cooperation in the area of import and export, investment, business information
and other commerce related activities for the benefit of the members of both
organizations signed Memorandum of Mutual Cooperation in Honolulu Hawaii on Oct
20, 2003.
Governor Linda Lingle's
Commendation 
Cooperative Agreement
Sing Tao
Newspaper Website Coverage (PDF File)
Sing Tao Newspaper
Print Version Coverage
World Journal Newspaper
Print Version Coverage (PDF file)
Pacific Business
Newspaper Coverage (PDF file)
Hawaii Chinese News
Coverage (PDF file)
October 10,
2003
VISA: Increase Visitors from China to Hawaii
requires Multi-State Efforts
Direct link to Pacific Business News
It is rather interesting
to see China VISA issues kept coming up. Many have came up with creative ways to
make Hawaii unique that somehow visitors to Hawaii will have a easier time to
obtain VISA from the U. S. Consulate in China. Prior to 911 and the Homeland
Security Act came on line, creative way to do the "Hawaii only" type VISA had
limited success.
The biggest challenge and few want to talk about to settle the VISA questions
and allowing more China travelers to come to United States including Hawaii is
to have "Destination Country Agreement" between China and the United States.
The "Destination Country Agreement" must be in place before China visitors are
allowed to visit Hawaii without forcing many of them to cook up with a business
reason to come here.
Hawaii is not known to be a business destination in China and as a matter of
fact throughout Asia. Once the "Destination Country Agreement" is in place,
wealthy Chinese tourists will be able to come to Hawaii. Based on the statistic
obtained from Hong Kong, Chinese tourist outspent Japanese & American tourist by
more than 50%. Rather than looking "quantity", we should look at the "quality"
of tourist we are attracting.
The "Destination Country Agreement" is between two countries. Therefore USA and
China government must negiotiate for a workeable agreement. In order for Hawaii
to benefit from the "Destination Country Agreement", we must work with other
States sharing our vision to convince the Federal Government to began the
negiotiation. California, Nevada and New York States are natural partners due to
their business, gaming and diverse ethnics appeals.
According to Madam Shen Huirong, Director General, International Liaison, China
National Tourism Administration & Mr. Shen Jianxiang, Executive General Manager,
China Merchants International Travel Company. In order for USA (Hawaii) to take
advantage of the Chinese outbound tourist. A destination country agreement must
be in place. There are 20 countries, most of them are in the Southeast Asia have
agreements with China. United States of America does not have an agreement with
China. Hawaii cannot cut a separate agreement with China! The latest agreement
was signed with Germany in 2002. Therefore, news reporting about Chinese
Airlines coming to Hawaii will probably not materialized as China travel agents
are not allowed to promote a destination like Hawaii that China does not have an
agreement with. Destination like Hainan trying to promote themselves as “Mirror
of Hawaii” will probably not wanting to send their people to Hawaii. Business
people travel between Hawaii and Shanghai will not book on charter flight that
offers service only twice weekly.
The most popular destinations for China outbound tourists are Hong Kong, Macau
and Thailand. Travel package cost is a major factor. But on the other hand,
after reaching their destinations, China tourists outspent any tourist groups
including the Japanese and the Americans.
Japan, Australia and New Zealand are destination countries open to Chinese
citizens from Guangzhou, Shanghai and Beijing. If and when an agreement is
signed between USA and China, Australia model to handle Chinese inbound tourist
has been successful with less than .05% of Chinese visitors overstay their VISA.
October 8,
2003
The Financial Secretary, Henry Tang
(left) and the Vice Minister of Commerce of the Central People's Government, An
Min signing the Annexes of CEPA on 29 September.
On 29 June
2003, the Central Government and Hong Kong signed the Closer Economic
Partnership Arrangement (CEPA). This opens up new and exciting opportunities for
international investors.
CEPA covers three main areas — trade in goods; trade in services; and trade and
investment facilitation.
For goods, many Hong Kong products will enjoy zero tariff in the Mainland
market. In services, a number of sectors will have greater market access in the
Mainland under CEPA. They include construction-related services, audio-visual
services, advertising, medical services, logistics, legal services, accountancy
and banking and insurance.
This agreement is the first for both Mainland China and Hong Kong. It creates
immense potential for Hong Kong to become a centre for value added manufacturing
and high quality services for a vast domestic market of 1.2 billion people. With
China's accession to the WTO and the signing of CEPA, Hong Kong's role as an
international trade and business centre and a gateway to China will be further
strengthened.
CEPA will have
a profound impact on Hong Kong's economic integration with the Mainland.
Director-General Mike Rowse said, "CEPA opens a new chapter in cross-border
trade and investment, making it considerably easier for Hong Kong-based
companies to expand across the boundary. This is especially attractive for
companies in the services sector, where Hong Kong is particularly strong.
The Hong Kong SAR Government, the
Airport Authority and the consortium led by Dragages et Travaux Publics (HK)
Limited entered into a joint venture agreement for the design, construction and
operation of a new International Exhibition Centre (IEC) at Hong Kong
International Airport on 23 August.
The IEC, with a first phase of 66,000 square metres of exhibition space on one
level, will have the largest column-free exhibition halls in Hong Kong. Soft
opening of the IEC will take place by the end of 2005, while the phase 1
development will be completed for full operation in the first quarter of 2006.
The IEC will be capable of further expansion to 100,000 square metres exhibition
space in response to market demand.
According to
the joint venture agreement, the Government and the consortium led by Dragages
will fund the construction cost of the IEC, whilst the Airport Authority will
contribute the land, in exchange for equity stakes in the joint venture. The
construction cost of the first phase development is estimated to be about HK$2.3
billion. The partners of the consortium include Yu Ming Investments and the
operating partner NEC, Birmingham of the United Kingdom.
Director-General, Mike Rowse and
Deputy Director of the Department of Foreign Economic Cooperation in the
Ministry of Commerce of People's Republic of China, Liu Ying-jun, shaking hands
at the seminar. More than 100 Mainland enterprises based in Shanghai and the
Jiangsu-Zhejiang area attended.
 Associate Director-General Ophelia Tsang
speaking at a seminar during the Fujian-HK Week. The one-day event aimed to
promote Hong Kong as an ideal platform for Mainland enterprises to expand
internationally — in line with China's "Going Out" strategy. The "Fujian-Hong
Kong Week" took place in Fuzhou from 21 to 27 August. The event featured a
variety of business-related seminars and workshops. The target audiences were
government officials, as well as leading executives from state-owned and private
enterprises.
 Director-General, Mike Rowse
speaking at the seminar. With him is the Deputy Director-General of the Foreign
Economic Cooperation Department of the Ministry of Commerce, the People's
Republic of China, Wang Ji-guang. The Seminar on Information Technology and
Technology Industries in Hong Kong was held in Xiamen, Fujian Province on 9
September. The seminar was part of the 7th China International Fair for
Investment and Trade (CIFIT), the only annual national investment promotion
event in Mainland China. CIFIT takes place in September every year in Xiamen.
The seminar was jointly organized by Invest Hong Kong, the Ministry of Commerce
of the People's Republic of China and the Commercial Office of the Economic
Affairs Department in the Liaison Office of the Central People's Government in
the Kong Kong Special Administrative Region.
September 15,
2003
Be
careful, yuan speculators -
CHINA ECONOMIC QUARTERLY
China's steadfast
commitment to its currency policy has been crucial to the country's economic
growth and should be maintained, according to Robert Mundell, an American
academic.
On Sept 15th, Ratings agency
Standard & Poor's has backed China's decision not to revalue the yuan, saying
that any flotation would be dangerous and could damage the nation's
creditworthiness, as well as that of local banks.
People's Bank of China governor
Zhou Xiaochuan sees Hong Kong playing an important role in the bank's currency
operations. The central government attached great importance to calls for Hong
Kong banks to be allowed to conduct yuan business with individuals in Hong Kong
and welcomed proposals to legitimize the overseas use of the yuan, the mainland
central bank chief said yesterday.
There is almost
no doubt now that the supposed undervaluation of the renminbi will be a major
political issue in the United States between now and the presidential election
in November next year.
While foreign issues rarely decide US elections, this
could be an exception because of the perceived impact of a cheap yuan on
mid-sized manufacturing companies in a handful of key states that US President
George W. Bush must carry to be re-elected.
Mr. Bush's opponents will use the threat of cheap
Chinese imports as one weapon in their attack on his management of the
sputtering US economy.
In the wake of US Treasury Secretary John Snow's
fruitless visit last week to Beijing, during which he asked China to adopt a
more flexible exchange-rate policy and got little more than smiles in return, a
group of US manufacturers said it may try to force the US government to file a
currency-manipulation charge against China at the World Trade Organization.
As the storm clouds of political verbiage and
obfuscation gather, it is worth remembering a few hard economic facts.
First, if the yuan is cheaper than it would be if it
floated today, the reason has nothing to do with China's trade surplus, either
with the US or with the world as a whole.
The sole reason the market now thinks the yuan is cheap
is that speculators have been betting for the last year that it is cheap. In the
first half of this year, approximately US$30 billion flowed from foreign bank
accounts back into China, for no other purpose than to profit from a hoped-for
revaluation. (By contrast, China's trade surplus in the first half was less than
US$5 billion).
This money serves no useful economic function, since
the amount of productive investment opportunities in China is limited. Instead,
it contributes to an inflationary buildup in the money supply and a wave of
over-investment that, if not checked, risks plunging the country's tottering
banking system into a fully fledged crisis.
This leads to the second point, which is that the
Chinese government's currency policy at present has only one goal: to defeat the
speculators. This means that it must hold fast to the peg at the current rate.
Any action on increasing flexibility - whether by a reset of the peg, a widening
of the trading band or a switch (as suggested last week by People's Bank
governor Zhou Xiaochuan) to a peg against a trade-weighted basket of currencies
- must wait until the current speculative pressure has been released.
This is at least a year away, and probably more, since
the authorities in Beijing must first tighten up on bank credit, deflate the
investment bubble and loosen controls on outward capital flows. It has begun
work in all three areas, but it will take some time for any policy changes to
have an effect.
Most officials in the People's Bank who deal with
exchange-rate policy would like to see a more flexible currency regime. But they
also believe, rightly, that the time to start moving towards such a regime is
not when the currency is under speculative attack.
September 6,
2003
Hong Kong government economists have
revised full year GDP estimates to 2 per cent, from 1.5 per cent, after a
stronger than expected pick up in economic activity in the second quarter.
Financial Secretary Henry Tang said the figure reflected growing domestic and
international confidence in Hong Kong.
 (Next to banner, right) Jim Thompson of
AmCham with Mike Rowse of InvestHK (left) and AmCham committee. Some of the
biggest names in the music world - legendary rockers The Rolling Stones, Spanish
tenor Jose Carreras, Latin rock guitarist Santana, boy band Westlife and R&B
singer Craig David - will head a glittering line-up of international artistes at
Hong Kong's largest ever music festival this autumn.
 Hong Kong's media sector has added
another high profile player to its ranks, with the opening of the Financial
Times Asia newsroom. As John Ridding, editor and publisher of the FT's new Asia
edition explains, when looking for an Asia base, Hong Kong was hard to resist.
 "Hong Kong is a developed economy within
a developing economy," Sir John Bond, HSBC Group Chairman said recently in New
York. "This is good news for Hong Kong. The great cities of the world became
great because they sat on the edge of a vibrant economy and because they
provided the infrastructure for growth."
Hong Kong-based
Cathay Pacific Airways announced it will launch its first freighter service to
Osaka, strengthening its presence in the Japan cargo market. The weekly service
will operate every Saturday starting 6 September.
Hutchison
Whampoa's ports in Hong Kong and Shenzhen posted strong numbers from January to
August 2003. Yantian, its port in Shenzhen shipped a record 3.3 million teu, up
27% on the previous year. Kwai Chung in Hong Kong, the world's busiest port,
moved 5.8 million teu.
Hong Kong was
ranked number one for "output per person" in the Asia Pacific region, and sixth
place in the world, in a survey on labour productivity produced by Geneva-based
International Labour Organization (ILO).
August 28,
2003
 Hawaii’s Reality Check
In 1980 when I did my exit
interview with my last employer before starting my own business, my former boss
told me that Hawaii will be the place for the rich, famous and the established
few. Most of our children will have to leave Hawaii for better opportunities.
That was 23 years ago. The reality has spoken for itself!
The multi-billion dollars
contract for the housing redevelopment brought in by the military is indeed good
news for those that are in the A/E/C/S (Architect/Engineer/Contractor/Suppliers)
businesses. After making more than 20 phone calls to many former Hawaii
residents and Chamber members outside of the State of Hawaii. Hawaii need to
have a more diversify business base and offer more friendly transportation
options, unless they are in the A/E/C/S businesses, it has offer little comfort
for them or any good reason for them to come home.
While many parts of the world
have become more connected to make face to face meeting easy, Hawaii is becoming
more isolated. Except for Japan, traveling to Hawaii from any financial centers
in Asia takes longer than going to California, Nevada, Washington State or
Western Canada even though the actual distance is shorter. Most airlines must
stop over Hawaii for refuel in the 1970s find it more economical to fly over
Hawaii with the new long distance fuel-efficient jets. Airlines are continuing
to reduce their airlift coming into Hawaii making visiting Hawaii even more
difficult, less choices and much more expensive.
One of our chamber’s members
recently ordered two new cars from a local auto dealership. The car arrived into
California port on May 15th, took those 2 weeks to leave California
port and after dropping off the cars in Honolulu, took those cars 10 days to
allow the local auto dealership to pick it up. The customer is naturally very
upset. The local auto dealership said that 2 companies are controlling shipping
of automobile. Neither is offering better services since they control the
market.
Hawaii has one of the most
recognized name brand, mostly associated with tourism and its natural beauties.
After one or two visits to Hawaii, many tourists found Hawaii rather boring and
lack of attractions. It is a frustration commonly shared by many inbound tours
operators here.
Have Hawaii done our own
reality check? Other than offering Sun, Sea, Surf, Sand, Hula Girls and Natural
Beauties of Hawaii, what else is Hawaii offering to the tourist? Who are the
purchasers of our business ideas, education/training, technology and
biotechnology? Who are our competitors? And most importantly, are they willing
to pay for it? I have seen focus group and business round tables formed to
envision what we can sell – have we ever found out from the perceived buyers’
requirements? And are they willing to pay for it?
Johnson W. K. Choi, MBA, RFC.
President & Executive Director
HKCHCC
(August 1, 2003) 
Hong Kong has renewed energy, says
TDC Chairman - Chairman
of the Hong Kong Trade Development Council, Mr Peter Woo, today wrote to more
than 250,000 overseas businesses updating them on the successful upturn in Hong
Kong's economy, and highlighting new opportunities in the region. More than 360
overseas companies set up offices in Hong Kong in the first six months of 2003,
an increase of 9.3 per cent over the same period last year, according to the
Companies Registry. The new additions brought the total number of overseas firms
registered in Hong Kong to 6,858.
Strong business recovery exceeds
expectations - The recent
release of bullish economic data points to a quicker than expected recovery in
the Hong Kong economy, Chief Executive, Tung Chee Hwa said recently.
Largest ever turnout as 62,000
buyers visit mega fairs -
The recently merged houseware, gift
and premium fairs attracted the largest ever number of buyers underlining Hong
Kong's importance as the region's sourcing hub and trade fair capital.
More benefits on offer under Free Trade Agreement (CEPA)
- The telecoms
sector has been added to the list of services which will enjoy preferential
access to the China market under the recently-announced free trade agreement (FTA)
between Hong Kong and the Chinese mainland.
"West bridge" to bring massive
economic benefits - A
bridge linking Hong Kong, Macau and the western area of the Pearl River Delta is
almost certain to be built, following support for the project from China's main
development agency. Hong Kong-based construction company Gammon Skanska has won
the HK$2.2 billion contract to construct the bridge for the western corridor
linking Hong Kong to Shenzhen, known as the Deep Bay Link. HKCHCC
(July 25, 2003)
Building A New World: Behind the Scenes With Bechtel
Julie
Pitta
Chek Lap Kok
Airport Master Plan (Hong Kong). The project (ACP) has been termed the largest
public works upgrade ever undertaken. It consisted of 10 major, interdependent
projects and was largely completed in 7 years. This 20 billion (US) megaproject
includes a new airport, 21-mile express rail system, bridges, three highway
projects, tunnels, a town for 260,000 residents, and two massive land
reclamations.
HKCHCC
(July 8, 2003) 
Why Hong Kong as a springboard to
access the China market?
Hong Kong offers unrivalled
growth opportunities for companies in the transportation and logistics industry.
In particular, proximity to Mainland China makes it an attractive investment
destination for multinational companies. China's recent accession to the WTO
will significantly increase its global trade volume. The UN estimates that, by
2006, China will be Asia's largest market in terms of container shipping volume.
A significant portion of this trade will be moved through Hong Kong. This growth
in container shipping will also increase the demand for supporting services in
Hong Kong such as chartering, fleet management, marine insurance, ship repairing
and bunkering and others.
The growth of the PRD (Pearl River Delta) into a high-tech manufacturing base
has intensified the need for an efficient logistics and air transportation
network. Hong Kong is well positioned to capture this market. In order to
accelerate the transportation and logistics flow between Hong Kong and the PRD,
the Hong Kong-Guangdong Co-ordination and Co-operation Unit has been established
as a fast-track facilitator.
As a result, more and more foreign
companies are expected to use Hong Kong as a springboard to access the China
market. Transportation and logistics companies are expected to be some of the
key investors, since they were previously unable to establish a presence in
China due to stringent government regulations. This presents an opportunity for
Hong Kong to act as a bridgehead for logistics knowledge transfer between China
and rest of the world. In this capacity, Hong Kong would be the gateway for
Chinese transportation and logistics companies wishing to create global
networks. 
DHL Success Story in Hong Kong - a
Case Study
DHL
is the world's leading express and logistics company, offering customers
innovative and customised solutions from a single source. The company provides
customized solutions, express, air and ocean freight and overland transport
through an international network, linking over 120,000 destinations in more than
220 countries. Worldwide revenues amounted to US$21.6 billion in 2002.
In April this year, Deutsche Post World Net, the parent company of DHL,
announced the global integration of DHL Worldwide Express, Danzas International
and Deutsche Post Euro Express (which is present only in Europe) under the
umbrella brand of DHL. Based in Brussels, Belgium, DHL is wholly owned by
Deutsche Post World Net.
DHL set up its operations in Hong Kong more than 30 years ago and has grown into
one of the major local and regional players in its industry. Hong Kong is also
the company's Asia-Pacific headquarters, covering 41 countries and territories,
from the Indian subcontinent to Japan and down to Oceania. DHL employs more than
20,000 people in the region and about 2,000 staff in Hong Kong. The city is also
home to the company's new Central Asia Hub serving the intra-Asian distribution
network covering some 13 key destinations in the region.
DHL's commitment to Hong Kong as its Central Asia aviation hub has been
reinforced by considerable local investment. In October 2002, the company
announced a franchise agreement with the Airport Authority to develop, construct
and operate a dedicated Express Cargo Terminal (ECT) at Hong Kong International
Airport. With a total investment of $780 million, the ECT will be the largest
project of its kind in Asia, handling up to 20,000 shipments per hour by 2004
and 45,000 by 2018.
Together with complementary multi-modal transport links to mainland China and
extensive air services to 140 cities worldwide, the ECT will strengthen Hong
Kong as a regional and international
air cargo hub. It will also create up to 700 new jobs by 2004 and over 900 by
2010. The groundbreaking ceremony for the new terminal took place in April 2003.
This year, DHL increased its stake to 40% in Air Hong Kong, Cathay Pacific's
formerly wholly-owned subsidiary. Under the agreement, Air Hong Kong will
purchase a fleet of aircraft to operate and enhance DHL's network to the major
cities in the region. Annual throughput for this joint venture will be about
160,000 tonnes - equivalent to about one-sixth of all intra-Asian cargo that
currently passes through Hong Kong's airport. Throughput growth in this sector
is estimated between 15-20 per cent per annum over the next 5 years.
John Mullen, DHL's Chief Operating Officer for Asia-Pacific, considers Hong Kong
as one of the most business focused and business friendly economies in the
region. Its geographical location is ideal for DHL's operations and the city's
world-class airport made it an easy choice for DHL's aviation hub. The current
tax regime is also extremely conducive to investment.
However, Mr Mullen also had a word of caution. While China is one of the key
growth markets for the future, Hong Kong must avoid becoming too China-centric
in its overall focus. It needs to balance its huge strategic advantage of
working with China with maintaining an outward-looking, cosmopolitan view on the
region.
At the same time, China is clearly the "star market" in the region for DHL. The
company was the first international express company to enter China more than 20
years ago and now sees its business growing there between 40% and 50% per year.
Hong Kong, on the other hand, is a very mature and established market for DHL.
In terms of market size, it ranges within the top three in Asia. Mr. Mullen also
explained that his industry is very lucky in the sense that it is experiencing
significant growth in times when other industries are suffering from the global
economic downturn.
Yet, he made it clear that there is no room for complacency: "We constantly need
to innovate and develop our products and services to succeed in an increasingly
competitive market environment."
DHL recently has developed some rather sophisticated solutions for the high-tech
industry, which add a lot of value to their customers' operations. The company
also constantly expands its infrastructure and services at its aviation hub in
Hong Kong. "This creates a win-win situation", Mr. Mullen added. "It clearly
benefits DHL but it also reinforces Hong Kong's position as a major
transportation and logistics centre in Asia." HKCHCC
(June 9, 2003)
'Global university'
launches first course -
13,000 interested in
online MBA targeted at China and Southeast Asia - By Linda Yeung
Universitas 21
Global, the world's largest online university, will launch its first academic
programme - an MBA course - late next month. Faculty staff from business schools
at the consortium's 16 member universities have collaborated in producing the
course.
The MBA course is aimed at markets in Southeast Asia and
China and had an initial target of 500 students, the Singapore-based consortium
said.
The program, emphasizing problem-based learning and
team work, has been accredited by its subsidiary, U21 Pedagogica.
The University of Hong Kong (HKU) is the only local
institution in the consortium. Other members include Fudan University, National
University of Singapore and the universities of Melbourne, Edinburgh and British
Columbia. HKU pro-vice-chancellor John Spinks called the new course one of the
most important developments in international collaboration for the provision of
online degrees around the world. He added: "The initial target for students will
depend very much on the quality of the applicants, but it will be selective.''
About 13,000 students have expressed an interest in
studying for the degree after initial advertisements, he added. He also expects
the demand for the MBA course to come from people who, for whatever reason,
cannot consider an on-campus program.
Universitas 21 Global estimates that in less than a
decade there will be about 100 million people worldwide fully prepared for
university study, but who cannot, or do not wish to have, access to a
campus-based university place. With an initial capitalization of US$50 million,
the educational consortium is planning to introduce a masters in business
information systems next. "Further online programmes will be introduced
progressively to meet patterns of student demand,'' said Professor Spinks.
Consortium chairman and University of Auckland
vice-chancellor John Hood stressed that quality would be a key concern. "No
Universitas 21 institution would have been willing to associate its name and
reputation with anything other than that of the highest standards of academic
quality and practice.''
HKCHCC
(May 30, 2003)
The Sarbanes -
Oxley Act of 2002 that President Bush signed into law on July 30, 2002 has major
consequences for U.S. public companies, their executives, accountants,
shareholders and regulators. Discussions leading to creation of the Sarbanes -
Oxley Act began with the collapse of Enron, and received widespread support in
the U.S. Congress with the announcement in June 2002 of massive fraud at
WorldCom.
The Act creates an independent
auditing-oversight board under the US SEC, expands auditor independence
requirements, makes corporate boards and executives more accountable, beefs up
penalties for corporate wrongdoers, forces faster and more extensive financial
disclosures and creates avenues of recourse for aggrieved shareholders.
One new requirement of the Act that will directly and significantly affect many
subsidiaries of U.S. public companies here in China is a new requirement that
management attest to the effectiveness of the Company’s internal controls over
financial reporting. This new requirement means every U.S. public company must
ensure its significant internal controls are well documented, test the design
and effectiveness of those internal controls and report on its assessment. The
Company’s external auditor must then test and report on management’s assessment
of its internal controls.
WTO and China
By Klaus Koehler, Managing
Director, EM Associates Ltd.
China was
one of the original signatories to the GATT (General Agreements on Tariffs and
Trade; a precursor to the WTO) in 1948. The Chinese Membership remained with
Taiwan (Republic Of China) until it was cancelled in 1971. In the same year, the
United Nations recognized the People's Republic of China as the official Chinese
government and granted Observer status to GATT. A Working Party on China was
formed in 1987 to handle trade issues. In 1995, the WTO was established and
China officially joined the WTO on December 11, 2001.
China's main commitments so far
To comply with WTO standards, China has revised its existing domestic laws and
enacted new legislation that is fully WTO compliant provided non-discriminatory
treatment to all WTO members removed export subsidies on agricultural products
eliminated dual pricing practices ensured that price controls are not used to
protect domestic industries or services providers established the right to
engage in distribution of all products in China within 3 years except some
goods, which will have such rights within 5 years allowed all enterprises to
import and export all goods and trade them throughout the customs territory
within three years (with limited exceptions)
Benefits of China's recent accession to the WTO
Over the past 20 years, China has seen enormous economic growth. Vigorous
reforms in government policy have fueled this expansion resulting in annual
growth rates averaging nearly 10%. Many new jobs and investment opportunities
have been created. The country's transformation from an inward looking, planned
economy to a more market oriented, trading country has had great impact on the
global economy, influencing consumer choice and investment location.
Being a member of the WTO helps China sustain its economic growth and reform.
Reforms are expected to boost the domestic economy and encourage foreign direct
investment. The membership will, in the long term, influence judicial reform,
regulatory reform, privatization and the labor markets. The export market is
expected to increase and access to advanced technology will be granted. China's
trade potential will continue to improve.
As a member, China participates in the formulation of international trade and
investment rules. The country is also able to defend its trade interests using
WTO's dispute-settlement system.
Adverse effects
There are
still many structural weaknesses in China's economic system. The dilemma for
China has been and will continue to be coordinating economic growth and
structural reform.
The short-term costs to China include a rise in unemployment as State Owned
Enterprises (SOE) rapidly restructure in the face of international competition.
The majority of SOE will eventually go bankrupt or become inefficient.
Maintaining social stability is expected to be another major concern, especially
in regard to the laying-off of SOE employees. With many SOE going out of
business, banks need to write off non-performing loans and recapitalize in order
to maintain depositor confidence.
The agricultural sector is also adversely affected. An increase in imports leads
to lower prices for agricultural goods and thus lower incomes for rural China.
As a result, there is mass migration to urban centers. Previously protected
agricultural products cannot compete with cheaper liberalized imports. Many of
the local protections have rapidly been removed and, despite the promises of
long-term prosperity, rural areas are experiencing hardship due to the free
market.
Tariffs
and quotas for imported goods
All
tariffs for imported goods are guaranteed, and eventually, China's average bound
tariff level for imported agricultural products will decrease to 15%. The WTO
has set 2010 as the final date for the reduction of tariffs, but even before
this deadline, many tariffs may be reduced, or even eliminated. In addition, all
import quotas, tendering and import licensing will be eliminated by 2005.
Trade restrictions and protectionist policies
Certain trade restrictions and protectionist policies-both inside China and in
other countries still continue. One example is the protection of a twelve-year
Transitional Safeguard Mechanism, which other WTO member states enjoy. Under
this protection, imports of Chinese products can be restricted where it can be
shown that unfettered access would cause market disruption for the domestic
producers. Any restrictions against imports from China by other member nations,
in a manner inconsistent with the WTO agreements, are generally being phased
out. On the other hand, China retains exclusive domestic trading rights for
cereals, tobaccos, fuels and minerals. Furthermore, some restrictions on
transportation and distribution of goods within China are permitted to continue.
Local Chinese regulations revised
Uniformity of laws and law enforcement throughout the country is required by WTO
rules, which prompted a change in local rules and regulations. According to the
Legislation Law of China, laws enacted by the National People's Congress (NPC)
and administrative and ministerial rules promulgated by industry authorities
take precedence over local laws and regulations administered by the local
People's Congress and its government authorities. Provinces, autonomous regions
and municipalities' governments have organized and revised local laws and
regulations under the uniform guidance of the Standing Committee of the NPC and
State Council. Particularly in special economic zones where foreign investors
enjoy preferential treatment, foreign related laws and regulations are being
re-organized and revised.
China and its neighbors
China's accession to the WTO has significantly affected China's relations with
other Asian countries. Many economies in Asia are presently suffering from
recessions and they are trying to revive their economies by a growth in exports.
China represents both a competitive challenge and an opportunity to gain from
its extraordinary economic performance. China's share of global exports has
increased over the past years whereas the export rates of neighboring countries
are stagnating. However, China's WTO accession will improve growth in the gross
domestic product for countries with high value exports. Some bank reports
indicate that China's accession to the WTO will give Taiwan's economy a boost
equivalent to 1.7% of Taiwan's 2000 gross national product by 2005. Other
countries in Asia are projected to benefit by 1.1% of their 2000 gross national
product as China's demand for their exports increases.
For
other Southeast Asian countries, however, the prospects are bleak as some banks
predict that Southeast Asian economies will lose between the equivalent of 0.1%
and 0.2% of their 2000 gross national product by 2005.
HKCHCC
(May 2, 2003) 
Jim Thompson, Chairman of the
American Chamber of Commerce - “Members of The American Chamber of Commerce are
totally committed to Hong Kong and will continue to look on this city as their
best option for investment in Asia. The completely transparent handling of the
challenge presented by SARS plus the high level of medical professionalism
displayed actually enhances Hong Kong's reputation as a city we can trust to
deal with unexpected challenges.
The role of the growing
Chinese economy, including Hong Kong’s place as a banking and logistics center
for the greater China market, was the theme of a concurrent session sponsored by
Hong Kong Economic and Trade Office at the 6th annual Global Conference of the
Milken Institute in Los Angeles in April. Titled “A
Rising Star in the Global Economy: The Greater China Market,”
the event drew an audience of over 800. Hong Kong ranked #1 in Milken
Institute's
Capital Access Index for second year.
HKCHCC (April
25, 2003)
SARS Epidemic: Hong Kong is Open for Business.....Please
enter here for complete story from Honolulu Advertiser
or
Go to Hawaii Reporter for complete story
We thank all of
you who have called to show concern and support for Hong Kong at this difficult
time. I can report that the situation there is stabilising. Daily, Hong
Kong government and heroic medical teams are gaining
experience and winning ground in the battle against severe acute respiratory
syndrome (SARS). Over the recent holiday period, the number of SARs patients
who went home from hospital after successful treatment outnumbered new
admissions, which has lifted spirits.
Some friends
have asked if they can confidently conduct trade with Hong Kong at this time.
The answer is a resounding “yes” for the following reasons:
o
Imports and mail
from Hong Kong do not pose a health risk. That is a World Health Organisation
fact.
o
Production is going on as usual
in Hong Kong’s widespread network of factories in the
Chinese mainland and elsewhere.
o
Goods are flowing
to overseas markets with minimum disruption.
o
Trade fairs are going ahead
in Hong Kong for an extended spring buying season, with stringent health
protection measures in place. At Hong Kong Trade Development Council's (HKTDC’s)
consolidated fairs for gifts and houseware (April and July) more than one third
of reconfirmed exhibitors are from overseas. Hong Kong
also look forward to welcoming overseas buyers with open arms, VIP treatment and
attractive travel packages.
o
Life is going on in Hong Kong,
with people going to work every day and schools re-opening on a phased basis.
o
Nimble and innovative Hong Kong firms
are finding new ways to connect with customers, including setting up of
temporary showrooms overseas.
The HKTDC, too,
has stepped forward with special initiatives such as web conferencing, virtual
exhibitions and catalogue shows in your markets to broaden your business
communication channels with Hong Kong,
Details are listed on our Resource
Center page.
The entire Hong
Kong community is united to overcome this problem. It is also the top priority
for leaders on the Chinese mainland. Temperature checks and health screening at
Hong Kong’s airport are restoring confidence in air travel. High-tech screening
will soon be installed at Hong Kong’s land crossings with the mainland, in close
co-operation with health authorities there.
It
would be a tremendous help if you would help us pass these messages on.
Meanwhile, please don’t hesitate to call us
at 808-222-8183
if
you have any questions.
HKCHCC (February
22, 2003)
Go to Hawaii Reporter for complete story
If you are involved with
trade and businesses outside our geographic boundaries during the past decade
working with entities representing various government interests, the easy first
step has been sending/receiving high profile speakers telling you “how the
pasture is greener on the other side”! Most of the speakers have brought with
them years of experiences. Their job is to provide a convincing message to the
audience. Many of them did an excellent job sharing their success stories. Most
audience will leave the meeting or dinner on a high note. Most of the time, the
bus stops here just with a good feeling. It is usually difficult for the
attendees to follow up with out of town speakers. Getting additional
information from the local sponsors can be very difficult in time.
Have you attended one of the
meetings described above in the past?
If you are interested to
expand your business outside of Hawaii, what is the value to you attending a
presentation by an expert for example in China trade showing you the
opportunities to take advantage of the trade worth billions of dollar? If your
interest is to increase knowledge of general trade and business, most of
you will probably satisfy with the information provided! For many of us wanting
to take the newly acquired knowledge to the next level to implement
what we learnt into practice, you will find major obstacles.
Where are some of the
obstacles?
-
Sponsoring organizations may not have extensive
knowledge on the subject matter presented.
-
Event use as mean for public relations only
-
Unable to obtain additional information and
follow ups
A recent meeting with one of
the Federal agency, the retired Director said the major challenge is their
advisors inability to provide complete and satisfy answers to businesses wanting to
expand their business overseas. Information is presented in piece meal and
seldom complete. People try to obtain information find themselves going around
in circle.
What to look for if you are
really interested to expand your business overseas?
-
Seek out local entities focus on promoting and
actually doing business locally and internationally
-
Look beyond the name – it could be misleading
-
Get connected with the local Chamber of
Commerce in the region of your interest
-
For Americans, get connected with the local
American Chamber of Commerce
-
Call the organization you have in mind, find
out how much do their Officers and Directors know anything about business
overseas (if that is your target market) – the number of trade missions
attended is not an accurate gauge for experiences as many are paid for by
government as a mean to reward loyalty. It has nothing to do with trade.
-
Who are their collaboration partners?
Once you have located a
credible entity to work with you. You are required also to do your homework.
-
Find out if there is a market for your products
and/or services
-
Consider working with a reputable partner
-
Observe local rules and customs
-
Invest some money and time
-
Do not lose your focus – it is so often when
you hear business executives came back from a foreign trip impressed, if you
look closer, they were impressed by things other than business and for the
wrong reasons!
Like marriage, a lasting
relationship takes time to know each others before taking the dive. The wine and
dine during courting are fun things. But it is by no mean a measurement for
successful relation.
HKCHCC (July
3, 2002)
After attending, organizing
and participating at various government sponsored trade mission for the past 6
years, we have decided and planned a private sector lead business focus mission
to Shanghai and Beijing last year. 911 had forced us to cancel and reorganize to
move it from Dec 2001 to June 2002.
Meetings are set up in advance
with clear focus and well defined objectives.
Meetings have resulted in
further discussions involving major investments and/or future co-operations. The
parties involved would like to keep most of the details private. In any event, I
can give you a brief summary of our meetings in Shanghai and Beijing.
1) Met with management team of an e-commerce company based in Shanghai,
investor is considering investing US$1,000,000 in the project. Further
discussion may involved the Manoa Innovation Center and to take
advantage of Hawaii High Tech Investment Credit (Act 221).
2) Met with one of the owners of a technology company in Shanghai with
Japan and Silicon Valley partners. The technology is currently employed in
Japan. Their business model will increase the efficiency of information
technology applicable to e-commerce and video delivery. Further discussion may
involved Manoa Innovation Center and to take
advantage of Hawaii High Tech Investment Credit (Act 221).
3) Met with Shanghai government to discuss various small and medium size
projects to be considered by Hawaii investors.
4) Met with Officers and attended meeting organized by American Chamber
of Commerce in Shanghai to discuss further business collaboration, sharing
success stories and challenges.
5) Met with Fudan University in Shanghai to
discuss join education projects with various Universities in Hawaii and the
Mainland USA.
6) Met with major travel companies to get a clear picture on China
Eastern Airline pending decision to began direct charter air service between
Shanghai and Hawaii.
7) Met with major travel companies to work with University of
Hawaii, School of Travel Industry Management to
provide trainings on a continuous basis for 1,000s of travel agents in their
network
8) Convinced a major travel company to bring their top 30 travel agents
nationwide (China) to Hawaii for training in Dec 2002. Original plan was to do
it in Washington DC.
9) Met with the China 2008 Olympic committee and discuss with them the
feasibility to participate in their infrastructure projects as well as other
business venue available. All infrastructure information will be made available
at their 2008 China Olympic website by Sept 2002. Companies interested can do
their homework online without leaving their office or home.
10)
Met with the organizer and promoter of the 2003 Women World Cup Soccer
to be held in four cities in China with specific business opportunities for
Hawaii companies to participate in the business venture. A formal presentation
will be made in Beijing within the next 60 days. Successful bid will enhance the
chance to win certain contracts for the 2008 China Olympic for the Hawaiian
based Company.
11)
Met with Advertising and film producers in Shanghai with studios in
Shanghai & Southern China to consider using their low cost high value business
model to allow USA Companies to subcontract some or all of the work to them to
increase profit margin. The same USA Companies will have the opportunity to
employ their advance technology to raise the standard of their collaboration
partners and gain a foothold at the distribution system in the China market.
12)
A technical seminar is planned in Beijing, spring 2003 with
distinguish speakers from Hawaii, Far East, China and the Mainland
USA.
13)
Discussed with profitable Chinese Companies on possibilities to list
them on various USA Stock Exchanges.
14)
Met with representatives of the China Furniture Manufacturers
Association to consider furniture importing opportunities to Hawaii.
15)
Met with representatives of the China Design Industry Association.
16)
Met with representatives of the Art industry to consider new business
model to distribute original artworks and paintings online.
17) Met, network & exchange ideas with our Chamber
Members in Shanghai & Beijing.
Most of the untold success
stories and business venture are kept out of the news media. Since no government
entity is involved, our collaboration partners in China have a clear vision that
we are serious about talking business. We got a lot done in 8 short days
despite the long flight time, jet lag and long hours of meetings. All of us have
come home exhausted but excited, charged up and plan our next move.
Please visit our photo album
page for some highlights
http://www.hkchcc.org/photo-album1.htm
HKCHCC (March
17, 2002)
Asia Moot Corp 2002 moved from Hong Kong to
Hawaii, Hainan Airline Chairman visit Hawaii, Large Tax Increase proposed in
legislature will hurt Hawaii & Hawaii businesses and Raiding the Hawaii
Hurricane Relief Fund
Asia Moot Corp 2002 moved from Hong Kong to
Hawaii
Moot Corp (business plan) competition, was founded
at The University of Texas at Austin in 1984, managed by Director Gary M
Cadenhead, Ph.D. Dr. Bee Leng Chua of the Chinese University of Hong Kong
founded the Asia Moot Corp four years ago. Six weeks ago, funding problem has
almost forced to cancel the Asia Moot Corp. Dr. Chua who met Dr. Shirley I.
Daniel, Director of the Pacific Asian Management Institute (PAMI) a few years
ago in Asia approached Dr. Daniel, PAMI and the College of Business
Administration, University of Hawaii for current and future years sponsorship.
Asia Moot Corp has found its home in the Hawaii for the coming years. It is good
for Hawaii and the University of Hawaii.
Teams representing 13 of the best business schools
in Asia, including the two top schools in India, Fudan University from Shanghai
China, Chulalonghorn in Thailand, Waseda University in Japan, as well as schools
from Korea, Taiwan, Hong Kong, and Singapore has participated.
Puonepun Sananikone, President and CEO of PacMar Inc
and Leighton K. Chong, Attorney at law (Hong Kong China Hawaii Chamber of
Commerce Members "HKCHcc") and others served as judges. Elvira Lo,
President of Elvira Chocolat, our chamber member has also co-sponsored some of
the events.
The event concluded with the presentation of $5,000
1st prize to Zhongshan University, $3,000 to 2nd place
winner Sasin Graduate Institute of Business Administration of Chulalongkorn
University and $1,000 each to division winners, Fudan University and National
Chengchi University.
Hainan Airline Chairman visit Hawaii
Mr. Chen Feng, Chairman and the Hainan Airlines
Group are visiting Hawaii. Hainan Airline is the 3rd largest airline
in China.
Hainan has bring fond memories to some of the
founding members of the Hong Kong China Hawaii Chamber of Commerce. Yen Chun,
Thomas Woo and I and 13 others representing the City and County of Honolulu
visited Hainan in 1985 to sign the Sister Island Agreement. Hainan was part of
the Guongdong Province. As you may know, Hainan is one of the provinces of
China.
Hawaii will need the direct airline between Hong
Kong and Shanghai to really tap into the China market. I will find out more in
the next few days.
Large Tax Increase proposed in legislature
will hurt Hawaii & Hawaii businesses
Sin tax (i.e. cigarette, liquor, beer and etc)
proposal to be substantially increased is going through legislature. It will
further hurt the restaurant, hotel and increase the cost of Hawaii as a business
destination. The cost will not only pass on to the visitors, but also to
businesses necessary to entertain client and to pass on to every single tax
payers in Hawaii.
Container (i.e. Beer, Soft Drinks and others)
deposit requirements, it is not as simple as collecting deposit money and
returning it to the vendors. It will require additional storage, handling,
delivery, cleaning and it will create more burdens for Hawaiian business.
100 million dollar will leave Hawaii if the $10 per
head long term care proposal passed through the legislature. It will probably
further increase the size of the Hawaii Government. It will hurt the low income
earner hardest. You are required to pay the $10 tax whether you make $5,000 or
$90,000 per year.
Raiding the Hawaii Hurricane Relief Fund
I have been joking with friends that if I am the
insurance company, I will put in a Hurricane exclusion clause for year 2002.
Memories are still fresh when two (2) hurricanes hit
Hawaii in 1982 and 1992. What happen in the unlikely event that a hurricane hits
Hawaii in year 2002? Raiding 100 million from the Hawaii Hurricane Relief Fund
may have serious consequences!
HKCHCC (February
17, 2002) Mainland China
enterprises spark soaring IPO in Hong Kong
Hong
Kong’s stock exchange is preparing for a sharp increase in the value of
initial public offerings (IPO) this year led by several giant Chinese mainland
state-owned enterprises, reinforcing Hong Kong’s role as an international
fund-raising centre for mainland companies
Pearl
River Delta set for logistics boom
South China’s Pearl River Delta
region is set to become a logistics hub for Hong Kong and the Asia-Pacific
region, according to Guangdong Governor Lu Ruihua.
“Efforts will be made to gradually
develop the Pearl River Delta, with Guangzhou and Shenzhen as its axis, into an
important logistics base for the whole country and even for the Southeast
region,” Mr Lu announced at the opening of a seven-day annual meeting of the
Political Consultative Committee (PCC) in Guangzhou on 28 January.
Continued role for
contractors in harbour clean-up
Overseas companies are helping clean
up Hong Kong through their contribution to building the SAR’s new
state-of-the-art sewage treatment works, the Harbour Area Treatment Scheme
(HATS).
Overseas firms who are involved so
far include: Skanska
International of Sweden, Balfour
Beatty of the UK, Leighton
Contractors of Australia, Japanese firms Aoki
Corporation and Torishima
Pump Mfg. Co Ltd, Philipp
Holzmann of Germany, Dredging
International of Belgium, SELI
of Italy, Kvaerner Group
of Norway, and UK-based firms Biwater
and Costain Building &
Civil Engineering Ltd.
Stellar
film performance attracts international attention
Rising international interest in
Hong Kong films and a boom in local box-office takings are boosting the SAR’s
film industry to new heights. Buoyed by positive forecasts and worldwide
recognition for its creative talent, efficient workforce and state-of-the-art
technology, Hong Kong filmmakers are looking at producing more films with bigger
budgets this year.
Entrepreneur
recycles his way to greener pastures
Stephen Greer arrived in Hong Kong in 1993 looking
for investment opportunities or a business venture to challenge his
entrepreneurial spirit. Discovering a demand for recycled stainless steel in the
Chinese mainland, he established a recycling company which last year turned over
HK$233 million (US$30 million). The 33-year-old recipient of the 2001 DHL/SCMP
Hong Kong Young Entrepreneur Award explains how Hong Kong was the ideal location
to launch Hartwell
Pacific, a “green business” that has grown into an international success
story.
“Hong Kong is an excellent place
to set up a fledgling enterprise and make it grow. The business environment
suits new or incubator companies and certainly accommodates my entrepreneurial
nature. Even as I was growing up in Pittsburgh, Pennsylvania, USA, and later as
a college student I was always involved in some sort of business activity such
as importing copper handicrafts from Africa, which I sold on campus.
Before I arrived in Hong Kong I knew
very little about doing business in Asia. In the early 1990s I was working in a
US chemical company based in Germany at a time when Eastern Europe was going
through some rapid changes and seemed like the place to search for new business
opportunities. Before I took the plunge and invested in the new European
economies, a friend and senior colleague who had previously worked in the Far
East suggested I try my luck in Asia.
The first thing that struck me about
Hong Kong was just how easy it is to set up a business. I incorporated Hartwell
Pacific within one day. Hong Kong is still a place where you can arrive on a
Monday and have your company set up on Tuesday. Some of the great attractions
that draws business to Hong Kong is the services it provides to the
multinational community through a straightforward and clear low tax environment,
simple import/export procedures, easy banking systems and free flow of
information. These easy-to-understand systems allow you to concentrate on
running your business and contributed significantly to Hartwell quickly and
profitably establishing itself as a regional steel-recycling player.
In the early days I mainly acted on
leads from the American Chamber of Commerce,
but soon discovered a niche market for recycled scrap metal in the Chinese
mainland, and in particular for stainless steel. Hartwell Pacific now employs
125 people worldwide, with 25 in Hong Kong. The business has expanded to include
brokering and trading in non-ferrous metals both regionally and internationally.
In our Hong Kong headquarters we are
able to conveniently and efficiently manage our international operations in the
mainland, the Philippines, Malaysia, Thailand and Mexico. You couldn’t do that
from Kuala Lumpur, Bangkok, Manila or even Tokyo as each of these places focuses
on their own domestic markets. Hong Kong’s outlook is global and a preferred
location to establish regional headquarters.
In terms of operating green
businesses there is a lot of interest emerging in the SAR but land shortage
remains an issue, with a considerable amount of space necessary to set up
recycling plants or green operations. The Government has recognized this and is
looking for ways to make smaller plots of land available. The future of the
“green industry” looks positive as environmental awareness accelerates.”
(Source & Credit: Hong Kong Trade
Development Council)
HKCHCC (January
30, 2002) Volunteer
scheme a boost to dignity
I have listened
to President George Bush State of the Union address yesterday. He has covered a
wide subject areas from the war on terrorism, economy, tax and volunteerism.
Since
911, Hawaii has been hard hit resulting in 10s of thousands of layoff in the
tourist industry. Some of larger high-tech companies like Ohana Foundation has
closed their door and layoff more than 80 employees. Square USA will terminate
their Hawaii operation and layoff more than 110 of their employees by the end of
March. Riding on the theme of our
President's speech last evening on "volunteerism", I would like to
share an article with you. It was written for Hong Kong readers with focus on
the tourism aspect of it. I thought the same can apply to visitors and high-tech
business in Hawaii.
The recession has seen many hard-working, skilled
and energetic people thrown out of work. These personal tragedies stunned people
who thought it could never happen to them. The economic malaise gets more sombre
daily. More people will lose their jobs.
One danger is that well-educated people whose lives
have been programmed towards activity and enterprise will lose their initiative.
Re-training mature people close to the peak of their careers is difficult.
Travel industry professionals David Leung Tin-lung
and Ronnie Ho Pak-ting have come up with what may be a realistic and sensible
answer. The pair want a scheme that would encourage people out of work to serve
as volunteers in the tourism industry.
Mr Leung, regional director for Tourism Queensland,
and Mr Ho, deputy chairman of the Travel Industry Council, say their notion
would keep people active and engaged while out of work.
''For many people, losing what they thought was a
lifelong career job can be a shattering experience,'' Mr Leung explains. ''Even
a part-time job with little or no pay can mean a difference. And look at the
calibre of these people. Many have degrees and can speak fluent English,
Putonghua, Japanese, German or other languages.
''They're all Hongkongers. They know the city. They
can talk about economics or food or culture. They would be ideal tourism
industry recruits while waiting for the economy to recover.'' Mr Ho says the
idea would dovetail ideally with the City of Life; Hong Kong is it! campaign.
The Hong Kong Tourism Board is helping all 18
districts stage festivals and events; perhaps district councils or district
boards could form panels of local volunteers who know a lot about their home
areas, he suggests.
Mr Ho, managing director of a travel agency, does
not want the volunteers to take work from tour guides or travel agents, whose
jobs are also under pressure, saying they would be a welcome addition to tourism
services, not a replacement.
Professor Ray Pine, of the Polytechnic University's
School of Hotel and Tourism Management, cautions that volunteers must not
replace lower-ranking workers in tourism jobs.
Like many, Professor Pine is convinced tourism will
fully recover and expand. One danger is that if seasoned professionals in
frontline jobs are displaced or laid off - waiters, cooks, housekeepers - it
will be impossible to replace them.
Professor Pine suggests that if hotels, restaurants
and tour companies cannot afford to keep staff, they should give them unpaid
leave, encouraging them to upgrade skills while their jobs are on hold. They
will then be able to move back into better jobs when the slump ends.
The volunteer suggestion has also found support from
Tourism Commissioner Rebecca Lai Ko Wing-yee, Hong Kong Tourism Board (HKTB)
chairwoman Selina Chow Liang Shuk-yee and HKTB executive director Clara Chong
Ming-wah. The commission would happily develop new ideas with the trade,
district councils and volunteers, Ms Lai said.
Ms Chow notes that as a broad principle, volunteers
are a good idea, but stresses they need to deliver quality service. To boost the
industry on a long-term basis requires visionary investments, dedicated effort
and well-focused resources, she stresses.
Ms Chong describes the initiative as commendable.
Volunteers with language skills who are familiar with art and culture could help
visitors in many museums.
Giving dignity and purpose to people suddenly thrown
out of a job is obviously a most worthwhile step. But it can also be an
important contribution to our tourism industry.
(Source & Credit: South China Morning Post
- Hong Kong & Kevin Sinclair (kevsin@pacific.net.hk)
is a Hong Kong-based journalist)
HKCHCC (January
9, 2002) CHINA – WTO: What Might
it Mean?
By invitation of JAIMS, I have attended a standing
room only Open House Presentation by Dr. William Fischer, Professor, the
International Institute of Management Development (IMD), Switzerland (former
executive president and dean of the China Europe International Business School (CEIBS),
Shanghai).
There are many distinguish guests in the audience.
They are Former Governor George Ariyoshi; Former President of University of
Hawaii, Dr. Matsuda; Former President and the East West Center, Dr. Victor Hao
Li; Former Dean of UH – College of Business, Dr. David Bess; Dr. Seiji Naya,
Director of Hawaii DBEDT; Ms. Brenda Lei Foster of the Hawaii Governor's Office;
Mr. Robert Lees, Secretary General of the Pacific Basic Economic Council (PBEC) and the list goes
on.
The title of the talk was "CHINA - WTO: What
Might it Mean?"
I would like to share some of the thoughts with
you.
Confirming what Dr. Richard Fung, Managing Director
of Li & Fung (Trading) Ltd of the HKSAR had said in Dec 2001 when I attended
the conference in Hong Kong, China is
committed to the WTO. The challenge is enforcement at the local level.
China entry into WTO was a historic moment. The
process leading to the entry into WTO begins more than 10 years ago.
WTO has provided an excellent excuse (external
force, the WTO requiring the change to lessen the internal political pressure) for China to
further reform its economy and State Owned Enterprises to compete in the World
market.
China GDP growth at 6% in 2000, 7.3% in 2001,
estimated 7% in 2002 and 7.7% 2003-2006.
China market is NOT one market. Most firms are
relying on price-competition instead of Brand recognition.
The emergence of domestic champion firms in Textile,
Mobile Telecom, Domestic White Goods, Steel and Beer have produced winners like
Haier, Tsingtao, Bao Steel, China Mobile Hong Kong, China Easter, China
Southern, Air China, PetroChina, SinoPec, Huaneng Power, Beijing Datong &
Shandong International Power and Legend Computer. Industries that will favor
foreign firms are Agriculture, Auto and Financial Services.
Many Chinese firms have beaten their foreign
competition in China and emerge as a major competitor in the global economy.
Two years ago, many people including Dr. Fischer
have thought Shanghai will replace Hong Kong as China’s financial center in
the near future. But Hong Kong and its people seem to have reinvent and continue
to transform and likely be a strong contender in the foreseeable future.
HKCHCC (December
17, 2001) Is Hawaii Ready to Meet
the Challenge?
There is much excitements and expectations on China’s
Entry into WTO. On behalf of the Hong Kong China Hawaii Chamber of Commerce
(HKCHcc), I have spent the last two (2) weeks meeting with more than 30 business
leaders in Hong Kong and Southern China. When the meeting is on a one on one
away from the News Media and not involving any political officials, information
received is more truthful and down to earth. The meetings were focus on the
followings:
- Finding collaboration partners for Hawaiian
Companies.
- Working in partnership with various Chambers of
Commerce in Hong Kong and Southern China.
- Partnering with other State Economic Development
Offices in Hong Kong (i.e. California)
- Perception of Hawaii as an
Education-Health-Biotechnology-technology center and tourism destination.
It is very disturbing when I introduce myself from
Hawaii at the beginning of each every meeting that all except one said the
absent of direct flight have made Hawaii an inconvenience business destination
choice. For those that have visited Hawaii more than 5 years ago cited
unfriendly and hostile custom and immigration officers. I think improvements
have been made on the custom and immigration areas and shared my personal
experience with them.
Among many business initiatives, there are a couple
of areas Hong Kong is pursuing, may help Hawaii if we play our card correctly.
They are Education and Health care. Hong Kong may be Hawaii’s best
collaboration partner. I have met with Mr. Frank Martin, President of the
American Chamber of Commerce in Hong Kong. We have discussions on why American
firms failed in China. Signing a contract for News Media consumption verses
getting paid for work performed are two different things. Mr. Martin has spent more than 25 years in Hong Kong.
Some of the most common reasons are:
- Lack of knowledge of the market.
- Top down approach, thought they will solve any
problem by throwing money at it.
- Lack of credible partner.
I am fortunate to have the opportunities to attend
conferences featuring top leaders like Mr. Anthony Nightingale, Director of
Jardine Matheson Holding Ltd; Dr. Lily Chiang, President, E1 Media Technology
Ltd; Mr. David Eldon, Chairman, The Hong Kong & Shanghai Banking
Corporation; Mr. Victor Li, Managing Director & Deputy Chairman, Cheung Kong
(Holding) Ltd; Mr. Anthony Wu, Chairman, Far East Ernest and Young; Dr. William
Fung, Group Managing Director, Li & Fung (Trading) Ltd; Mr. Peter Woo,
Chairman, Hong Kong Trade Development Council; Honorable C H Tung, Chief Executive,
Hong Kong SAR; Mr. Christopher Cheng, Managing Director, Wing Tai Corporation
Ltd; Honorable Antony Leung, Financial Secretary of the Hong Kong SAR; Dr. Fu
Yuning, President, China Merchants Holding Co Ltd; Ms. Annie Wu, Managing
Director, Hong Kong Beijing Air Catering Ltd; Dr. Denis Simon, President,
Monitor Group (China) and others.
Discussions and meetings were made with the
representatives of HKTVB and RTHK in Hong Kong on the possibilities on
exchanging programs with the Hawaii Public Television Station. While details
need to be worked out, the response is overall positive.
I have met with Janie Fong, Director of the Economic
and Trade Office in Hong Kong. I am very impressed on her operation with offices
in Beijing and Shanghai helping California Companies partnering with Hong Kong
and China business entities. HKCHcc will be working with her office to assist
Hawaii Companies to pursue the Hawaii-Hong Kong-California-China partnership.
The latest discussion of the Hong Kong PEG to U. S.
Dollar, the challenge of Shanghai replacing Hong Kong as the financial center
and China entering the WTO have become interesting topic among the business
community in Hawaii. I have met and invited Mr. Norman Chan, Deputy Chief
Executive of
the Hong Kong Monetary Authority to attend a luncheon sponsored by the HKCHcc in
Hawaii on Friday, Feb 22, 2002 to provide us with update information. Mr. Chan has
accepted our invitation.
One of our collaboration partners is the Hong Kong
Trade Development Council (HKTDC). I have a long discussion over dinner with Mr.
Dennis Yau, Executive Deputy Director of HKTDC on how to further improve and
expand on our business relationship. I am expecting the business partnership in
the pursuance of trade between HKTDC and HKCHcc will be made stronger than ever.
I have met with leaders in the travel business
including many of my fellow alumni of the UH School of Travel Industry
Management on the impact of the Mainland China tourist trade. The Mainland China
visitor has increase substantially both in numbers and the money they spent in
the Hong Kong economy for the past two years. They are expecting the trend to
continue. Taiwan has also experience an increase of Mainland China tourist
visiting the Island. I have asked on the challenge for Hawaii to get an increase
share of the Mainland China tourist. Obtaining a VISA from the U. S. Consulate
is the biggest challenge. Cost and lack of a direct flight to Hawaii are common
reasons cited for selecting Far East tourist destination and visiting West Coast
USA instead of Hawaii.
I have discussions with parties familiar with
various agreements signed by various government entities between China and
States in the USA. For larger cities like Shanghai and Beijing, they must have
10s if not 100s of similar agreements. The success of a venture will depends on
the strength and credibility of the business arrangement. The relationship among
parties still play an important role, but a less important role compared to 5
– 10 years ago. According to Dr. William Fung, Group Managing Director of the
Li & Fung (Trading) Ltd, China will fully implement all the rule and
regulations of the WTO. The biggest challenge is the enforcement on the local
level.
While the State is trying very hard to promote
tourism, there are certain Federal rules and regulations placing Hawaii in
competitive disadvantage. Jones Act is one reason why it cost $5,000 to ship a
40 foot container to Hawaii and less than $2,000 to Los Angels. Similar outdated
protective legislative measures are reasons why no airline flew directly from Singapore, Hong Kong and Taiwan to
Hawaii!
When I returned home from Hong Kong, I must go
through the 5 hours long wait in Tokyo for the connecting United Airline flight to Hawaii.
The positive note was the flight must be 80% full, a sign that the Japanese
tourist may be returning to Hawaii. The custom and immigration officers were
friendly. A nice cup of cold juice was presented when I exit the custom gate.
What I do not understand was why one (1) baggage claim area was assigned to an
80% full Boeing 747-400? For those who travel to Japan, Hong Kong and Taiwan,
the size of our baggage claim is considerably smaller. To add to the insult, one
lady, very rude and unfriendly yelling out to visitors repeatedly to move the
luggage carts to the other end of the baggage claim not to block the baggage
handler to remove the overflow baggage. After a long flight, the last thing you
want is someone kept yelling at you.
HKCHCC (November
14, 2001)
Sharing Thoughts of Guy Kawasaki, CEO, Garage
Technology Ventures, "Straight Talk - 10 Thoughts for Hawaii"
Guy Kawasaki, CEO of Garage Technology Ventures has
made a presentation on Nov 13th sponsored by the University of Hawaii
College of Business Administration to a standing room only crowd estimated at
over 200. Live Webcast was available for those unable to attend the 5:30pm event
followed by a networking reception.
Guy’s talk has divided into three (3) topics,
"Then Versus Now: Starting a Company in the New New Economy",
"What Goes Down, Must Come up – 10 reasons why a good time to start a
Company", and "Straight Talk – 10 thoughts for Hawaii".
I found the last topic most interesting, confirming
many realities Hawaii must face. During the past 6 years, my direct
participation in various Chambers Of Commerce, Business Association and Software
Companies put me in direct conversation with experts on both sides of the
Pacific Ocean. People live outside of Hawaii are viewing many of the perceived
advantage promoted by Hawaii very differently. When many of us present our view
points to decision-makers in Hawaii. The typical answer is they do not
understand Hawaii. They are outsiders!
Guy was a graduate of Iolani School in 1972, BA from
Stanford University, MBA from UCLA as well as an honorary doctorate from the
Boston College and author of seven books. He has worked for Apple Computer until
1997, found Garage.com in 1997 with over 430 millions venture fund under
management and with strong family ties in Hawaii. We really cannot write him off
as an outsider.
I was a little surprise, despite with the standing
room only crowd. News media was not visible.
His viewpoint is important enough that I thought to
share with those that listen. Many venture capital firms, high-technology
companies and investors have echoed Guy’s message as follow.
- Entrepreneurs, not capital comes first
- Entrepreneurs comes from engineering schools and
technology companies
- Build a world class engineering school in Hawaii
- Support internship at technology companies
- Allow our best children to go away (i.e. go to
Singapore, Hong Kong, London) to get worldwide perspective
- Broadband (i.e. cable lines pass through Hawaii)
does not matter – not selling point
- People fly direct (i.e. no need to stop by Hawaii
if people want to go the Silicon Valley) – Is Hawaii situated in the
middle of the Pacific a real advantage?
- Learn the rule of the game
- Look at Israel and learn from them
- Do your (Hawaii) own things – Copy cat does not
work
Some of Guy’s speeches are listed on his website http://www.garage.com/guy/speeches/
Streaming
Video on Guy's Speeches
HKCHCC (November
3, 2001)
Opportunities for Hawaiian Companies
I have attended an informative business seminar in Taipei, Taiwan between
October 29th to Nov 2nd. It has also given me an
opportunity to meet with 48 business leaders from 30 cities from the United States
and Canada. During the 5 days of workshops, we get to know each other’s pretty
well, opportunities to share business ideas and continue to stay in touch with
each other’s in the future.
The business leaders are selected from various Chinese related
organizations willing and able to promote trade and business between Taiwan and
their respective economic regions. Attendees selection are based on the merit and ability to carry out
trade and business.
I am honored to attend this exclusive hosted event.
There are many opportunities available for Hawaiian Companies to partner
with the Taiwanese Companies to expand to the Mainland China market. There are
more than 150,000 Taiwanese working and living in Shanghai alone. More than
15,000 SME (small and Medium Enterprises) has manufacturing operations in PRC
(People Republic of China).
Many of the Taiwanese SME also has offices in Hong
Kong. We can help Hawaiian Companies through our relationship with the HKTDC
(Hong Kong Trade Development Council), HKETO (Hong Kong Economic and Trade
Office), AmCham – Hong Kong (American Chamber of Commerce – Hong Kong), the
Hong Kong General Chamber of Commerce and others (please go to our website for a
long list of collaboration partners in Hong Kong and Mainland China) http://www.hkchcc.org/collaborate_partners.htm
Taiwan has also present many good investment opportunities for Hawaiian
Companies.
For those that are interested in the tourist trade, The American Institute
in Taiwan (equivalent to U. S. Consulate) issued over 350,000 visa (many are 5
years multiple entry VISA) to the United
States in the past year (the 3rd busiest after Mexico and Korea).
Therefore a direct flight from Taipei to Hawaii is very critical and to our best
interest.
There are many opportunities that Hong Kong China Hawaii Chamber of
Commerce (HKCHcc) can offer you. We can help you to look outside the box. Our
focus is business with NO political agenda.
Can we help you?
HKCHCC (October
18, 2001)
US Chamber of Commerce and TDC
officials have pledged to help US companies, especially SMEs, strengthen
alliances with Hong Kong SMEs to maximize business opportunities in the Chinese
mainland market after WTO entry (HKCHcc is
a member of U. S. Chamber of Commerce in Hong Kong and Shanghai).
(Source & Credit: Hong Kong Trade
Development Council)
HKCHCC (October
11, 2001) -
Hong Kong Chief
Executive Tung Chee-Hwa yesterday delivered a $15 billion package of new jobs,
modest tax relief and business-friendly measures for a Hong Kong badly hit by
the worst economic crisis in decades
Relief Measures
- More than 30,000 short-term jobs to be created
- Property rates cut by $2,000 in 2002
- Tax deductibility on mortgage interest payment to
increase by $50,000 per year for two tax years
- A $300 million community projects fund to be set up
Education
- An extra $200 million for secondary schools to hire more
teacher assistants
- Native English-Language teachers scheme to be extended
to all primary schools
- A $5 billion fund to be set up to subsidize continuing
education and training programs for lifelong learning
Business Environment
- $1.9 billion funding for small and medium-sized
enterprises
- Permanent residents who are foreign nationals can apply
for three-year multiple visas to travel to the mainland
Infrastructure
- $600 billion spending on road and rail links in next 15
years
- $2 billion to build a new exhibition centre at Chek Lap
Kok
Governance
- A quasi-ministerial system proposed for the top three
secretaries and most policy bureau heads, with political appointees to sit
on Exco (decision to be made by next chief executive)
($1 US$ = $7.8 HK$)
HKCHCC (Sept
5, 2001) - "Green
Card" lottery
DV-2003 will make permanent residence visas available to persons meeting the simple, but strict, eligibility requirements.
Applicants for Diversity Visas are chosen by a computer-generated random lottery drawing. The visas,
however, are distributed among six geographic regions with a greater number of visas going to regions with lower rates of
immigration, and with no visas going to citizens of countries sending more than 50,000 immigrants to the U.S. in the past five years.
Within each region, no one country may receive more than seven percent of the available Diversity Visas in any one
year.
For DV-2003, natives of the following countries1 are not eligible to apply because they sent a total of more than 50,000
immigrants to the U.S. in the previous five years:
CANADA, CHINA (mainland-born), COLOMBIA, DOMINICAN REPUBLIC, EL SALVADOR, HAITI, INDIA, JAMAICA, MEXICO, PAKISTAN, PHILIPPINES, SOUTH
KOREA, UNITED KINGDOM (except Northern Ireland) and its dependent territories, and VIETNAM. Persons born in Hong Kong SAR, Macau SAR and Taiwan are eligible.
For complete information, please go to the following link:
http://travel.state.gov/visainstructions.html
Source & Credit: Jean Kim, Damon Key Leong Kupchak Hastert
HKCHCC (August
22, 2001) - Business
the catalyst of Hong Kong's success
Following are excerpts from a speech by the
Chief Secretary for Administration Donald Tsang at a Chamber's 140th Anniversary
Distinguished Speakers luncheon on July 27.
First, Hong Kong. How do we feel four years
after the transition? Are we in good shape? Are we heading in the right
direction? What does the future hold for us? Can we compete with our regional
rivals?
These are good questions, which I hear debated
all around me. By legislators, commentators, critics, business people,
academics, teachers, nurses, doctors, lawyers, taxi drivers and men and women on
the top deck of the Shau Kei Wan tram. That's the great thing about Hong Kong:
you never find yourself short of someone with an opinion to express or, more
likely, an argument to make.
Some people worry about this apparently
cantankerous tendency. But coming as I do from a large and competitive family,
and from a profession in which I have been encouraged to argue the point and
defend my corner, I see this simply as part of the fabric of Hong Kong, and one
of its greatest strengths. The trick is to harness this energy and enthusiasm -
and occasional angst - and turn it to positive advantage.
Whatever our current problems, we need to be a
bit more gung ho. We really do have a lot going for us.
Having said that, I can understand why in the
aftermath of the Asian financial crisis, many of our fellow citizens still feel
bruised and battered. I can understand why they are worried by the uncertainties
of the world economy and the march of globalization. That's only natural. But
have we forgotten that Hong Kong is the most international of all cities -
Asia's world city? Is it not true that globalization will naturally benefit more
those economies which are open and competitive? To my mind the new opportunities
which globalization offer are abundant enough to hurdle any hazards that may
come our way.
The Chief Executive, in launching this
Distinguished Speakers series, went into some detail about his vision of our
role in the Pearl River Delta. It's a role full of promise, so long as we are
prepared to seize the synergy.
The whole of China is our backyard. This is
the country, which is expected to become the world's second largest economy
within the space of the next 25 years. Is that an opportunity or a threat? Will
poor little Hong Kong get steamrollered on the way to this astonishing
achievement? Will we be left behind by Shanghai? Let me deal with that last
question, as it is one that has taken on a life of its own.
It has almost become an urban myth that before
too long Hong Kong's star will be eclipsed by Shanghai's; that Shanghai is a
'happening' place that is fast catching up and even now luring business away
from Hong Kong. More often than not, the rapid advances in Shanghai - and
elsewhere in China such as Shenzhen and Guangzhou, not to mention Singapore and
Sydney - are explained in terms of 'win and lose'. As in: Shanghai is becoming
much more prosperous and open so therefore Hong Kong will lose out.
This proposition is far too simplistic. Not
only that, it's wrong. Hong Kong and Shanghai do, and will continue to, play
complementary, rather than competitive roles. Hong Kong is and will remain the
pre-eminent international financial centre for the Mainland as well as in the
wider context the major hub for regional headquarters in the Asia-Pacific.
Shanghai will continue to develop as the major manufacturing, financial and
business centre for the domestic Mainland market. The Mayor of Shanghai sums
this up rather well by describing Hong Kong and Shanghai as the twin-engine of
the national economic machine, helping the nation to take off, and reach higher
economic platforms in this century.
Having said that, there are certain major
strengths that Hong Kong does have in comparison with our Mainland cousins, and
will continue to have in the foreseeable future. These strengths factor heavily
in the decision-making process of multi-nationals looking for a regional base,
or of small and medium-sized enterprises looking for a foothold in the Mainland
market or the Asian region.
The most important is our legal system. We
operate under a common law system that is trusted, tried and tested by
international business. Our capital account is fully convertible. A strong and
well-regulated financial sector; a free press; the free flow of information; low
taxes and a simple taxation system; a pool of managerial talent with
international experience; ease of access, proximity to major markets; a dense
network of services firms. And a clean, corruption-free administration that
believes in a level playing field.
These are our strengths. This is the Hong Kong
advantage. It's imperative that we protect and enhance these assets.
Just as the economic landscape is changing, so
too is the political and social landscape. The government is subject to scrutiny
now as never before: through the legislature and, unrelentingly, through the
eyes of the media. We are being held to account for each and everything we do,
both large and small. This trend is likely to become more marked as the
political system develops in tune with the requirements and ultimate goal of the
Basic Law.
There is certainly a recognition of this by
the Hong Kong General Chamber of Commerce. I welcomed the initiative of this,
our oldest and largest business organization, just over two years ago when the
general committee set out its stall, so to speak, on the changes in the SAR's
political scene. In acknowledging that the SAR political environment is evolving
in one direction: towards greater democracy and a more developed, plural
society, the General Committee had this to say: "Communication and dialogue
with the media, with the politicians, and with the grassroots population is a
requirement in the post-handover - Hong Kong people ruling Hong Kong' society.
This dialogue will not be easy, since not everyone will agree with every agenda
item of the business community and since politics is often messy and sometimes
openly adversarial in nature. But businessmen must be prepared to roll up their
sleeves and set out their case. And the business community has a good case,
since the true definition of 'business community' is almost as wide as the
entire six-million-plus population of Hong Kong."
Now, more than two years on, how does the
report card read? Is the business community out there in the market place of
ideas and community aspirations, sleeves rolled up, making its case? Winning the
arguments? Is the message of business getting through to the grass roots? How
will philosophy and aims of business be translated into success at the ballot
box? Believe me, sharp elbows and nimble footwork are required.
Mr Chairman, I apologize if I have gone on at
some length. But I did not want to let this opportunity slip to convey some
important messages to this audience. First, that for all our problems, real and
imagined, Hong Kong has a hell of a lot going for it; and we can capitalize on
that if we rekindle some of our fighting spirit. Second, that we have nothing to
fear from neighboring cities so long as we leverage our unique advantage under
One Country Two Systems. And third, that the business community needs to think
about doing more to make its case in the SAR's evolving political scene. I hope
these messages have provided some food for thought."
Source & Credit: Hong Kong General Chamber of Commerce (HKGCC)
HKCHCC (August
22, 2001)
The
Financial Secretary Signs Off Quietly
Salaries Tax
- Standard rate of Salaries Tax remains at 15%
- Personal allowances remain unchanged
- No change in the progressive rates
- Increase in the allowance for self education of HK$10,000
Profits Tax
- Standard rate of Profits Tax for corporations remains at 16%
- Standard rate of Profits Tax remains at 15% for persons other than
corporations
- No change in the rates of depreciation allowances
Estate Duty
- No change to the general scope of the Duty
- No change to the general rates of the Duty
- No changes to the cumulative rate bands
Source & Credit: Hong Kong General Chamber of Commerce (HKGCC)
HKCHCC (July
31, 2001) - United
States Report on Hong Kong
United States Report on Hong Kong as of July 31, 2001
Released to Congress on August 7, 2001
Bureau of East Asian and Pacific Affairs
Hong Kong under Chinese sovereignty has remained one of the freest cities in
Asia, with the Hong Kong Government committed to advancing Hong Kong's distinct
way of life. With some notable exceptions that bear continued close attention,
the Government of the People's Republic of China (PRC) has generally kept its
commitments to respect Hong Kong's high degree of autonomy. In the period from
April 1, 2000 to July 31, 2001, Hong Kong remained a free society that extended
basic civil liberties to its citizens every day, defined its identity in terms
of being an open international city, and largely continued to make its own
decisions in pursuit of its own identity and economic interests. Nonetheless,
there were some issues warranting attention, especially the Hong Kong
Government's strong rhetoric toward and possible action against the spiritual
group Falun Gong. It is worth noting, however, that the group, although outlawed
in the mainland, remains legal in Hong Kong, thus providing a highly visible
validation of Hong Kong's autonomy. Despite the PRC ban on Falun Gong in the
mainland, which subjected thousands of practitioners to arrest and abuse, the
movement continued to practice freely in Hong Kong and held numerous
demonstrations and vigils outside Beijing's Liaison Office protesting the PRC
Government's mistreatment of practitioners in the PRC.
Hong Kong's civil service remained independent, and many officers initially
appointed to senior posts by the British remained in key posts. Hong Kong's
export control system remained robust. Hong Kong continued to play an important
role as a regional finance center, actively participating in international
efforts to rebound from the Asian regional recession while managing successfully
the turn-around of its own economy. The Hong Kong press remained free and
continued to comment critically on most issues, including the PRC and its
leaders, and the Hong Kong Government. Demonstrations -- often critical of the
PRC -- continued to be held. Mainland Chinese companies were subject to the same
laws and regulatory supervision as all other enterprises. Indeed, Hong Kong's
Independent Commission Against Corruption successfully prosecuted several Hong
Kong officers of mainland companies.
The rule of law and an independent judiciary remained in place as pillars of
Hong Kong's free and open society. Concerns about the ultimate authority of Hong
Kong's highest court over the long term lingered over possible re-use of a
mechanism, employed by the Hong Kong Government in 1999 in the "Right of
Abode" case, that brought about an ex post facto reinterpretation of the
Basic Law by the National People's Congress Standing Committee. Beijing's denial
of requests for U.S. military ship and aircraft visits to Hong Kong in April and
May 2001, although within the Central Government's purview under the rubric of
defense and foreign affairs, negatively affected Hong Kong's reputation as an
open, cosmopolitan, and internationally connected city. While Hong Kong
residents enjoyed generally unfettered rights of expression and association, the
same rights were not guaranteed to outsiders; in May, on the occasion of a visit
to Hong Kong by PRC President Jiang Zemin, the Hong Kong Government denied entry
to around 100 overseas Falun Gong members who had planned to participate in
practice sessions and demonstrations against PRC treatment of mainland
practitioners.
Hong Kong's political system continued to evolve. The legislature and free press
utilized public fora to demand and obtain government accountability. The
Government announced it would consider how to make senior officials more
accountable, although it was not clear how accountability would be enhanced with
respect to the Hong Kong people and legislature. There was public debate over
the pace of democratizing elections for the legislature and chief executive,
although the Hong Kong Government continued to state that the time was not
appropriate to consider changes to Hong Kong's election arrangements.
The United States has substantial interests in Hong Kong and supports the
concept of Hong Kong's high degree of autonomy under Chinese sovereignty. In
recognition of Hong Kong's autonomy, the United States continues to accord Hong
Kong a special status distinct from the rest of China. The United States
continues to lend support to Hong Kong's autonomy by concluding and implementing
bilateral agreements, promoting trade and investment, arranging high-level
visits, broadening law enforcement cooperation, bolstering educational,
academic, and cultural links, and treating Hong Kong separately from the
mainland for export control purposes.
There were no suspensions under section 201(A), terminations under section
202(D), or determinations under section 201(B) of the United States-Hong Kong
Policy Act of 1992, as amended, during the period covered by this report (April
1, 2000 to July 31, 2001).
HKCH CC
(July
28,
2001) -
Hong
Kong entrepreneurs are already the largest investors in every Mainland province!
Hong Kong entrepreneurs are already the largest investors in
every Mainland province. According to one recent report, at
the end of 1999 there were over 184,000 Hong Kong-funded projects throughout the
country. And China's own statistics puts the
cumulative value of Hong Kong's realized direct investment in the Mainland at
US$162 billion in June last year, Mr. Leung said.
"This involvement should give our enterprises a head start when China
finally becomes a member of the World Trade Organization. Our investors,
particularly in manufacturing, have been a driving force in China's
externally-oriented economy. This role should be maintained and even
strengthened in the post-WTO era," he said.
At the same time, the Mainland's trade is expected to double
within five years after it joins the WTO. This opens the opportunity for Hong
Kong companies and their partners to sell their products to the world and the
huge Mainland domestic market.
Many smaller companies from around the world will want to do
business with more open China and establish a presence here in Hong Kong to make
that possible, Mr. Leung said.
Financial Secretary, Antony Leung told the audience at the Hong
Kong General Chamber of Commerce luncheon
that he believes Hong Kong is on the cusp of another exciting new era in its
remarkable success story
Source & Credit: Hong Kong General Chamber
of Commerce (HKGCC)
HKCHCC (July
20, 2001) - Hong Kong
Science Park Welcomes First Silicon Valley Tenants
Executives of three Silicon Valley technology companies made history on June 19, 2001 when they met with Victor Lo, Chairman of the Hong Kong Science and Technology Parks Corporation, and other Hong Kong representatives to sign an agreement to open offices in Hong Kong's new Science Park. Journalists and about 100 guests witnessed the signing at a banquet in Santa Clara, where
Mr. Lo spoke of the innovative partnership between Hong Kong and Silicon Valley and the three executives praised the concept of the Science Park and discussed their reasons for climbing aboard. The 3.5 million square foot campus-style
Science Park in Tai Po, aims to attract cutting-edge companies in sectors covering Electronics, Information
Technology, Biotechnology and Precision Engineering. It is to be completed in several stages, with the first spaces becoming available for tenant companies to establish their R&D, design and regional headquarter activities in early 2002. Advanced Analogic Technologies, Inc, Pericom Semiconductor Corporation, and REnex Technology Limited - the three companies that signed on at the ceremony - will be in this first wave.
Tenant companies will enjoy unprecedented access to innovation and technology resources via the Park's close alliances with Hong Kong's six top universities, including the Chinese
University of Hong Kong, which is almost adjacent to the Science Park. Joseph Ng, President of Business Development for REnex, a wireless modem manufacturer, cited the concentration of
wireless communications expertise at CUHK as one of his firm's reasons for reserving about 4,300 square feet of office space in
the Park.
In his keynote speech at the signing ceremony, Victor Lo
outlined the reasons for selecting Hong Kong as a base for expansion into Asia.
"We are an exciting and competitive international city," he said, "where business enjoys easy access to a full spectrum of
services and infrastructure. Our innovation and technology industry operates under a well-established framework, with intellectual property rights protected by effective laws. And culturally, I feel comfortable in claiming that we are the definitive example of 'east meets west.'"
Richard K. Williams, CEO and CTO of integrated circuit
designer and manufacturer Advanced Analogic Technologies, cited his company's desire to strengthen its presence in Asia and to locate operations closer to its customers and manufacturing partners.
Alex Hui, CEO of high-performance interface integrated circuit developer
Pericom, said at the signing ceremony that Pericom's 12,622 square foot facility at the Science Park would take
advantage of Hong Kong's pool of engineering talent.
Robert Chen, CEO of REnex, said he saw the Science Park as
part of a bigger picture; he called the Park an example of the resurgence of Hong Kong's prominence as a gateway to Asia. "We are proud to be part of that resurgence," he said.
The Hong Kong Industrial Estates Corporation and the Hong Kong Industrial Technology Center Corporation merged with the Science Park earlier this year. This move, which had been
promoted by former UC Berkeley Chancellor
Chang-lin Tien, is designed to create an end-to-end support structure capable of meeting the gamut of technology industry needs ranging from tech business incubation to manufacturing.
Hong Kong Science &
Technology Parks
The Santa Clara signing ceremony was organized by the Hong
Kong Economic and Trade Office in San Francisco*, the California Office of Trade and
Investment*, HongKong-SV.com*, and the Hong Kong Association of Northern
California* (*go
to our business link page to enter their sites for more information)
Source & Credit: Hong Kong
Economic & Trade Office in San Francisco
HKCHCC (June
2001) - Why 50,000 Americans Work, Live &
Invest in Hong Kong?
The US Presence in Hong Kong
The United States has maintained a
commercial presence in Hong Kong since the 19th century. U.S. citizens represent the largest foreign business group in
the Hong Kong Special Administrative Region (SAR). According to the U.S.
Consulate General, an estimated 50,000 permanent or temporary U.S. passport
holders reside in the SAR.
US Investment in Hong Kong
U.S. direct investment in Hong Kong in 1999 amounted to
US$20.8 billion, an 8% increase from 1998. 1
This figure
could significantly understated because it includes only amounts reported by
U.S. parent companies of subsidiary corporations established in Hong Kong and
does not reflect investments by individual American entrepreneurs.
US Trade with Hong Kong
U.S. exports to Hong Kong for 2000 were US$14.6 billion,
while imports from the SAR totaled US$11.4 billion, resulting in a US$3.2
billion trade surplus (up from US$1.2 billion last year) in favor of the United
States.2 The top five U.S. exports to Hong Kong are:
electrical machinery and parts (24%), office machines (16%), manufactured
articles (5%), Telecommunications (5%), and edible meat products (4%).3
The U.S. is Hong Kong's second largest trading partner, after
China. The top five domestic Hong Kong exports to the US includes
clothing/apparel (64.7%), electrical machinery (13.0%), jewelry (6.4%),
textile yarn, fabrics and made-up articles (3.0%), and printed matter (2.1%).4
Hong Kong also serves as an important re-export zone for US-China trade,
handling US$36.4 billion worth of exports to the U.S., and US$6.1 billion worth
of U.S. exports to China in 2000. 5
The U.S. is the
largest supplier of goods to the Hong Kong government with sales reaching US$136
million for the year 2000. 6
US Presence in Hong Kong
Hong Kong is the preferred location in Asia for multinational
regional offices and headquarters. The United States has 212 regional
headquarters (the largest number followed by Japan and the United Kingdom), and
358 regional offices in Hong Kong (the second largest number after Japan).7
Overall, there are approximately 1,100 U.S. companies operating in Hong
Kong, employing some 250,000 Hong Kong workers.8
U.S.
banks in Hong Kong had assets totaling approximately US$69 billion in 2000. 9
Most American consumer products are available in Hong Kong, as evidenced
in the myriad of U.S. brands that can be seen in many stores.
Eight American states and nine U.S. ports maintain
representative offices in Hong Kong.10
The U.S. Consulate
General is the largest in Asia, and one of only two consulates that maintain
direct reporting lines to Washington DC. In addition, there are numerous
American non-governmental organizations actively involved in the Hong Kong
community, including alumni associations, educational, social, professional, and
media organizations. Approximately 7,545 Hong Kong citizens are pursuing
tertiary education in the U.S.11
Some 966,008 visitors
from the U.S. came to Hong Kong in 2000, a growth of 12.5% from 1999.
12
1 2000 US HK Policy Act Report
2 HKSAR Census and Statistics Department
3 HKSAR Census and Statistics Department
4 HKSAR Trade and Industry Department.
5 HKSAR Trade and Industry Department
6 HKSAR Trade and Industry Department
7 2000 Survey of Regional Offices Representing Overseas
Companies in HK – Census and Statistics Dept.
8 2000 US HK Policy Act Report, US Consulate General in
Hong Kong
9 Hong Kong Monetary Authority.
10 Association of US Ports Authority
11 Institute of International Education
12 Hong Kong Tourism Board
Source & Credit: American Chamber
of Commerce in Hong Kong (AmCham Hong Kong)
HKCHCC (June
2001) -
Hong Kong Remains World's Freest Economy
Hong
Kong remains the world's freest economy, according to the
latest findings of the Economic Freedom of the World: 2001
Report published by the Cato Institute of the
United States in conjunction with the Fraser
Institute of Canada. Welcoming the news,
the Acting Financial Secretary, Mr. Stephen Ip, said
he was pleased that the Report firmly acknowledged Hong Kong's openness to
business and trade, a key element of competitiveness.
The
Special Administrative Region (SAR) also scores first both for the Trade
Openness Index and the Comprehensive Index, which
are two new features added to this year's Report.
The
Trade Openness Index is created to investigate the link between freedom to trade
and wealth, while the Comprehensive Index integrates some new factors into the
analysis in seven major areas: size of government; security of property rights;
access to sound money; freedom to trade with foreigners; regulation of capital
and financial markets; regulation of labor markets; and freedom to operate and
compete in business. "Hong Kong is committed
to maintaining an open and business-friendly environment as well as a level
playing field for investors from all over the world. We will continue our
efforts in strengthening our position as an international financial and business
center," said Mr. Ip.
HKCHCC (June
2001) -
Ideas
Sought for West Kowloon Reclamation The
HKSAR Government has launched an international competition
inviting conceptual proposals for the development of a 40-hectare site at the
southern tip of Western Kowloon Reclamation into a
integrated arts, cultural and entertainment district. The object is, through the
development, to enhance Hong Kong's position as one of the Asia's leading
centres for the arts and for cultural entertainment activities, as well as to
help create a new look for Victoria Harbor.
The
competition is open to all qualified planners and architects. Deadline for
registration is June 8, 2001 and for submission of proposals, September 29,
2001. Submitted proposals will be adjudicated by a 10-member jury made up of
experts from within and outside Hong Kong.
The
Chairman of the jury is Lord Rothschild, a jury
member of the architectural equivalent of the Nobel Prize.
Mr. I. M. Pei, architect, has agreed to serve as Honorary
Special Advisor to provide advice on brad strategic issues in the
competition. Potential participants are welcome to visit the competition website
at http://www.plb.gov.hk/ competition for
further information.
HKCHCC (June
2001) -
Opportunity
in China's Western Region Hong
Kong and American Companies should take advantage of the
opening up of the consumer market and infrastructure development in China's
Western Region, says a Hong Kong Trade Development Council
(HKTDC) report, Entitled "Opportunities for
Hong Kong in Western China," it looks into Hong Kong companies'
investment opportunities in the industrial and services sectors in that region.
Presenting the report, HKTDC Assistant Chief Economist,
Pansy Yau, said: "Though average per capita spending on consumer
goods in the region is still lower than that in coastal regions, spending in
major cities of the region is catching up fast. There is an existing huge market
for Hong Kong consumer products.
"The
consumer market in the region is catching up fast. The progress of urbanization
will change the pattern of consumer spending. The emergence of a larger, younger
consumer group, as well as the growth of a middle class, will expand the size of
the consumer market along with further economic growth. Hong Kong companies may
consider capitalizing on the relaxation of the domestic sales right after
China's WTO accession in gaining a foothold in the Western Region market."
She
pointed out that the Western Region development programme brings to foreign
investor a more favorable and less restrictive environment. Local authorities
will have greater autonomy to approve foreign investment projects, and foreign
investors will be allowed to participate in a wider scope of business.
HKCHCC (June
2001) -
Hong
Kong International Airport Named World's Top Airport
Hong
Kong International Airport (HKIA) has been named the World's
Best Airport for 2001 in an independent survey conducted by a
British-based airline and air-travel industry research company. HKIA emerged as
the clear winner in a survey conducted by Skytrax Research
(formerly Inflight Research Services), more
than 15% ahead of second-placed airport Kuala Lumpur.
HKCHCC (June
2001) -
Cyberport
to Open for Tenancy Companies interested
in applying for office space at Hong Kong's Cyberport can
now make application. Monthly rental has been set at HK$11 - $13 (US$1.40 -
$1.70) per sq ft lettable. A spokesman for the Information
Technology and Broadcasting Bureau advised companies interested in
becoming Cyberport tenants to put in their application early.
Over
290 companies from all round the world have expressed interest in becoming
tenants at the Cyberport. Fifteen of them have signed letters of intent to
become anchor tenants. They are: Cisco, CMGI,
Hewlett-Packard, Hikari Tsushin, Hua Wei, IBM, Legend, Microsoft, Oracle,
Pacific Convergence Corporation, Portal, Silicon Graphics, Softbank, Sybase, and
Yahoo. Cyberport tenants will be selected
through Hong Kong Cyberport Management Company Limited, which
has been set up by the Government to hold the title tot he Cyberport project.
HKCHCC (June
2001) -
Hong
Kong, Shanghai 'Partners in Growth' Hong
Kong and Shanghai are strategic partners serving as
engines for growth in the Asia-Pacific region and gateways to China rather than
as head-on competitors, says the Hong Kong Trade
Development Council Chief Economist, Mr. Edward Leung. "Regardless
of competition, Hong Kong is Shanghai's largest foreign investor and the fourth
most important trading partner. Hong Kong investment in Shanghai has brought
both capital and management expertise.
On the
other hand, newly-unfolded opportunities in Shanghai provide Hong Kong companies
with a strong bridgehead for extending their business in the Yangtze
River Delta, " he said. "Hong Kong will continue to be a major
source of international capital for Shanghai in fostering its economic
development," he added.
HKCHCC (June
2001) -
Hong
Kong Tourist Association (HKTA) now the Hong Kong Tourism Board (HKTB)
Reconstitution
of the Hong Kong Tourism Association
(HKTA) as the Hong Kong Tourism Board (HKTB) will
provide the organization with a more structured and targeted approach for attracting
visitor to Hong Kong than ever before, utilizing the methodology of a
"knowledge economy", new Executive Director, Ms.
Clara Chong, has pledged. The organization name change took effect from
April 1, following passage of the Hong Kong Tourist
Association (Amendment) Bill 2001 through the Legislative
Council on March 14. For
more information on this and other articles, please contact our office.
 |
