MACAO MAGAZINE: Do you think that more should be done in the Pearl River Delta to put SMEs in contact with other companies in the region?
Jackson Chang: Guangdong and Macao are situated on the Pearl River Delta, with a population of around 55 million between them. The area is a major economic hub and one of China’s most affluent regions. In recent years, the two places have been co-operating closely in a variety of areas. Progressive improvements to and deepening of the “mainland and Macao Closer Economic Partnership Arrangement” (CEPA) have further strengthened liaison between the two places, thus providing overseas investors with huge business opportunities.
IPIM has established co-operation with Guangdong trade and investment departments in organising business delegations on visits overseas and hosting numerous business exchange activities in Macao and Guangdong as well as overseas. We also jointly organise a number of events on the mainland and Macao, such as “the Guangdong and Macao Branded Products Fairs” and “Macao-Guangzhou Famous Products Fair”, to name just a few. To assist local SMEs in exploring new business networks, IPIM has also organised delegations of entrepreneurs to visit major cities in Guangdong and Guangxi in recent years. All this work is aimed at promoting closer trade and investment co-operation within the Pearl River Delta, in order to assist SMEs to grasp the abundant business opportunities in the region.
MM: One of the most important aspects of promoting businesses is to create a platform for entrepreneurs to meet. IPIM has set up a portal to promote the three centres, in which Nam Kwong plays an important role. So far what are the results of this portal? In our contacts with Portuguese-speaking countries (PSC) and Chinese entrepreneurs, we feel there is a lack of information on countries, businesses, laws and even people. Do you plan to increase this awareness in PSCs to create a better understanding of China’s potential and the role of Macao as a platform for their businesses?
JC: Since the 4th Ministerial Conference of the Forum for Economic and Trade Co-operation Between China and Portuguese-speaking countries in Macao in November 2013, Macao’s role as a Commercial and Trade Service Platform between China and Portuguese-speaking Countries (PSCs) has been further enhanced. The “Three Centres” – “ a commercial and trade service centre for SMEs between China and PSCs”, “a food product distribution centre for PSCs” and “a centre for conventions and exhibitions for economic and trade co-operation between China and PSCs” – are also being set up.
One of the projects under the “Three Centres” is the Economic & Trade Co-operation and Human Resources Portal between China and PSCs, (hereafter referred to as Portal), a tool for economic and trade co-operation between China and PSCs. It provides information including: a database of bilingual professionals fluent in Chinese and Portuguese; economic and trade data; and information on food products from PSCs. By using the Portal, companies can conveniently access relevant information about China and PSCs, interact with other firms and explore new business opportunities. You can also find up-to-date information on conventions and exhibitions taking place in China and PSCs, and information on trade legislation.
The Portal can also become an efficient business-to-business and business-to-customer online platform where firms can present their products and services.
At present, there are over 620 registered users on the Portal and the PSCs food database showcases around 1,300 food products from Angola, Brazil, Cape Verde, East Timor, Guinea Bissau, Mozambique and Portugal. Since its launch in April 2015, the portal has received over 49,000 visits.
We have also been carrying out a lot of promotion in Macao, mainland and overseas, with the hope of increasing the usage and penetration of the Portal. Through online and offline support, we hope to encourage more collaboration between Chinese and PSCs enterprises, especially through Macao as a platform.
Through the development of the Portal and “three Centres” and in view of market changes and the operational needs of businesses, online and offline functions and facilities can be integrated to promote and build a highly efficient business service platform. This assists with resources such as information, capital, business processes, logistics and professional services and provides more effective and more diverse channels to showcase companies’ products, services and business opportunities.
MM: China’s strategy of the “One Belt One Road” has been a hot topic in Macao. Everyone has said that Macao can participate in it, but so far we haven’t seen any concrete plans. Diplomats from China and the PSCs have said that this “Belt and Road” initiative should be extended to the PSCs in Asia, Africa and Europe. The previous ambassador of China in Portugal even said that the road should end in Lisbon. What do you think? Should this grand plan include the PSCs?
JC: Due to its special geographic location and its role as an economic and trade co-operation platform for China and Portuguese-speaking countries, Macao possesses unique advantages in the implementation of the “Belt and Road” initiative.
The “One Belt One Road” initiative is an inclusive project open to all countries. As mainland China strengthens its economic and trade connections with countries along the Silk Road Economic Belt and the 21st Century Maritime Silk Road, Macao strives to make full play of its strength, to be in line with the “Belt and Road” initiative. In particular, it has its role as a trade and economic co-operation service platform between China and PSCs, to strengthen trade and economic partnerships with ASEAN countries, and further assist mainland enterprises to go global and tap the PSCs markets: in addition, enhance collaboration in the Pearl River Delta region and the development of the Guangdong–Hong Kong-Macao Big Bay Area by means of different degrees of participation, creating a more desirable environment and exploration of business opportunities.
MM: In recent years, CEPA has given more opportunities to Macao business people to work in China. The entrepreneurs of the PSCs still do not understand the benefits of CEPA. Could you explain the advantages of accessing CEPA facilities to an entrepreneur from the PSCs. If they are based in Macao, can they use these facilities?
JC: Macao can serve as a stepping-stone for PSCs’ products and services (particularly those from SMEs in PSCs) to enter the mainland market. This enables PSC enterprises to be better prepared for marketing and product design operations or explore the mainland market in co-operation with Pan-PRD enterprises through franchising.
CEPA provides incentives in trade in goods, trade in services as well as facilitation of trade and investment, and numerous pilot liberalisation measures launched in Guangdong. Under CEPA, all goods of Macao origin under tariff items can enjoy zero tariff treatment when imported into the mainland. The new agreement under CEPA further expands the areas of the mainland economy that are fully or partially open to Macao providers of services to a total of 153 sectors. The agreement means Macao’s CEPA permissions now cover 95.6 per cent of the 160 trade and service sectors officially recognised and classified as such by the World Trade Organization.
Indeed, various Macao financial institutions and enterprises have established networks in the PSCs. Enterprises from the PSCs have also set up factories in the city to market their products to the mainland by enjoying the preferential treatment under CEPA.
MM: IPIM officials said recently that there are plans to organise a fair only with the PSCs and China. Is this viable? If so, when can it be held? In the last MIF, we saw a Portuguese and PSCs fair within the big fair. Is this a sign that a separate fair could be successful?
JC: In order to develop better the role as the Business and Trade Co-operation Service Platform between China and the PSCs and advance the construction of the “Three Centres”, the “Portuguese-speaking Countries Products and Services Exhibition” was set up for the first time under the concept of “exhibition-within-an–exhibition” at the 20th MIF, covering a total of 2,000 square metres. The exhibition attracted over 150 enterprises from seven PSCs showcasing their products at the venue; it involved several sectors, such as food and beverages, tourism, financial services, E-commerce and education. Based on this success, we will continue to host the “Portuguese-speaking countries Products and Services Exhibition” during this year’s MIF and continue to enrich the contents of the exhibition. We will also consider the possibility of organising an individual exhibition in the future.
MM: Often it seems that IPIM and the Macau Forum are doing the same job. Could you explain their complementary roles?
JC: IPIM works mainly to improve co-operation with the PSCs in the areas of trade, investment and enterprises, with the aim of consolidating Macao’s role as a trade and economic co-operation service platform between China and PSCs. We have also put a lot of effort into promoting and advertising the “Three Centres”. What is worth mentioning is that a specific department dedicated to promoting trade and investment co-operation with PSCs will be set up within IPIM this year.
MM: Has the Macao Product Display Centre that IPIM set up some years ago brought any results to the diversification of the economy and promotion of Macao’s products in China and the PSCs?
JC: The Macao SAR Government established “Macao Ideas” – the Macao products display centre – in May 2011 and entrusted its management to IPIM. The objective of “Macao Ideas” is to create brand awareness of local products; it serves as a platform specialising in the promotion of “Made in Macao” products, “Macao Brands”, “Macao Designs” and “Food products from PSCs with distribution channels in Macao”. Since its inception, “Macao Ideas” has received approximately 73,000 visitors. Over the past four years, many local enterprises have seized new business opportunities after showcasing their products in “Macao Ideas”, and expanded their scope of business. For example, a souvenir manufacturer received more purchase orders; a Portuguese pastry maker entered into a long-term contract as a supplier to several food souvenir shops; a design and manufacturer of leather goods enjoyed an increase in business turnover and brand awareness for its products after showcasing their products in “Macao Ideas.”
MM: If you are an investor and want to come to Macao looking to invest with an eye on southern China, what is IPIM’s advice in terms of areas of business that could be successful, especially now that diversity of the economy is a major issue?
JC: Macao is working towards becoming a World Tourism and Leisure Centre and promoting moderate economic diversification. Currently, the city is speeding up the development of its convention and exhibition, Traditional Chinese Medicine, cultural and creative industries, as well as commercial and trade services. In 2014, revenue from non-gaming sectors including wholesale, retail, hotels, food and beverages, construction and finance reached 190 billion patacas (around US$24 billion), while gaming revenue stood at 360 billion patacas (around US$45 billion).
The completion of various large tourism, entertainment and resort facilities have also accelerated the development of related industries such as hotels, conventions and exhibitions, retail, food and beverage. They have provided new opportunities for other emerging sectors including environmental, cultural and creative industries. With its fast growing service sector supported by a strong tourism industry, Macao can serve as an ideal platform for investors to make greater inroads into the mainland market.
The SAR government will also continue to work closely with the relevant mainland departments to foster the development of the Three Centres, creating more business opportunities for mainland, PSCs and Macao enterprises in the related industry.
MM: Do you believe that the new area of Hengqin can be a good space for the diversity of the economy? In what areas? And also for investors of the PSCs?
JC: Macao and Guangdong are currently working on numerous projects according to “The Framework Agreement of Guangdong-Macao Co-operation” including the construction of the Co-operation Industrial Park on Zhuhai’s Hengqin Island, which will create valuable opportunities for business collaboration in areas of leisure tourism, convention and exhibition, cultural and creative industries, Chinese medicine as well as other sectors.
In April 2014, the Macao SAR Government recommended 33 investment projects submitted by local enterprises wishing to operate in the 4.5 square-kilometre “Guangdong-Macao Co-operation Industrial Park”, to the Zhuhai authorities. Until now, 19 projects have been signed and the land has been supplied.
Meanwhile, the China (Guangdong) Pilot Free Trade Zone Hengqin Area was officially launched on 23 April 2015. The policies for the FTZ create an international, market-orientated and legal business environment, further abolishing barriers for investors’ wishing to enter the market and actively promoting financial innovation co-operation. It will help Macao and PSC businesses to expand in all areas and help with the city’s moderate economic diversification. Together with the completion of several major infrastructure projects such as the Hong Kong – Zhuhai – Macao Bridge, which will be completed in 2016, it will further open up new business and co-operation opportunities to investors from the mainland, Macao and PSCs.
The Macao SAR Government will continue to work with the Guangdong province to create more favourable conditions for the development of SMEs, professionals and the young people of Macao. (Macao Magazine. photos by Eric Tam and courtesy of IPIM)