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Interview

Building a bridge between China and USA

AmCham:
Building a bridge between China and USA

By Fernando Ferreira

The American Chamber of Commerce (AmCham) was founded in 2007 and stands at the forefront of American business development in Macau, providing insight and business connectivity, thus promoting American business interests and practices in Macau.
MDTimes spoke with Charles Choy, chairman of the American Chamber of Commerce in Macau, an organisation which includes Costa Antunes, director of the MGTO, as well as Grant Bowie, president of MGM Paradise as top official members.
The objectives of the American Chamber in Macau include the promotion of trade, commerce and investment development between the United States of America and Macau, providing a forum in which the American business community in Macau can identify and discuss common commercial interests in Macau, among others.
The purpose of the interview was to ascertain the objectives of AmCham Macau in terms of areas of interest for US investments, as well as their medium-long term objectives regarding the development of US based investments in Macau.

MDTimes – How long has AmCham been in operation and how many members do you have?

Charles Choy – AmCham Macau has been established in the year of 2007, in May, so we are a little bit older than two years, it's a young chamber. It's been composed of a group of dedicated American and local businessman and we've grown from a membership of 15 at the beginning, to now a little bit over 80, mainly corporate members.
We believe we are one of the largest foreign chambers in Macau and we've had several activities in the past, such as an Oregon wine tasting, it's part of the trade promotion, to promote Oregon wine co-hosted with the Wine Society of Macau and also one of our major participation was at the MIECF this year, that's a major promotion of environmental technologies, American technologies.
Activities wise, we are looking forward to another wine tasting function, promoting California wine at the end of August and we will have another major environmental promotion, at the next MIECF but the climax of our year will be the AmCham Ball, at the MGM.

MDT – In terms of commercial trade but also in terms of political cooperation, do you see Macau as a gateway into China?

C.C. – First of all, Macau is definitely a part of China and I think that Macau is really a gateway into China. In certain areas, that we can easily point out, such as number one, the Portuguese speaking countries platform, that Macau has been playing very well, for or on behalf of China, number two, Macau is the only gaming city on China, we enjoy a lot of freedom and a lot of business incentives that the other cities of China don't enjoy and also, Macau is and will be a gateway into China would be the new Pearl River Delta (PRD) integration, in which Macau will play a very important role and it will make Macau even more a major tourist destination.
In terms of political cooperation, that's a good question actually. We are a business chamber so I'm not sure…

MDT – But business and politics go together and business interests are connected to political aspects.

C.C. – Put it this way, as a businessman, if you have to push for the political sense, Macau is providing a good dialogue platform between China and the United States, because we have a lot of events that involve US companies and also the fact that we are working with the US community service, in this way, we are communicating, both privately and as a business platform, so in this way I think it's helping because politics is basically communicating.
Macau is playing a very active role in terms of communication between people, not so much with governments.

MDT – How and why is Macau interesting to US investors? In what areas other than gaming?

C.C. – If I put it into one major aspect, it would be growth potential. Macau, compared to a lot of cities in the world, is offering an unprecedented growth potential to businessman and also, as I mentioned before, the PRD integration is opening up a new horizon.
Macau has always been having problems with land scarcity, a similar system with Hengqin Island, with visa free entry, would promote Macau, and also this growth potential will attract investors.
Macau is enjoying a status that no other city in China is enjoying, which is the fact that we can run gaming here. Gaming itself is a good investment in Macau, using Macau's policy and benefits and through this gaming investment, we can see a lot of construction, thus construction investments, accounting and legal services.
I think these are adding up to the whole investment portfolio of American investors in Macau. And is it only gaming that nurtures American investment? I would say no. From our chambers experience, there are a number of other businesses that would like to start their ventures in Macau, such as wine sellers.
Gaming is more a initiator of business; and initiating some sort of understanding of what Macau is and what it can offer and after this gaming thing is more or less mature, we can see wine investors, also a lot of environmental technologies firms trying to get a foot into Macau and selling their technology and developing their technologies in Macau and using Macau as a gateway into the PRD region.

MDT – Can US wine compete with Portuguese and French wine?

C.C. – Well, I'm not a wine person, I'm just representing the chamber. From a personal point of view, it would be similar to Portuguese wine, more a casual wine and the price would be affordable for frequent consumption.
But I don't see it as competition but more of a diversification in the market, since Macau is trying to become an international city it should fit in different spectrums of demand, of choices; an international city is a city that's willing and able to offer choices.

MDT – In order to become the 'Las Vegas of the Orient', Macau's casino companies need to support entertainment and amusement activities. Is it a top priority for US based casinos?

C.C. – There is a good chance that amusement design companies in the US can contribute to Macau. The territory, with the continuous support and dedication to become a city of entertainment, I think that some facilitated entertainment or amusement supplements would be in high demand.
Besides environmental technology, we do have an idea to promote these businesses, which would enhance Macau's status as an entertainment centre in Asia.

MDT – Does Macau have the necessary infrastructures to support that kind of high investment?

C.C. – It takes stages. At the beginning it would be more like a service; Macau is a small city, you wouldn't be expecting a lot of hardware investments, such as hotel and gaming. These sort of design companies or environmental technology companies would be participating in Macau industry in terms of services provider.
And Macau would offer a very good and efficient platform for these companies trying to enter Macau, with things like low tax and the support of the government.

MDT – Who are your major partners here and how's your relationship with US-based casino companies?

C.C. – In the past, we've worked with IPIM, co-organising events, DSE, the Macau Chamber of Commerce, the Wine Society and local chambers as well, and Macau Chamber of Commerce being one leader in local chambers and we have a good relationship with them.
Las Vegas Sands, MGM and Wynn are all our members and regarding Wynn, Sands and MGM their vice presidents and presidents are on our board, so we have a close working relationship and they are good members of our chamber.

MDT – Has the global financial downturn affected American investments in Macau, particularly casinos, or have the poor financial results in the US dictated a reduction of gaming investments in Macau?

C.C. – Starting with the financial crisis. This crisis is a major one and no one will object to that, it affects everyone and a lot of US companies are suffering, that's true and it's something we know.
To some extent, Macau is being affected being an international member of the world but I can't talk on behalf of our members, as we play quite a neutral role, serving as a platform. But I do observe that the companies you mentioned are seeking for many ways to continue or further develop their activities and operations in Macau.
An example would be the IPO's that almost all companies are seeking for opportunities to be voted in Hong Kong and it's a very encouraging sign that these companies are trying to do more than just what they were doing in Macau.
So, what is AmCham doing here? We are not an agent, we're not a partner of these companies but the companies and their executives are participating in our events and in this sense, a more indirect sense, we are promoting a lot of communication between the government and our members.
And that's the platform we are providing. But I don't think AmCham is doing anything or should be doing anything actively.

MDT – What are the chamber's plans for the short, medium and long term?

C.C. – One of the missions that we've started out from and we still do is to get newcomers from the US, American companies and their families, to get into Macau society and integrate these two communities together, and through our events we are doing just that.
That's our medium and long term mission.

 

Business association outshines expectations the Brit way

by Sara Farr

Three years on, the British Business Association of Macau (BBAM) has seen an increase in the number of its members. It has held its first Gala Ball, which attracted hundreds and left the poms wanting for more. It has planned to set up an environment sub-committee and is looking forward to the coming years and what the SAR has to offer. The chairman, Henry Brockman, speaks with the Macau Daily Times.

MDTimes – BBAM has been set up for three years now. What progresses and developments have there been?

Henry Brockman – Progress has been step by step, but all is expanding. When you consider, compared to some international communities, how small the British investment community is in Macau, we have come a long way. In 2004/2005 there was only a hand full of us here – five or six people who would meet up for drinks and discuss business in Macau. We set up [BBAM] on July 20, 2006, and volunteers would get together on the weekend and we’d put something together. But then we found a part-time volunteer help and we opened this office. That was a big move for us in January 2008. And also since the beginning of this year we’ve also had someone full time, so that means we can increase the levels of activity that we offer to our members. But we are only ever as good as what we do for our members and whether we’re fulfilling their wishes and requires. We’re not a government office, we’re not some voice or mouth-piece of British government policy. We’re a member organisation and we try and reflect that.

MDT – Do you help companies that are interested in investing in Macau talk with the local government here?

HB – We will act as an addition channel, but we can never replace UK Trade and Investment, the British Consulate-General nor can we replace IPIM [Macau Trade and Investment Promotion Institute]. IPIM already does a fantastic job running with overseas investment inquiries and most of the time we just pass it on to IPIM. I think that mainly those companies that decided to invest in Macau and have got a business here or management here or are on the process of setting that up, they’re the ones that find us useful, because they can then meet up with other members and share common experiences of setting up and doing business in Macau and what those challenges are.

MDT – Have you found that throughout these three years, there are more British people looking to invest in Macau?

HB – The official statistics show a surprisingly low level of cross-border trade between Macau and the UK. I think we’re talking about 24 million pounds in terms of exports and imports [per year]. But that’s using the old-fashioned economics approach. If you look at bills of lading and actual goods that have been imported and exported, that’s what you’ll get. So that 24 million pounds includes a few Bentleys and a few bottles of whisky, and maybe some telecoms equipment, but not a lot else. The real level of cross-investment flow between Macau and the UK is a lot higher and continues to grow, although there has been a little bit of a pause in the last nine months.

MDT – Because of the global financial crises?

HB – The flow of money is pretty invisible. The city of London is the world’s largest financial sector, and there have been a number of foreign investment funds not only from the US, but also from the UK, that have invested in property here in Macau. In fact, the largest property investors in Macau are listed in the AIM stock market in London. So that’s already pretty significant. Plus, there are a lot of British expat professionals who work in other sectors such as architecture, engineering, construction and so forth. And that has also taken a pause in the last nine months. So yes, due to the ‘crises’. Things were expanding, but since September/October last year, I’m afraid it’s been more crises-mode. But fortunately for us, that hasn’t stopped our momentum. We continue to grow our membership. We continue to grow the number of activities we hold and we continue to grow, hopefully, our relevance. More people are coming up to our events, so that should mean our relevance.

MDT – How many members do you currently have?

HB – We have 62 members, but we have three categories in which to measure members. We have corporate member with five nominated delegates, and we have SME’s [small and medium sized enterprises], two nominated delegates and two individual members. And it’s split about one third, one third, one third. So in all, our membership base is probably nearing 200 hundred.

MDT – And what does Macau have to offer British people over Hong Kong?

HB – I think this is where the Chinese government has really helped Macau. There was an incident two or three years ago when Donald Tsang [Chief Executive of the Hong Kong SAR] was trying to persuade Beijing that he could build some casinos on Lantau. Around that time Beijing was very clear and said ‘no, Hong Kong is for financial and service industry and Macau is for gaming and entertainment.’ And since then, they have come out with further helpful direction setting for Macau, looked at the whole PRD [Pearl River Delta] and diversified the economy. But diversify the economy along existing strengths, so instead of just doing gaming and VIP, they have looked at other forms of bringing in tourists and offering entertainment and MICE industry. So what does Macau offer British? If you are a UK company specialising in those fields, then Macau is a very interesting place to invest. And if you’re a UK organisation with strong sporting links or in education, Macau is also a very interesting market. That’s on the business side.
On the personal side, when I first came to Macau in 1995, I remember meeting one or two British expats then and they felt like they were right at the end of the earth. There were very few other expats, they didn’t speak Portuguese or Chinese. It was a very small and lonely place to be. Today it’s very different. Hong Kong is a very big city and has a lot of expats, but those expats have been building up over many years, so there are the kinds of clicks, so if you’re a sporting person you join the football club, and if you’re a Brit you hang out with other Brits, and if you’re a Dane you hang out with other Danes. And there’s a kind of invisible ranking system. Macau’s different. Very multicultural, without any hang-ups and clicks. Since the 1830’s, for the first time, Macau with its expats has become very multicultural, in addition to the long Portuguese tradition. Everyone is in it together, and there’s that feeling of shared adventure in being here in Macau. So in terms of investment and to live in, Macau has a lot to offer British.

MDT – Have you received complaints on how hard or challenging it is to invest in Macau?  

HB – I think as a neutral organisation you have to be very careful about taking sides. Therefore, if we hear any of our members ‘complaining’ about doing business, that’s an opportunity for us to introduce them to new business partners or government departments they haven’t been working together with before. And helping them to realise there’s always a solution if they play within the system.
Last year we set up a specialist committee on human resources, and this year we will be setting up a specialist committee on training. Because the British Chamber of Commerce in Hong Kong have specialist committees on construction, China, retail, banking, finance, but they do not have a specialist committee on HR because it’s managed by professional, pacific HR industry in Hong Kong which runs along certain lines. But in Macau, what a lot of our members find is that senior general management and executive management in companies find that they are involved quite heavily, often on a day-to-day basis, in managing their company’s HR issues. I’m not saying that’s necessarily a bad sign. If you’re setting up in a new industry and a new market, for the first time, then getting the right team in place is pretty critical.

MDT – BBAM organises networking evenings and last year you organised the first Gala Ball. How did that go?

HB – We were really pleased with the way the ball went. We like to think it made a big splash and that people really enjoyed themselves. We didn’t go for a mega-event, we went for a human-scale human-size event with a maximum for 300 people, and I think we got 280 people at the Four Seasons. So we made a small working profit. But the priority was fun with a British accent.

MDT – Are you planning another one for next year?

HB – Yes. We think it was successful enough that we would now like to do it every year. The British community is very small here, and we have to earn the right to do what we do, so we have to do it as well as we can. So whether it’s a networking evening or business lunches or a seminar, it’s got to stand on its own two feet. We don’t want people to think they’re doing us the favour by coming along. We want people to think ‘God that was a good ball, I really want to make sure I go next time.’ Also, we raised 8,000 patacas for a charity in East Timor – ASSERT – which helps landmine victims and limbless people to have limbs fitted and to reintegrate into society. So we’re very pleased about that.

MDT – Are there initiatives to support local charities?

HB – The other initiative that we set up was to initiate a scholarship of 60,000 patacas to be paid out over three or four years to a local student. We feel that our job as a business association, we’re not experts in charity, we’ll leave it to the International Ladies Club and to others who know far more about helping charity organisations in Macau. And we will then, in our own terms, support what they do whole-heartedly. But we’re a business organisation, people came to this event and we will set up a scholarship which will help a student from Macau with a constraint economic background, who wouldn’t otherwise further themselves, to help them in their education, either for the latter part of their schooling or for university here in Macau. We’re inviting a board of trustees for that, who will then decide what kind of studies it should be.

MDT – And when will this be announced?

HB – We intend to have a press conference during the MIF [Macau International Trade Fair] to announce the whole organisation and hopefully the result of who we have chosen. So even though we have raised the money, we don’t want to rush into do it and we think the right time will be during the MIF.

MDT – BBAM is also planning an environment sub-committee. How is that coming along?

HB – We’re only as strong as what our members have time for. And with the exception of the secretariat office manager here in our office, we’re all volunteers. The two previous putative chairmen of our environment sub-committee have passed on. One unfortunately died, Andrew Stow, and the other was posted to Bangkok, Anthony Williams. So we’re just waiting for the right person to come along. The sub-committee continues to be a concern of all our members. Anyone from the international business community will always want to know how they and their business can contribute to having a more carbon-neutral impact on the economy and I think it’s always useful for an international chamber of commerce or business association such as ourselves to try and take the best of what’s been done elsewhere by our members in the other countries, and see how that can be applied here in Macau. We definitely applaud initiatives such as IIUM’s [Macau Inter-University Institute] new campus building, and others such as cleaner power for Macau, natural gas, better waste-water treatments and the clean incineration of rubbish. We’re just waiting to find one of our members with the time, energy and initiative to take it forward.

MDT – What other plans does BBAM have for the rest of this year and next?

HB – We just want to carry on doing what we do in a more professional manner, in a manner which continues to appeal to a wide range of people and community, so that we continue to be relevant to our membership. What I would love to see, would be for more new British investment and faces in Macau. Wouldn’t it have been great if four or five years ago Virgin [Atlantic] had won one of the concessions? If you look at gaming, the UK has a very long tradition on betting for sports and the leading sports betting houses in the world are British. There has been a lot of talk recently about how the new administration from 2010 onwards will be opening up the sports betting concessionary field in Macau. And if that were to be the case, that would be a great opportunity for well-known British names to come to Macau.

MDT – Are you concerned about the change in the SAR’s government?

HB – No, certainly not. I think continuity is a good thing. Macau has been one of the most successful places on earth in terms of GDP growth in the last five years. And if it’s one of the most successful places on earth, what’s wrong with continuity? I think the naysayers and grumblers are the ones looking at the unsustainable growth and unsustainable expectations of both growth and pipeline of growth and then became disappointed when they couldn’t be fulfilled. But if you look at the actual double-digit that has taken place, and which will continue to take place, that’s pretty darn successful in my book. So well done to the Macau government.

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