CEPA 'morale booster' for Hong Kong economy ( 2003-11-18 15:55) (China Daily HK Edition)
To Bertrand Michaud, president of the French Chamber of Commerce and Industry
in Hong Kong, the recently-concluded Closer Economic Partnership Arrangement, or
CEPA, is more a morale booster than an economic stimulant, at least for now.
CEPA, he says, is an idea to be developed into business success over time.
But it is a good sign as it helps shape the direction where Hong Kong wants to
go, he adds.
More important, perhaps, is that CEPA gives Hong Kong people something to
hope for at a time when they "just want to get out of the economic quagmire".
The economy is 50 per cent facts and 50 per cent perceptions, he says. Figures
don't always show the entire picture, he says. It's important for people to feel
good and CEPA "is a very good sign".
As managing director for Asia Pacific of Hermes, a leading French purveyor of
luxury goods, Michaud says that CEPA's effect on his company's business is
indirect at most. When the people of Hong Kong regain some confidence in the
economic recovery because of CEPA, they are expected to spend more on luxury
goods, he says.
The demand for luxury goods in Hong Kong has been on the skid since the
bursting of the economic bubble in 1997. The economic slowdown, coupled with the
decimation of asset value and high unemployment rate, have greatly depressed
consumer spending.
Although quite a number of people have been hard hit by the property price
collapse, the society on the whole has remained relatively wealthy as reflected
in the high level of bank deposits totalling around HK$3,000 billion (US$384.6
billion).
Many retailers are hoping that the increased confidence in the prospects of
the economy can help release part of the pent-up spending power of the Hong Kong
people, economists say.
Well-known brands, including many from France, will stand to benefit greatly
from this development, Michaud says.
Other than that, French luxury goods makers will unlikely find CEPA of much
benefit to them, Michaud says. "Nothing in CEPA applies to us," he says. That's
because "we make everything in France".
What matters to him and other French luxury goods makers is the opening of
the mainland retail market under the World Trade Organization agreement. Michaud
says he is confident that the mainland government will implement the
market-opening process according to schedule.
He says that his company is keen to obtain a retail licence on the mainland
after the market is opened to foreign companies. One big advantage of having
such a licence would be the elimination of a whole lot of paperwork, according
to Michaud. At present, his company has a joint-venture outlet in Beijing and
another one in Shanghai.
Even after the opening of the mainland retail market, Hong Kong will still
have a role to play, Michaud says. "We have chosen Hong Kong as our regional
base because Hong Kong is the centre of the region," he says.
His confidence in Hong Kong, he says, is shared by the large French business
community represented by 430 companies, which employ 30,000 people, including
6,000 French nationals.
Michaud says that the French luxury-goods manufacturers are particularly
impressed by the determination and efforts of the Hong Kong government in
clamping down on counterfeit goods. The government's commitment is supported by
comprehensive legislation, vigorous enforcement and sustained public education
efforts.
The intellectual property rights law in Hong Kong covers trademarks,
copyright, patents and designs, plant varieties and trade secrets.
As a member of the WTO, Hong Kong is bound by the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS). As such, Hong Kong has fully
incorporated TRIPS standards into its domestic laws, which, in many cases, not
only comply with but also exceed the international standards.
On the enforcement side, a continuous war is being waged on the infringement
of intellectual property rights.
Michaud says that the French business community feels encouraged that the
Hong Kong government has made the protection of intellectual property a high
priority issue. It is important to Hong Kong in retaining its position as Asia's
principal entrepot for trade, in particular between the mainland and
international markets.
