Connectivity: Bringing the world of business together Peter Woo Chairman Hong Kong Trade Development Council 21 November 2005

Global convention for SMEs = CONNECTIVITY Global convention for SMEs = CONNECTIVITY

Global convention for SMEs 30,000 HK SMEs 5,000 MPEs 1,500 SMEs from overseas The concept works! 30,000 HK SMEs 5,000 MPEs 1,500 SMEs from overseas The concept works! + +

Delivering more value World Federation of HK Business Assns Bilateral committees Hong Kong – UK Hong Kong – France World Federation of HK Business Assns Bilateral committees Hong Kong – UK Hong Kong – France

Delivering more value A platform for collaboration between designers and manufacturers Assist SMEs to move up value chain A platform for collaboration between designers and manufacturers Assist SMEs to move up value chain

Let’s talk business! The China story 4 Out performed expectations in past 25 years Annual GDP growth at 8.5% over 10 yrs GDP will double in next 10 years The China story 4 Out performed expectations in past 25 years Annual GDP growth at 8.5% over 10 yrs GDP will double in next 10 years

The China story 20% of the population in the “middle- class” = 250 million This group will increase to 25% by % of the population in the “middle- class” = 250 million This group will increase to 25% by 2010

Huge consumption power of the new rich US$ 2 billion on luxury items in % of the world's luxury market by 2015 Space industry (Shenzhou 神舟 6) Huge consumption power of the new rich US$ 2 billion on luxury items in % of the world's luxury market by 2015 Space industry (Shenzhou 神舟 6) The China story

China’s future direction: Sustainable development for the whole country Balanced growth among different regions Further urbanisation to lift living standards Sustainable development for the whole country Balanced growth among different regions Further urbanisation to lift living standards

Implications for China: Move 200 million rural dwellers to cities in next years Expand / build 200 cities of 3 million people each Do all types of productions (low-to-high end) Car exports – soon? Move 200 million rural dwellers to cities in next years Expand / build 200 cities of 3 million people each Do all types of productions (low-to-high end) Car exports – soon? Pie in the sky? Many believe not !

Hong Kong’s connectivity Opportunities for Hong Kong Build / finance / operate China's new urban infrastructure Provide the services needed Set up factories in new industrial areas Opportunities for Hong Kong Build / finance / operate China's new urban infrastructure Provide the services needed Set up factories in new industrial areas

HK’s first-mover advantage Over 50% of China's FDI from / or through Hong Kong Experience and know-how to manage risk Over 50% of China's FDI from / or through Hong Kong Experience and know-how to manage risk

HK’s first-mover advantage China's service economy is 32% of GDP Hong Kong’s service economy is 89% of GDP China's service economy is 32% of GDP Hong Kong’s service economy is 89% of GDP

HK’s first-mover advantage Success in PRD in last 25 years Replicate in other parts of China Success in PRD in last 25 years Replicate in other parts of China

Time to act Balancing opportunities, competition and risk "Wait-and-see" no longer a viable strategy Take full advantage of the Hong Kong platform Connect with Hong Kong Balancing opportunities, competition and risk "Wait-and-see" no longer a viable strategy Take full advantage of the Hong Kong platform Connect with Hong Kong

What about mainland enterprises? 4 million MPEs 30% growth in their number p.a. – compounded over last 10 years What about mainland enterprises? 4 million MPEs 30% growth in their number p.a. – compounded over last 10 years Time to act

Use the Hong Kong platform to: Connect with the world’s markets Raise capital and finance deals Improve competitiveness Use the Hong Kong platform to: Connect with the world’s markets Raise capital and finance deals Improve competitiveness What about mainland enterprises? Time to act

Hong Kong’s Story 5.5% growth Cepa III More tourists (Disneyland open) More RMB services Removal of estate duty tax 5.5% growth Cepa III More tourists (Disneyland open) More RMB services Removal of estate duty tax

~ transactions in goods and services Good news from TDC – CEC expansion 40% more exhibition space 8 trade fairs to go for #1 in the world Bumper year for Hong Kong trade fairs Good news from TDC – CEC expansion 40% more exhibition space 8 trade fairs to go for #1 in the world Bumper year for Hong Kong trade fairs The Hong Kong Agenda Build critical mass of:

~ Capital market ~ Infrastructure and logistics ~ Talent and creativity - people ~ Capital market ~ Infrastructure and logistics ~ Talent and creativity - people The Hong Kong Agenda Build critical mass of:

Over stressed and over worked Demand for talent and creativity far greater than before Attract more talent and entrepreneurs globally Act as agent for China's talent-hunt Over stressed and over worked Demand for talent and creativity far greater than before Attract more talent and entrepreneurs globally Act as agent for China's talent-hunt The Hong Kong Agenda

Raise the bar - Make it more difficult for others to catch up Differentiate ourselves - Move up the value chain Raise the bar - Make it more difficult for others to catch up Differentiate ourselves - Move up the value chain The Hong Kong Agenda

World capital for: SMEs Entrepreneurs World capital for: SMEs Entrepreneurs plus World platform for private capital The Hong Kong Agenda

Join a global talent-hunt for China: Hong Kong Business Associations - a source of talent Your services are needed Join a global talent-hunt for China: Hong Kong Business Associations - a source of talent Your services are needed HKBAs’ connectivity

Focus on connectivity Connect with other associations Map out a plan for the next 5 years Build your critical mass Focus on connectivity Connect with other associations Map out a plan for the next 5 years Build your critical mass HKBAs’ connectivity Message for Hong Kong Business Association members:

Message for HKBA members: Penetrate your local business community Spread the gospel Make HK a “must” on China trips Connect with 10 new players and bring them here Penetrate your local business community Spread the gospel Make HK a “must” on China trips Connect with 10 new players and bring them here

HKTDC’s connectivity TDC is the conduit We match-make businesses the world over Our credo: “ Anyone using the Hong Kong platform ~ is our client” TDC is the conduit We match-make businesses the world over Our credo: “ Anyone using the Hong Kong platform ~ is our client” We are at your service!