You got to know when to hold 'em, know when to fold 'em
Business heavyweight Jack So Chak-kwong will spearhead Hong Kong's efforts to fight off competition from Macau for convention business as chairman of the Trade Development Council.
SCMP, Sept 4
The conclusion we got from the study trip was that there is no future for Hong Kong to keep expanding our exhibition and conferencing facilities, as the ones we have are tiny compared to those in other countries. So, rather than spending money to specialise in this area, we would do better to diversify our development.
James Tien Pei-chun,
Chairman, HK Tourism Board,
August 30, SCMP
Itake it back. I said that the 12-day round-the-world junket from which eight legislators have just returned was a waste of public money.
But if it has truly convinced them that we should not pour much greater sums of public money down the black hole of the convention and exhibition business, perhaps it was not so great a waste after all.
Mind you, I am not certain that they are convinced of it yet. The only one of the eight who has said so is Mr Tien and he was not the group leader, nor did he finish the tour. He dropped out early. I have still to hear the other seven say publicly that they agree with him.
But he is right, no doubt about it. We simply don't have the acreage to compete in this business of building ever bigger halls and auditoriums and anyone who tries to do it would be guilty of a gross misuse of scarce public land. To stay in the game now is to start choking off the supply of land to build Hong Kong people better homes.
That's why I can understand a TDC source we quoted, who said that the strategy for promoting Hong Kong business, products and services might be changed under Mr So's chairmanship to handle the 'complicated situation'.
There is actually nothing complicated about the situation. It's a straightforward challenge. Do we want to play poker against Sheldon Adelson, the chairman of Las Vegas Sands Corp, who has just opened his big Venetian casino complex in Macau? Do we want to look him in the eye and say: 'See your bet and raise you' and then push all our chips into the middle of the table?
All our chips is what it would have to be. It would involve building massive new hotels with thousands of big rooms each, building exhibition space better measured in hectares than square metres, allowing casinos in, building associated mini-amusement parks and turning a blind eye to prostitution on a truly enormous scale.
And it's not just one resort in Macau that we have to look at. There are more of them of that size going up on the Cotai strip and along the Pearl River all the way to Guangzhou. Most of them are probably uneconomic but the owners, mostly government-linked, don't seem to care.
Of course we are not going to compete with this sort of thing. It would be utterly silly to try. What we have to do is fold our cards, take our losses and walk away from this gambling table. Humiliating as that may be, we really don't have much option. To stay in is to wipe ourselves out.
For the TDC this means accepting that in a few years Hong Kong may no longer be the natural centre for annual big exhibitions of mainland-made goods. The attractions elsewhere to exhibitors and buyers will be just too great.
It thus looks like Jack So has been given the job of leading the TDC into a new incarnation and it so happens that I am once again in position to advise him. I used to do it regularly many years ago when I was research manager at Sun Hung Kai Securities and he was a senior executive of the company.
I don't say he always welcomed my advice back then and he may even have had good reason not to. He gets it anyway.
New incarnation, Jack, should not be an even older incarnation for the TDC than the exhibition business is. That older incarnation was to promote export sales of Hong Kong wares. Forget it. We no longer make things here for export.
Nor should it be helping lazy low-end Hong Kong manufacturers who moved their production shops across the borders years ago but never moved up market. Beijing now wants to kill off these sorts of shops and has every reason to do it.
Don't get in Beijing's way. There is no hope for these shops. Pronounce the funeral services, if you will, and then clear out.
There is also no role for the TDC in promoting Hong Kong's service exports. It can't teach bankers to bank, traders to trade or shippers to ship and we already have a tourist board.
In fact, Jack, there isn't much of a role for the TDC at all any longer, and if it can't survive on its own as a standalone exhibition business paying market rent for its exhibition facilities than the best thing to do with it is probably just shut it down.
Which would leave you with the chairmanship of the Hong Kong Film Development Council.
Now that one might just have a chance of becoming something. Hong Kong could make something of film and other performance arts in its new incarnation, following a route earlier trodden by cities such as New York and London. You might want to spend more time on that than you do on the TDC, Jack.