Asia

The New Manila Bay City of Pearl is Hong Kong architectural firm hpa’s most scaleable mixed-use project, says Deputy Managing Director Nicholas Ho. This “smart city” is an example of the Belt and Road Initiative’s backbone development and the reason why the Philippines chose Hong Kong professionals with an international outreach. hpa is going on to spread its expertise across Asia and the Middle East.

Speaker:
Nicholas Ho, Deputy Managing Director, hpa

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

Hong Kong-based Taiping Reinsurance is involved in risk assessment and abatement for multi-billion US dollar projects across the Belt and Road Initiative, including an oil extraction project in Myanmar, metro rail development in Malaysia and hydroelectric power in Pakistan. General Manager Polly Ho says the company is a “protection provider” for clients, while Hong Kong can build on its role as a re-insurance centre for international firms.

Speaker:
Polly Ho, General Manager, Taiping Reinsurance Co Ltd

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

Zai Lab is a high-tech bio-pharmaceutical company headquartered in Shanghai, with a background of innovative medical R&D. Through cooperation with the world’s top multinational companies and R&D institutions, Zai Lab s relatively established preclinical medicine for joint research, and builds product series through concurrent internal R&D and licensing. For Zai, global data transmission is vital to its daily business. The company is highly demanding of its network environment and Internet accessibility.

HKT provides ICT solutions to a number of the world’s top 500 companies and serves many famous pharamaceutical enteprises. The project team gained extensive experience of MPLS VPN solutions tailored to the needs of Zai Lab.
HKT’s experienced consultant team was able to take overall control of the project and solve problems arising during the implemenation. For example, by coordinating departments including the Resources Department and the Engineering Department, the team was able to complete the project ahead of schedule.

The MPLS VPN solution which HKT provided to Zai Lab has improved their Internet accessibility significantly. The experience of the staff in accessing other regions’ websites has also been enhanced, while data transmission has become faster, more stable and more secure.

In response to the “Belt and Road” policy, Zai Lab plans to expand its business worldwide.

Prosper Construction Holdings, a Hong Kong-based contractor that provides marine construction services, offers its expertise to both the private and public sectors in different parts of the world. Since its inception in 2001, the company, which operates in the name of its flagship company Hong Kong River Engineering Company, has completed various large-scale marine infrastructure projects in Hong Kong, Macau, Southeast Asia, the Middle East and Africa. Many of these projects are located in countries or regions along the Belt and Road route. 

One of the Belt and Road projects recently completed by Prosper Construction involves a cement production plant in Indonesia, which was put into operation in August 2016. Located in Manokwari, the capital of the province of Western Papua, the plant is funded by two Chinese enterprises, the State Development and Investment Corporation and Anhui Conch Cement Company. The joint venture between the state-owned investor and Anhui Conch Cement, a private enterprise that is China’s largest cement maker by market value, is a typical form of partnership for Belt and Road initiatives. 

The establishment of the cement plant is expected to help meet Indonesia’s surging demand for infrastructure projects. It is also set to help ease cement price pressure especially in Papua, the easternmost province of Indonesia bordered by West Papua. The long distance between Papua and the main cement-producing regions of Indonesia means cement prices in Papua are among the highest in the country.

With a price tag of US$300 million, the cement factory has an initial capacity of 1.5 million metric tons per annum. The project comprises various features, including production structures, lighting and power supply and communication facilities, and marine facilities. Prosper Construction was responsible for the marine infrastructure, which consists of several berth platforms, an approach bridge and a cargo terminal. The company’s Hong Kong team played an important role in winning the contract to build the marine infrastructure. Leveraging their industry knowledge, technical knowhow and network of contacts, the team members prepared the tender proposal and arranged for experienced consultants to design the plans of the infrastructure. 

In implementing the project, Prosper Construction faced different challenges, including the tight work schedule and harsh sea conditions. Nevertheless, the Hong Kong contractor managed to complete the project without a hitch, demonstrating the efficiency and resilience of a Hong Kong company with substantial experience in its trade.

Established in Hong Kong more than 20 years ago, On Time Express Ltd (OTEL) is a leading provider of freight forwarding and logistics services with a global presence. In 2014, OTEL set up a specialised eTotal team to handle small-sized parcels and develop e-commerce logistics solutions. Leveraging OTEL’s extensive logistics network, eTotal provides e-tailers with a comprehensive logistics solution that includes booking for air and sea freight shipping services, overseas warehousing, delivery by local post and localised pre- and after-sales services.  The services  are aimed at streamlining the order management process and reducing transportation time. 

eTotal has established close partnerships with leading e-commerce operators including Alibaba’s Cainiao Network. With the help of eTotal, in just one year, the shipping time of small-sized parcels travelling from China to Russia has been reduced from 30-45 days to 15-20 days, with some even arriving in 5-7 days. 

eTotal owns warehouses in Shanghai, Beijing, Shenzhen and Hong Kong, and processes close to 100,000 parcels  (or 10 tonnes of goods) daily. The company offers air charter services during peak seasons. Apart from strengthening existing partnerships and optimising routes and services, eTotal also supports the Belt and Road Initiative by connecting more e-commerce platforms and sellers, and expanding into the Central Asian and European markets, in order to offer a more comprehensive logistics services package for cross-border e-tailers. The exponential growth of cross-border e-commerce business in recent years is dependent on modern cross-border logistics. The Belt and Road Initiative facilitates international trading and provides unlimited opportunities for the development of cross-border logistics and e-commerce.

With its strategic location at the heart of Asia, state-of-the-art infrastructure, advanced IT application and extensive land, sea and air transport networks, Hong Kong has long been a global logistics and supply chain hub and a gateway for Chinese mainland enterprises to explore Belt and Road opportunities.

An international logistics services provider based in Hong Kong, On Time Express Ltd (OTEL)’s  business includes air freight, sea freight, warehousing, delivery, supply management and supply chain consultancy. As the China-Europe Railway Express (CR Express) freight transportation service matures, OTEL’s rail services are also improving, providing a more convenient and environmentally-friendly logistics solution in addition to air and sea freight services to its clients. 

Launched in 2011, CR Express offers fast-track cargo rail transportation services between China and Europe. As a key to facilitating Belt and Road connectivity, CR Express has been renowned for its shorter lead time, high freight volume, convenience, safety and efficiency. CR Express now provides services to up to 10 Chinese mainland cities, including Chongqing, Zhengzhou, Chengdu, Wuhan, Suzhou, Yiwu, Hefei and Harbin. Its network has also expanded to major economic zones in 11 different countries, including Duisburg and Hamburg in Germany, Cherkessk and Chelyabinsk in Russia, Pardubice in Czech Republic, Warsaw, Łódź and Małaszewicze in Poland, Madrid in Spain, Rotterdam in the Netherlands, and Brest in Belarus.

In recent years, the number of returning trains has increased significantly and some of the routes started providing regular services including: Hamburg, Germany to Wuhan; Brest, Belarus to Suzhou; and Madrid, Spain to Yiwu. This presents a new logistics model for the import of European cargo and reduces operational costs for the cargo rail operator. The variety of freight shipped via CR Express has expanded from electronics such as mobile phones and computers to clothing, vehicles, auto parts, food, wine, coffee beans and wood. 

Working together with CR Express, OTEL provides a one-stop solution for FCL (full container load), LCL (less container load), customs clearance, trailer transport, warehousing, insurance, overseas door-to-door delivery and container return at different locations. OTEL has long-term storage agreements with warehouses at Chinese ports such as Zhengzhou, Chengdu, Wuhan, Suzhou, Yiwu and Xian. With overseas truck services covering Europe and the Middle Asia, onward truck transhipment is also provided in hub areas including Duisburg and Hamburg in Germany, Warsaw and Małaszewicze in Poland, and Brest in Belarus. International clients of OTEL ship items including clothing, auto parts, industrial products and electronics. As cross-border e-commerce business continues to flourish, OTEL has rolled out a tailored railway shipment solution to fulfil their e-commerce clients’ demand for direct, low quantity and high frequency transactions.

BillionGroup Technologies Ltd, an energy and environmental consultant in Hong Kong founded in 1991, has established an international presence through providing public and private sectors with a diversity of consultancy and implementation services related to energy conservation and pollution prevention.

The consultancy firm’s clientele spans different parts of the world, including Hong Kong, the Chinese mainland, other parts of Asia, Europe, Africa and Americas. In 2012, it made its first foray into Bangladesh, a country covered by the Belt and Road Initiative, to oversee the operational efficiency of six local factories. Recently, BillionGroup entered into deals with the commercial sectors in the Asian-Pacific region. With the support of governments including that of Bangladesh, the Hong Kong company provides green consultancy services for a variety of development projects.

BillionGroup’s services in the on-going package scheme cover an extensive scope. Leveraging its expertise and the fruits of its research in innovative energy-saving solutions, led by founder and veteran engineer Ir Steve Wong, BillionGroup strives to help the public and private sectors of Belt and Road countries, including Bangladesh, Indonesia, Malaysia, Myanmar, Timor-Leste, Thailand and Vietnam, to create a greener environment and higher operational efficiency.

The services provided by BillionGroup include the introduction of smart lighting to factories in Dhaka to achieve an estimated 95 percent cut in electricity costs, as well as an integrated airport baggage handling system, of which the cross-belt sorting technology can boost throughput by 300 percent. The system can also reduce energy costs by 33 percent and minimise the number of cases of mishandled luggage. There is also a waste-to-energy conversion scheme designed to convert 20,000 tons of urban waste to generate about 11,800 tons of organic fertilisers.

The projects are expected to help raise the living standard of people in Bangladesh and other Belt and Road countries, where energy infrastructure is insufficient and operational efficiency and environmental conservation are not always the priorities in urbanisation projects. BillionGroup’s leading role in the projects exemplifies how Hong Kong green consultants can make use of its substantial knowledge in ‒ and access to ‒ advanced technologies to help neighbouring countries along the Belt and Road routes move forward in the 21st century.

Pinsent Masons, an international law firm with a presence in Hong Kong for more than 30 years, represented a mining company and a power company involved in the Thar II project in Pakistan, one of the first projects to be financed under China's Belt and Road Initiative and the first of the planned US$ 46 billion of investments under China-Pakistan economic cooperation agreements.

Completed in 2015, the Thar II project includes the US$ 700-million development of the Thar Block II coal mine, and the US$ 821-million financing of the associated 2 x 330 MW power station.

The project involved a hybrid of Chinese and Islamic financing and two financings (financing for the power station of USD$821 million and financing for the mine of USD$700 million), comprising a combination of Chinese credit from Sinosure, with additional conventional and Islamic Pakistan rupee tranches.

The mining company represented by Pinsent Masons is a joint venture between the government of Sindh, Engro Corporation, various Pakistan and Chinese strategic and financial investors, and China Machinery Engineering Corporation (CMEC); the power company is a joint venture between Engro, CMEC and a financial investor.

Pinsent Masons' lawyers served as the bridge connecting the infrastructure needs of Pakistan with the development capability of China. The lawyers have long been advising on the delivery of complex infrastructure around the world in some of the most challenging environments. The successful delivery of this project has demonstrated the unique expertise of the firm’s Hong Kong partners, who have deep understanding of international infrastructure project financing and experience of advising Chinese investors on their outbound investments. Hong Kong has long been regarded for its tradition of rule of law and advanced legal profession, and the involvement of Pinsent Masons' Hong Kong team enabled the firm to bring such values and qualities to the delivery of the project.

King & Wood Mallesons (KWM) advised on the launch of the first sovereign wealth fund jointly established by China and the United Arab Emirates. The establishment of the fund will significantly strengthen the cooperation between China and the United Arab Emirates, promote collaboration on the Belt and Road strategy, and enhance the international cooperation on capacity and equipment manufacturing.   

The fund was jointly established by China Development Bank Capital Corporation Ltd (CDB Capital), the State Administration of Foreign Exchange, and Mubadala Development Company of Abu Dhabi. Launched in December 2015, the fund will invest into energy, infrastructure, high-end manufacturing, clean energy and other high-growth industries. 

This deal was innovative in the design of its establishment mode and investment strategy. The fund was established by the subsidiary investment institutions of each government, therefore requiring careful consideration of the policies on currency and foreign exchange. 

The investment advisor (IA) of the fund is based and operates in Hong Kong. Therefore, Hong Kong law was used as the governing law for all key fund documents for the IA, covering issues from internal compliance to the IA's daily operations. 

KWM acted as the PRC and Hong Kong legal counsels for CDB Capital. KWM provided a one-stop service including negotiations with sovereign parties, offshore analysis, fund structuring and fund formation advice, regulatory compliance requirements and anti-trust law related advice. 

KWM’s Hong Kong team of lawyers advised on a wide range issues in connection with the fund’s formation and its subsequent operations such as SFC license issues, leases, employment law issues, etc. Drawing on the experience of the KWM team (many of whom are qualified in both PRC law and common law jurisdictions), their bilingual language capabilities and knowledge of working with Chinese businesses, KWM was able to work seamlessly with the Chinese parties and the Middle East sovereign wealth fund.

This transaction was short listed for the award of “Innovation in Corporate & Commercial Law (Asia-Pacific headquartered law firms)” by the Financial Times Asia Pacific Innovative Lawyers 2016 Awards. The KWM team was led by Beijing partner Gong Mulong and Beijing/Hong Kong partner Helena Huang, with support from Hong Kong partner Guo Sun Lee and Beijing partners Liu Cheng, Liu Zhigang, Wu Wei and Tang Yingmao.

iQ Energy, a Hong Kong-based company that specialises in providing recycling services in Hong Kong and metal-scrap trading in overseas markets, has recently branched out to trading energy-efficient lighting products. The company closed a  deal to sell their latest Ceramic Nano Light to ZharykNur Media Ltd, a construction company in Kazakhstan after participating in the HKTDC Hong Kong Business Mission to Astana and Almaty, Kazakhstan on 17-22 May 2016. With the country’s property market developing rapidly, the demand for outdoor and street lighting as well as commercial lighting has been rapidly growing. According to project manager Roy Lee, the Kazak government encourages SMEs to be involved in development and infrastructure projects by providing financial support. Given the specific conditions of the Kazakh market, he thinks Hong Kong companies excel in understanding local culture, “translating” international documentation standards and trade practices to local partners, and creating a sustainable market for products made in China and elsewhere.