What, exactly, is left for the Trade Development Council to develop?

PUBLISHED : Thursday, 14 April, 2011, 12:00am
UPDATED : Thursday, 14 April, 2011, 12:00am


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This week sees the confluence of three important fairs as the Hong Kong Trade Development Council capitalises on its reputation for hosting some of the world's most respected trade shows for a huge range of industries.

SCMP special report, April 13

To get the proper perspective on this one, just look at the chart. Domestic exports of merchandise are now the equivalent of only 4 per cent of our gross domestic product, down from more than 50 per cent 25 years ago.

That residual 4 per cent is mostly due to a lingering export activity in electronics and jewellery but in neither case am I convinced that the figures tell the full truth. We probably have a booking anomaly here. Certain foreign buyers may find it convenient for tax or customs reasons to pretend that Hong Kong is the point of origin.

The simple fact is that we no longer produce merchandise for export. Yet we still maintain a government agency to promote merchandise exports. We also subsidise the Trade Development Council with a special tax, the trade declaration charge, because, even with the Convention and Exhibition Centre at its disposal, it cannot break even on 'some of the world's most respected trade shows'.

No grocery shop would ever keep on its shelves an item so far past its sell by date. Why is this decrepit old thing from a bygone era still around?

The answer is, of course, that the Trade Development Council has attempted to redefine its role. It now describes itself as the 'international marketing arm for Hong Kong-based traders, manufacturers and service providers'.

This begs the question, of course, of whether any real Hong Kong entities among these traders and manufacturers still ask the Trade Development Council to fill this role for them. Give these people the option of abolishing both the trade declaration charge and the Trade Development Council and I'm sure neither would be with us much longer. As to being a marketing arm for service providers, the Trade Development Council has yet to tell us just what it can teach the city's bankers about banking, insurers about the insurance industry or port operators about cargo organisation. It has no role to play in services, end of story.

What the Trade Development Council is really telling us is that over the years it has built up international attendance at seven or eight big annual trade shows and would like to keep running them. The Hong Kong angle is that some of the mainland based companies displaying their wares at these shows have directors with Hong Kong ID cards. That's what is meant by 'Hong Kong-based'. It's a stretch.

But if this is sufficient reason to keep the Trade Development Council alive with subsidies, why not also help Peruvian companies that were established by people who hold Hong Kong ID cards? These are also Hong Kong-based by our loose definition. Why are only such companies in the mainland considered?

And if the Trade Development Council wishes to respond that the mainland is the motherland and Peru is not, may I ask whether the Shanghai government would ever be so considerate of Hong Kong's status within the motherland as to set up a government agency to promote the Hong Kong businesses of Shanghai residents who left in 1949?

I thought not.

Running trade shows may indeed be a worthwhile business for Hong Kong but it should be run as a business, not as a corporate welfare scheme, particularly when few other people in Hong Kong benefit any longer. It is way past time that we pinched off the drip-feed of public money into the Trade Development Council and told it to get out of bed and stand on its own two feet.

If it cannot do this, then we will have good evidence that trade shows are no longer a worthwhile business for Hong Kong, that the market is not willing to pay what it costs to hold such shows when other trade show venues in Guangdong have much more available land and governments much more willing to throw away money.

I doubt it will prove so, however. The Trade Development Council already has private competition in Hong Kong, which manages to keep itself going despite hostile bureaucrats who find it difficult to keep promises that they will be even-handed.

I think the problem with the Trade Development Council is purely that it's fat and lazy because it can be and sees no reason to change if it doesn't have to. This bunch needs a kick in the ... oops, end of column, sorry, can't fit that word in.