Business Commentary As I Am Traveling

No time for long posts, but I will try to record down interesting observations pertaining to business and commerce. Still in HK, contrary to popular perception, this financial center has many layers to it. The ultra rich (listed company owners and property owners) basically get to enjoy all the perks. HK is a place where its good to be rich. The ultra rich population probably is just the top 1%-2%. Then there is the upper middle class. To qualify, you basically has to have paid up at least one property and be invested / paying off one or two more properties - that will put you in the net assets region of HK10m-HK30m. I think that makes up another 10% of the population. I think I have to qualify here, its 10% of households, and not an absolute number of people.

Its crazy I know, but if your net worth is below HK10m, I don't even consider you as upper middle class, because you are not living as upper middle with your net worth below that in HK. If your net worth is between HK1m-HK10m, you are middle class. That grouping probably makes up another 20% of households. If your household net worth is less than HK1m, you should be living in government flats, busily saving to put down payment on a private property - this grouping should total about 50%. Included in this group are those who are still battling the negative equity aspect from the last financial crisis.

What about the rest? The rest are barely making ends meet, and its a significant grouping, with a large number of them being recent immigrants. Many are just around the poverty line, and would be receiving some sort of subsidy or monthly allowance from the government.

Of course, this is not a scientific data collection but rather from my observations from having been in HK many times over the past 10 years. Its a brutal society when it comes to money. Its unapologetic in its pursuit of money, and when you have it almost all your other character failings an be overlooked. The funny thing is that even the poor would still be wanting to work and live in HK, rather than complaining and protesting of the wide disparity of income between the poor and rich. Here is one place where the poor and striving will work hard willingly, grumble a bit about where they are but will not blame the place or the rich because they somehow embody and breathe the spirit of capitalism - its OK to be poor, but at least its a place that give me a shot at being rich if I work hard, get the right opportunities, and/or the other cards fall in the right places for me.


p/s photo: Rachel Kum

When Not To Go To HK

Was just in HK for business... never go during summer... its like a steam bath sauna every time I go out walking. Just 5 minutes and you will be bathing in your own sweat. I think I took 4 baths a day when I was there. Another reason why one should not be in HK during the last week of September and first week of October is the extended China holiday period. Smiles are forecast across much of Hong Kong for the next 8 days as a stream of visitors with money to spend pours in from the mainland.

Retailers, caterers and people in the travel sector are those who will sport the biggest grins, generated by a windfall as an estimated 8.85 million people pass through border checkpoints. The estimate by the Immigration Department shows a 10 percent increase from the number of visitors last year during the Golden Week holiday period, when most factories in the mainland are closed. This year's holiday has an additional layer on top of Hong Kong's usual shopping and sightseeing come-ons and attractions, with the Mid- Autumn Festival adding zest on October 3.

Joseph Tung Yao-chung, executive director of the Travel Industry Council of Hong Kong, said most tours were 80 to 90 percent booked, and he expects a 10 percent increase in business. The Standard reported last week that the travel sector had forecast a 5-10 percent boost despite the strains of the human swine flu (H1N1).

There is certainly confidence across the retailing, catering and travel businesses that cash registers will ring merrily, with plenty of predictions about double-digit increases in business. Gearing for the rush from the mainland, many shops are hiring extra staff for the first two weeks of October. Officers of the Immigration Department are also bracing for busy times over the next 12 days. About 3.4 million passengers - a daily average of 262,000 - are expected to pass through Lo Wu alone.

The heaviest outbound day will be October 1, when 206,000 people are expected to head into the mainland, but there will be a solid stream flowing in the opposite direction for days. The heaviest inbound day is likely to be October 4, with 196,000 visitors expected to go through the checkpoint. Passenger traffic at Lok Ma Chau is also going to be heavy over the holiday period - an estimated 1.43 million, for a daily average of 110,000 - with October 3 looking like the busiest day.

On top of stopping all leave to handle the rush, the Immigration Department will have additional security guards to help in crowd control. And department officers along with police, customs and the MTR Corporation will be in a joint command center at Lo Wu to oversee traffic and handle any emergency. The department has appealed to would-be cross-border travelers to avoid the October 1-4 period if possible and in any event to be sure all their documents, such as home visit permits, are valid.

p/s photo: Eva Huang Sheng Yi

Understanding Business Mentality In China, Taiwan & HK - The Zhang Zhiyi Experience

Boy, I am so happy to be able to talk about Zhang Zhiyi in my blog on Asian business. Can you imagine that? Zhang had a wonderful 12 months thanks to Memoirs of A Geisha, but suffered enormous criticism over her role, which involved being involved with a Japanese man... in a movie role. I am not even going to go into how low-brow and uneducated an opinion it is to be offended by that MOVIE ROLE. You'd think things would die down..., NO... Zhang appeared magnificently in the recent Oscars, and even presented and she spoke surprisingly well in English. Was that good enough for the media? Apparently not. The media in China, HK and Taiwan have plenty to say about Chinese actress Zhang Ziyi and most of it is downright vicious. Below are excerpts from an article in The Straits Times in Singapore today.

Hollywood was enthralled with Zhang's beauty in Memoirs Of A Geisha, but it was her turn in House of Flying Daggers that captivated my attention. After her role as a presenter in the Oscars, this was what the HK papers had to say, and her gown was magnificent by the way. 'Zhang Ziyi's Armani evening gown made her look so flat-chested it was scary' said HK's Sing Tao Daily said in a headline. She has said previously the venom has to do with Hong Kongers' deeply entrenched bias against mainland Chinese, who are viewed as bumpkins and gold diggers. 'They think, 'How can you be an international movie star? You are only from China.' For them, China is like the countryside,' Zhang said in an interview with The Sunday Times of London in 2004.

Such evidence is found in a 2004 article in HK's Next magazine, a popular weekly known for its hard-charging paparazzi. It printed a photo allegedly showing Zhang squatting down to check out the bottom shelf in a store. A caption read: 'Miss Zhang displays the special trait of our motherland's compatriots: spreading her legs wide and squatting down.' People can often be seen squatting in China in crowded places - such as railroad stations - where the ground is too dirty for sitting and there is limited public seating. Zhang's rapid rise and ongoing success may also have bred envy. Many Hong Kong publications made sure their knives were extra-sharp for the Oscars, where she presented the award for best editing. A headline in Apple Daily ripped into her English: 'She still can't change her English with a Beijing country accent. She didn't pronounce the 'r' in the winning movie Crash properly.' This one really irked me, when do you find an average HK person speaking English well?? So what if she's got a Beijing accent, she's from Beijing isn't she? Nobody faults Antonio Banderas for speaking English with a Spanish accent!!! Or Gerard Depardieu for speaking English with the clipped French accent?? Does Apple Daily's editor even understand what is good English and what is accent? I mean, seriously, Zhang's intonation and pronounciation are so much better than Jackie Chan - do we see any HK papers savaging Jackie's English??

Sing Tao Daily said she read her cue card with 'quivering lips' and her pronunciation of Crash sounded more like that for the toothpaste Crest. The Ming Pao Daily noted that she forgot to hug or shake hands with the award winner, though it conceded that her English was improving. Hong Kong writers also savaged her Giorgio Armani outfit, a black beaded bustier with a crystal-encrusted grey skirt. 'Lacking in youthful vigour,' read a photo caption in the Oriental Daily News. Apple Daily hissed: 'Zhang Ziyi two decades behind the times.'

'Zhang Ziyi's English rolls off her tongue,' said Taiwan's Liberty Times. Another Taiwanese newspaper, the Min Sheng Daily, said 'Zhang Ziyi's English is no longer poor'. In China, there is still a strong undercurrent that they cannot accept that she has to "sleep" with a Japanese man, even though it was in a movie. Playing a Japanese woman already stirred open some wounds which have not healed properly for many years. China found it hard to "celebrate" with Zhang's new found international stardom but have toned down the viciousness of late.

Business Lessons

1) Though most HKers would not like to admit it, deep down there is a feeling of resentment against how fast some of the Chinese from mainland have gotten rich. HKers feel that they have progressed much faster economically and up the developed country curve, and to make less money than them is an insult. This mentality prevails even when certain HK companies go to the mainland to expand - beware and be aware.

2) HKers not only begrudge the rich ones from mainland but also abhorrs how crudely they spend their money in HK especially - no class as they say. But most HKers also know they needed cash from China to fund the down trodden economy in HK for the past few years. HKers can't wait for the good times to roll again so that they can pass crass remarks and shoo the mainlanders back to where they belong.

3) When doing business in China, you are either with them or against them. If you fallout with the Chinese, well its not going to be a "agree to disagree" mantra. You cannot afford to have a fallout as some entrepreneurs have found out the hard way. Many would want to hedge their fortunes by parking funds elsewhere whenever possible. There is an under current of uncertainty that you could find yourself in the wrong side of the turning tide of political sentiments too swiftly in China.

4) Taiwan politicians will fight like mad with politicians in China in the media, but business wise, China has been quite open in welcoming Taiwanese investors. Much of the open war of words is to appease the masses of both sides for championing nationalistic interests. But business has been going to and fro, especially from Taiwan to China in a big way for a very long time. Thus, you will usually find that anything China says will find the Taiwanese going the opposite way, mainly to spite the other party. You don't like Zhang Zhiyi, I think she is adorable. Hence when doing business with either Taiwan and China, you do not go extolling the virtues of Taiwan to China or China to Taiwan. Just do the business, even though they may actually agree with you opinions about the other country, its best not to say them out loud.

As the above are generalisations, they are bound to be exceptions. Generalisations applied harshly on everything will lead to prejudice and unjust discrimination. Generalisations are just tools for use to learn a bit more about something, not a divining rod.