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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. Feedback & Ask Mike Taiwan – TBBC 10th Plenary; inauguration of Taiwanese President Indonesia – Cancellation of visit by President Yudhoyono, Tax reform Paper Korea – Mr Man Soo Kang, the Minister of Strategy and Finance of the Republic of Korea addresses over 200 in the City of London; eGovernment Event, Seoul, 7-9 July Singapore – Britcham Networking event; CommunicAsia; Visit by Science Minister Philippines – Lord Jones Visit in October; economic overview Thailand – Economic & Banking Overview Vietnam – Secretary of State to visit Malaysia – Economic Overview; Megg Munn’s June Visit; Election Hong Kong & Macao – economic overview; Competition Law; Rail Projects General Items of Interest - Follow up on ASEAN Retail Event 8 May with guests Harvey Nichols, Latest Trade figures Jan-Feb 08 
Taiwan
A full and exciting programme has been developed for the Taiwan British Business Council in Edinburgh on 17 June which gives UK business an opportunity to meet senior Taiwanese decision makers in ICT, Financial Services and renewables/urban regeneration sectors. UK businesses can still participate and should contact mike.qureshi@ukti.gsi.gov.uk to register their interest. President Ma Ying-jeou was formally inaugurated today as the 12th President of Taiwan on 20 May. While he vowed to maintain Taiwan's "three noes position" (no independence, no unification and no use of force) in relation to Taiwan’s position with China, it is expected that cross-Straits talks will move forward which should enhance the economy of Taiwan. UK Trade and Investment will be working with the new administration as it prepares for UK Taiwan Annual trade talks scheduled for November 2008. Following the inauguration of President Ma, Premier Liu has held his first Cabinet and unveiled the following policies and priorities to ensure continued economic prosperity in Taiwan:
IndonesiaIt is unfortunate that the proposed early June visit to the UK of President Yudhoyono has been postponed. However, preparations leading up to the visit demonstrated the amount of UK success already in this high growth market as well as the number of projects which British companies are looking to develop in Indonesia. With strong growth, the largest population in SE Asia and being just over an hour from Singapore, the new UKTI team in Jakarta is starting to develop a proactive programme to ensure UK plc knows more about specific sectors in this market. Tax Reform Paper:
Korea
The UK welcomed the first senior Minister from President Lee’s administration on 7 May when Mr Man Soo Kang, the Minister of Strategy and Finance of the Republic of Korea addressed over 200 in the City of London. Minister Kang spoke impressively and frankly about Korea’s ambitious economic aspirations under President Lee. He also handled confidently a question and answer session in which he did not duck questions about corporate governance issues in the Korean chaebol (large conglomerates). Minister Kang also reported that Korea is focussing on developing further a number of sectors in which it is seeking international collaboration: Renewable energy/climate change technology, ICT, Biotechnology and Financial Services. BERR has recently visited Korea to discuss the better regulation agenda. This is an ongoing theme with a number of Asian markets given our wish to demonstrate that active consultation with the private sector can lead to more efficient delivery of policy.
eGovernment Event, Seoul, 7-9 July 2008 The Seoul Metropolitan Government are organising an eGovernment event in Seoul where they hope to promote exchanges and cooperation between global eGovernments. The organisers are keen to invite UK City mayors.
Singapore
The British Chambers of Commerce in Singapore, Malaysia and Indonesia ran the first networking meeting for the three members of the three countries in Jakarta in May. This included state of the nation addresses by the new Ambassador to Indonesia, Martin Hatful, the Deputy High Commissioner in Singapore, Amanda Brooks, and the Director of Trade and Investment in Malaysia, Trevor Lewis. The formal agreement between the three Chambers aims to provide the respective member companies to network, to access British Chamber services in the three markets and, more importantly, to explore new business opportunities in the region.
Philippines
Lord Jones Visit Trade Minister Lord Digby Jones of Birmingham will arrive this October to talk to Trade Secretary Peter B. Favila about possible investments in the financial services, retail, mining and power sectors. Economic Overview Inflation jumps to 8.3% in April, highest in 3 yrs April inflation report sparks sell-off UK still among the biggest investor in the Philippines
Thailand
GDPEconomic growth for 2008 has been officially forecast to grow 4.5-6.0%, but latest unofficial views suggest a good chance of achieving the upper half of this range on the back of many aggressive economic stimulus announced during February to April by the newly-elected Samak Government. In contrast with global trends of lower growth ahead, Thai economic growth in 2008 is expected to improve on last year which was marred by political uncertainty and military rule. Key to watch this year is for consumption to rise by 5.0% (from 1.4% in 2007) and investments to recover by 9.5% (from nil growth in 2007) if the new government’s plans are fruitful. InflationInflation, while negligible in 2007 at 2.3%, hit Thailand quickly in 1Q at 5.0%, underpinned by sharp rises in food and energy. Pork and rice, for example, has jumped 40% and inflation has overtaken other issues to become the top agenda for the new Commerce Minister. Minister Mingkwan Sangsuwan rounded up 250 producers covering 33 product lines within weeks of stepping into office, trying to urge them to adopt ‘voluntary price controls’ but costs pressures (turning acute since November 2007) was too much to bear and only a handful of consumer product manufacturers agreed to stall price rises for another 6 months. The exercise did not receive cooperation from others (particularly the agri-business sectors), illustrating the gravity of rising commodity prices on food-packers needing to inevitably pass the cost onwards to consumers. The Energy Minister is also helping curb the impact of inflation by temporarily re-instating subsidies to soften the impact of fuel price rises for 6 months. TradeExports remained robust to date with 21% growth recorded in 1Q, on strong agricultural goods. Imports shot up by 38% on exceptional items (oil drilling platforms and aircraft) producing a trade deficit of $1.2bn. The forecast for the year of 10.5% growth in exports, 17% growth in imports (as infrastructure spending gathers pace), seems due for an upwards revision. Thailand currently prefers that the trade balance narrow or even go into deficit as this would take strength off the currency. Interest RatesThe Bank of Thailand (BoT) kept its policy interest rates unchanged at 3.25% (the repurchase rate) throughout 1Q despite cuts in global rates elsewhere. Inflation has deterred any temptations to cut rates. The BoT also saw improvements in business sentiment and other measures (removal of capital controls on short term fix) as sufficient stimulus to support the economy. Also, the fortunate lack of any serious US sub prime debt fallouts here meant interest rate management can stay focussed on growth and inflation matters. BankingWith Thai banks having negligible direct exposure to US sub prime loans, the banking sector posted healthy results: average operating profits rose 34% in 1Q. The increased in profitability came mostly from better margins as funding costs declined along with interest rates last year. 2008 is tipped to be a good year for Thai banks on the expectation of improvements in the domestic economy following government stimulus measures. Non performing loans averaged 6.8% in 1Q, down slightly from 7.3% a year ago.
Vietnam
Malaysia Malaysian contribution this month covers the Malaysian economy, Meg Munn MP's Ministerial visit to KL, legal services liberalisation, new Malaysian Cabinet and Developmental Plans going forward. Malaysian Economy Bank Negara Malaysia has projected 5-6% growth for the Malaysian economy this year against a backdrop of mounting external uncertainties (US slowdown, oil price, etc.). Governor Tan Sri Dr Zeti Akhtar Aziz said "We have the capacity and the capability to implement and support a steady growth path for the Malaysian economy". The Malaysian economy grew by 6.3% in 2007, fuelled by domestic demand, and Bank Negara expects the trend to continue. Meg Munn MP's Visit to KL and Legal Services Sector Liberalisation Malaysia has made good progress in reforming its banking and financial system in recent years. Local banks have been consolidated, coupled with phased liberalisation to allow greater competition, particularly in Islamic finance. The Malaysian Government has also progressively dismantled exchange and other controls imposed during the Asia Crisis - including abandoning the Ringgit peg to the dollar in 2005 in favour of a managed float. The Ringgit has since strengthened considerably and reached record highs against the dollar – hitting a 10-year high of 3.13 in April 2008. Meg Munn MP, FCO's Minister for Asia, will be visiting Kuala Lumpur between 8-10 June 2008. The Minister, amongst other things, is expected to lobby Malaysian Ministers and policy makers to further liberalise Malaysia's financial and legal services sectors. Strong and recent rumours in KL have revealed that Malaysia is considering opening its legal services sector to allow five international law firms to operate in the key area of Islamic finance transactions. Although a final decision has not yet been taken, Meg Munn's visit is timely in terms of finding out the timetable for such progress. Those with an interest should contacts UKTI's Eamonn Staunton in KL at Eamonn.Staunton@fco.gov.uk Malaysian Elections and Developmental Plans The new Malaysian Cabinet has been appointment following the Elections in March 2008, although the Government has a reduced majority. They continue to move forward with their plans to help the Country reach Developed Nation Status by 2020. The Ninth Malaysia Plan (9MP) for 2006-2010 and the 3rd Industrial Plan (3IMP) for 2006-2020 are key documents that highlight the country's developmental plans going forward. Key UKTI DSO sectors remain as education and training, defence, oil and gas, ICT & Electronic, financial services, environment and agriculture (livestock). Further information is available at www.uktradeinvest.gov.uk
Hong Kong
HK’s fundamentals remain strong; official statistics show steady growth on retail sales, with a 20% yoy growth in March with support by both local and tourists consumption. Externally, HK has recorded yoy increase of 7.6% and 6.6% of total exports and imports of goods in March, thanks to expansion of the EU markets as well as unexpected rebound in the US market. Hong Kong government consultation on launching its first competition law On 6 May 08, the Hong Kong Government launched a three-month public consultation on HK's first competition law. The proposed law focuses on businesses engaging in four anti-competitive practices: price-fixing, bid-rigging, carving up markets and fixing sales. The Hong Kong economy has survived for a long time with no over-arching competition policy (there are currently only laws for telecoms and broadcast media), but pressure from international organisations, and a gradual appreciation from Government and businesses that it could bring benefits, has pushed this forward. Hong Kong’s new railway projects worth £6.5 billion Construction plan to tackle traffic problems in Macao The Macao SAR Government has plans to build a 22 km elevated light metro with a capital cost of £270 million to solve the city’s worsening traffic problems. General items of Interest:Retail Opportunities in the ASEAN markets 8 May: UKTI organised a highly successful event at Asia House with guest speaker Joseph Wan, CEO Harvey Nichols. Attendees included Sir Terence Conran in addition to companies such as Boots & Ted Baker. As a result, UKTI forged a number of strong relations with mid-corporate retailers to take forward into the markets. Trade figures, all markets, to Feb 08: 8 May: UKTI have organised an event at Asia House to promote the retail opportunities in the ASEAN markets. The event will be aimed at mid-corporates. Harvey Nichols will be speaking to Manny Silverman of their experiences in the region. Other guests include Grant Thornton & Fox Williams. Flyer attached: Trade figures, all markets, to Feb 08:  Trade figures, all markets, to Dec 07:
Snapshot graphs - goods & services by market - to December 07: 
UKTI’s website – includes trade opportunities, exhibitions, recent successes and trade briefs, by market. https://www.uktradeinvest.gov.uk/ TBBC website – 10th plenary page - http://www.tbbc.org.tw/html_e/e_tenthmeeting/ Trade section of Business Link for information on tariffs and documentation: www.businesslink.gov.uk/internationaltrade Email mike.qureshi@uktradeinvest.gov.uk with your questions about UK Trade & Investment activity Your suggestions for content or themes to appear in the next edition are welcomed. Email mike.qureshi@uktradeinvest.gov.uk
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John Hutton MP; the Secretary of State for Business, Enterprise and Regulatory Reform, is expected to visit Vietnam in early June. This is an apt follow up to the recent visit to the UK by Prime Minister Dung during which we saw the announcement of a number of business contracts worth US$1.4 billion. The signing of MoUs and Co-operation Agreements that will be worth US$5.1 billion when they come to fruition. John Hutton is the most senior trade representative from the UK ever to visit Vietnam. The business environment is improving rapidly in this market and with growth second only to China, UK business attention has never been higher. 
