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    Hong Kong: Staying Relevant


    © International Trade Centre, International Trade Forum - Issue 2/2002

    TPOs are facing many challenges in a dynamic, fast-changing environment. But there are also opportunities if they can "renovate and reinvent" to remain relevant. Hong Kong's TPO is one example. After several difficult years, the Hong Kong Trade Development Council (TDC) can now foresee a big boost for its exporters after China's accession to the World Trade Organization. To take exporters forward, TDC has embarked on organizational change while building on its traditional strengths.

    Hong Kong, China, faced its worst economic situation with the 1997 Asian financial crisis. Just as we were getting back on our feet another economic downturn occurred - and this one was global. As one of the world's most open, trade-dependent economies, Hong Kong was harder hit than many.

    The situation was especially hard for small and medium-sized enterprises (SMEs). But a long tradition of turning adversity into something positive allowed our SMEs to cut losses - and costs - and adapt. They have emerged stronger, more resilient and more competitive.

    New opportunities

    The biggest boost to trade, however, is likely to be China's recent entry into the WTO. Hong Kong is already the largest source of foreign direct investment for the Chinese mainland and handles around 40% of China's foreign trade. These "first-mover" advantages are underpinned by linguistic, cultural and blood ties. The TDC, already in the process of reinventing or "renovating" itself, is gearing its changes around the need to develop the Chinese mainland as part of Hong Kong's domestic market.

    Our heritage

    Before renovating, it is important to review the foundations. Every TPO is the creation of circumstances particular to its economy, which influence the way it evolves.

    • Promoting "two-way" trade. The TDC was originally founded to promote two-way trade in goods (we have to import raw materials in order to export manufactured goods). Now that Hong Kong is a centre for trade in services, we have expanded that mandate to cover services.
    • Importance of SMEs. Another Hong Kong characteristic is the large number of SMEs involved in external trade: around 100,000 currently export.

    TDC is thus an organization geared to SMEs, which typically have big ideas but limited budgets - hence the diversity of our services.

    Tough questions

    Because of the economic downturn, TDC's income has been falling, precisely when we need to do more trade promotion. At the same time, expectations are rising. Customers demand more and better services and more value for money. The media watch our every step.

    This has made us look critically at everything we do. We ask ourselves: Should we still be doing this? Is this the best way? Could we put these resources to better use? In other words, how do we stay relevant? Here is how TDC is attempting to answer.

    Staying relevant

    • Embracing new challenges. In 1996, we accepted the Government's invitation to take on the promotion of Hong Kong's service exports. With services now accounting for 86% of GDP, this was a natural evolution of our role. Together with a broadened portfolio, overnight, our new mandate brought us a new lease of life and new challenges for years to come.
    • Building on core competencies. We have built on our experience and strengths, such as producing market and product information; business matchmaking; and organizing trade fairs.
    • Demand-driven planning. We have created a more interactive and open planning process that invites greater year-round participation by stakeholders, customers and employees.
    • Focusing on core customers. To increase support to SME clients, we have put in place various customer service initiatives and outreach programmes, such as an "SME Market Day". We are also doing more to bring the market to our SMEs, who cannot afford money or time to travel.

      One way of doing this is by expanding our trade fair portfolio. We are raising the quality of our fairs to attract more international buyers; and marketing the fairs harder, especially after 11 September. Our strategy is working. We have seen an increase in overseas buyers at our shows since September, when other events around the world were cancelled or saw huge declines in attendance.

      We track the impact of these and other initiatives through regular customer satisfaction surveys.

    • Increased use of information technology. We are continuing to improve our two-year-old Trade Portal (http://www.tdctrade.com), the cyber-platform for our services.

      New content and new strategic partners have enriched our online presence. We are also using the site as a "multiplier" of our existing services (last year, by moving from manual to online trade enquiries, we topped 2.4 million replies; our newspaper, Hong Kong Trader, reaches three times more people online, at a fraction of the cost).

      Our latest development is a cyber marketplace and online direct marketing service (available from http://www.hkenterprise.com).

    New staffing policy

    We have overhauled our human re-sources policy to improve quality, productivity and employee satisfaction, by:

    • recruiting new talent under an executive trainee scheme;
    • rotating young executives' posts so that all spend time on overseas postings in TDC offices;
    • introducing a performance-related pay system to reward excellence (we are the first Hong Kong public organization to do so); and
    • managing out employees unable to move with the times and add more value.

    Putting our house in order has helped to buttress faith in TDC.

    Seizing opportunities

    TDC's number-one priority in China's WTO era is to develop the mainland as Hong Kong's domestic market.

    We already have an infrastructural advantage - a network of 11 mainland offices, which is higher than any other overseas TPO. To reinforce our position of strength, we have developed a three-pronged strategy to help Hong Kong companies:

    • raise the profile and image of their branded products among mainland consumers;
    • break into the Pearl River Delta's extensive distribution networks; and
    • capture more services business from increased trade flows between Hong Kong and the mainland, especially the Pearl River Delta.

    To implement the strategy on a practical level, we have:

    • stepped up China-related research;
    • strengthened our mainland presence, for example by hiring a full-time economist in Beijing; and
    • introduced a China Business Advisory Service, in which experts from mainland trade authorities are seconded to TDC's head office customer service centre to give one-on-one advice.

    The changes at TDC are more than just cosmetic. We are remoulding the very spirit of the organization, changing our mindsets and sharpening our vision.

    Hong Kong Trade Development Council

    • Mandate: Responsible for promoting Hong Kong's trade in goods and services.
    • Institutional positioning: Statutory organization of the Hong Kong Special Administrative Region.
    • Founded: 1966.
    • Location: Based in Hong Kong, with over 40 offices worldwide including 11 on the Chinese mainland.
    • Staff: 852.
    • Of interest: Helps to develop Hong Kong's role as a gateway to the Chinese mainland.

    Hong Kong Trade Development Council,
    36/F, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong
    Tel.: +852 2584 4333
    Fax: +852 2824 0249
    E-mail: hktdc@tdc.org.hk
    Web site: http://www.tdctrade.com

    Michael CC Sze is Executive Director of the Hong Kong Trade Development Council. He can be contacted at michael.sze@tdc.org.hk.