Bulletin Board
PANGAEA.Talk.NEWS(tm)
December 1995 issue
HONG KONG and CHINA -- The omnipresent countdown is visible as PRC prepares to reclaim Hong Kong on July 1, 1997. A recent visit to Beijing and the clock in Tiananmen Square says a lot. This looming transition still poses many unanswered questions about the business climate. And from what we hear, PRC's presence will be felt. But controversy abounds. Fortune magazine warns, "it's over" for Hong Kong despite previously ranking it as one of the best cities for business. However, a recent survey by the Heritage Foundation puts Hong Kong at the top of free market economies. (The Heritage report measured 10 criteria for economic freedom, including: trade, tax, government spending, monetary policy, capital flow and foreign investment, banking policy, wage and price controls, property rights, regulation and black markets. While Singapore was also rated a ``free'' economy, it trailed Hong Kong because of its higher corporate tax rates.) Moreover, with the threat of newcomers such as Vietnam, Indonesia and others, there is growing competition in the region. We can only wait and see. We welcome your (Source: YOUR LINK HERE)
WARSAW, Poland -- Consumer confidence on the rise, according to a recent poll commissioned by the Rzeczpospolita daily. As a result, consumer interest in spending is also increasing. Almost half of the nearly 1,000 people polled this November ('95) thought Polish matters were moving in the right direction; one third expected Poland's economic situation would improve in the next 12 months. 16% said their finances improved over the last year and the amount of optimists for the next 12 months was twice that About 25% of Poles expected to be able to save some money next year and nearly 33% said that now was a good time to buy durable goods. These levels were the highest found in 1995 according to Demoskop Institute. (Source: YOUR LINK HERE)
VIETNAM -- A recent trip to Vietnam revealed some surprising barriers to the adoption of internet connectivity in Vietnam. Common wisdom tells us that control of controversial or subversive information (political issues) would be a tremendous threat to communist party control. But it appears that control of profits (which are expected to be quite sizable) is among the leading barriers at this time. (A concern consistent with an open market economy.) There appears to be an ongoing battle between the Ministries of Post and Telecommunications and the Institute of Information Technology, which controls the industry at this time. There are an estimated 600 internet users now in Vietnam; the number is reportedly doubling every quarter. In a recent (November '95) visit with business and political leaders in Vietnam, PANGAEA(tm) received tremendous support from private companies and political leaders interested in and who understand the importance of doing business online -- or through the internet when it became available. Moreover, the government has practically eliminated duties on PCs to encourage citizens and businesses to buy and use them. The internet is coming.(Source: YOUR LINK HERE)
BERLIN, Germany -- Construction sites are changing the face of Berlin. While the number of sites varies from one source to the next, the numbers range from 900 - 1,400 in the downtown area, to about 3,000 throughout the entire city. Among the biggest projects, there are about 300+, with an estimated total value of US$20-40 billion. The city's government and business district features the work of more than 150 architects from 11 countries. Berlin (once a city divided) plans to become the site of unification, housing important government and industry headquarters in Germany. Locally, these projects are creating new jobs, housing, recreational facilities, transportation links and more -- all this, in step with the ecological concerns. For the international business community, this represents tremendous opportunities (office space, showrooms, sales opportunities, etc.) as well and a boost to our global economy. (Source: YOUR LINK HERE)
SAO PAULO, Brazil -- Procter & Gamble opened its largest Latin American plant in Brazil (27. Nov. '95) to make medicine and personal hygiene products for the region. Consumer products giant, P&G has invested $250 million in Brazil since 1988, when it started operating in the country through the acquisition of Perfumery Phebo. (Source: YOUR LINK HERE)
JOHANNESBURG, South Africa -- Late November '95, South Africa signed taxation agreements with Canada and Russia as part of an ongoing bid to attract foreign investors, the Finance Ministry said. The country has existing agreements with 22 other nations; most recently they signed a similar treaty with Lesotho and Italy. Six other treaties are also near completion and others are being negotiated. The agreements limit taxing jurisdiction in order to increase commercial activity. (Source: YOUR LINK HERE)
JAKARTA, Indonesia -- In a position to become the leading tire producer in Southeast Asia. Indonesia produced nearly 12 million automobile tires in 1994, up from 9 million the year before. It is expected that tire production will triple by 1997 due to plans by major multinational tire makers such as Japan's Bridgestone and Sumitomo Rubber, the US' Goodyear, Germany's Continental and others. The excess production (beyond the approximately 9 million domestic tire sales) is planned for export. But with rising Indonesian wages, there is concern about keeping global market prices competitive with growing exports from Vietnam and Myanmar. Extra capacity will be difficult to absorb domestically as new car sales grew only 6% through October '95. At the same time, Indonesian government lowered tariffs on tire imports and plans to cut duties to below 20% in 1998. Indonesian tire makers fear a glut at home, causing reduced tire prices domestically and increased competition caused by global players. (Source: YOUR LINK HERE)
ASIA -- Consumerism in Asia is expanding with a flood of consumer goods and services; advertising budgets are increasing accordingly. Ad spending in Asia was estimated at about US$75 billion in 1994, growing about 15% per year on average. But in some Asian markets ad spending is growing very rapidly. Spending in China was estimated at $2.8 billion last year and expected to increase to $13 billion by 1997. The India Advertising Association reports that local ad spending increased 50% this year from last. And much of this business is going to established international agencies (such as Saatchi & Saatchi, Young & Rubicam, McCann Erickson and others). For multinational advertising agencies expanding in Asia, there is good news. It is expected to get easier as Asian governments begin to liberalize their policies on advertising to comply with international trade agreements. Currently, only Japan, South Korea, Taiwan and Hong Kong are (regarded as) fully open to foreign advertising agencies. Moreover, in many Asian countries, there is a lack of trained advertising professionals. (Source: YOUR LINK HERE)
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