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i�BDlletin A Hong Kong General Chamber

of Commerce magazine

CHAIRMAN

Peter Sutch DEPUTY CHAIRMAN

C C Tung VICE CHAIRMEN

Dr Lily Chiang Anthony Nightingale

DIRECTOR

Dr Eden Woon EDITORIAL BOARD

Ian Perkin Dr. Y.S. Cheung Dr. W.K. Chan Sidney Fung

Louise Parkinson TRANSLATED BY

Eliza Yeung Priscilla Lo ADVERTISING

Carmen Ho CHAMBER SERVICES LTD

Tel: 2823 1291 Fax: 2527 0380

The Chamber is apolitical. Any advertisement

of a political nature does not necessarily imply

endorsement by the Chamber

PUBLISHED BY

The Hong Kong General Chamber of Commerce

22/F United Centre,

95 Queensway, Hong Kong

Tel 2529 9229 Fax: 2527 9843

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CONT�ENTS

COVER STORY

The Budget 1999-2000 1999�20001fJtJlitiE�riJJ�:

P.11 FS seeks to boost confidenceM�1UUttf.J 111w• )-Jt,,

P.15 What's not in the BudgetfflJU�� i:r 1' JE

P .17 Merger of Exchanges makes Hong Kong more competitive �� JiJr-§-�:l!Bti:lll!$t,;�* iJ

P.18 Hong Kong Ci�il Servants will still gethigher wage 0$�I�1J3Jl1i�

P .19 The environment is neglected in the Budget ffi. �mm! lff 1i r09 m

P.20 Hong Kong becomes more competitivetransport-hub W )ltUHlJiJi i:r ,t,, � * iJ

J

Hong Kong SME Award. �Jiq:i 1Nll/.iE��

Regular Featur $.- ft rkJ tP.4 Editorial

tt� P.7 From the Director

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P.8 Legco Report.tr �•I t'f=l!Hs:

P.36 Profile: Environmental Industrya business reality ? 0ii]fffi:1)- : ��I�11t��

P.44 Roundtable,NJJ!q:.·-

P.48 Chamber Eventsjffif.t)j!;JJJ

P.50 Chamber in Action*f.tlJJ�

P.54 Forecast)j!;!./Jffli!i'

APRIL 1999

Analysis of Donald Tsang Yam-kuen's 1999-2000 Budget. 1999/2000ij::Jl'.iftW�'.73'ffr

P.21 HKSAR Leadership-Anson Chan stays on to 2002 �l�Hi1JJ!i - jijJ5"Ji:4:I¥HE�2002XF

P .22 Keeping Hong Kong a Premier Business City jU�=i 5lHUE �iffi �U!3f.ttm {ll

P.24 Perspectives of a Congressional mission toAsia �llllf.t!H tB�:mm��

SM Es• q:uMf!lie•: P.30 SME Finance Scheme no help

g:i ,J,:ll�m:!Utll1mlJUt$ P.32 SMEs get their just award

g:i,J,:l1Ui�4tJU� =t!i9 P .38 Government to spearhead e-commerce

initiative iI&lff*�:tUbii-1-iffii'.R!i

P.39 Members meet with Legco Repi'�f'UL$mtfUOHls�iI&

P.40 Leisure Vacations- Sun, sand and dramaon the Cape 5�!fUtO!iiffi�l5l?Mcril&Zhl

P.46 Revised PRC contract law may benefitbusiness pgtmWffil"�fc.l�iUiiffi

The Bulletin welcomes letters and articles from

Chamber members, but reserves the right to

edit any material supplied. Letters or other

contributions should be sent to: The Managing

Editor, The Bul/etin, The Hong Kong General

Chamber of Commerce, 22/F United Centre,

95 Queensway, Hong Kong Fax. 2527-9843.

Email. erkin@hk�or .hk

{IilJifjf/D f!J:j{/!,�i1Jj1f1f�*tiii '!fl� · tfi2f,.f/Jffi. f.i�ti#UI} 0 *filFrix • �ftHN.iJ..ij9sM,f.Jt-cp,t,,22 ft�jJJ,#[email protected] {Lff/jfjf!J) ,�j/j� 0 f!/:J{ 2527-9843 �fl!J [email protected]

The Hong Kong General Chamber of Commerce

Chamber Committees Chairmen

General Committee Chamber Council Mr Peter SUTCH

Americas Mr Andrew YUEN

Arab & African Mr Lawrence FUNG

Asia Mr Joseph POON

China Dr Lily CHIANG

Economic Policy Mr Martin BARROW, OBE, JP

Environment Mr Barrie COOK

Europe Mr Manohar CHUGH

Human Resources Mr Yun POON

lndustrv and Technology Committee Dr Lily CHIANG

Legal Mr R T GALLIE

Membershi Ms Fanny LAI

Shipping Mr Terence SIT

Small & Medium Enterprises Mr Denis LEE

Taxation Mr Roderic SAGE

Hong Kong International Mr Brian STEVENSON

Dr Lily CHIANG

HK Coalition of Service Industries Executive Committee

Mr Stanley KO

Financial Services Mr David RUAN

Information Services Mr Tony AU

Professional Services Mr Anthony GRIFFITHS

Real Estate Service Mr Nicholas BROOKE

Statistics Mr George LEUNG

Transport/Infrastructure Mr K KYEUNG

Hong Kong Franchise Association Mr Eric CHIN

Associate Organisation Pacific Basin Economic Council

Hong Kong Mr John STRICKLAND

4 The Bulletin Apri I 1999

EDITORIAL

A Farewell Message ...

As we.apprpach the end·of the secono Millenium according to the Christian calendar - and prepare to reflect on the past 1000 years of human history - it is astonishing to

consider just how much of mankind 1 s dramatic development has been compressed into the final tenth of that entire time span.

Were any human being who celebrated the birth of the Twentieth Century to be brought back to life today, they would be hard-pressed to recognise the world which is about to rejoice in the advent of the Twenty-first, and the new Millenium: There has been so much change in so little time.

Yet it is not merely the prospect of the new Century and the new Millennium that have prompted these thoughts on the rapid pace of change and human progress. Far more important to me on a personal level are my own recent reflections on how rapidly and dramatically Hong Kong has developed in just the final third of the current Century.

As some of you may already know, at the end of this month Peter Sutch, Chamber Chairman. I will be stepping down as Chairman of the Chamber. Some of you may also know that l will be leaving Hong Kong to take up a position at the Swire Office in London. This move will bring to an end 33 years in Hong Kong, a large part of my own life-time and almost one-third of the closing Century of this Millennium.

What years of trem.endous change and incredible progress they have been for Hong Kong and all those who live here, culminating, of course, in the return of sovereignty to China in mid-1997 and the creation of the Hong Kong Special Administrative Region (SAR) of the People 1s Republic.

Few would have anticipated such a development back in the mid-1960s. On the Mainland, the Cultural Revolution was in its early stc1.ges and riots would hit Hong Kong itself in 1967. Sir David Trench was Governor. Hong Kong's population had just passed 3.7 million (it is now heading towards double tt,at at 6.8 million). The then Colony's Gross Domestic Product (GDP), or total output, was HK$14.2 billion (less than US$2 billion at today's exchange rate). Today it is HK$1,289 billion (US$166 billion).

Per capita income was HK$3,921 (US$505) and today it is HK$192,776 (US$24,874). Total trade was HK$22.52 billion (US$2.9 billion) and today it is $3,220 billion (US$416 billion). Tourist arrivals in Hong Kong were around 500,000. Today they are 20 times that.

These are just a few of the numbers that reflect the huge progress Hong Kong has made in the past 33 years. I regard it as a tremendous privilege to have witnessed this truly dramatic development and, without being too self-congratulatory, to have played some small role in the expansion of the private sector throughout those years.

Hong Kong has now established itself as one of the world 1s major cities for business, a major centre for finance and investment, a key entry point for international business to China, and a major travel, tourism, communications and services hub. As I now prepare to leave Hong Kong for London, I am confident that with the continued economic opening of the Mainland, the future of the Hong Kong SAR is bright.

We may have been through some difficult economic times recently as a result of the East Asian financial crisis and it might take some time to recover fully. The longer-term outlook for sustained growth and development is, however, all the more assured by the adjustments taking place in the economy and the community at large, painful though they currently are. I certainly look forward to seeing Hong Kong 1 s - and the Chamber 1s - progress and development on my return visits to the SAR.

If I have any particular suggestions, they are pleas to Government to bite the bullet on the environmental problems that we so clearly have, to put education at the top of the priority list and resist the pressure and temptation to move away too much from our traditional marketdriven approach. Perhaps most of all we must package and promote ourselves more effectively internationally. For all our current problems, we are still one of the best places in the world to do business. Let 1 s be proud of that and tell the world.

Finally, I would just like to thank all those who have given me tremendous support during my years in Hong Kong and, in particular, the strong support I have received from the General Committee and Chamber members and staff in my year as Chamber Chairman. As l have written elsewhere, I may be absent from Hong Kong in the coming years, but the SAR will always have· my strongest support. May you all prosper in the years ahead. ■

Peter Sutch Chairman

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FROM THE DIRECTOR - � tli -M;

Chamber Director, Dr Eden Woon.

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PBEC International General Meeting here· in May

Many of you know that the Hong Kong General Chamber of Commerce has an associated organisation - the Pacific Basin Economic Council (PBEC), Hong Kong committee and two subsidiaries - the Hong Kong Franchise Association and the Hong Kong Coalition of Service

Industries (CSI). Both the Franchise Association and the Coalition of Service lnd�:1;stries are actually committees of the Chamber, and Chamber members are welcome to participate in everfrs of these two subsidiaries. Both are extremely active, with many seminars being run by the Franchise Association on franchising in Hong Kong and China, and with some noteworthy projects being run by the CSI, such as the Tripartite Forum and the Service Awards.

But a major international event this year is being hosted by PBEC Hong Kong. It won the right to host the 32nd International General Meeting of PBEC on May 17-19 of this year. Over 600 executives and spouses are expected from around the Pacific Basin, from Chile to Australia for this event. We are in the final stages of planning the program and inviting the speakers, and we have over 60 speakers from around the world confirmed. These include Mr C H Tung, our Chief Executive, President Joseph Estrada of the Philippines, Michel Camdessus-the Managing Director of IMF, John Bond - Group Chairman of HSBC, Lach Ian Murdoch - Chairman of News Ltd, among others. Peruvian Prime Minister Victor Joy Way, US Deputy TreasurySecretary Larry Summers, and US Commander-in-Chief Pacific Admiral Dennis Blair are expected to attend. Most importantly, for the gala opening dinner on 17 May, a PRC State leader will present the keynotespeech.

The theme of the PBEC international meeting, the last one this century, is 11Challenges of the next

Century for the Pacific Basin". This is not a conference on the Asian financial crisis. Rather, the conference will look ahead into the next century, after the current temporary crisis, to see what challenges the region faces in the environment, in food supply, in trade barriers, in bank restructuring, in regional security, in telecommunication advancements, in information technology, in labour issues, etc. As we sit on the threshold of the Millenium, this conference promises to be thought-provoking for everyone. Elsewhere in The Bulletin

you can find the complete program and registration details. I hope we can see you there. ■

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e/Nff LEGCO REPORT

A Budget \Nith -� long-term plan

The recently announced 1999-2000 Budget has won the wide support of the

community. A Budget with a deficit is acceptable, although I suspect whether the

medium range forecast of a growth rate of 3.3 per cent is achievable. As a whole

though, the measures proposed in the Budget will undoubtedly help to boost the economy

in the long run.

James Tien

Financial services and tourism The financial services and tourism sectors have long been important to the economy of SAR, bringing home substantial

revenues each year. However, faced with increasing global competition, Hong Kong must strive to improve these sectors.

The improvement plans proposed in the Budget, including the mergers of clearing houses and exchanges, the reformation

of the regulatory systems of the financial market, and the proposed construction of large-scale tourist attractions such as the

Disney theme park, will indeed help enhance the competitiveness of Hong Kong, and in turn, strengthen the status of Hong

Kong.

Cyberport helps technologisation Information technology (IT) plays a critical role in economic development. If the local IT industry can develop, spin-off

sectors, such as high-tech industry, will also follow. Hence, the Cyberport project, announced in the Budget, is worth our

support.

In the long run, if Hong Kong is to maintain its commercial and industrial competitiveness, and remain in the premier

league of international cities, we have to catch up in our IT development by attracting high-tech business. Due to the Asian

financial turmoil, the global economy has undergone restructuring which has resulted in a shortage of liquidity. The

Cyberport will help attract foreign funds.

The rule of law, economic freedom, an extensive telecommunications network and the reduction of costs in Hong Kong

after the financial crisis are beneficial to high-tech and high value-added industries. I hope that the Cyberport project will

be the dawn of a new era for the local business community.

Revolutionise our bureaucratic system A blossoming economy requires the support of a sound bureaucratic system. It is for this reason that I support the

Government in its civil service reform. The current system has not been changed for twenty years, with problems in

overstaffing, uncontrolled expansion, escalating expenses in pay and fringe benefits and declining efficiency.

Huge expenses in pay and benefits have not only put great fiscal pressure on the Government, but at the same time

soaked up the badly-needed resources required by other public services. A streamlined government structure will relieve

the fiscal pressure on Government while improving the effectiveness of resource allocation and reducing red tape. Therefore,

civil service reform must be implemented as soon as possible and at the same pace of local economic development.

Although the Budget advocated numerous far-sighted initiatives, it will not bring immediate remedy to the current

economic recession. Some Chamber members said that tax rebates and a freeze of various fees and charges were not

enough. I urge the Government to look more closely at the difficulties of the business community and take action to bring

immediate relief to all sectors. As you read this, the revised SME Special Finance Scheme should have been released. I

hope that it will bring good news to us all. ■

8 The Bulletin Apri I 1 999

Your comments are welcomed.

Address: Legislative Council Building, 8 Jackson Road, Central, Hong Kong Tel: 2301 3602; Fax: 2368 5292

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('fl!:/f§ : 2301 3602 , {$1[. : 2368 5292)

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email: [email protected]

COVER STORY - BUDGET 1999-2000

FS seeks to boost confidence By IAN K PERKIN

The Financial Secr

.etary, Donald

Tsang Yam-kuen, produced an economic programme for tougher

times when he presented the Special Administrative Region (SAR) Budget for 1999-2000 to the Legislative Counci I on March 3.

In the Budget, which covers the fiscal year from April 1 this year to March 31, 2000, he went to great lengths to inject some economic confidence into the community and to target key areas of priority in government policy.

By announcing some big developments - the prospective Disney theme park and Cyberport, the partial privatisation of the MTR, the merger of the stock and futuresexchanges - he sought to enhance futureconfidence in the SAR.

And by allowing increased spending for 1999-2000, an expected Budget deficit of $36.2 billion, immediate tax rebates on tax paid for the 1997-98 financial year and few other tax changes, he also tried to boost immediate confidence.

As some commentators have already remarked, the address itself seemed to be more of a policy statement on behalf of the Government rather than a normal Budget outline, with the bulk of its 188 paragraphs· devoted to pal icy issues.

There was, of course, the obligatory coverage of key elements in the Budget

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including expenditure and revenue issues and the overal I budgetary outcomes, a deficit of $32 billion for the 1998-99 year and $36 billion for 1999-2000.

This, in itself, was recognition that some further fiscal stimulus was required to cushion the local economy's descent into recession and to ultimately give it a push

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along to positive growth in the near-term future.·

But it was in his bigger announcements in his two-hour speech that the Financial Secretary did most to stray from the traditional Budget path by announcing major initiatives aimed at furthering Government policy and lifting confidence.

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Securities Markets I n a n n o u n c i n g t h e p r o p o s e d

demutualisation, merger and list of the SAR1s stock and futures exchanges, for example, the Financial Secretary was furthering the Government 1s policy aims of better financial regulated markets and enhancing Hong Kong1s role as an international financial centre.

The move has, not surprisingly, drawn widespread applause from international financial houses operating in Hong Kong, although the response from local operators, who have control led both markets, was something less than warm.

Nevertheless, the initiative, with a little further arm twisting from Government, has already gained the support of both the Stock Exchange and the Futures Market, which is a major step in the right direction.

Demutualising, merging and possible I isting of the two securities markets hardly needed to be announced in the Budget, however, as the recent experience of both Singapore and Australia show.

Cyberport B y a n n o u n c i n g t h e p r o p o s e d

development of a high-technology, $13 billion (US$1.68 billion) Cyberport, the Financial Secretary was also pursuing another high priority Government policy objective, the development of the SAR as a high-tech, information technology (IT) centre for China and the region.

The Cyberport, to be located at Pokfulam on the western side of Hong Kong island, is to be a joint private-public sector development, with the private interests being led by Mr Richard Li1s Pacific Century group. Mr Li is the second son of one of Hong Kong1s richest property tycoons, Mr Li Ka-shing.

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12 The Bulletin April 1999

According to the Financial Secretary, the Cyberport 11�i 11 provide the essential infrastrudure for the formation of a strategic duster of information services companies11

specialising in the development of'services and multi-media content for businesses and industries.

Lending their support in a special announcement on Budget day were a bevy of international IT companies, including Hewlett-Packard, Hua Wei, IBM, Oracle, Pacific Convergence Corporation (a joint venture between Mr Li 1 s Pacific Century Group and Intel), Softbank, Sybase and Yahoo!.

In a later visit to the SAR, Microsoft chief (and reputedly world 1s richest man'), MrBill Gates, also threw his company's· not inconsiderable weight behind the development of the Cyberport for Hong Kong.

Again, however, it was not something that needed announcing in a Government Budget statement, except as an illustration of the Administration1s policy thrust and a confidence booster in what have been difficult economic times.

The proposal does, of course, involve a financial commitment from Government, mainly in the form of the provision of land for the project, but this will have to,be the subject of future Budget allocations, in any case, and when i t would be more appropriate to include in the Budget.

Disneyland Likewise, the annoncement of a

proposed 1

1 Disneyland11 style theme park with the Walt Disney Company was hardly the sort of development that needed to be included in a Budget statement, especially at this early stage of negotiations.

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But again it was a matter of the Financial Secretary pushing the right policy buttons, especially, in this case, those related to boosting community confidence and showing the Government 1s commitment to the longer-term development of the local tourism industry, whether from the Mainland or elsewhere.

Hong Konts high cost base, especially land costs, means that should the Disney theme park go ahead - itself by no means certain -that there is likely to be a cost in future Budgets, as there will be for the Cyberport.

But there was nothing of a fiscal nature to warrant its inclusion in the 1999 Budget speech, except perhaps for the Penny's Bay reclamation costs, where the proposed theme park is scheduled to be sited.

Given its unique global standing and reputation, the proposal for a Disney theme park in Hong Kong (there are only four elsewhere in the world), was a great button for the Financial Secretary to push to bring a lighter touch to a Budget formulated i.n otherwise grey economic times.

Privatisation More relevant to the 1999-2000 Budget

and the years immediately following was the Government 1s announcement of the partial privatisation and stock market listing of the Mass Transit Railway Corporation (MTRC), one of the most successful Governmentowned business operations in the SAR.

Again, the Financial Secretary was pushing the right policy buttons with this initiative, this time the ones marked 11deregulationU, 11privatisation 11 and the

11development of the local equity market11

•

But in this case at least, the announcement of the proposed sale of a minority shareholding

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in the MTRC was a relevant inclusion in the Budget speech as it will have a direct impact on future Government revenues and, therefore, on the size of future Government surpluses or deficits.

While the partial privatisation of the MTRC is likely to be the biggest undertaken by the Government (at least for the foreseeable future), the Financial Secretary also hinted at the sale of other Government businesses in the near-term future, particularly the supply of water.

Civil Service Reform

Further details of the .Government's proposed reform of the Civi I Service, including entry and exit requirements, pay and fringe benefits, disciplinary procedures, performance management professional training and personal development, came in the week immediately after the Budget, but the initial announcement of far-reaching reform was contained in the Budget itself.

As a major cost item in every Budget year, the remuneration and other benefits paid the Civi I Service are a key Budget matter, and therefore the early outline of the reforms in the 1999-2000 Budget is understandable.

Their inclusion in the Budget did, h o w e v e r , s e r v e to u n d e r l i n e t h e Government's and the Financial Secretary's commitment to making the public sector of the economy more cost efficient and effective, more productive and accountable.

At a time of economic downturn, when there has been growing public concern about the costs of the Civi I Service, its internal operations and the level of service it provides, there was clearly a community message to be put across.

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Again, the Financial Secretary was pushing the right buttons as far as the community is concerned. He re-emphasized this point by also announcing a freeze on Civil Service salaries for the 1999 calendar year. . �

Tax Rebates

Another innovative approach taken by the Financial Secretary in the 1999-2000 Budget was the announcement of a 10 per cent rebate on all profits, salaries and property taxes paid during 1998 in relation to the 1997-98 Budget year.

While such rebates are far from unique elsewhere, especially in Hong Kong 1s great rival, Singapore, where they have become a regular feature of the annual budgets, they are totally new to the SAR.

In announcing the wide-ranging rebates, the Financial Secretary was again pushing the right buttons, directing his attention this time to those marked 11economic boost1

1 and 11consu mer confidence11

•

As the 1997-98 fiscal year was, however, a boom year for corporate profits, especially in the property sector, most of the benefits of the 10 per cent tax rebate will go to companies (especially property companies) and the return to most individual tax payers will be limited.

The tax rebates, while welcome, are therefore unlikely to have much of an impact on overall consumer spending and economic growth. In any case, less than half the workforce in Hong Kong pays any tax at all, so that the overall impact on the community is reduced.

Fiscal Situation

The overall fiscal situation outlined by the Financial Secretary in his 1999 Budget

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speech was fairly much as expected with the Government trying to maintain spending during the economic downturn, maximising existing revenues where possible and forecasting three years of deficits.

But there were a couple of surprises, the first being the fact that the 1998-99 deficit (before tax rebates) was much smaller than expected and the second being the increase in public spending to 21.5 per cent of Gross Domestic Product (GDP) in 1999-2000, the highest since the early 1980s.

Initial estimates from the Government put the 1998�99 deficit at $24.5 billion (final accounts will not be completed until later this year), but the announcement of the 10 per cent tax rebate will result in the total deficit for the year expanding to some $32.3 billion.

Before the announcement of the tax rebate, total revenue was some $220:6 billion for the year ($38.4 billion lower than originally expected mainly due to the suspension of land sales during the year) and total expenditure was $245.1 billion (a modest $ 3 .1 bi I lion below original estimates).

The tax rebate will, however, have the effect of reducing revenues further by some $8.5 billion.

For the 1999-2000 fiscal year, total Goverf1ment spending is put at $241 .6 billion and total revenue at $205.1 billion, producing a deficit for the year of $36.5 billion. Total public spending will be $290.1 billion or 21.5 per cent of GDP.

The large deficit for the 1999-2000 year reflects the Government's increased spending in a bid to offset the economic downturn and lower revenues due to the weaker tax base (a result of expected lower

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IiftiJHU 1999 �4 J::l 13

profits and salaries:taxes and other taxes and charges and stamp duties).

It also reflects the fact that the Financial Secretary in his 1999-2000 Budget only tinkered with the revenue side of the Budget, leaving the major sources of revenue largely untouched in terms of percentage rates, although some smarler taxation sources, as well as property rates, did see some changes.

Economic Situation

The overall weakness in the local economy, and the impact of the East Asian financial economic crisis on the SAR, were all too apparent in the economic forecasts in the 1999-2000 Budget.

Looking back over the 1998 calendar year, the Financial Secretary indicated the economy had declined by 5.1 per cent for the full year after growing by a rapid 5.3 per cent in the all-important 1997 year of return to Chinese sovereignty.

The economy did, however, apparently reach its nadir in the third quarter of last year when it slumped by 7 per cent. In the first two quarters of the year, it contracted by 2.6 per cent and 5.1 per cent respectively, while in the final three months of the year it would have dee! i ned by some 5 per cent.

Looking ahead, the Financial Secretary predicted that the local economy would grow by 0.5 per cent in this (1999) calendar year. He also indicated that in the medium range forecast period (through to 2003), the economy would grow by an average 3.5 per cent (at least as far as Budgetary purposes are concerned).

If there is one potential weakness of real concern in the 1999-2000 Budget it is the reliance on growth of 0.5 per cent to

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achieve the forecast Budget outcomes. While modest growth, it is a forecast at the top end of the range of those made by economists in the private sector.

·.Moreover, the Government i's relyingcompletely on a recovery in private sector consumption to produce all of this growth (it is expected to increase 2.5 per cent for the year), with external trade and investment expected to continue to be negative.

Were there to be another crisis regionally and globally and the local economy was hit, the predicted growth rate would not be achieved. As a result, the Budget forecasts would prove to be totally unachievable (as they proved to be in the 1998-99 year when the Asian crisis hit Hong Kong ever harder).

In such circumstances, the 3.5 per cent medium range growth forecast, already suspect, would also be difficult, if not impossible to attain. It is these economic forecasts which are the most optimistic -and therefore most vulnerable - content of the 1999-2000 Budget.

Chamber Reaction

In its own immediate reaction to the Budget, Hong Kong General Chamber of Commerce said the Financial Secretary had attempted to be innovative and to boost confidence in his 1999-2000 Budget despite the financial constraints imposed by substantial Budget deficits and a relatively weak economy.

But it added that 11whether he succeeds or not in his aims may depend on events outside his control11

•

11 ln particular, the ability of the economy to grow 0.5 per cent this year and an

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average 3.5 per cent over the medium term may be in doubt if economies like the US, Europe and the Mainland see slower growth this year," the Chamber said.

11The major announcements in the

Budget - the negotiations with the Walt Disney Company on a theme park for Hong Kong, the proposals for a Cyberport and the planned privatisation of the MTRC - are exciting initiatives.

11 B ut they well do nothing to boost

growth immediately and it is yet to be seen whether they will proceed as smoothly as the Government obviously hopes.

"More important in the short term will be the proposed 10 per cent rebate on profits, salaries and property taxes, the extended freeze on government fees and charges and the decisions not to raise salaries and profits taxes.

11Together with the projected deficit for the 1999-2000 fiscal year they should provide a modest fiscal stimulus to the local economy and provide some limited relief to the local business community - particularly some small and medium sized business -hit hard by the 1998 recession," the Chamber said.

1

1 Even with these measures, however, the year ahead is going to be a difficult one for the local business sector, the Government and the whole community as the economy continues to struggle to emerge for the economic downturn.

'The Government's forecast of 0.5 .per cent real growth in the economy in calendar year is at the upper end of private sector forecasts and may be difficult to achieve," it said. 11Failure to do so would adversely the projected Budget figures for the 1999-2000 fiscal year.'' ■

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What's not in the Budget

The taxation measures proposed in the 1999-2000 Budget provide some good and interesting news, but then;

are also areas that have been overlooked, according to the Chamber's Taxation Committee. These include a two-tier tax system and consumption tax ..

Speaking at the Business and the Budget Roundtable following the delivery of the Budget speech on March 4, Mr Roddy Sage, Chairman of the committee, agreed that the Financial Secretary, this year, had a difficult time putting a Budget together when considering revenues came down from such a surplus to a such a deficit.

11 l 1 m very happy to get the 1997-98

rebate on my salaries and profits tax bill. That together with a 50 per cent reduction in my rate bill from July to September will outweigh the additional costs of going through the tunnel, betting fees and the like for several years, but there is room for improvement," he said.

11 Firstly, 25 per cent of the salaries

taxpayers, which is about 1.2 million people, contribute to 80 per cent of the salaries tax - therefore there are very few people involved in this rebate system.

11 Most corporations are probably

astonished to learn that they are going to get a profits tax rebate. Banks and property companies account for at least 50 per cent of the profit taxes collected - but do these people really need it? I doubt it.11

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M·r Kaushal Tikku, Vice-Chairman of the committee, added that under the current economic environment, it is highly unlikely that the rebate will be ploughed back into the local economy, as experience in Japan has shown.

The Tax Committee recommended a two-tier tax system in their submission to the Financial Secretary as this would act as a buffer shielding the impact of profit tax to businesses that are .in need.

Mr Tikku explained that business profits up to HK$100,000 could be taxed at a lower rate (say 1 0 per cent) while those in excess of this threshold could be taxed at the standard rate (currently 16 per cent). This would no doubt cost the Government a significant amount but at least such a handout would be targeted at small businesses in Hong Kong.

Mr Sage said that the Chamber also encouraged the Financial Secretary to allow companies to carry losses back - say for a period of two years - providing immediate relief by getting back profit tax they,;,may have paid in previous years.

In addition, there is a need to consider the introduction of consumption tax.

11 Consumption tax is inevitable. Overall there is no change in the tax system despite the fact we 1 ve moved into a deficit - so what is the Financial Secretary going to do for the next two years? 11 Mr Sage said.

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Mr Roddy Sage, Chairman of the Taxation Committee.

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11lt is very obvious that we are going to

have a tax system that is reliant on income from property transactions - that is wrong. We need a far more stable form of taxation. A consumption tax or sales tax, however people dislike it, provides that. It does not have to be a burden on poorer people because you can be selective about who you apply to.11

Putting this year 1s Budget as innovative, the Chamber 1s Chief Economist, Ian Perkin, warned against overly positive outlook of the economy in the next two years.

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*irtff��M¥*�ffimtt��*�-&B{Jffl-�iUtl:liJr�, {g1tMl1a-, #fiuf-f* *ffi�S"J�,fil��-§'[email protected]�-fl

Mr Kaushal Tikku, Vice-Chairman of the committee.

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IiffiJ:HIJ 1999 � 4 J=I 15

"There are too many uncertainties in the year ahead to say we can reach the plus side of the growth curve. Most analysts predict negative growth, 11 Mr Perkin said.

He said there was no doubt that the economy will get better in the second half of the year, but perhaps not as good as th_e government forecasts.

He also stated some pre-requisites: 11The Budget has to be good this year because the one next year will be a pre-election Budget. Mr Tsang also has the Basic Law to consider - he must strive for fiscal balance and avoid deficit. Also, Hong Kong needs a lift and that is what Disney and the Cyberport are about. 11

Mr Perkin joked that from now on the Hong Kong SAR will be called the Hong Kong SOR (Special Disney Zone) in the light of Disney's plans to set up a theme park in Penny's Bay, Lantau.

"Summing up the Budget, (the Financial Secretary) urges the flock to go forth and spend, and then he will bring them the promised (Disney) Land," he said. ■

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Mr Ian Perkin, the Chamber's Chief Economist.

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THE HONG KONG GENERAL CHAMBER OF COMMERCE

ANNUAi GENERAL MEETING

AGENDA ITEM 1: ELECTION OF GENERAL COMMITTEE MEMBERS

1) The following six members of the General Committee retire in accordance withArticles 25(a) and 25(b):

Mr Peter Barrett Mr Linus Cheung Mr Walter Kwok Mr Victor Li Mr J B M Litmaath Mr Peter D A Sutch

2) For the six vacant seats above:

Organisation Development Ltd Hong Kong Telecommunications Ltd Sun Hung Kai Properties Ltd Cheung Kong Holdings Ltd Scarfell Enterprises Ltd John Swire & Sons (HK) Ltd

a. The following offer themselves for re-election in accordance with Article 25(c):Mr Linus Cheung Hong Kong Telecommunications Ltd Mr Victor Li Cheung Kong Holdings Ltd Mr J B M Litmaath Scarfell Enterprises Ltd

b. The following offer themselves for election in accordance with Article 26 andBye-law 4:Mr Manohar Chugh Mr James Hughes-Hallett Mr Raymond Kwok Mr K. K. Yeung Mr Andrew Yuen

Nisha Electronic Industries Ltd John Swire & Sons (HK) Ltd Sun Hung Kai Properties Ltd K. K. Yeung Management Ltd On Kun Hong Ltd

3) All of the above members seeking re-election or election are eligible under Article26 and Bye-law 4.

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Merger of Exchanges makes Hong Kong more Competitive

The demutua

. lisation and merger of

the Exchanges and C learance Houses, announced in the 1999-

2000 Budget, is seen as a positive development by the Chairman of the Chamber's Economic Policy Committee, Mr Martin Barrow. But he warned Government should avoid creating a 'bureaucratic monster'.

11 The current market st ructure is fragmented horizontally in terms of market segments and vertically in terms of market functions, thus limiting economies of scale and frust rating the development of a coherent and consistent market strategy that is essential in meeting the global and external challenges," he said.

Mr Barrow agreed that while the current market structure had served Hong Kong well for the last decade, it has increasingly become a constraint over its competitiveness and efficiency in responding to the challenges from technological advances, globalisation of the international financial markets and the needs of the increasingly sophisticated investors both locally and overseas.

Currently the market comprises two Exchanges and three C learing Houses. Following the Ian Davison Report of 1 988 , t h e E x c h a n g e s h a d b e e n modernised in terms of constitution and m a n a ge m e n t , a n d b e c o m e mo re accountable to wider pub I ic interests and

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responsive to market needs. However, t h e y r e m ain e s s e n t i a l l y m u t u a l , membership-driven organisations.

In his Budget 1999-2000 speech the Financial S e c r e t a r y proposed to demutualise and merge the two Exchanges and their associated Clearing Houses into a new holding company and ultimately list the shares of the company on the stock exchange for trading and wider public ownership.

The ownership of the new entity will be separated from trading rights. The latter will be opened up to allow eventually unrestricted access to the Exchanges, subject only to regulatory requirements and the payment of applicable fees.

To make the entity more business driven, it will be allowed to make profit

HONGKONG FUTURES

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and distribute dividends to shareholders, a privilege, which is at present not available to the members of the Exchanges. Its corporate governance structure wi 11 allow sufficient representation of the interests of different groups of market participants and the wider interest of the public and the overall economy of Hong Kong.

The Government prefers this objective to be achieved through a commercial and due process involving both Exchanges within a specified timeframe, which sees the ultimate listing of the new entity, by September 2000. This requires expeditious actions by the Exchanges.

11 1 believe the merger is a good move putting things together simplifies the situation, 11 he said. ■

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I ifli FI f!J 1999 � 4 FI 17

Hong Kong Civil Servants will still get higher wage

A I though the civi I service pay freeze for 1999-2000 financial year is viewed positively by the Chamber's

Human Resources Chairman, Mr Yun Poon, some civil servants will still get an increase in their salaries this year.

11 lf you go through it carefully it isn't an across the board pay freeze it only applies to government employees who have reached the top of their payment scale. Other employees who may have just started their job or who are not at the top of the scale will get a salary increment if they are progressing in their position," he said.

When taking this into consideration only 50 per cent of civil servants will be effected by the pay freeze.

11The action of this pay freeze is very appropriate, which is reflected by the media. Civil Servant Staff Associations and Unions also support it. Government is the largest employer and it needs to reflect conditions suffered by those employed in the private sector and bring salaries down,11

he said. Government packages often consist of

very good perks, and multiple fringe ben�fits.

11The Government has announced steps to improve productivity of civil servants and better human resource management. I expect an evolution not a revolution of the government salary system,11 he said.

Mr Poon believes the system should be changed to be more competitive from a global point of view.

11 1 don't expect a drastic change but the Government are headed in the right

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Just 50 per cent of civil servants will be effected by the pay freeze.

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direction, hopefully we'll see overall wage level come down to more realistic levels,11

he said. The civil service structure is soon to get

a revamp. The reform will include a revision of entry and exit mechanisms, pay and fringe benefits, disciplinary procedures and performance management, professional training and personal development.

11This is necessary when business conditions change you need to change with them, realign your resources to increase productivity. I don't think it is necessary to

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cause redundancies. The Chamber has talked to Government about headcount control for more than a decade. But now Government has the opportunity to rebalance resources and expertise -p e r h a p s t h r o ugh r e t r a i n i n g n o t redundancies,11 he said.

Mr Poon said that Government should a p p r o a ch t h e i r h u m a n r e s o u r c e management with a new paradigm and take a more innovative approach.

"This could be by privatisation of their departments and outsourcing," he said. ■

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The environment is neglected in the Budget

If one examines the Government's projected expenditure closely outlined in the Budget, spending on the

environment will decline by 10 per cent in 1999-2000 at a time when concern about it is mounting.

Chairman of the Chamber's Environment Committee Barrie Cook said that he was rather di sap pointed at this prospect, adding that failure to take action would jeopardise Ho·ng Kong' s chances of remaining a leading international business centre, as deteriorating conditions wou Id repel investment.

Vi c e-C h a i r m a n o f t h e Chamber's Taxation Committee Kaushal Tikku agreed that the decreased amount of spending on the e n v i r o n m e n t would be detrimental to Hong Kong.

the environment and at the same time, ensure that such a handout is spent in Hong Kong.

These concerns were acknowledged by Gordon Siu, Secretary for Planning, Environment_ and Lands when he spoke at

"There is anecdotal evidence that many foreign executives are unwilling to come to Hong Kong b e c a u s e o f i t s p o l l u t e d environment and this does not bode well for Hong Kong's wish to be a premier international city, 11

Mr Tikku said. Pollution haze over Central.

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He suggested the Government could put the HK$8.5 billion tax rebate to better use by paying for the bulk of the cost of converting taxis and buses to cleaner fuel. That would help to improve

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the Hong Kong-Guangdong Environmental Partnership Seminar on 15 March.

"Worsening environmental conditions are a cost to the community effecting health

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and decreasing productivity. Prevention is cheaper than cure. Inv e s t ing i n environmental technology creates jobs and ensures less degradation of our natural capital, 11 he said.

But he added that during this time of harsh economic conditions the Government has other more urgent and pressing demands to be met in the 1999-2000 Budget, and that the Budget could not possibly cover everything.

Mr Siu stated that continued cross-border cooperation is what is neede d to deal with the pollutin of air and water.

Assistant D irector of the E n v i r o n m e n t P r o t e c t i o n Department Elvis Au said that under the Hong K ong-Guangdong Environmental Protection Liaison Group a study on air pollution is being conducted and the two are a l s o c o l l a b o r a t i n g o n environmental impact assessments, waste reduction and protection of the Chinese white dolphin.

The Chamber has recently formed a Hong Kong Business Coalition of the Environment. This attempts to broach the issue of

pollution and act as a focused privatesector voice on environmental problems. Currently it's actively tackling the problem of floating refuse in the harbour. ■

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IiffiJHIJ 1999 �4 fi.l 19

Kwai Chung Container Terminal. �mUUU .. Ufi

Hong Kong becomes more competitive transport-hub

Hong Kong will attract more ships onto its register by reductions in the registry charges announced in the

1999-2000 Budget. Through this package of measures, the total tonnage of ships registered in Hong Kong may increase to 1 0 mi 11 ion tons in three years, thereby creating 15,800 additional jobs.

Mr Arthur Bowring, Director of the Hong Kong Ship Owners Association, was pleased about these measures, as it would make Hong Kong more competitive in attracting ships to register here.

"We presented these recommendations to Government in December 1998, so we were very pleased that they were taken on board so quick. It is a good first step but there is more work to be done," he said.

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Mr Bowring said it was important for Hong Kong to keep a high-quality registry, so as to not attract the wrong ship.

"Hong Kong has a good reputation for high quality ships - we want to keep it that way. We don 1 t want to be a 1 flag ofconvenience 1 like Panama, where any old rust bucket can come onto the register and pay no regard to international conventions. We want ships that are well maintained and owned by Hong Kong companies," he said.

The shipping industry accounts for 1.7 per cent of Hong Kong 1s GDP and employs over 50,000 people. At present the total tonnage of ships registered in Hong Kong amounts to over 6.2 million tons.

To strengthen Hong Kong 1s status as an international shipping centre and enhance

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Hong Kong 1s regional competitiveness, theFinancial Secretary reduced the merchant shipping registration and related fees.

In the Budget the fee for registration of a ship not exceeding 500 gross tons was revised to $3,500. And a flat rate of $15,000 will be charged for all other ships, which exceed this limit. Currently ocean going vessels registered in Hong Kong are subject to the maximum fee of $100,000.

The maximum level of annual tonnage charges will also be reduced from $180,000 to $100,000. And 21 fee items for other types of registration-related services, such as changing the registered name or tonnage of a ship and registering a change in address of ship owner will be reduced or abolished. ■

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HKSAR LEADERSHIP � tl-f� �1'

Anson Chan stays on to 2002

Beyond the Budget, there was further good news for the SAR. To universal acclaim - it was announced in late

March that the Chief Secretary fo·r Administration, Mrs Anson Chan, would remain at the head of the Civil Service until June 30, 2002.

At a special press conference on March 23, the Chief Executive, Mr Tung Chee Hwa said he had invited Mrs Chan to extend her service as Chief Secretary for two-and-ahalf years and that he was "delighted that Anson has accepted this invitation".

"After I was selected as the Chief Executive in the later part of 1996, in the process of forming the slate of principal officials for the HKSAR Government, one of my fundamental considerations was to work for the stability of the Government and our community," he said.

"Hong Kong 1 s reunification with China was a major historical development. 1 One Country Two Systems' was an entirely new endeavour, our ability to preserve stability was critical to Hong Kong 1 s continued success and prosperity.

11On this basis, I decided then that all eligible serving principal officials should be appointed to their original posts. This was not a move of political expediency.

11 lt has always been my thinking that we should maintain stability at the top echelon of the HKSAR Government, so that we can keep a consistent direction for Hong Kong's future developments.

'1Therefore, I had determined from the

very outset that, unless there were

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e x ·.c e p t i o n a I circumstances, I would invite the Chief Secretary to serve for the five-year term of my office as Chief Executive."

He said that since the handover on July 1, 1997, he and the Chief Secretary had worked· w ell and closely together at the head of Government.

"The fact is that when we were faced with some really very difficult and tough challenges, she made some remarkable a n d i m p o r t a n tcontributions, 11 he said. 11She was always there to support me, to give me the right advice for us to move forward together.

11 T h e f a c t i s t h a t Anson's stay will, I know, be in the long-term overall interests of Hong Kong. I know my decision is supported by the Executive C o u n c i l , b y a l l t h e principal officials, and I know will be by all the civil servants.

Mrs Anson Chan, Chief Secretary for Administration.

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"I believe this decision will also be welcomed by the community serve the interests of the SAR as we move as a whole. We together will be able to forward into the 21 st century," he said. ■

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I rffj ,.El flJ 1999 � 4 ,.El 21

PREMIER BUSINESS CITY

Keeping Hong Kong a Premier Business City

This is a reprint of an Op-Ed article published in the South China Morning Post on March 4, 1999. It reflects the position adopted by the General Committee on behalf of the Chamber.

By Dr Eden Y Woon

In the past few months, there has been a great deal of discussion about the political environment in Hong Kong

and its effect on business and investment. The General Committee of the Hong Kong General Chamber of Commerce is dismayed that those who express concern about some trends in the evolving political scene are often criticised as being 11antidemocratic11. In fact, this criticism is not only unfair, but also untrue. The Chamber believes that this is not an argument about democrac·y, on whose road Hong Kong is surely heading, but an entirely appropriate argument about whether certain social agenda items being put forward by some politicians have a negative impact on our business and investment environment and development.

There is a feeling among many in the business community - ranging from 11big

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business11 to small and medium enterprises (SMEs) - that special interest groups, especially those in the labour and social welfare camps, are trying to pressure the SAR Government to shape Hong Kong's business policies very vocally and deftly through the.media and other public venues. These suggested policies more often than not require the SAR Government to ;;pend more on welfare, enact more regulations and introduce more legislation on employer/employee relations. In short, they add to the cost of doing business for the Hong Kong business community and ultimately affect employment.

Nor is it helpful to try to separate the city into 11business11 and the 11peopleU, or 11employers11 and 11workers11. This does not reflect the true situation in Hong Kong, since few here do not depend for their livelihood on thriving businesses, whether they be a landlord, a shopkeeper, an office-worker, a labourer or a civil servant. There is a further attempt to separate 11big busi ness11 from smal I and medium enterprises in Hong Kong, when in fact the business policies concerns mentioned above are shared by all businesses. The Chamber, for example, has over seventy-five percent of its 4000-

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strong corporate membership made up of SMEs, in addition to large local and international companies.

The economic recession which Hong Kong is going through has exacerbated this counter-productive polarisation of society. It is tough enough for all of us to survive the economic downturn, but for the sake of the future of both the economic and political development of Hong Kong, all three groups - businessmen, politicians and Government - must work together to preserve our status as a top business and cosmopolitan city.

How? First, let us talk about the business community. There is no doubt it must adjust. The political environment is evolving in only one direction, towards greater democracy and a more developed, pluralistic society. The sq-called 11good old days11 are not coming back. Communication and dialogue with the media, with the politicians, and with the grassroots population is a requirement in the postHandover 11 Hong Kong people ruling Hong Kong11 society. This dialogue will not be easy, since not everyone wil I agree with every agenda item of the business community and since politics is often messy and sometimes openly adversarial in

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nature. But businessmen must be prepared to roll up their sleeves and set out their case. And the business community has a good case, since the true definition of 1

1business community11 is almost as wide as the entire six million plus population of Hong Kong.

What about the politicians? There is no denying the fact that politicians must do their best to represent their constituents, and one can perhaps sometimes sympathise with their frustration at feeling ineffective in the current political structure. But more politicians must be sensitive to the greater good and be responsible to the whole of society. Asking for more public spending and h a n d o u t s b y t h e G o v e r n m e n t i s incompatible with our low tax structure, and incongruent with our successful traditions and incentive mechanisms. For some of them to whip up anti-business and antiwealth sentiment is just as bad since businesses - including thousands of small and medium enterprises - and their

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employees generate the wealth of this city. We should not lose sight of how important to Hong Kong the 11business community11 is and how many people depend on tho

,.se who

risk their investments and energy in • developing their businesses. Hong Kong is a business city; so the stronger the companies, the more everyone in Hong Kong benefits.

Finally, the Government plays a key role. Because this is an executive-led Government with the legislative counci I essenti-ally made up of the 1

1opposition party11

, the Government must be particularly sensitive not to appear to be imposing policies on the people. Some of the more provocative statements by politicians perhaps come from a sense of frustration w i t h t h e G o v e r n m e n t . Th e SAR Government, just a short 20 months from a colonial Government, must be given high marks for diligently trying to admi1nister Hong Kong during this difficult period.

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♦ LGT Bank in LiechtensteinA Member of Liechtenstein Global Trust

Confidentiality Stability

However, there has to be more acceptance of responsibility for decisions, more instilling of confidence, and more massaging of policies if there is wellthought-out input from legislators or from the people as a whole. Reacting only to loud voices reinforces the inclination to air issues in a confrontational manner; which leads us down a vicious circle of pressure and public politicking. At the same time, the Government must be firm in rejecting policies which are counter to Hong Kong's free market principles.

The Chamber believes strongly that Hong Kong is still a great place to invest and do business. But there is a need for fresh action. Strengthening Hong Kong's role as a premier centre for international business remains critical if we are to meet our goals as a society. It is up to all of us to join in and not shy away, to communicate, to unite, and to work together for a more prosperous future. ■

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For over 75 years, we have been offering both the well-established investment advantages of Liechtenstein, a AAA rated financial centre in the heart of Europe and all the benefits of a professional private banking group focussing on individual client oriented services.

LGT Bank in Liechtenstein AG Representative Office Hong Kong Dr Henri W Leimer or Mr Philip Jehle Phone: (852) 2523 6180 Fax: (852) 2868 0059

LGT Bank in Liechtenstein AG Representative Office Tokyo Mr Yasuhiro Usui Phone: (813) 3435 2741 Fax: (813) 3435 2742

ItffiJHtJ 1999 �4 .F.! 23

US CHAMBER REPORT � � t -t'" f �

Perspectives of a Congressional mission to Asia By The Honourable Jim Kolbe,

Republican Senator for Arizona

With the onset of the financial crisis in Asia last year and the intense congressional debate over

renewed funding for the International Monetary Fund (IMF), the need to focus on the crisis in Asia and the international financial system became increasingly clear. Thus, at the request of the Speaker, I formed a bipartisan delegation to visit several key countries in the region, including South Korea, Indonesia, Hong Kong and Japan.

In general, I am somewhat pessimistic for a quick recovery in the short-term. But this really drives home the need for the US to continue playing a leadership role in the Asia-Pacific region. One of my greatest fears is that, as our exports to Asia continue to decline and our imports

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increase, the US will succumb t o protectionist forces. T h i s would b e absolutely the worst thing we could do, not only for the world economy, but also for our own continued prosperity.

Hong Kong, along with Singapore, serves as the financial nerve of Asia. Because Hong Kortg 1s economy relies so heavily upon international trad�. and financial services, it is closely linked to the rest of Asia.

Because of this fact, the impact of the Asian financial crisis on Hong Kong 1 s economy is profound. For the firsttime in many years, Hong Kong is experiencing a deep recession, punctuated by rising unemployment. If I had to sum up the situation in Hong Kong with one word, it would be 11nervous 11

• Because they are so economically dependent in the region, there may not be any real recovery in Hong Kong until the region recovers .. ,,, .. ,

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If there is one bright spot in the bad news we've been hearing, it would be South Korea. We were immensely impressed with South Korean President Kim Dae-Jung 1s firm commitment to economic reform.

The situation in Indonesia is quite different from Korea. Despite incredible economic turmoil, there has been no substantive action taken to reform the economy.

Today, Japan is the second largest economy in the world, accounting for twothirds of the Asian economy. Japan holds the key to economic recovery for the entire region. Judging by the lack of political will the Japanese economy will continue to stagnate. And, unfortunately without Japan making the necessary changes, there is little hope for the rest of the region. ■

This article was taken from the US Chamber of Commerc e's mon thly publication The Asia Insider.

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( 7F X if/{ § � fjJJ pJj 1t JHU Th e A s i a Insider)

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fll'UNITED I R IN S

The Ho11g Kong General Chamber of Commerce Hong Kong Trade Development Council

The Hon TUNG Chee Hwa Chief Executive of the HKSAR of the PRC

Ms Martha Lucia RAMIREZ

Foreign Trade Minister, Colombia

Mr Michel CAMDESSUS

Managing Director International Monetary Fund

Mr Lachlan MURDOCH

Chairman & CEO, News Ltd

Mr Ernest S MICEK

Chairman & CEO, Cargill Incorporated

Mr ZHU Xiaohua Chairman, China Everbright

Mr Russ DAGGATT

President & CEO Teledesic Corporation

Dr Victor FUNG

Chairman HK Trade Development Council

Official Carrier

� CATHAY PACIFIC

H E Joseph ESTRADA

President, The Republic of the Philippines

Mr Gabriel SINGSON

Governor, Philippine Central Bank

Mr John R .H BOND

Group Chairman, HSBC Holdings plc

Prof Jagdish BHAGWATI

Arthur Lehman Professor of Economics Columbia University

Mr Tadashi NISHIMOTO

President, KDD Corporation

Mr Kosaku INABA

Chairman & CEO, Ishikawajima-Harima Heavy Industries Co Ltd

Mr Morton BAHR

Vice President, AFL-CIO

Mr Clyde PRESTOWITZ

President Economic Strategy Institute

Mr Victor JOY WAY

Prime Minister, Peru

Mr Lawrence SUMMERS

Deputy Secretary of the Treasury United States

Admiral Dennis BLAIR

Commander-in-Chief United States Pacific Command

Dr Kenneth COURTIS

Chief Economist & Strategist Deutsche Bank Group Asia Pacific

PBEC 32nd IGM Program 14-19 May 1999, Hong Kong Convention and Exhibition Cen�e

"The Challenges of the Next Century for the Pacific Basin"

1230-1430

1300-1400

1415-1715

1430-1445

1445-1645

1645-1700

1700-1900

1730-1830

2000-2200

0800-1800

0800-1300

1300-1400

1830-2000

0800-1800

0700-0830

0900-0930

0930-1015

1030-l l l5

PBEC Golf Tournament

Registration

Directors General Meeting with working lunch (Invitation only)

Chairman's Breakfast Meeting with member committee chairmen

Working Committee Meetings I (3 meetings)

Special Fund Investment Advisory Committee Meeting

(Committee members only)

Strategy Committee Meeting (Committee members only)

E1 Working Committee Meetings II (3 meetings)

E1 Working Committee Meetings III (3 meetings)

Finance Committee Meeting (Committee members only)

Chairman's Dinner for PBEC officers (Chairmen & Directors General only)

(Hosted by Chairman of Host Committee at HSBC Building)

Registration

PBEC Steering Committee Meeting

Board of Directors Meeting (Board members only)

Immediately following Steering Committee Meeting

Chairmen and Int'l Counselors luncheon

(Chairmen and Int'l Counselors only)

Speakers / Moderators Reception

All speakers are confirmed unless otherwise stated in the program

Registration

Member Committee Breakfast Meetings

OPENING PLENARY SESSION

Call to Order Mr Robert G LEES, Secretary General

Pacific Basin Economic Council

Welcoming Remarks Mr John E STRICKLAND, Chairman

Hong Kong, China Member Committee


Chairman's Address Dr Helmut SOHMEN, Chairman


KEYNOTE ADDRESS

"Title to be announced"

Introduction : Dr Helmut SOHMEN, Chairman


Keynote Speaker : The Hon TUNG Chee Hwa

Chief Executive of the

Hong Kong Special Administrative

Region of the People's Republic of China

PLENARY SESSION I

"Governments, Markets and Economic Development"

Featured speaker : Mr Michel CAMDESSUS, Managing Director

International Monetary Fund

1115-1145 f1 1145-1300 CONCURRENT ROUNDTABLE DISCUSSIONS

on Governments, Markets and Economic Development

1. Can protectionism be eliminated in the 21st century?

Chairman: Dr Victor Fung, Chairman

HK Trade Development Council

Panelists: Mr Hisamitsu ARAI

Vice-Minister for International Affairs

Ministry of International Trade and Industry, Japan


Panelists: Mr Noel LEVI, Secretary General, Forum Secretariat, Fiji

Mr Clyde PRESTOWITZ, President

Economic Strategy Institute

Ms Martha Lucia RAMIREZ

Foreign Trade Minister, Colombia

2. A managed economy vs. a free market·

Chairman: Mr Victor CHU, Chairman, First Eastern Investment Group

Panelists: Mr Sokan CHANG, Vice Chairman

Korea Federation of Textile Industries

Mr LIU Yong Hao, Chairman, New Hope Group

Mr Dennis PEDINI, President for Asia Operations

New York Life International

3. Political stability and regional security : measures to sustain economic

development in the region

1315.1430 m

Chairman: Ambassador Chas FREEMAN, Jr, Chairman

Projects International, Inc

Panelists: Prof Paul DIBB, Professor & Head

Strategic Defence Studies Centre

Australian National University, Canberra

Mr Hahn-Koo LEE, President

Daewoo Economic Research Institute

Prof ZHANG Yunling, Director

APEC Policy Research Centre

Chinese Academy of Social Sciences

Keynote speaker : H E Joseph ESTRADA, President

The Republic of the Philippines

1445-1530 PLENARY SESSION II "

Information and Imagination"

Featured speaker : Mr Lachlan MURDOCH, Chairman & CEO, News Ltd

1530-1600 t:1 1600-1715 CONCURRENT ROUNDTABLE DISCUSSIONS

on Inf otmation and Imagination

1. Telecommunications : how can development accelerate?

Chairman: Ms JoAnne PATRICK-EZZELL, President & CEO

AT & T Asia/Pacific Group Ltd

Panelists: Mr HAN Songlin, Deputy Director, China Telecom

Mr Chi-Young KWAK, President & CEO, DACOM

Mr LU Shyue-ching, President & CEO

Chunghwa Telecom Co Ltd

Mr Tadashi NISHIMOTO, President, KDD Corporation

2. Is information technology in Asia up to top world standards?

Chairman: Mr KUO Yun, President

Institute for Information Industry, Chinese Taipei

Panelists: Mr K C KWONG, Secretary for Information Technology

& Broadcasting, HKSAR Government

Mr Michael RAWDING, Regional Director

Microsoft China Co Ltd

Mr Roberto R ROMULO, Chairman

Equitable Cardnetwork, Inc

Dr Robert YUNG, Chief Technology Officer for China

Director of Intel China Research, Intel Corporation

3. The power of media in the globalized economy

Chairman: Mr Nayan CHANDA, Editor

Far Eastern Economic Review

Panelists: Mr Robert KEATLEY, Editorial Advisor

South China Morning Post

Ms Lynette LITHGOW, Anchor, CNBC

Mr Yasuhiro TASE, Deputy Editor

Nihon Keizai Shimbun. Inc

Mr Dominic ZIEGLER, Asia Bureau Chief, The Economist

1900-2200 OPENING GALADINNER

Introduction : Mr YU Xiaosong, Chairman, China Member Committee


Keynote Speaker : A Senior State Leader of the People's Republic of China (invited)

·J ElMi3 0800-1800 0745-0945 1030-1115

AU speakers are confirmed unless otherwise stated in the program

Registration BOARDROOM BREAKFASTS AND BRIEFINGS PLENARY SESSION ID "Environment and Growth" Featured speaker : Mr Ernest S MICEK, Chairman & CEO

Cargill Incorporated l ll5-1145 fl1145-1300 CONCURRENT ROUNDTABLE DISCUSSIONS

on Environment and Growth 1. Food for thought : challenges of feeding the growing world

Chairman: Mr Sam SMITH, President

Panelists: Washington State University Mr Greg ARASON, President & CEO Canadian Wheat Board Mr DU Ying, Director Research Department Ministry of Agriculture Mr Joe POPE, Chairman, Trade New Zealand Dr Manuel SOTOMAYOR, General Manager Sotomayor SA

2 . The use of regenerable resourcesChainnan: Mr Chandran NAIR, CEO, ERM (HK)

Panelists: Ms Christine LOH, Legislator, HKSAR Mr Ross SAYERS, Managing Director & CEO CLP Holdings Ltd Mr Hiroyuki SHIMOJIMA, Senior Managing Director, Honda Motor Co Ltd Mr Colin TAM, President, PSEG Asia Ltd

3. The environment : can we afford the current pace of economic growth?

1315.1430 ID

Chainnan: Mr Barrie COOK, Chief Executive Officer

Panelists: CKl Materials Mr Hiroyuki FUJIMURA, Chairman EBARA Corporation and Chairman Environmental Committee of the Tokyo Chamber of Commerce & Industry Prof Peter HILLS, Director, Centre of Urban Planning & Environment Management, University of Hong Kong Mr QIN Zhongyi, Vice President, China Yangtze Three Gorges Project Development Corporation Mr Ken THOMPSON, Executive Vice President Atlantic Richfield Co (ARCO)

Keynote Speaker : Mr Victor JOY WAY Prime Minister, Peru (invited)

1445-1530 PLENARY SESSION IV "Technology vs. Labor" Featured Speaker : Mr Kosaku INABA, Chairman & CEO

Ishikawajima-Harima Heavy Industries Co Ltd

1530-1600 t1 1600-1715 PLENARY PANELDISCUSSION

on Technology vs Labor Chairman: Mr Eugenio HEIREMANS, Executive President

The Chilean Social Security Association Panelists: Mr Morton BAHR, Vice President

American Federation of Labor & Congress of Industrial Organizations (AFL-CIO) Mr Mong-Gyu CHUNG, Chairman Hyundai Industrial Development & Construction Co Ltd Mr Kiyoshi KANITANI, President Nachi Robotics Advanced Technology America Inc. Ms YU Ying, Senior Engineer Changchun First Automobile

1800-1930 RECEPTION AT THE GOVERNMENT HOUSE (Hosted by The Honorable Mrs Anson CHAN, Chief Secretary for Administration of The Hong Kong Special Admiristrative Region Government)

0700-0830 0900-0945


Registration Member Committee Breakfast Meetings PLENARY SESSION V "Emerging Markets in the Global Economy" Featured speaker : Prof Jagdish BHAGWATI

Arthur Lehman Professor of Economics Columbia University

0945-1015 � 1015-1130 CONCURRENT ROUNDTABLE DISCUSSIONS

on Emerging Markets in the Global Economy 1. The aftermath of economic crisis : implications for future development

Chairman: Mr Dean O'HARE, Chairman & CEO Chubb Corporation

Panelists: Mr Tadahiro ASAMI, Managing Director The Tokyo Mitsubishi Bank Prof Nieves CONFESOR, Professor Asian Institute of Management Mr John S WADSWORTH, Chairman Morgan Stanley Dean Witter Asia Mr ZHU Xiaohua, Chairman China Everbright

2. Building a better banking system : the framework for healthy economic growth Chairman:

Panelists:

Mr David CARSE, Deputy Chief Executive HK Monetary Authority Mr A Ian GILLESPIE, President & CEO Export Development Corporation Mr Gabriel SINGSON, Governor Philippine Central Bank Mr Chartsiri SOPHONPANICH, President Bangkok Bank Public Company Ltd Mr Enrique VILATELA Riha, President Mexican Bank for Foreign Trade (Bancomext)

1145-1315 PBEC IGM 2000 LUNCHEON RECEPTION 1330-1530

1530-1550 1550-1620 1620-1700

PLENARY SESSION VI "Globalization" Keynote speaker:

Other speakers:

�

Mr John R H BOND, Group Chairman HSBC Holdings plc Mr Peter EIGEN, Chairman Transparency International Dr Kenneth S COURTIS

Chief Economist and Strategist Deutsche Bank Group Asia Pacific (invited) Mr Russ DAGGATT, President & CEO Teledesic Corporation

PBEC ENVIRONMENTALAWARD PRESENTATION CLOSING KEYNOTE ADDRESS Reading of the Mr Robert G LEES, Secretary General Conference Statement Pacific Basin Economic Council

Closing Remarks Dr Helmut SOHMEN, Chairman Pacific Basin Economic Council

Announcement of Mr Robert G LEES, Secretary General Election Results of Pacific Basin Economic Council PBEC Officers and and

Acceptance Remarks New PBEC Chairman

Invitation to the 33rdIGM

Host of PBEC IGM 2000

1700-1800 Board of Directors Meeting (optional) 1800-1830 Press Conference 1900-2230 A NIGHT AT THE RACES

(Sponsored by The Hong Kong General Chamber of Commerce)

\ I

-

__________ >-----------...

ol local Enterpri-�•�" � -- �:::::::::::::::--->

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---------

It may not have been a HoUywood event or Grammy Award, but it had its fair share of glitter as the nation's top corporate personalities gathered to applaud the winners of this year's SME Awards - held at the Renaissance Harbour View Hotel on February 12.

"The First Hong Kong SME Award" is the first award be:i:ng held in Hong Kong jointJy organized by the Hong Kong Productivity Council and The Hong Kong General Chamber of Commerce. The objectives of this event is to identify success models to spearhead Hong

Kong's continued growth and competitiveness.

Johnson Hung, founder and CEO of Air Eagle International Fre.ight (H.K.) Ltd - bagged the 1998 Best Managed SME Award Certificate

of Merits has this to say.

"We may not be the first but we're already a winner being able to be selected as the finalists to this award. This will not be possible without the ardent support from our cfients and my T.E.A.M at Air Eagle."

Our Motto and Mission statements, we at Air Eagle aim to be; still stands - The T.E.A.M which means Together Everyone Achieves

More ... and to our Cl'ients we say:

" We may not have the answer, but we'll find it

We may not be the biggest, but we'll be the most committed to your Success

And Your Business is our Business which is important to us

We never tum away even the smallest of orders. "

Mr. Johnson Hung of Air Eagle receive the HoRg Kong SME Award from Mr. Peter Sutch (Left) Chairman, Hong Kong General Chamber of Commerce and Mr. Kenneth Fang (Right) Chairman, Hong Kong Productivity Council

Mr. S andra Leung (Left) Director of Operations, Mr Johnson Hung (Middle) Managing Director, and Mr. Franco Lai (Right) Director of Sales

In pursuit of excellence and maintaining the highest standard of:

"Customer Comes First Service"

We are committed to: - Business Development- Staff Development- People-oriented Management- Customer Satisfaction

- Quality Service

Air Eagle provides a wide range of services in International Freight forwarding for air, ocean, export, import - to and from USA, Europe and Intra-Asia. In addition, Air Eagle is able to offer unique tailormade logistics, management solutions for clients distribution, inventory control, warehousing management requirements as wel l as break-bulk and ocean

consolidations etc.

Today, Johnson has moved on to the next big step is global presence with a "Onestop" integrated logistics management solution for Air Eagle.

Unit 1003, 10/F, Vanta Industrial Centre, 21-33 Tai Lin Pai Road, Kwai Chung, Hong Kong

Tel: (852) 2331 3660 Fax: (852) 2318 1216 E-mail: [email protected]

SMEAWARD

SME Finance Scheme no help

The Government's SME Financing Scheme, announced on August 24, is considered to be a cosmetic

charade offering no real help to SMEs facing this current harsh conditions, according to Mr Denis Wing Kwan Lee, Chairman of the Chamber's SME committee.

"This scheme will not help those definitely in need because the criteria for entry stipulates that companies must not have any overdue payment of more than 60 days in the past 12 months of business. In other words, SMEs that meet the scheme's requirements would be able to get a bank loan anyway without the Government's guarantee," he said.

The banks have also laid down their own criteria to ensure entrants to the scheme are creditworthy.

"Most banks stipulate that the SME must show profit over the last three years - which is not very easy for an SME,U he said.

Al I the 1,000 SM Es that have been approved by the bank have not been rejected by the scheme.

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"It is obvious the scheme is absolutely useless - SMEs that would be able to get bank loans without the scheme have been approved," he said.

T h e G o v e r n m e n t i s reviewing the scheme and hopefully there will be a relaxation of selection criteria for the scheme.

The SME Committee has w ri t ten to the In d u s t r y Department o f fering their recommendations for revision of the scheme.

According to the Hong Kong G o v e r n m e n t , t h e definition of an SME in the nonmanufacturing sector is one that employs less than 50 people.

If you were an SME in the manufacturing sector you would employ less than 100.

Mr Denis Lee (third from right), Chairman of the SME Committee, at the Mainland factory of a Hong Kong SME.

"There are problems with this def inition some SMEs

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employ only five people in Hong Kong, but 1,000s on the Mainland - they are still considered SMEs,U he said.

Mr Lee said that due to the east Asian economic crisis SMEs have been facing more and more competition from other Asian markets.

"Hong Kong's export and manufacturing sector have lost their competitiveness because of the devaluation of neighbouring countries currencies," he said.

Starting from 1995, Asian countries had the fastest growing GDP in the world so many Hong Kong SMEs targeted them as their major markets. But, in 1997 the crisis hit and they lost their market share.

"From export figures we are now at our lowest point for the past 26 years. The profit tax dropped in 1998 by $38 billion, so the whole business community is in bad shape, but it is the SMEs that are hit much harder,11

he said. This can be attributed to a lack of capital

base and a small company structure. Most SMEs in Hong Kong get their trade

finance through collateral. In Hong Kong, what the collateral banks want is property or cash deposit. Because of the property

slump collateral has gone down and banks have started to recall their loans or part of the loans from SMEs.

• 11This has happened at such a bad time wh$n SM Es cannot get orders. They simply cannot payback their loans so many have gone bankrupt.

11We have an unofficial figure from various SME committees and associations that estimates between August last year and March this year 40,000 SMEs have closed down,11 he said.

Unemployment, at present, stands at 6 per cent.

"Unemployment is particularly severe in the import/export trading sector - and this represents SMEs thathave gone out of business. At present, if an SME does get an order they do not have the cash flow to implement it. The banks are very cautious about trade financing. Before if an SME had a Letter of Credit they could get a loan very easily - now there is no way," he said.

The Committee is trying to help SMEs by providing ideas to boost productivity.

11 ln most SMEs the boss decides everything and is therefore the main source of information. This can be very limiting.

OBITUARY ir ™l

SMEs should utilise the Internet, trade association libraries etc to get market information so they can gain a competitive advantage," he said.

Mr Lee also recommended that full use of IT could improve office efficiency. He said that high value-added service would also help SMEs to procure and retain customers.

The Chamber's SME Committee has urged Government to formulate a mid to long term strategy to assist and promote SMEs in Hong Kong which account for 98.3 per cent of businesses and employ 63 per cent of the wiorkforce.

"One ofthe problems with SMEs is that they use short term lending to fund long term investment - so most fail. We need to look for other ways of short term financing to help with the cash flow problem," he said.

Mr Lee said that he could not see banks changing their lending culture and suggested that SMEs go to other financial institutes.

"Asset-based financing enables SMEs to sort out their short term cash flow. Another way is for them to use Export Credit Insurance, which is cheap, and the banks might be willing to give them loans," he said. ■

John Louis Marden 1919-1999

Mr John

_ Louis Marden, former General Committee member and a long-time Chamber supporter, died peacefully at his

home at Shek O on Thursday, March 18. He was 80 years old. Mr Marden, who carried one of the most famous and recognisable names in Hong Kong business, was a member of the

Chamber's Council until his death. He originally joined the General Committee of the Chamber in 1973 and was Chairman for two years in 1982-83 and 1983-84.

Mr Marden joined Wheelock Marden, the company founded by his father, George, in 1946 and became a director of the company in 1952. He succeeded his father as the group's Chairman in 1959.

His directorships included Hong Kong Bank, Dairy Farm, the Cross Harbour Tunnel, Hong Kong Electric, among many others. Wheelock Marden had extensive interests in Hong Kong including property and retailing (including Lane Crawford) and insurance and aviation.

The company became the subject of a takeover battle in 1985 when John Marden stepped down as Chairman. The group eventually came under the control of the late Sir Yue-kong Pao 1 s shipping group.

Mr Marden is survived by his wife Anne and a son and three daughters. Both John and Anne Marden were strong supporters of various charities, especially through the Marden Foundation.

Vale John Marden.

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.Iifij JHIJ 19991:f:: 4 'A 31

SME AWARD

SMEs get their just award

T he backbone of Hong Kong 1 s corporate population, the SMEs, making up 98 per cent of businesses

in the SAR, were awarded for their hard work and success in the 1998 Awards for SMEs on February 12.

Contestants went through a stringent screening process to be chosen as finalists for the New SME Award and Best Managed SME Award.

Companies established for less than three years were eligible for the New SME Award while those that were older could enter the Best Managed SME Award.

A team of assessors visited the Hong Kong operations of each candidate and interviews were conducted with department heads, management and staff to gain an indepth understanding of their business operation.

The assessment consisted of seven cr i ter ia. First ly, judges looked a t leadership qualities of an SME and, specifically, how management influences and inspires staff to work enthusiastically in suppor t of the organisa t iona l performance objectives.

Business Development was also examined. SMEs were judged on their ability to identify and maximise business opportunities for sustainable growth.

Human resources development was another a r e a t h a t w a s assessed.

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Organisational development was measured by seeing how effective the business structure was in sustaining the SMEs growth. Resource management was also looked at, which determined how an organisation manages its resources efficiently. More points were given to the critical success factors of a business and what business fundamentals an organisation has to drive

its augmentation and long-term viability. Finally, business results were given the

most points and related to the customer and stakeholder satisfaction and contribution to society of an SME.

Finalists were selected from the assessment and each gave a five-minute presentation to the judging panel on their achievements.

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Golden A ward � #

Winner - Dunwell Petro-Chemical Company DU NWE LL •

Dunwell Petro-Chemical was incorporated EMMM-·MMl'MMM> Judge 1s Comments "Business opportunities of Ounwe/1 are viable and environmentally-friendly. Dunwell is a wellbalanced organisation with both outstanding business and social achievements. Its dedication to total customer satisfaction and employees involvement - in vision and action - gives the company a truly competitive edge."

in 1991 with the vision of promoting waste oil recycling industries in Hong Kong. It's core business lies in the recycling of waste lubricating oil and marketing of lubricating products in Hong Kong, China and Taiwan. Today, Dunwell is a privately owned, profitable waste-oil recycler. It is also a major company in Hong Kong, which manufactures and markets green lubricating oil. In 1997, Dunwell was certified an ISO 9002 company.

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Silver A wards II- J/J.

Winner - ABC Data and Telecom Founded in 1978, ABC had the vision to build a software kingdom by the Year 2000 via a financial information superhighway. It is dedicated to

Judge 1s Comments

ABC Data And Telecom Limited

providing financial and interactive multi-media software to various financial institutions in Hong Kong and Asia. ABC was amongst the earliest pioneers in Hong Kong to develop financial software for use in the microcomputer in the late 70s.

''ABC has a very impressive management team dedicated to product innovation/ cus tomer satis faction and employee loyalty. It is a visionary company anticipating market developments and responding rapidly."

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Winner - Shun Sang Company

� Incorporated in 1993 as a wholesaler and distributor of personal hygiene products. It has established partnership with Procter & Gamble (P&R) for five years. From 1997, Shun Sang has been working more closely with P&R and has taken part in its inventory and logistics management system.

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Certificates of Merit fl � #

Air Eagle lnt'I Freight Biu Chun Watch Hands and Parts Manufacturers Coils Electronic Company

Judge's Comments "The strategic business relationship that Shun Sang built with P&G has enhanced its corporate culture - which spell the characteris tics of a success ful SME. Success ful communication is its corporate mission, and the emphasis of strong teamwork and effective application of information technologies are critical success factors of Shun Sang."

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Iitff fa.l f!J 1999 � 4 fa.I 33

SMEAWARD

Golden ,4 ward 1-' Jj_J-.

Winner- lnnomind International inn©mind Founded in 1996, with two people and limited capital, lnnomind International is a young and energetic company that has successfully launched novelty products to over 20 countries. In the same year, it developed POPHalo, the first multi-layer EL flashing watch in the world. Its sma1"'t: mix of fabulous design and innovative technology has created a big splash in the industry. lnnomind is known for instilling creative elements into daily, mundane products to create new, profitable market niches. Its mission is to originate more creative products that can evoke consumers' emotions, and ultimately encourage a more lively fun loving life.

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Silver A wards it 1#!-

Judge's Comments "lnnomind has demonstrated a strong commitment to develop long-term stakeholder relationships in all aspects of its business. Both creativity and technology - the soft and hard of running a business - are all well taken care of. Top m a n a g e m e n t's v i s i o n h a s b e e n f u l l y communicated and built into the key processes. lnnomind is a well-managed and highly innovative SM£ built from scratch and deserves recognition."

M•1uui {Ellf�}J��F·�S�&�I�M��fl9f�� if , ldL!i!!Jlf.5fUtl9lff :&;Jtiitff:1,fik O f!!€mfuJUitf;tf:�JUJ/#, R�U�H��fr�am, ��@��, �0� filitE�f/JJ:.f!!€ft;f5flj, ffJ.,C,,S-¥ 0 1ffJJ!l!iw#i.J!l.JlcJBz �'��E��r�,��•�IM$JtM§�� fJ O ll$Jfiflf!z , JJ:llfffE�/JIJift , !f.1-fJM?!fHffJJ!l!fMi · :iY!#i#l!lkfl9i:f:1/J\J1:-i;!, 1ltEMtfJ.JHff O J

Winner - Han Xuan International �'"fW£t# ;f nw ::j:,· Judge's Comments Development ct;u,,, ,� .. M'S<

Founded in May 1996, Han Xuan set ;Ji 11 Ill" ll! w"' i.

11With only a few years of experience in food and beverage market, Han Xuan's success is considered outstanding. Its flexible management style and its innovative attitude have provided a solid platform for Han Xuan 's rapid development. Its success in franchising and strategy to explore international markets clearly indicate top management's long-term vision to become an international food and beverage corporation."

up business with only 12 staff focused on supplying Taiwan-style food and beverages to the local market. Han Xuan has achieved tremendous success in the past two years and developed into a 35 staff company with offices in five different cities. Han Xuan 1s success in franchising its Taiwan food and beverage shops is evidence of its market acceptance of its products and service.

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Winner - Oriental Logistics Ori e n t a l Logi s t i c s w a s establi shed i n November 1997 with a market focus on industrial logistics services. The company provides a wide range of services such as warehousing, inventory management, physical cargo distribution, third-party warehousing services and sea and freight management.

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Certificates of Merit f-l:. ft. 1#!-�

ork Cinsulatncy Asia Corporate Information


Judge's comments 11Oriental Logistics has developed and communicated clear business goals and missions. Through the use of appraisal systems, key performance indicators and reward schemes, human resources management concepts are nicely applied in the company. On the other hand, Oriental Logistics is customer-focused and has demonstrated a structured approach for quality assurance. Its expertise, vertical integrated services and business networks are believed to be the key factors by which it has obtained services contracts from several top ten chemical manufactures and maintained healthy financial growth. 11

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.mrM1i:M ( �l.;J.W;OO) 1f�0P]

As the only independent, 1SO-9002 certified lube oil blender in Hong Kong, we can :

- custom formulate different grades of lube oil

- pack/repack according to distribution needs

- deliver in Hong Kong, Mainland and other areas

- provide comprehensive oil analysis service

Hong Kong Awards for Industry : 1996 PSCE Certificate of Merit in Environmental Performance

1997 HKPC Productivity Award

1997 HKITCC Certificate of Merit in Technological Achievement

Hong Kong SME Award: 1998 Best Managed SME Award -- Gold Award

�m i:p ,}1£:*!lt HKSME AWARD

PROFILE - SME

Environmental Industry -a business reality ?

In d u s t r i e s a s s o c i a t e d w i t h environmental protection will be the fastest growing sector in the 21 st

century, according to Mr Daniel Cheng, Managing Director of Dunwell PetroChemical Company, which won the Best Managed SME Golden Award.

"Pr o a c t i v e p a r t i c i p a t i o n i n environmental protection (EP) and bonding the awaren ess of EP with b usiness development strategy will undoubtedly become vital elements in enhancing the market competitiveness of a company in the future/ he said.

He said environmental awareness and protection therefore has gradually become the long-term development strategy and direction of major corporations as past experience has proved that environmental damage is costly.

11As a result, environmental industry is emerging as the industry with the most potential in the near future,11 he said.

Hong Kong disposes of more than 15,000 metric tons of waste daily; a major portion of which is sent to the three landfills in the New Territories. Unfortunately, the capacity of all these landfills is close to being reached.

11At the same time, the cost of handling and treating waste has increased to

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HK$700/MT which has prompted the Government to seek other waste treatment alternatives,11 he said.

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Recently, the Government has released the Waste Reduction Framework Plan (WRFP). One of its targets is to reduce 58

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per cent of municipal solid waste. 11The Environmental Protection Department (EPD) of the HKSAR Government has established more regulations, monitoring and enforcing systems as well as penalties to maintain a better environment, 11 he said.

Mr Cheng said that companies should be environmentally responsible in their purchasing and try to buy products with a high-recycled content.

He explained that environmentally aware companies would experience lower operating costs and promote a 11green11

image in the international market. 11 ln promoting the concept of EP, our

next generation of students shou Id be educated to recognise its importance, 11 he said.

Incorporated in 1991, Dunwell had a vision of promoting waste oil recycling industry in Hong Kong.

Areas of Dunwell's business range from the collection and re-refinery of sp-ent oil, blending and marketing of lubricating oil products, design and installation of waste water management systems. They also provide a used oil analysis service.

I n recent yea r s Mr Cheng has concentrated his efforts on educating industrialists on the proper recycling of spent lubricating oil and the use of 11green11 oil products.

It was due to his commitment to the environment that Mr Cheng was selected as a winner of The Young Industrialist Award in 1995 and Innovative Entrepreneur in 1996.

-

-

Use of Dunwell's re-refined lubricant by a major bus company.

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His company, Dunwell, was awarded the PSCE Cer t i f ic ate of Meri t in Environmental Performance, organised as part of the 1996 Hong Kong Awards for Industry.

In 1997 Dunwell was a winner in the Hong Kong Awards for Industry HKPC's Productivity Award, as well as HKITCC Certificate of Merit in Technological Achievement.

Mr Cheng serves as the director of Applied Research Council, and sits on the Technology Committee of the Industry Department, the Government of the Hong Kong SAR. He also holds a number of key positions on committees and boards related to the environment and industry. ■

I ;ftj fa.I flJ 1999 � 4 fa.I 3 7

INFORMATION TECHNOLOGY

Govern111ent to spearhead e-co111merce initiative

C yberspace is a new frontier thatoffers enormous opportunities to Hong Kong but in order to utilise

these the SAR must aggressively pursue ecommerce, according to Mr K C Kwong, Secretary for Information Technology and Broadcasting at a joint business luncheon.

11We are demonstrating the benefits of e-commerce to the commun i t y bybecoming a leading user. We will launchthe Electronic Service Delivery (ESD)scheme - a scheme to provide governmentservices over the Internet," he said.

Mr Kwong hopes that the scheme wi 11 increase awareness of e-commerce and act as a catalyst to pump-prime the development of e-commerce in the private sector.

11 By exploiting the convergence o f computing power, telecommunications and multimedia presentation, the Internet has created an ever expanding and digitally connected virtual commun i t y - a community that transcends geographical and time boundaries providing enormous business opportunities/ he said.

Mr Kwong said that in comparison to radio, which took 38 years to reach an audience of 50 million people globally, the Internet only took four years. Traffic on t he Internet doubles every 100 days and industry estimates predict e-commerce will increase to US$220 billion by 2001.

11Through e-commerce new markets can be reached that are too costly to be

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explored by conventional means. This is useful to SMEs which cannot afford to establish a physical presence overseas," he said.

Mr Kwong pointed out that e-commerce also r e d u c e s s a l e s a n d marketing costs.

"Sales activities wou Id be expanded simply by increasing the capacity of the network servers. This is cheaper and more flexible than employment of sales

--

personnel/ he said. Mr KC Kwong, Secretary for Information Through closer and Technology and Broadcasting, speaking at a joint

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trim down unproductive i n v e n t o r y , s h o r t e n production cycles and reduce throughput SM Es that make up 98.3 per cent of time. businesses in Hong Kong.

Using e-commerce can also enhance This will involve the establishment of an customer relationships and service. open information infrastructure, which at a

11 Online support services are more later stage will be opened up to the private efficient for customers. The services can sector, for the establishment of e-commerce. also be individually customised to build- The Government has invited tender for up customer loyalty in an increasingly the supply of the ESD system by the private competitive world, 11 he said sector.

Mr Kwong said the Government was The first phase of the scheme will promoting e-commerce particularly among be running in I ate 2000 covering the

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service of 10 departments and pub I ic agencies.

The Government also intends to provide a secure environment for e-commerce through the establishment of a local public key i nfrastru ctu re and certif ication authority.

11 With the establishment of digifal signatures and a public/private key mechanism, we will be able to establish the identity of the parties to an electronic transaction, authenticate electronic messages transmitted, guarantee the integrity and confidentiality of the messages and ensure that they cannot be repudiated/ he said.

Other government objectives are to provide a clear legal framework to enhance certainty in e-commerce transactions. The same recognition will be given to electronic records and digital signatures as that for their paper-based counterparts.

11 We are now working on a bi 11 to establish the framework, we aim to introduce the bill into Legco within the next quarter/ he said.

Finally, Mr Kwong said the Government aims to nurture the IT industry b y outsourcing government IT projects as much as possible.

"Starting in 1999-2000, all new IT development and maintenance projects will be outsourced unless there are overriding reasons for retaining the work i n- h o u s e . Our target is t o outsource two-thirds o f all n e w IT projects in Government by 2001 so as to create a market of sufficient size to stimulate the development of the IT industry/ he said. ■

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TOWN HALL MEETING -;Ai � -t-

Members meet with Legco Rep

Mr James Tien, the Chamber's Legco representative, met with about 30

members for an informal meeting on the evening of March 16.

With the intention of developing stronger communications between our Legco rep and Chamber members, Mr Tien answered questions and absorbed members I opinions so that he cou Id better reflect their views in Legco.

Some questions were about the telecommunications policy; others focused on the environment, competition policy, SMEs, the Cyberport and Mr Tien's position on his abstention from the vote of confidence for Chief Justice, Ms Elsie Leung.

Mr Tien answered al I questions frankly and gave his own candid opinions on various issues.

The evening went off productively and even ran overtime as members enthusiastically expressed their views.

A similar meeting will be held soon, so if would like to air your opinions please join us. ■

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Legco Representative, the Honourable James Tien, answers members' questions at the Town Hall Meeting in the Chamber.

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Mr Shalom Levy, a member from the Chamber's Envaronment Committee, asks Mr Tien a pertinent question.

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IifijJHlJ 1999�4.F.I 39

LEISURE VACATIONS

The Plettenberg Hotel. fi��J;l�£19 The Plettenberg )@"JS

Sun, sand and dra By Louise Parkinson

Cape Town, South Africa , i s renowned for spectacular vistas of

. dramatic cliffs cascading to the South Atlantic Ocean on the west side and to the Indian Ocean on the east. The difference in temperature is quite apparent and only the brave try the chilly Atlantic.

The best time to go is in the summer, which falls between November and February.

This is the time I traveled and was surprised by the similarity of the scenery to Hong Kong - the majestic Table Mountain surrounds hilly streets declining down to the city 'bowl' as buildings vie for space on the small space of flat land by the sea.

Si tuated on the slopes of Table Mountain, opposite to a reservoir and park, is Mayville House, a lovingly


restored Edwardian mansion dating back to 1905.

This historical Cape Town landmark evokes a bygone era of gracious living while offering personalised service standards required by the discerning traveler. The handsome period building is beautifully restored and refurbished in colonial style furniture. Each of the five en-suite bedrooms has been exquisitely decorated so that each has its own unique personality.

Other facilities include a sitting, breakfast and smoking room and swimming pool, which is overshadowed by the magnificent Table Mountain.

Mayville house is a few minutes from the city centre of Cape Town and within easy reach of many of the Cape's most celebrated scenic attractions; including the world renowned winelands, golf courses, beache s, the Victor ia and Alfred Waterfront and the Kirstenbosch Botanical

Gardens. Service at the small, exclusive guesthouse was unsurpassed. The inclusive full English breakfast featured delicious homemade bread. Even when asked for a deviation from the normal menu, in this case kippers, the host was kind enough to go to the market and supply them the next day.

This five star service was very different to what you experience in Asia's large hotels - it was personalised and you felt you were staying in someone's home rather than a hotel.

No children under 10 are allowed into the hotel, which ensures peace and quite. Prices start at R360 (HK$452) per night sharing with full English breakfast so when compared to Hong Kong, it is extremely reasonable.

One of the trips worthwhile taking is the sunset harbour champagne cruise in Table Bay. This takes place on a 58-foot

aon the eape gaff rigged schooner, which departs from the waterfront each afternoon and is only R60 (HK$75) per adult.

When we sailed the views and the sunset were spectacular, however it does get cool in the evening so wrap up - extra blankets are provided if required. Be sure not to drink too much champagne (all of which is free), as the sea can be quite rough!

Another day out is to hire a car and drive around the Cape on the coastal road to Cape Point. This is the most famous southern tip of Africa. Actually, Cape Agulhas is the most southern tip of Africa but is less well known. A funicular railway can take weary walkers up to the top of the peninsula or you can hike there. From the top you can take another cliff path to the absolute point of the peninsula and look out to sea and view the Indian Ocean to the east and the Southern Atlantic .to the west. Some people even say that you can

see a difference in the colour of the water - however this escaped me.

Driving further around the Cape onetravels on spectacular roads that seemingly grip the side of the cliffs as they tumble down to the choppy water below.

The bay that is next around from Cape Point is False Bay - a huge inlet that seems to go on for miles. In fact it is named 1false 1

because many explorers were deceived and believed they were sailing up the West Coast of Africa when in fact they had only passed Cape Point and still needed to negotiate the southern most tip Cape Agulhas. Many wrecks lay testament to this maritime deception.

Further along the coast is Boulder Bay. Swimmers can enjoy the sheltered cove full of huge rocks for diving off, along with the penguins who take refuge here in summer. This is truly a natural experience, with penguins appearing unaware of your presence.

As you drive further along the coast road you will come across quaint villages with fish and chip shops useful for a late afternoon dinner.

Another worthwhile adventure is to hike up the 3,000-foot Table Mountain. This is an arduous trek and should only be attempted by the fit. Other sightseers can take a cable car, which provides equally spectacular views of Table Bay and the surrounding area. On top of the mountain are a variety of restaurants and bars to celebrate your accomplishment if you hiked there.

There are numerous beaches in Cape Town, notably Camps Bay, which has unspoiled white sands and panoramic vistas.

Interested parties can take diving coucses to qualify for the PADI certificate. I did this and the water was exceedingly clear but the instructor had to carry a shark pod (to repel sharks) as a two-metre Great

Iifl'iJHIJ 19991¥ 4 ,El 41

LEISURE VACATIONS

White had been sighted. The price for a f_qur half-day course was only HK$800.

Another area of interest is the Victoria and Alfred Waterfront, this area features shops and restaurants overlooking Table Bay.

An absolute must for holidaymakers is a tour of the Stellenbosch winelands. Tourists can hire a driver and guide to visit exclusive vineyards and sample wine at a very reasonable cost. We had lunch at a small hotel in the shade of trees situated in a beautiful garden. Be aware of the quota of wine you can bring back into Hong Kong because at these prices it is very easy to over buy.

After fully experiencing the beauty of the Cape we decided to make our way up the coast on an exhilarating drive along the aptly named Garden Route to Plettenberg Bay, which is known for its temperate climate.

We stayed at The Plettenberg; a hotel built on a rocky headland with breathtaking vistas of sea, sand and mountains. The hotel has 40 superbly furnished rooms each done in an individual style.

Rock, deep sea fishing and diving can be arranged by the hotel. There are two Gary Player designed golf courses in the vicinity and you can enjoy bowls and tennis at the nearby Country Club. Stunning coastal drives to the Tsitsikamma Forest, Nature's Valley and Elephant Walk also allow you to soak up the tranquility and wonder of the natural environment.

Plettenberg has three unspoiled beaches one of which - Pojnt Beach - is 20km long.

The nearby town of Knysner provides ex c e U e r:i t .. s h o p p i n g o p po rt u n i t i e s , particularly ·in locally produced ·arts and· crafts. We went there on Christmas Eve and were able to fulfil I all our gift requirements. Go down to the South Keyes by the waterfront and indulge in a lunch of locally caught seafood and South African white wine. There are plenty of charismatic small restaurants serving tasty food at reasonable prices.

Plettenberg also has a bustling high street with street cares and shops selling anything from swim wear to scented candles.

A first-class Italian restaurant can be found near the town centre. Here guests can experience breathtaking sea views and delectable food.

Frequent boat tours leave the main beach to view seals, dolphins and whales that mate and calve in this unpolluted bay.

A holiday in South Africa represents good value for money. Luxury tours and accommodation are at the upper end of what you would expect for this standard, and in my opinion, surpass anything in Asia.

Whilst traveling in Cape Town and to Plettenberg we did not feel unsafe, however due to higher crime rates particularly in carjacking you need to be extra vigilant.

South African Airways flies to Cape Town via Johannesburg every Monday Wednesday and Saturday, a three-month roundtrip excursion fare costs HK$5,980. ■

Mayville House, Cape Town. 00f:U&m�B9 Mayville House


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Iiffi}HIJ 19991¥4 f.l 43

ROUNDTABLE

Countermeasures to prevent industrial espionage

The word espionage conjures up images of the KGB, MIS, James Bond and the CIA, so people tend

not to believe that such a thing exists, but it's happening here and now, according to Mr Bruce Wimmer, Regional General Manager, Pinkerton Consulting Services.

Mr Wimmer was speaking at a Roundtable luncheon on February 10.

"Many people think of espionage as what happened during the Cold War between the US and Soviet Union. But times have changed - the world of espionage today is in business - and it is very real," he said.

Almost every company gathers information about i ts comp etition. Competitive intelligence is information that can help to enhance your company's position.

"In most cases that information can be gathered through legal, ethical and noncovert methods, this is not business espionage. Business espionage uses cloak and dagger methods that are unethical and, in many jurisdictions, illegal," he said.

The Economic Espionage Act of 1996, enforced in the US, is defined as trade secrets that are stolen, taken or carried away, or procured by fraud or deception.

"E s p i o n a g e i s c o mmi t t e d b y Governments that are integrated with business, competitors and any freelancers out there, who sell trade secrets," he said.

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To protect your business it is important to increase awareness of espionage amongst staff.

"Classify sensitive information on a needto-know basis. If you try to protect everything you will protect nothing. Install a security reporting syst�m like a hotline were people can report anonymously," he said.

Mr Wimmer suggested that companies should work closely with legal staff to develop good non-disclosure and noncompete agreements.

"Have a review system for corporate information releasing and do background investigations of key employees, particularly new hirees and people being promoted," he said.

Other espionage countermeasures are using crosscut shredders; the old strip shredders are not good enough. Control access to buildings and sensitive areas of the facility.

Companies should enforce a clean desk policy so all sensitive documents and computer disks are removed from the desk and locked up. Also computer security measures Ii ke fi rewal Is, login codes, automatic logoff and secure screensavers should be used.

"Periodic technical surveillance countermeasure surveys can be done which sweep premises for bugs� Data can be encrypted for telephone and fax lines," he said.

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More than six million devices used in espionage were sold in Hong Kong in 1997 - that is one for every person in the SAR.

"Laws are not sufficient for protection -wiretap laws are outdated and not in I ine with today's technology," he said.

One method used frequently by spies is to gather secrets under an assumed role.

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11 We have documented cases o f individuals working for a Japanese News Network posing as journalists who were gathering sensitive information. Another successful method is to pose as a graduate student doing research - in this role you're innocuous and pose no threat-it's amazing what information companies give out, 11 he said.

The absolute best role to assume though, is one of a good potential customer - it's incredible what information a company will reveal to get a sale.

11 Pretexts are easily used even over the telephone, 11 he said.

Often spies will disguise themselves as legitimate tourists or visitors to obtain trade secrets.

11Some Japanese visitors on a tour of a US company were found taking covert photographs, dipping their ties into secret solutions and using their shoes to pick up metal chips,U he said.

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Another method used is raiding the "black forest" (black garbage bag) of ·a company.

11 lts incredible what people throw in their trash. CNBC News asked me to do a trash raid on camera -we found the bank statements of a company for a year, profitloss statements of 22 outlets for a year, special arrangements they had with suppl iers etc and H o n g K o n g ID information -the guy from CNBC could not believe it, 11 he said.

Spies may also break into a company bypassing the locks and covertly copying documents or-physically stealing them.

"In Taiwan a company who made pipe fittings had a big contract coming up. Documents were stolen for the contract they were bidding on and the company went bankrupt. A toy manufacturer in Taiwan showed off his latest designs to some people (competitors) who were very interested, and got his home address. That

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evening the toy models were stolen from his house, 11 he said.

Another method is recruitment or penetration.

11A Japanese company was trying to penetrate a competitor with a secretarial spy. You must be careful who you hire, 11 he said.

Hiring people away is another method used - for example if you have experts with specific knowledge competitors may pay them more money and hire them in order to obtain that knowledge.

"In Hong Kong a company manufacturing dim sum hired away a senior person in a similar company resulting in a major espionage case, 11 he said.

Hacking into a company's computer network is another example of espionage.

. Planting covert listening devices such as wiretaps is another common method for obtaining sensitive information. This can be done on a fax line or planted in a calculator or electric socket device. ■

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I iffi JH-tJ 1999 ff 4 � 45

CNPC

Revised PRC contract law may benefit business

A new contract law, that is in the drafting process at the Ninth National People's Congress, may

have far reaching advantages for Hong Kong enterprises that do business on the Mainland, according to Ms Angeline Hui, Senior Sol ic i tor , Corporate Legal Department, Jardine Matheson.

"The new PRC contract law should be generally welcomed by foreign investors for providing a uniform basis for contractual legal principles, getting closer to Western legal concepts and setting out a better legal framework for foreign businessmen to do business in China," she said.

The new comprehensive law will unify existing laws, taking into account conditions that have come before and absorb useful international experience.

The aim is to enhance the development of a healthy socialist market economy.

"Because of the introduction of new legal concepts in the law, it will, however, create uncertainty in the short term but given time, the Chinese court will be able to develop and accumulate practical experience and legal principles in interpreting such concepts based on the PRC's unique business environment," she said.

Officials will use the practice experience gained from enforcing the existing Economic Contracts Law, Law of Economic Contracts

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Involving Foreign Interests and Law on Technological Contracts.

The new law will lean to improving the ease of administration by absorbing as many rules as possible from administrative regulations and judicial interpretation on contracts that proved to be effective in the past decade.

Ms Angeline Hui, Senior Solicitor, Jardine Matheson.

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Mr Gu Angran, Chairman of the Commission of Legislative Affairs under the NPC Standing Committee said: 11The three existing laws have made significant contributions to safeguarding the rights and interests of c'ontract parties, promoting economic growth, technological advances and expansion of foreign economic and trade affairs."

However he pointed out that as China continues reforms and opens wider to the outside world, the regulating scope and some rules of the three contract laws are no longer compatible with new economic and social development.

The basic principles of the draft contract law are "equality, wi II i ngness, fairness, honesty and credibility".

He said the parties involved had the right to conclude contracts according to their own will. However, the content and process of concluding the contract must a lso be in l ine with the law and administrative regulations.

Referring to the conclusion and fulfillment of contracts, he pointed out that the rights and duties of the parties involved should be defined by conclusion of the contract. He said that taking everything possible into consideration before concluding contracts will be conducive to safeguarding the legal rights and interests

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of the parties involved, reduce disputes in existing contracts and facilitate prompt solutions to disputes.

He noted that fulfillment of contracts is linked with interests of the parties involved and significant for commodity circulation and economic development.

He pointed out that the draft contract law emphasises the principle of complete fulfillment of contracts. That is to say the parties involved have to perform their specific duties according to the agreement in contract and either of them must not change or stop performing the duties unilaterally.

In order to ensure the parties involved fulfil! contracts, maintain trade order in the market, compensate losses that incur on other parties and safeguard the legitimate rights and interests of the parties involved, the draft contract law goes further to perfect the rules on liabilities of violation of contracts.

11This is an important rule to ensure that the parties involved will perform their duties in accordance with the contract," he said.

The sub-provisions of the draft contract law retain the forms of contracts that the three existing contracts laws stipulate, including contracts of supply and sales, electricity supply and usage, fund lending, leasing, project underta king, project engineering, storage and preservation technology.

At the same time, in I ight of new developments in economic and trade practice, the draft contracts law stipulates additional forms of contracts, including contracts of leasing for fund raising, donation, trust, brokerage and mediation.

Gu said that the existing Economic C o n t r acts law, Law on Ec o n o m ic contract Involving Foreign Interests and Law on Technological Contracts would cease immediately after the new law is adopted. ■

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INTERSHIP � f- 1: � f # t1

Summer internship scheme for Mainland operations

The Chinese University of Hong Kong invites businesses with Mainland

operations to open up internship opportunities this summer

As one of the leading businesses withoperations on the Mainland, you are

well aware of the recruitment problems you face. Now the Chinese University of Hong Kong has a.programme designed to help improve your human resources on the Mainland. Through arranging internships via the China Career Development Award Programme, you can enjoy the benefits of: • additional human resources to complete

short-term or closed-end projects; • an early testing-ground to identify

suitable talent; • enhancing your corporate image by

your efforts of training young talent.The programme offers a six to 12-week

summer internship scheme for next-tofinal year undergraduate students from all disciplines to work at your branch operations in B e i j ing, Shanghai, Guangzhou or other cities in China.

The university will arrange students 1

accommodation, transportation and insurance. We will also provide an extensive support network to ensure the well-being of the students throughout the period of internship training.

Since the introduction of the

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programme in 1997, the response from students and companies has been remarkable. About 200 students worked as interns in the Mainland offices of 51 companies/enterprises in Beijing, Shanghai, Guangzhou and other cities in China over the past two summers. lnternships were offered in accountancy, advertising, banking, freight services, terminal operation, property, manufacturing, market research, retailing, hotel management, trade promotion and software development. Feedback from participating companies and students has been most encouraging.

Interested companies should complete the following and fax to the Office of Student Affairs of the Chinese University of Hong Kong at (852) 2603 5933 or emai I to [email protected]. For enquiries, please contact Miss Winnie Tsang on (852) 2609 7220.

Company: _ ________ _

Contact Person:

Title: ___________ _ Tel: ___________ _ Fax: ___________ _

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Iiffif:l flJ 1999 � 4 .FI 47

CHAMBER EVENTS � fh � �

Fun and frolics at the Chamber•s 1999 Spring Dinner By Simon Ngan

If anyone were to look for examples ofcamaraderie in the Chamber, they need not l o ok further than the annual

Chamber Spring Dinner. This year it happened on March 12.

Despite the challenging econ omic conditions, the Organising Committee was able to muster a list of 50 prizes. Although this was less than compared to last year, it was nevertheless considered to be an achievement given the business climate.

The Spring Dinner has become a yearly fixture on the Chamber 1 s calendar since it was revital ised in 1994 by the SME Committee. For some, the Dinner serves as a timely event to express appreciation to their staff. Whatever the case, the event provides a cost-effective and hassle-free solution to owner-managers.

This year 1s Spring Dinner was honoured by the presence of Mr Chau Tak-hay,

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Secretary for Trade and Industry and was c o-h o sted by the Chamber 1 s Deputy Chairman and SME Committee Chairman, respectively Mr C C Tung and Mr Denis Lee.

T h e C h a m b e r w i s h e s t oackn owledge the prize contributions by members as well as those who subscribed to places at the Spring Dinner. The Chamber a l s o t h a n ks t h e O r g a n i s i n gCommittee, which has put in time and effort to make the event a continued success. ■

Light entertainment for the evening came in the form of Ms Yeh You Qi, who is reportedly an up-and-coming star on the Mainland and also Or Eden Woon, Chamber Director and Mr Wu Chieh Ming (right), Director, Far East Trade Service.

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A pair of Feng Shui Lions were won appropriately by twin brothers.

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Thanks to Mrs Maria Cheung, for her hard work and dedication to ensure the success of the Spring Dinner.

There were 16 participants in the Beer Drinking Competition. The three winners all came from the same company, GL Design.

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Theatre / Exhibition and Conference Centre AT

22/F United Centre, 95 Queensway, Hong Kong (above Admiralty MTR Station)

Suitable tor :

Exhibitions

Meetings

In-House Trainings

Sales Presentations

Press Conference

Workshops

For details please call

2823 1205 / 2823 1246

Room Rates :- Chamber Members get 20% discount

Monday - Friday

Seating capacity

09:00 - 17:30 09:00 - 13:00 or13:00 - 17:00 Extra Time Per Hour

Theatre/Exhibition

11 O seats (1,300 sq ft)

$8,100

$5,600

$1,540

Conference Room 1 Conference Room 2 Committee Room 40-60 seats (830 sq ft) 15-30 seats ( 4 70 sq ft) 5-8 seats (135 sq ft)

$5,200 $2,950 $840

$3,600 $2,000 $580

$990 $550 $160

Includes - Overhead Projector, Whiteboard, Reception Area, Slide Projector, TVNideo recorder and Self-service Cafe Bar

NEW PUBLICATIONS ON FRANCHISING

Franchising training kit {4tt+.�&*�ij m}

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Set of two books comprising a Planning Guide and an Operational Guide-•��-·��ffi��·�ffi� At HK$200. A choice of either Chinese or English versions available � 1J � 1'-200 JG - • • 11 if Tf k � � k i&. "f 1*' ilBt

1998 Directory of Franchise Operations in Hong Kong {1998��4ttt.�& * Wf ;;t� il}

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A Listing of 111 franchise operations in HK, with contact & investment information � §1] � � 111 Fai 4t -tt j� * Wf !Jfl a� JTftf f-i-Jl R :it :f �4-

At HK$80 (members)/HK$100 (non-members)-t" l 1ii111Ut-�t 80]t , Jfir � ��t10o]t Most text in English, complement with some Chinese �x_��kA�·Wf��Jl-�f#mifrrk

Available at the Chamber at 22/F United Centre, 95 Queensway, Hong Kong Enquiries please call 2823 1250 �#JL3d' Jx./r---A_f1j.j-;�fa.t�,t-Jl4jf (�4ff:..t-t ,,.;22,tt-) :t-t��!k.�2823 1250

CHAMBER IN ACTION

Budget Heads Cham�er Activities

After the Lunar New Year holiday lull, levels of activity throughout all Divisions of the Chamber picked up

in the month under review. Highlights of the month were, Chamber

activities related to the announcement of the Government's 1999-2000 Budget, continued preparations for the Pacific Basin Economic Council 1 s International General Meeting (IGM) in Hong Kong in May and the opening of the Chamber Club restaurant facilities at Cheung Kong Center in Central. A joint business community luncheon went ahead on March 19 with the Financial Secretary as the speaker. It was attended by 600 business leaders.

The Economic and Legal Affairs Division once again held its popular 11Business and the Budget 11 luncheon following the Budget announcement, the function this year being held in the Chamber's own Conference Room.

The International Business Division continued its work in putting together the programme for the PBEC ICM and ensuring the logistics are in place for a successful ICM in May.

The Chamber's Legal Com mittee issued a press r elease re-stat ing i ts confidence in the local legal system, which was especially aimed at international business.

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The newly constituted Industry and Technology Committee held its first meeting on March 2 to discuss the details of a submission paper to the Commission on Innovation and Technology. The paper analyses the interim report presented by the Commission in late 1998. The paper was submitted to Prof Tien Changlin, Chairman of the Commission on March 15. A press release on our submission was issued, for detail_s please see our Web site: www.hkgcc.org.hk. At its meeting the Committee also heard a presentation by Mr Daniel Ng of Wharf Cable on the development of Internet and multimedia services in Hong Kong.

"Services 200011 Study On March 1 a press statement was issued

publicly announcing the 11 Services 2000 11

study. It coincided with the date when the WTO Financial Services Agreement came into force.

The CityU research team began work on the first survey which consisted of p�rsonal interviews with about 20 members of the HKCSI from various sectors. The first survey is in preparation for a comprehensive survey to be conducted later on. Work has also begun on compilation of the 11Handbook of

GATS commitments11•

About 100 Chamber members were surveyed by the Financial Services Committee

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this month on the Money Lenders Ordinance. The Committee concluded that the Ordinance in general was satisfactory and no immediate review would be required.

A member survey on the 11 Need in Employing PRC Nationals11 conducted early in the year achieved a response rate of three per cent. The-survey reveals that there is no strong urge amongst respondees to recruit PRC nationals. Those who have had experience in recruiting PRC nationals agreed that it was dif f icult to obtain employment visas for them due to excessive bureaucratic procedures in both Hong Kong and China.

Web site: www.hkgcc.org.hk The new membership directory was

placed on the Chamber Web site in March. The new edition provides four modes of searching the membership database. It also offers more business information on members, including company background and business activities.

A new corner was introduced on the Web site in February. The Chamber News notifies members of Chamber activities, new services and other important Chamber announcements.

There were 22 tenders for Government Supplies Department and seven tenders for other Departments announced on the Chamber Web site. ■

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Left: Welcoming banquet for the Chamber delegation hosted by the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), PRC.

Right: Meeting with Mr An Min, Assistant Minister of the Ministry of Foreign Trade and Economic Cooperation. Left to right: Dr Eden Woon, Chamber Director, Mr Terence Sit, Leader of the Delegation and Chairman of the Chamber's Shipping Committee and Mr An Min.

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A small delegation (above) led by Mr Brian Stevenson, Chairman of the Hong Kong International, visited Okinawa, Japan, recently to participate in the "Hong Kong Business Seminar" organised by the Naha Chamber of Commerce and Industry with the support of the Okinawa Prefectual Government. During their visit, the delegation took the opportunity to call on Mr Takashi of the Naha Chamber on February 24 to discuss matters of mutual interest. For more details about Okinawa and Naha Chamber, please contact its representative in Hong Kong, Mr Yoichi Kinjo at Tel: 2501 7250 and Fax: 2868 1455.

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Top: Speakers at the Hong KongGuangdong Environment Partnership Seminar on Environment and Energy on March 15. From left to right: Mr Wang Zikui, Deputy Director General, Guangdong Environmental Protection Bureau; Mr Barrie Cook, Chairman of the Chamber's Environment Committee; Mr John Szeto, Vice Chairman of the Chamber's Environment Committee and The Honourable Christine Loh, Chairman, Legco Environmental Affairs Panel.

Bottom right: Mr Gordon Siu, Secretary for Planning, Environment and Lands, HKSAR Government, spoke at the luncheon.

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CHAMBER IN ACTION

The Asia Committee organised a Roundtable on March 1, at which Mr Christopher Rees (left), Senior Trade Commissioner of.Australia in Hong Kong, was the guest speaker. In his presentation, Mr Rees told members how Australia survived the Asian economic crisis and briefed members on the latest economic developments in Australia. He was welcomed by Mr Joseph Poon (right), Asia Committee Chairman . . m:Jtt•�•M3.F.I 1 El.tH,mt:J:•tr' �-1UH}5i�Jjtjjfij$-_€.�iffi$-trn�Jtrr (ti::) 0 e...t' ¥

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With the intention of bringing together venture capitalists and new, cuttingedge high tech companies and talent, E1 Mix held their first informal gathering on the evening of March 9. Innovation in emerging areas such as multimedia, the Internet and home networks requires skills from various disciplines. The idea of this event was to bring together entrepreneurs, technical experts, artists, fresh graduates, professionals and venture capitalists in a party atmosphere so they can explore commercial opportunities or just mingle and meet like-minded people.The party was hosted by Dr Lily Chiang (left) V - · Chamber,the Chamber and the Hong Kong Po nic University's Multimedi Innovation Centre. Dr Lily Chiang commented that the even a een a major success and that she looked forward to holding a similar event in the near future. One partygoer, Dr Pascale Fung, from the Hong Kong University of Science and Technology, said that she believed this type of event was imperative for Hong Kong 1s vision of becoming a high-tech hub.

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Mr Manohar Chugh (right), Chairman of the Europe Committee, welcomed Mr Etienne Reuter (left), Head of the Office of the European Commission in Hong Kong. He spoke at a Roundtable on the Euro. ��-�-±R�Mm(�)Mffi�M��-�

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Mr Peter Sutch (left), Chairman of the Chamber, met with Mr Bo Xilai (right), Mayor of Dalian, at a dinner or&anised in his honour when he visited Hong Kong. The dinner was attended by 80 particirants from thelocal and internationa business community. Mayor Bo outlined areas for international cooperation in Dalian and its economic development. *�**�-�*(�)�-��·�iffi·±·

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CSL

Comprehensive Services

• Exhibition organising• Conference/seminar management• Programme arrangement• Corporate and c : Roadshows

eremonial eventsPress Conferences

For enquiries, please contact: Ms Carmen Ho / Ms Jenny Wong E-mail: [email protected]: (852) 2823 1291 / 2823 1268Fax: (852) 2527 0380Website: www.hkgcc.org.hk

Chamber Services Limited A wholly-owned subsidiary o(The Hong Kong General Cham/Jer of Commerce

Apr 21, 99

COMING EVENTS

Seminar: Business Intelligence in a Declining Economy (English)

Apr 21 - May 5, 99 Seminar: Management Update on Labour Laws [session 5 - 7] (Cantonese)

Apr 22, 99

Apr 22, 99

Apr 22, 99

Apr 23, 99

Apr 23, 99

Apr 27, 99

Apr 28-29, 99

Apr 29, 99

Apr 29, 99

Apr 30, 99

Apr 30, 99

May 3, 99

May 5, 99

May 6, 99

May 6, 99

May 7, 99

May 12, 99

May 12-13, 99

May 13, 99

Apr28,99

Training Course: Professional Selling Techniques for Sales Teams - How to Succeed in Face-to-Face Selling (Cantonese with English Manual)

Roundtable Luncheon: Short, Medium and Long Term Financing Solutions - Unearthing the Value of Your Company's Assets (Cantonese)

Training Course: Business Applications of Enneagram (Cantonese)

Joint Conference: Hong Kong Taiwan Economic Forum 1999 (Putonghua)

Training Course: Coaching & Teambuilding Skills for Managers & Supervisors - How to Inspire Commitment and Cooperation to Build Winning Teams (Cantonese with English Manual)

Annual General Meeting

The Chief Financial Officers Forum - "Leading Change: Managing in the New Economic Reality" (English)

Training Course: The Latest Developments with PRC Capital Gains Tax and Mitigation Measures (Cantonese)

Roundtable Luncheon: Technology and its relevancy to Hong Kong traditional manufacturing industry (Cantonese)

Roundtable Luncheon: Franchising in Mainland China -Experience Sharing with TCBY and Shenzhen Auntie Shirley Laundry House (Cantonese)

Guangzhou New International Airport - Business Opportunities (Cantonese)

Training Course: How to be an Outstanding Receptionist (Cantonese with English Manual)

Fellowship Dinner at the Races in Happy Valley (English)

Subscription Luncheon: Reform of China's Banking Industry and Its Future Development (Putonghua)

Cocktail Reception in Honour of European Consul Generals in HK (English)

Roundtable Luncheon: How do Asian Entrepreneurs and Investors benefit from Offshore Trusts? (English)

Roundtable Luncheon: Streamlining Sino-Hong Kong Manufacturing Management by applying Information Technology (Cantonese)

Training Course: Grammar Workshop (English)

Roundtable Luncheon: The Latest Developments in the Economy and Market Situation of Russia (English)

COMMITTEE MEETING

Financial Services Committee Meeting

(Regular committee meetings open to respective committee members only,

unless otherwise specified.)


Diary Dates

Apr 28-29, 1999

The Chief Financial Officers Forum

"Leading Change: Managing in the

New Economic Reality"

2 days Conference

Furama Hotel

(Enquiries: Ms Yvonne Kwan,

Tel 2823 1269)

May 6. 1999

Subscription Luncheon

"Reform of China's Banking

Industry and Its Future

Development"

Liu Jinbao

Chief Executive of the

Bank of China's

Hong Kong-Macau Regional Office

and

Chairman of the Hong Kong

Association of Banks

Island Shangri-La Hotel

(Enquiries: Ms Joe Cheng,

Tel 2823 1225)

n) e I

May 14-19. 1999


32"d International

General Meeting

HK Convention and

Exhibition Centre

(Enquiries: Ms Polly Leung,

Tel 2823 1202)

Website: www.pbecigm99.org

11r

company,n

9 9 9 - 2 0 0 0

scheduled to publish this August, in book form and on Chamber's homepage, **��OO�**�A�W�•�Afffi�W™**·�•-�•-•nhl•��Wfi 0

to attract Business

Opportunities

As a Chamber member, you may highlight your company profile in addition to a free listing in the Directory:

-��j*��j��¾�T��#

1. Corporate Logo Insertion 0'§'.l-tJtt

(1) Printed form in the Directory WI�:gfffi:tJDfP0'a'HJtt (HK$500) ......... o (2) Appeared on Chamber's homepage 0 �-tltt..ttftJ (HK$500) ........... oDo both (1) and (2) for just ffirfi-&tt , .Rt& (HK$750) .......................... O

Please cut and paste ypur original Company Logo here (or attach original artwork) Finished logo size about 0.78" x 1" - on printed directory in Black & white - listed in Chamber's homepage in Colour

2. Photo Insertion �R-J:!i" ......................................................... O 3. Product Photo/ other information £�11� / !t1iliiU1 .... O

(Photo)

Company Chief i}��A

HK$250 per year �1¥ HK$250

Name: _____ _ Pi :g Position:

(Photo)

Business Contact ��ij��A

HK$250 per year �1¥ HK$250

Name: _____ _ Pi_:g: ___ _ Position: ____ _

please paste your Product Photo/ other information here

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HK$2,200 per year �1¥ HK$2,200

4. Company Name in Red Print 0 '§'.l :eH��I ($750) ........... O

5*. Advertising Insertion f7'.lffe!/;E ............................................. 0

Please inquire for advertising rates for different positions of advertisement space in the Directory

Telephone: (852) 2823 1288 Fax: (852) 2527 9843 Email: [email protected]

For insertion, please complete this Form and send your cheque made payable to "The Hong Kong General Chamber of Commerce" to

22/F United Centre 95 Queensway Hong Kong

Enclosed is a cheque for HK$ __ _ ________ Cheque No.: Company Name: Membership No.: Address: _________ __________________ _

Contact Person: Tel: _______________ Fax: _____________ _

Signature & Company Chop:

(Authorized Executive & Name in Block letters)

Date: __________ _

Note: Unless otherwise specified, insertions in the printed Directory are in black and white; Homepage placements are In colour close to speci

supplied.

All ADs (Items 2-5) WILL APPEAR IN THE CHAMBER HOMEPAGE MEMBERSHIP DIRECTORY PAGE, FREE OF CHARGE, UPON RECEIP

YOUR INSTRUCTIONS.

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