Press Release: VTCO Opening Hong Kong, 14 July 2011

Introduction

Direct investment from China have surged after 2004 and will continue to rise, making the country the leading foreign investor in the world, according to projections by a recent United Nations Conference on Trade and Development and the Chinese government itself.

The projection of government is that the Chinese investment abroad will exceed, within five to 10 years, the volume of foreign direct investment into China. In 2010, foreign direct investment into China rose 17.4% to reach $ 105 billion.

To achieve this forecast, the Chinese investment would more than double since the volume received by foreign companies in China continues to increase each year at rates higher than two digits.

Chinese appetite

The rapidity with which the Chinese economy is expanding has taken many by surprise. China currently invests in over 80 countries, the result of a phenomenon that has intensified only in the last three years.

In developed countries, Chinese investment, especially in areas such as national resources, is often regarded as a risk to national security. But there is a strong economic logic behind these investments.

One of these motivations is to diversify investments, currently very focused on U.S. Treasury bonds, thus reducing the risk that the country runs by accumulating an excessive amount of foreign currency reserves.

In 2010, the Chinese foreign currency reserves hit a record $ 2.85 trillion, the value is roughly one-third of total foreign currency reserves in the world.

Aggressive policy

The government is full of money and have to take care of their reserves, ensuring they will not lose value. The result has been to seek investment opportunities around the world. Some people see this as a new assertiveness of China, when in fact it is a natural choice for a country which is faced with a huge influx of foreign currency reserves.

The Ministry of Commerce is quoted as confirming that until February 2011, the total stock of Chinese investment in the world had reached a record $ 264 billion. In 2010, according to a survey by the Heritage Foundation, based in Washington, Brazil was the main destination for Chinese investments.

Vanuatu Government Initiative

Seizing on this opportunity the government and its agencies, the Vanuatu Financial Services Commission and the Vanuatu Investment Promotion Authority, combined to develop an initiative to capture a share of the Chinese investment market and the spin offs that it has created. This decision was also made against a backdrop of few important reasons:

• Vanuatu maintains a one China Policy and China for its part has supported Vanuatu among other Pacific Island countries throughout history in their quest for independence;
• Vanuatu has a long history with China both politically and economically so the initiative binds the two countries more strongly together; and
• China is huge market and at the rate it is growing at, it will overcome the United States to become the biggest economy in the world sooner than later.

Vanuatu must therefore take advantage of the opportunities this provides and with proper planning it stands to gain much from this initiative.

Components

The initiative comprises four components but all four will operate under an apex body known as ‘The Vanuatu Trade Commission Office’ in Hong Kong. A Hong Kong company, Vanuatu International Companies Limited (VIC) has been appointed to represent the government and its agencies in Hong Kong:

1. Offshore Financial Services: Vanuatu Financial services Commission
2. Foreign Direct Investment: Vanuatu Investment Promotion Authority
3. Permanent Residency Program: Immigration Department

It is anticipated that Tourism [Vanuatu National Tourism Office] as confirmed by the Minister of Trade and Deputy Prime Minister, Ham Lini Vanuaroroa, will follow suite shortly.

Hong Kong was chosen because of its location as the financial hub of the South East Asia region. Hong Kong is also important because it is a common law jurisdiction similar to Vanuatu. But the most important reason is that Hong Kong is the main entry point for foreign direct investment into China and the exit point for Chinese investors wishing to invest overseas.

In addition, three of the world's top commercial banks in Hong Kong have indicated their readiness to partner the Vanuatu Financial Services Commission in this initiative to streamline account application process for Vanuatu international companies. A confirmation of the importance of the Chinese market and an endorsement of the Government/VFSC/VIPA’s joint initiative – is certainly an opportunity the Vanuatu Government would not want to miss.

At the grand opening of the Vanuatu Trade Commission Office at the prestigious Hong Kong Jockey Club in Happy Valley on Thursday 14 July 2011, the Deputy Prime Minister, Ham Lini Vanuaroroa in his speech commented “This is all very exciting and anxious times for Vanuatu as we prepare to move ahead with an initiative of this nature and magnitude. I believe this the first time government and its agencies have combined to develop such an initiative. It is new and we maybe in uncharted territory here but I can assure you that you can always count on the full backing of the Kilman Government. This backing is made against a backdrop of few important reasons:

• Vanuatu maintains a one China Policy and China for its part has supported Vanuatu among other Pacific Island countries throughout history in their quest for independence;
• Vanuatu has a long history with China both politically, socially and economically so the project binds the two countries more strongly; and
• China is huge market and at the rate it is growing at, it will overcome the United States to become the biggest economy in the world sooner than later.

Therefore, Vanuatu must take advantage of the opportunities this provides and if it plays its cards right it stands to gain much from this project. I sincerely hope that this is the beginning of better things to come.”

He also cautioned Vanuatu officers who will be attached to the Vanuatu Trade Commission Office in Hong Kong: “To our government officers and officers of government agencies who will serve at the Vanuatu Trade Commission Office in Hong Kong, I ask that you respect the laws of Hong Kong. If you have to travel across to China, please respect their laws as well at all times. This is the foundation for good conduct of any civil servant.

You must also remember that when you are working in Hong Kong, you are representing the people of Vanuatu. It is therefore important that you conduct yourself properly because how you conduct yourself at the office and in public will be a reflection on the country as a whole.

In performing your duties, I expect you to be transparent, effective and efficient at all times. When you are in Hong Kong you will find that the pace of work and general client expectations are higher than what we have back in Vanuatu and I expect you all to rise to the challenge. Anything less cannot and will not be tolerated.

The government wants the Vanuatu Trade Commission Office in Hong Kong to be the shining example of a representative office for the Pacific Island countries in terms of transparency, effectiveness and efficiency of services it provides to the public at large. If we can do this and maintain that level at all times, I don’t see any reason at all why Vanuatu should not be in the fore front in terms of financial products, foreign direct investment, tourism and the like.”

Perhaps the most important part of the occasion was the presence of Mr. Zhan Yong Xin, Deputy Commissioner of the Office of Foreign Affairs of the People's Republic of China in Hong Kong who in his speech spoke of the warm and cordial relationship Vanuatu has with China and added his country’s welcome and best wishes to the Vanuatu Trade Commission Office in Hong Kong.

Becoming China Friendly

China like Vanuatu is rich in culture and tradition. To win over a Chinese investor requires trust and confidence and this is built over time.

Simple First Steps

The aim of your becoming "China Friendly" is much easier and less daunting than you might think. The obvious instant barrier is one of language, therefore a simple starter step towards China Friendliness could be as simple as producing a two page PDF in Chinese which can be both a printed addition to your existing guest documents and downloaded from your existing website. You are instantly marked out as a business that has taken a real step to being "China Friendly" in this way. Producing guest literature in Chinese would literally transform the experience for a Chinese visitor, for example menus, visitor information, safety instructions or directions and guide books can be easily modified to include Mandarin Chinese.

Reaching out to China

Despite increased use of the internet and of information channels such as television and newspapers, word of mouth has genuine authority in Chinese culture. Relationships, connections and reputation are equally important cultural considerations. Providing Chinese pages on your website will undoubtedly be well received, however providing cross cultural training and information to ensure that your staff understand and can cater for the requirements of your Chinese visitors, and clients, thereby creating the best possible first impression, should not be under-estimated.

Countywide Campaign and Support

The country must extend the original campaign further from pure tourism opportunities to other inward investment in the areas of business. The positive support for this campaign in official circles has been phenomenal. Government offices have been busy forging high-profile links within China for Vanuatu companies of late and have taken an ongoing interest in our campaign. The Country and Choose Vanuatu's enthusiastic stamp of approval mean that the campaign will automatically attract attention within China. The development is eminently PR-able; no other country in the world has instituted such a campaign and this fact will naturally create good will and interest.

The next logical step involves actively promoting Vanuatu within China. Along with the positive PR attracted by our campaign there are numerous travel and trade exhibitions at which our country can be represented. By presenting an holistic offering, encompassing a broad spectrum of business and industry sectors and tourist attractions we can literally put Vanuatu on the map within China as a 'must see' destination.

Getting Involved

What we now need is for individual, on the ground businesses and people to join those who have already taken the first steps in becoming China Friendly. This is a long-term proposal but one which will be all the more powerful the more private sector providers of all sizes and types in Vanuatu join in. Be it by taking the Simple First Steps, or by sponsoring the ongoing campaign and promotion of our delightful and vibrant country within China, we hope that Vanuatu businesses and individuals will rise to the challenge of making Vanuatu the First China Friendly Country.

17 July 2011 

Vanuatu Delegation:

Government: Deputy Prime Minister, Ham Lini Vanuaroroa; DPM Security, 1st PA Clifford Bice; 1st PA Office of the Prime Minister Richard Kaltongga; Jimmy Rantes Acting Director of Trade; Francois Batick Principal Immigration Officer
Vanuatu Investment Promotion Authority: Lionel Kaluat Chairman VIPA Board; Benjamen Malas Deputy Chairman VIPA Board, Smith Tebu CEO
Vanuatu Financial Services Commission: Bill Banitamwata Chairman VFSC Board, Keith Hango Board Member, Jerry Ishmael Board Member, George Andrews Commissioner, John Stephens Tougon Board Secretary.

Hits: 1321

Last Updated on Friday, 05 August 2011 13:39