The past year was one of adjustment for Hong Kong and for the world at large. It was also a year of economic and geopolitical challenges. While the ordeals of doing business at times seemed unrelenting, we also had cause for optimism as the Greater Bay Area blueprint began to take shape.
On the business front, Hong Kong’s economy held up reasonably well against a global backdrop of uncertainty, finishing 2018 with 3% real growth. Unemployment remained at a 20-year low of 2.8%, and visitor arrivals grew a healthy 11.4%.
We saw two major infrastructure projects come into operation. The opening of the Express Rail Link in September removed the physical and mental obstacles that the GBA was a faraway, conceptual plan. This was further reinforced with the opening of the Hong Kong-Zhuhai-Macao Bridge in October. Your Chamber established a Greater Bay Area Working Group to dovetail with the China Committee’s work, seminars and visits to GBA cities.
Our recent high-level business delegation to Guangzhou and Shenzhen met with senior Guangdong officials and businesspeople. Everyone was extremely bullish on the development of the province. Members who participated in the visit pointed out that we need to ensure we are among the front runners leading the GBA development forward. If not, we risk becoming second fiddle.
We also formally established a Belt & Road Working Group. In April, I was lucky enough to be in Beijing with the Chief Executive and some of our other General Committee members for the Belt & Road Forum. Leaders from around the world converged in the city. Being the bridge that can link the world with the Mainland, Hong Kong is in an incredibly lucky and enviable position. We will be doing everything that we can to help members benefit from these developments.
While most of the world has been working hard to deepen their relations with China, the United States seems to be going in the opposite direction. The tariff dispute has blown up into a full-scale trade war, although President Trump called it a little disagreement. His playing down of the confrontation gave us hope that the world’s two largest economies’ differences would soon be resolved. However, his executive order to bar the use of telecoms equipment made by Huawei shows the dispute could escalate.
The impact of the trade war on Hong Kong’s real economy has so far been limited. Re-exports that were directly affected by the additional tariffs accounted for 4% to 5% of the total re-exports of Hong Kong. That said, our economy is weakening, as it grew a mere 0.6 percent in the first quarter of this year, due to weaker domestic and external demand. In addition to the uncertainty created by Mr Trump, the uncertainty of Brexit is also weighing on business sentiment across the globe.
With the whole world fighting to attract talent, we need to do more to attract professionals to Hong Kong. This has never been so important, as Hong Kong looks to retool its economy to become an innovation and technology (I&T) powerhouse. We need to ensure that we have the skills and know-how to achieve this.
During the course of the year we worked hard to collect your views through forums and our committees to present to the Government sound policies and priorities to be included in the Policy Address, the Budget and our CEPA wish-list.
We also saw significant consultations put out by the Government that would result in fundamental changes to Hong Kong. On the Government’s fugitive law amendments, we tried to be the voice of reason during heated debates.
To conclude, I would like to say that the Chamber exists for – and because of – its members. Without members contributing their time and expertise over the years, Hong Kong wouldn’t be the leading financial and business hub in Asia that it is today.
We will be in for a challenging year ahead. But with new opportunities being created by the transformation of our economy, the Greater Bay Area plan, and the Belt & Road Initiative, we should be in a very strong position going forward.
Making Your Voice Heard
Shirley Yuen, CEO, HKGCC
It is a pleasure to report with good news on your Chamber’s work over the past year.
On advocacy, we made steady progress on a number of fronts. Regulatory and geopolitical disputes dominated the headlines and our work in 2018. As always, we served as the voice of business on a host of issues from the abolition of the MPF offsetting mechanism to labour shortages to the ongoing fugitive law amendments. We presented sound reasoning to stress businesses’ concerns to the Government.
While we may not always win every debate, we do have more successes than the Administration would like to admit. Officials also told us they always appreciate the hard work and thorough research that we put into supporting the business sector’s position.
We were also unrelenting in lobbying the Government to address the problem of regulatory bottlenecks and outdated regulations by including regulatory impact assessments into the policymaking process. We tried to win over sceptics by organizing a two-day event with international speakers sharing their expertise on how a regulatory impact assessment system operates.
To steer our work in advancing Hong Kong’s role in the Greater Bay Area plan, we set up a GBA Working Group and partnered with members to pool our expertise.
On connecting businesses, we organized seminars, business-matching meetings, overseas missions, networking sessions, and teamed up with consulates and international chambers. Our missions to cities in the GBA were so popular that we will be organizing another round of visits to help more members dig deeper into the economic and business developments in the bay area.
Internationally, we organized business and study missions to Osaka, Tokyo, Prague, Vienna, San Francisco, Taichung, Taipei, and most recently Tel Aviv.
Most of the 500-plus events that we organized provided useful networking opportunities. In addition to our regular cocktail of business and social gatherings, our Young Executives Club (YEC) and Women Executives Club (WEC) continued to organize an extremely diverse range of events, from whiskey appreciation to fitness workouts.
We pride ourselves on the quality of our business documentation services. Our Certification Division’s head office in Mong Kok was relocated to a nearby building to provide customers with a modern, spacious environment. We also revamped the division’s website to further enhance our online services.
The Chamber’s venue rental services also underwent an upgrade. The modest investment resulted in the utilization rate of rooms growing by roughly 30% last year over 2017’s figure.
Many of the accomplishments over the past 12 months wouldn’t have been possible without the strong support and guidance of the General Committee. The Chamber’s committees also provided expertise to reinforce our role as the voice of business and sound reasoning. I would like to thank all of you for your loyalty, support, and suggestions, and for your attendance here today.
Leveraging Our Unique Strengths
Jeffrey Lam, HKGCC LegCo Representative
Hong Kong businesses have been confronted with growing domestic and external challenges in recent years. Weathering the trade war, and also pressures from rising costs, such as rents and wages, is no easy task. Throughout the year, I have repeatedly urged the SAR Government to keep abreast of the challenges facing businesses and to strengthen our business-friendly environment.
As an international financial, trading and maritime hub, Hong Kong’s excellent international network and professional talent are advantages that can help drive forward the development of the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) plan. I have long advocated that by coupling our strengths with those of the Mainland, and leveraging our unique advantage under the “one country, two systems,” Hong Kong can play an important role in these developments.
The Leading Group for the Development of the GBA recently rolled out eight measures to further facilitate the flow of people, goods, capital and information within the region. I welcome these measures, which are in line with my recommendations to the Central and Hong Kong Governments earlier. We look forward to the Central Government announcing additional measures to facilitate the flow and incentives for Hong Kong residents to live and work in the Mainland. On the Hong Kong side, we need to act fast if we are to get on board the Mainland’s express development train.
On housing supply, the Government must apply the right solutions to stabilize the market and promote viability over the long term. Increased housing supply boils down to speeding up the supply of land for building flats. The “Lantau Tomorrow Vision” reclamation project is a realistic, long-term objective. It will not only meet the long-term housing needs of Hong Kong, but will also provide land for the development of different industries that will contribute to improving Hong Kong’s overall competitiveness.
The business community has been working silently behind the scenes to contribute to Hong Kong’s success and development. But it also needs to have confidence to continue to invest in Hong Kong’s future. As such, I will proactively assist the business sector cope with challenges and difficulties by serving as your voice to the Government. I will also urge the Administration to do more to enhance our business environment to attract investors from around the world.
Finger on the Pulse of Digital Developments
Eric Chin, Chairman, Digital, Information & Telecommunications Committee
A key aspect of the committee’s work is to monitor developments affecting the industry, and to share information on topical issues with members. Last year we hosted 14 seminars on a variety of topics, ranging from artificial intelligence, blockchain technology and crypto assets to digital marketing, cybersecurity, smart city and mobile payment systems. Each of these events attracted an average of 100 members, which I believe clearly shows that we have our finger on the market’s pulse.
The committee also looked into how members can harness opportunities arising from the Greater Bay Area initiative. In addition to meetings and roundtable luncheons, we organized a study mission to Shenzhen, which was a first for the committee. We plan to do more such missions in the future.
Policy advocacy is another key function of the committee. Last year we formulated the Chamber’s response to the Government’s Phase 1 Review of the Television and Sound Broadcasting Regulatory Regimes. The committee also drafted the Chamber’s submission to the Hong Kong Monetary Authority’s consultation: “Guideline on Authorisation of Virtual Banks.”
We will continue to closely monitor government policies and advances in the digital, information and telecommunications sectors. Key developments include the rolling out of 5G services in Hong Kong, monitoring progress of the Smart City Blueprint, as well as new fintech initiatives.
During the year, the committee raised awareness among the wider community on the benefits of digital advances in Hong Kong, and how to avoid falling victim to cybercrime. The committee supported the Chamber as a key sponsor in the ‘Cyber Security Professionals Award’ and as a co-organizer of the annual ‘Internet Economy Summit.’
In addition to a very busy past year, the number of members joining the committee has grown by 40% since in 2016.
Ensuring Sustainability and Prosperity
Jeanne Ng, Chairman, Environment & Sustainability Committee
Looking back at 2018, the committee remained committed to identifying and pursuing ways to promote a sustainable business environment.
We believe that sustainability does not mean having to sacrifice profits. On the contrary, it implies the creation of more potential business opportunities that support the economic, social and environmental development necessary for the long-term sustainability of our society.
An important aspect of the committee’s work is policy advocacy. Notable mentions include a joint undertaking with the Chamber’s Shipping & Transport Committee to formulate a Chamber submission to the Government on the setting up of the Hong Kong Offshore LNG Terminal.
The Chamber also lent its support to a Government undertaking to introduce a green bond certification scheme for the dual purpose of promoting Hong Kong’s financial industries and providing more funding for green projects.
As an advocate of the polluter-pays principle, the Chamber welcomes the legislative amendments put forward by the Government last year to enable charging for the handling of municipal solid waste.
The committee believes there are many benefits for Hong Kong in becoming a greener city and that this should be a shared objective. A sustainable future is not a given unless there are real efforts and broader awareness of our habits and, where necessary, changes to our way of doing things.
To help members appreciate the importance and benefits of sustainability, as well as associated business opportunities, the committee organized a number of site visits in 2018. It also organized seminars on topical issues such as the Feed-in Tariff Scheme, and the legislative proposal to regulate the use of mercury in Hong Kong.
The committee will continue to serve as a bridge between the government and businesses on sustaining Hong Kong’s competitiveness as a livable city.
Staying Competitive in Services
Mark Michelson, Chairman, HKCSI-Executive Committee
The committee aims to promote and facilitate the continuing development and competitiveness of Hong Kong’s service industries, which account for over 90% of our GDP. New technologies are increasing our ability to trade in services while creating platforms that allow many more SMEs to participate in this trade.
Our city stands to benefit from the opportunities arising from the Greater Bay Area and other initiatives, building on our comparative advantages in professional services, trade, R&D and logistics.
During the year, the committee invited officials, business organizations and analysts to discuss the development and prospects in the services sector. Last June, for example, Stuart Harbinson, Honorary Advisor to HKCSI, shared his thoughts on trade policies and service issues amid the turbulent global trade environment.
We co-organised an Entrepreneur Forum with the Young Executives Club. Some energetic start-ups and social enterprises shared their entrepreneurial journey at a fully-booked Chamber Theatre.
The committee has maintained a regular dialogue with the Trade and Industry Department to ensure the development of Free Trade Agreements (FTAs) between Hong Kong and other economies
Hong Kong's service industries have benefited from the conclusion of FTAs with ASEAN and Australia. The agreements will bring about legal certainty and better market access for the trade in goods and services as well as investment protection to Hong Kong.
I recently represented the HKCSI to speak at the APSC-ABAC Public-Private Dialogue on Services in Jakarta, Indonesia. During the seminar, we highlighted the regional practices of trade in services in the digital era, and called for governments to adopt policies to liberalise trade in services, invest in human capital and remove red tape. The committee will continue to work on these initiatives and help members cope with different scenarios and changes.
Aron Harilela Re-elected HKGCC Chairman
Aron Harilela, Chairman and CEO of Hari Harilela Ltd, has been re-elected Chairman of the Chamber for the coming year. Harilela said he was honoured to have been re-elected, and pledged to continue to work on improving Hong Kong’s business environment.
The election was held at the inaugural meeting of the General Committee immediately after the HKGCC’s Annual General Meeting on the evening of 31 May. Peter Wong, Deputy Chairman and Chief Executive of the Hongkong and Shanghai Banking Corporation Limited, was re-elected as Deputy Chairman.
Victor Li, Chairman and Managing Director of CK Asset Holdings Limited; John Slosar, Chairman of Cathay Pacific Airways Ltd; and Leland Sun, Managing Director of Pan Asian Mortgage Co Ltd., were re-elected as Vice Chairmen.
At the AGM, members elected a total of six members to fill the seats on the General Committee – the governing body of the Chamber – who were required to step down this year. All six of them were re-elected: Victor Li, John Slosar, Leland Sun, Peter Wong, Edmond Yue and Betty Yuen.
HKGCC General Committee
Chairman: Aron Harilela
Deputy Chairman: Peter Wong
Vice Chairmen: Victor Li, John Slosar, Leland Sun
Legco Representative: Jeffrey Lam
General Committee Members:
Nicholas Brooke, Agnes Chan, Jennifer Chan, Oscar Chow, Allen Fung, Gao Yingxin, Stanley Hui, Benjamin Hung, Jacob Kam, Ronald Lee, David Lie, YK Pang, Neville Shroff, Douglas Woo, Emil Yu, Yu Pang Chun, Edmond Yue, Betty Yuen and Allan Zema