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HONG KONG - BOATING EQUIPMENT AND SUPPLIES - ISA9306
SUMMARY
This article titled: "The Boating Equipment and Supplies Market in Hong
Kong", dated June 1993, was prepared by Willien Ha, American Embassy - Hong
Kong. The article consists of 19 pages and contains the following subtopics:
OVERVIEW
STATISTICAL DATA
MARKET ASSESSMENT
BEST SALES PROSPECTS
COMPETITIVE SITUATION
MARKET ACCESS
TRADE PROMOTION OPPORTUNITIES
A. OVERVIEW
Sector Summary
Boating in Asia Pacific waters, or "Asia's Caribbean", remained firmly in
the world industry spotlight during 1992-1993 as increasing numbers of North
American, South American, European and Australasian builders set up sales
networks in this fast-growing sector.
Two-thirds of the world's population live in Asia's Caribbean, and
increasing wealth led by Japan and then the so-called "four tigers" of
Korea, Taiwan, Hong Kong and Singapore is filtering down through class
levels and rubbing off on neighboring countries which are themselves now
experiencing economic upturns.
Leisure time is a right, sporting lifestyles an achievable expectation, and
watersports are suddenly in vogue.
In 1992, Hong Kong had a total import market of US$ 31.2 million worth of
boating equipment and supplies. The USA had a big share, holding up 47.6
percent (US$ 14.85 million) of the import market. Ninety-one percent of
this US$ 14.85 was for the import of outboard motors. As compared to the
1991 figure, there was a drop of 36 percent in the import of outboard
motors, mainly as a result of new legislation aimed at restricting large
engines. Please refer to section (E) below for detailed explanations.
Subsector Summary
Hong Kong is an island and is surrounded with pleasure boating harbors.
While most of the pleasure boats are locally constructed "junks", these
boats are generally equipped with a wide variety of modern accessories,
where American manufacturers excel. American made motors are also in heavy
demand. Up-scale pleasure boats also constitute a small, but highly
lucrative market.
Hong Kong itself has experienced mixed fortunes since Tiananmen Square,
which sparked a massive middle-class exodus to Canada and Australia and
depressed the boat market. Large infrastructure projects, such as the new
airport, mean an influx of multi-national engineers and construction
executives who are historically inclined to buy boats during their stay.
Many emigres are returning with their "safety valve" passports, and massive
industrial investment in Southern China, particularly by Hong Kong and
Taiwanese businessmen, seems likely to make the China Coast the world's
economic dynamo this decade. Demand to support this development is already
strong, spearheaded by sales of modern commercial ferries and inter-island
craft that now ply between Hong Kong, Macau and various Pearl River ports in
the hinterland. Heavy car and truck traffic gets clogged at the Hong
Kong-China border, and ferry timetables are not always convenient, so
new-breed businessmen have begun turning to private motor yachts, nicely
tax-deductible, to fulfil their needs.
For the purpose of this Industry Subsector Analysis report, a number of
subsector products were selected for the study. The selected products are
outboard motors, radar apparatus and navigational aid apparatus, and other
navigational instruments and apparatus such as sonar, echo sounder, fish
finder, aquameter, speedometer, fuel gauge sensor, direction finder, GPS
receiver, radar, VHF transmitter, etc. Please note that every effort has
been made to identify statistical data related to marine (specifically
pleasure craft related) use only, but census figures available are gathered
in accordance to the "make" of the product, rather than to their use.
Besides that when the boating equipment and supplies are imported into Hong
Kong, the importers did not specify in great detail the goods imported.
Sometimes the items are merely grouped into categories as "other
navigational instruments" without identifying statistics for each item.
Therefore, statistics indicated below are estimates for reference only.
B. STATISTICAL DATA
Boating Equipment & Supplies
(U.S. Dollars Million)
(% Gain/Loss)
Est. Avg. Ann.
Growth Next 3
Year 1990 1991 1992 Years
Import Market 27.92 33.91 31.20 +10%
Local Production 5.30 3.45 4.20 +5%
Export 4.58 3.04 3.65 +5%
Re-Export 13.44 15.86 23.00 +10%
Total Market 15.20 18.46 8.75 +10%
Imports from U.S. 19.14 21.06 14.85 +10%
Exchange Rate 7.75 7.75 7.75
Future Inflation Rate Assumed: 11%
1992 Import Market Share USA Japan Italy U.K.
47.6% 39.8% 9.0% 8.0%
Receptivity Score (1-5): 3
The receptivity score (5 means extremely receptive) reflects the degree of
satisfactory performance of the U.S. manufacturers. The reason for the
rating mainly lies in the competitive price of the boating supplies and
equipment.
C. MARKET ASSESSMENT
Market Demand. In 1992, a total of 5,461 pleasure boats were registered
with the Marine Department. A detailed breakdown of the number of vessels
by type and length are indicated below. The purpose of this chart is to
give the readers an idea of the number of pleasure vessels registered in
Hong Kong. Through the figures, U.S. manufacturers will have a better
picture of the size of the Hong Kong market, in terms of the number of
vessels and need for boating equipment and supplies.
No. of Vessels Registered with Hong Kong Government
Marine Department (1992)
Length Type
(in meter) Yacht 5 6 7 8 9 0 Total
Under 5 4 3 4 13 1,235 12 1,271
5 - 8 82 119 143 44 1,408 35 3 1,834
8 - 11 148 98 289 17 44 68 11 675
11 - 14 81 48 381 1 3 282 5 801
14 - 17 32 29 303 1 177 542
17 - 20 5 4 162 78 249
20 - 23 2 46 1 1 3 53
23 - 26 15 2 17
26 - 29 6 2 8
29 - 32 5 5
32 - 35 1 1 2
35 - 38
38 - 41 1 1
41 - 44
Over 44 1 1 1 3
Total 355 303 1,356 75 2,692 658 22 5,461
Note:
Yacht refers to pleasure crafts whose owners register their license no.
through the various yacht clubs in Hong Kong
Type #5 refers to auxiliary powered yacht
Type #6 refers to inboard engined launch or motor cruiser
Type #7 refers to outboard engined launch or motor cruiser
Type #8 refers to inboard or outboard engined run-about or ski-boat
Type #9 refers to inboard or outboard engined junk, locha or native craft
Type #0 refers to inboard or outboard powered catamaran or trimaran
In 1990, Hong Kong imported a total of 118 motorized pleasure boats with 22
vessels from the U.S. The U.S. took up 14 percent (US$ 3.64 million) of the
total import market (US$ 26 million). The following year, U.S.'s share was
18 percent (US$ 5 million) of the total import market of US$ 27.5 million.
In 1992, the Hong Kong Government modified the "Imports and Exports
Classification List" from the previous edition (1988) upon full adoption of
the harmonized system. The statistics showed that a total of 648 sailboats
(non inflatable), non-inflatable rowing boats, and canoes, and vessels for
pleasure or sports were imported into the colony. These imports accounted
for US$ 36.7 million with U.S. taking up 19 percent (US$ 6.9 million) of the
total import market. The overall statistics show that Italy is U.S.'s main
competitor in terms of high end pleasure crafts while Taiwan dominates the
low end market. It is important to note that most Taiwan manufactured
vessels use American engines and accessories.
End-User Profiles. As mentioned above, large infrastructure projects, such
as the new airport at Chek Lap Kok, mean an influx of multi-national
engineers and construction executives who are historically inclined to buy
boats during their stay.
Hong Kong has long been an important regional center in the Asia-Pacific
region. Its central location and excellent external communication links
have made Hong Kong attractive to overseas companies not only for business,
but also as a convenient base from which to supervise other offices in
neighboring countries. With the significant economic development in the
Asia-Pacific region in recent years, Hong Kong's regional role has become
increasingly important. A recent survey conducted by the Hong Kong
Government Industry Department identified 1,345 regional representatives by
overseas companies in Hong Kong. They include 588 regional headquarters and
757 regional offices. The U.S. has the largest number of regional
headquarters in Hong Kong, with 206 companies, followed by Japan (74
companies) and the UK (73 companies). The major lines of business of the
regional headquarters included wholesale, retail, import and export
activities, followed by real estate and business services, manufacturing and
finance and banking.
The multi-national companies, large trading companies, banks and financial
companies are end-users of medium-priced and up-scale pleasure boats.
Pleasure boats are bought as symbols of wealth and fortune, as entertainment
tool for business contacts, and as recreational benefits for staff. These
end-users also tend to have large offices and budgets. They are image
conscious and have a comparatively high portion of Western employees, with a
preference of high quality pleasure boats and boating equipment.
The political uncertainty of Hong Kong after 1997 caused an exodus of
wealthy, learned upper and middle class Hong Kong citizens to flee to
advanced countries such as USA, Canada, Australia. Many emigres are
returning with their "safety valve" passports. These are also another group
of end-users of the boating industry.
D. BEST SALES PROSPECTS
Outboard Motors (HS 84072100)
(U.S. Dollars Million)
(% Gain/Loss)
Est. Avg. Ann.
Growth Next 3
Year 1990 1991 1992 Years
Import Market 23.51 26.18 21.11 +10%
Local Production 5.30 3.40 4.20 +5%
Export 4.58 2.99 3.65 +5%
Re-Export 10.76 10.79 14.77 +10%
Total Market 13.47 15.80 6.89 +10%
Imports from U.S. 18.55 20.01 13.56 +10%
Exchange Rate 7.75 7.75 7.75
Future Inflation Rate Assumed: 11%
1992 Import Market Share USA Japan Belgium China
64% 33% 2% 1%
Radar Apparatus (HS 85261000), Radio Navigational Aid Apparatus (HS 85269100)
(U.S. Dollars Million)
(% Gain/Loss)
Est. Avg. Ann.
Growth Next 3
Year 1990 991 1992 Years
Import Market 2.97 4.50 4.58 +10%
Local Production 0 0 0 +0%
Export 0 0 0 +0%
Re-Export 1.89 2.66 4.34 +10%
Total Market 1.08 1.84 0.24 +10%
Imports from U.S. 0.29 0.58 0.49 +10%
Exchange Rate 7.75 7.75 7.75
Future Inflation Rate Assumed: 11%
1992 Import Market Share Japan USA U.K. Taiwan Other
63% 11% 10% 4% 12%
Other Navigational Instruments & Apparatus (HS 90148000)
(U.S. Dollars Million)
(% Gain/Loss)
Est. Avg. Ann.
Growth Next 3
Year 1990 1991 1992 Years
Import Market 1.44 3.23 5.51 +10%
Local Production 0 0.05 0 0%
Export 0 0.05 0 0%
Re-Export 0.79 2.41 3.89 +10%
Total Market 0.65 0.82 1.62 +10%
Imports from U.S. 0.30 0.47 0.78 +10%
Exchange Rate 7.75 7.75 7.75
Future Inflation Rate Assumed: 11%
1992 Import Market Share Japan USA Italy Norway Other
47% 14% 13% 6% 20%
E. COMPETITIVE SITUATION
Domestic Production. According to statistics available from the Hong Kong
Trade Development Council, 1991 recorded 429 establishments in the local
ship building industry, with 7,184 employed in this industry.
Pleasure/sport yachts and cabin cruisers are major export items of Hong
Kong's ship building industry. In 1991, Hong Kong exported 42 motorized
pleasure crafts valued at US$ 11.2 million and 103 non-motorized pleasure
crafts worth US$ 593,000. Hong Kong also manufactures workboats for local
users, including trawlers for fishing; dredgers, barges and landing crafts
for cargo-handling; fire-fighters, police/customs' patrol boats.
Ships produced include passenger coasters such as ferries and catamarans.
Hong Kong companies have also set up manufacturing bases in China to produce
ocean-going liners and container ships.
Local boat builders fall into two categories. One, the traditionalists who
use wood hull construction methods and build junks. Two, yards which use
modern hull construction techniques using fiberglass and steel for the
production of high unit value motor cruisers. The traditional Chinese junk,
the backbone of the local boat building industry, only recorded sales of US$
2.37 million in 1990. Hong Kong boat builders have seen the bottom knocked
off their business by inexpensive imports from Taiwan, Thailand and the
Philippines and quality yachts from Europe.
About 80 percent of the boat/shipyards are small establishments having 10 or
fewer employees, majority of which are repairers servicing local fishing
boats and pleasure crafts. There are only 10 shipyards employing more than
100 workers. They are mostly boat/ship builders as ship building is a very
labor intensive industry requiring highly specialized technicians. Hong
Kong mainly manufacturers boats of 10 to 20 meters of length. Though it is
technically feasible to custom-build boats of up to 70 meters, space of most
shipyards is not sufficient for large ship fabrication. Most boats are made
of glass reinforced plastic (GRP), a lighter and more durable material.
Large boats, however, must have steel bodies of sufficient strength.
Pleasure crafts are mainly exported to the U.S. and EC, where Taiwan is the
major competitor. Hong Kong's cruisers are superior in design and quality.
Boats are usually custom-built to end-user' specifications.
Hong Kong also produces parts and accessories for pleasure crafts. Windsurf
sails, outboard engines and stern drives are produced for local, Asia and
the U.S. markets.
Imports. As noted above, Hong Kong's main source of pleasure boats are
imported from Italy (high-end), Taiwan (low-end) while the U.S. takes the
lead in the middle range.
U.S. dominated Hong Kong's import market of outboard motors. This is
interesting to note that in 1990, 1991 and 1992, some 19 percent, 26 percent
and 25 percent respectively of these outboard motors were re-exported to
China. Incidentally, in the past few years, there were reports on the
successful and unsuccessful capture of U.S.'s version of "rum runners",
caught smuggling stolen vehicles and others consumer goods, such as audio
visual equipment, cigarettes, small home appliances from Hong Kong into the
China. These rum runners (or nicknamed "Dai Fai" in Chinese) were equipped
with powerful outboard motors that often beat the speed of the local coastal
guards. As a result, the Marine Department issued notice (dated June 1990)
announcing that the horse power rating of all pleasure boats fitted with
more than one outboard engine cannot exceed 448 kilowatts (600 horse
power). Exemptions for licenses issuance will only be granted in certain
circumstances. Similar rules apply for fuel tanks: the fuel tanks of such
pleasure vessels cannot exceed 817 liters (180 gallons) without the prior
approval of the Director of Marine.
Japan took the lead (90 percent) in exporting direction finders (DF) into
Hong Kong while USA's Loran sea system dominated the market of radio
navigational aid apparatus (80 percent). As for radar, Japan dominated the
market by supplying 90 percent of the radar equipment for Hong Kong's market
while the USA took up 5-8 percent of the pie.
In areas of other marine electronics, the USA held 70 percent of the GPS
receiver market while Japan took the remaining 30 percent. In the area of
"other navigational instruments" such as sonar, fish finders, depth
sounders, countries like Japan (40 percent), Taiwan (25 percent) and USA (25
percent) dominated Hong Kong's import market. As for VHF transmitters,
Japan imported 50 percent of Hong Kong's needs while the rest of the market
was shared by the USA (20 percent), the U.K. (15 percent) and Taiwan (5
percent).
U.S. Market Position & Share.
In terms of shipping of pleasure crafts into Hong Kong, interviews with
leading importers of pleasure crafts indicated that as a result of the
worldwide recession, U.S. manufacturers have cut their production. For
example, the USA used to offer 10 production lines with pleasure crafts of
different sizes. Now they only keep 2-3 product lines to hang on.
Therefore, to the consumers, there are not many choices to choose from.
As mentioned above, the USA took the lead in the export of outboard motors
to Hong Kong. The USA took up 64 percent of Hong Kong's import market.
Japan followed closely by taking up 33 percent of the import market.
As for radar and navigational aid apparatus, major boating equipment and
accessories importers indicate that it was a tug of war between the U.S. and
Japan, each holding about half of Hong Kong's import market. But as for
"other navigational apparatus", Japanese manufactured products are more
popular.
Competitive Factors.
The most important competitive factors for the industry are price, quality
and service. Interviews with local companies indicate that U.S. suppliers
are generally ignoring their export market. A consensus opinion is that
U.S. manufacturers are not responding "quickly" enough for their
agent/distributors and/or customers. A possible answer to this phenomenon
is that when compared to the U.S. domestic market, Hong Kong's market is
viewed as being relatively small. Therefore, if U.S. suppliers want a
greater share in this market, they should be more responsive and competitive
with their counterparts, such as Japan, U.K., Italy, etc.
Japan is the major competitor for the U.S. because it serves the mid market
which is dominated by U.S. firms. Besides that, the proximity of Japan to
Hong Kong enhances Hong Kong companies to find Japanese companies to fulfil
their rush orders.
The success of the industry also rests largely on the collective ability to
anticipate and respond to the changes presented in an increasingly demanding
and competitive marketplace. A substantial commitment to provide more
timely assistance to consumer questions and concerns will be helpful.
F. MARKET ACCESS
Import and Export Regime
Hong Kong is a free port and one of the world's best examples of an "open
market economy".
Hong Kong is a member of GATT in good standing. There is no legislation or
practice which restricts access to the Hong Kong markets by foreign
exporters or which mandates preference for locally manufactured products.
Hong Kong companies (and the Hong Kong Government itself) do not have any
predisposition to any one supplier--and are far more inclined to purchase
based on the terms of price, delivery, quality and service.
Import duties are levied only on tobacco, alcoholic liquors, methyl alcohol,
some hydrocarbons, and nonalcoholic beverages. A modest declaration charge
and an assessment of 0.05 percent is made on imports and exports to fund the
Hong Kong Trade Development Council. Technical and safety standards are not
used as a political or trade control mechanism, and they are normally
accommodated with little difficulty.
The Hong Kong Government imposes restrictions on the export of
high-technology products to COCOM-proscribed countries, such as the People's
Republic of China. Restrictions on trade with China were relaxed
significantly by the United States in 1991. Textiles are subject to import
and export licensing because of the territory's obligations under agreements
with the USA and other countries. The import of munitions, firearms and
fireworks is strictly forbidden.
Useful contact:
Customs and Excise Department
8/F, Harbour Building
38 Pier Road
Central
Hong Kong
Tel: (852) 852-3324
Fax: (852) 542-3334
Marine Department
21st Floor
Harbour Building
38 Pier Road
Central, Hong Kong
Tel: (852) 852-3001
Fax: (852) 541-7194
Guidelines for Selecting an Agent or Distributor in Hong Kong
One of the best ways to sell products in the Hong Kong market is through the
use of agents or distributors.
An agent takes orders in your name. Distributors act in their own name, and
may stock products purchased from you for resale. The choice of whether to
use an agent or a distributor depends on your business, and the type of
relationship with which you are the most comfortable. You may also find
that your local distributor has good contacts in China, which can be used to
expand your sales to this enormous market.
Working with agents and distributors in Hong Kong is very much like working
with an agent in the United States. Hong Kong uses British common law as
the basis of its legal system, and unlike many other countries, has no
special legislation regarding agents or distributors. Any contract which
does not contain illegal or unconscionable provisions is allowed. In other
words, virtually anything you can agree to with your agent, and put into a
written contract, is acceptable and enforceable. There are no restrictions
on territory, nor any requirements for a notification grace period upon
termination of the agency agreement.
Because of the similarities of Hong Kong law to US practices, FCS Hong Kong
does not recommend any text for an agency agreement. You may use an
American text, or simply draw up your own agreement. As with any
understanding, the more complex the contract, the more likely it will be
that you will need legal counsel in drafting the text. This has nothing to
do with any special complexities of Hong Kong law, however, but simply the
necessity of clarity in legal documents when large sums of money are
involved.
The types of agents and distributors you will find in Hong Kong are very
similar to those found in the United States. You will find "rack jobbers,"
who simply stock retail stores with standard items. There are also stocking
distributors, who generally require higher commissions than other agents,
but since they buy for their own account your risks in international sales
are lower when dealing with them. You will also find agents who provide
sales, engineering and technical support for complex systems. Regardless of
the type of agent you are seeking, Hong Kong has a plethora of qualified
individuals and companies.
Americans are often surprised by the diversity of the business sectors seen
on the business cards of Hong Kong agents. It is not uncommon for a company
to deal in a wide variety of products--everything from chicken parts to
airplane parts. This is often quite distressing to Americans, who expect
their distributor to "stick to the knitting." Although it is a good idea to
make certain that a potential distributor has experience in the specific
sector of interest to your company, you should not be overly concerned when
local distributors are widely diversified in the sectors in which they
sell. This is completely in line with Hong Kong custom and practice.
Often the managing director of a company will want to list all businesses
with which he or she is directly affiliated. Each of these businesses will
be discrete units, with specialized management and salespeople. In some
cases, each division will be led by a family member, who will have
specialized schooling or skills. Where a member of the younger generation
would form an independent company in the United States, it is common
practice in Hong Kong for a child to retain an affiliation with the parent.
Because of this practice, the companies may appear to be more widely
diversified than their US counterparts, although this difference is more
form than substance.
One area in which Americans may have trouble with distributors in Hong Kong
is with their perception of the loyalty of their local agent. Americans
have complained that as soon as they get an agent trained, he or she either
drops them, or leaves them for a competitor's product, taking the client
list with them. This is a problem which should not be underestimated, and
one where American exporters must take preventative action prior to signing
a contract.
FCS Hong Kong offers the following advice:
1. Be careful about granting an exclusive agency too soon. Before you
agree to exclusivity, have either very good references on your partner, or
some experience. Some Americans have found that the local agent wants an
exclusive agreement to BLOCK the sale of the American's product in the
market. This occurs when the agent already represents a competitor, and
wants to keep competition to a minimum.
2. Be cautious about how much technical information you give potential
agents before you have had sufficient experience with them. Intellectual
property is often difficult to protect, and the copying of products is
endemic in Asia. Be very careful of any potential agent who requests too
much technical information, drawings, or specifications before an agreement
is signed. Supply technical data in increments, as your negotiations on the
agency agreement progress; not giving too much, but sufficient to determine
the capability and sincerity of your potential partner. Theft of
intellectual property is prohibited by local law, but prevention of piracy
is less expensive and more effective than retrospective legal action.
3. Pay close attention to your agent in the first few months of the
agreement. Make certain that there is an appropriate level of sales
activity after an agreement is signed. Although individual markets develop
at differing rates, monitor the progress toward sales of your product to
assure it is progressing at the appropriate rate. If you do not see
sufficient progress, take immediate action. Warn your agent that you want
more activity, and terminate the agreement if nothing happens. Make sure
your agreement specifies how much activity should occur, and include
remedies, such as a probation period, in which you can terminate the
agreement for cause.
4. Make certain that your agreement contains provisions restricting the
agents' activities in your industry sector after termination of the
contract. This is to prevent the agent from simply using the time with you
to become trained in the technology, and to acquire a client list.
Covenants can be included in an agency agreement which prohibit the agent
working in the same industry for specific periods of time after the contract
is terminated.
By following these steps you can find, as have hundreds of other American
companies, that working with an agent or distributor in Hong Kong can be an
effective way of doing business.
Getting paid
The preferred method of quoting is "cif" or "c and f" in HK$. U.S. and
other freely convertible currencies may be accepted for bids and pro forma
invoicing.
Terms of payment depend on the relative negotiating strength of the buyers
and sellers. US suppliers should seek to obtain letters of credit or sight
draft terms when dealing with buyers who are not well known to them. Asking
for a letter of credit is a standard business practice, and your potential
customer will not interpret this as a sign of mistrust.
The Consulate General does not enter directly into trade disputes between
American and Hong Kong commercial parties. The Hong Kong Foreign Commercial
Office can furnish the names of Hong Kong law firms if the need arises.
Hong Kong is the region's leading finance center with 163 fully licensed
banks (20 with American ownership). Letters of credit, document collection
and international remittance are widely available. All licensed banks are
authorized to provide loans to residents and nonresidents. Risk of
financing receivables can be readily evaluated via locally available credit
information. Prospective exporters should make use of banking relationships
to determine credit risk.
The importance of trade finance to the territory has resulted in a high
level of bank efficiency in providing import payment services. The local
currency, the Hong Kong dollar (HK$), is freely convertible and there are no
regulations that hamper inward or outward remittance of capital or profits.
Currently the HK$ is pegged at 7.78 to the US$ and has fluctuated little
since the inception of the linked rate policy in 1983.
Selling to the Hong Kong Government
The Hong Kong Government Supplies Department (GSD) is responsible for the
procurement of goods and services required by the government. The GSD will
usually purchase by open tender, with decisions based on price, quality and
delivery. "Selective tender" and "single tender" are rare. The GSD gives
no preference to any particular source of supply from any country or
organization. American companies now enjoy a 33 per cent market share of
GSD purchases, which approached US$ 1 billion in 1992.
Tenderers have six weeks to prepare their offers. Tenderers are urged to
submit offers with at least a 30-day validity period. Payment is usually
effective by check within 30 days of delivery. All tenderers can receive an
assessment of their bids, successful or not. Total bid prices and names of
the successful tenderers are published weekly in the Government Gazette.
For information about a subscription to the Government Gazette, contact:
Mrs. Ruby Kam
Information Officer
Publication Sales Office
Government Information Services
1 Battery Path
Central
Hong Kong
Tel: (852) 842-8802
Fax: (852) 537-1543
Potential suppliers must first be prequalified with the GSD. To become a
"Registered Supplier" and regularly receive the GSD's tender notices,
companies must provide background information about the goods that they
offer. The GSD evaluates this information and selects qualified suppliers
for inclusion on its register.
To contact the GSD:
12 Oil Street
North Point
Hong Kong
Fax: (852) 807-2764
Tel: (852) 802-6102
Tlx: 61675 HKGSD HX
Trademarks
Trademarks are registered in Hong Kong under the Trade Marks Ordinance,
which is based on Britain's Trade Mark Act of 1983. Every trademark, even
if already registered in the USA, UK or elsewhere, must satisfy all the
requirements of the Hong Kong Ordinance before it may be accepted for
registration in the territory. Only owners of registered trademarks may sue
for infringement.
Trademarks for Services
The Intellectual Property Department of Hong Kong allows registration of
trademarks for services (also known as "service marks"). Trademarks used to
identify services such as banking, advertising, insurance, construction,
transportation and retail sales services (such as retail trade names) can be
registered on the Trade Marks Register and enjoy the near monopoly
protection accorded registered trademarks.
In the case of a conflict between two applications for an identical or
similar mark for similar services, the registrar will give priority to the
application filed earlier. Consequently, companies, partnerships and
individuals in service industries are advised to apply to register their
valuable trademarks immediately. The registration process will probably
take from one to three years.
Patents
Hong Kong does not provide for the original grant of patents. A grantee of
a British patent or a European patent with a British designation may apply
within five years of its date of issue for re-registration in Hong Kong.
Copyright
The Copyright Ordinance protects every original literary, dramatic, musical
or artistic work with an author who was domiciled or resident in Hong Kong
or in a Berne Convention country when the work was made or first published.
The law covers software as a literary work. Enforcement of the ordinance is
vested in the Customs and Excise Department and has been historically
vigorous.
Designs
Any person who has registered a design in Britain enjoys the same rights as
if the certificate was issued in the UK with an extension to Hong Kong.
Automatic protection for original designs without registration is also
conferred by the Copyright Ordinance (1973).
Passing Off
Owners of unregistered trademarks may not sue for infringement of those
marks. They may sue in "Passing Off", a common law tort, unique to British
law, which requires the trademark owner to prove acquired reputation in the
mark and actual damage caused by se of the mark by the other party.
Useful contact:
Director of Intellectual Property
15/F, Queensway Government Offices
66 Queensway
Central
Hong Kong
Tel: (852) 867-2817
Key Contacts:
A.A. Company
1st Floor
SPA Centre
53-55 Lockhart Road
Wanchai, Hong Kong
Tel: (852) 529-7202
Fax: (852) 861-3644
The Boatique
Shop 10-11, Ground Floor
Aberdeen Marina Building
8 Shum Wan Road
Aberdeen, Hong Kong
Tel: (852) 555-9355
China International Trading Enterprise
236 Aberdeen Main Road
21st Floor
Aberdeen Industrial Building
Aberdeen, Hong Kong
Tel: (852) 552-0178
Fax: (852) 873-00679
Concord Ltd.
Ground Floor
19-21 Wing Lok Street
Central, Hong Kong
Tel: (852) 543-3118
Dodwell Engineering - Engine Dept.
10th Floor, Tower 2
Metroplaza
233 Hing Fong Road
Kwai Fong, New Territories
Hong Kong
Tel: (852) 410-6545
Fax: (852) 401-2507
Faithful Marine Company
24 Po Chong Wan
Shum Wan Road
Aberdeen, Hong Kong
Tel: (852) 554-1541
Fax: (852) 873-1893
Far East Yacht Specialists Ltd.
3rd Floor, Hong Kong Diamond Exchange Bldg.
8-10 Duddell Street
Central, Hong Kong
Tel: (852) 525-7015
Fax: (852) 877-2222
MAS Marine Ltd.
107 Hutchison House
Murray Road
Central, Hong Kong
Tel: (852) 526-5359
Fax: (852) 868-0087
Megayacht Marine
Suite 1407, 14th Floor
Dah Sing Financial Centre
108 Gloucester Road
Wanchai, Hong Kong
Tel: (852) 598-5033
Fax: (852) 498-4008
Mustang Marine Co.
B9 Marina Cove Arcade
Ho Chung, Sai Kung
Hong Kong
Tel: (852) 719-0720
Fax: (852) 358-0179
New Town Marine
Ground Floor
168 Gloucester Road
Wanchai, Hong Kong
Tel: (852) 893-1838
Fax: (852) 893-6996
OMC Asia
35-47 Tsing Yi Road
Tsing Yi Island
New Territories, Hong Kong
Tel: (852) 431-2210
Fax: (825) 433-0185
Ronsil Development Ltd.
703 Hung On Mansion
177-181 Jaffe Road
Wanchai, Hong Kong
Tel: (852) 511-7819
Fax: (852) 507-5489
Simpson Marine Ltd.
Aberdeen Marina Tower
8 Shum Wan Road
Aberdeen, Hong Kong
Tel: (852) 555-8377
Fax: (852) 783-4014
South China Marine
Unit 2, Ground Floor, Aberdeen Marina Tower
8 Shum Wan Road
Aberdeen, Hong Kong
Tel: (852) 814-0555
Fax: (852) 873-5689
Thunderbird Marine Ltd.
Lot 18, Tao Fung Shan Road
Shatin, Hong Kong
Tel: (852) 604-7582
Fax: (852) 694-8768
1997 and the Future of Hong Kong
At midnight, on June 30, 1997 Hong Kong will become a "Special
Administrative Region" (SAR) of the People's Republic of China. The treaty
between Great Britain and the PRC which created the SAR of Hong Kong
guarantees the future existence of the current territory as a capitalist
enclave until at least the year 2047. The Chinese speak of "one country,
two systems," which has become the standard way of describing what is
anticipated in Hong Kong after 1997. A similar system has been negotiated
for the Portuguese colony of Macau, with the transition taking place in 1999.
While it is impossible for anyone to predict the future of Hong Kong with
certainty, current indicators suggest that the People's Republic of China
will abide by the Hong Kong Accords. The reasons for this optimism are as
follows:
1. The PRC has invested heavily in Hong Kong. In fact, the PRC is the
largest investor in the territory (estimated US$ 15 billion). This
investment is predicated on the assumption by the PRC Government that their
capital will continue to generate income well beyond 1997. The PRC has been
profiting from its Hong Kong investment for years, and there is no logical
reason to assume that they would now want to destroy this source of
income--especially at a time when Hong Kong "belongs to them."
2. China needs Hong Kong's infrastructure to sustain its current policy of
fostering economic growth. Indeed, the growth targets set by the PRC
Government would be utterly impossible without the use of Hong Kong's banks,
trading companies, and the container port facilities. Over 60 percent of
all Chinese exports flow through the port of Hong Kong.
3. The current PRC leadership has pointed with pride to the economic growth
of the southern regions of China, indicating that this is a model for the
rest of China. This growth is a direct result of Hong Kong investment and
management. Hong Kong has created over 3,000,000 jobs in southern China
through its investment over the last few years. To explain this, a Chinese
Communist leader was quoted as saying, "Just because capitalists use a
certain method to run their economy, doesn't make it a capitalist method."
The liberalization of China has been based on Hong Kong models, with this
likely to continue.
4. Historically, the PRC has never taken actions which were specifically
designed to damage Hong Kong business interests. Even during the depths of
the cultural revolution in China, Hong Kong was considered "off limits."
There is no indication that this is going to change.
If one were to paint the most likely post-1997 scenario, given current
economic and political indicators, it would be of Hong Kong continuing as it
is today. Most observers agree that there may be certain areas where the
inexperience of Chinese administrators may cause a deterioration of some
services, although this will be gradual, and without a substantive effect on
the overall functioning of business.
A second scenario, which is not considered the most likely, must be
contemplated: A political and economic status quo in Beijing underlies most
predictions about the future of Hong Kong. While it is conceivable that
this could occur over the next few years, forces for reform in China are
gathering strength. The situation remains very volatile, but if economic
reformers achieve a dominant position in PRC politics, the cloud hanging
over Hong Kong's future could dissipate very rapidly. With Chinese society
achieving political openness, an improvement of human rights, and adherence
of the PRC government to conventions regarding the proliferation of weapons
of mass destruction, the entire picture for Hong Kong could radically change
for the positive. A drastic reform in China, coupled by acceptance of these
reforms by the United States and Europe, could leave Hong Kong as the model
for the entire Chinese society. The current boom in Hong Kong would be
expanded exponentially to meet this challenge. Although few observers see
this as the most likely scenario, the possibility of reform in the PRC
positively affect Hong Kong should not be dismissed. If recent signs from
the 14th Party Congress are any indication, a strong reform movement in
China appears to be gathering strength.
Companies interested in the Hong Kong market should watch the political and
economic changes in China very carefully, since the vitality of Hong Kong is
directly tied to China's future. Reliance on newspaper accounts, which
often prefer reporting on negative or sensational developments, should be
counterbalanced with other sources of information. Far too many American
companies are currently avoiding Hong Kong out of a misguided fear of the
developments slated for 1997. This risk of missing a profitable opportunity
must be counterbalanced against the political risk presumed for 1997. Since
selling in Hong Kong generally does not require a huge commitment of funds,
because of the possibility of using agents and distributors, few companies
should avoid Hong Kong out of fear of losing assets through the changes due
in 1997. We urge potential exporters to give Hong Kong more than a cursory
evaluation when assessing the market potential of various Asian countries.
G. TRADE PROMOTION OPPORTUNITIES
Many promotional vehicles are open to suppliers to introduce and develop
their services in the Hong Kong market. These include:
- special trade fairs and exhibitions
- advertising in the media and other public relations activities
- holding seminars
- in-store promotions
- joint promotions with wholesale and retail outlets
Hong Kong is a major conference and exhibition center. Hundreds of
international exhibitions are held annually. The Hong Kong Conference and
Exhibition Center has 180,000 square feet of exhibition space and will soon
be expanding. Television is a widely used medium with an estimated daily
audience of 5.27 million out of a population of 5.8 million.
As one of the largest centers in the world for Chinese language
publications, the territory produces 600 publications, including 51 Chinese
newspapers and 2 English daily newspapers. Advertising agencies, including
many of international standing, offer a full range of services.
Suppliers should provide technical catalogs in English, and desirably in
Chinese, for distribution to agents and firms. Company brochures are
particularly useful when visiting Hong Kong for the first time.
English-Chinese business cards are a must.
Conferences and exhibitions scheduled within the next 24 months include:
Hong Kong Boat Show 1993
26 February 1993 - 1 March 1993
Club Marina Cove
Clear Water Bay, Hong Kong
(Promotion Consultant)
Media Services
1102-3 Hennessy House
313 Hennessy Road
Wanchai, Hong Kong
Tel: (852) 893-9672
Fax: (852) 838-1875
Theme: A display of sailboats, motor yachts, fishing boats, sports fashion
shows, marine gear, ski boats, sport cruisers and outboard engines.
NOTE: As of publication date, two rival marina clubs that offer berth
facilities are contemplating doing their own boat show in 1994. Therefore
no definite date has been set confirmed for next year's show.
Trade Journals:
Asian Boating
(Asian Sports Publications Group)
Sai Kung P.O. Box 116
Hong Kong
Tel: (852) 791-0556
Fax: (852) 791-0782
Fragrant Harbour Publications Ltd.
1011 Block B
Sea View Estate
North Point, Hong Kong
Tel: (852) 566-8120
Fax: (852) 807-3162
Boating Supply Guide
Marina Ventures HK Ltd.
Room 2001
Pacific Place Two
88 Queensway
Hong Kong
Tel: (852) 522-3653
Fax: (852) 868-1741
SOURCE: National Trade Data Bank and Economic Bulletin Board - products of STAT-USA, U.S. Deparment of Commerce.
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