Although October was reminiscent of the heydays when Hong Kong businessmen scrambled to find hotel rooms at inflated prices and flight bookings for a flood of visitors, complacency should not be allowed to triumph again.

Once again, Hong Kong's Malthusian syndrome appears to be driving another cycle of inflationary boom which is mostly supply driven as a result of a restrictive land policy and lack of new investment by the real estate sector.

The difference is that this time there are real alternatives across the border in Shenzhen and mostly in Shanghai, where a majority of members are confessing their current or intended strategies of delocalising a growing part of their operations. This comes at a time when the image of Hong Kong overseas is in dire need of revamping as more and more business leaders and potential investors take advantage of a growing number of direct flights to Beijing or Shanghai to bypass Hong Kong.

Major landlords, hoteliers and employers in Hong Kong would be well advised to lead the way on moderating rental and salary increases, failing which the revival of the Hong Kong miracle rebound might well prove short lived and the new Invest Hong Kong Office will have a hard time convincing would-be overseas investors to come to Hong Kong rather than to cheaper and increasingly attractive alternative mainland destinations.

China's WTO entry positive for Hong Kong

October is a hectic month for those of us in the trading business. Many overseas buyers are here because of the Canton Fair and the many other fairs in Hong Kong. Invariably, the topic of conversation at luncheons and dinners always ends up debating the effects of China's WTO entry on Hong Kong.

I tell them that I am optimistic about the future, because we in business in Hong Kong continue to be lucky, in spite of it being "a borrowed place on borrowed time." Hong Kong continues to possess advantages for companies doing business in Asia and the Greater China region. Even with Hong Kong becoming one country, two systems, the opportunities with China's opening up remain comparable to those 20 years ago. My only concern is when will Hong Kong's advantage cease to exist?

H Y Hung
Vice-chairman
Americas Committee

But over the last few years, traditional trading businesses have been adversely affected by the financial crisis, e-commerce and upstart online companies, which have diminished their role of middleman. China's accession to the WTO will present immense opportunities for Hong Kong, and many sectors like banking, insurance, telecommunications, IT, et cetera, will definitely benefit. But these industries are dominated by a few large corporations. This which leaves little opportunity for small businesses and their role of middleman will diminish further. As a result, SMEs will continue to suffer and eventually many small- and medium-sized enterprises may vanish.

Before we reach this critical juncture, leading business organizations like the Hong Kong Trade Development Council and the Hong Kong General Chamber of Commerce should come up with some brand new, practical ideas that can help SMEs face the new challenges and continue to do business. SMEs are not asking for direct financial assistance. All we are asking for is a guiding hand. Any effort to this effect will be sincerely appreciated by SMEs.

Manohar Chugh
Vice-chairman
Asia/Africa Committee

My congratulations on producing your guidebook "Managing Business in China." I have spent some time on it recently and found it well researched, and full of fresh and useful tips.

Some points I found very informative, for example, "localisation of management in the Mainland has no consistent performance impact;" and "reality of control, which is more important than the formalities of ownership."

I think it should be read by every PRC practitioner. Again, thank you for the initiative and I look forward to others to come.

Lawrence Yee
Vice president & General Manager
Greater China & Korea
Dun & Bradstreet