Pelle Tornberg, President and Chief Executive Officer of Metro International, speaking at a joint Chamber luncheon on October 13, said many newspapers are losing advertising income to television channels which have more attractive demographics than newspapers.

"In Europe, especially, the profile of newspaper readers is basically people like me: too fat, too old, too maleish and so on," he said. "So what we have done, is to deliver the audience that is forgotten by the newspapers: young people and females."

Some 49 percent of Metro's readers are in the 13-34 age group, compared to 30 percent for the industry average.

"The business game here is to deliver readers that advertisers want to talk to," he said. "Our readership is more similar to TV rather than paid-for newspapers."

With a global circulation of 4.1 million newspapers daily, Metro ranks as the third-largest paper in the world. Mr Tornberg said his ambition is not to become the world's largest newspaper, but most profitable, and to arrive at that goal, the paper will stick with its current formula of producing a thin newspaper.

He said studies have revealed that people are actually spending less and less time reading newspapers, while top papers around the world have compensated for this by adding pages. As a result, only between 20 and 30 percent of a newspaper is actually read.

"If you compare the thickness of [leading newspapers] and Metro, you might say Metro has too few pages. But as the average reading time has been lowered, ads have a greater impact because people read 100 percent of the paper," he said.

Despite branding and advertising mindshare, Mr Tornberg said that advertisers are only interested in whether they can sell more products though ads in one paper than in the other.

Many SMEs still do not perceive the need to go e-commerce, and their reluctance is holding back the development of electronic commerce in Hong Kong, say IT analysts.

Despite all the machinery being in place, certain companies simply have no interest in going down this road. Part of the problem lies in immature IT regulations, not just in Hong Kong, but regionally, Yvonne Chia (right) and Angus Forsyth (centre), Partners of Stevenson, Wong & Co., said at the Chamber's roundtable luncheon on October 10.

Speaking at the Chamber's Distinguished Speaker Series luncheon on October 21, Mr Eskew said he believes these new air rights will enhance competition and improve service by forging strong links between Hong Kong and his company's European and Asian hubs.

Starting January 1, 2004, made in Hong Kong goods falling under one of 273 product codes exported to the Mainland can enjoy zero tariff. For product categories not currently covered, manufacturers can, starting January 1 next year, submit applications for zero tariff to the Trade and Industry Department (TID).

Charmaine Lee (right), Assistant Director-General of Trade and Industry, TID, told members at a Chamber CEPA workshop entitled, "Rules of Origin Under CEPA," on October 8, that goods covered in subsequent phases under CEPA can include products currently in production in Hong Kong, as well as products intended to be manufactured here.

"Provided that the products meet all the CEPA rules, starting January 1 next year, manufacturers can apply for zero tariff treatment," she said.

For goods currently being produced, manufacturers should provide a product description and product code to the TID. Manufacturers planning to manufacture goods also need to provide production capacity and the estimated workforce to produce the goods, among other data.

"Before June 1 each year, we will submit the consolidated list to the Mainland, and both sides will enter into consultations on the rules of origin of applicable products," she said. "Both sides will complete the consultations before October 1 each year and make a public announcement before December 1."

For goods already being produced, tariff preference will be granted beginning January 1 of the year following the announcement. For products intended to be manufactured in Hong Kong, zero tariff will be granted beginning January 1 of the following year after the products have come into production.

Of the 273 Mainland product codes enjoying zero tariff preference starting 2004, 187 product codes will adopt Hong Kong's existing process-based origin rules, 46 will use the "Change in Tariff Heading" approach, and the remaining 40 will use the "30 percent value-added" requirement.

"The definition of 'Change in Tariff Heading' is: the product has been manufactured to the extent that its classification falls in a different four-digit tariff heading from the classification of the constituent materials used," Ms Lee explained. "The 30 percent value-added content is: value of raw materials, plus value of component parts, plus labour costs, plus product development costs."

Chan Woon-san, Senior Director of Certification, HKGCC, also speaking at the workshop, said 68 percent of products -- jewellery, textiles and garments, plastics, paper, cosmetics, and pharmaceuticals -- will retain their existing rule of origin classification.

All manufacturers, however, must apply for a certificate of origin to export their goods to the Mainland.

"Applications for CO will be largely the same as existing arrangements. The new CO will be light green, have the embedded watermark of the issuing organisation on it, and be in English and Chinese," he said. "It will also be valid for 120 days from the date of issue, and can include five product codes"

Given the rapid growth in arrivals since 1999, his bullish prediction may even end up seeming conservative. Last year, 6.83 million Mainlanders visited Hong Kong, up from 3.21 million in 1999.

"With the abolition of the Hong Kong Group Tours Quota and the opening up for more travel agents to organise these tours, Mainland arrivals reached 6.8 million in 2002, which accounted for 41.2 percent of all arrivals during the year," he told the audience at a Chamber CEPA roundtable workshop on October 20.

The SARS crisis cut the legs from under this growth, and the market didn't start to recover until June, when CEPA was signed. The agreement allows Mainland residents in a number of provinces to visit the HKSAR in their personal capacity (FIT programme).

Three of the five phases of the FIT programme have already been implemented. Dongguan, Foshan, Jiangmen and Zhongshan residents have been allowed to travel to Hong Kong since July 28. Guangzhou, Huizhou, Shenzhen and Zhuhai residents since August 20, and Beijing and Shanghai residents since September 1. The fourth phase, which will allow Chaozhou, Heyuan, Qingyuan, Maoming, Shantou, Shaoguan, Zhanjiang and Zhaoqing residents to visit Hong Kong, should have started on October 1, but has been delayed. Come July 1, 2004, all Guangdong counties and towns will be added to the programme.

As a result of the programme, "946,122 Mainland arrivals were recorded in August 2003, a remarkable 43.4 percent growth over the same month in 2002," he said.

More Mainland FIT travellers coming to Hong Kong will provide a shot in the arm for the tourism industry here and stimulate confidence and consumption among Hongkongers, he predicts. However, he doubts if it will increase spending pro rata, given that Mainland tourists who traditionally bought goods for their relatives, friends and neighbours when coming here, will no longer need to do so as they will be free to travel here whenever they wish.

While CEPA has had a direct impact on the number of Mainland visitors coming to Hong Kong, Mr Young feels the agreement contains little direct benefit to travel agents.

"Under the agreement, travel agents in Hong Kong can establish business in the Mainland, but only for inbound or domestic travel," he said. "But it is the potentially huge outbound market that Hong Kong travel agents are hoping to get a piece of."

Michael Hobson, Group Sales & Marketing Director, Mandarin Oriental Hotel Group Ltd, also speaking at the luncheon, said we mustn't get too carried away with visitor arrival figures, as up to one-third of arrivals simply pass through Hong Kong. More emphasis should be put on room nights, which also adds value to the Hong Kong tourism product, he suggests.

In 1995, tourists spent an average of 3.9 nights in Hong Kong. That dropped to 3 nights in 2000, and climbed back to 3.6 nights today. He attributes this rise to Mainland tourists, who besides spending more than average tourists, also tend to stay longer.

"Some people think of the Mainland tourism market as a cheap business coming to Hong Kong," he said. "In my experience, I can assure you that they are very comparable and even ahead of guests from other countries."

To ensure that Hong Kong continues to attract Mainlanders and tourists from other destinations, Mr Hobson suggests that more attention and planning be placed on the Hong Kong brand to include product, price, promotion and place.

As a product, Hong Kong needs to enhance its infrastructure and planning. We also need to pay more attention to enhancing the harbour, which is Hong Kong's greatest asset, as well as things like outdoor dining, and the whole tourism package, especially with the opening of Disney. The industry should also not allow Hong Kong to be perceived as a cheap destination by continually slashing prices.