2nd Quarter 2014 The official Newsletter of ABAC July 7-10 November 4-7 November 8-10 ABAC 3 Meeting ABAC 4 Meeting APEC CEO SUMMIT Seattle, USA Beijing, China Beijing, China ABAC Prepares Report to APEC MRT, Calls for Renewed Focus on FTAAP (Santiago, Chile) 7 May 2014 – Held the challenges and difficulties in real- The FTAAP was first introduced by against the backdrop of the ma- izing FTAAP, and to develop concrete ABAC at the APEC Leaders’ Meeting jestic Andes Mountains in Santiago, measures and feasible options to ad- in Chile ten years ago. Chilean Presi- Chile, this year’s second meeting of dress these. dent Michelle Bachelet reminded the the APEC Business Advisory Coun- Council of this fact when she graced an cil (ABAC) welcomed new initiatives For their part, the business leaders ABAC luncheon, and went on to state from ABAC members, including top- noted the fast-approaching deadline Chile’s unwavering commitment to ics on mining and disaster-resilient in- of the Bogor Goals, an APEC commit- the FTAAP goals. “Chile believes in free frastructure, and discussed progress ment to achieve free and open trade trade, in the exchange and coopera- on work relating to SMME financing, and investment by 2020, and sug- tion between the nations of the Pacific the movement of workers, and global gested that APEC considers adopting from the beginning of our history,” she data standards for pharmaceutical a “top down” approach in the FTAAP said. “This is a history that we will contin- products. process. The identified pathways ue to honor.” each face their own set of challeng- At the start of the four-day meeting, es in terms of political direction, mem- The Council also deliberated on the the ABAC members immediately dis- bership coverage, and level of ambi- direction of its services agenda particu- cussed APEC China’s proposal which tion and speed; and ABAC saw the larly in the promotion of the efficient seeks to refocus efforts on the over- need to articulate the overall vision of movement of workers in the region. all vision of a Free Trade Area of the FTAAP at this crucial time. The Coun- “The problems of skills shortages and Asia-Pacific (FTAAP) now that nego- cil agreed to support the proposal mismatches in the region are becom- tiations of various pathways are well and expressed this in its 2014 Letter to ing more acute and damaging to busi- underway. These pathways include Ministers Responsible for Trade (MRT). ness competitiveness and efficiency,” the Trans Pacific Partnership (TPP), the “We would welcome concrete steps says ABAC Philippines member Doris Regional Comprehensive Economic towards the realization of an FTAAP Ho. This led ABAC to endorse the idea Partnership (RCEP), and the recenlty such as developing a roadmap, a of developing a framework and a gov- concluded Pacific Alliance. In par- timetable, and a feasibility study,” ernance structure that would effective- ticular, the proposal seeks to analyze said ABAC Chair Ning Gaoning. ly manage the movement of temporary Page 1 Continued on Page 2... continued from page 1 (ABAC Prepares Report to APEC MRT)... aimed at promoting measures to Leaders in November 2014 in Be- encourage investment flows in the jing, China. region. The Council agreed to put forward the idea of establishing a high-level APEC Regional Investment Analytical Group (RIAG) which would foster the use of better quantitative analysis and policy benchmarking of investment policies related to attract- ing foreign direct investment. The proposed RIAG is envisioned to pro- vide report and recommendations ABAC 2014 Chair Frank Gaoning addresses which could be reviewed by ABAC members at the ABAC 2 Plenary and recommendations submitted to APEC Leaders and Finance Ministers. contract workers. The members are keen These were among the issues high- on working with APEC in exploring this pro- lighted in ABAC’s 2014 letter and re- posal and have agreed to present this to port to the APEC Ministers Responsi- the APEC Human Resource Development ble for Trade (MRT) which was drafted Working Group for consideration. and finalized in this meeting. The busi- ness representatives also stressed the Meanwhile, the Finance and Econom- importance of building new, high ics Working group is focused on issues quality regional and domestic infra- directly related to ways that advances structure for connectivity. “This coor- integration of financial markets and facil- dination matters to business investors itating improved infrastructure connec- and users,” ABAC states in the letter. tivity in the APEC region. In Santiago, the It adds, “It will help to increase the FEWG discussed four major work areas: in- pipeline of viable infrastructure pro- ternational valuation standards, financial jects, strengthen quality transporta- inclusion, work streams under the Asia-Pa- tion networks and enhance global cific Financial Forum, and the ongoing value chains.” talks with APEC governments under the Asia-Pacific Infrastructure Partnership. The report to APEC MRT is one of the reports submitted to APEC min- In addition, the FEWG discussed isters building towards the submis- President Michelle Bachelet of Chile addressing an next steps in its multi-year program sion of a letter and report to APEC ABAC luncheon in Santiago. Deeper Business Engagement in APEC Mining Talks Sought 6 May 2014 – The agenda of the ABAC’s force this year are centered on respon- fora. In order to achieve this, the Sustainable Development Working sible mining and investments on mining study will analyze current and fu- Group in Santiago took a surprising new and, therefore, it is critical for regulators ture potential of the mining sector shape as members presented new initi- to hear from the industry. in the region and identify its so- atives related to the mining sector. The cio-economic impact on APEC contribution of mining to the region’s ABAC raised the proposal to organize economies. It will also present best economic growth was reviewed and a Mining Industry Forum in Beijing in late- cases of responsible and sustaina- it was noted that in spite of its relative June this year to engage the industry ble mining practices, and draft importance, the sector has received players with the ministers and MTF dele- regulatory and policy recommen- limited attention in APEC in the past few gates. Mr. Urquiza expressed his support dations for APEC consideration. A years. to this idea and has committed to dis- draft report will be presented in cuss this to his peers in the task force. ABAC 3 meeting in Seattle, and is A day before the SDWG meeting, a targeted to be completed and number of ABAC members and staffers To add value to this discussion, ABAC presented to the APEC Leaders in had a dialogue with APEC Mining Task has also endorsed a mining study which November. Force (MTF) Chairman Rodrigo Urquiza aims to leverage existing economic who welcomed business sector’s inter- data and studies, convey business sec- est and participation in the APEC MTF. tor perspectives through interviews, and He shared that the priorities of the task cement mining discussions in the APEC Page 2 ABAC Explores Internet Supply Chain Financing for SMMEs Online 5 May 2014 – Promoting innovative ways form stores all historical data including the e-commerce micro loan, the to facilitate the increased participation transaction history, business evaluation, P2P platform assesses the credibil- of small, micro and medium-sized en- credit score, feedback and rating from ity and risk assessment of the bor- terprises in the regional supply chain buyers, and dispute and refund re- rowers based on their information. remains to be a key focus of ABAC this cords. Internet supply chain financing is It was estimated that the P2P lend- year. An important element of this work also characterized by efficiency. Elec- ing market is around US$11 billion, is to explore various forms of SMME fi- tronic processing dramatically improves with over 800 P2P companies in nancing which could serve as an alter- the efficiency of service in the financial China alone. Meanwhile, the small- native to the traditional secured loans industry est market of the three, “Crowd offered by banks. Funding,” aggregates people in Ms. Wang shares that, in China, there one platform to share common in- At the ABAC 2 meeting held in San- are three types of internet financing terests on a project or an idea, and tiago, the SMMEE Working Group ex- models tapped by online SMEs. The they can contribute money to the amined a new financing model called “e-Commerce Micro Loan” is a finan- pursuit of projects they support. “Internet Supply Chain Financing.” This cial service offered by e-commerce type of micro lending was designed to platforms in cooperation with banks or According to the paper present- cater to the financing needs of online financial institutions. SMEs can apply for ed by Ms. Wang, big data has the entrepreneurs who, in most cases, lack a loan soon after receiving orders on- “4V Advantages” – volume, veloc- the fixed assets (i.e. real estate, machin- line and uploading a tracking number ity, variety and value, which she ery, vehicle) required to secure bank for the client. The platform will forward foresee to be an important and loans. But what these types of business- the application and online data of the strategic element of future busi- es have are considered valuable in to- applicant to its partner bank for deci- ness models. She expects these day’s highly digitized world. Indeed, the sion which usually takes half an hour. In emerging financing models to conditions of credit and collateral are 2013, the market for e-commerce micro grow further and cause dramatic quickly evolving from physical to virtual.