Trade Development Council chief Jack So says body still plays a key role
Even though critics question the TDC's relevance, chairman Jack So insists the promotional body now maximises many benefits from the mainland
Hong Kong's days as a manufacturing hub may be long gone, but Jack So Chak-kwong, outgoing chairman of the Trade Development Council, believes the trade promotion body will never get past its use-by date.
Created in 1966 at the height of Hong Kong's industrial boom, the TDC has long been criticised as an anachronism in a city, which generates 90 per cent of its gross domestic product from the services sector. The TDC is a statutory body run by a council consisting of government and industry figures. Although it receives an annual subvention from the government, totalling HK$384 million for the last financial year, the bulk of the TDC's income comes from its own activities.
And So says the city's status as a financial services centre and facilitator of investment into and from the mainland offered a new mandate for the TDC to promote not just trade but "any economic activity that comes through Hong Kong that would give us added value".
One criticism of the TDC is that its activities, including more than 30 international trade shows per year, use public money largely to promote products made on the mainland.
But So dismisses that suggestion and argues that cross-border activities bring about many benefits for locals.
"Hong Kong companies benefit both at the front end in getting orders, designing products, managing the manufacturing and also at the back end, in logistics and financing," So says.
"Most importantly, the profits come to Hong Kong companies. Their headquarters, sample rooms, designers, managers and financial controllers are still in Hong Kong. Would you rather these companies move to Singapore?"
The value of Hong Kong exports rose 3.9 per cent year on year in the first five months of this year, although all of the growth was in re-exports - goods made, for the most part, on the mainland and moved through Hong Kong to abroad. The value of domestic exports fell 3.5 per cent in the same period.
Having kick-started Hong Kong's biggest trade promotion campaign yet in the United State last month, So says the TDC would work even harder to match mainland and overseas enterprises with local firms, so Hong Kong can benefit by helping overseas firms enter the mainland market and mainland enterprises expand overseas.
"Our value is to manage change; in these 40 years, not only has TDC changed itself, Hong Kong also changed itself. We are just a reflection of the larger Hong Kong economy," So says.
Beijing's announcement last week that it would create the mainland's first free-trade zone in Shanghai, with a view to extending it to other mainland cities, has shaken some in Hong Kong. But while some fear the tax-free status and simple customs clearance procedures that have made Hong Kong Asia's logistics hub could lose their shine, So believes the TDC and the city will always find ways to exploit the situation.
"Even when yuan becomes totally convertible one day, it's still a situation that can benefit Hong Kong," he says.
"People are predicting Hong Kong's demise, but I don't think it'll happen. Competition from Singapore and Shanghai is not new, and now competition from Qianhai [a new special economic zone in Shenzhen] is coming, but we're already on to something else.
"We collaborate with these cities, and sometimes even take advantage of the partnership. We should not be pessimistic."
A prominent figure in business and political circles, So has held various senior positions in stockbroking, banking and the property sector since the late 1970s, when he left the Independent Commission Against Corruption after serving as one of its first batch of graft-busters.
So's first spell with the TDC started in 1985 when he became its executive director, a position he served in until 1992. Three years later he joined the MTR Corporation as chairman and chief executive.
His time with the public transport giant came as the Airport Express and Tseung Kwan O lines came into use and the city's two landmark skyscrapers, the International Commerce Centre and the International Finance Centre took shape above Kowloon and Hong Kong stations respectively.
After leaving the MTR Corp in 2003, he joined telecoms provider PCCW as deputy chairman and group managing director until 2007, when he became TDC chairman. "I'm very happy that when I look around, I see I got involved in every one of those buildings. I take out my Octopus card, I was involved with that as well. When I switch on the television, I see Now TV. I'm a lucky man," he says.
It's a far cry from the struggles of his early days with the TDC, when getting space at overseas trade shows to showcase locally made watches and toys was often a painful task.
" Often we were not allocated any space in the hall - they asked you to set up tents in the car park or rent a truck in an open space. That's how we got started."
Even in Hong Kong, a lack of exhibition space meant the TDC was limited to running mini "trade fairs", until So's lobbying led to construction of the city's first exhibition centre - which opened in Wan Chai in 1988.
"Now people accuse us of monopoly of trade shows, but back then nobody was doing that," So says, referring to criticism that the TDC's management of the government-owned Convention and Exhibition Centre in Wan Chai is squeezing out smaller players.
So says the TDC has adapted to the growth of the service centre, organising international events such as the Asia Financial Forum, Entertainment Expo and other trade fairs to promote design, music, television and computer games.
But underneath all the financial, legal and accountancy services, the TDC still does what it does best - promoting trade - because as So puts it, the service sector exists because it is needed to facilitate trade.
Its trade promotion campaign in the US attracted 1,500 American companies to attend talks and business-matching sessions in New York, with a further 1,000 attending in Los Angeles. InvestHK, which promoted foreign direct investment in Hong Kong, said the number of inquiries from US companies looking to open offices in the city had doubled since the beginning of the year, when the TDC began liaison work for the campaign.
"These companies can go directly to Shanghai or Beijing, but they choose to come to us because they see that coming through Hong Kong is the most effective way to find the Chinese market; they would rather pair up with Hong Kong companies than make all the mistakes," So says.
Looking to the end of his six-year term in September, the TDC chief says he will not linger on even if the government offers him the opportunity. He will continue other aspects of his public service, including heading the government's Economic Development Commission.
"There are good reasons why one should stick by the six-year rule. Nobody should hang on to a position for too long," So says.