香港

Hong Kong & : Your Profitable Access to

April 2008

Stewart J. Ballard Chief Commercial Consul U.S. Commercial Service American Consulate General and Macau

澳門 1 Hong Kong - A Great City Built on World Trade, Finance & Shipping

2 Hong Kong – Gateway to Asia

Beijing

Shanghai

3 Hong Kong – Gateway to China

4 Hong Kong – Gateway to the Pearl River Delta Hong Kong – A Trade Promotion Hub of Asia

6 Hong Kong – A Rich Culture • Population: 6.9 million • Population Density:6,410 people per square kilometer • Ethnic Groups: Chinese (95%), Others (5%) • Languages: Cantonese, Mandarin, English • Literacy: 94.4% • Education: 75.5% of children finish upper secondary or equivalent vocational education • Expatriates: 60,000 American residents • History: British colonial rule (1842-1997) Sino-British Joint Declaration (1984) Reversion to Chinese sovereignty (July 1, 1997) One Country, Two Systems

(1997-2047) 7 Hong Kong – A Stable Polity

• Type: Special Administrative Region of China, with its own constitution (The Basic Law) • Chief Executive: Donald Tsang • Branches: Executive: Chief Executive, Executive Council, Administration Legislative: Legislative Council: 30 of 60 directly elected in September 2004 for 4-year terms Judicial: Court of Final Appeal; other lower courts • Subdivisions: Hong Kong, Kowloon, New Territories • Suffrage: Permanent residents, aged 18 and over, living in Hong Kong for the past seven years are eligible to vote. 8 Hong Kong – A Stable Polity

• 1 Country, 2 Systems: ¾ Hong Kong is a Special Administrative Region of the People’s Republic of China, with a high degree of autonomy in all matters except foreign and defense affairs. Hong Kong will retain its political, economic and judicial systems for 50 years after reversion and will continue to participate in international agreements under the name of “Hong Kong, China.”

• Values: ¾ Hong Kong is a free and open society, where human rights are respected; courts are independent of political influence; and there is well-established respect for the rule of law. The government is relatively small, clean (of corruption); transparent (operationally) and does not engage in censorship. Taxes tend to be low in Hong Kong. 9 Hong Kong – A Dynamic Economy • GDP: $209.4 billion (2007) • GDP Per Capita: $30,238 (2007) • GDP Growth: 4.8% (2007) • GDP% of Services: 91.2% (2006) (cf. 73% in U.S. and 34% in PRC) • Work Force: 3.6 million (2007) • Retail Sales: $32.2 billion (2007) • PRC Tourists: 15.5 million (55% of 2007 total visitor of 28.2 million) • HKG Budget: $27.8 billion (planned expenditure) (Apr 2007 - Mar 2008) • HKG Infrastructure: $4.5 billion (2007-2008) • HK Industry: Textiles, clothing, electronics, plastics, toys, watches, clocks, logistics

• HK Manufacturers: 15,004 (September 2006) 10 Hong Kong – A Dynamic Economy

• FDI Inbound: $740 billion (2006) • FDI Inbound PRC: $260 billion (35.1% of 2006 total) • FDI Inbound U.S.: $35.5 billion (48% of 2006 total) • PRC Firms in HK: 2,200 (367 listed in Hong Kong) • US Firms in HK: 1,285 (including 593 regional offices, 298 regional HQs and 394 local offices) • FDI Outbound: $675 billion (2006) • FDI Outbound PRC: $271 billion (40.2% of 2006 total) • Venture Capital: $40 billion • Investment Funds: 1,980 (Mar 2006) • Regional Offices: 3,890, including 1,246 regional HQs and 2,644 regional offices (2007) • HK in PRD: About 80,000 factories with 11 million employees (70% FDI in PRD) (cf. 15,004 manufacturers in HK) 11 Hong Kong – A Dynamic Economy • Total Exports: $349 billion (2007) • HK Exports: Clothing, electronics, textiles, watches, clocks, office machinery • Total Imports: $372.5 billion (2007) • HK Imports: Consumer goods, raw materials, semi- manufactures, capital goods, foodstuffs, fuels • Exchange Rate: $US1.00 = $HK7.77 (12-30-2006) = currency peg • Strengths: ¾ Free port, no exchange controls, free flow of information, strong legal system, sound banking system, efficient capital market, rigorously enforced anti-corruption regime, accumulated public and private wealth, virtually no public debt, low taxation, developed infrastructure, educated workforce 12 Hong Kong – The Local Market

• Hong Kong’s local market of 6.9 million people is augmented by 28.2 million tourists, including 15.5 million from mainland China. Total retail sales are $32.2 billion per year.

• Hong Kong’s local business market is augmented by its large conglomerates, which include 11 of the top 50 transnational companies in emerging markets.

• These firms include: Hutchison Whampoa, Jardine Matheson Holdings, Li & Fung, First Pacific Company, Citic Pacific, Orient Overseas International, Swire Pacific, Guangdong Investment, Shangri-La Asia, Hong Kong & Shanghai Hotels, and China Light & Power Holdings. These 11 firms have combined sales of $24.2 billion 13 Hong Kong – The Local Market

• Hong Kong has 268,000 SME’s, e.g., the Hong Kong General Chamber of Commerce’s membership of 4,000 includes 60% or 2,400 SME’s.

• A foreign-owned firm that establishes itself in Hong Kong is considered by the Hong Kong Government as a Hong Kong firm.

• U.S. firms have 38% or 46 of Hong Kong’s 132 franchises (2007). 14 Hong Kong – American Brands In the Market

Kenneth Cole, Tommy Hilfiger, See’s Candies, Ben & Jerry’s, Polo Jeans, Rockport, Estee Lauder,15 Haagen-Dazs, Anne Klein, McDonald’s, California Pizza Kitchen, Theory, Starbucks, KFC, 7-11 Hong Kong Major Projects

Hong Kong Int’l. Airport $582 Mn (Upgrade passenger terminal $200 Mn Harbour Area Airfield improvement $388 Mn) Treatment (Main Plant) $2.5 Bn

West Kowloon Cultural Hub $2.8 Bn (earmarked)

Stadium at Kai Tak $647 Mn

Cruise Terminal at Kai Tak $308 Mn

HK Govn’t. HQ HK-Macau-Zhuhai $633 Mn Ocean Park 16 Bridge $5.7 Bn $705 Mn Hong Kong-Macau-Zhuhai Bridge

• US$5.7 billion • Share between the three governments: – Hong Kong: 50.2% – Guangdong: 35.1% – Macau: 14.7% • Invite private developer to bid for the project

17 Major Projects in Hong Kong USD • Additional Mass Transit $12 Bn – South Island line $1.2 Bn – Shatin to Central link $4 Bn – Guangzhou-Shenzhen-Hong Kong Express rail link $1.9 Bn – Tuen Mun-Chek Lap Kok rail link $2.6 Bn • West Kowloon Cultural Hub (earmarked) $2.8 Bn • Hong Kong-Macau-Zhuhai bridge $5.7 Bn • Hong Kong Government Headquarters $633 Mn • Cruise Terminal at Kai Tak old airport site $308 Mn • Possible 3rd airport runway • Additional university campus buildings and residence

18 US Exports to Hong Kong

USD Billion 25 20.1 Bn 17.8 Bn 16.3 Bn 20 15.8 Bn 13.5 Bn 15

10

5

0 2003 2004 2005 2006 2007

19 U.S. Exports to Hong Kong

• Electrical machinery and electronics parts • Machinery & Mechanical Appliances • Precious metals and stones • Medical and photographic equipment • Plastics • Leather • Meat and fruit • Toys and games • Paper and wood items • Aircraft parts

20 Hong Kong and The Pearl River Delta (PRD)

• 46.5 million people - 2.8% of China’s population (2005) • PRD is the “richest” region of China • 9.9% of China’s GDP • Per capita GDP in Shenzhen > US$5,127 • 19.2% of China’s foreign direct investment (FDI) • 27.8% of China’s exports • Hong Kong is the source for 70% of PRD’s FDI • US companies’ growing presence -- P&G, Walmart, Dell, IBM • Substantial and diverse business opportunities

21 Closer Economic Partnership Agreement (CEPA) • Enhanced access for Hong Kong products & service providers • Starting from January 1, 2005, most types of products made in HK can be exported to China with zero tariff • Made in HK = 30% value-added • Preferential access to HK service suppliers in 27 sectors • Foreign companies that acquire majority shares of HK companies for 1 year = HK companies

22 Closer Economic Partnership Agreement (CEPA) Examples of goods covered are: • fisheries products • food and beverages • chemical products • pharmaceutical products • cosmetics • plastic and rubber products • leather and fur products • textiles and clothing • metal products • jewelry • mechanical, electrical and electronic products • clocks and watches 23 Hong Kong – The Regional Market

• Within six hours’ flying time of Hong Kong, you can sell to 2/3 of humanity!

• 94% of Hong Kong’s exports are reexports of third-country goods

• Hong Kong has 3,890 foreign firms’ Asian regional offices and headquarters. In 2007, U.S. had 1,285 regional and local offices, including 298 regional headquarters and 593 regional and 394 local offices.

24 Hong Kong – The Regional Market • 31 of the top 100 PRC firms have Hong Kong offices

• 2,200 PRC firms have Hong Kong offices

• Hong Kong firms own about 80,000 factories and employ 11 million people in nearby Guangdong province, PRC, the heart of the Pearl River Delta, China’s richest region that is responsible for one- third of China’s exports to the world

25 Hong Kong – 2007 Re-exports by Destination: Statistics ($US Billion)

P.R.C. - $164.6 U.S.A. – $44.7 Japan - $15.2 Germany - $10.1 United Kingdom - $9 Korea - $6.7 Taiwan - $6.3 Others - $78.3 Total: $334.9

Source: Trade & Industry Department, the Government of HKSAR 26 Hong Kong – 2007 Re-exports by Origin: Statistics ($US Billion)

P.R.C. - $207.5 Japan - $27.2 Taiwan - $24.6 Korea - $12.6 United States - $9.7 Malaysia - $7.1 Thailand - $6.1 Others - $40.1 Total: $334.9

Source: Trade & Industry Department, the Government of HKSAR 27 Hong Kong – A Global Financial Hub

28 Hong Kong – The Global Financial Market

Among global exchanges, Hong Kong ranks

#1 in derivative warrants trading in Asia #1 in stock options trading market in Asia #5 in capital funds raised worldwide #7 in market capitalization worldwide #10 in equity turnover worldwide

• USD$2.67 Trillion market capitalization in 2007

(up 55% from 2006) 29 Hong Kong – The Global Financial Market • 181 foreign banks; more than 90 foreign insurers; 234 investment companies; 185 venture capital funds • Of Asia’s $100 billion in private equity, Hong Kong firms manage $27 billion. The U.S. supplies over two-thirds of Hong Kong’s private equity capital. • Hong Kong dollar is pegged to the U.S. dollar • Strengths: Clean and sound financial regulatory framework. Free flow of information. Many professional, objective sources of financial information. Many international professional business advisory firms 30 Hong Kong – A Global Transportation Hub

Kwai Chung Port 31 Hong Kong – A Global Transportation Hub

• Hong Kong set a record in its container throughput in 2007 by handling 23.9 million TEUs (Twenty-foot-container Equivalent Units)

• Largest container port serving southern China and one of the busiest ports in the world

• Hong Kong’s seaport is used by eight international shipping lines, including American President Lines, Maersk Sea-Land, Mitsui OSK, Nedlloyd, P&O, OOCL, etc. (2006)

• Hong Kong’s seaport has over 500 container liner services per week to over 500 destinations worldwide (2006)

• Hong Kong has 2,232 international freight forwarders (2006) 32 Hong Kong – A Global Transportation Hub

In 2006, Hong Kong International Airport handled:

• 85 airlines, including 18 cargo airlines, serving 150 worldwide destinations

• 771 scheduled flights per day

• 121,780 passengers per day

• 9,863 tons of air cargo per day (3.6 million tons/year)

33 Hong Kong - Best Prospect Sectors (Imports from the U.S.) • Electronic Parts/Components $5.7 Bn • Medical Equipment $3.1 Bn • Computer Peripherals $2 Bn • Travel/Tourism Services $764 Mn • Education/Training $360 Mn • Cosmetics and Toiletries $180 Mn • Environmental Technologies $170 Mn • Film and Video $80 Mn • Safety and Security Equipment $55 Mn • Landscape Architecture $46 Mn • Green Building Products $21 Mn 34 Hong Kong Best Prospect Sector: Electronic Parts/Components Imports from the World (2007): $132 billion Imports from the U.S. (2007): $5.7 billion (4.3%) Local market: $6.2 billion Competition: China, Taiwan, Japan, Singapore • Hong Kong re-exports over 90% of its imported electronic parts and components. • In 2007, 70% of Hong Kong’s exports of electronic parts and components went to mainland China, totaling $89 billion. • China’s Five-Year Plan to develop its electronic information industry and its WTO membership will sustain demand for electronic parts and components. 35 Hong Kong Best Prospect Sector: Electronic Parts/Components • Hong Kong imports electronic parts and components for use in a wide variety of products: computers, telecommunications equipment, toys, games, watches, clocks and audiovisual equipment. • Opportunities exist for U.S. companies to supply the following: ¾ High-end printed circuit boards ¾ High-end chips ¾ Semiconductors ¾ Parts for computers ¾ Parts for multimedia devices ¾ Parts for telecommunications equipment 36 Hong Kong Best Prospect Sector: Medical Equipment Imports from the World (2007): $9.6 billion Imports from the U.S. (2007): $3.1 billion (32%) Local market: $2.5 billion Competition: Japan, EU (Germany) • No duties, product registration, or sale regulations, except for radiation equipment • Hong Kong re-exports 74% of its imported medical equipment, mainly to China • Hong Kong has 32,500 beds: 12 private hospitals and the Hospital Authority’s 44 public hospitals and 185 clinics • Aging population has more chronic ailments: stroke, diabetes & heart disease 37 Hong Kong Best Prospect Sector: Medical Equipment • Opportunities for U.S. medical equipment used in these areas: ¾Diagnosis/treatment of malignant neoplasms, heart disease, cerebrovascular diseases, chronic liver disease, cirrhosis and septicaemia ¾Diagnosis/treatment of diabetes mellitus, respiratory disease and cancer; analysis of blood and virus; and X-ray equipment ¾Rehabilitation of the disabled and elderly: assessment or functional equipment and tools; therapeutic equipment for heart illness; pain reduction or exercise equipment 38 Hong Kong Best Prospect Sector: Computer Peripherals

Imports from the World (2007): $36.5 billion Imports from the U.S. (2007): $2 billion (5.6%) Local market: $2.6 billion Competition: China, Japan, Thailand, Taiwan

• Hong Kong re-exports 100% of its imports of IT equipment • Over 60% of Hong Kong’s IT equipment exports go to China: $20 billion in 2007 • Hong Kong Government’s estimated IT spending for 2007/2008 is $690 million • E-government: 90% of Hong Kong Government services are on-line 39 Hong Kong Best Prospect Sector: Computer Peripherals • Hong Kong has 1.86 million broadband customers, representing

75.9% of the total household broadband penetration. • There are over 1 million IPTV (Internet Protocol T.V.) subscribers.

• Opportunities exist in these areas: ¾ Wireless/mobile applications of

IT products and solutions ¾ Digital entertainment ¾ Logistics/supply chain management ¾ E-commerce ¾ Multi-media products

¾ IT-security 40 Hong Kong Best Prospect Sector: Travel/Tourism Services Departures from Hong Kong to the World (2007): 31,564,000 Arrivals from Hong Kong to the U.S. (2007): 241,000 (est.) Imports from the U.S. (2007): $764 Million Average Spent per Tourist $3,170 (source: U.S. Travel & Tourism Administration)

Outbound flight market breaks down: - 73% short-haul - 27% long-haul Competition for the U.S. as a destination: - Southeast Asia: Japan, Taiwan, Thailand, South Korea, and Mainland China - Long-haul travel: Europe, Australia, New Zealand, USA, Canada, Africa and the Middle East 41 Hong Kong Best Prospect Sector: Travel/Tourism Services • There are 90 direct flights from Hong Kong to the U.S. each week • <50% HK visitors to the U.S. were Free Individual Traveler (FIT) • 15% joined prepaid package tours • Rest were business & VRF (visiting relatives & friends) • The average Hong Kong/China tourist in the U.S. spends $150/day and stays 15 days. • There are over 1,000 tour operators and travel agents in Hong Kong, handling over 25 million trips worldwide each year. • Opportunities exist for new U.S. destinations, i.e., other than Los Angeles, San Francisco, Las Vegas, Hawaii, New York, Boston and Washington, D.C. and for tour operators that are sensitive to Hong Kong/China clients’ needs. • Meeting, Incentive, Convention & Exhibition (MICE) travel to the U.S. • Shopping, wine appreciation, horse riding, and skiing 42 • Cruises Hong Kong Best Prospect Sector: Education/Training

• 70,000 HK students were abroad in 2007, approximately 15,000 HK students were in the U.S. • Total expenditures in the US by HK students (2007): US$360 million • 99% of HK visa applicants successful, 7,000 visas issued in 2007 • 14th largest source of foreign students in the U.S. 43 Hong Kong Best Prospect Sector: Education/Training

• Hong Kong students are inclined to study in the U.S.: ¾ They perceive American institutions as having the best programs in business, engineering, computer science & information technology. ¾ The Hong Kong business community prefers U.S. degrees because of the strong business relationships between U.S., Hong Kong and China. ¾ U.S. has a number of the most prestigious universities in the world.

44 Hong Kong Best Prospect Sector: Cosmetics and Toiletries Imports from the World (2007): $1.4 billion Imports from the U.S. (2007): $180 million (24.1%) Local market: $814 million Competition: China, Japan, France • Hong Kong is an important launch pad for cosmetics, and skincare products into the Chinese market. • Hong Kong had 15.5 million PRC tourists in 2007 - cosmetics are still among their top three purchases in Hong Kong. • U.S.-made products are considered to be of technologically-advanced formulations and are sought after.

45 Hong Kong Best Prospect Sector: Cosmetics and Toiletries • Hong Kong accepts U.S. product labeling. There are no mandatory labeling or registration requirements for cosmetics. • Opportunities exist for U.S. products: ¾ Complete line of facial whitening and anti- ageing products ¾ Hair coloring and treatment products ¾ Color cosmetics for eyes, lips and face, including permanent make-up for eyes ¾ Nail colors, nail-care products and artificial nails ¾ Body care products ¾ Skin treatments, slimming treatments, and massage products for use in spas, day spas, professional skincare salons, or dermatologists’ offices ¾ Skincare and personal care products made of naturally-derived and organically-grown ingredients ¾ As private label for local dermatologists/plastic 46 surgeons Hong Kong Best Prospect Sector: Environmental Technologies Imports from the World (2006): $550 million Imports from the U.S. (2006): $170 million (31%) Local market: $170 million Competition: Japan, EU (France, Germany) • Solid waste management solutions and technologies will absorb most of the Government’s investment in the environment in the next few years • The core technology of the new Integrated Waste Management Facility (IWMF) will be incineration (the first phase calls for a handling capacity of approximately 3,000 tons per day), supplemented by sorting and recycling technologies. 47 Hong Kong Best Prospect Sector: Environmental Technologies • Opportunities for: Air: ¾Analytical instruments ¾Vehicle emission particulate reduction devices ¾Desulphurization/denitrification technologies Water/wastewater: ¾Water filtration equipment (such as biological filtration) ¾UV disinfection technologies

¾Analytical instruments 48 Hong Kong Best Prospect Sector: Environmental Technologies

Solid waste: ¾Incineration ¾Mechanical-biological treatment (waste sorting & separation) ¾Biological treatment (composting) ¾Waste-to-energy technologies

49 Hong Kong Best Prospect Sector: Film and Video

Imports from the World (2007): $91 million Imports from the U.S. (2007): $80 million (88%) Local market: $130.5 million DEFT Hong Kong Competition: Japan, UK, India, Mission to the U.S. South Korea 10 / 2008

50 Hong Kong Best Prospect Sector: Film and Video

• Opportunities for: ¾ Films with special effects ¾ Educational and documentary videos/ VCDs/DVDs ¾ Film training ¾ Film financing

51 Hong Kong Best Prospect Sector: Safety and Security Equipment Imports from the World (2006): $926 million Imports from the U.S. (2006): $55 million (7%) Local market: $151 million Competition: Japan, Taiwan • Hong Kong re-exports 31% ($291 mn) of its security equipment to China • A regional transportation and logistics hub, Hong Kong spends heavily on security systems in its airport and freight-cargo facilities. • Major Hong Kong security companies are supplying sizeable integrated security systems for hotels and casino facilities in neighboring Macau. • Growth is expected in all sectors: surveillance system; access control equipment; internet protocol cameras; workplace management security systems; and home safety3 52 Hong Kong Best Prospect Sector: Safety and Security Equipment

• Opportunities for U.S. products such as: ¾ X-ray scanners ¾ Surveillance equipment ¾ Chemical detection system ¾ Infrared sensor ¾ Rescue equipment ¾ Detention equipment ¾ Radio frequency wireless technologies ¾ Access control: smart card systems, biometrics & fingerprint readers

53 Hong Kong Best Prospect Sector: Landscape Achitecture Imports from the World (2007): $160 million Imports from the U.S. (2007): $68 million (30%)

• Shortage of landscape architects in Hong Kong • Market demand increase due to tourism-related projects and government’s plan to “green” the environment • Private developers in hotel, residential and shopping mall projects in mainland China creates demand • Macau and nearby Hengqing Island in China have resorts, hotel and theme park projects that need landscape architects.

54 Hong Kong Best Prospect Sector: Green Building Products

Imports from the World (2007): $238 million Imports from the U.S.(2007): $21 million (9%) Local market: $105 million Competition: China, Japan, EU (Germany, Italy, Spain, U.K.)

55 Hong Kong Best Prospect Sector: Green Building Products • Hong Kong re-exports over 50% of its imports to China • Opportunities in HK transport, tourism and institutional projects: ¾ Cruise Terminal at Kai Tak old airport site ¾ Additional Mass Transit line – South Island line and Shatin to Central Link ¾ The Guangzhou-Shenzhen-Hong Kong Express Rail Link ¾ Hong Kong-Macau-Zhuhai Bridge ¾ Tuen Mun-Chek Lap Kok link ¾ West Kowloon Cultural Hub ¾ Additional campus buildings and residence for university students ¾ Possible 3rd airport runway ¾ Possible tenth terminal for container port • Macau casino resort opportunities • Opportunities for: ¾ Environmentally friendly building materials ¾ Energy-efficient building materials ¾ Construction equipment saving time/labor ¾ Hotel and resort architectural and landscape architecture 56 services Hong Kong Best Prospect Sector: Financial Services • Estimates of the size of the global emissions trading market by 2010 vary from US$40 billion to US$100 billion •Asia has 80% of the Clean Development Mechanism project market •China has around 61% market share (by value) in CDM projects

• The Hong Kong Stock Exchange is currently seeking to partner with an overseas exchange to build a trading and clearing platform and other emissions-related products in Hong Kong.

57 Hong Kong Best Prospect Sector: Financial Services • Opportunities for: Emissions Trading: ¾Exchange and financial institution partnerships ¾Consultancy and project development for environmental and greenhouse gas related transactions

IPOs/exchange traded funds/index linked products focusing on the environmental and greenhouse gas markets: ¾Services providers, traders, insurance and financial services firms 58 Macau Business Opportunities

• Fast-growing market: 30.9% GDP growth in 3rd Quarter of 2007

• Fueled by billions of dollars of new U.S. investments in gaming and increased PRC tourist arrivals (13.5 million PRC tourists in 2007)

• U.S. exports have doubled in the last 2 years, up 13% over last year

59 U.S. Exports to Macau

$US Million 226.4 Mn 250 200.2 Mn

200

150 101.5 Mn 85.5 Mn 100 54 Mn

50

0 2003 2004 2005 2006 2007

60 U.S. Exports to Macau (in millions of U.S. dollars)

Product 2003 2004 2005 2006 2007

Machinery & 8.3 18.2 24.1 54.7 68.9 Mechanical Appliances Special Classification 10.4 14.6 20.2 35.8 45.8 Provisions Toys, Games & Sport 1.3 6.6 14.6 29 31.8 Equipment Electrical, Sound, A/V 12.6 12.3 14.7 22.5 22.6 equipment

Aircraft 5.6 14.5 11.5 13.3 14

Other 16.3 19.3 16.4 44.9 43.3

TOTAL 54.5 85.5 101.5 200.2 226.4 61 Macau Business Opportunities • Opportunities in the gaming and resort sector for U.S. exporters include:

¾ Air conditioning systems ¾ Recreational and sports equipment ¾ Environmentally friendly building ¾ Security systems, especially materials surveillance equipment ¾ Carpeting for heavily trafficked or ¾ “Smart building” systems outdoor areas ¾ Training in hotel, restaurant and ¾ Computer systems and financial resort operations software ¾ Hotel supplies ¾ Fire- and smoke-resistant drapes and ¾ Spa treatment products, spa equipment and management window treatments services ¾ Elevators and escalators ¾ Restaurant franchises ¾ Furniture ¾ Fitness equipment ¾ Gaming equipment ¾ Retailers in apparel, footwear, ¾ Restaurant equipment jewelry, luggage, chocolates, ¾ Landscape architecture services clothing accessories ¾ Energy-efficient lighting 62 Macau's Cotai Strip

63 64 Macau – Locations of Major Real Estate Projects

65 Major Projects in Macau

USD • Venetian’s Cotai Strip Development $12-15Bn – 8 Hotel, Plus Massive Retail & Casino Projects $9 Bn – The Venetian Macau Resort Hotel $2.2 Bn • Wynn Cotai $4 Bn • Other Residential Projects $3 Bn • Macau Studio City $2 Bn • City of Dreams Underwater Casino $1.1 Bn • Galaxy Cotai Mega Resort $375 Mn (est.) • MGM Cotai $375 Mn (est.) • MegaBox – on Cotai $375 Mn (est.) • Shun Tak/SJM JV on Cotai $375 Mn (est.) • Hello Kitty theme resort on Cotai $375 Mn (est.) 66 Macau Training Services

• Visitor arrivals to Macau (2007) over 27 million (+23% from 2006) • Projected for visitor arrivals (2008) over 34 million (+25%) • English speaking visitors (2007) 233,000 Projected a +35% for 2008 314,000 • # Accommodation Premises 85 • # of Rooms 17,313 • # of new projects in two years +28 hotels • # of new Rooms +19,775

• Fueled by $2.5 billion in new U.S. investments by 2006 in the gaming and increased PRC tourist arrivals (13.5 million PRC tourists in 2007)

67 Macau Training Services

Training Opportunities at Tourism/Business Facilities:

¾ Macau Business Tourism Center ¾ The Venetian Macau-Resort-Hotel ¾ Sands Macau ¾ Ponte 16 ¾ Fisherman’s Wharf ¾ The Cotai Strip ¾ Grand Waldo Hotel ¾ Galaxy World Resort ¾ StarWorld Hotel ¾ Macau Studio City ¾ Rio Hotel ¾ Macau Science Center ¾ Wynn Macau ¾ The City of Dreams ¾ Grand Lisboa ¾ New Cotai Ferry Terminal ¾ Crown Macau ¾ MGM Grand Macau 68 Macau Training Services

• Opportunities for U.S. Training Services:

¾ Hospitality Management ¾ Chef and kitchen staff training ¾ Safety training ¾ Supervisor and management training for gaming ¾ Incentive ESL program ¾ Exhibition & Convention management ¾ Tour guides training

69 Macau Retail Market

• Macau’s retail market is undergoing a major transformation since the opening of numerous large-scale prime retail properties in the Fisherman’s Wharf, Venetian’s Grand Canal Shoppes on the Cotai Strip, Wynn Resort, MGM Grand, and Ponte 16.

• 7.5 million sq. ft. of prime retail space will be available in Macau by 2010

• Numerous international luxury retail brands have established their outlets at these prime retail space to target the high-spending gaming and MICE visitors.

• Strong domestic spending and flourishing Mainland tourism boosted retail sales in Macau by 33% to US$1.8 billion for 2007. 70 71 Macau Security Services & Equipment

• Opportunities for U.S. Training Services:

¾ Gaming industry ¾ High-end retail ¾ Hotel & hospitality ¾ Macau Airport

72 Macau Broadcasting & Entertainment Services

• Opportunities for broadcasting equipment: ¾ Macau Dome is seeking new broadcasting and audiovisual equipment. Project size is about $10 million • Opportunities for entertainment services: ¾ Sporting events (e.g. NBA exhibition between Orlando Magic and Cleveland Cavaliers ¾ Concerts and theatre (e.g. Celine Dion) ¾ Macau Studio City $2 billion integrated resort, entertainment and broadcasting complex

73 Macau Hotel and Restaurant Equipment

• With over 27 million visitors in 2007, Macau is a growing market for hotel & restaurant equipment. • Opportunities for: ¾ Freezing cabinets ¾ Ranges, roasters, ovens and food-warmers ¾ Dishwashers ¾ Food preparation equipment: toasters, fruit juicers, small- size bakery equipment, coffee/cappuccino machines ¾ Mini-brewery equipment for bars

¾ High-end hotel linens, carpets 74 U.S. Commercial Service Hong Kong Export Success Story:

“A year ago China was a dream, now we’re there for the long term.” Paul Fuhrmann, General Manager

• In November 2001, Mr. Fuhrmann contacted CS Hong Kong, looking for aviation trading companies servicing the Hong Kong and China markets. • CS Hong Kong Commercial Specialist Elanna Tam matched Envirovac with Hong Kong aviation trading company V-Mark • V-Mark began promoting Envirovac’s system to Shenzhen Airlines, a mainland Chinese air carrier • As a result, Shenzhen Airlines specified Envirovac’s system for its purchase of ten 777-900 aircraft • V-Mark also promoted Envirovac’s system to AVIC I Commercial Aircraft Company, one of the leading Chinese aircraft manufacturers • As a result, AVIC I specified Envirovac’s Evac system for use in all of its ARJ21 aircraft in September 2003 75 U.S. Commercial Service Hong Kong Export Success Story: “Yes! We opened an account with Duty Free Philippines, a large distributor in Singapore, and several other smaller distributors throughout Asia.”

Sebastien Gavillet, RST Inc. USA • RST Inc. USA exhibited at Cosmoprof Asia in 2005 and 2006 in Hong Kong, a U.S. DOC-certified and Asia Now trade event. • Las Vegas USEAC Director Tony Michalski counseled RST before the company exhibited at Cosmoprof Asia 2005 and introduced CS services. RST took part in Showtime at Cosmoprof Asia 2005 and 2006. • Commercial Specialist Dey Robles of CS Philippines recruited a buyer delegation to both shows and distributed the U.S. exhibitors’ profiles, including RST’s to the delegates. • One of CS Philippines-recruited delegate from Landmark Management, the purchasing agent of Duty Free Philippines purchased spa products worth US$8,000 from RST Inc. USA at Cosmoprof Asia 2006. • Commercial Specialist Luanne Theseira introduced several Singapore buyers to RST at the CS Hong Kong-hosted reception at Cosmoprof Asia 2005 and provided background information on a Singapore company that expressed interest in the distributorship. 76 Stewart Ballard Chief Commercial Consul U.S. Commercial Service American Consulate General 26 Garden Road Central, Hong Kong Tel: 852-2521-1467 Fax: 852-2845-9800 Email: [email protected] Website: www.BuyUSA.gov/hongkong Asia Now website: www.BuyUSA.gov/AsiaNOW

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