LI, Tao @ Hong Kong

The Financial Reporting Council (FRC), an independent statutory body established to enhance regulation of Hong Kong’s accounting profession, may be relatively unfamiliar to the public, since it didn’t come into existence until 2006. However, its new chief executive officer P.M. Kam, who took the helm on April 1, told China Daily he is optimistic about initiating some changes, even though he is still in the process of learning.

“I know FRC is not very familiar to the public, so one of my missions in the position is to bolster FRC’s influence and to enable more people to understand what we are doing, and to let the public contribute to the city’s healthy accounting environment in return,” said Kam.

P.M. Kam, FRC chief executive officer.

Empowered by the Financial Reporting Council Ordinance, FRC was established by the Hong Kong government in 2006, with advice from the then Hong Kong Society of Accountants (now Hong Kong Institute of Certified Public Accountants) with the task of enhancing the integrity of financial reporting through investigations and enquiries of listed entities in Hong Kong.

Though FRC is not empowered to discipline or prosecute, it may look into any auditing or reporting irregularities, or any non-compliance issues related to the listing rule and report them to the Hong Kong Institute of Certified Public Accountants, the Securities and Futures Commission or the stock exchange for follow-up actions.

“From the public perspective, if accountants are investigating other accountants, people may perceive some unfairness going on there. As FRC is an independent statutory body made up of experienced professionals and advisors from a wide range of backgrounds and industries, the public is more likely to deem our work objective and impartial,” said Kam.

Kam himself is a professional with accounting expertise. A certified public accountant who has worked with Jardine Matheson, a well-known British trading company, as the group financial controller for over 30 years, Kam said there is no difficulty for him to identify the irregularities or instances of non-compliance arising by mistake or intentionally.

He said the FRC carries out investigations or enquiries on its own initiative, or mostly, upon receipt of complaints, including anonymous ones. During their initial screening, most technical mistakes will be cleared up immediately after communicating with the relevant companies.

Kam said his experience at Jardine is an advantage, since he can articulate the practicalities of financial reporting from a preparer’s perspective. However, if he finds that a company is trying hard to hide something, he “definitely will not let it run away.”

“What’s more, FRC is entitled to query the director of a listed company, even if he is not a member of the Hong Kong Institute of Certified Public Accountants, while the institute is not authorized to do so. It gives us extra power to solve problems more easily and effectively,” Kam said.

Kam said that in theory, the fewer issues he is investigating, the better the functioning of the regulatory framework of accounting the city is adopting.

“In 2008 and 2009, the number of complaints the FRC reviewed after screening was only 15 and 19 respectively, which, in comparison with the thousand listed companies, is rather small,” Kam said. “However, only about 60 percent of the complaints are settled within two months. I believe there is still room for us to work more efficiently in the future,” he added.

China Daily

(HK Edition 05/25/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-05/25/content_9887505.htm

An auctioneer (left) awaits new bids during Tuesday’s public land auction. Provided to China Daily

A site in Hong Kong’s Peak district was sold for HK$1.82 billion in an auction Tuesday, which translates into a record-high unit price of HK$68,200 per square foot of finished gross floor area for property sold at public auction.

Martin Lee, vice-chairman of Henderson Land Development Co and son of tycoon Lee Shau-kee, who bagged the luxury site after beating rivals, told media after the auction that he plans to build a luxury house on the site for a family residence.

The accommodation value of nearly HK$70,000 for the 53,350 square-foot site in 35 Barker Road, The Peak is believed to be a new record high in the city’s history of luxury land auctions, said Joseph Tsang, auctioneer and International Director and Head of Capital Markets at Jones Lang LaSalle, a major real estate consultant firm in Hong Kong.

The HK$88,000 per square foot paid for another Henderson-owned property, a Conduit Road luxury apartment sold last year, still holds the record for a non-auction sale.

“Today’s auction results reflect that the ‘super’ luxury residential property market remains intact following the government’s implementation of new (tightening) measures targeting the property market, while the transaction price will have an ‘indicative’ meaning for the future trends. We expect that the luxury residential market will remain positive,” Tsang said.

The price beat analyst estimates that ranged from HK$1.2 billion to HK$1.3 billion, and the per-square-foot price also exceeded the sellers’ expectations, said Tsang.

“This shows that the outlook of the luxury market is still positive,” said Tsang. “After redevelopment, the site could be resold for more than HK$100,000 per square foot,” he added.

However, some real estate analysts believe the winning bid has no indicative meaning for the outlook for the whole property market, as the buyer plans to build a new house on the site as a private residence rather than for resale.

“The winning bid could not serve as an indicator for Hong Kong’s property market, as the site was bought for personal use, and not sold at a market price,” said Wong Leung Sing, research head at Centaline Property Agency Ltd.

Wong said the prices other developers offered for the site during the auction may be closer to its market price, as they have to count the costs carefully if they want to develop the site for resale.

To cool the city’s over-heated real estate market, the Hong Kong government in April announced a series of measures to curb possible price manipulations by developers in new project launches.

Financial Secretary John Tsang also announced earlier that the government will accelerate government land auctions this year.

China Daily

(HK Edition 05/19/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-05/19/content_9865332.htm

Yantai and Qingdao, two of the economic-powerhouse cities of Shandong province, Wednesday held economic and trade cooperation signing ceremonies with Hong Kong investors as the 2010 (Hong Kong) Shandong Week continued.

Located in east Shandong peninsula and widely known for its tourism resources in China, Yantai this year brought to Hong Kong dozens of investment projects, including undertakings in infrastructure and real estate, tourism, logistics, advanced manufacturing and featured industry parks. Deals for 18 projects, involving total investment of US$1.47 billion, were sealed on-site at the signing ceremonies held at the Hong Kong Convention and Exhibition Center Wednesday morning.

Zhang Jiangting, mayor of Yantai, said that since the first Hong Kong investment in the city in 1984, nearly 3,000 cooperation projects between the two cities have been undertaken, noting that Hong Kong has become Yantai’s biggest outside investor over the years.

“In 2009, import and export trade between Hong Kong and Yantai totaled US$580 million. Hong Kong compatriots have not just invested in our city, but have actively supported us to organize a series of economic and trade activities in Hong Kong, as well as a fruits and vegetables fair and wine festivals in Yantai,” said Zhang.

Yantai is among the first 14 mainland coastal cities that opened up to the outside world. Over the past 20 years, the city has given full play to its own strength to develop tourism, logistics, and manufacturing industries, and has explored 4 potential industries including petrochemical, metallurgical, biological and nuclear power industries.

Zhang believes Yantai’s comparative advantages could integrate well with service-oriented Hong Kong, and expects more Yantai enterprises to utilize Hong Kong as a platform to attract international capital.

The provincial capital of Shandong province, Qingdao held its own economic and trade signing ceremony Wednesday afternoon at the Grand Hyatt Hotel in Hong Kong.

During this year’s Shandong Week, Qingdao has signed contracts for 79 projects with Hong Kong investors, involving a total investment of $17.5 billion, of which 52 are service-related projects, with the rest being manufacturing-related investments.

“Qingdao and Hong Kong are similar in many ways: we are both open cities, port cities, brand cities, tourism cities and Olympic cities. During China’s opening up in the past 30 years, Hong Kong has always been Qingdao’s most important trade and investment partner, and the two sides have maintained a good relationship in various fields,” said Xia Geng, mayor of Qingdao.

Xia said over the past 10 years, ports, logistics, finance, tourism and other modern service industries have become the mainstream sectors the two cities cooperatively develop. Nearly 3,500 Hong Kong enterprises and organizations have been established in Qingdao, while advancing manufacturing industries, real estate, modern service industries and other fields. Among them, 588 projects have involved investment amounts equal to or in excess of US$10 million.

Margaret Fong, acting chief executive of the Hong Kong Trade Development Council, delivered a keynote speech for the event. Fong said the high-level economic and trade cooperation between the two cities has been comprehensive and proactive over the years. As Hong Kong and Qingdao are close trading partners, she believes the growing economic and trade activities between the two cities will further boost bilateral exchanges and drive the cooperation between the two cities to a new level.

China Daily

(HK Edition 05/13/2010 page2)

http://www.chinadaily.com.cn/hkedition/2010-05/13/content_9842615.htm

Tai’an city, which derives its name from the Chinese national spiritual symbol Taishan Mountain, launched its Hong Kong campaign Monday to promote investment opportunities in the city as the “2010 (Hong Kong) Shandong Week” starts Monday.

Tai’an is trying to convince Hong Kong investors that besides its widely-known historical tourism resources, it also has complex infrastructure and an ecological environment that is conducive to boosting cooperation between the two cities.

“Tai’an and Hong Kong are complementary in terms of strength and advantage. Hong Kong’s experience in the service sector can help strengthen the quality of our manufacturing industry,” said Li Hongfeng, Tai’an’s mayor, at the 2010 (Hong Kong) Forum for Development of Major Industries in Tai’an City and Fair for Investment & Trade held in the JW Marriott Hotel Monday.

Twenty-three project agreements with a total investment value of US$1.75 billion were signed during the forum, involving several sectors, including agriculture industrialization, tourism and service, cultural industry and hi-tech deals.

Li said in recent years, Tai’an has given priority to the further development of the automobile, new materials, chemistry and bioengineering industries, to promotion of agriculture industrialization and to further improvement of key tourist and culture industries. It has also built high-tech industrial development zones and tourism & economic development zones to attract foreign enterprises to settle in the city.

“We hope investors from Hong Kong will have better knowledge about Tai’an through this fair,” said Li.

Mandy Ng, manager for mainland promotions at the Hong Kong Trade Development Council (HKTDC), delivered a welcoming speech at the forum, on behalf of the HKTDC.

Ng said Hong Kong could provide a good platform for companies from Tai’an to finance, while Tai’an provides a playing field for Hong Kong enterprises to explore investment opportunities.

“If Tai’an’s rich historical heritage and recreational resources could integrate with Hong Kong’s advanced cultural and innovative industries, the two sides could share complementary advantages and yield greater collaboration,” said Ng.

Located in Shandong province and covering an area of 7,762 square kilometers with a population of 5.5 million, Tai’an is a major production base of energy and raw materials in China, as well as an important national agricultural production region.

Mountain Taishan, which is listed as a natural and cultural world heritage site by the United Nations Educational, Scientific and Cultural Organization (UNESCO), and renowned for its natural scenery and historical culture, receives more than 15 million visitors each year. In addition to boasting the landmark mountain, Tai’an has also designed a series of unique tour programs with their own appeal over the years, including folk-custom and agricultural tours, and offers an impressive array of tourist goods, including folk souvenir snacks that delight tourists from all over the world.

China Daily

(HK Edition 05/11/2010 page2)

http://www.chinadaily.com.cn/hkedition/2010-05/11/content_9832113.htm

Since the central government announced plans to revamp the mainland medical system last year, players in this sector have all rolled up their sleeves and have prepared to share a slice of the 850 billion yuan stimulus package, which aims to renovate the nation’s rigid healthcare environment and ensure fair and affordable care for the world’s biggest population.

However, some new entrants to the mainland market believe they need to locate their business strategically, in order to stand out from the crowd.

“We are one of the three largest providers of endovascular aneurysm repair (EVAR) technology to cure aortic aneurysm in the world; but when we started our business on the mainland in 2007, we were immediately confronted with fierce competition from the local and international players,” Philip Nowell, director & Global Business Unit leader of the US based Cook Medical, told China Daily in Hong Kong.

Nowell believes the mainland’s healthcare reform will result in explosive demand for advanced technology, especially in the second- and third-tier cities where hospitals are most desperate for facility upgrades.

“Although EVAR has been widely adopted in most major cities and academic hospitals, it is rarely seen in hospitals of small cities, which are targeted to benefit from the healthcare reform. It will be our key market to explore for the next few years,” said Nowell.

One of the leading causes of death in the world, aortic aneurysm is a concomitant of improved living standards and is a common disease in the mainland.

EVAR is an advanced technique used to treat aortic aneurysm, a weakened and bulging area in the aorta – the major blood vessel that feeds blood to the body – where a rupture could be life-threatening.

EVAR causes less discomfort to the patients and requires shorter hospital stays, while its costs are comparable to those associated with traditional open-heart surgical repair. Nowell said the promotion of this new technology in the second- and third-tier cities will require a lot more effort, as physicians need sufficient guidance and expertise to master this complex technique.

“What the physician lacks most is experience, so our major job is to provide help to some Chinese physicians by bringing experts from the US and have them working together. These doctors will later assist and help those doctors from hospitals of second- and third-tier cities to master EVAR,” said Nowell.

Cook Medical’s EVAR has been adopted in 100 hospitals all over China, from big cities like Beijing and Shanghai, to smaller ones, e.g., in southern Xishuangbanna in Yunnan province; northern Jiamusi in Heilongjiang province; and western Shihezi in Xinjiang Uygur Automonous Region.

However, considering the billions of dollars the Chinese government plans to invest for hardware and software upgrading in over 300,000 hospitals, Nowell said the company will increase product choice and broaden product lines to beef up sales.

“The global EVAR market reached US$1 billion in 2008 and I expect the market will feasibly climb to US$2-2.5 billion by 2015. The mainland is the fastest growing market in the world, and our business growth increased 49 percent to US$7.7 million last year. We are planning to manufacture products in China, and to offer more affordable new technologies to local patients in the near future,” said Nowell.

China Daily

(HK Edition 05/07/2010 page2)

http://www.chinadaily.com.cn/hkedition/2010-05/07/content_9819614.htm