The Hong Kong Dollar will be devalued, but not for a while. Capital from Hong Kong is flowing into Main Land China. Everybody expected this. Nobody predicted the presure it would cause in Hong Kong's currency. The World Bank bail out helped more than one country. If nothing happens before Monday morning, we're up. Next Friday should be down, just from fear/profit/loss taking....................................
twice.virtualmarketing.com
Vendors Hopeful At Hong Kong Show - -November 3, 1997
By Kathleen Lander
Hong Kong continued conducting business as usual in the first 100 days after the hand-over to China, according to manufacturers attending the recent 17th Hong Kong Electronics Fair.
"The fears of reduced press freedom, corruption and judicial changes have not happened, and the transition has been totally transparent," said Allan Wong, chairman of VTech Holdings and of the sponsoring Electronics Committee of the Hong Kong Trade Development Council (HKTDC).
Businesspeople are relying on announced plans of Chief Executive Tung Chee-hwa to maintain free trade policies with low, predictable taxes and to keep the Hong Kong dollar pegged to U.S. currency. Operating in a comfort zone of usual business practices, unchanged street names, and little public presence by Chinese soldiers, Hong Kong today is as much occupied with the transition from a manufacturing economy to high tech as with policies coming from mainland China.
One immediate problem is the currency crisis in Southeast Asia. "Hong Kong firms that have plants in regions with lower prices could benefit, but eventually there will be increased competition for Hong Kong from the Southeast regions," Wong said, adding that "Hong Kong will move some funds there."
Longer term, there are concerns about a possible spread of corruption from mainland China, where red envelopes of money speed many transactions, and about the need for improved public education to provide the managers and high-level technical staff for upgraded Hong Kong businesses.
Accelerated changes in the business environment will occur between now and 2001, members told the Federation Of Hong Kong Industries in a survey held from last May to July. More than 60% expect improved economic and infrastructure conditions, but as high as 59% anticipate worse corruption.
Hong Kong manufacturers, which now do production elsewhere and assembly locally, are emphasizing upgrading to lines with higher value, quality and sophistication.
"Production plants now are in mainland China and throughout the region, capturing competitive advantage wherever it can be found," said Victor Fung, HKTDC chairman. "The underpinning for the manufacturing network is the business-to-business service sector, which accounts for 84% of gross domestic product. Hong Kong is a place which makes business happen, helping others to compete with their products in Asia's vast new markets."
Trading of Hong Kong electronic parts and components is becoming easier with mainland China's reduction of taxes, which were as high as 32%, a change expected to reduce the quantity of gray-market goods, and with a World Trade Organization agreement to lower customs duties.
The Asian Electronics Forum, held concurrently with the fair in the convention center, emphasized the need for upgrading and technological innovations to compete in the global market of the 21st century. By the turn of the century, speakers predicted:
* Telecommunications offering worldwide "follow me" service with a single phone number.
* A $16 billion DVD-RAM drive market, $8 billion for DVD-video player-recorders, $4 billion for DVD audio players, and $120 billion for software discs.
* Improved projection systems for LCDs, reflective color displays, and fully integrated AM/LCDs.
* And a test in Hong Kong of the world's first choices in commercial broadband interactive television services.
China will be a major customer for electronics, stated Tang Zhong Wen, China Chamber Of Commerce chairman for electronics, who predicted the Chinese market will grow 30% yearly through 2000, reaching $361 billion (U.S.) and probably growing to $723 billion by 2010.
In line with the Hong Kong trend to upgraded technology, electronicsAsia, a simultaneous fair, showcased electronic components and the latest production technology with exhibitors from 23 countries. It was a joint effort of the HKTDC and Munich International Trade Fairs, a subsidiary of Messe Munchen, Germany.
Exhibits at the main fair often emphasized company capabilities, ISO certification, and production capabilities over the actual products. Lines shown put stress on telecommunications, security items for both home and personal use, and TV, plus personal audio of all types, and clocks and watches.
Multimedia TV had only two entrants. Sampo showed a 29" multimedia monitor with a set-top box offering 33.6K modem and Ethernet connection, built-in browser and e-mail, onscreen or optional infrared keyboard, printer port, and phone/video/audio cables.
Skyworth offered multimedia TV in 14"-34" sets. Plugging into a PC allows an Internet connection, and the sets include Video CD and karaoke options.
A trend toward larger screens, 29"-34", appeared in sets intended for some Asian markets, but those for export to third-world countries were primarily 14" screens (13" by U.S. measuring standards).
Video CD is the preferred format today, although several manufacturers plan DVD entries next year.
The Electronics Fair, the first to be held in the expanded Hong Kong convention center, drew more than 32,000 buyers who visited 1,100 exhibitors in 1,600 booths. |
