Hong Kong Management Consulting Service for China

1
Speaker Mr. K K Yeung, JPFCMA, FCCA, FCIS,
FCPA (Practising)Chairman, Management
Consultancies Associationof Hong KongVenue
FEACO European Annual Conference 2006, Congress
Park Hotel Flamenco, Budapest, HungaryDate 9th
November, 2006

• Hong Kong Management Consulting Service for China
  
• the Prospective Worlds Factory

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China and Hong Kong Relations
Year Year Year Year Year
1997 British handed over sovereignty over HK to China 1997 British handed over sovereignty over HK to China 1997 British handed over sovereignty over HK to China 1997 British handed over sovereignty over HK to China 1997 British handed over sovereignty over HK to China

GDP 1980 2005
(100 Million) (6th 5 year) (11th 5 Year)
China (1) Euro 452 Euro 18,232
HK (2) Euro 143 Euro 1,382
FDI Hong Kong (3) FDI Hong Kong (3) FDI Hong Kong (3)
Year 2002 2003 2004 2005 2006 Amount (US billion) 9.7 13.6 34.0 35.9 20.66 Quarter 1 to Quarter 2 preliminary figures Year 2002 2003 2004 2005 2006 Amount (US billion) 9.7 13.6 34.0 35.9 20.66 Quarter 1 to Quarter 2 preliminary figures Year 2002 2003 2004 2005 2006 Amount (US billion) 9.7 13.6 34.0 35.9 20.66 Quarter 1 to Quarter 2 preliminary figures Year 2002 2003 2004 2005 2006 Amount (US billion) 9.7 13.6 34.0 35.9 20.66 Quarter 1 to Quarter 2 preliminary figures Year 2002 2003 2004 2005 2006 Amount (US billion) 9.7 13.6 34.0 35.9 20.66 Quarter 1 to Quarter 2 preliminary figures

Source (1) National Bureau of Statistics of
China (2) Hong Kong Census and Statistics
Department (3) Hong Kong Census and Statistics
Department
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China and Hong Kong Relations

• Chinas Road Map to World Industrial Power
• Deng Xiao Ping (??? era) (Late 1970s -1992)
• Late 1970s 4 Modernization Socialist Market
  Economy
• 1979 JV Laws introduced
• 1986 WOFE Laws introduced
• Jiang Ze Min (??? era) (1993-2003)
• 1990s State Enterprise Reform
• 2001 WTO Accession
• Hu Jin Tao (??? era) (2003- till now)
• 2004 Green GDP
• 2005-2006 Macroeconomic control measures
• 2005 ????
• 2005 Self-developed technology

Source K K Yeung Management Consultants Limited
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Hong Kong as Catalyst to Chinas Growth

• HK Trade (HK million) 2003 2004 2005
• Imports from China 785,625 918,275 1,049,335
• Domestic exports to China 36,757 37,898 44,643
• Re-exports to China 705,787 850,645 967,923
• HK Investment into China Rank No. 1 in 2005
• HK employment in China 237,500 residents in
  2005
• HK enterprises employees in China over 11
  million
• HK factories in PRD Over 60,000
• HK Port container throughput 22,602,000 TEUs
  in 2005
• Pearl River Delta

Source K K Yeung Management Consultants Limited
5
Hong Kong High-tech Exports

Hong Kongs Merchandise Exports of High-tech
Products
US billion
Remarks Classification of high-tech products
according to standards promulgated by the OECD
and Eurostat Source Census and Statistics
Department, Hong Kong SAR Government
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China Factor World factorys demand for
technology
1st
Computers (e.g. PCs and notebooks)

Computer parts

Computer input./output units (incl. Printers scanners)

Digital storage units (incl. Floppy/hard/optical disk drives)

TV sets (incl. Plasma LCD TV

Video record/reproducing apparatus (incl. DVD players)

Digital still image/video cameras (e.g. digital camera)

Sound recording apparatus (incl. MP3 players)

Transmission apparatus (incl. Mobile phones)

Telephonic or telegraphic switching apparatus

Motors generators (incl. Micro motors)

Liquid crystal devices (not consulting articles)
1st
1st
2nd
2nd
China as the worlds largest exporters (selected
item rankings)
1st
2nd
3rd
2nd
2nd
2nd
2nd
Source China Statistics Yearbook on High
Technology Industry 2005
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China Factor Mainland as a source of technology
Technological Manufacturing Activities on the
Mainland
(Total 4,535 patents in 2004)
Source China Statistics Yearbook on High
Technology Industry 2005
8
Management Consulting Movement in China

• Pre-11th 5 Yr Plan
• - FDI related consultancy
• - Inward technology transfer
• - Plant installation related
• - Invest China
• - Training
• Post-11th 5 Yr Plan
• - Outward investment related consultancies
• - Outward technology transfer
• - China invest
• - More training

Source K K Yeung Management Consultants Limited
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Chinas Training Needs

• Reshape industry structure
• Upgrade workforce to stay competitive
• Shortage of talent

• Serious staff turnover
• Hunt for foreign talents
• Training as an alternative

Source MCAHK/HKTDC Joint Study of 15th June, 2006
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Chinas Training Market
Market Segment Price Reference
Open Class Training Courses Euro 100-150 per person per day
Customised Training Courses High-end Middle-end Low-end Euro 3,000-5,000 per day Euro 1,500-2,500 per day Euro 1,000 per day
Trainers High-end Middle-end Low-end Euro 3,000 (or more) per day Euro 1,500-2,999 per day Euro 1,499 (or less) per day
Source MCAHK/HKTDC Joint Study of 15th June, 2006
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Targets by Industry Sector

• Manufacturing companies
• Trading companies

• Financial services companies
• Government

Source MCAHK/HKTDC Joint Study of 15th June, 2006
12
Hot Offers

• Leadership, strategic management
• Interpersonal skills (communications, teamwork,
  etc.)
• Negotiation skills
• Presentation skills
• Problem solving / decision making

Source MCAHK/HKTDC Joint Study of 15th June, 2006
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Target China Cities

• In Trade Development Councils survey, Shenzhen,
  Guangzhou and Shanghai are the most popular
  places to which Hong Kong companies export their
  training services. Shanghai and Beijing are seen
  as having better prospects over the next 1-3
  years.

Source MCAHK/HKTDC Joint Study of 15th June, 2006
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Privileged Market Access Under CEPA

• Foreign companies provide training courses to
  users on the mainland mostly in the form of
  customised programs for individual companies via
  setting up management consultancy companies on
  the mainland. Foreign companies are not yet
  allowed to set up wholly-owned consultancy
  companies on the mainland. However, CEPA enables
  Hong Kong companies to set up wholly owned
  consultancy companies on the mainland.
• Personnel intermediary agencies may offer open
  class training courses. Nevertheless, only
  minority foreign joint venture personnel
  intermediary agencies are allowed presently. In
  contrast, CEPA enables Hong Kong companies to set
  up majority-owned joint venture personnel
  intermediaries.

Source MCAHK/HKTDC Joint Study of 15th June, 2006
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China Training Case Study 1

• Client
• A leading worldwide container shipping company
  from France. The client has 60 people in
  Shenzhen
• Participants
• Original training needs identified for 2 groups
  of people, namely
• 1. Basic Level
• - For Sales Team
• - For Customer Service
• 2. For Supervisory/Executives
• - For Supervisors/Managers
• Recently, the consultants conducted a Leadership
  Skill training for their South China staff in
  Xiamen
• and also a Quality Selection Interview Skills
  program in Shenzhen and Xiamen.

Source Dew-Point International Ltd.
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China Training Case Study 2

• Client
• A worldwide shipping organisation with more than
  100,000 employees and offices in over 125
  countries, global headquarters in Denmark
• Recently, the consultants conducted a Sales Image
  workshop (2-Day Program) for their staff in
  different regions as below
• 1 Class in Shenzhen
• 1 Class in Shanghai
• 1 Class in Hong Kong

Source Dew-Point International Ltd.
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China Training Case Study 3

• Client
• A Banking Group in Shenzhen, headquarter based in
  Shanghai
• Training Programs included
• Customer service skills for tellers
• Coaching skills for supervisors

Source Dew-Point International Ltd.
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China Training Case Study 4 -Business
Improvement Program (BIP) Seminar

• Client
• A Hong Kong toy company with 3,000 staff factory
  in Dongguan (South China)
• Objectives
• To confirm the companys aim and mission
• To develop and increase competitiveness
• Participants
• 11 senior and middle managers in Hong Kong /
  China
• Contents
• Various management topics
• Case studies
• SWOT analysis
• Business plan

Source K K Yeung Management Consultants Ltd.
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China Training Case Study 5 Seminar on China

• Client
• An international textile company listed on the
  Amsterdam Stock Exchange with over 8,000 staff
  worldwide
• Objectives
• To provide an overview of the investment
  environment in China
• To share experience on the latest MNCs
  strategies in China
• Participants
• Total 11 participants including the President
  CEO, CFO and Managers from various subsidiary
  companies
• Contents
• Introduction
• Creating a prominent presence in China
• Case studies
• Country presentation
• Workshop SWOT Analysis
• Workshop Development plan in China
• Conclusion

Source K K Yeung Management Consultants Ltd.
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Management Consultancies Association of Hong
KongWrite Up
One distinctive feature of Hong Kongs services
sector is the importance of business to business
services. Management consultancy is one such
important service, but its extent and scope was
not clearly understood by potential users.
Therefore, the Hong Kong Coalition of Service
Industries (HKCSI), the service policy think tank
of the Hong Kong General Chamber of Commerce
(HKGCC), commissioned the University of Hong Kong
to undertake a study of the current and future
place of management consultancy in relation to
Hong Kongs competitiveness, together with an
analysis of how the sector might be promoted.
The study was funded by the Services Support Fund
of the HKSAR Government in October 1997 and
completed in early 1999.   The academic team was
led by Professor Michael J Enright and Dr Edmund
R Thompson, who came to a very clear conclusion
The Next Revolution in Hong Kongs Economy will
not be a Technological Revolution, but a
Managerial Revolution. Management consulting
adds value to Hong Kong through its own sales and
expenditures, through the revenues and profits
brought back to Hong Kong from exports, through
the increased competitiveness of its local client
base, and through its ability to transfer global
best practice management tools and techniques to
the local business environment.   In view of the
importance of the management consultancy sector,
a key recommendation from the survey was to
advocate collective action to promote the
management consultancy sector through the
creation of an association to speak for the
industry. As the representative for the
industry, the association would carry greater
weight in interacting with government,
educational institutions and other organisations
at home and abroad.   The Management
Consultancies Association of Hong Kong (MCAHK)
was therefore formed in April 1999 with the
assistance of the HKGCC and support from the
HKSAR Government. The purposes of the
association were to provide a central body for
inquiries particularly overseas parties who
wished to use the services of Hong Kong based
consultants, to provide a networking and
educational arena for local consultants, to be a
conduit for information, and to act as a
representative for issues pertaining to
management consultants.
Source Management Consultancies Association of
Hong Kong
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Professional Guidelines

• Confidentiality
• A member shall treat client information as
  confidential and will not take advantage of
  privileged information gathered during the
  professional work undertaken
• Professional Competence
• A member shall only accept work for which he/she
  is competent and (where applicable)
  professionally qualified
• Assignment Clarity
• A member shall ensure that, before accepting an
  assignment, the objectives, scope, deliverables,
  workplace and fee arrangements are mutually
  understood and agreed.
• Independence
• A member must be able to conduct each assignment
  objectively. He/she should not be biased by any
  stakeholder about any aspect of the clients
  thinking which could alter the impartiality of
  the members advice.
• Conflicts of Interest
• A member shall not represent himself as an
  independent evaluator and at the same time accept
  commissions or other benefits from others in
  connection with a recommendation to a client
  regarding services or products without the
  clients knowledge and consent.
• Proprietary Materials
• We recognize our responsibility to the profession
  to share with our colleagues the methods and
  techniques we utilise in serving clients. We
  will not knowingly, without their permission, use
  proprietary data, procedures, materials, or
  techniques that other management consultants have
  developed but not released for public use.
• Client Relations
• We will not make offers of employment to
  employees of clients without prior consultation.
  If we are approached by employees of clients
  regarding employment in our firm or in that of
  another client, we will make certain that we have
  our clients consent before entering into any
  negotiations with employees. When consultants
  change employers, they have a responsibility to
  fulfill or adequately transfer the clients
  contacts and assignment details prior to
  termination.
• Professional Reputation
• We will respect the professional reputation and
  practice of other management consultants. This
  does not remove the moral obligation to expose
  unethical conduct of fellow members of the
  profession to the proper authorities.
• We will strive to broaden public understanding
  and enhance public regard and confidence in the
  management consulting profession, so that
  management consultants can perform their proper
  function in society effectively. We will conduct
  ourselves so as to reflect credit on the
  profession and to inspire the confidence,
  respect, and trust of clients and the public.

Source Management Consultancies Association of
Hong Kong
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Thank You