Hong Kong organizes largest ever promotion in Jakarta

The Jakarta Post, Hong Kong | Business | Fri, August 14 2015, 3:28 PM
Hong Kong will come to Jakarta in a big way in the middle of September. The city, located just off mainland China, will host a week-long promotion of its fashion, jewellery and electronic products and services and try reaffirm to Indonesians its role as the best gateway into mainland China, the world’s second largest economy.

Labeled ‘In Style Hong Kong’, the large-scale promotion will bring to the Jakarta Convention Center and the Grand Indonesia shopping mall more than 100 Hong Kong lifestyle brands. Some of these include fashion retailers such as G2000, Giordano, Bossini, Chow Tai Fook jewelleries, watchmakers such as Edwin Cosi Moda, Memorigin and Charles Hubert and electronics companies such as Goodway and Gold Peak.

This will be the largest economic promotion campaign Hong Kong has ever undertaken in Southeast Asia, propelled by the rationale that Indonesia is the largest economy in the ASEAN region, and the country is therefore an attractive market for Hong Kong businesses. This is the rationale that Raymond Yip, Deputy Director General of the Hong Kong Trade Development Council (HKTDC) detailed to a group of Indonesian journalists last week.

“We expect some 10,000 trade buyers, importers, distributors, retailers, brand agents, franchisees and specialists to visit the exhibition, the largest ever promotion we will make in Southeast Asia,” added Yip.

HKTDC is organizing the whole promotional program, which will also be attended by Hong Kong Chief Executive CY Leung.

Yip said that the Hong Kong Design Award Display, entitled ‘Fame In Style’ and located at Grand Indonesia from September 14-20, would showcase a range of award-winning products in addition to ‘Batik crossover’ collections by six designers, namely Lulu Cheung, Walter Kong and Jessica Lau, Walter Ma, Aries Sin, Harrison Wong and Cecilia Yau. The purpose of ‘Fame In Style’ is to highlight Hong Kong’s creative and design power.

Yip said that as part of the promotion, HKTDC senior officials and business leaders would also hold a full-day symposium and services consultation and business-matching event at the main lobby of the Jakarta Convention Center on September 17.

According to HKTDC, Indonesia-Hong Kong trade ties amounted to US$5.1 billion in 2014 and Hong Kong was the 9th largest foreign investor in Indonesia, with $657 million of investment in 2014.

The symposium will brief Indonesian businesspeople on why and how Hong Kong, with a per capita income of over $42,000, has become the second largest private equity center in Asia, Asia’s second largest stock market, its third larget foreign exchange market and the third largest source of foreign direct investment in Asia, all in addition to being the most important entrance port to mainland China.

Business visitors also will receive comprehensive briefings on how they could benefit from using Hong Kong as a platform to make investments or enter the market in mainland China, particularly as the city is a new and emerging center of fashion design and creative enterprise. (vin)

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HK emphasizes role as platform for global supply-chain

The Jakarta Post | Business | Fri, August 14 2015, 3:43 PM

The Hong Kong government invited a group of Indonesian journalists, including Vincent Lingga of The Jakarta Post, for  a visit to Hong Kong last week in light of the In-Style Hong Kong in  Jakarta in September, dubbed as the largest ever economic and trade  promotion campaign Hong Kong will ever make in the ASEAN region.

Below is his report based on a series of interviews and discussions with Hong Kong officials and business executives:
Its  strategic role as the gateway to the world’s second largest economy,  mainland China, being an efficient regional logistics hub and the  world’s third-largest financial center are several of the strongest  advantages Hong Kong will offer to the Indonesian business community and  consumers during a big bang, week-long economic promotion in Jakarta  next month.

But the fundamentals that will continue to  strengthen Hong Kong’s role as the leading trading and financial center  in Asia are what Hong Kong Trade Development Council (HKTDC) deputy  executive director Raymond Yip calls the Hong Kong brand.

“The  Hong Kong brand embodies a strong rule of law, good governance, first  class infrastructure and a credible regulatory system in the financial  service industry,” Yip noted at a briefing.

All these advantages  have made Hong Kong the most efficient platform to access the Chinese  economy, concurred Indonesian Consul General Chalief Akbar in Hong Kong. 

“Indonesian companies intending to enter the market in mainland  China should take advantage of the complete pool of financial, legal  and knowledge resources available in Hong Kong,” Chalief added.

Jimmy  Chiang, the associate director general of Invest, the department of the  Hong Kong administration in charge of foreign direct investment (FDI),  cited another important role of Hong Kong as what he called the  ‘superconnector’ of investments between mainland China and the rest of  the world.

“About 60 percent of China’s investment overseas was made through Hong Kong,” Chiang said.

He  cited the 2015 World Investment Report of the Geneva-based United  Nations Conference on Trade and Development that named Hong Kong as the  world’s second largest FDI destination, receiving a total of US$103  billion last year, behind mainland China which got $129 billion.

The  report showed Hong Kong’s ranking surpassed the US, which attracted $92  billion, the United Kingdom ($72 billion) and Singapore ($68 billion).

Hong Kong also ranks second in FDI outflows with $143 billion in 2014.

“These  numbers underscored Hong Kong’s role as a super-connector, in which  foreign companies use Hong Kong as a base to invest in mainland China,  and mainland Chinese companies increasingly use Hong Kong as a platform  to make global investments and acquisitions and to raise funds,” Chiang  said.

Hong Kong is also the second largest stock exchange in Asia  after Tokyo, and is the sixth largest hub for foreign exchange trading.  According to the latest data at HKTDC, as of the end of May, there were  more than 1,780 companies listed on the HKE with a total market  capitalization of $3.2 trillion. About 50 percent of the listed  companies are mainland Chinese corporations.

But the relationship  between Hong Kong and mainland China seems complex. Beijing for the  most part has kept its promise to uphold the ‘one country, two systems’  mandate.

Officially, Hong Kong is considered a ‘Special  Administrative Region’ (SAR), which means that it is treated as a  separate country from an immigration standpoint and continues to  circulate its own currency, the Hong Kong dollar. Hong Kong also retains  an independent legal and judicial system inherited from the previous  British rulers.

The message HKTDC wants to convey to Indonesia  next month is that “If you want a piece of mainland China’s rising  economic power, it’s best to find a proven and safe entry point. Its  name is Hong Kong.”

Kenneth Choy, a senior executive of the Law  Society of Hong Kong, cited the experiences and expertise of the almost  1,000 local and 80 international legal firms in Hong Kong that are  important for firms intending to do business in mainland China.

“We  have deeper understanding of the laws, culture and business practices  in China, which is key to minimizing the risk of commercial disputes.  Yet more importantly, the international arbitration center here is  independent, credible and very reliable,” said Choy.

The basics  that make Hong Kong a model for free-market enthusiasts is the city’s  low taxes, unfettered capital flows and rule of law routinely earn  recognition as the world’s freest economy, Chiang noted.

Hong  Kong therefore has and will continue to play a pivotal role in the  modernization of the Chinese economy, providing capital, logistical  support, access to world markets, management know-how, technology,  equipment, design and research, marketing skills, procurement services  and quality assurance.

According to Chiang, the services sector  (financial, trading, tourism and real estate) accounted for almost 93  percent of Hong Kong’s $291 billion gross domestic product last year.

Even  though today most manufacturing companies have relocated out of Hong  Kong in search of lower-cost land and labor, notably in the Pearl River  Delta region (southern area of mainland China), industrialists remain  active in Hong Kong, operating their local offices as trading companies  and business headquarters that support offshore production.

They  mastermind and control the entire production process from their  headquarters in Hong Kong. Such an arrangement allows Hong Kong  companies to make the most of location advantages and division of labor.

 Today,  many Hong Kong traders still possess this dual operational status. They  perform non-manufacturing activities in Hong Kong, providing support  services such as marketing, order processing, materials sourcing,  product design and development, quality control, and logistics support  to their affiliated factories offshore, particularly in mainland China.

Its  long international business experience and knowledge about China make  Hong Kong the best partner for foreign companies to do business with or  in China, and for mainland Chinese companies to do business around the  world, noted Raymond Wong, the business development director of the  Geneva-based SGS, the world’s largest inspection, verification, testing  and certification company.

But advanced technology, research and  development activities have now become the new focus of the economy to  make Hong Kong another technology center in Asia, Wong added.

Hong  Kong’s extensive financial and business service cluster is unique in  Asia for its breadth, depth, sophistication and mix of international and  local firms. This cluster includes private banking, fund management,  corporate finance, currency trading, insurance, venture capital finance,  direct corporate investment, stock broking as well as support services  as laws, accounting, management consulting, executive search, public  relations, advertising, communications and information technology  support.

Hong Kong export trading firms have increasingly played  the role of packagers and integrators, matching demand from North  America or Europe with sources of supply throughout Asia and beyond.

Hong  Kong is able to play this role because it is the home to a number of  dynamic clusters of industries that are related to each other, that draw  upon common skill bases or inputs and that can reinforce each other’s  competitive position through dynamic interaction. They are capable of  bundling, integrating or packaging different aspects to create unique  combinations.

Its complete and most dynamic clusters of  industries facilitate a process to deliver products across the globe  involving financial and business service centers, suppliers,  distributors, port operators, forwarders, customs brokers, forwarders  and carriers in a finely-tuned chain operating in concert.

No  wonder, as of early this year more than 3,800 foreign companies had  their regional headquarters in Hong Kong for overseeing their Asian  operations.

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