britain in hong kong jan-feb 2014
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BritainThe Official Magazine of The British Chamber of Commerce in Hong Kong Issue 29 Jan - Feb 2014
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Best Foot Forward
The Road Ahead for Hong Kong’s SME Community
www.britcham.com
The British Chamber’s Sterling Members
January-February 2014
The Official Magazine of The British Chamber of Commerce in Hong Kong
Room 1201, Emperor Group Centre, 208 Hennessy Road, Wanchai, Hong KongTel: (852) 28242211 Fax: (852) 2824 1333 Website: www.britcham.com
Britainin Hong Kong
Publisher Paul Davis [email protected]
Editor Gina Miller [email protected]
Editorial Bruce Andrews Support [email protected]
Kieran Colvert [email protected]
Design & Portia Le Production [email protected]
Ester Wensing [email protected]
Advertising Claris Tam [email protected]
Abid Shaikh [email protected]
Executive DirectorCJA Hammerbeck CB, CBE
General ManagerJessie Yip
Marketing and Communications ManagerEmily Ferrary
Business Development ManagerPhillippa Cook
Membership ManagerLucy Jenkins
Events ManagerStephanie Rose
Events ExecutiveMandy Cheng
Events and Marketing AssistantEmily Chan
Finance Manager Michelle Cheung
SecretaryYammie Yuen
Office AssistantSam Chan
© All published material is copyright protected. Permission in writing from the Publishers must be obtained for the reproduction of the contents, whole or in part. The opinions expressed in this publication are not necessarily the opinions of the Publishers. The Publishers assume no responsibility for investment or legal advice contained herein.
Business Angel ProgrammeNeil OrvayAsia Spa & Wellness Limited
Business Policy UnitTim Peirson-SmithExecutive Counsel
China CommitteeTim Summers
Construction Industry GroupNigel WhiteGammon Construction Limited
Education CommitteeStephen EnoBaker & McKenzie
Environment CommitteeAnne KerrMott MacDonald Hong Kong Limited
Financial Services Interest GroupRichard WinterQuam Limited
HR Advisory GroupBrian RenwickBoyden Search Global Executive
ICT IT CommitteeCraig ArmstrongStandard Chartered
Chairs of Specialist CommitteesLogistics CommitteeMark MillarM Power Associates
Marketing & Communications CommitteeAdam O’ConorOgilvy & Mather Group
Real Estate CommitteeJeremy SheldonJones Lang LaSalle
Scottish Business GroupJohn BruceHill & Associates
Small & Medium Enterprises CommitteeViktoria KishInternational Study Programmes (HK Ltd)
Strategic Supply Chain ForumDominic JephcottVendigital Limited
Women in Business CommitteeSheila DickinsonThe Fry Group
YNetwork CommitteeRory GammellJones Lang LaSalle
Level 12, Infinitus Plaza, 199 Des Voeux Road,Sheung Wan, Hong KongTel: (852) 3796 3060Fax: (852) 3020 7442Email: [email protected]: www.ninehillsmedia.com
Cover Image: retrorocket
British Chamber of Commerce Secretariat
CONTENTSIN DETAIL Chairman’s Message 4 News 6 New Appointments 8 COVER STORY Best Foot Forward 10 BUSINESS The Importance of Backing Exports 14 FEATURE ARTICLE Angels and Other Strangers 18 REAL ESTATE Hong Kong’s Retail Reign 22 FINANCE Five Horses Worth Betting On? 24 LOGISTICS Headed for Blue Skies 27 DEVELOPMENT Paying for China’s Urbanisation 30 NGOs Strengthening Corporate Social Responsibility 32 LOGISTICS Asia Logistics and Maritime Conference 35 SURVEY The Money, The Method, The Job 38
LIVING No Place Like Home 41 Artistic Merit 44 Rugby Hong Kong 46 Business on the Menu? 48 New Beginnings, New Adventures 50YOUR CHAMBER Christmas Drinks 54 Member Discount 56 Member Get Member 58 Shaken Not Stirred 60 Perspective 62
IN DETAIL
LIVING
YOUR CHAMBER
Chairman's message
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Galloping Online in Year of the Horse
By the time you are reading this, we will have entered the Year of the Horse. Inevitably I have
been thinking about what to write with a “Horse” theme! Rather than taking the usual “what do the fung shui masters say?” way out, I decided on a different tack.
It is arguable that for all of human history until the last few hundred years, the “innovation” that changed our way of life most was the discovery of how to ride a horse. Before that all distances on land had to be covered at walking speed, whether for peaceful means or in war. Horses dramatically increased the range and speed at which human interaction could take place. We tend to think about this in terms of time saved and distances covered. We could do the same things much faster. But what it enabled was not simply more of the same, speeded up, but a change in the possibilities for human collaboration.
Man’s ability to cooperate with a broader range of people was transformed. No longer were only those in your local village or tribe available for “collaboration”. The impact of this goes beyond trading to more complex arrangements that today we might describe as global outsourcing. Simply knowing more people dramatically raised the possibilities, not just in business, but also in academic and intellectual work and indeed conflict.
Railways increased this “range” of interaction further but they have done so at the margin rather than a transformative level. Air travel is simply too expensive to transform at the scale of the entire population. For me the innovation we are currently experiencing that matches, indeed exceeds, the horse in its transformative power is the Internet. Suddenly the number of people one can reach – one’s “neighbours” if you like – has increased by orders of magnitude. As with the horse, this is not simply a matter of the speed of communication, (though the speed is remarkable), but the scope for collaboration is also transformed. Not only can messages be exchanged faster, but collaborative Nick Sallnow-Smith
work can also occur that once would have been impossible. The importance of this was underlined in a recent Scientific American article on inventions. The article noted that inventions were rarely the consequence of a solitary boffin sitting in a lab waiting for a “eureka” moment but more typically of a collaboration between an extended group of scientists across continents.
We have only an early and inadequate sense of what this will mean. One consequence is likely to be that trade in physical goods, or indeed virtual data, which has driven the development of economies and created cities as the nodes for that trade, will no longer be the drivers in the future. Collaboration between widely scattered individuals across the world will create value and employment. Everyone is potentially your neighbour now. Cities may still thrive because of the human need for social contact but the people with whom you collaborate to create wealth will be all over the planet.
What does this mean for our Chamber? It is already more than a networking group that permits useful introductions. For example, we “collaborate” across our membership to produce our policy papers. But we need to think more deeply about how we can do this better. How can we enable collaboration between members here and outside Hong Kong? Are there innovators in these fields who could challenge our conventional thinking before we become irretrievably “last century”? Let us know your thoughts on these matters as we gallop into the Year of the Horse.
Oh, and Kung Hei Fat Choy!
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News
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The British Chamber of Commerce is delighted to announce that RBS have recently upgraded their corporate membership to become the Chamber’s 20th Sterling Member.
The RBS Group is a large international banking and financial services company. Headquartered in Edinburgh, the Group operates in the United Kingdom, Europe, the
Middle East, the Americas and Asia, serving over 30 million customers worldwide.
R B S a r e c o m m i t t e d t o supporting their cl ients’ needs g loba l l y w i th an extensive range of products a n d s e r v i c e s i n d e b t financing, global markets, risk management solutions and transaction services.
The British Council launched a Skills for Social Entrepreneurs programme in 2009, a global programme rolled out in 14 countries providing socia l entrepreneurs , NGO practitioners, and community leaders with skills training and access to UK expertise.
In Hong Kong, the British Council partners with Community Business, a non-profit dedicated to advancing corporate social responsibility in Hong Kong and Asia, to organise capacity building initiatives for social enterprises in Hong Kong, including business skill-trainings and best practice sharing by successful social entrepreneurs from the UK.
Since April 2013, more than 120 social entrepreneurs in Hong Kong have used the programme.
Hong Kong’s financial services and transportation sectors lead the way in delivering effective communications strategies in 2014, according to a new global report from MHP Communications. The first annual Effective Communications Index, polled by Populus, has found that 30% of Hong Kong respondents say that financial services companies are the most effective communicators in the region.
Hong Kong res idents a l so believe that their transport companies are among the best communicators they encounter, underpinned by a strong sense of these organisations’ community engagement, with 30% of those surveyed in Hong Kong saying transport companies are the best at having a connection with the community.
RBs becomes Chamber’s 20th sterling Member
Building Local social enterprise Capacity
Give Them something to
Talk about
News
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Mr CY Leung’s second Policy Address on 15 January revealed his chief initiatives designed to support the needy, and ensure Hong’s Kong’s sustainable economic future. The Chief Executive promised measures to ease the burdens of a city beset by poverty and pollution. Some of the key points include:
• HK$10 billion in subsidies to get polluting commercial vehicles off the road;
• Possibly end policy restricting property development in Pok Fu Lam and Mid-Levels;
• Develop a new town the size of Fanling or Sheung Shui;• Reclaim 2,000 to 3,000 hectares outside Victoria Harbour;• Explore incorporating nursing homes for elderly into
redevelopment projects; and• Set up a committee on standard working hours.
Hong Kong continues to attract companies looking to enter china, though talent continues to be in short supply, according to the 2014 Michael Page Salary & Employment Forecast for Hong Kong released in late January.
The report’s key findings included: 41% of Hong Kong employers expect a p ro fess iona l sk i l l s s h o r t a g e i n t h e coming year, 74% of employers expect to increase salaries, but this will vary according to performance, and 52% will offer flexible working arrangements.
In global survey on Anti-Money Laundering (AML) released b y m o n t h b y K P M G , t h e company’s finding showed that, although anti-money laundering measures are an increasing priority for senior management across Asia, awareness and take-up still lags behind the global average.
This was KPMG’s fourth survey, and canvassed responses from 317 AML and compl iance professionals from the top 1,000 global banks, across 48 count r ie s . The su rvey found 88% of all respondents indicated AML was a priority for senior management, but in Asia Pacific, that number was below the global average, with 80% of respondents indicating that boards of directors take an active interest in AML.
salary and employment Forecast
Asia Lags in AML Awareness
Chief executive’s January Policy Address
NewAPPOINTMeNTs
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STERLINGHemisphere Freight Services LimitedAndy PerrinManaging DirectorT: +44 (0)1206 228850E: [email protected]: Hemisphere House, 847 The Crescent, Colchester Business Park, Colchester, Essex, CO4 9YQ, United KingdomFreight Forwarding/Logistics & Delivery
CORPORATELIM Advisors LimitedGeorge LongChairman & Chief Investment OfficerT: +852 2533 0900E: [email protected]: 19/F, Ruttonjee House, 11 Duddell Street, Central, Hong KongConsultancy
STARTUP Thirsty Brothers LimitedIvan LauDirectorT: +852 6707 4747E: [email protected]: 7/F, Block B, Eastern Sea Ind. Building, 48-56 Tai Lin Pai Road, Kwai Chung, New Territories, Hong KongWines & Spirits
Expat InsuranceMarc MeldrumChief ExecutiveT: +852 2107 3707E: [email protected]: 31/F Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong KongInsurance
Wynd Co-Working SpaceMichael MaDirectorT: +852 3462 2777E: [email protected]: 10/F, Room 1003, 43-55 Wyndham Street, Central, Hong KongBusiness Services
Shipping Masters HKJeremy MastersManaging DirectorT: +852 6692 2798E: [email protected]: Unit 1001, 10/F, Miramar Tower, 132 Nathan Road, Tsim Sha Tsui, Hong KongShipping
City & Urban International HK LtdNikki GreenDirectorT: +852 9222 6085E: [email protected]: 9/F Royalton 11, 116 Pokfulam Road, Pokfulam, Hong KongProperty / Real Estate Services
Fastlane Capital LimitedAlex SoDirectorT: +852 9483 8609E: [email protected]: Flat 10C, Acme Building, 22-28 Nanking Street, Kowloon, Hong KongAccounting
Conflict Change Consulting LtdSala SihombingDirectorT: +852 9197 1883E: [email protected]: 3/F, Lee Roy Commercial Building, 57-59 Hollywood Road, Central, Hong Kong Dispute Resolution Services
STARTUP ADDITIONALGCP Asia LtdMatthew FlynnPartnerT: +852 2815 2113E: [email protected]: 19/F, Two IFC, 8 Finance Street, Central, Hong KongConsultancy
PMO Academy Ltd Roger NicklessDirectorT: +852 29311 8095E: [email protected]: Suite 2207-2209, Tower Two, Lippo Centre, 89 Queensway, Admiralty, Hong KongConsultancy
OVERSEASHoldingham GroupNicholas BarnesPartnerT: +65 6850 7176E: [email protected]: 1 George Street, 15-05, 049145, SingaporeManagement Consultants
INDIVIDUALJessica RobinsonT: +852 3105 3701E: [email protected]: 33A, Tower 5, Phase 4, Bel Air on the Peak, Hong Kong
V i r g i n A t l a n t i c Airways announced the appointment of David Rose as Head of Asia Pacific (APAC) operations, which i n c l u d e S y d n e y , Hong Kong, Greater China and Japan.
David takes up his new position having served as the Shanghai-based Country Manager of China; his regional duties will now see him established in Hong Kong. David joined Virgin Atlantic as a Commercial Strategy Analyst. He went on to become a Route Revenue Manager in the United States, then Virgin Atlantic’s Country Manager for Kenya, based in Nairobi. Shanghai was his next port of call.
Respected economist, Martin W. Hennecke, has joined the group as Chief Economist of The Henley Group, bringing a wealth of knowledge and experience to The Henley Investment Committee.
As the Chief Economist , Martin will have a leading role in the Investment Committee, with responsibility for market
analysis and related communications.
Martin has 15 years of experience in the financial advisory industry, having worked with major German- and Hong Kong-based financial institutions. He is a strong advocate for ethical and unbiased independent advice, using his economic forecasting and research expertise to formulate investment strategies for clients, matching their needs.
David RoseNew Head of Asia Pacific,Virgin Atlantic
Martin w. Hennecke JoinsThe Henley Group
New British Chamber Members for December
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Best Foot ForwardHong Kong’s SME community is critical to its economic health and prosperity, yet there are countless barriers to success and hurdles for SMEs to overcome, not least amongst its investment community. This month, the British Chamber of Commerce has launched its SME Marketplace to help small business owners who need professional support. – By Gina Miller
“The goal of the new SME Marketplace is to connect service providers in Hong Kong with small businesses who need preferential rates for professional services such as accounting, legal advice, IT advice, insurance and healthcare, coaching and mentoring and other services.” The Marketplace rates are structured around a subscription service, or a discounted fee unavailable elsewhere on the market.
“There is a very real need for service provisions at an affordable rate, and as businesses move up, they can go bigger, or pay more for those services. The SME Marketplace will also give participating businesses a platform to sell their services and provides them with greater visibility to clients,” said Ms Kish.
“We are also trying to help develop greater support for financing. We are trying to make inroads with banks and with bigger institutions that can help provide more flexibility to the SME sector, to help people access bridging loans for cash flow, for instance,” she said.
From tiny acorns…SMEs go through several phases of development: from the generation of an idea, to finding a niche in the market and determining whether a new business idea will make money, to raising its initial investments and creating a business plan. This last step is where ideas survive or fail, says Ms Kish.
Once financed and launched, an SME must then capitalise on its initial investment, and either bring in more investments or grow organically to become larger organisations.
They are small but mighty. In December 2012, there were approximately 308,000 small-
to medium enterprises in Hong Kong. These companies comprised 98% of all the registered businesses throughout Hong Kong and employed 47% of the city’s private sector employment. In terms of simple economics, there is nothing “small” about the weight SMEs carry in Hong Kong.
It comes as no surprise then, that the British Chamber of Commerce has launched a new initiative to support small businesses. In February, the Chamber launched its SME Marketplace, a resource centre for SMEs looking for professional support offered through online portals and a special events series.
“The SME market in Hong Kong is growing fast and is very vibrant,” said Viki Kish, Chairperson of the Small & Medium Enterprises Committee for the Chamber, and Managing Director of International Study Programmes.
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“You put your products into place and you have to understand your clients and modify those products to suit them; you adapt to what the market wants and what clients will spend money on,” she said.
This is what Iain Reed, President of TiE Hong Kong, a not-for-profit organisation that fosters entrepreneurs through mentoring, networking and education, calls the “Pivot.”
Every small business owner and entrepreneur needs to be a little thick-skinned, and determined to push through with his or her original plans, says Mr Reed, “but a business should be prepared to ‘pivot’; to move the business through various iterations until it meets its best market.”
“The key is customer validation: You need to get in front of your customers to see what works.”
Once a business is making a profit, it needs to invest in innovation and to understand h o w i t w i l l c o n t i n u e t o differentiate itself from the competition; perhaps develop new product lines in order to grow its market share or find new geographies to sell into. It’s always useful to consider an exit strategy versus a continued growth strategy.
Street senseThe Hong Kong Government has launched a number of initiatives to support SMEs. It offers four incubator programmes, including the Hong Kong Science & Technology Parks, the DesignSmart Initiative, the Design Incubation Programme and Cyberport’s Digital Media and ICT Industry Start-up Incubation Programme.
The Trade and Industry Department offers SUCCESS, a Support and Consultation Centre for SMEs that offers business information and consultation services. And the HKTDC offers small business resources such as SME start-up programmes, which are intended to provide entrepreneurs and foreign SMEs with guides to setting up their businesses in Hong Kong, obtaining finance, and finding information on the
China market.
At a glance, Hong Kong is working hard to promote SMEs.
Sisters Ilissa and Dorian Howard launched their online retail shoe company Milk & Honey in 2011 in Hong Kong and Los Angeles. Ilissa runs the Hong Kong operation, managing everything from suppliers, inventory, products, order scheduling, packaging, discount cards and the supply chain – to the company’s website.
Given that Milk & Honey is an e-commerce business, it was accepted into Cyberport’s Incubation Programme, which focuses specifically on Hong Kong’s ICT industry.
Cyberport’s programme is generous: Offering rent-free office space and shared meeting rooms, the programme also offers impressive reductions in fees for tech support, professional services, marketing and promotion.
Milk and Honey also entered an accelerator programme in the US, said Ms Howard, where the ecosystem for investors and mentors is much larger. “It’s harder to break into the investor scene in Hong Kong,” she said. “It would be great if there was more organisation.”
The key is customer validation: You need to get in front of your customers to see what
works.– Iain Reed
Sisters Ilissa and Dorian Howard launched Milk & Honey, an online retail shoe company in 2011.
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“Cyberport is brilliant. The resources are excellent and the people are wonderful and helpful,” says Ms Howard, “but sometimes it would be easier to go through the processes with staff who had direct entrepreneurial experience.”
Ms Howard’s complaint is common amongst SME operators. Business people who operate in the public market do not really understand the growing pains and experiences of start-ups, explains Mr Reed (see article Angels and Other Strangers on page 18).
Mr Reed’s association with TiE was a corollary to his work with the British Chamber of Commerce’s Angel Programme. “It came out of an idea for mentorship. TiE organises a group of people who are mentors and will introduce entrepreneurs to the process, helping current mentors spread the load of their protégés,” he said.
SMEs a re c r i t i ca l to the economy o f a l l governments, and support for SMEs in growing apace in all major cities such as London, Israel, Sydney, Athens, and Hong Kong.
Hong Kong’s history of entrepreneurialism is just that: history, says Mr Reed. Hong Kong society has moved away from mum-and-dad businesses, as most parents today want their children to go to university and be trained up for professional careers in law or medicine.
The consequences of “professional-only” thinking, however, are seen internationally: The labour market is stuffed to the rafters with lawyers, teachers, engineers and other professionals who are desperately fighting for space in a saturated market. Conversely, entrepreneurs and SMEs are charging ahead, generating jobs and driving innovation at home and abroad.
In the UK for instance, SMEs accounted for 99.9% of all private sector businesses, 59% of private sector employment and 48% of private sector turnover according to the UK Federation of Small Businesses.
The challenges for organisations such as TiE and the British Chamber’s SME Marketplace are threefold: Engaging with the government for increased support for Hong Kong SMEs, engaging
with banks and investors to provide working capital for SMEs, and finally, engaging with parents in the local community to see the value SMEs offer their children’s future – as opposed to that law degree that they might never get to use.
Drilling down For new businesses in Hong Kong, finding out where the resources are, the legal requirements of filing corporate forms for taxes, banking, office rental and professional services can be overwhelming. The information is available, but it’s not always easy to find, said Ms Howard.
“What SMEs need is a comprehensive online reference where you can get information on everything you need in a clear and concise manner. Entrepreneurs are generally time and resource poor, and would prefer to focus what they do have on growing the business” she says. “Invest HK is a great option, but an online reference you can easily go back to with all information in one place, rather than searching around for it in many locations, would be perfect and allow people to focus on their business instead of the red tape.”
The British Chamber’s new initiative is designed to address these kinds of concerns; to be a one-stop resource centre for affordable expertise, and a location where SMEs can connect with other businesses and mentors.
…at the end of a successful SMEs development, the business owner will need to
consider selling to a larger company, or buying into another company and getting bigger.
– Viki Kish
Photo: Milk and Honey
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IN DETAIL: BUSINESS
Britain needs more small and medium-sized companies to export if we are to sustain our economic growth and compete with other European countries in the emerging markets. The Government’s trade promotion organisation, UKTI, has a role to play, but making a step-change in our export performance will require stronger business-to-business networks. British Chambers and British companies overseas can gain from this new export drive by providing the services that SMEs need. – By Paul Lynch
The Importance ofBacking Exports
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To deliver this vision, UKTI is working in partnership with the British Chambers of Commerce and wider UK business groups. This is a collective effort and must be viewed as a marathon, rather than a sprint. This will be a major undertaking over the next years and aims to culminate in a quality-assured global business network offering a wider range of higher-quality business support services in each market, and in the government’s redeployment of
resources – allowing it to add more value to business by brokering access to major international projects.
The UK is not alone in these goals; our EU competitors are also investing in strengthening business networks to increase exports. The race is on to win market share in the world’s fastest-growing economies.
The UK programme has two key aspects: capability building and outsourcing. Capability includes strengthening overseas business networks in the 40 pilot markets; accreditation of service providers by the British Chambers of Commerce; connecting our UK-overseas business networks to create a global B2B
network by British Chambers of Commerce; and finally, leveraging Trade Associations through the UKTI Trade Challenge Partner Programme.
Outsourcing will begin in Mainland China, with the China British Business Council delivering all UKTI SME services from 2014-15. We will start further outsourcing pilots in 2014-15.
The partnership with the British Chambers of Commerce and UK business networks is profoundly important to the success of the programme. Building a global B2B network will start with connecting the overseas business networks to UK chambers and increasing the range and quality of services on offer to businesses.
Outsourcing will only begin once the business network can demonstrate capability to take on UKTI services without compromising the customer experience. The China British Business Council has been delivering a proportion of UKTI SME services
The UK Government has made it clear that export growth is a key part of the wider growth
agenda. UK companies, however, are not as export oriented as other European companies. As a result, the government has prioritised the need to raise the number of UK companies exporting to the EU average.
On a practical level, this means that we need to increase the number of exporters by 100,000 and double exports to £1 trillion (HK$13 trillion) by 2020. SMEs are vital to the achievement of these goals. To support SMEs, the UK needs radically to change the way we engage companies; sticking with the status quo is not an option.
The key differences between t h e U K a n d o u r m a j o r c o m p e t i t o r s ( e s p e c i a l l y Germany, France, the US and Japan) is that they deliver a wider range of business suppor t th rough p r i va te sector business networks, with strong global capability and connectivity between regional, national and international markets. Meanwhile, the UK’s global B2B network is fragmented and offers only variable capability, fewer services than competitors, and tends not to be well connected to UK business networks.
O n 1 2 N o v e m b e r 2 0 1 2 , t h e P r i m e Minister announced plans to bring about a transformational change in the support provided by businesses for businesses, particularly SMEs. He launched an £8m-programme (HK$104 million) to enhance overseas business networks across 20 high-growth markets. Hong Kong was one of the original pilot markets, and the programme has since expanded to 40 markets.
Success will be a sustainable, global network of business-led organisations providing a package of practical business support that is compelling and coherent and offers the customer a seamless end-to-end journey.
Success will be a sustainable, global
network of business-led organisations providing a package of practical
business support that is compelling and
coherent and offers the customer a seamless end-
to-end journey.
Paul LynchDirectorTrade & InvestmentHong Kong, UK Trade & Investment, British Consulate-General
The UKTI team in the British Consulate General helps British companies enter and grow their business in the Hong Kong market, and encourages investment from Hong Kong into the UK. Hong Kong is the UK’s second-largest market for goods in Asia-Pacific (after mainland China), and the location of seven High Value Opportunities, with opportunities worth well over £5 billion a year. Hong Kong is also the origin of 3% of FDI into the UK.
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IN DETAIL: BUSINESS
for 10 years and is ready to deliver all SME services from 2014-15. The UKTI team in Hong Kong and the British Chamber have started to explore how the Chamber and its members might start to deliver small volumes of UKTI services, for example event management, in 2014-15.
The initiative has started well. There are already positive signs that the creation of a global business network is generating positive pressure on both regional UK chambers and overseas networks to improve the level and quality of service. This is a positive supply and demand dynamic that will benefit British business and the wider diaspora of local, regional, national and sector business networks.
Hong Kong is already a great place for UK companies to do business. The British Chamber, in its executive team and through its members, has a wealth of practical knowledge to share with British companies wishing to enter the market for the first time. The Chamber already does a lot to support SMEs. UKTI would like to work with the Chamber to build on this capacity, and to market better the services that the Chamber and its members already offer.
In the immediate term, nothing much will visibly change for the customer. UKTI will stay focused on delivering high-quality services and maintaining high-quality customer relations. But as the C h a m b e r , t h r o u g h its business networks here and in the UK, gears up capabil ity, I hope that it will see
opportunities to introduce new, additional services to support business and to strengthen partnership arrangements. The Chamber is very much in the lead on shaping its offer to ensure that any new activities are sustainable and support the prime objective of adding value to Chamber members.
Some business services are unlikely to be offered by the Chamber or its members, and UKTI is talking to other service providers in Hong Kong, such as HKTDC, to explore how they might be part of the network.
Slowly UKTI will transfer service delivery to the private sector as the capability to deliver services to the same or higher standards grows. In the short term, we will pilot arrangements where organisational capabilities allow so that we can learn as we go. In the long term, businesses will benefit from a wider range of high-quality support.
Whatever we change, one thing that remains absolutely clear is the priority the UK government attaches to boosting our bilateral trade and investment.
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Angels and
Other StrangersThe British Chamber’s Business Angel Programme is now seven years old. An early-mover in the Angel Investor community, the Chamber helpedusher in a growingfield of alternate investors, providing the capital, education and mentorship needed for new entrepreneurs and SMEs to gain a foothold in theHong Kong marketplace. – By Gina Miller
The decks are stacked in Hong Kong’s favour: Last autumn, the World Bank released its
2013 “Ease of Doing Business” economic survey indicating that Hong Kong had maintained its position, holding second place, after Singapore among 189 nations.
For anyone with a standardised business (100% domestically owned, who has start-up capital
equivalent to 10 times their income per capita, who engages in industr ia l or commercia l activities, and who employs between 10 and 50 people within the first month of operations) this is excellent news. Ultimately, it’s impressively easy to do business in Hong Kong if you are already in business, but what happens if you’re a new enterprise looking for initial or growth investment?
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For entrepreneurs and SMEs trying to get a foothold in the Kong Kong markets, or raise working capital to launch or build a business, things get a little more complicated. As a result, applying for divine intervention is not an unusual method; Hong Kong has a growing community of heavenly creatures.
This year marks the seventh anniversary of The British Chamber’s Business Angel Programme,
sponsored by Baker Tilly Hong Kong. The British Chamber was the first to initiate an Angel Investor Programme in Hong Kong. Since it’s launch in late 2007, the Chamber’s Angel sub-committee has vetted approximately 140 applicants, shortlisted from hundreds of anxious and enthusiastic would-be entrepreneurs.
HistoryThe idea for the Angel Programme originally came out of the Chamber’s IT Committee, says Iain Reed, Chairman of EFA, a financial software and consulting firm, the Vice-Chairman of the Angel Committee, and the President of TiE Hong Kong, a not-for profit organisation that fosters entrepreneurship through mentoring, networking and education.
“Several years ago, the committee realised that regardless of the great business ideas and good will and skills people were trying to bring to the market, that these were all intangible assets. Banks were not willing to provide loans and there was insufficient funding from smaller investors… The end result was the Chamber’s organisation of the first Angel Programme.”
The Chamber’s Business Angel Programme was designed to bring entrepreneurs and investors together in a safe and mutually-beneficial environment. Entrepreneurs enjoyed the security of pitching their original ideas and proposals, without fear of being copied and beaten in a rush to market. The Angel Investors benefit from the solicitation of tested business plans, since all business proposals that come before them are pre-approved by the Chamber’s committee, which means they needn’t waste their time on unattractive propositions.
Applicants don’t have to be members of the Chamber: To apply for the Business Angel Programme, aspirants should be aiming to raise
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U S $ 1 0 0 , 0 0 0 t o $ 2 million and submit their proposal according t o t h e C h a m b e r ’ s appl icat ion pol icy , w h i c h i s a v a i l a b l e o n l i n e . F o l l o w i n g t h e t h r i c e - y e a r l y applications windows, the Chamber vets and selects good potential investments.
A shortlisted few are then chosen to give their presentations to the Chamber’s Angel sub-committee, which g i v e s t h e m a d v i c e on how to improve thei r sa les p i tch. A month later, the newly polished and guided applicants go on to perform their final pitch to a panel of Angel Investors.
Angels at the table Angels, to be clear, occupy a special place among investors in start-ups. In Hong Kong, the traditional model for small business investing was to borrow funds from family and friends. Those are not Angel investments. An “Angel Investor” is a stranger who is willing to invest his or her own money in a business previously unknown to him or her, says Mr Reed. A Venture Capitalist (VC) is also generally unknown to the business, but he or she invests someone else’s money. There is also a difference in the scale of the investment.
Neil Orvay, Chairman of the Chamber’s Business Angel Programme explains that Angel Investors aim to provide early-stage capital or seed investments into a business. Individual investors offer US$10,000, $25,000 and on up to $2 million.
“These amounts are insignificant to many venture capitalists and private equity investors, where interest starts at US$10 million to $20 million,” be said.
Although Hong Kong’s h i g h - i n c o m e s t a t u s would suggest that it is a hotbed of well-heeled Angels, racing to invest their dollars into the next tech start-up, the city is, in fact, a conservative env i ronment for most investors, says Mr Reed.
People historically invest in real estate or in the markets, areas of high familiarity, he explains. So it takes a little more work and nous to bring alternate investments to the right audience of investors. T h e B u s i n e s s A n g e l Programme provides an excellent first step, both for entrepreneurs and interested Angels.
“ W e ’ v e b u i l t a g o o d group of Angels via word of mouth,” says Mr Reed. “Mostly these are people with spare cash. It’s fun
for them, because they are investing in a group of people who are starting their own entrepreneurial journey. It’s exciting and much more fun than real estate.”
For the angels who do invest in start-ups, the rewards can be plentiful. Angels take on a much higher risk with untested businesses, but a successful return is worth the risk.
“Most angel investors are looking for at least 10 times their investment,” said Mr Orvay.
It’s not (just) about the moneyMoney may be the bottom line, but it’s not the only benefit applicants to the Business Angel Programme enjoy. Mentorship and training, via the Angel Programme’s feedback and guidance provides invaluable information on how to get in front of investors. After that, business relationships start to unfold and the field of new entrepreneurs and their mentors deepens.
Mostly Angels are people with spare cash. It’s fun for them, because they are investing in a group of
people who are starting their own entrepreneurial journey. It’s exciting and much more fun than real estate.
– Iain Reed
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“Angels tend to be more hands-on,” says Mr Reed. “The best Angel Investors are usually entrepreneurs themselves, and because they have already been through all these new experiences, they can understand what a new business is going through; a good Angel will also be a mentor.”
“Folks who are used to investing in the public market, on the other hand, may not ful ly understand the growing pains and experiences of start ups.”
And Angels like to share, he says. “They tend to show their deals to each other… The people I’ve stayed in touch with, following their pitch to the Business Angel Programme, most of them get funded, but not necessarily through the Chamber’s Angel Programme breakfasts.” Rather, they get their initial exposure to other Angels through the programme and meet new investors by virtue of entering the broader Angel community.
“It’s prudent to share and diversify the risks among a group of Angel Investors, and you need to diversify your investments i f you want a return.”
What does a good investment look like?Mr Reed says he has three main questions that need to be answered during an investment pitch: What problem is the business solving? How will it make money? And who is in the team?
The first two questions sound obvious, but Mr Reed argues that the key to building a strong business is the team. It’s the team that guides a new business through its many iterations to a final product, and each member of the team takes on one of the innumerable tasks that the business owner is juggling so that he or she may focus on improving and increasing the business.
Investors are looking for zealous entrepreneurs, argues Mr Reed. “To me the important question is: ‘Have you quit your job and are you working on your own business full time? Are you passionate about doing it?’.”
“You need to be a l itt le bit mad to be an entrepreneur,” he says. “None of us is fully sane; passion is important.”
In addition to creating a good product that solves a problem (or answers a need in the market), beyond making money and having a good team, an entrepreneur also needs integrity. Who, at the end of the day, will invest their money in someone who appears untrustworthy? Entrepreneurs need to prove the solidity and planning behind their business strategies at every level of their application and dealings with investors.
Seven years strongFortunately in the Chamber’s Angel Programme, strong vetting and clear definitions determine who gets to pitch to the Angels. And it’s a two-way street. Angels also must meet criteria set by the Chamber, so entrepreneurs are provided security from lookie-loos, or investor tourists who aren’t serious about commitment.
As the programme has taken root over the past seven years, the face of Hong Kong’s investor community has changed. “When we s tar ted the programme, there was nothing – but today
the ecosystem for Angels is huge,” said Mr Reed. “There are events on every week, and the government is fully behind Angel investing, and there has been a discernable acceleration in the past two years. I think the Chamber can take credit for its success.”
Coming nextThe next British Chamber Business Angel Programme presentations will be taking place on Tuesday 25 March 2014. If you have a great idea or have started a new business and are looking to grow, the Chamber would like to help. To find out more about this programme, please visit our website or email [email protected].
For the angels who do invest in start-
ups, the rewards can be plentiful. Angels
take on a much higher risk with untested businesses, but a
successful return is worth the risk.
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IN DETAIL: REAL ESTATE
Hong Kong’s Retail Reign
With the most expensive retail rents on the globe, replete representation of the world’s leading luxury brands, and more new market entrants than any of its APAC rivals, Hong Kong is winning the retail race. What’s more – its retail market is still growing strong. – By Joe Lin
Hong Kong’s position as one of the worlds’ most prosperous retail markets remains
unchallenged as the city’s retail rents ranked highest internationally in 2013. Despite persistent high operating costs and prime retail rents, Hong Kong remains one of the top spots for new market entrants and is experiencing a change in its retail landscape format.
Hong Kong’s high prime retail rents are still mainly supported by the influx of luxury retailers. According to the latest transactions on some of Hong Kong’s first-tier retail streets, such as Russell Street and Canton Road, the monthly achievable rent for a premises between 800-1,200 leasable square-feet, is approximately HK$2,500 to $3,000 per square-foot, (or US$3,850 to $4,620 per square-foot, per year). It’s hardly surprising that these high costs narrow the market and that Hong Kong has the highest representation of luxury retailers among all global cities.
In the main, it is only the luxury brands that can afford the rental levels demanded on Hong Kong’s first-tier retail streets. Luxury jewellers or watch retailers like Omega, Rado, Burberry, and other locally renowned goldsmiths like Chow Tai Fook and Emperor Jewellery are among the key players.
CBRE Group, Inc.CBRE Group, Inc. (NYSE: CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com
Joe Lin Executive Director, Retail Services,CBRE Hong Kong
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Luxury retailers are not the only winners in Hong Kong; in 2013 the city’s retail landscape underwent a dynamic change with mid-range fashion now competing with luxury and business retailers for the top spot.
For the first time, mid-range brands accounted for the largest portion of new arrivals in the Hong Kong retail market, together with luxury and business. This trend of increasing variety among retailer tiers displays a dramatic change in the
retail landscape and health of Hong Kong’s booming retail market.
CBRE research shows that in 2013, Hong Kong ranked as the number-one established market destination for new retailer entries for the second consecutive year. That Hong Kong won so many more new entrants than its APAC peers was particularly impressive, given that it is already wel l served by the major i ty of global retailers, and has the on-going challenge of high rents and a shortage of new space.
CBRE a lso noted that 50% of las t year ’s new entrants in Hong Kong were mid-range international retailers, whose influence has already started to take effect. New entrants are accepting their first stores in Hong Kong – in malls – to avoid the high rental burden of street shops. If this trend continues, the driving force behind high street rents will begin to decline.
With shifts in Chinese shopping patterns and the trend of retailers opening shops in malls, Hong Kong’s prime retail rents could stabilize throughout 2014, with 0-5% increases given that supply is still limited in prime retail streets; while rents in secondary areas are likely to drop by at least 10%.
The robust presence of the high-end retailers in Hong Kong is a direct outcome of the surge of consumption demand from mainland spenders. Since 2003, Hong Kong has benefitted from the Mainland Chinese Government’s Free Independent Traveler (FIT) Scheme, which has helped relax travel requirements, expediting Chinese travel to Hong Kong.
Originally in place to support Hong Kong’s economy following the impact of SARS, the FIT Scheme has aided and underpinned Hong Kong’s long period of retail boom.
Hong Kong’s retail rents grew rapidly from 2004-2012, with the largest increases showing between 2010-2012, following the global financial crisis. Annual rental growth rate in prime retail districts reached 27% in 2011, largely because China was unaffected by the global financial turmoil and maintained its spending power during this time. In addition, the west’s liquidity easing policy and the Hong Kong-United States currency peg led to currency devaluation in both the US and Hong Kong.
Each of these elements has ensured retail prices in Hong Kong look cheaper to the Chinese, while the high quality assurance, wide range of products available, and duty-free consumption are further attractions to the Chinese consumer.
Strong Chinese consumption power gives great confidence to retailers who consider Hong Kong a “must” market to enter and expect good returns, even though prime retail rents remain the highest in the world.
…in 2013 the city’s retail landscape underwent a dynamic change with
mid-range fashion now competing with luxury
and business retailers for the top spot.
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IN DETAIL: FINANCE
Five Horses Worth Betting On?While nothing can ever be predicted with certainty, The Henley Group shares with us some market developments which, in their view, may materialise in the Year of the Horse, with a particular emphasis on those areas of risks and opportunities that a majority of market participants seem to overlook.
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Number One - BitcoinsBitcoin has had a great run in 2013, but we are concerned about up and coming competition to the crypto-currency and therefore do not recommend it as an investment. While the supply of Bitcoins may be limited, the supply of virtual currencies, as such, is not. There are already more than 50 similar currencies being traded on the market, such as Litecoin, Megacoin, BetaCoin and Junkcoin to name but a few, many of these have been launched over the past several months, and they may well dilute each other’s values going forwards.
Martin W. Hennecke
Chief Economist, The Henley Group [email protected]
DISCLAIMER: The purpose of the contents herein is to provide you with general market information and trends. No content herein may be construed as offer, invitation, advertisement, inducement, representation, advice or recommendation of any kind. You should consult with a licensed investment adviser for obtaining professional investment advice that is tailored to suit your specific needs and situation. The Henley Group makes no guarantee, representation or warranty and accepts no responsibility or liability as to the accuracy, completeness or correctness of the contents herein.
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IN DETAIL: FINANCE
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Number Two - RussiaAt an average price-to-earnings ratio of 5-6, which is a more than a 50% discount on the emerging markets average and almost a 70% discount on the developed markets average, Russian equities are now one of the most underpriced asset classes in the world. At the same time, this market also appears to be one of the most neglected, if not despised investments currently available, which is something one typically finds at major market bottoms.
In our view, Russian equities could surprise on the upside this year and beyond, with potential triggers being a planned pension reform that would result in higher local equity-market inflows, as well as the growing air pollution problem of China that may prompt the country to increase natural gas imports from Russia (as a means of reducing the use of coal in favour of cleaner burning natural gas).
Number Three - Property vs EquityHong Kong and China property prices have risen substantially over the past five years and are now the highest in the world in relation to annual household incomes. On the other hand, Hong Kong and China equities have vastly underperformed or outright dropped in the same past five years and are now among the world’s cheapest on a valuation basis.
In our view this trend has overshot and may now reverse course, with equities outperforming physical property prices over the coming years.
Number Four - BondsWestern sovereign bonds including France, Germany the US and the UK probably represent the largest financial market bubble one can find right now, and we would expect prices to fall this year and beyond. Yields are still near record lows, while interest rates and inflation may rise, causing potential capital and purchasing power loss on bonds.
Moreover, the default r isk appears to be completely ignored by investors as well. Standard & Poor’s warned us, back in March 2005, that a crisis leading to eventual default in what is the supposedly safest bonds may be around the corner, starting with France (which coincidently just reported an all-time record high number of unemployed, and meanwhile has already received two downgrades by S&P, just as the agency predicted nine years ago).
Number Five - Precious MetalsThe combination of the factors of an increasing spotlight on precious metals trading (and the alleged manipulation thereof) by Germany’s top banking regulator Bafin, meant strong Asian gold demand continued.
Continued rising mining costs and the return of the Eurozone crisis (despite publicity to the contrary, debt and unemployment across most of the Eurozone) has only continued to grow, and the Bundesbank is now suggesting a special ‘levy’ on tax payers of indebted Eurozone countries to deal with the crisis could lead to a substantial rebound in precious metals prices this year.
Hong Kong and China equities have vastly underperformed or outright dropped in the same past five years and are now
among the world’s cheapest on a valuation basis.
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Headed for Blue SkiesThis second of a two-part article explores the opportunities – the tailwinds – for the airfreight sector, which globally carries over $10 trillion worth of products, generating revenues of $78billion, and employing 32 million people.
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IN DETAIL: LOGISTICS
Handheld devices They are ubiquitous: Everywhere, everyone has a hand-held device, through which they are connected to everyone else. In many cases consumers use them ceaselessly, every hour of the day, every day of the year.
Many users have multiple devices. A recent report concluded that there are now more handheld devices in use than there are people on the planet: that is, more than seven billion hand held devices!
From manufacturing and marketing perspectives, these products have ever-shorter product l i fecyc les . Technological functionality drives differentiation and time-to-market is the source of competitive advantage.
With their small form factor and relatively high value, the necessity of speed to market naturally means that handhelds are bound for airfreight-
oriented supply chains. Indeed, new product launches typically result in charters for freighter aircraft to get the new devices expedited through their globalised supply chain ecosystems for simultaneous launches in San Francisco, London and Shanghai. All of which is positive news for the airfreight sector.
E-Commerce drives demandThe digital revolution is also driving multi-channel retail consumption and consumerism. Online and offline channels collaborate to send and receive content and commerce. The digital world is borderless and seamless, consumers can interact and transact across the globe and around the clock. The resulting explosion in e-commerce is probably one of the leading shining lights for the air-cargo business.
As yet, digital delivery is still limited to a narrow range of content-oriented products such as electronic books, music and video that can be delivered electronically via the Internet. The vast majority of consumer products still have to be physically delivered in packages and boxes, by people and trucks. The expectation of e-commerce consumers is for speedy gratification through expedited delivery shortly after the online purchase has been made, which steers the order fulfilment process towards an airfreight-oriented model.
2013 ended with some positive news for the airfreight sector. During the fourth quarter,
global air-cargo revenues increased year-on-year, partially due to expedited shipments of Asia-sourced consumer products wanted in stores for the Christmas holiday shopping season in Western Europe and North America. Specific sectors such as perishables, valuables and pharmaceuticals also showed encouraging volume growth.
On another positive note, B o e i n g p r e d i c t e d t h a t d e s p i t e t h e n e a r - t e r m slowdown, total global air-cargo traffic will more than double over the next 20 years, compared to 2011 levels, for an average 5.2% annual growth rate.
S o m e w h a t c o m b a t i n g the prevalent headwinds (discussed in our last issue), there are several underlying consumer trends providing a positive influence on the air-cargo sector, generating encouraging tailwinds, not least driven by a trifecta of digital consumers, handheld devices and the explosion of e-commerce.
Digital consumersThe global population of digital consumers continues to rise on an exponential basis – ranging from the digital natives that intuitively and instinctively use technology from an increasingly early age (four-year olds using iPads), through to the digital migrants who gradually (and sometimes reluctantly) adopt and adapt to the technology-driven world of today. These trends will provide compelling benefits to the airfreight sector, as handheld devices empower digital natives to purchase online 24/7 through e-commerce platforms.
The expectation of e-commerce consumers
is for speedy gratification through expedited delivery
shortly after the online purchase has been made.
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Mark MillarChairman, Logistics Committee
Mark Millar provides value for clients with independent and informed perspectives on their supply chain strategies in Asia. His ‘Asia Supply Chain Insights’ series of consultations, seminars and corporate briefings help companies improve their understanding of the complex landscapes, make better informed business decisions and increase the efficiency of their global supply chain ecosystems. He serves as Chair of the Logistics Committee at the British Chamber of Commerce in Hong Kong. [email protected]
This a i r f re ight- f r iendly need-for-speed is further emphasised by the borderless nature of e-commerce, which results in global transactions wherein the buyers and sellers are hundreds, if not thousands, of miles apart. But their high-speed communication via technology-enabled online connections have resulted in a standard expectation of rapid turnaround and expedited delivery of physical products.
Time-sensitive products Apart f rom high-tech and consumer electronics, other sectors with time-sensitive and small form-factor products are also providing some a beneficial push towards air cargo. With particular attention paid to the pharmaceutical and perishable sectors, airlines are developing product offerings that feature the latest temperature-control technology.
Last October IAG Cargo – the combined freight operations of British Airways and Iberia – opened a new pharmaceutical centre at its London Heathrow hub, which features two temperature-controlled zones to store products with different temperature requirements.
John Cheetham, IAG Cargo Regional Commercial Manager for Asia Pacific and India, said “the challenges in the airfreight markets have put pressure on traditional thinking and historical traffic flows.” Mr Cheetham explained that IAG cargo, has worked hard to overcome such challenges by targeting business to a broader range of network destinations, like Latin America, instead of relying on the diminishing flow to traditional markets. “We have also invested heavily in our product portfolio, particularly in our Constant Climate temperature controlled range of products, to cater for growing
pharmaceutical movements,” said Mr Cheetham. “IAG now has over 80 constant climate stations across their global network.”
In the USA, Delta is opening a new 3,000 square-foot refrigerated storage unit at Detroit airport, while American Airlines is expanding its cooler facility at New York JFK airport. Here in Hong
Kong, the new Cathay Pacific Cargo Terminal at HKIA features three different cold storage facilities, providing a range of temperature control options, and FedEx i s now o f fe r ing their Cold Shipping Package Option, providing a refrigerated environment for packages during transit, of 2-8 degrees centigrade for up to 96 hours.
What will the currents bring?From the global perspective, airfreight is valued at more than one third of world trade by dollar value, but less than 1% of world trade by volume. Fast but expensive, airfreight is most relevant to high-value products with short product life cycles, where time to market is critical. The three rapidly expanding global sectors of e-commerce, pharmaceutical, and healthcare products are expected to drive positive growth for the airfreight sector, countering potential headwinds.
The digital revolution, with the prevalence of smart hand-held devices, has truly only begun and its affect on the world is likely something that we cannot fully anticipate. Nevertheless, it is a positive dynamic for the airfreight sector and will continue to be so for the foreseeable future.
As in all business, companies that respond with agility and flexibility to empower their supply chain ecosystems are the ones that will survive and thrive.
The vast majority of consumer products still have
to be physically delivered in packages and boxes, by
people and trucks.
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IN DETAIL: DEVELOPMENT
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Paying for China’s UrbanisationChina’s ability to finance expanded public services and infrastructure for its growing population has critical implications for the nation’s economic growth and wellbeing.
An essential ingredient in China’s growth and development over the past 30 years has been
its on-going process of urbanisation, and one of the most important elements of China’s economic future is how it will continue to fund the large-scale projects necessary to support sustainable urbanisation.
Given China’s economic model and history of centralised planning, one might expect that a signif icant funding element would come from central government support to local government budgets. In reality, however, this
has been limited, leaving the job mostly to local government officials and city leadership. These loca l leaders a re respons ib le fo r managing the on-going urbanisation processes in their cities, identifying sources of capital, and uti l ising funds needed to pay for on-going urbanisation projects, such as housing, schools, roads and hospitals.
At the same time, however, local officials have faced considerable constraints that have limited their funding sources to a few options, namely: bank loans and land sales.
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be put on a more solid and sustainable footing, local governments need more funding models with greater flexibility.
One option toward greater flexibility could come from China’s progressive bond programme, which was expanded in July 2013 to include six local governments (from four previously). Bonds can now be issued and used to fund projects by the local governments of Shanghai and Shenzhen, and
by the provincial governments of Zhejiang, Guangdong, Jiangsu, and Shandong.
Analysts believe that giving local governments the right to sell bonds will help relieve debt burdens, and help improve debt transparency.
Land sales are not actually sales of land, per se, as the government retains ownership of the land. City governments collect the funds directly from developers and use those revenues to build roads, schools, and other municipal projects. Although China is a large country, there are obvious drawbacks to such a system. For example, land can generally be sold once (or at least infrequently – land leases are typically of 40- to 70-years’ duration). In some eastern locations in China, where the development processes are more advanced, g o v e r n m e n t s a r e already running low on land.
The second funding source is debt, primarily through bank loans. Technically, Chinese local governments cannot borrow directly from banks. Despite this limitation, many have found ways to access bank funding using municipal investment entities known as Urban Development Investment Corporations (UDICs). As many as 8,000 UDICs now exist, and they account for between 80- to 90% of debt-funded urban infrastructure spending. Local government debt is approaching RMB20 trillion (US$3.3 trillion), and concerns have been raised over the sustainability of such debt levels and structures.
Despite rapid urban development in the past 30 years, China still has decades of development and expansion ahead. The ability of China’s cities to finance expanded public services and infrastructure for their growing populat ions has cr i t ical implications for the nation’s economic growth and wellbeing. If funding for China’s urbanisation is to
If funding for China’s urbanisation is to be put on a more solid
and sustainable footing, local governments need more funding
models with greater flexibility.
David FreyPartner, KPMG China
Robert RitaccaResearch Manager, KPMG’s Global China Practice
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 155,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
in DeTaiL: ngos
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Strengthening Corporate Social ResponsibilityPwC launches an NGO seminar to help improve transparent reporting and build donor trust in Hong Kong.
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low. For charities to continue to attract funding in the long term, PwC believes NGOs need to communicate clearer strategies on how the funds are being put to use.
The session opened with a panel of prominent business, government, civil society and NGO leaders who shared their views on why transparency and strong governance is key when it comes to strengthening donor communications and for the long-term sustainability of NGOs. Asian Charity Services helped to moderate a panel that included speakers Annie Chen, the Founder and Chair of RS Group; Christine Loh, the Under Secretary for the Env i ronment , Hong Kong SAR
Government; Kris Tong, the CEO of TREATS; and Laura Lau, the Head of Philanthropy, Swire Group Charitable Trust.
The session was followed by two training modules with the objective of providing NGOs with the skills to strengthen donor and stakeholder communications by building trust, and practising good governance and transparent reporting.
PwC Assurance Partner Eric Yeung guided the participants through a good governance framework, outlining common challenges and management practice concerns for NGOs. As a
In line with PwC’s commitment to be part of building trust and transparency in civil society,
the professional services firm recently held a seminar to help Non-Governmental Organisations (NGOs) in Hong Kong gain a better understanding of how to increase donor engagement, support and trust through effective reporting, good governance and robust internal controls. T h e S t r e n g t h e n i n g D o n o r Communications session was held on 29 November and attracted more than 100 participants from approx imate ly 70 Hong Kong NGOs. It will be followed up with a mentoring programme in 2014, involving PwC professionals offering guidance to 20 NGO participants.
Joanne Oswin, PwC Chief of Operations and Corporate Responsibility Lead Partner, hosted the seminar, supported by Asian Charity Services.
“As an increasing number of funds are directed to NGOs, it is vital that the highest levels of oversight and transparency are apparent to ensure the future existence of these organisations,” Ms Oswin said.
With no regulatory body in place to monitor the more than 7,000 NGOs in Hong Kong, accountability and transparency of local NGOs is
With no regulatory body in place to
monitor the more than 7,000 NGOs in Hong Kong,
accountability and transparency of local
NGOs is low.
partner within PwC Risk and Controls Assurance practice, Mr Yeung has more than 16 years’ of experience providing clients with advice in the areas of corporate governance, internal audit, internal controls and risk management.
The second training module was led by PwC Peop le and Change Manag ing D i rec to r Adam Salzer, and by Manager Raymond Mak. Together, they explained the specific reporting considerations for NGOs and how these meet the needs of donors and other stakeholders.
Mr Salzer’s 25-plus years’ experience in strategic HR Consultancy, and extensive experience working with Not-for-Profit Organisations and government departments in Hong Kong, Mainland China, Cambodia, the United Kingdom and Australia meant his remarks carried weight.
“One of the great pieces of feedback we’ve had was the number of times the messages throughout the event hit home for individuals in the room. We know some of the NGOs in
the room did not have the time or resources to focus on these areas. Now they have more of an idea on how they would like to continue their path to more transparent reporting and better governance,” Ms Oswin said.
To build on the training content, PwC launched a mentoring program for 20 of the participant NGOs. PwC’s programme adviser Asian Charity Services made the selection of these 20 NGOs based on agreed-on criteria. These NGOs will have the opportunity to work with PwC professionals to identify the areas most relevant to them and where they need to focus their efforts.
The mentoring objectives are designed to cover evaluation and improvement of typical donor communication tools as well as internal controls and processes that help to deliver effective donor reporting. This is an excellent opportunity for local NGOs and their staff to receive professional guidance and understand the benef i ts of strengthened trust and communication with stakeholders.
PricewaterhouseCoopers Ltd22/F Prince’s Building, Central, Hong KongT: (852) 2289 8888, F: (852) 2810 9888, www.pwchk.com
PwC – Corporate Responsibility. At PwC, we believe in being part of it: the global conversation and movement towards responsible business practices that create positive change in the world. We aim to be part of the solution to global challenges in two ways: being a catalyst for change; and doing the right thing.
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Asia Logistics and Maritime ConferenceThe British Chamber of Commerce was a Supporting Partner for the recent Asia Logistics and Maritime Conference (ALMC) where industry leaders discussed the latest trends and developments in the Supply Chain, Logistics and Maritime sectors.
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IN DETAIL: LOGISTICS
Or g a n i s e d b y t h e H o n g K o n g T r a d e Development Council at the Conference and
Exhibition Centre, the ALMC was attended by more than 1,500 logistics providers and users from 26 countries and regions.
The conference opened with the keynote address from HKSAR Chief Executive CY Leung, outlining Hong Kong’s enduring strengths, including its free-port status, sophisticated financial system, robust rule of law and the common law system underpinned by an independent judiciary.
These qualities provide favourable conditions for expanding professional maritime services including shipping management, finance, marine insurance, legal services and arbitration services - and because Hong Kong is an international business hub, it connects the Mainland China and the rest of the world.
Mr Leung also announced that Hong Kong is preparing to negotiate a Free Trade Agreement (FTA) with the 10-member ASEAN bloc. The Hong Kong-ASEAN FTA wil l help strengthen trade and logistics in the Asia region and add to the competitiveness and efficiency of regional supply chain ecosystems.
The first plenary session entitled “Shaping the Future of Asia: The Emerging Dragons”, explained Intra-Asia’s trade as a driving force within global trade. George Yeo, Chairman of the Kerry Logistics Network, predicted that the mainland would be the immediate focus.
“Looking at the trends, China’s trade with its neighbours will overtake even its trade with the United States and the European Union,” said Mr Yeo.
As Hong Kong proceeds to negotiate its own free-trade agreement with the 10 ASEAN nations, the city’s role in the region is evolving. Robert Li, Executive Director of the Lenovo Group’s Supply Chain for Asia Pacific, said Hong Kong’s success as a regional hub for the logistics and maritime industries puts the city in an enviable position.
The second plenary session t i t led “Retai l Revolution: a Brave New World”, explored the impact of e-commerce on logistics networks and supply chain ecosystems and was moderated by Mark Millar, Chairman of the Logistics Committee at the British Chamber.
Setting the scene for the discussion, Panel Chair Mr Millar outlined three forces that are reshaping the retail industry, resulting in a material and long lasting impact for all stakeholders as:
1. The Asia Era, whereby the centre of economic gravity has firmly shifted eastwards,
2. The Digital World, in which the Internet is all pervasive and consumers are increasingly digital natives, and
3. The Mobile World, where the proliferation of smart hand held devices is driving consumer behaviour and related social dependencies.
Panellists for the Retail Revolution discussion included Mr Shi Tao, Vice President of the JD.com
Group, who confirmed that 2013 was the milestone year when China surpassed the US as the world’s number one e-commerce market. There are already 250 million onl ine shoppers on the mainland, 70% more than two years ago, with 32% growth expected in the next three years. In this highly compet i t ive landscape, the trend is showing more g rowth in bus iness - to -consumer (B2C) e-commerce than consumer-to-consumer (C2C). Mr Shi stressed that to gain competitive advantage, companies must focus on last-mile delivery.
Scott Price, President and CEO of Walmart Asia, advised that 45% of the global 2.7 billion Internet users are in Asia, compared to 21% in Europe. He confirmed that it is critically important for Walmart, and other retailers, to perfect the logistics and keep costs down, while straddling the online and bricks-and-mortar worlds.
Hong Kong is preparing to negotiate a Free Trade
Agreement (FTA) with the 10-member ASEAN bloc. The Hong Kong-ASEAN FTA will help strengthen trade and logistics in the Asia region and add to
the competitiveness and efficiency of regional
supply chain ecosystems.
Mark MillarChairman, Logistics Committee
Mark Millar provides value for clients with independent and informed perspectives on their supply chain strategies in Asia. His ‘Asia Supply Chain Insights’ series of consultations, seminars and corporate briefings help companies improve their understanding of the complex landscapes, make better-informed business decisions and increase the efficiency of their global supply chain ecosystems. Mark serves as Chair of the Logistics Committee at the British Chamber of Commerce in Hong Kong. [email protected]
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“If you’re not online, you’re not in retail” was the message from Paul Teague, former president, Asia Pacific, for The Net-a-Porter Group. He confirmed that in the luxury sector, retailers make the online experience enjoyable by offering interesting editorial content such as celebrity columns, while ensuring that a purchased item arrives on time and helps create the “wow factor” consumers are demanding.
Managing Director of Zalora South East Asia, Michele Ferrario, emphasised the importance of last-mile delivery, especially in emerging markets that are less well served when it comes to logistics infrastructure. Another important skill for e-tailers is having the ability to accept multiple forms of payments from consumers, including cash-on-delivery, which can introduce further complexities into the supply-chain ecosystem.
During the question and answer session, the panellists discussed the importance of effective and efficient hinterland fulfilment – the last-mile deliveries into third-, fourth- and fifth-tier cities and even further into rural areas – where even the local villages have Internet access. They also discussed Hong Kong’s role as a regional distribution centre (RDC) for e-fulfilment, given its proximity to production sources in southern China and its excellent port and airport infrastructure.
In 2014, the Logistics Committee will compile an industry position paper on the opportunities and challenges for Hong Kong as a RDC serving markets across Asia.
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IN DETAIL: SURVEY
The Money,The Method, The JobBó Lè Associates conducted its annual regional client survey showing the hiring, compensation and social media use across countries and industries. More than half of all companies surveyed say they intend to increase headcount, but who is paying the best, and where are they finding their new employees?
Throughout its regional client survey, Bó Lè Associates noted that the majority of
compensation, hiring and social-media trends in 2013/14 have been a clear extension of 2012. Most companies plan to offer one- to three- month’s salary as bonuses, while increasing their senior executives’ base salary by 5-10%, and like last year, 50% of all companies intend to increase their headcount by 5-10% going into 2014.
Performance and profitsEmployees’ overall performance in 2013/14 is expected to largely mirror 2012, with some 37% of employers in the Financial Services & Insurance industry indicating that they will give
out three- to six-month’s salary as bonuses. Meanwhile, 18% of employers in the IT&T industry expect to give out six- to nine month’s salary as bonuses and 5% of employers in the Healthcare industry plan to give out nine- to twelve-month’s salary as bonuses.
Going into 2014, 10% of employers in the Industr ia l industry plan to increase thei r employees’ base salary by no more than 5%, while 23% of companies within the IT&T industry plan to increase their employees’ base salary by 15-20%. Nine per cent of employers within the Architecture, Construction & Property industry indicated that they plan to increase their employees’ base salary by more than 20%.
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The Money,The Method, The Job
other hand, is still used most extensively by companies in marketing their products or services, or for announcing news and events. In terms of headcount adjustments, 31% of employers in the IT&T industry and 25% in the Financial Services & Insurance industry plan to increase their staff by 10-20%. Some 13% of respondents from the Professional Services industry also indicated that they intend to increase their staff by 20-30%. On the other hand, 14% of employers in the Consumer industry will encounter a hiring freeze and 29% of respondents from the Natural Resources & Energy industry have indicated that they will face a headcount freeze going into 2014.
More than 50% of employers in the IT&T industry intend to increase their mid-senior level executives’ base salary by more than 10%, while 8% of employers within the Professional Services industry indicated that they plan to increase their senior executives’ base salary by more than 20%. In the Consumer industry, however, 14% of companies do not plan on offering any increase in the base salary for their top executives.
Finding the talentPromoting internal candidates and outsourcing the process to executive search f i rms are st i l l the top two methods companies use to fill executive roles. Social media, on the
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IN DETAIL: SURVEY
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Companies across al l industries think that mid- to C-suite level positions are the most difficult to place, while 33% of respondents from the Electronics & Electronic Equipment industry think hiring mid-level positions are the most difficult. Some 32% of respondents from the Industrial industry think senior-level positions are the most d i f f i cu l t to p l a c e a n d 2 9 % o f r e s p o n d e n t s from the Natural R e s o u r c e s & E n e r g y i n d u s t r y think that placing C-suite positions is the most difficult.
Social media benefitsEven though 69% of companies across industries regard social media as effective, all industries rated social media as the least important channel for executive-level hiring and only 13% of companies within the Manufacturing industry depend heavily on employee referral programs to fill their
executive-level roles. Although social media is not a primary tool for hiring top executives, it is still regarded as an effective instrument to achieve other purposes. Approximately 35% of employers in the Financial Services & Insurance industry use social media for building
their employer brand. In order to maximise efficiency, different industries have chosen to focus their social media efforts on various social media channels: 27% of respondents from the IT&T industry principally use forums, while 13% of respondents from the Food & Beverage industry mainly use blogging sites.
The majority of companies consulted have expressed their view that social media is effective, and as a result, increasing effort will be channelled into social media to increase brand exposure and companies’ presence in the market, as well as a means to acquire new customers.
Bó Lè Associates
Bó Lè Associates is the largest executive search firm in Asia with a well-developed network of 16 wholly owned local offices in the region. For more information, please contact our Managing Director, Nancy Yick at [email protected] or visit our website at www.bo-le.com.
Approximately 35% of employers in the Financial Services & Insurance
industry use social media for building their employer brand.
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www.britcham.comLiving
No Place Like HomeIn the heart of Admiralty, Pacific Place Apartments is the epitome of luxurious urban living in Hong Kong. From a central location that reveals the essence of the city and its culture, residents enjoy a home with a remarkable level of sophistication and elegance, complemented by exceptional service and amenities. – By emily Ferrary
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Living
Staying away from home has become an inevitable part of business travel , and
something that the Hong Kong property market is all too familiar with. In the past, hotels were always the obvious choice, but with companies now sending executives across the world on extended contracts, Serviced Apartments are becoming a more attractive alternative.
One of the main reasons for the shift is that you can enjoy the comfort and privacy that you have in your own home, while benefitting from the greater flexibility of a serviced apartment, along with the fully inclusive facilities. Serviced Apartments can be an excellent stop-gap if you are re-locating to a new area, if you need a temporary place to stay when moving home or as a perfect get away for leisure travellers wanting to stay in a city for an extended stay without having to fork out on hotel charges on a nightly basis.
Conveniently located in the heart of the city, the Pacific Place Apartments provide all the comforts of home with all the benefits of executive living and, after a weekend spent at the apartments, it is too tempting to imagine living in situ.
The location couldn’t be better, with direct access to Pacific Place, the world-renowned shopping mall designed by international award-winning British designer Thomas Heatherwick and home to a range of luxury stores and Michelin-starred restaurants.
It is only a short air-conditioned stroll to Admiralty MTR station and with famous attractions such as Hong Kong Park and the nearby Starstreet Precinct, which boasts art galleries and chic boutiques, only a stone’s throw away, it is certainly one of the most accessible areas for the discerning business traveller.
Taxi ranks and private car drop-off points are on the doorstep and school buses pick-up students from directly outside the lobby entrance, making it just as convenient for families as for businessmen.
From the outside, one can be mistaken for thinking that you are walking into part of the Conrad Hong Kong. However, the apartments actually take up 27 floors of the building with 270 suites in total ranging from one to four bedrooms suites all of which are complemented with impressive views of either the city, harbour, Hong Kong Park or Victoria Peak.
For more information on Pacific Place Apartments please call 2844 8361 or visitwww.pacificplaceapartments.com.hk
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Residents can enjoy five-star hotel-standard amenities with complimentary membership at the adjoining Conrad Hong Kong’s health and leisure facilities, which include an outdoor swimming pool and a 24-hour fitness centre.
Unlike other typical Serviced Apartments, residents can also enjoy room service provided by the Conrad Hotel. Other amenities include daily housekeeping and laundry services, an expertly informed Concierge Team on duty seven days a week, 24-hour maintenance and security services ensuring that homes are well maintained at all times, as well as discounted rates in the Conrad Hong Kong’s valet laundry, business centre and food and beverage outlets.
Baby-sitting can be offered 24/7 and catering staff can be arranged for any in-apartment celebration. Such services definitely help maintain a certain kind of lifestyle of unrivalled convenience.
So what are the apartments themselves like? Well, although the last complete refurbishment of the property’s two wings was carried out almost a decade ago in 2005, the apartments still have a
modern and fresh feel to them. All of the units are fitted with the latest lifestyle amenities and are exceptionally designed to maximise every inch of space. Modern touches such as a flat panel television, Bose surround-sound home theatre system, complimentary Wi-Fi, and wireless Internet access are available as standard.
There are four interior design schemes to choose from, meaning there is an apartment to meet most people’s tastes. The apartments, as well as being elegantly understated with furniture, accessories, and artwork all complimenting one another, are particularly spacious ranging from 1,220 square-feet to 2,650 square-feet which, bearing in mind the location, is quite remarkable compared to the typical-sized Hong Kong apartment.
The minimum lease is one month but Pacific Place Apartments also provide a longer-term base for professionals to stay during their time in the SAR. I learnt that the longest staying guest has been there for almost 20 years, which I suppose is testament to just how much of a home it can be.
One senior banking professional, a resident for more than three years, said “Nothing comes close to the convenience and comfort of Pacific Place Apartments. This has really become my home away from home”.
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Artistic MeritArt is no longer the reserve of collectors or galleries; it has become an integral part of a contemporary luxury lifestyle. Well-travelled and influential home buyers are just as educated on the art scene today as they are on their investment portfolio. – By Yan Adams
Sterling Chamber member Grosvenor, which will celebrate its 20th anniversary in Hong
Kong this year, has been around long enough now to know how to host a good party or two. Chamber members may recall being treated to cocktails at Grosvenor’s last luxury development. The Westminster Terrace, located close to Ting Kau.
I t was wi th some ant ic ipat ion then, that Grosvenor’s latest residential project in Asia, The Westminster Roppongi, was officially launched on 28 November at an exclusive event hosted at The Grand Hyatt Hotel in Roppongi Hills, Tokyo. The launch followed previous sales exhibitions in Singapore, Taipei and Hong Kong.
Guests, including Japanese celebrities and local business partners, were all treated to a 3D projection mapping display celebrating “The Art of Change”, a theme inspired by the design and skill that went into the renovation work at The Westminster Roppongi itself, earning it the “Best Residential Renovation/Redevelopment Japan” award at the 2013 Asia Pacific Property Awards.
The event also reflected an integral aspect of Grosvenor’s Westminster-branded portfolio of residences: art. Throughout the night, the unveiling of specially commissioned artworks by contributing artist Noritaka Tatehana – designer of some of Lady GaGa’s most notorious shoes! – was then concluded to impressive effect with a performance from contemporary pianist Keiichiro Shibuya, played in time with a digital art display created especially for the set. The evening also featured the announcement of The Art Residency, a new initiative from Grosvenor and Tokyo-based creative house Artless Inc. The Art Residency will encourage a range of local and international artists to take up residency at The Westminster Roppongi for a number of months, where they will be free to work with complete creative freedom.
During the residency, work produced will be displayed throughout the property’s 14 floors, while the artists will also provide talks and workshops to the local community and engage with the wider public through various social media channels.
Yan AdamsMarketing Communications Executive, Grosvenor Asia Pacific
For more information on The Westminster Roppongi, the launch event or The Art Residency, please contact Yan Adams, Marketing Communciations Executive at Grosvenor Asia Pacific, at [email protected]. You can also find out more about the residency at http://thewestminsterartresidency.com.
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On the recent resurgence in the Tokyo residential market, Mr Loup also noted that “with the wider economy on a sustained recovery path heading towards the 2020 Olympic games, the outlook for Tokyo housing will remain well underpinned.”
“There is an obvious turnaround in Japan’s e c o n o m i c f o r t u n e s driven by both external and domestic factors and domest ic buyer s e n t i m e n t i s w e l l anchored. With prime
residential prices estimated at about a half that in Hong Kong and two-thirds of Singapore, attractive relative pricing and the near 20% depreciation of the yen have also drawn in strong foreign interest , particularly from Asian buyers.”
“Tokyo presents a compelling argument now for being as s ign i f i can t an inves tment destination in Asia as London is in the West: Both cities provide a broad and exciting range
of lifestyle options, be it cultural, recreational or culinary,” said Mr Loup.
The first artist to take up residency as part of the programme is Shun Kawakami, the founder of Artless Inc. His residency began in February 2014.
At the end of each residency, the remaining pieces will then be held for open exhibition in Artless’ own gallery. Some of these works are intended to then be auctioned for charitable causes.
N i c k L o u p , G r o s v e n o r A s i a Pacific Chief Executive, explained the rat ionale of the res idency programme: “Art today is not just the reserve of collectors or galleries; rather, it has become an integral part of a contemporary luxury lifestyle. Well-travelled and influential home buyers are just as educated on the art scene today as they are on their investment portfolio, and this is something that should be reflected in the residential offering of developers.”
“As such, art will play an increasingly important role within our Westminster portfolio of luxury residences,” said Mr Loup.
There is an obvious turnaround in Japan’s
economic fortunes driven by both external and domestic factors and
domestic buyer sentiment is well anchored.
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LIVING
The Book Discover the ingredients to a bit of Sevens magic; The Book: A Celebration Of The History Of The Hong Kong Sevens Week, depicts the history of a Hong Kong landmark event and a spectacle that sends tens of thousands of people from around the world on a pilgrimage to the Hong Kong Stadium every March.
The Book pays homage to the biggest names, the hardest hits, and the wildest parties that the Hong Kong Rugby Sevens Week has hosted since its humble beginnings in 1976. Hundreds of iconic photographs and a feast of Sevens facts and information tell the tale of the city’s biggest sporting attraction and all of the features which make it such a phenomenal success.
From the very first brainwave that gave birth to the Sevens tournament, to the most famous players to have set foot on our home turf, to the most outrageous costumes to have graced the South Stand, The Book bares all.
Along with the action and the stunning snapshots of the Rugby Week, The Book also pays tribute to many of the rugby-mad businesses that have been patrons of the Hong Kong Rugby Sevens over the years and have dedicated so much to the success of the tournament.
So if you’re a Sevens fanatic, interested in the makings of a world-famous rugby tournament, or have ever attended Hong Kong’s biggest party, then let The Book: A Celebration of the Hong Kong Rugby Sevens Week, be your endlessly entertaining companion.
And for those Seven’s aficionados, the big question is: Are you in it? The perfect gift and souvenir for the Sevens, The Book is on sale in 27 Hong Kong bookshops.
Rugby Hong Kong
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Thank you to our co-organisers, KPMG for their continued support.
KPMG is committed to supporting rugby in our community... The Sevens is the highlight of the rugby and corporate calendar and showcases the vibrancy, cultural mix and work hard - play hard
spirit of Hong Kong. - Andrew Weir,
Senior Partner at KPMG, Hong Kong
The Chamber and KPMG Rugby DinnerLast year’s Britcham and KPMG Rugby Dinner was featured in The Book as one of the city’s most popular rugby events leading up to the infamous Hong Kong Sevens. Every year the dinner features an impressive line-up of speakers of international rugby stars to get fans warmed up for the big weekend.
In the lineup and committed to keeping us entertained this year are: Scott Hastings, former Scotland / British & Irish Lion, together with World Cup winner Simon Shaw MBE, former England / British & Irish Lion, and Hugo Porta, Former Argentine player and IRB Hall of Fame inductee.
This year’s dinner will take place on the 27 March at the Hong Kong Football Club from 8:30pm until late. Ticket sales start after Chinese New Year. The Book is available to members at a special price of $360 on the night or pre-order. For more information or to order, please visit www.carinat.com/thebook or contact [email protected].
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LIVING
Business on the Menu?
Alfie’s by KEE and The ReserveAlfie’s by KEE, the Hong Kong Home of Alfred Dunhill is a chic British award-winning restaurant, bar and lounge, located in the heart of the financial district. Its breakfast is one of the best in town, offering a Full English with all the trimmings. For lunch and dinner, there’s a wider choice of traditional British fare such as Fish and Chips, Roast Chicken and Cottage Pie.
Located in Prince’s Building, it is popular with many of the business elites that work in the area and as night falls it transforms into a hot spot for after-work drinks. Last year, Alfie’s welcomed a much-anticipated new addition, The Reserve, a sophisticated bar and lounge which showcases the very best British produce and design. Building on the success of Alfie’s, The Reserve evokes the intimate comfort of a British private club with leather panelled walls, copper trim and relaxed lighting, offering discerning customers an escape from the city in a casual, intimate and refined setting underpinned by indulgent food, fine wines and spectacular single malts.
T’ang Court and The Bostonian, The LanghamHigh above the bustling streets of Mong Kok, you can enjoy award-winning Cantonese c u l i n a r y m a s t e r p i e c e s a t the elegant T’ang Court, a Michelin two-star restaurant. This restaurant gets full marks for superb Cantonese cooking and a swish, quiet room that’s conducive to conversation.
The Langham Hotel also has a renowned seafood restaurant, t h e B o s t o n i a n , w h i c h i s recommended by the Michelin guide, offering a set lunch of buffet-style appetisers, entrées, dessert and cof fee or tea everyday of the week. Have we mentioned that you can expect superb dishes served in American-sized portions?
Kitchen, W HotelConvenient ly s i tuated above Kowloon station and next to the iconic ICC, W Hotel offers three ‘wow-worthy’ buffets per day at Kitchen, its popular modern bistro. Once the deal is done why not head to W’s chic WOOBAR for a sophisticated cocktail.
Flint Grill & Bar, JW MarriottThe newly opened Flint Grill & Bar at JW Marriott in Admiralty offers modern dishes made with top ingredients in an elegant yet welcoming setting. In its open kitchen, guests are welcome to watch chefs turn market-fresh seafood and prime cuts of meat into American classic dishes. If you’re looking for business lunches, try the 3-course Executive set lunch on weekdays. Private rooms are also available but make sure you book in advance.
The PrincipalThe Pr inc ipa l i s the Press Room’s Group newest venture and is arguably the group’s most sophisticated. Serving a range of original neo-Spanish dishes, The Principal also offers one of the most original wine lists in town, with wines from Slovenia, Japan and Morocco to name but a few. Tables in the airy, modern dining room are well-spaced and for those who want more privacy, several semi-private booths are available. There is also a private dining room for larger groups. Situated in one of the trendiest areas in Wanchai, The Principal is perfectly located for those working in or around Pacific Place.
If you are looking for a place guaranteed to impress a boss or client, or a discreet destination to eat while discussing a deal, have a look at our pick of Member Restaurants – all of them amongst Hong Kong’s best restaurants for a business meal.
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The Grand Hyatt Steakhouse and GrissiniNothing beats a good steak and the Grand Hyatt Steakhouse serves some of the best prime cuts of beef from the US, Canada and Japan. Of course, if steak isn’t your thing, they also have an oyster and seafood bar, a beautifully decorated cigar room, and a wine room serving up to 160 labels.
Grissini, which is as old as this Grand Hyatt itself, serves a range of Italian classics and an extensive selection of Italian wine. While Grissini may be on the pricier end of the scale, you can also enjoy a breathtaking view of the Victoria Harbour and delightful service from the staff.
DotCodNearing 13 years of operation in the basement of Prince’s Building, DotCod Seafood Restaurant and Oyster Bar is still as popular as ever amongst city workers. The executive chefs have continuously provided inspiration for the menus, offering innovative seafood and other dishes.
A well-stocked bar and attractive menu served in an elegant ambience bring in the crowds. Make sure you book a table otherwise you risk wasting your lunch break waiting. Besides oysters they also serve a wide range of pub snacks for you to choose from, making the bar a nice place for a happy hour drink with colleagues after a long day’s work in the office.
Caprice, Four Seasons Caprice is a world-class restaurant that offers French haute cuisine with elegant modernity, and where the a la carte menu changes to reflect the seasons in France. One of only a handful of restaurants in Hong Kong that has been awarded three Michelin stars, Caprice is a well-established favourite. The food is exquisite and the service is nothing short of superlative – this is an absolute must if you want your clients to feel special. Be sure to try the Caprice Cheese Cellar, which only enhances Caprice’s reputation for serving the finest cheese selection in Hong Kong.
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LIVING
New Beginnings,New AdventuresAnother year has begun, bringing with it a whole new range of exciting travel options. While we will never say “no” to destinations such as Bali, Phuket or Boracay, this year we want to bring you new experiences and take you to places you haven’t been before. - By Nicole Pang
IcelandThe land of f i re and ice: In our opinion Iceland is one of the most magica l p l aces on ea r th . Famed for the iridescent Northern Lights, the country is also home to exploding geysers, t h u n d e r i n g w a t e r f a l l s , r u g g e d c o a s t l i n e s a n d s t e a m i n g h o t s p r i n g s . Wi ldl i fe lovers wi l l enjoy whale, dolphin and porpoise c ru i ses as we l l a s husky dogs ledd ing . Adventu re enthusiasts should definitely op t fo r he l i cop te r r ides over the famous volcano, Eyjafjal lajokull, as well as snowmobiling through the country’s gigantic glaciers.
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TanzaniaThe Serengeti is synonymous with Tanzania, home to a range of wildlife that hunt, roam and sleep right before your eyes – and what a sight that is! Tanzania also boasts an amazing coastline with crystal-clear waters and pristine white sand. A journey to the country’s Spice Islands will make you feel like Robinson Crusoe, and is the perfect place to unwind and escape the hustle and bustle of city life.
JordanA historian’s heaven, Abraham and Moses, John the Baptist and Jesus Christ are all linked to Jordan. Whether you are religious or not, following in their footsteps is bound to be a spiritual adventure.
Jordan is home to close to a hundred sites of biblical importance including the Dead Sea, Mount Hor, Lot’s Cave and Mount Nebo. Last, but not least, there is of course the archaeological wonder of Petra – described by UNESCO as “one of the most precious cultural properties of man’s cultural heritage.”
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LIVING
PeruIf you are an avid hiker, Peru is a must-visit destination. Follow the Inca trai l and discover the once-lost city of Machu Picchu, or trek the Andes and be wowed by the sheer size of these mountains. Peru is a country teeming with mystery with diverse sceneries ranging from deserts and snow-capped mountains, to the lush vegetation of the Amazon rain forest.
CubaThe land of rum, cigars and salsa, Cuba never fails to surprise us, which is why we cannot get enough of this little piece of Caribbean paradise. La Havana’s cultural richness is discernible at every turn and is still very much sheltered from mass tourism. The architecture, vibrant colours and vintage cars will make you feel like you’ve travelled back in time. After a few days in the capital, venture further afar and wander the island’s many beaches, or lose yourself in the labyrinthine streets of Camaguey.
TaiwanThere is so much more to this little island than the city of Taipei; though the capital is also a great option for foodie getaways, with all its quirky little restaurants and bustling night markets. After you’ve eaten your fill at the markets, hop on a train and get out of the city where the island becomes a biker, hiker and surfer’s paradise.
Taroko National Park is one of the seven wonders of Asia and is renowned for its winding tunnels and steep marble cliffs. There are also seemingly endless surrounding islands such as Kinmen and Matsu, famous for their traditional villages and pagodas, and Penghu is known for its beautiful temples, beaches and surfing hotspots. If you have a week to spare, cycling down the eastern coastline is stunningly beautiful, not to mention a great way to work off those beef noodles, oyster omelets and red-bean mochi.
Lightfoot Travel
Bespoke travel company Lightfoot Travel (www.lightfoottravel.com) is an Asia-based tour operator specializing in tailor-made holidays, honeymoons, short breaks, boutique accommodation and private villas in Asia and beyond. For more information please email [email protected] or call (852) 2815 0068.
Nicole PangRegional Marketing Manager
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Papua – IndonesiaPapua is most certainly Indonesia l ike you’ve never seen it before. The world’s second-largest island, formerly known as Irian Jaya, is a land of varied biodiversity and rich culture. An off-the-radar diving destination, Papua is sure to impress with its incredible marine life and untouched, impenetrable jungle.
One of the best ways to see this part of Indonesia and get to the best diving spots is on a live-aboard. Reach the most untouched areas, dive up to twice a day, island hop and visit remote villages, and fall asleep to the gentle rocking of the boat and the sound of the waves.
ItalyIf you’ve already ridden a Vespa in Rome, had a romantic gondola ride in Venice and eaten pasta to your heart’s content in Florence, you may think that you’ve seen all of Italy. Think again! Here’s our list of other Italian cities just waiting to be explored:
The Lazio Lakes are a short drive from Rome and are surrounded by medieval vil lages. The region showcases diverse landscapes, from sandy coastl ines and woodland to marshland and volcanic lakes. Not to be missed!
Matera, in the South of Italy, is one of the oldest inhabited cit ies in the world and home to the UNESCO World Heritage site, the ancient cave dwellings of Sassi.
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YOUR CHAMBER
The British Chamber Christmas Drinks
11 December 2013, Azure, Hotel LKF
Sponsored by
Thank you to everyone who joined us at Azure, Hotel LKF on Wednesday 11th December for the British Chamber Christmas Drinks, sponsored by Truphone. In true British fashion, guests enjoyed lively conversations and made new acquaintances over a glass of mulled wine and plates of mince pies. W e w o u l d l i k e t o t h a n k Truphone for sponsoring all the drinks of the evening and Azure for hosting the event and sponsoring two prizes for the lucky draw.
Thanks to everyone again for making the event a successful one. We hope everyone had a great time and we promise to bring you more excit ing networking events in 2014!
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YOUR CHAMBER
There are many great benefits of being a member of The British Chamber of Commerce.
One of those is the Member Discounts programme, an exclusive package of discounts that range from discounted car rentals, reduced hotel accommodation, airfares and even relocation costs.
Every six months we invite members to prepare a tailor-made offer to all the members of the British Chamber. You can find these benefits listed below and for more details please visit our website www.britcham.com.
Members will receive 10% discount on top of the lowest rates that Accor’s Asian hotels are offering on the day. This applies to over 1600 Sofitel, Pullman, MGallery, Novotel, Mercure, Thalassa & Orbis hotels worldwide. You will also receive a 5% discount on top of the best unrestricted rates for hotels including ibis (in specific countries), All Seasons & Hôtel Barrière. For more information please contact Regina Yip on 2868 1171 or email: [email protected]
Members of the British Chamber of Commerce can benefit from a 10% discount at this chic restaurant in Central. To make a reservation please call 2530 4422 or email booking: [email protected]
Members will receive a 10% discount off the total bill at Man Ho Chinese Restaurant, SkyCity Bistro, Velocity Bar & Grill, and The Lounge (promotion does not apply to alcoholic beverages). To make a reservation please call 3969 1888
Members can book a Smart Room at the special rate of HK$1,600 including a daily eye-opening buffet breakfast (subject to availability). You will also receive a 20% discount at five of the hip restaurants and bars that the hotel has to offer. Furthermore, when you book the 21 day long room package at HK$23,100 you will receive a Round Trip Limousine Service. For more details please call 2980 7785
Members will receive a 20% discount on food only in MoMo Café. To make a reservation please call 3717 8888
Members will receive a 10% discount off on the total bill at award-winning Dynasty Chinese Restaurant, all day dining at Cafe Renaissance, Scala Italian Restaurant and the Lobby Lounge. To make a reservation please call 2802 8888
Members will receive a 15% discount off the bill. For more information please call 2810 6988 or email [email protected]
Members will receive 15% off the lunch buffet in Kitchen and dinner in Sing Yin, Monday to Friday, and 10% off in all venues at all other times. For more information or to make a reservation please call 3717 2222
MemberDiscount
Food & Beverage & Accommodation
15% discount on food and beverage at The Grill and 10% discount on treatments upon spending HK$1,000 at the Plateau Spa. To make a reservation please contact The Grill on 2584 7722 or the Plateau Spa on 2584 7688
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As a member of the British Chamber of Commerce you can enjoy exclusive offers from British Airways. For more information please visit: www.britcham.com/memberdiscount/ british-airways
Members can enjoy 20% off British Standards Online (BSOL) subscription and all types of training courses run by the BSI Training Academy. For more details, please visit www.bsigroup.hk
As a member of the British Chamber of Commerce, you can enjoy a 10% discount on all normal price merchandise when shopping at Colourliving in Wanchai. Please call 2510 2666 or visit www.colourliving.com
Compass Offices are offering all Britcham members a free, no obligation one month Virtual Office Address Package to help you get set up in Hong Kong as well as 50% off meeting room rental. Please email [email protected] or call 3796 7188 to find out more
Special offers are available exclusively for members of the British Chamber of Commerce. Please call 2532 6060 for more details or to make a reservation
Members can enjoy a complimentary serviced office for one month, 50% off Virtual Office subscription and up to 20% off meeting room and video conference bookings. Please contact 2293 2299 or email [email protected]
Wynd is offering a 10% discount off the membership price if for members of the British Chamber of Commerce who sign up for three months or more
Britcham members will receive a complimentary six-month Businessworld Gold card that gets you access to 1,200 business lounges in prime central city business locations in Asia and around the world. For more information or to accept this offer please visit www.regus.hk/localpartnership
British Chamber members can get a 5% discount on all purchases from VisitBritain’s online shop at the checkout. Please visit www.visitbritaindirect.com/world for further details
The Hive is offering one additional month’s membership at no extra charge for any member who signs up for six months. For further details, please visit www.thehive.com.hk
Lifestyle & Travel
Business Services
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Member Get Member
Cafe Deco Bar & Grill – Sunday BrunchFor the most amazing views of Hong Kong, Cafe Deco Bar & Grill is a great brunch option. Indulge in a wide variety of delicious specials whilst overlooking the Peak’s spectacular view every Sunday and public holiday from 11am to 3pm at Cafe Deco Bar & Grill.
Cellarmaster WinesAs part of this year’s ‘Member get Member Campaign we are p leased to announce that any new member who signs up through this referral programme wi l l receive a comp l imenta ry bo t t l e o f C h a m p a g n e P o m m e r y , courtesy of Cellarmaster Wines.
In addition, if you successfully introduce a company to us that results in them joining the Chamber, you will receive a fantast ic dinner for two courtesy of a top restaurant in Hong Kong.
Cafe TOO, Island Shangri-La, Hong KongThe innovative cafe TOO brings casual dining to a higher level of creativity. Their ten cooking theatres, each featuring a different culinary style, are showcases for the best of international cuisine as well as stages for their chefs’ engaging performances.
Make a successful referral to the British Chamber of Commerce and enjoy a fantastic meal for two. So what are you waiting for? Spread the word throughout your network to enjoy a complimentary meal for two at one of these fantastic member restaurants.
If you happen to refer the most new members to the Chamber, you will win a stunning prize: a complimentary brunch for four at Cafe Deco Bar & Grill, courtesy of Café Deco Group.
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The Bostonian, The Langham, Hong KongThis well-established restaurant has been a Hong Kong favourite for well over a decade. Located at the lower lobby level of The Langham, Hong Kong, The Bostonian has an excellent reputation for its superb steaks, and more recently its fully sustainable seafood menu. Featured by one of Hong Kong’s influential restaurant bibles, “The Hong Kong Best Restaurant Guide” since 2000 and recommended by The Michelin guide, the Bostonian is a hallmark for impeccable service and exceptional food.
To enter:• Consider who among your contacts might be interested in
joining the Chamber• Email [email protected] with the name and contact
details of your suggested company• If appropriate, contact your suggested company and let
them know that the Chamber will be in touch• The Chamber will follow up with each suggestion directly• I f your referra l i s successfu l , the Chamber wi l l
contact you with details of how to book your dinner
Café Renaissance, Renaissance Harbour View Hotel, Hong KongCafé Renaissance is the perfect place for all day dining. Located on the Mezzanine floor, the 210-seat all-day dining café serves a wide variety of dishes from all over the world. Café Renaissance serves wholesome breakfasts, chef crafted lunches and dinner buffets plus à la carte menu daily and brunch on weekends, in a warm and welcoming atmosphere.
Terms & Conditions• You must be a member of the British Chamber to be
eligible for this offer. The dining vouchers will only be provided if your referral results in a new member for the Chamber
• This offer is valid for all members whose referral results in a new Corporate, Overseas or Startup member of the Chamber. It does not apply to Additional members or additional YNetwork members
• The Chamber will allocate the restaurant vouchers. Members will not be able to choose which restaurant they visit and must adhere to the terms and conditions
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Shaken not
Stirred 28 November 2013 – Boujis, Central
(left) Jessie Chan (Stephenson Harwood), Sammie Ho (Abercrombie and Fitch) and Kathryn Brogan (Stephenson Harwood); (right) Lee-Ann Ford (Ford Academy for Student and Teachers) and Alexa Reason (Flight Centre)
(left) Jennifer Dong (Fragrance Du Bois), Angel Yao and Edward Coates (DLA Piper); (right) Lloyd Smith (Taylor Brunswick) and Stephanie Dixon (Flight Centre)
(left) Richard Barton (Newgate) and Claire Robinson (Guardian Life Management); (right) Natalie Wong Tsz Shan (Shipping HK Forum), Ane Alfeiran Corral (Residence G HK) and Jeremie Aliamus (GCP Hospitality)
S p o n s o r e d b y
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23 January 2014 – Zuma, Central
(left) Russell Brown and Yong Zhau (British Chamber of Commerce – China) and Brigadier Christopher Hammerbeck CB, CBE (British Chamber of Commerce – HK); (right) Linda Pham (MetLife Asia Pacific Ltd), Sian Folkard (JP Morgan Chase Bank), Samantha Cornelius (StandOut Internships (HK) Ltd) and Dawn McGregor (China Water Risk)
(left) Emilia Mason (Woods Bagot) and Caroline Court (Cushman & Wakefield (HK) Ltd); (right) Tom Knights (Active Network), Liz Search (Livinism Ltd) and Marc Menard (Swiss Insurance Partners)
(left) Martyn Ludlow and Jim Mackie (Forth Capital (HK) Ltd), Ceri Silk, (Skeyndor Institute), Alan Taylor (AT Associates Hong Kong Ltd) and Marc Meldrum (Expatriate Insurance Brokers (HK) Ltd); (right) Paul Gardner (Fresh Accounting Ltd) and Laura Canamasas (Wynd Ltd)
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Stephen KittsManaging Partner AsiaEversheds
How is business?2013 was a positive year for Eversheds in Asia. The world of legal services is fast moving and dynamic. We have been in Hong Kong for five years and over that time experienced significant growth in people and revenues. At the start of the year we set ourselves some challenging objectives to build our brand, client base and develop our people. Our business is all about confidence and teamwork. It has been great to see the team pull together in a positive manner to deliver our strategy. We have built important new relationships, leveraged our global credentials into the market, won new clients and achieved significant revenue growth.
What are your plans for the firm in the region this year?Asia is the top strategic priority for the development of the Eversheds global business. There is lots of potential for us in the region and takes a lot of hard work and dedication to grow the business. We have a progressive approach to the delivery of legal services. It is a competitive market and we need to distinguish ourselves with some fresh ideas that make our clients’ lives easy. I often say that we are prepared to be “disruptive” in the market – this is meant in a positive way as the requirements of clients are rapidly changing. We will think out of the box and come up with innovative ideas to best deliver the service they need.
PerspectiveIn each issue of Britain in Hong Kong, the Chamber checks in with one of its Sterling Members to get a fresh perspective on our local businesses, and a peek into the personalities of our captains of industry.
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We will make some strategic investments in specific lines of business. We believe there is a window of opportunity for us to develop our brand in Hong Kong and China particularly as Chinese companies continue to globalise. We opened a new office in Beijing in May 2013 and we have been mandated on some significant outbound investments for major SOEs and private companies.
The most important issue for me is that we release the potential of our business in Asia and create the right environment for our team to prosper.
What, to your mind, has been the most crucial element in the success of Eversheds over the years?We listen to what clients want. Corporates have become more sophisticated and demanding: they want top quality, added value legal advice delivered in a spirit of cost effectiveness and efficiency. Some call it the “more for less” approach.
C l i e n t s a l s o w a n t m o r e certainty and transparency on costs. Gone are the days when lawyers they can quote low and at the end of a job charge whatever is on the meter. We will work with a client to put them in control of the relationship, both from a cost and service delivery point of view.
For example, we have just been appointed in Asia to deliver a full legal service with a tailored pricing model, with tiered, blended rates, an innovative performance-based fee element and project management provisions covering 158 countries. This unique delivery model is underpinned by consistent quality, transparency, clear cost control and comprehensive metrics for our clients and Eversheds.
What does your work involve personally?As Managing Partner for Eversheds in Asia. That means I have a leadership role across our offices in Hong Kong, Beijing, Shanghai and Singapore. I work on strategic issues and aim to create an empowering environment that allows our lawyers to take responsibility to develop the business.
We need to have a joined-up approach to our business in Asia and globally: We now have 50 offices across Europe, Africa, the Middle East and Asia. It is very important we do not simply play lip service to working as one team – our business is more than having flags on a map. Communication is critical to our success and I get our lawyers from the senior partners to the junior associates to share ideas and work together. I encourage the right behaviours and if we get this right good things happen – new opportunities arise, we have loyal clients, and we improve our prospects for success. It is a win-win situation.
I try to spend as much time as possible with clients. We are an ambitious business with a lot of good things to say. It is very important that we deliver our credentials to the market in a confident and coherent manner. I see my role as being part ambassador for Eversheds, part coach to our team to give them the tools to grow the business, and part facilitator/door opener to ensure we join up the dots between our different teams, offices and clients.
I am, at heart, an M&A lawyer and enjoy working with clients on their strategic projects. Asia has delivered some great opportunities for us to work on cross border deals and I enjoy rolling up my sleeves and getting stuck into transactions.
What is the most exciting business related news you’ve heard recently?Whilst this isn’t especially new news we are very excited about the increasing globalisation and sophistication of Asian businesses. Clients want new solutions to service delivery and cost control as they spread their wings and invest, and we have risen to the challenge. There is a greater emphasis on taking a joined-up approach across jurisdictions to deliver top-quality advice. We use technology to make a client’s life easy and being efficient. Eversheds has developed a number of online toolkits and mobile applications that will ensure some of the mystery (or anxiety) of doing business outside of Asia is reduced.
Clients also want more certainty and transparency on costs: Gone are the days
when lawyers can quote low and at the end of a job
charge whatever is on the meter.
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Clients tell us that we really differentiate ourselves from our competitors by delivering integrated service across jurisdictions, which is something not many law firms can do in practice.
How does the British Chamber of Commerce add value to your business?We have recently upgraded our membership to be a Sterling member that demonstrates the importance we attach to the Chamber. We are a relatively new business in Hong Kong and we want to develop our connections, build strong relationships and raise our profile. The Chamber is a fantastic organisation that helps us get close to influential individuals and companies that will add real value to our business. We also want to deliver value back to the Chamber and its members so hopefully it will be a two-way street.
How long have you been living in Hong Kong?I came to Hong Kong in November 2012, so I am still the “new boy” in town!
What’s your favourite spot in Hong Kong?I am still finding my way around and I’m sure there are lots of very nice places I haven’t yet discovered. I do enjoy walking the Dragon’s Back and looking down on the coastline and Shek O golf course (although it’s not a hike to be done on a busy Public Holiday!).
If there were one thing you could change about Hong Kong what would it be?Difficult question and probably the answer is “not much”. I have been very impressed with all that I have experienced in my 14 months here. There is a real “can do” attitude gives great confidence that anything is possible.
What have you learnt recently that you didn’t know before?It sounds like a statement of the obvious but whilst I have been in Hong Kong the world really does seem to be a small place, made especially so by the fantastic transport infrastructure in Asia
and Hong Kong in particular – London and the UK have a lot to learn!
Which words or phrases do you find most overused? My teenage children use “like”, “know what I mean, like”. It is infuriating – I do wonder why I have paid for private education!
What is your favourite (non-professional) occupation?I would love to be a professional golfer – lots of exotic travel, 5-star hotels, the best golf
courses in the world... and I might get paid millions of dollars to do it!
What is your most marked characteristic? Depends who you talk to! My wife would say untidy (maybe at home but not in the office!), my work colleagues might say quietly determined and ambitious.
If you had a motto, what would it be?Just do it!
I am, at heart, an M&A lawyer and enjoy working with clients on
their strategic projects… I enjoy rolling up my
sleeves and getting stuck into transactions.
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