Members on the 7th Annual Hong Kong Business Summit Discussion Panel shared their views with the audience on a host of issues impacting business in Hong Kong.

In his introduction of the panel, Chamber Chairman C C Tung said that the expansion of Hong Kong's trade in both goods and services in the past year has been one of the key factors in the SAR's exceptional economic recovery. It has also provided a solid base for further improvement in the year ahead.

Indications that the U.S. economy is now slowing will likely ease demand for exports in the coming year, but an important factor in the trade equation is how China's WTO accession early next year will affect trade, he said.

Ian Perkin: The forecast is actually based on property prices having bottomed out. In terms of the CPI [Consumer Price Index] figure, the rental cycle is just starting to run down. ... You can see it dropping now in the CPI. So as far as that is concerned, that will drop out, we think, in the first quarter. ... So yes, we've seen the prices bottom out and seen the rent cycle finish.

James Hughes-Hallett: I'm pretty glad to hear Ian say the property prices have bottomed out, but I think that is a fair reading.

Certainly in the commercial sector I think they have more than bottomed out, they've turned up quite steeply, as anybody who has renewed rents recently will have found out to their cost.

David Eldon: Obviously the financial sector! I guess the problem the financial sector faces at the moment is what is it going to do in 2001? If you look to see the growth, or perhaps the lack of growth, in areas like lending over the course of the last 12 months, and where that may go in 2001, I think there is probably a bit of an uncertain question mark.

What we have to do as a financial centre though is to remain competitive in the market, and make sure we retain the skills in this market that we need to ensure that we are a strong financial centre.

There are competing centres. People are trying very, very hard to knock Hong Kong off its perch. That is fine by us, because I think we are capable of competing with the best anywhere. The question that most frequently gets raised is, 'Isn't Shanghai going to become the most important financial centre in Asia in time?'

Graham Brant: There are a couple of aspects of Hong Kong business which is very beneficial to helping this concept of a digital hub. One is the concept of business agility and speed. It is a very entrepreneurial place: when companies see an opportunity and a reason for doing something they will move quickly. The other thing is the concept of deregulation, which provides a good environment to encourage that creativity and ability to move fast.

I'll give you an example. The next 12 to 24 months is going to see some very, very major changes in the wireless world in terms of mobile phone technology; in terms of the ability to deliver data services wirelessly, and Hong Kong has every ability to be at the forefront of that revolution.

C C Tung: Hong Kong will continue to do well in capturing particularly the southern part of China's cargo movement, and the Pearl River Delta of course is a major manufacturing centre for exports to the U.S. and Europe. Hong Kong has the critical mass; it is the number-one container port today. It is well served by many of the shipping companies. So in terms of service, coming through Hong Kong certainly is better than any other port around us. Although physically and in terms of costs, Hong Kong probably is a little more constrained today, but on the other hand the growth of exports will continue. If Hong Kong's growth in terms of container throughput is of a smaller percentage, we have a very large base to come off, so I think Hong Kong will still continue to do well.

Anthony Wu: I think the government will continue with its present policy of minimum intervention. I think that has been a success factor of Hong Kong. Especially when China enters the WTO, I think Hong Kong businesses do need a lot of help from the government in really helping them take full benefit of this opportunity, and I think the government will continue to adopt this present policy in helping businesses go forward.

Andrew Yuen: I think the government has been helping the SMEs in training and also urging banks to release more cash for the SMEs, which has been a problem for most SMEs after the Asian financial crisis.

C C Tung: I think we still face a lot of these issues. For example, our company, OOCL, trades into China. We have offices in China, but we do not enjoy the same benefits in this case as our competitors from the U.S. or Europe because they do have the backing of a country and they are often able to come to a treaty agreement. ... While a Hong Kong company, in reversal, we are actually being disadvan-taged. I think this level playing field will probably become more level as soon as China gets into the WTO; as soon as the WTO provision comes into play.

Graham Brant: We run about 80 per cent of our Asia operations out of Hong Kong ... Japan remains our biggest financial revenue source in Asia, but for the other 11 countries which are part of Microsoft Asia, Hong Kong is by far in the best position to provide the centre of expertise in terms of what we do to support those companies in terms of sales, marketing support, new technology ... With Japan in the north and India in the south, geography alone means that Hong Kong has a very good position.

Anyone who has tried to run a regional centre out of Tokyo will spend half of their life travelling through Narita Airport. So the ability to have Chek Lap Kok and its connections to the rest of the world, just from the transportation point of view, is a major benefit.

And the other thing is the question of the multinational culture that you have here in Hong Kong. We have just over 250 staff based in Hong Kong now. Probably about 50 per cent are local hires. The other half are people from many different nationalities and experiences. That provides a very diverse culture and Hong Kong is a city that can support that.