From the ChairmanServing as Chairman ofthe Hong Kong TradeDevelopment Council(TDC) since October2000 has been oneof my most rewardingexperiences. Havingfaced several majorchallenges in the pastsix-and-a-half years,I believe that thenumerous initiatives wehave taken during thisperiod have positionedHong Kong and the TDCwell for the future.No one should ever underestimate the importanceof trade to the Hong Kong economy. Manufacturingand trade activities now account for approximately45 per cent of GDP and 1.3 million jobs in HongKong. In 2006, total trade surged past the HK$5trillion mark for the first time in history.Since 2000, I have visited about 80 cities andbusiness centres around the world, and have metand addressed some 60,000 business owners andexecutives. Bringing new players to Hong Kong is ajob that never ends. My message is simple: the HongKong platform helps you grow your business.Our focus is on small and medium-sized enterprises(SMEs). We help them connect with potentialbusiness partners, especially the many new playersthat we bring to Hong Kong. Connectivity is the key.The bottom line is to help all players, existing as wellas newcomers of any nationality, do more business.This results in more business activity and more jobsfor the community.
Initiatives for a new centuryThe Pearl River DeltaOne of my first tasks as the new TDC Chairman in 2000 was to foster a closer relationshipbetween Hong Kong and the Pearl River Delta (PRD). Our concept of “Hong KongPlus” embraces the PRD and all the opportunities that it creates, while building acritical mass that is attractive to international companies. By doing this, we encourageeven more business flows in and out of the mainland and throughout Asia via theHong Kong platform, resulting in rapid growth in services, which then translates intomore employment.The Yangtze River DeltaThe rapid economic development in the Yangtze River Delta (YRD) region is equallyimportant to the Chinese economy. One of the key factors of success for this region isthe high concentration of mainland private enterprises (MPEs) – more than 360,000 ofthem in Zhejiang Province alone. I visited the YRD together with a business delegationthree years ago and witnessed the thriving economy propelled by MPEs there. Thisled to the opening of a TDC office in Hangzhou this year to cope with the increasingdemand for our services, bringing to 12 the number of TDC offices in the mainland.Connecting the world’s SMEsThe TDC has also strengthened its worldwide officenetwork connecting Hong Kong with key internationalmarkets. We now have 42 representative offices worldwide,including those on the mainland. Through this network, weassist Hong Kong companies in penetrating emergingand potential markets as well as established markets. Ournetwork of offices also connects with potential playersfrom overseas and the mainland, bringing them to theHong Kong platform.We champion and create more opportunities for oureconomic heroes – the SMEs that make up some 98 per centof our companies. And we have transformed our modestlyscaled SME Market Day, which generally attracted about5,000 visitors, into the now globally recognised World SMEExpo, which last year attracted nearly 32,000 SMEs fromHong Kong, the mainland and overseas – the largest numberof visitors so far.The TDC’s six bilateral committees with Hong Kong’skey trading partners have taken a more sectorspecificapproach. Pictured is a sub-group meeting ofthe Hong Kong-Korea Business Round Table held inHong Kong last August, focusing on the logisticsindustry.Korean Consul General Seok Tong Youn presents the prestigious Industrial Service Medal toChairman Peter Woo for his contributions to the promotion of trade and business betweenKorea and Hong Kong.In addition, the formation of the Federation of Hong KongBusiness Associations Worldwide has created a uniqueinternational network of business contacts for Hong Kong.When the Federation was first set up in 2000, there were 28member associations with 7,700 individual associates. Thereare now 31 member associations with 11,000 individualassociates. Delegates from these groups visit Hong Kongannually, usually coinciding with World SME Expo.The TDC has also led the way in promoting high-levelbilateral meetings with business leaders and seniorgovernment officials in key markets, with the aim of openingmore doors for our SMEs. There are now six bilateralcommittees with Hong Kong’s key trading partners,including the two with the UK and France, both of whichwere established after 2000. Our approach is region toregion, city to city, business to business and sector to sector.Such two-way dialogue has been effective in bringingtogether Hong Kong companies with potential businesspartners overseas.The Chairman in discussion with Tianjin Mayor DaiXianglong during his visit to Hong Kong last May. Suchhigh-level dialogue helps to reinforce the message thatHong Kong is the ideal platform for mainland enterpriseslooking to enter international markets.To leverage the advantages of strategic partners, werecently entered into an alliance with the ChinaDevelopment Bank, again focusing on SMEs. The goal is toassist Hong Kong SMEs and their counterparts on themainland to develop their businesses through the servicesprovided by both organisations.More exhibition spaceWe anticipated the need to create more downtownexhibition space to reinforce Hong Kong’s position asAsia’s trade fair capital. Despite heavy usage of thelandmark Hong Kong Convention and Exhibition Centre(HKCEC), Hong Kong is facing intense and increasingtrade fair competition from neighbouring cities. Coming
The TDC London Dinner is the Council’s most importantevent in Western Europe. The Chairman is pictured herewith the Chief Secretary for Administration, Rafael Hui(centre), and the UK Minister of State for Industry andthe Regions, Margaret Hodge, at last October’s dinner.up with an innovative short-term solution, we convertedthe HKCEC car park into a showroom, providing exhibitionspace for some 1,200 customers that would have otherwisebeen left on waiting lists.To provide more dedicated exhibition space, we firstpresented the Council’s plan to expand the HKCEC twoyears ago. I am pleased to report that construction workfor the expansion project is under way and that it willbe ready for use by early 2009. The expanded HKCECwill feature a 40 per cent capacity increase, enabling atleast five of Hong Kong’s mega trade fairs to becomethe world’s largest events of their kind. The importanceof trade fairs to Hong Kong’s economy cannot beoverstated. These events draw some HK$19 billion intothe economy every year. To supplement the HKCEC’sphysical marketplace, we have developed the Council’swebsite – tdctrade.com – into a virtual marketplace forall kinds of goods and services. This TDC portal is one ofthe most popular trade portals in the world, attractingmore than 9.5 million hits a day at peak times from just500,000 daily hits when it was launched in 2000.Trade in technologyWe also foresaw the need for Hong Kong to rise up thevalue chain by embracing innovation and technology asa third economic engine alongside our two traditionalpowerhouses: merchandise trade and services trade.Hong Kong is already emerging as a technology tradecentre, and is poised to become the leading marketplacefor technology in Asia. The numbers are promising:• one-third of Hong Kong’s exports are high-tech products• 4,000 Hong Kong companies have invested substantiallyin their own R&D and product development• 80,000 Hong Kong-controlled factories in the PRD areupgrading their technology• The government has set up industry-specific R&Dcentres as well as research institutes at universities,all geared to maximise key high-tech growth sectorssuch as ICT, logistics, supply chain management andenvironmental protectiontechnology marketing, developing a joint marketing programme to promote HongKong’s R&D centres, organising additional technology-focused shows such as ICT Expoand launching a new technology portal on our website.Aligning with ShenzhenA year ago, I talked about the importance of forging a strategic alliancewith Shenzhen in developing innovation and high technology. Council executivesfollowed through, signing a cooperation agreement with Shenzhen authoritieson a high-tech alliance that should ultimately establish this region as a true“Silicon Delta”.Turning adversity into opportunityWhile we have done our best to foresee and act on Hong Kong’s future needs, eventshave occurred that no one saw coming, such as SARS. Here, the TDC worked hard toturn adversity into opportunity for Hong Kong traders isolated by the deadly syndromein 2003. We moved quickly to develop an eight-point plan for Hong Kong-basedcompanies, commenced free web conferencing, introduced new virtual trade showsand helped Hong Kong stay on its feet through a most challenging time. We alsomoved a couple of affected trade fairs from their original April slots to July. This turnedout to be successful, opening a new window for trade fairs in the summer, traditionallyconsidered a low season.After experiencing how the TDC and Hong Kong worked together to mitigate the effectsof SARS, I am more confident than ever that we will be able to meet the inevitablechallenges of the future. This is good, because there will be plenty of challenges downthe road for all of us.More and more, Hong Kong companies are engagingin technology trade between the Chinese mainlandand overseas markets. This is done by transferringoverseas technology for mainland application andcommercialising the mainland’s indigenous technologyto fit international markets.A high-level advisory committee, which I chair, wasformed to advise on the promotion of innovation andtechnology through the Hong Kong platform. In justa few months, we have spearheaded Hong Kong’sWorld SME Expo has quickly evolved into a major international event for SMEs. The Expo held inNovember 2006 attracted tech-oriented visitors from Hong Kong, the mainland and overseas.
The Chairman greets Beijing Mayor Wang Qishan beforea Hong Kong-Beijing Economic Cooperation Symposiumround table at the TDC’s head office last November. Forbusiness leaders and government officials from bothcities, the 10-year-old symposium is a valuable forum inwhich to meet and exchange ideas.The mainland is the de facto domestic market forHong Kong under WTO and CEPA. To raise awarenessof Hong Kong products among mainland consumers,we will step up innovative promotion initiatives of the“Hong Kong Brand” in the mainland. We at the TDCwill lead this effort in partnership with other membersof Hong Kong Inc.TDC at 40 – developing new frontiersLast year the Council celebrated its 40th anniversary. AsChairman, I am proud and honoured to be associatedwith this Hong Kong institution. Our celebration wentfar beyond the TDC. For us it was an opportunity to payhomage to Hong Kong’s extraordinary success in worldtrade, and to the people that made it possible. Lookingahead to the next 40 years, as the title of this annual reportstates, we will push forward to develop new frontiers. Ican foresee the TDC becoming more demand driven andless supply driven, developing a more pan-Asian focusand extending its activities to the technology and creativeindustries. The mainland will always be our core focus,but as the pace of globalisation quickens, new doors areopening for our SMEs, and I know this organisation willwant to be there.Corporate governanceOver the years, we have taken solid steps to ensure thatthe TDC is viewed by our stakeholders as transparent andaccessible to all members of the public and community.Organisations such as the TDC are – and should be – underconstant scrutiny by the public. The TDC was formedunder an ordinance and with guiding principles. Internalguidelines were set down for the executive to ensure thatthe Council fulfils its mandate with best practices. Forexample, the percentage of administrative costs in the totalexpenditure of the Council has come down significantly,from close to 40 per cent in 2000/01 to less than 31 per centthis past financial year. Maintaining and refining our goodrelations with the community will always be a key focus.When I became Chairman, I initiated an annual planprocess to formulate TDC promotional strategies andaction plans over a three-year cycle. The process involvescomprehensive consultations with stakeholders on thewidest possible basis. The annual plan is then made publicat the end of this exercise, and the organisation is heldaccountable for the delivery of the plan. The Councilhas also developed a set of published performancemeasurements to evaluate the TDC’s effectiveness in anopen and transparent way. An assessment committeehas been established to review the performance of theExecutive Director twice a year. Fostering trust borne oftransparency will always be one of our commitments.Standing at the helm of the TDC through the early days ofthis century has been exhilarating. Council members,chairsand members of our 17 advisory committees, Hong KongBusiness Associations worldwide, and above all, the manythousands of companies who are our customers andassociates, all have my lasting personal thanks.I believe that the TDC has the right goals, the right skills andthe right team to carry out its mandate as the marketingarm of Hong Kong Inc. As I mentioned earlier, we welcomemore players to the Hong Kong platform, whether they arelocal, from the mainland or from overseas. Anyone usingthe Hong Kong platform is the TDC’s client. Their success isHong Kong’s success.In the Executive Director’s summary that follows, you willsee a list of key performance indicators. They provide a clearpicture of the TDC’s performance during the year. UnderFred Lam, the management team has been motivated todeliver a first-rate performance. I have every confidencethat this team will take the TDC to the next level.Peter Woo, GBS, JPChairman10 11