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  • [Crisis Fallout] U.S. Firms Still Keen to Invest in HK and China
  • May 5, 1998 (HONG KONG) -- The Asian economic crisis may have caused turmoil throughout the region, but U.S. companies are still keen on investing in Hong Kong and China, experts said.
    After all, the region is known for its resilience. James Liu, CEO of Hong Kong Industrial Technology Center Corp. (HKITCC), aims to establish Hong Kong as a technology hub through exchange activities and incubation programs. He maintained that the Asian economic crisis opens new opportunities for the development of technology-based businesses in Hong Kong.

    "Before the economic crisis, people rushed into the property and stock markets. All they did was speculate, speculate and speculate," Liu said. "Now, after the crisis, people are putting the property and stock markets aside. It is a good opportunity for the incubation of technology businesses in Hong Kong."

    HKITCC led a delegation of 28 participants, most of whom were top executives from the telecommunications, software and electronics sectors, to California's Silicon Valley between March 31 and April 5. The mission aimed at networking with leading business executives in the technology sector and exploring business collaboration opportunities.

    According to Liu, who was one of the leaders of the delegation, the economic crisis had little if any effect on the technology-based industry in Hong Kong, nor does it affect U.S. technology companies' desire to invest in Hong Kong and China. But he admitted that Southeast Asian nations seem less attractive to foreign investors after the turmoil.

    "U.S. companies are interested in expanding in Asia," Liu said. "Although Southeast Asia is less attractive, China still presents a potential big market to them."

    As a result of the six-day trip, a Memorandum of Understanding was signed between PCS Technology Research Group Ltd. and Tryport Electronics Ltd. to exploit thermocoupled generator technology in China. Initial investment for this project is estimated at US$3-5 million. Negotiations on an agency agreement and a manufacturing contract also opened up.

    Paul Volcker, chairman of the U.S./Hong Kong Economic Cooperation Committee, shared a similar positive view regarding U.S.-Hong Kong trade relations after the economic crisis. "The cooperation between the U.S. and Hong Kong is good. We share many economic policies and our orientations are similar. I am not aware of any friction," Volcker said.

    The United States is Hong Kong's second-largest export market. Hong Kong's total exports to the United States rose by 5 percent in the first three quarters of 1997 after a mere 1.4 percent rise for all of 1996. In that period, domestic exports of semiconductors, electronic valves and tubes marked a 22 percent increase, a significant growth compared with other sectors.

    The United States was Hong Kong's third-largest source of imports in the first three quarters of 1997. Leading import items were electrical machinery, telecommunications equipment, audio and video equipment and computers.

    Related "Currency Crisis Fallout" story is at: [Crisis Fallout] Korean Electronics Firms Bet Their Future on Exports
    Related "Currency Crisis Fallout" story is at: [Crisis Fallout] China's Machinery, Electrical Exports to Hit US$67 Billion

    (Eleanor Yeung, Asia BizTech Correspondent)

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    Nikkei BP BizTech, Inc.
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    Updated: Mon May 4 22:27:50 1998