EDITION 10, JANUARY 2009 News Letter for the Pacific Rim, Hong Kong & Selected South East Asia Markets

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 & Hong Kong. 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.

Trade Minister’s Visit to the Region

Singapore 

Taiwan   

Indonesia  

Korea  

Philippines   

Thailand/Cambodia  

Vietnam  

Malaysia   

Hong Kong & Macao 

Asia Task Force Events & General Items

Trade Minister’s trip to the Region

Trade Minister Gareth Thomas with Vietnam's Prime Minister, Nguyen Tan Dung

Gareth Thomas MP, Minister for Trade and Development: Asia Visit 12-21 January

UK Trade and Investment’s New Year started off with a high impact visit by Gareth Thomas to Singapore, Taiwan, Hong Kong and Vietnam.

The key messages the Minister brought to each of these UKTI high growth markets was one of a resilient British economy in which innovative and dynamic businesses still thrived and continued to internationalise. The Minister also stressed that freer markets, and not protectionism, are the best way to tackle the global economic slowdown and argued for a swift conclusion to the WTO Doha Development Round. 

In Singapore, the Minister, along with 6 UK companies, exchanged ideas with the Building and Construction Authority on Singapore’s 2nd Green Buildings Masterplan  to make existing buildings more energy efficient.  An Host2Host MOU was signed with the Minister for Community Development, Youth and Sports; an UKTI initiative developed to help deliver our 2012 Olympic Games legacy objectives and promote UK business.  The Minister and 9 accompanying UK companies reaffirmed the UK’s commitment to delivering the Land Transport Authority’s current and upcoming projects. A meeting with the Trade Minister was an opportunity to raise key DDA and FTA issues. 

The Taiwan visit, a first by a UK Trade Minister for six years, was extensively covered in the Taiwanese media. Gareth Thomas opened the UK Taiwan trade talks at which there was a great determination to resolve the small number of market access difficulties which confront UK business in Taiwan. The UK’s priority, when it set out its agenda for the trade talks in 2008, was to encourage Taiwan to sign up to the WTO’s Government Procurement Agreement. This it has now done and is particularly timely given moves to push ahead with the i-Taiwan infrastructure programme globally. The Government Procurement market, for those signed up to the WTO agreement, is worth annually $5.5 trillion. The Minister also offered in principle support for trade enhancement measures between the EU and Taiwan. Finally, he managed to promote British business expertise, especially in the railway and urban regeneration sectors, at his bilateral meetings.

Gareth Thomas managed to squeeze in a short visit to Hong Kong during which he gave a keynote speech at the Institute of Civil Engineers (ICE) Asian Pacific Conference. The Minister applauded the work of the organisation, with over 80,000 members in more than 160 countries, reminding the audience that Britain is the sixth largest manufacturing nation in the world.

In Vietnam, the Minister pursued both his trade and development briefs. The most significant meeting in Hanoi was with the Prime Minister. As well as offering to continue our support in helping Vietnam implement its WTO commitments, Gareth Thomas introduced the Prime Minister to twelve UK businesses looking to develop their companies interests in Vietnam. At a meeting with the Trade Minister, the UK priorities raised at the December meeting of the Joint Economic and Trade Committee were reiterated.

The Malaysian leg of the visit was cancelled at short notice due to the Minister’s return to the UK on urgent parliamentary business.

Singapore

December saw a suitably busy close to what proved to have been a busy year for Singapore. The 48 UK companies exhibiting at OSEA, Asia’s largest Oil and Gas show, formed one of our largest exhibition groups in 2008. The exhibitors were joined by an outward mission, also organised by EIC, plus commercial officers from neighbouring ASEAN markets. The UKTI pavilion at Asia TV Forum saw brisk business too for the household names exhibiting there such as the BBC and Channel 4. Further success for British firms was seen in the shape of four out of six new licenses to act as a Qualifying Foreign Law Practice being awarded to British firms (Allen and Overy, Clifford Chance, Herbert Smith and Norton Rose).

Looking forward, the New Year kicks off with a general mission from Northern Ireland, an exhibition group at Global Security Asia and inward missions to food (IFE) and education fairs in March. Singapore will also be represented at the Asia Task Force Roadshow events in the North West and North East in early March and in the West Midlands at the end of March. The Director of Trade and Investment will additionally be visiting the East and South East regions in March.

As this bulletin issues the annual budget announcement is being made. The budget has been brought forward by one month and will be used to introduce a raft of fiscal and related measures designed to stimulate the economy.

Taiwan

Taiwan’s accession to the WTO Government Procurement Agreement, giving UK business access to the $21 billion Taiwanese GPA market, was the key business headline over the past month. This announcement is even more notable given plans for the i-Taiwan programme, a series of infrastructure projects worth around NT$4tn (US$121bn) to be developed over eight years. Priorities include: Island-wide Transportation Network, Kaohsiung Port-City Regeneration, Taoyuan International Air City, Central Region New High-tech Industrial Clusters Program, Intelligent Taiwan, Industrial Innovation Corridors, Urban and Industrial Park Regeneration, Farm Village Regeneration, Coastal Regeneration, Green Forestation, Flood Prevention and Water Management, and Sewer Construction

As reported earlier, the visit by Gareth Thomas, presented significant opportunities for UK business to promote themselves at the highest level in the Taiwanese administration.

Indonesia

With projected growth for 2009 predicted at being around 5.5%, and having secured loans of over $5billion, the Indonesian Government has not felt the need to be rushed into developing a fiscal stimulus package but they have suggested that up to $4.9 billion will be used to ensure growth is maintained. UKTI Jakarta will report when it is aware of what opportunities may arise for British business.

In the meantime the amount of UK business traffic going through Jakarta continues to increase. The number of services supplied to UK business is significantly higher this year and with exports up more than 30% the UK is beginning to compete across a number of sectors. Immediate follow up to the recent visit to Indonesia by HRH the Prince of Wales will see a delegation from Jakarta come to the UK to meet businesses who specialise in urban regeneration and development. 

Korea

Broad UK business interest in Korea at the moment is dominated by two issues: the EU Korea Free Trade Agreement (FTA) and Government initiatives aimed at boosting the economy. Prospects for a conclusion to the FTA this spring are looking good. The EC Commissioner visited Seoul for a further round of negotiations on 19-20 January. Significant progress was made, although some sensitive issues remain. On almost all issues there is now a basis for agreement, and on others a way forward had been identified. A final negotiating round could take place in the first week of March to conclude the agreement formally. 
The Korea Government has announced its intention to develop some 22 key industries which they see as being the next generation growth engines for Korea including: energy and environment, transportation (cars and shipbuilding), IT,  biotech and knowledge based services. As well as the above there are opportunities for UK producers of a range of consumer goods. The Korean press has recently spoken of “hordes” of Japanese tourists coming to Seoul on shopping expeditions taking advantage of the weak Won. 

Philippines

On 21 January 2009 the bicameral conference committee of the Senate and the House of Representatives approved the 2009 national budget. This includes US$1.05 billion as an 'economic stimulus package' to be allocated for 'additional' infrastructure projects, primarily in the education, environment and health sectors.

The Senate has yet to ratify the budget.

Thailand/Cambodia

From early February, UKTI will have temporary resource based in Phnom Penh, to develop our trade relationship with Cambodia.

The first of 600 genetically-advanced breeding pigs have been shipped out to Cambodia as part of a 20-year franchise agreement in a deal clinched by Yorkshire-based international pig-breeding company, ACMC Ltd. It is believed to be the first time ever that Cambodia has imported genetics from Britain. The initial order is worth almost £1 million. UKTI team in Bangkok, together with colleagues in Phnom Penh, played a key role in building the relationship between the company and the Cambodian Government.

Thai scientists visit Biotechnology Business Exchange

UKTI recently sponsored an inward delegation of Thai scientists to BBE in London. Part of the programme was a visit to some UK fisheries.  The main objective was technology transfer and development of long term training programmes.

Vietnam

In early December, the second meeting of the UK Vietnam Joint Economic and Trade Committee (JETCO) took place with Sir Andrew Cahn, UKTI’s Chief Executive, leading for the UK. The Vietnamese agenda, as well as seeking closer Government to Government co-operation on trade, sought UK help to develop its commodity businesses in the UK both in relation to trading and warehousing. The UK asked Vietnam to consider a less administrative process for visas and an early implementation of its remaining WTO commitments. We also made an offer to help improve the transparency of information which comes from the Vietnamese market. Given the success of the first JETCO, we are optimistic that we can make progress on these issues.

The significant business interest in Gareth Thomas’ visit shows that, despite the economic slowdown, Vietnam is likely to remain a market which the UK is keen to develop.

Malaysia

Although GDP growth predictions vary (from 1.3% to 3.5%) all sources predict growth demonstrating that Malaysia is proving to be relatively resilient. Malaysia is not expecting to slip into a recession and the Government is expected to introduce a second fiscal stimulus package to halt deceleration in 2009. The Malaysian Government admits that 2009 will be "very challenging" given the slowing global economy and the negative effect on her exports. We are already seeing weakened demand from USA, Europe and Japan. On 21 January, Bank Negara Malaysia (Central Bank) cut the overnight policy rate (OPR) by a record 75 basis points to 2.5% effective from 1 February 2009. This is part of a wider Government strategy to minimise the impact of the global financial crisis as it implements its RM7 billion economic stimulus package and proposed second package to save jobs.

UK firms are still researching and investing in the Malaysian market in significant numbers. The KL team report brisk business and heavy workloads. We are expecting a slight slowdown in the next few weeks given the Chinese New Year holidays. However, we are expecting Trade Missions from Northern Ireland (19-24 Feb) and East Midlands (mid March) before the end of this financial year. As the Government focuses on economic reforms, long-term sustainability, promoting private consumption and investment and developing skilled workers, we will be looking out for new business opportunities for British companies.

Hong Kong

The Hong Kong Special Administrative Region (SAR) Government plans big spending on public infrastructure projects to prop up domestic demand and to save jobs. The Government has plans for 10 mega infrastructure projects worth in excess of £20 billion and has publicly committed to speeding up their implementation. This is equivalent to 15 times the total expenditure on new public works in 2006. Projects approved include an initial £2 billion for the West Kowloon Cultural District; the £3.5 billion Hong Kong-Zhuhai-Macao Bridge; massive investment on the boundary crossing facilities and the connecting roads in Hong Kong; and five new railway schemes.
Another project - construction of the Tamar government complex - is already underway and the Government is also actively pursuing the early completion of a new cruise terminal at Kai Tak and other developments at the vast former airport site.   This gives a strong outlook for the construction industry in Hong Kong - a market in which UK construction companies have traditionally done well and the decline of sterling exchange rates has given UK companies a 25-30% boost in competitiveness here from six months ago.

 Asia Task Force Awareness Raising Events & General Items

UKTI’s Asia Task Force are working on a series of regional events to promote trade in the South East Asia & Pacific Rim markets.  UKTI are working closely with Harvey Nash on an event in the South East focussing on Vietnam & Korea, for 19th February.  Also confirmed is an Aberdeen event, 18th February, focussing on oil & gas opportunities.  Please contact Mike Qureshi if you wish to register interest.  Mike.qureshi@uktradeinvest.gov.uk   020 7215 4827.

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

Springboard

Springboard is a new UKTI magazine for globalising businesses that promotes UK business excellence on a global stage.   Features include an exclusive interview with Lord Mandelson, a cover story on the manufacturing strategy, a feature on beating the downturn, a major report on India, and an interview with Business Ambassador Sir John Bond, Chairman of Vodafone. Available at http://www.ukinvest.gov.uk/UKTI-publications/4037902/en-GB.html

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