The Tenth Joint Meeting of Taiwan-Britain Business Council

The purpose of this newsletter is to alert UK business to what UKTI sees as the main headlines in the Pacific Rim & South East Asia markets. It is meant to be no more than a snapshot. To go to a chapter – Click on heading, press `Ctrl’, then left click.

Feedback, comments and contributions to the UKTI strategy are always welcomed. Further information on any of these subjects is also available.

Korea – Korea British Business Council (KBBC), Presidential Elections, Market Access

Singapore - SBBC Discussing Strategy Singapore Plenary 2008, Photonics Mission 2007

Philippines – Montalban Methane Power Plant, Aid Funded Business, BPI set up in London

General Items of Interest EU Asean Papers, Trade Figures up to Sept 07, UKTI Emerging Markets Forum & Outreach Events and Useful URLs

Taiwan

Sir Thomas Harris succeeds Martin Barrow as Chair of the Taiwan British Business Council, (TBBC’s), UK Steering Committee.
Presidential elections are due in March. If the recent legislative elections are anything to go by, we may see a change in the political Party running the country – an administration which promises closer ties with China. This election will dominate the Taiwanese landscape for the next few months, although will not interfere with day-to-day business.

UKTI is preparing for the annual Government to Government trade talks, scheduled for May. We need to hear from UK business regarding what they would like us to raise so we can push their concerns.
We are looking to set up the annual meeting of the business-to-business Taiwan British Business Council. In 2008 the focus will be on ICT, renewable energy and financial services. The date of the event will be in early June with Scotland being the likely location.

Indonesia

Indonesia’s macro-economic recovery from the Asian financial crisis of ten years ago goes from strength to strength. GDP growth (in US$ terms) is exceeding the pre-crisis levels and is now higher than inflation. Against this background, the Government continues to focus on a stable economic and political environment.

On 14 January, the Finance Minister Sri Mulyani visited the UK. She took the opportunity to address a number of UK investors under the umbrella of the Indonesia British Business Council. She also discussed Sharia markets and carbon trading with the financial services sector at a meeting hosted by the Lord Mayor of London.

Korea

Sir David Wright has been appointed Chair of the new Korea British Business Council (KBBC).

Just before Christmas Lee Myung-Bak, former Mayor of Seoul and previous Chief Executive of Hyundai Construction won an overwhelming victory in the Presidential race. His campaign focused on strong economic growth and business friendly policies. His 7-4-7 proposal promises a 7% annual growth, leading to $40,000 per capita GDP (in ten years time), and placing Korea as the world’s 7th largest economy. How he will now develop and deliver his policies remains to be seen.

With the change in President, the mandate to conclude the EU-Korea Free Trade Agreement falls. Negotiations had been progressing well but the deadline to complete the agreement by the end of 2007 was always ambitious. We will be pushing the new administration to renew the mandate for negotiations.

John Hutton MP, the Secretary of State for Business, Enterprise and Regulatory Reform visited Korea in November 2007. He pushed for improved market access for UK businesses and made the case to Koreans that the UK remains their natural business partner of choice in Europe. He also heard about how Korea handles its nuclear energy sector. Looking ahead, UKTI continues to hear from businesses about how we can influence the Korean Government to improve the business environment. This will be collated and presented to the newly formed Korea British Business Council which, once agreed, should offer private sector endorsement to the issues of concern to business that Government needs to prioritise.

Vietnam

The headline is that the Prime Minister of Vietnam, with his key Economic Ministers, will be in the UK from 3-6 March. A main pillar of his visit will be to address UK businesses with the intention of increasing bilateral trade and investment. The programme is yet to be finalised. The Vietnamese are keen to hit as large an audience as possible to discuss their future plans for this fast growing (second only to China) market economy.

In September 2007, Andrew Cahn (UKTI’s Chief Executive) led the UK delegation at the inaugural UK Vietnam Joint Economic and Trade Committee (JETCO). These are annual Government to Government talks aimed at improving the business environment. A full account of the meeting and action points is attached. We are keen that business feeds into this process for the 2008 meeting. Without business’s agenda items, we have no agenda.

Singapore

2008 got off to a roaring start. The Singaporean Prime Minister announced growth had hit 7.5% in 2007 and predicted to be in the range of 4.5-6.5% this year. British businesses gained some early successes, for example Arup and HSBC were both part of the winning consortium for the new National Sports Stadium (see design above) and Gammon Capital won their first PPP project, to build a second campus for the Institute of Technical Education.

October will see a visit from the Lord Mayor of London, which will focus largely on financial services, given Singapore's role as the fourth largest financial services hub globally.

Philippines

In an environment of low inflation, low interest rates, a strong Peso and a record level of remittances from Overseas Filipino Workers, the Philippine economy sustained an impressive 7.3% growth in GDP in 2007, the highest for 31 years.

December saw the inauguration of Montalban Methane Power Plant. The project is a joint venture between the UK’s Carbon Capital Markets and the local group of Salvador Zamora. This is a landfill gas-to-power facility that is expected to generate about 15 MW of electricity from the municipal waste in the Montalban Landfill in Rizal Province. Total project investment is estimated at £15 million. The UK’s Organics Ltd was also awarded the turnkey supply contract for its landfill gas equipment. HMA and other team members attended the opening. This is the largest facility of its kind in SE Asia.

During visits to the UK, Trade and Investment Officer Fidel Ventura promoted business opportunities in ADB assisted projects. In total about 75 companies attended the briefings. As a result a total of 25 delegates, representing 22 organisations are to participate in an outward mission to visit the ADB HQ in Manila at the end of February. This is the biggest mission that UKTI Manila has received for many years.

Bank of the Philippines Island (BPI), which had previously received local support from UKTI, has now formally opened a full banking service in London. This is one of the largest ever Philippine investments in the UK. In addition the Philippine Veterans Bank opened a remittance centre in London.

Thailand

On 21 January - four weeks after the general election - the new Parliament convened, with the Palang Prachachon Party (PPP) leading a coalition government with five smaller parties. PPP has also taken the key position of Speaker of the House. Samak Sundaravej, leader of the PPP was elected as Prime Minister on 28th January 2008. He will also take on the role of Defence Minister in the new cabinet, which is due to be announced week beginning 4 February.

Taming the strength of the Thai Baht’s appreciation is one of the top concerns of Thai businesses voiced over the past week as the new government is taking shape. Managing the Thai Baht effectively is critical towards growth targets. The Thai Baht rose 7% against the USD in 2007 and 12% in 2006.
Official growth forecasts by the central bank are between 4.5-6.0% in 2008, (subject to different oil price scenarios), up from 4.3-4.8% estimated for 2007.

2008 got off to a great start with the announcement that Rolls Royce had won two significant aero engine contracts with Thai Airways and Bangkok Airways, worth $550 million. In addition, both contracts will be covered by ten-year total care service agreements, based on an agreed dollar fee per engine flying hour.

A trade mission from Northern Ireland will visit Thailand from 27-29 February and The Minister of State for Trade and Investment, Lord Digby Jones of Birmingham, is due to visit Thailand with a small business delegation in March. This is likely to be the first visit by an EU trade Minister since the coup in September 2006.

Malaysia

Malaysia celebrated its 50th Anniversary of Independence from the UK in 2007 and the British High Commission organised a year-long campaign of introducing UK firms into the market. The business climate, supported by a stable political system, remains strong and GDP growth for 2007 is expected to be 6%.

The services sector (nearly 60% of GDP) is increasingly important and the Government is committed to making progress in reforming its banking, insurance and capital market system. Local banks and insurance firms are consolidating and phased liberalisation, to allow greater foreign competition, is expected. Along with Dubai, Bahrain and London, Kuala Lumpur is one of the leading international centres for Islamic Finance. Malaysia's Multimedia Super Corridor (MSC) continues to attract high levels of British investment.

The Government has launched its Ninth Malaysian Plan (9MP) for 2006 to 2010 and its 3rd Industrial Plan (2006-2020) highlighting areas of opportunity as Malaysia moves towards its target of achieving "developed nation status" by 2020.

Emerging Markets Forum took place in London, January 9th 2008. Chaired by Sir David Wright with speakers including Lord Jones. The objective was to raise awareness of the opportunities in High Growth Markets.

Outreach Events. Objective: to encourage mid-corporate companies to export to Emerging and High Growth Markets. The dates for these UKTI sponsored events in the nine UK regions are:

Glasgow, 6th Feb; Leeds, 6th Feb; Nottingham, 8th Feb; Exeter, 13th Feb; Newcastle, 5th March; Slough, 17th March; Herts, 25th March; Cardiff 27th March; London, 5th March (tbc)

UKTI’s website – includes trade opportunities, exhibitions, recent successes and trade briefs, by market. https://www.uktradeinvest.gov.uk/

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