CHAMBER PROGRAMMES
September 2003
Issue

Chamber Programmes
Inbound Investment
Selling the PRD to Japan & Korea
Hong Kong and the Pearl River Delta (PRD) do
not even register a blip on Japanese and Korean firms' radar screens when it comes to
investing in China, a recent survey shows.
Up to 80 percent of Japanese SMEs are trading or actively exploring
investment opportunities in China, with the majority of them going directly into the
northeast of the country.
Saimond
Ip, Executive Director of the Hong Kong Pearl River Delta Foundation, which carried out
the study with The Hong Kong Economic and Trade Office Tokyo, said more needs to be done
to increase the mind share of Hong Kong and the PRD among Japanese and Korean firms.
"In Japan, people are not talking about Hong Kong at all," he
said. "Excluding the one-country, two-system policy, the reality is there is close to
zero mind share on Hong Kong. Everybody is focusing on China, especially Shanghai, and
northeast China, and as a result Hong Kong is becoming irrelevant."
Speaking at the Chamber's July 30 roundtable luncheon, Mr Ip said Hong
Kong needs to reposition itself not just as the entrepot into the PRD, but as the hub for
southern China.
For Japanese firms already in Hong Kong, they clearly understand the
benefits of operating in the SAR. However, SMEs in Japan see Hong Kong as an expensive
Chinese city and as such don't even consider investing here.
"We need to clearly articulate how the division of labour
works," he said. "This has been working very well for a long list of Hong Kong
and Taiwanese companies, in that only value added services are done here, and the labour
intensive operations are done in China. We need to show them how they can benefit from
this."
Hong Kong also needs to put more emphasis on specific industries to
attract investors, because promotion of support services that Hong Kong excels in has so
far failed to stimulate much interest from Japanese investors. Mr Ip suggests efforts
shift to sectors that Japanese investors are focusing on, such as the information
technology, bio-tech and environmental protection sectors.
Only 3.8 percent of Korean investments in China last year were made in the
PRD. Almost all of the huge wave of Korean investment pouring into China since 2000 has
been going into the Beijing and Yangtze River Delta regions.
Both Korean and Japanese firms operating in Hong Kong clearly understand
the benefits that Hong Kong affords them. However, "Koreans back home do not
understand this. They have hardly heard of this region," he said. "Like in
Japan, there needs to be an aggressive marketing campaign not just to bring investors into
Hong Kong, but Hong Kong plus the PRD, so that Korean businesses better understand the
whole region with Hong Kong as the engine," he said.
In the meantime, he said more needs to be done to welcome new Korean
investors who still find it easier to set up business in Shanghai than in Hong Kong. The
SAR's rule of law, financial services, and clearly improving environment are all positives
for attracting investors, and now with the Closer Economic Partnership Arrangement, or
CEPA, Hong Kong never looked so attractive to investors.
"There is a lot of interest in what CEPA means for investors,"
he said. "Japan has actively been pursuing its own FTAs with other regions, and now
with CEPA, their interest is not so much how it benefits Hong Kong, but how it benefits
Japanese companies. So we really need to seize this opportunity to help companies clearly
understand what benefits Hong Kong offers them."
Speech Slides
Equal Opportunities
EO Essentials Kit for SMEs
Hong Kong's small- and medium-sized
enterprises may not have the resources or understanding to avoid falling foul of equal
opportunity employment laws, a survey shows.
Anna Wu, then Chairperson of the Equal Opportunities Commission, explained
at the Chamber's July 25 seminar, co-organised by EOC, that the survey also showed SMEs
wanted more information about their obligations under the anti-discrimination laws, in a
clear, concise language.
"In response to these very clear messages, the EOC has developed the
'Equal Opportunity Essentials Kit for SMEs,' a free, self-help guide on compliance,"
she said. "We realize that many businesses in Hong Kong are facing difficult times,
and this kit will assist SMEs understand their obligations under the existing
anti-discrimination laws."
Herman Poon and Dr Andy Chiu of EOC, also speaking at the event, explained
a checklist in the kit can enabled SMEs to find out how well their business meets its
obligations under the anti-discrimination law. For areas that still need some improvement,
the tools inside the kit can help small businesses implement EO effectively.
The seminar moderator, Chamber Vice Chairman, former SME Committee
Chairman, and member of the EOC, K K Yeung, drew to the EOC's attention that too much
legislation would put an unnecessary burden on SMEs. He urged the EOC to strike a balance
between legislation and practicalities when formulating future legislation.
For a free copy of the EO Essentials Kit for SMEs, call the EOC hotline
at 25118211, or visit its Web site, www.eoc.org.hk/CE/sme/index.htm.
Mr Poon's Speech Dr Chiu's Speech Q & A
Full
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