Issue 149 - The Australian Chamber of Commerce in Hong Kong.

THE SMALL BUSINESS EDITIONASIAN CENTURY EDITIONa new economic narrative to help push Australiato an exports focus beyond “sell ‘em dirt”– An Australian blogger on the White PaperAUSTCHAM NEWSISSUE 149 - 2012www.austcham.com.hkThe “Asian Century”: We’re standing in it!Much has overtaken Prime Minister Julia Gillard since she released the Australia in the Asian Century WhitePaper. But, slush funds aside, Michael Wray reports that analysis of the policy document has now settledon two broad themes: admirably ambitious, but lacking policy bite.Firstly, the paper sets an appropriatebut ambitious agenda for Australiato become more prosperous byriding on the coat tails of “Asia’sunstoppable rise”.In the paper’s foreword, Prime MinisterJulia Gillard calls for Australia to “seize” onthe opportunity created by the expected“transformation of the Asian region into theeconomic powerhouse of the world”.“Australia can be a winner in this Asiancentury by becoming more prosperous,more resilient, and sharing the newopportunities,” she wrote.Secondly, despite listing 25 keyobjectives to be met by 2025, the whitepaper delivers virtually no guidance on thepolicies and funding that will be needed toachieve the goals.Australian Targets for the Asian Century• By 2025, Australia's GDP per person will bein the world's top 10, up from 13th in 2011,requiring a lift in our productivity.• This will mean Australia's average realnational income will be about $73,000per person in 2025 compared with about$62,000 in 2012.• Globally we will be ranked in the top fivecountries for ease of doing business andour innovation system will be in the world'stop 10.• By 2025, our school system will be inthe top five in the world, and 10 of ouruniversities in the world's top 100.• All students will have continuous accessto a priority Asian language - Chinese(Mandarin), Hindi, Indonesian and Japanese.• Our diplomatic network will have a largerfootprint across Asia supporting stronger,deeper and broader links with Asian nations.• Our leaders will be more Asia literate, withone-third of board members of Australia'stop 200 publicly listed companies andCommonwealth bodies having deepexperience in and knowledge of Asia.Source: ABCEven Opposition Leader Tony Abbott, theman Gillard decries as having “no policies,no plan, just negativity”, actually managedto find something positive to say about thepaper’s overall vision.“It is full of laudable goals,” he said.He immediately added that there were“not very many specific initiatives andcertainly no commitment of money to any ofthem”.Abbott’s view has been echoedthroughout Australia’s academic, businessand media classes.it is full oflaudable goalsThe Australian’s veteran politicaljournalist Paul Kelly said the white paperhad received an “ambivalent” receptionbecause it contained the paradox of settingbenchmarks to be met in 2025 that “cannotbe achieved within Labor's present publicpolicy and financial frameworks”.He added: “In 40 years coveringnational governments I cannot recollect acont. P3COPYRIGHT © 2012 THE AUSTRALIAN CHAMBER OF COMMERCE IN HONG KONG AND MACAU

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previous vision statement that has beenso ambitious nor a statement where thegulf between present outcomes and futurebenchmarks is so substantial.”Some more tempered commentatorshave said it was unfair to expect sucha wide ranging report – it apparentlyrequired significant rounds of editing justto chop it down to 320 pages – to outlinedetailed policies and costings.However now the paper has beenlaunched, the government is presumablycrafting policies to ensure the goals aremet and questions are rightly being askedof their ability to reach and fund them.Each of the 25 objectives in the paperalone will require a huge investment intime and money. Collectively, achievingthem all will be a daunting task.For example, one of the most widelydiscussed objectives has been givingevery Australian student the opportunityto undertake a continuous course of studyin at least one priority Asian language -Chinese (Mandarin), Hindi, Indonesian andJapanese.fewer Year 12 studentstook Indonesian classes in2009 than in 1972Currently, the state of Asian languageeducation in Australia is atrocious.According to the white paper, less than6 per cent of Australian Year 12 schoolstudents studied Indonesian, Japanese,Korean or Chinese (Mandarin) in 2008. Andfewer Year 12 students took Indonesianclasses in 2009 than in 1972.Clearly, there will need to be a hugerethink on language education andwhatever the answer is, it won’t be cheap.Perhaps just as importantly, schoolCOVER STORY | 3children will have to be convinced thatinvesting time to learn one of thesedifficult languages will benefit them in thelong run.That was a point former Prime MinisterKevin Rudd made at an AustCham lunchduring a trip to Hong Kong a few monthsago when he called on businesses to putmore emphasis on hiring graduates withlanguage skills.Similarly, objectives on the diplomaticfront seem to meet a strong disconnectbetween hopes and realities.Liberal Premier of Victoria Ted Ballieusaid the paper committed to boostinggovernment-to-government relationships inthe region but budgets for the Departmentof Foreign Affairs and Trade were currentlybeing slashed."Australia ranks a lowly 25th among34 OECD nations in terms of diplomaticmissions," Baillieu told a business dinner."It waxes lyrical about Austrade'srole, but the number of overseas basedAustrade staff has fallen - with no sign ofan increase."AustCham Chairman Andrew Steadsontold ABC Radio he believed putting fundingback into DFAT and Austrade was the mostimportant objective for the government.“The other key things that they couldbe doing is putting in place a series ofcomprehensive double tax agreementswith the Asian geographies that theyhaven't done that with yet,” he said.“And then I think lastly is getting allthe free trade agreements sorted out.”So while there is plenty to quibbleabout on the road to Gillard’s dream ofAustralia being a “winner” out of the socalledAsian Century, few could argue withthe final goal.Kelly, at The Australian, said the mainrisk was that the paper became a “whiteelephant” if the grand plans ran into alack of funding capacity.“This document must not be forgottenin today's disposable politics,” he said.“It is a test for the nation and a testfor Labor. It needs to become a permanentmeasuring stick. In order to prove hercommitment, Gillard should unveil acredible implementation strategy.”Michael Wray is a former News Ltdjournalist now based in Hong Kong.

4 | CHAMBER CHATTERDear all,The Australian Chamber of Commercein Hong Kong and Macau has almost1200 members, representing more than700 Australian and local companies in acommunity of about 80,000. In August2012 AustCham turned 25. It is the largestAustralian business grouping outsidethe country and the second largest of 27International Chambers in Hong Kong.EVENTSUPDATEUPDATEDECEMBER AT A GLANCEFri, 7 DecemberMacau Christmas Mingler with BBAM6:00 – 8:00pmThe Fire Place, G/F, The Westin Resort MacauTue, 11 DecemberDirect Marketing in Hong Kong: ordinancechange seminar12:30 – 2:00pmKennedys, Hong Kong ClubWed, 19 DecemberThe Directors’ Race Night6:30pm until lateStable Bend Terrace, Hong Kong Jockey ClubJANUARY 2013 AT A GLANCETue, 15 January 2013Mix at Six6:00 - 9:00pmTamarind Terrace, 2/F Sun Hung Kai Centre30 Harbour Road, Wan ChaiFri 25 JanuaryIsland Shangri-la HotelThe AustCham National AustraliaBank Australia Day Luncheon 2013To mark the Chamber’s 25th anniversaryveteran journalist and story-tellerGeorge Negus will re-live what madethe news in Australia over that quartercentury from 1987 -2012.Tickets now on sale.Book online at www.austcham.com.hkIn the Secretariat office we are all on acountdown to December 19 – the Directors’Happy Valley race night, which will signalthe end of a very busy year for the team.We hope you’ve seen some positivedifferences in the Chamber over the last 12months. There’s always more to improve,introduce and upgrade but some of the2012 highlights for us have been:(a) Finally bringing you the option ofbooking Chamber events online(b) Moving from the old fashioned membercards to ecards (about 75% of you havedownloaded)(c) Our inaugural ACCESS: China forum& the Australian Reflections speakerseries(d) The SME Start Me Up series for wouldbesmall business owners.There’s a long list of services and activitiesto be introduced in 2013 as part of theChamber’s 25th anniversary. To increasethe value to your membership we will bedelivering:(a) An inaugural Mentor Program(b) A formal Business Matching service(c) An SME NetworkThe Bean Counter(d) A quality program of speaker events,starting with George Negus for AustraliaDay.We’ve had fun working with all members.In 2013 you can be assured the Chamberteam is here to go out on a limb for you.Below you can see Veronique and Karenpractising that service approach – on ateam high wire course in Cheung Chau.Best wishes for the festive season andthank you for all your support this year.From Andrew, Cathy, Cloudia, Eric, Iris,Karen, Kirsty, Tanya, Veronique andVicentia.Before this column, most of us in the AustCham office didn’t drinkmuch coffee. Now it’s one sip to distinguish fair trade Ghana beansfrom the Ancient Arabica variety. There have been many a sleeplessnight so we are begging for more of your contributions in 2013! Thankyou to all those who have helped us out. See you in the new year for acoffee and chat, Bean Counters.Take a seat Latte please What do you get?BO-LO’GNECafé & BarG/F, King HoBuilding, 41-49Aberdeen Street,Centralagnès b. Café LPGG/F, Chung SanHouse, 8-10 GoughStreet, CentralA Word from WellingtonLatte $38Latte $36Originated from Kyoto in Japan, the Central shop is theirfirst branch in Hong Kong. They have their own cake factoryand all bakeries are freshly baked every day. Coffee + ayummy 81 layers Danish probably a good start to the day.The stylish French café opened on Gough Street a year ago.It is decorated with a European charm with mosaic tiledfloors and small round tables. If you are craving somethinglight, they also provide salads and sandwiches.Java Java(Coffee & TeaLounge)188 HollywoodRoad, Sheung WanLatte: $34Great décor, great service and great Illy coffee. Java Java is acomfortable and friendly lounge watch the world pass by onHollywood Road open mic on Thursday nights and on Fridayand Saturday nights, live music. It strikes a chord.To include your favourite coffee haunt (no major chains) email a shortevaluation to karen.wu@austcham.com.hk

6 | AUSTRALIA FOCUSDemystifying Chinese Investment:China outbound direct investment in AustraliaThis is from a joint publication from KPMG and the University of Sydney China Studies Centre which providesgreater clarity on Chinese ODI into Australia and the behaviours exhibited by the organisations behind the deals.Asummary of this report was presentedChina’s investment by stateby KPMG Partner Doug Ferguson to theChamber’s Mining, Energy & CapitalInvestment (MINCAP) Committee. If you areinterested in such free briefings on energy investment,please register with Veronique.liu@austcham.com.hkChina’s investment inflows into Australia80% of investment is in mining Investment diversity hasbeen greatest in NSW116 deals completed (Sep 2006 to June 2012)Over the last six years (from September 2006 to June 2012)116 completed deals were recorded by the research partners,totalling USD 45.1 billion invested by Chinese enterprisesin Australian businesses. Almost 80 percent of this wasdirected into mining industries and a further 12 percentinto the oil and gas sector. Other industries barely rated interms of overall ODI volume. Investment diversity has beengreatest in New South Wales, where 30 percent of China'sinvestment volume was directed into real estate, agriculture,architecture, renewable energy, finance and other sectors.4 distinguishing characteristics of Chinese ODI in Australia1. Focus on ENR2. ‘Mega-sized’ deals3. SOE investor dominance4. Preference for investing with listed companiesThe average size of deals was larger in Australia comparedto other countries, with 19 of the completed deals having atransaction value of more than USD 500 million, and almosthalf having a transaction value of over USD 100 million each.Chinese investment in Australia: percentage of deals by sizeBased on number of dealsBig 4 Australian Banks active in Asia PacificMandated lead arrangers, Asia Pacific (ex Japan)2007 2010 1H 20121 ANZ Investment Bank State Bank of India State Bank of India2 Citigroup Bank of China ANZ Investment Bank3 National Australia Bank ANZ Investment Bank Bank of China4 Westpac Bank of Taiwan Westpac5 Commonwealth Bank HSBCCommonwealth Bankof AustraliaTo enquire about advertising, submit an article,comment or respond to austcham news, pleasecontact Karen at karen.wu @austcham.com.hkor call +852 2522 5054.An examination of the ownership structure of the 11 largestChinese investors and their investments in Australia resulted inthree preliminary observations. First, unlike other internationalinvestment locations for China, the majority of investment is bylong-established central SOE's with a considerable track recordof international activities.

SOE investment in Australia• Dominated by long-established central SOEs• Wide variety of entry strategies – dominated by M&A• SOEs are behaving like international companiesChinese companies already in AustraliaChinese investment by energy sectorCoal projects attracted the largest investment (approx50%) closely followed by gas (43%). Chinese SOEsoverwhelmingly the dominant investors, accountingfor 99% of investment. There are spillover benefits toother Australian industries as well, including finance,professional services and infrastructure.Although M&A is the most dominant form of Chinese ODI inAustralia, the variety of entry strategies used by large ChineseSOE's is the second notable point. And third, Chinese SOEs arebehaving similarly to other international investors in Australia.Mining and gas = 92% of deal value 2006-12China’s largest energy companies have rapidly increasedtheir stakes in Australia’s energy sectors in recent years.There were 24 deals completed over last 6 years witha total of US$12.8 billion. 6 of these deals were overUS$1 billion.Financing challenge• Australia’s total energy production (excluding-uranium)is expected to more than double by 2035.• Significant funding challenge. Australian Treasuryestimates more than A$200 billion will be needed onnew generating capacity by 2050• Foreign capital is vital. Chinese companies remain veryinterested in making long-term energy and infrastructureinvestments in Australia• Significant opportunities for an era of beneficial newstrategic partnershipsNext step forward• Chinese investment in Australia’s energy infrastructurenot equivalent to China’s share in offtake from coalmines and gas fields• Chinese investors want active participation with Chinesebanks increasingly active in international syndication• Trade relationship needs to be underpinned by anappropriate investment relationship to help secureAustralia’s long-term prosperity• Trade relationship needs to be underpinned by anappropriate investment relationship to help secureAustralia’s long-term prosperityThe full report can be found:http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/china-insights/Documents/demystifying-chinese-investment-2012.pdfSTART YOUR LTD. AT 12/12/12 FORcontact us: services@triple-eight.hk / +852 2527 0738terms & conditions: www.triple-eight.hkIN BUSINESSTIMING IS EVERYTHING

8 | ACCESS: CHINAThe Chamber’s ACCESS: China Forum was held on 2 November 2012. The first-time Forum attracted over 150attendees in sessions about market entry in China. Special thanks to our Gold Sponsor National Australia Bank,supporting sponsor PRIMASIA, venue partner Bloomberg and session sponsor Kreab & Gavin Anderson.Gold SponsorSupporting sponsorMichelle Garnaut of M RestaurantGroup shared the good, bad and ugly!Bloomberg’s Robyn Meredith led thediscussion on company structure.Former Ambassador Dr Geoff Raby,advisor to Kreab opens the day.GinaMcLellan of Talent2 andmoderator Paul Gordon discusspeople p issues.Andy Lake of Aconex spoke aboutsetting up in China.Kim Toh of Deaconslisted company options.Brendan Mason of CochlearChina spoke of IP concerns.Calvin Leung of NationalalAustralia Bank talkstrade.Phil Pearce of Goodman Asia, Mike Bellamyof China Sourcing Info Centre, RobynMeredith with Pansy Yau of HKTDC talkabout supply chains and logistics.Michael Wadley of AshurstInternational gives a legalperspective.Ambassador Ms FrancesAdamson welcomed guests tolunch at the China Club.National Australia Bank’s AdamGazal says grace before lunch.Luncheon Guest speaker Clinton Dines,Former CEO of BHP Billiton was describedas “Inspired”.The Forum brings together headline speakersdiscussing the intricacies of doing businessin China.

ACCESS: CHINA | 9The Forum’s Lunch, at the China Club, with Clinton Dines, Former BHP China CEO.Guest Claire Ip with Fan Ho ofTelstra.Andy Lake of Aconex withPeter Maruff of Velocity.Guest Lisa Chen withKimToh of Deacons.Guest Andrew Chin and CandiceChan.Michael Murphy of Calibre AssetManagement with AustralianConsul General Paul Tighe.Katrina a Arkell of Qantas withAustCham Shanghai ChairmanPeter Arkell.Georgia Milne ANZand Andrew Whitford ofWestpac.AustCham Chairman AndrewSteadson with AustralianAmbassador in China, HerExcellency Frances Adamson.Lillian ian Servage withTeresa esa Tam ofForum supporting sponsor PRIMASIA.DrMichael Tsui withDeborah Leung of CPAAustralia.Peter Schofield ofBuilt andHaydenFlinn of King & Wood Mallesons.Michael Clifton and PhilIngram fromAustrade.Kenneth etLeung of Ever InfoConstruction Services and Marcus NeillVof CBRE.Virna Artemas with AustCham BoardDirector Lee George Lam.

10 | HONGKONG FOCUSHong Kong’s cold shower for foreign property investorsFor Australian expats in Hong Kong,there is little joy to be had lookingaround their homes and imaginingwhat the same money would affordthem Down Under.Unfortunately, things just got appreciably(15% to be exact) worse for all non-permanentresidents wanting to enter the world’s mostexpensive property market.On October 26 the Hong KongGovernment slapped a 15% buyer’s stampduty of the property’s value on all realestate purchases by non-permanentresidents and corporations.SCMP PhotosThey also extended the special stampduty (SSD) that was first introduced abouttwo years ago. The SSD attempts to stopspeculation by placing penalties of upto 20% on owners who sell any propertythey have owned less than three years.The moves were the latest step inthe government’s attempts to dampendemand in the overheating propertymarket. They became effective hours afterthey were announced.The World’s leastaffordable housing marketIt is still too early to gauge the fulleffect of the new taxes but early signssuggest they will lead to a big dropin sales volumes but less downwardmovement in prices.“We are yet to see the price movementin the sale and purchase market - thoughwe noted reductions in price level insome cases recently,” said Lau ChunKong, International Director and Head ofValuation and Advisory Services, JonesLang LaSalle, Hong Kong.“Whereas in the rental market, this hasnot been affected by the stamp duty changesdirectly. It is yet to see how this marketwould react to change in stamp duty.”BloombergBefore the decision, home prices inHong Kong had risen to 17.6 times themedian household income, making it theworld’s least affordable housing market,according to research by Knight Frankproperty consultants.Hong Kong Housing secretary AnthonyCheung Bing-leung recently warned of aproperty bubble.

"Property prices are rising consistently,while our economic performance remainsfragile, so from an economic point of viewmany academics are warning about anincreasing risk of a bubble,” he said.Much of the rise has been blamedon a rush of mainland buyers using theterritory’s property market as a vehicle forparking their capital in Hong Kong.Hong Kong has also seen a sharp risein “hot money” as the local currency’s pegto the US dollar means it effectively importsthe US’s current easy monetary conditions.To top that off, mainland buyers havealso benefited from a stronger renminbi,which has appreciated about 6% againstthe local currency since the start of 2011.These conditions have seen thepercentage of mainland buyers for newHong Kong properties jump from 5.7% in2008 to nearly 20% last year, according toHong Kong Government figures.Lau said the new tax would deterinvestors and buyers from mainland aswell as any overseas investors or potentialpurchasers who had not lived in Hong Kongcontinuously for seven years, the thresholdfor becoming a permanent resident.“The newtax also coverscompanies andcompaniesrepresent morethan 50% of thebuyers in termsof number of transactions in the residentialmarket with property values more thanHK$20 million in recent years,” he said.Corporate Patron Additional MembersLy Hien GourVice President, Financial Institutions GroupCommonwealth Bank of AustraliaTel: 852 2844 7500www.commbank.com.auTerrence ShiphamLead Partner, Performance ImprovementErnst & YoungTel: 852 2846 9888www.ey.comCorporate Additional MembersVivien LeeProduction DirectorColour Max Commercial Printing Co LtdTel: 852 9319 9011www.colourmax.comA recent Reuters column labeled the taxas an “anti-foreigner property tax”.“It punishes Hong Kong-basedexpatriates who want to establish apermanent base in the city as well asdomestic developers seeking to spruce upold buildings,” wrote Peter Thal Larsen inhis Breakingviews column.Senior Managing Director for HongKong, Macau & Taiwan at CBRE, CraigShute, highlighted a CBRE research notethat showed the impact of the tax was feltimmediately after being announced.“A sizeable number of mainlandpurchasers made their way straight todevelopers’ sales offices to secure unitsbefore the changes became effective atmidnight,” the note said.“Sales then dipped significantly throughthe weekend and shares in quoted (realestate) companies fell on the first daysof trading post-announcement. A numberof surveys of homeowners and potentialbuyers in both Hong Kong and MainlandChina suggest that consumer sentiment wasalso affected.”Shute said the government was makingsteps to boost housing supply in HongKong and there was a feeling that the newmeasures were an attempt to “buy time”for it to reach the market.“The real issue affecting prices in bothresidential and office is the lack of supply,”he said.“The government is taking some steps toincrease supply especially in residential butit takes time for supply levels to catch up.”- Michael WrayShane ChessonManaging DirectorCo-Head of Technology GroupGlobal Investment Banking Asia Pacific, CitiTel: 852 2501 2812www.citi.com.hkSteven FungPatent AttorneyMarks & Clerk Hong KongTel: 852 2526 6345www.marks-clerk.comIndividual MembersAlexis GeorgeCOOING Insurance Asia /PacificTel: +852 3762 8200www.ing.comSally-Ann KlapDirector of Sales – MICESheraton Macao HotelCotai CentralPre-Opening OfficeTel: +853 2882 9188www.sheratonmacao.comHONGKONG FOCUS | 11NEWSOBE Organic WinsBusiness AwardsCORPORATENEWSAustCham member OBE Organic has won theBusiness Excellence Award and EmployeeExcellence Award (to General ManagerDalene Wray) at the Hong Kong AustraliaBusiness Association’s Queensland chapter galaawards.Ms. Dalene Wray, the recipient of the EmployeeExcellence Award said, “We’re thankful to HKABAfor recognizing the many years of work we’ve putinto our mission to bring the powerful benefits oforganic beef to consumers around the world.”The company has experienced an 8.5% increasein retail sales since the establishment of theirregional headquarters in Hong Kong last year.OBE Organic director, Scott Fraser said, “With65% of Australians buying organic in the lastyear, and more than a million regular Australianconsumers of organic products, the importantrole that organics is playing in our home countryis extremely encouraging. With the efforts ofthe business team, we’re exporting increasingvolumes year on year, and our retailer partnersaround the world couldn’t be happier with thefantastic taste and healthy qualities of OBEOrganic beef.”MEMBERCLASSIFIEDSNeed to sort outyour Aussie tax?We are a HK team of Australian CharteredAccountants specialising in:• Australian tax returns for HK expatriates• Holistic international tax adviceHolistic Business Consulting Pty LtdTommy Ip www.myoztax.comAndrew Harrison +852 69018136Who To Blame?The views expressed in this publicationare not necessarily those of the AustralianChamber of Commerce in Hong Kongand Macau, its members or officers. TheAustralian Chamber of Commerce in HongKong and Macau takes no responsibility forthe contents of any article or advertisement,makes no representation as to its accuracyor completeness, and expressly disclaimsand liability for any loss however arisingfrom or in reliance upon the whole or anypart of this publication.

12 | COMMITTEE COMMENTAsian Century White Paper – What it means to our future leadersThe recently announced Asian Century White Paper maps Australia’s engagementwith Asia in the next decade. AustCham Young Executives Co-Chair Patrick Daley– as part of the next generation of leaders already working in Asia, responds withwhat that means to him.It seems that about once in ageneration, Australia and Australianssee fit to remind themselves ofAustralia’s geographical reality.Australia is located near, and increasinglymore closely related to, reliant on andinvolved in Asia.The release of the AustralianGovernment’s White Paper titled “Australiain the Asian Century” in October thisyear, again signals a new attempt to mapa path by which Australia can best takeadvantage of the opportunities presentedby Australia’s relationship with Asia.This is of course not a newphenomenon. One may recall theKeating government’s focus on increasedengagement in Asia. However, Asia’seconomic (and particularly China’s)accelerated economic advancementover the last 20 years, along with thecorrespondingly greater impact that Asianow bears upon global economics andinternational relations makes Australia’smost recent attempt to grapple withthe reality of Asian power and influenceparticularly important. What once was adiscretionary change in policy direction,has now become a necessary andunavoidable realignment.Asia is an increasingly importantregion, and it is in Australia’s interest tohave a clear and detailed strategy throughwhich to engage that region.So how does it rate? Does the WhitePaper give new direction and insighton Australia’s Asian potential, or is itsimply an exercise in making sweepingmotherhood statements and setting outvague aspirational goals?At first glance, it is easy to beskeptical. Certainly, discussion of“deeper connections”, “new developmentopportunities” and “maximizingprosperity”, while inoffensive in themselves,do not provide a clear roadmap to asuccessfully Asian focused future. Likewise,the White Paper ticks many of theexpected boxes, the importance of focusededucation and training, infrastructure.(importantly including communicationsinfrastructure), tax and regulatory reform,foreign investments, relationships with keyregional players. But it would be difficultto assert that the White Paper presentsanything new and innovative that has notbeen covered in previous policy initiativesby this and previous governments.Furthermore, many of the issues thatthe White Paper discuss, such as risingincome in Asia, demographic shifts bothin Australia and in Asia, and Australia’scomparative advantage in resource andsome agricultural industries, are issues thatthe majority of Austcham’s membershipwill be familiar with and, where necessary,have developed strategies to deal with.But to my mind, the White Paper is farfrom a wasted exercise.The breadth of the Paper’s subjectmatter necessitates a treatment of thatsubject matter which may seem shallowand/or undeveloped. Likewise, theWhite Paper correctly identifies areas ofimportance for Australia’s future in Asia,such as the need to continue productivitygrowth, lower the cost of doing business inAustralia and train young people in Asianlanguages and culture.However, the true value of the WhitePaper is that it provides for a refocusingon the challenges of the coming AsianCentury. If Australia is to continue tothrive and develop, it must meet thesechallenges, and many different sectionsof the Australian community, both withinAustralia, throughout Asia and elsewherearound the globe, must develop anddeploy strategies to meet these challengesas they pertain to them.Certainly, as a member and chairpersonof the Australian Young Executivescommittee, the opportunity to move toHong Kong, and my continuing involvementwith and support from Austchamhas reinforced the need for a deeperunderstanding of Asia’s cultures, languagesand peoples. The development of thisunderstanding will be an unavoidablechallenge for future Australian leaders ofpolitics, business, industry and education.The White Paper brings this challengefirmly in to view, and at least for a shorttime, makes it a central topic in theAustralian national conversation. It is abase to build from, and should be thelaunching point for more detailed policyinitiatives, as well as projects from withinthe business, educational and scientificcommunities.Because, once in a generation is notgood enough. The conversation must becontinuing. The Asian Century is hereand now. Australia is advantageouslyplaced and has a unique set of strengthswith which to meet the coming decades,but in order to best use those strengthsAustralia and Australians must maintain acontinuing awareness of the reality of theAsian Century and the effect it will have onAustralia as a nation. While not giving anyendpoints, the White Paper does at leastprovide for a good start.Patrick Daley is an Associate of Haley & Co.CORPORATENEWSNEWSTelstra AppointmentTelstra recently appointed Tim Chen asthe new President & Group ManagingDirector.Mr Chen, 56, was previously Beijing-basedpartner with international private equityfirm GL Capital Group. He held seniorexecutive roles for international firmsincluding Microsoft, Motorola and AT&T BellLaboratories. He joined Telstra as a member ofthe Board of Directors in March 2012, havingbeen identified for his technology, strategicand business experience working with privateand public sector organisations.“Tim’s appointment increases the focus andurgency in growing our presence in Asia andrealising the significant revenue opportunitiesin the region,” Telstra CEO David Thodey said.“We know that having deep insights intothe Asian environment across our leadershipteam is a strategic advantage as we lookto strategically grow our regional interests,particularly in Network Applications andServices and expanding with our pan-Asiancustomers.”

COMMITTEES IN ACTION | 13CPI Committee: The NewEngineering Contract (NEC)On 13th November, the Construction, Property& Infrastructure Committee hosted a breakfastwith Mr. C.S. Wai, the Permanent Secretary forDevelopment (Works) and Mr. S.M. Ho, Chairman of theTask Force on NEC3 Collaborative Contracts, to discussthe current and future use of the NEC on Governmentprojects in Hong Kong.The NEC is a construction contract that differs fromthe standard form contracts presently in use in HongKong in that it expressly requires both parties to actin the spirit of mutual trust and co-operation. It alsoprovides a framework for the early identification andresolution of issues and disputes.Mr. Wai noted the considerable support withinGovernment for the NEC and its more frequent useon Government projects, noting that the first NECpilot public works project was completed withoutdispute, ahead of programme and within budget. Mr.Ho emphasised the underlying co-operative natureof the NEC and the cultural shift in attitudes requiredto effectively implement the NEC. Various concernswere noted by participants, including the risk of overmodification of the NEC, the proper role of externalconsultants on a Project based on partnering principles,the considerable resources required to project managean NEC based project and potential legal issues.It was encouraging to note Government’scommitment to the exploration and implementationof a collaborative based contracting system. The CPICommittee extends its gratitude to Mr. Wai and Mr. Hofor attending to share their views and experience of theNEC form of contract.- Phillip Rompotis, Stephenson HarwoodCPI Committee: Breakfast update on the on the HKInternational Airport ExpansionMr Kevin Poole was the guest-ofhonourat a breakfast session withthe Construction, Property andInfrastructure (CPI) Committee members lastmonth. He was invited to present and discussthe proposed 3rd runway expansion project atHong Kong International Airport and to providea status snapshot of the present approvalprocess and related challenges.After introducing the project, Mr Poole gavea detailed overview on traffic development and growth in aviation in Hong Kongand the wider Pearl River Delta. In particular he made reference to the changes inflight and passenger profiles against initial expectations at the time of the airport’splanning and construction. Hong Kong is a victim of its success. He also presentedthose projects which are currently under construction such as the Midfield Terminaland the Western Airfield enhancements. Furthermore he explained the drivers for thelatest status of the 3rd runway layout and the adjacent Terminal Pier development.He also provided details about the Terminal 2 refurbishment and future link to thenew Pier.The subject of the Environmental Impact Assessment (EIA) process was discussedin some detail. Mr Poole explained why this issue is currently in the press andrepresents a significant challenge within the approval and acceptance process. Healso mentioned the Social-Environmental Impact Study, which is a request by anumber of social representation groups, who question the present approach of theimplementation and scale of the airport expansion.All members agreed that Hong Kong’s specific profile and role as a historical traderoute hub depends on infrastructure projects such as Hong Kong InternationalAirport, which are a crucial element of Hong Kong’s sustainable growth.The challenges facing the present and future workforce market, in particular inthe construction sector, were also discussed. Mr Poole confirmed that the airportexpansion will have a major demand for workforce especially after the landreclamation during construction of the Terminals and airfield infrastructure.- Caspar Baum, EC HarrisMovember update!We had some great interest in theinaugural year of Movember in HongKong with some great individual andteam efforts in raising much needed funds forthe Hong Kong Cancer Fund.Hong Kong Cancer Fund is Hong Kong’slargest cancer support organisation, providing free information,professional guidance and peer support to anyone living withor affected by cancer.You can still donate to this very worthwhile cause bygoing to the AustCham Hong Kong Movember Network pagehttp://hk.movember.com/mospace/network/AustChamHKwhere you will find links to teams and individuals includingAustCham Board Directors Andrew Steadson and Phil Ingram(please see after shots below…) and sponsoring them andothers for their Mo growing efforts!Movember will be back in2013 so please get involvedor sponsor a friend next yeartoo!- Andrew Quinlan, AustChamPeople Forum: The hidden connectionbetween employment and social mediaWith the proliferation of online social media networks in recent times,it is essential for employers to put in place policies to govern theiruse in the workplace. This was my theme at a recent People Forumbriefing on “The hidden connection between employment and social media”."Social media can no longer be ignored by employers in today's world but theydon't need to be intimidated by it".The use of online social media in connection with HR presents someinteresting challenges and real problems: misuse of social media duringor outside of work to the damage or disadvantage of employers; staffwho have been dismissed after posting inappropriate comments aboutcolleagues; and the fine line between public and private lives. There aresubstantial legal issues lurking beneath each of these examples includingquestions like: is it lawful to vet a job applicant using social media sites?How much is too much social media at work and how do employersrestrict or monitor its use? How should employers manage reputationalrisks associated with its use?Ellen Cheng, HR Legal Director Intel Semiconductor (US) Ltd’s Greater AsiaRegion, co-presenter at the briefing, gave the attendees insight into whatIntel does in relation to online social media. It was very interesting to hearIntel’s 3 (simple) rules of engagement for use of online social media and howthey and the Hi-tech industry generally view Social Media in the work place.- Hong Tran, Partner, Mayer Brown JSM

14 | ON THE SCENETHE AUSTCHAM BDO GREAT DEBATE WAS HELD ON THE 12 NOVEMBER AT CLUB LUSITANO. OUR PANELISTSWERE TREVOR GREGORY OF HK FOOTBALL UNION, NOEL PRENTICE OF SCMP AND CHRIS REYNOLDS OFCHAMPION SYSTEM AUSTRALIA. SPECIAL THANKS TO OUR SPONSORJohn French and Gerad Sitaramayya ofACE Insurance.Dorothy Pak of BDO with Winnie Tang ofAustrade.Bianca Chiu of Alphaeight Institute withNicholas Batels of Terra Firma.Robby Nimmo, SCMP sponsor Noel Prentice andEric Chiu of Fast Track Asia.Grant Jamieson of KPMG, Shirley Kwok ofKing & Wood Mallesons with guest speakerChris Reynolds of Champion System Australia.PaulMitchell of KPMG and BrianHunter of PricewaterhouseCoopers.Antony Phillips of Carinat Ltd, Dan Parr ofFast Track Asia, Warwick Jones of Jp Morgan.Sherryn Hancock of ING Investment, DougFerguson of KPMG with Alex Gibbs ofAustralian International School.Danae Vrettos of Built, Eric Zegarraand Sala Lo of event sponsor BDO.Colin Sanders of SIRIUS Partner andEstella Tsui of BDO.Johnson Moderator Peter Darley with speakers debate “That thereKong, MD of BDO deliversthe welcome speech to guests.Moderator Peter Darley with speakers debate “That thereis a tangible business return on sports sponsorship”.Book AustCham events online at www.austcham.com.hk

Like to see your company brand here?Now selling 2013 advertising space!Email Karen at karen.wu@austcham.com.hk for detailsON THE SCENE | 15NOVEMBER MIX AT SIX WAS HELD AT FRITES WANCHAI. THANKS TO OUR SPONSORNeil McCormick of Carey, Suen Group, WillCoverdale of Mining Associates and BrockLittle of Island Property Consultancy.Julian Bannigan of Currency Fair(middle) with Scott Ryan and John Dengof National Australia Bank.David Fergusson, Peter Rogozik and AllardNooy.John Timpany of KPMG andTommy Ip of Holistic BusinessConsulting.Joseph Lam of BALtrans withTerry Ng of Interglobe CorporateSolutions.AustCham Sustainable DevelopmentCommittee Vice-chair Chris Knopwith Yoshi Mitsui of HULT.Guests Amy Reynolds andJenny Pang.Joyce Chan, Alice de la Fuente Saez andRobin Hwang of Foodlink Foundation.Bruce Fox of AGS Four Winds with guestRikki Standich.Matthew Hunt of Vanguard with JonasTam and Raymond Chu of NationalAustralia Bank.AustCham Hong Kong and MacauRoom 301-302, 3/F, Lucky Building39 Wellington Street, Central., Hong KongTel: +852 2522 5054Email: austcham@austcham.com.hkEditorial Committee:Kirsty Boazman, Karen WuDarren Bowdern of KPMG andRoss Smith of Shenton Ltd.Frederick Wong of event sponsorGrand Hyatt HK with luckydraw winner Emily Caska.Kathryn Stannard of CalibreAsset Management and LucyZhang of ORB Global WealthManagement.Printing: Colour Max Comm Printing Co LtdFlat 12, 8/F, Shing Yip Industrial Building19-21 Shing Yip Street, Kwun TongKowloon, Hong KongTel: +852 2891 7917Website: www.colourmax.com