China Woos Taiwan, Whips Hong Kong

JUN 16, 2014 11:39 PM EDT

OCCUPY CENTRAL HAS UNNERVED MAINLAND AUTHORITIES WITH THREATS TO SHUT DOWN THE ISLAND'S BUSINESS DISTRICT THIS FALL.  PHOTOGRAPHER: LAM YIK FEI/BLOOMBERG VIA GETTY IMAGES

By Adam Minter

How do you woo a renegade province? If you’re Yu Zhengsheng, a high-ranking Politburo member often described China’s top political advisor, you do so by assuring the renegades that you really, truly do understand why they might resist your embrace. Consider what Yu had to say at a recent forum to promote exchanges between the mainland and Taiwan, the independent-minded island that the Chinese government badly wants to call its own:

“We understand the mentality Taiwan compatriots have developed under special historical conditions; we respect their identification with the current social system, values and lifestyle; and we know that some friends still harbor misgivings on the development of the cross-Strait relations.”

The statement certainly sounds reasonable (though some may reasonably pause over the temporary-sounding phrase “currentsocial system”), which suggests China has finally learnt the virtue of a soft touch after years of failed threats. But Taiwan isn't likely to heed Yu's honeyed words.

The reason why can be found 450 miles to the southwest in Hong Kong, where Beijing is taking exactly the opposite approach with a territory that has in fact returned to the Chinese fold. The 1984 agreement with the United Kingdom that restored Hong Kong to Chinese rule pledged that the island would be allowed a “a high degree of autonomy, except in foreign and defence affairs,” which were ceded to China. Decisions about the local culture, economy, “life-style,” and local governance would be Hong Kong’s alone.

Most crucially, Hong Kong’s Basic Law (akin to a constitution), adopted in advance of the city’s return to China in 1997, set as a goal that the province’s chief executive be chosen by universal suffrage. In 2007, China’s national government set 2017 as the year in which this would happen. Unfortunately for Hong Kong’s voters, in 2013 China insisted that candidates who “confront” the national government would be ineligible to become chief executive, regardless of public will.

In recent months Occupy Central, a homegrown non-violent protest movement, has threatened to shut down central Hong Kong this July to force democratic concessions from Beijing. The movement, which has emerged amid rising anti-China sentiment in Hong Kong, has clearly unnerved the Chinese government. Last week authorities responded with a “white paper” clarifying its policy toward Hong Kong. It’s a blunt, hard-line document that fundamentally alters the meaning of China's promise of “one country, two systems" to both Hong Kong and Taiwan.

“The ‘one country’ is the premise and basis of the ‘two systems,’” the authors declare. “And the ‘two systems’ is subordinate to and derived from ‘one country.’” Later they add, with a hint of menace, that “a socialist system by the mainland is the prerequisite and guarantee for Hong Kong's practicing capitalism and maintaining its stability and prosperity.” In other words, Hong Kong’s autonomy isn’t an inviolable principle. It’s a privilege that can be revoked at any time the central government feels its authoritarian rule is threatened.

This is not what Hong Kong was promised back in 1984, nor is it the offer Deng Xiopeng made to Taiwan back in 1979, when he suggested that “so long as Taiwan returns to the embrace of the motherland, we will respect the realities and the existing system there.” Rather, it’s a short-sighted policy change that will alienate both Hong Kongers and the students who occupied Taiwan’s legislature this spring. The latter protest movement, sparked by moves to establish closer economic ties with the mainland, took both Chinese and Taiwanese leaders by surprise. Despite China's recent attempts to charm the island through commerce and goodwill exchanges, clearly the next generation of Taiwanese remain jealous of their hard-won autonomy and much-freer political system.

A rigid line from China is almost certain to provoke more and stronger resistance in both Hong Kong and Taiwan. A better strategy would be for Beijing to get comfortable with the freedoms it's already promised to the people of Hong Kong. Its pledges to extend the same sort of flexibility and consideration to Taiwan might be a bit more believable then.

To contact the author of this article: Adam Minter at shanghaiscrap@gmail.com
To contact the editor responsible for this article: Nisid Hajari at nhajari@bloomberg.net

BLOGGING MAXIMIZED: Ten ways to beef up your business blog

THE TOP TENS

Ten ways to beef up your business blog

JEFF QUIPP

Contributed to The Globe and Mail

Published Friday, Apr. 04 2014, 5:00 AM EDT

Last updated Thursday, Apr. 03 2014, 3:20 PM EDT

These tips work.  Careful "tag" selection is also critical to build traffic.  Solicit comments and discussions.  Share your blog with followers, publish on your Linkedin site, don't be afraid to publish "pioneer" thoughts on your area of "expertise".  It is truly rewarding to give back!

Blogging an essential way for businesses to engage with past, current and potential customers. It’s a way to share ideas, impart information, solicit feedback and connect with entire communities of stakeholders. So what could go possibly wrong? Well, lots if you do it poorly.

Here are ten things to keep in mind when blogging for your business:

1. Don't overlook the importance of blogging in core marketing initiatives. Many companies view blogging as an afterthought; something to do once all of the ‘real’ work has been done. This is a mistake. In order for your blog to be effective, it needs to be treated as an important aspect of your business.

There are many ways to limit the amount of time that blogging takes. Make it a company mandate that employees write a post every month, for example, which allows you to leverage internal knowledge to create fresh content, while not taking up too much employee time. Another good idea is to have blogging meetings, where you have a number of employees write as much as they can within an hour in the same room.

2. Using the same format time and again? Don’t be afraid to switch it up. People absorb information in different ways, and using a variety of methods will allow you to appeal to varied tastes.

One common blogging myth is that a post needs to be a certain length. This simply isn’t true. If you have something to write about, write about it. Don’t let a word count limit you. And don’t think you need to stick to a particular template; experiment with different ways of presenting information -- such as incorporating an infographic, audio or video for example.

3. Keep your tone and brand voice consistent. Even though you may have multiple writers contributing to your company’s blog, you should ensure that the blog’s overall tone consistently reflects your brand. Ask yourself: Is your brand informal, fun, or edgy? Or is your brand personality more formal and to the point?

Different writers are bound to have different writing styles, but ultimately the blog exists to reflect your brand. Create a tone/best practices guide for your blog to help guide each writer. This will help ensure the voice of your brand is presented consistently throughout every post.

4. Be discriminate about guest bloggers. Guest blogging can help build brand credibility, community, and your customer base. It can also help you build relationships with people outside of your core business and get your content in front of new audiences. That said, it's important to be strategic about which guest bloggers you get. There has been a rise in people offering guest blogging in order to build links cheaply, and this can be harmful to your blog. Make sure you seek out guest bloggers who are well-respected and authoritative, produce high quality content and add value.

5. Include calls to action (CTAs). They're important because they can help direct readers to other relevant information, encourage your audience to move further along the sales process, and ultimately increase conversion rates. Be sure to include relevant CTAs in every post so it’s easy for your audience to move from one piece of content to the next relevant piece. At the very least, each blog post you publish should have a CTA relevant to the post included at the bottom, but including one above-the-fold isn’t a bad idea either – this gives readers with a shorter attention span an option for exploring what your company has to offer without having to continue reading.

6. Promote other blogs. It’s not a bad idea to give other blogs a nod when they produce high-quality, useful content. In fact, it can help you build new relationships that could be mutually beneficial for both you and the blog you choose to promote. If you see a great post that you think will be relevant to your audience, don’t be afraid to tweet or post it on your Facebook. Your interest in that bloggers’ content may well be reciprocated by way of future acknowledgement and that helps your brand reach a completely new audience through an endorsement from a trusted source.

7. Open up. This doesn’t mean you should start blogging about cars if you sell clothing. It means that you can often find topics that are timely and interesting to your readers that are not directly related to your core business functions. For example, HubSpot, a company that offers inbound marketing software, recently did a post on the rise of feminist stock photography. It has nothing to do with marketing automation, but it does resonate with their marketer-based audience. Great bloggers find this variety by looking for content sources outside of industry publications, as long as they are high-quality, innovative and interesting.

8. Add value to the news of the day. It’s important to know what others are saying about the news of the day or a particular subject. It’s equally important to add to the conversation, not just regurgitate what everyone else is saying. Your blog can be meant to act as a voice of authority on a subject, but if you’re not contributing anything valuable or unique, you will not be able to establish authority among the search engines. By providing deeper insight, other blogs, websites or social media channels may link back to you and cement your credibility on the subject.

9. Engage. Putting your thoughts out publically means anyone can read them, praise them, criticize them or do nothing at all. Your blog should welcome that and allow a platform for engagement. By encouraging potential discussion and giving readers an opportunity to provide feedback – whether it’s positive or negative - you show an interest in connecting, hearing ideas, and understanding where there may be considerations or needed improvements. While allowing comments will open you up to unwanted criticism, not allowing them could demonstrate that you have something to hide or are not interested in anyone else’s opinions. And often times, in the digital world, restricting access and staying quiet, becomes a rallying point for everyone else.

10. Check spelling and grammar. This may be common sense, but many people still don’t use spellcheck and they don’t edit their posts closely. By posting a blog with spelling and grammatical errors you defeat its purpose almost immediately. Your audience will quickly tune out and you will lose any credibility and authority you have built up. Use spellcheck, have someone else with fresh eyes read it over and make sure it’s clean before posting. Structure, formatting, flow and quality of writing all factor in.

With each blog post, ask yourself this question: if this post was the only thing influencing a potential buyer’s decision to choose my company, would I want them to read it? If the answer is no, then you need to make improvements.

Jeff Quipp is the founder and CEO of Search Engine People Inc. (SEP), Canada's largest digital marketing firm, which has been on the PROFIT 500 ranking of Canada's Fastest Growing Companies for the past five consecutive years.

IMPORT / EXPORT: US Trade Forecast Report - A bank's perspective

US Trade Forecast Report - HSBC Global Connections

The U.S. is one of the largest and most dynamic economies in the world. With a population of over 300 million people, the U.S. is a prime destination for investment by foreign companies.

The USA’s economy has experienced steady growth since 2010. This growth is being driven partly by consumers, which is feeding through to consumer goods imports. Firms are also investing and expanding capacity. Industrial machinery and transport equipment dominate exports and the country’s geographical position provides good access to the fastest growing markets in the global economy.

• Conditions are expected to improve rapidly over the next six months, with HSBC Trade Confidence Index jumping seven points to 114.
• USA’s competitiveness in transport equipment and industrial machinery gives exporters an advantage in the growing market for infrastructure goods.
• China’s rapidly growing economy will become an increasingly important market for USA exports, but Latin America will remain the most important consumer of the USA’s exports in the long-term.

Top five export destinations*

Rank	2011	2030
1	Canada	Canada
2	Mexico	China
3	China	Mexico
4	Japan	Brazil
5	UK	India

Forecast data modelled by Oxford Economics, based on HSBC Global Research macro data. *The table considers goods exports between the 23 countries in the sample.

Conditions are improving for USA importers and exporters, with 67% of survey respondents expecting volumes to rise over the next six months. This will be driven by improving domestic conditions and the rapid pace of expansion in emerging markets, despite the recent slowdown.

Equipping for growth

Why infrastructure is important

Infrastructure is vital for achieving and maintaining a high level of economic development. As an exporter, the USA benefits from growing demand in emerging markets, but it is also a significant importer of infrastructure goods.

The USA is a leading exporter of industrial machinery and transport equipment. It stands to benefit from rising global demand for infrastructure goods, particularly from emerging markets.

China will become an increasingly important market. Exports of transport goods to China is forecast to rise by over 10% pa until the 2030s.

The USA will also be an important source of demand for infrastructure goods, with industrial machinery, ICT equipment and transport equipment accounting for over half of the growth in imports in the long-term.

As a result the USA is highly ranked for both intermediate infrastructure goods and industrial machinery within our sample.

Equipping for growth (% year Growth 2013-30)

“The investment countries are making in infrastructure is phenomenal and provides a huge opportunity for businesses looking to grow and develop.

Rising middle classes across Asia’s rapidly emerging markets will drive significant infrastructure demand in the region. As China looks to scale the value chain in terms of the goods it manufactures, there is a strong opportunity for developed economies to supply sophisticated investment equipment to the country’s producers.

We expect infrastructure-related goods to increase their share of rising global trade, providing strong opportunities across both developed and emerging economies for exporters and importers of those goods and the merchandise that can be manufactured as a result.”

James Emmett, HSBC Global Head of Trade and Receivables Finance

Short-term snapshot

Trade flows should accelerate in the short-term, with 67% of respondents expecting trade volumes to rise over the next six months (up from 48.3% in H2 2012). The key driver of this rise is an expected improvement in global economic conditions, with 29% of respondents citing this as the main reason for increasing business.

HSBC Trade Confidence Index

The acceleration of growth in the USA and the impact this is having on the global economy is evident in the HSBC TCI. The Index has jumped up to 114 (from 107 previously), the highest level ever recorded. At the sectoral level, wholesale/retail companies are most optimistic about the outlook, which reflects the expected acceleration in private sector spending.

Cross border business

Although growth in emerging markets has slowed in recent months, they will still support an expansion of trade, with 20% of respondents citing Latin America and 13% choosing Greater China as the most promising regions for trade in the short-term.

Region to region trade

Corridors of choice

• The USA has good access to a wide range of export markets because of its geographical position, openness to trade and competitiveness. More than 50% of respondents report trading with Latin America, Greater China, the rest of Asia, Canada and Europe.
• Although Canada is the country’s largest export market, Greater China and Latin America are seen as the key growth markets over the next six months.
• Man-made goods (including infrastructure goods) are a key export and import into the USA, with around 75% of firms dealing in the trade of semi-finished/finished goods.
• Unlike other countries, currency volatility is not an issue for USA traders. Instead, the cost of essential services (shipping, logistics and storage) is the most common barrier to import and export growth.

Opportunities for business

Firms are well-placed to take advantage of demand for the infrastructure goods needed for economic development. They have good access to all the world’s fastest growing markets. Looking ahead, robust growth in Greater China and Latin America will result in these regions becoming increasingly important markets for USA businesses.

Long-term outlook

As the world’s largest economy, the USA has historically been a driver of global economics trends, and is forecast to grow around 6% pa on average over the period 2013-30. This remains the case today, with accelerating demand in the USA set to trickle down to other countries via trade flows. But the recent slowdown in emerging markets will have an impact on demand for USA exports, although these markets are expected to be a source of growth over the longer-term.

Corridors to watch

The USA’s nearest neighbours, Canada and Mexico, are currently its most important export markets, accounting for 19% and 14% of exports respectively. Although Canada’s importance will diminish over time as emerging market demand increases, it will still account for 17% of exports in 2030, while Mexico’s share will remain constant over the next three decades.

The fastest growing market will be China. The country’s share of USA exports will more than double over the next thirty years, from 7% today to 18% in 2040. In contrast, the importance of Europe as a source of demand will fall, with the region’s share dropping to 13% in 2030 from 20% in 2012.

At a sectoral level USA exports are driven by industrial machinery and transport equipment, which will together account for 35% of the growth in exports over the next three years. Industrial machinery is also a large component of imports, but the USA will continue to import significant amounts of ICT and transport equipment, petroleum products, clothing and apparel.

Sector contribution to increase in merchandise exports

Focus on infrastructure

• The USA is well-placed to take advantage of developing economies’ demand for infrastructure goods. Its top two export sectors (in terms of contributions to growth) are industrial machinery and transport equipment, which directly supply the goods needed for countries to develop their infrastructure and for companies to build up capital stocks.
• As a result, the USA scores highly on our goods for infrastructure and investment equipment rankings (third and second respectively), although this position is challenged over the forecast horizon.
• The USA will also remain a significant consumer of infrastructure and investment goods from abroad given its need to renew and replace the country’s existing capital stock.

Conclusion

Although the USA will face increasing competition from emerging markets over time, the rapid development of these countries will also bring new opportunities for trade. Those in China are well-known, but Latin America will also become a key market over the next thirty years.

About the HSBC Global Connections Report — Modelled by Oxford Economics:

Oxford Economics has tailored a unique service for HSBC which forecasts bilateral trade for total exports/imports of goods, based on HSBC’s own analysis and forecasts of the world economy, to generate a full bilateral set of trade flows for total imports and exports of goods and balances between 180 pairs of countries. Oxford Economics produces a global report for HSBC, plus regional reports and country specific reports on the following 23 countries: Hong Kong, China, Australia, Indonesia, Malaysia, India, Singapore, Vietnam, Bangladesh, Canada, USA, Brazil, Mexico, Argentina, UK, France, Turkey, Germany, Poland, Ireland, UAE, Saudi Arabia, and Egypt.

Oxford Economics employs a global modelling framework that ensures full consistency between all economies, in part driven by trade linkages. The forecasts take into account factors such as the rate of demand growth in the destination market and the exporter’s competitiveness. Exports, imports and trade balances are identified with both historical estimates and forecasts for the periods 2013 15, 2016 20 and 2021 30.

The model looks at two-digit classifications from the COMTRADE database, grouped into a set of thirty headings. The sector data has been tracked by country, to give an insight into the primary drivers of trade between the 25 countries and territories in the sample. The sector data has been calculated to show growth as a percentage of the overall contribution to growth, to ensure that the model highlights the sectors which are representing the biggest drivers of growth. More information about the sector modelling can be found on: www.globalconnections.hsbc.com

Oxford Economics formerly Oxford Economic Forecasting was founded in 1981 to provide independent forecasting and analysis, tailored to the needs of economists and planners in government and business. It is now one of the world’s leading providers of economic analysis, advice and models, with over 500 clients. Oxford Economics commands a high degree of professional and technical expertise, both in its own staff of over 70 professionals based in Oxford, London, Belfast, Paris, UAE, Singapore, Philadelphia and New York, and through its close links with Oxford University and a range of partner institutions in Europe and the USA.

About the HSBC Trade Confidence Index:

The HSBC Trade Confidence Index is conducted by TNS on behalf of HSBC in a total of 20 markets, and is the largest trade confidence survey globally. The current survey comprises six-month views of 5,800 exporters, importers and traders from small and mid-market enterprises on: trade volume, buyer and supplier risks, the need for trade finance, access to trade finance and the impact of foreign exchange on their businesses. The fieldwork for the current survey was conducted between May June 2013 and gauges sentiment and expectations on trade activity and business growth in the next six months.

Equipping for growth Methodology:

This report looks at the key industry sectors that contribute to an economy’s productive capacity. This will include not only trade in the intermediate goods required for infrastructure projects, but also trade in the investment equipment required by businesses to boost production.

It collects key investment-related sub-sectors into two groups, defined as “intermediate goods for infrastructure” and “investment equipment”. As the sectoral trade forecasts are based on the UN’s Standard International Trade Classifications at the two-digit level, this does present some issues in accurately defining the sub-sectors that contribute to investment, due to broad sectoral definitions.

Intermediate goods for infrastructure:

66 Non-metallic mineral manufactures

67 Iron and steel

68 Non-ferrous metals

69 Manufactures of metals

76 Telecoms equipment

81 Prefabricated buildings

79 Other transport equipment

Investment equipment:

71 Power-generating machinery and equipment

72 Machinery specialised for particular industries

73 Metalworking machinery

74 General industrial machinery and equipment

75 Office machines and automatic data-processing machines

77 Electrical machinery, apparatus and appliances

87 Professional and scientific instruments

Based on the same underlying forecasts used for the existing analysis of trends in bilateral trade flows, the report examines how exports/imports of these two aggregates are expected to evolve over time. The import forecasts for these aggregates will be linked to the underlying investment requirements of the economy, while the export forecasts will be linked to the economy’s ability to produce the investment goods required by other nations.

This document is issued by HSBC Bank plc. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. The views and opinions expressed by contributors are their own and not necessarily those of HSBC Bank plc. Under no circumstances will HSBC Bank plc or the contributors be liable for any loss caused by reliance on any opinion or statement made in this document.

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