Close by the Beijing-Kowloon railway line which runs through the suburbs of the southeastern Chinese city of Nanchang, is one of land-locked Jiangxi province's business success stories. A floriculture center run by the Jiangxi agriculture department annually provides 24 million quality seed plants, 900,000 quality seed balls, and 600,000 potted flowers from a 320 million unit tissue culture base, making the center a leader in the province's flower-and-plant trade. Not content to rest on its laurels, the center aims to boost its capability by seeking investment to increase its tissue culture base by some 200 million units. The project will involve the construction of 2,500-square meters tissue culture housing and 400,000 square meters of photo-nursing greenhouses plus the purchase of auto-control equipment and tissue culture instruments. The additional product will be marketed in the Chinese southeast and the coastal cities of China, with consequent benefits for local employment and prosperity as well as the investing agency. The project is just one the province of Jiangxi, as part of the Chinese delegation, will promote at the upcoming APEC Investment Mart to be held in Seoul, Korea, June 2nd to 5th, under the theme "The New Asia-Pacific: Investor's Choice for the 21st Century." At the Mart, all 21 member economies of the Asia Pacific Economic Cooperation representing a market of almost three billion people, will present through the medium of government pavilions what are in many cases vastly reformed investment regimes designed to create greater accessibility and transparency for foreign business. The more welcoming and stable environments for foreign investment the region will portray at the Mart come in the wake of, and is in direct response to, the Asia-wide crisis that has devastated some economies, depressed demand in others, wreaked political havoc in some areas, and generally threatened to eradicate the economic and social advances achieved in the region over the last 30 years. For example, while Chinese GDP increased in excess of 10 percent in 1998, personal consumption actually contracted by more than one percent. Should Jiangxi and other regional and central governments together with the corporations who accompany them be successful in attracting active interest from the more than 3,000 potential investors who are expected to attend the Mart, then the region will have made a significant advance in turning the tide of economic calamity which threatens to overwhelm them. Economic Dynamism No country has made more wrenching changes, societal, economic and legislative, to overcome its difficulties than Korea. No wonder then, that the initiative to hold the Mart to provide a showcase of reform and the resultant opportunities to attract much needed infusion of foreign capital and expertise should come from Korean president Kim, Dae-jung. President Kim proposed Seoul host the Mart during the APEC leaders' summit meeting held in Kuala Lumpur in November last year. The proposal was unanimously adopted by all the leaders and was embodied in their final declaration. "The seriousness of the economic crisis and the prescriptions have varied from economy to economy, but one factor that has been repeatedly emphasized is the vital importance of foreign direct investment (FDI) in the economic recovery of the region," said President Kim in his presidential invitation to the Mart to investors worldwide. He added: "The participants will be able to acquire a renewed understanding of the vast improvements in the investment environments of the economies. The result will be, above all else, enhanced investor confidence in the region." The Investment Mart is an "Opportunity for investors around the globe, offering business leaders a chance to discover new and exciting possibilities that the APEC region offers, said Jenny Shipley, prime minister of New Zealand, the chair of APEC in 1999. "As we in APEC move closer to our goal of free and open trade and investment, we are creating a region that offers increased prosperity to all who participate in it." No better forum exists in which to mount an undertaking such as the Mart than APEC. The organization was founded in 1989 with the goal of advancing the economic dynamism of the region and a sense of community by promoting trade and practical economic cooperation. The results are that the region's trade has expanded from 43 percent of the world total to more than 50 percent over the last 10 years. Despite the current downturn, Asia-Pacific is still one of the world's fastest-growing regions, economically. A measure of its success is the expansion of its membership from 12 at its foundation to 21 presently. Initially the organization was a forum for the exchange of views and the planning of projects of mutual benefit, largely the process of Asia-Pacific economic cooperation and the promotion of a positive conclusion to the Uruguay Round of the GATT. As the needs of its members evolved, APEC has evolved into a forum of greater substance and higher purpose, specifically, to build the Asia-Pacific community through achieving economic growth and equitable development through trade and economic cooperation.
Catalyzing Investment Flows In Osaka in 1995, APEC leaders adopted the Osaka Action Agenda which firmly established the three pillars of APEC activities. They are: trade and investment liberalization; the facilitation of business through the simplification of customs and the general commercial climate; and technical and economic cooperation. In the wake of region-wide economic turmoil, APEC leaders at the November 1998 Kuala Lumpur summit reaffirmed their confidence in the strong economic fundamentals and prospects for recovery by the economies of Asia-Pacific. They agreed to pursue a cooperative growth strategy to end the financial crisis. They pledged efforts to strengthen social safety nets, financial systems, trade and investment flows, the scientific and technological base, human resource development, and business and commercial links so as to provide the basis and set the pace for sustained growth into the 21st century. Furthermore, the leaders identified that a specific element in the cooperative effort to support an early and sustained recovery was devising new approaches to catalyze the return of stable and sustainable private capital flows into the region. It is against this backdrop of urgency and the realization of the need to introduce concrete measures to counter the economic fallout of the crisis that the leaders at the Kuala Lumpur summit endorsed President Kim's proposal that Korea should host an investment fair to give all member economies a platform from which to promote their reforms and the new landscape of opportunity which has emerged as a result. Certainly, members have responded with alacrity to the opportunity the Mart represents. Japan and Russia have already booked extra space above the 100 square meters offered free to exhibitors within the 10,368 square- meter Pacific Hall in Seoul's Convention and Exhibition Center where the event wil be held. "The delegation from Russia will exceed the one sent to the APEC Leaders' Meeting in Kuala Lumpur," said Vladimir Saoutov, general manager of the Russian-ASEAN Fund, the body organizing Russia's participation. With the worst of the financial crisis over, Russia is fielding more than 200 delegates from the private and public sectors, he said. "They will be offering opportunities in almost every sector of the economy, from diamond mining to aerospace and pulp and paper." Key Projects Mexico has also exceeded the expectations of the event's organizers. "Our delegation will have between 40 and 50 members," said Jose Valenzuela Garcia of the Seoul branch of the Mexican Bank of Foreign Trade. "They'll be promoting all kinds of investment opportunities showing why Mexico is the best place to invest," he explained. Mexico has recently emerged from a financial crisis to emerge as one of the world's premier destinations for foreign investment. The Chinese delegation will be composed of representatives of 15 provinces and cities and in all will be 60-strong. "The delegation will include officials from the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), local government officials, a lot of company representatives, and perhaps also one of our deputy ministers," said Yang Weiqun, Third Secretary for Economic and Commercial Affairs, at the embassy of the People's Republic of China in Seoul. "We are now preparing some key projects, which will be determined by local governments and the companies. In our pavilion we'll promote certain companies, display product samples and introduce specific projects that are concerned, for example, with infrastructure, electronics, machinery, textiles and food processing." The varying levels of development within APEC will be reflected in the type of sectors promoted. The Indonesian pavilion, for example, will feature opportunities in plantations, the fishery, agro-business, export-oriented industries such as textiles, electronics, rubber, chemicals, as well as the metal industry and tourism. Hong Kong, China, on the other hand, is particularly seeking investment involving technology and/or high-value-added activities, according to the Special Administrative Region's Director-General of Industry, Industry Department, Francis Ho. "In the manufacturing sector this includes the industries of electronics, information technology, chemicals, biotechnology and pharmaceuticals, environmental technology and equipment," said Mr. Ho. "In the service sector, this includes services related to software, computers, telecommunications, finance, trading and related activities, professional and technological services, environmental and management services." Sweeping Liberalizations The Hong Kong pavilion itself will feature attractive exhibition panels to highlight the comparative advantages of doing business in the SAR, said Mr. Ho. "These include being a springboard to the Chinese mainland, its world-class financial, transport and communications infrastructure and its free market." The Korean pavilion is a case in point in its reflection of national priorities and opportunities regarding inbound investment. The pavilion is divided into seven sections, each promoting a different aspect of the investment market. One is dedicated to the Korean investment environment and the massive changes it has undergone in order to open what was before a relatively closed economy in an effort to regain stability and jump-start growth. The section serves to introduce major initiatives such as the Foreign Investment Promotion Act which underscore the Korean government's efforts to establish a transparent and truly investor- friendly business climate. The Local Government section features the most promising social overhead capital (SOC) projects on which regional administrations are seeking foreign partnerships to further develop their economies. Examples are as diverse as the Chungmun Tourism Complex to be built on Chuju Island and the Kyongsangnam-do province's Hwang River Straightening Project. The central government also, will seek to harness private foreign capital in its various capital works projects in the Real Estate and Infrastructure section. The Portfolio Investment, M&A and Privatization sections will all reflect sweeping liberalizations regarding foreign ownership in their respective areas of the stock market, the corporate market, and state-held assets. Information on Korea's top-potential, ground-breaking venture companies will be available through the High-tech SME section. In a sense, the pavilion aims to lay bear the various avenues by which the international investment community can penetrate the Korean economy to their maximum advantage.
Mobilizing Support Meanwhile, investors are playing close attention to Japan's involvement with the Mart since many regard the world's second-largest economy as a potential catalyst for Asian economic recovery. The size of the Japanese delegation has not been finalized as of going to press, but Japan has already doubled the size of its alloted pavilion space, indicating the fresh importance Japan is placing on attracting foreign investment. The Japanese government has, in fact been winning praise from business leaders and economists around the world for its new program to stimulate and restructure its economy. Many observers interpret Japan's leading presence at the Mart as evidence of its commitment to assuming a guiding role in getting the region's economy back on track. A vital element in the success of the Mart, of course, will be the attendance in significant numbers of potential investors, acting either on behalf of a corporation or their own account. Joonam Kim, director general of the Korea Trade-Investment Promotion Agency's (KOTRA's) Investment Cooperation Department and the unit within the agency mandated with the Mart's organization, said a two-part strategy is being employed to this end. "Firstly, we are totally utilizing KOTRA's worldwide network to invite potential investors and prominent business people to visit the Investment Mart," he said. "We've engaged 45 such KTCs for this purpose that will invite in total some 2,000 business people selected from the database each center maintains on its region." Mr. Kim gave the example of Amsterdam KTC which has a database of 5,000 companies, from which it identified 50 as those most promising to invest in the Asia-Pacific area and duly invited them to Seoul in June. As of early April, more than 1,000 potential investors approached in this manner have either given a firm commitment to attend the Mart or expressed a strong interest in doing so. The second part of the strategy lies in co-opting exhibiting public and private international organizations as sponsors. The APEC investment Mart has garnered strong support from international organizations such as the United National Industrial Development Organization (UNIDO), the United Nations Conference on Trade and Development (UNCTAD) and the Asian Development Bank (ADB), each of which have agreed to be sponsors. The World Bank specialized agency, the Multilateral Investment Guarantee Agency (MIGA), will exhibit as part of a wider presence on the part of the bank, and further contribute to the event as a participating organization. Promotional Drive From the private sector, the Mart has also gained the sponsorship of Citibank, which has 11 branches across the country, and has the greatest profitability and the largest asset base of any foreign bank in the country Korea. By lending their name to the Mart, and maintaining a presence at the event in order to enhance their profiles in region and promote their services, these organizations will be making an invaluable contribution to its credibility and hence its attractiveness to the investment community. However, said Mr. Kim, "Sponsorship also means a deep involvement in the promotional activities for the Investment Mart." For example, MIGA will undertake to promote the Mart to its database of some 14,000 potential investors and issue invitations accordingly. Meanwhile UNIDO, which has developed an expertise over four decades in delivering investment services for developing economies, many of which will be represented at the Mart, will support the event by sharing with KOTRA its databases on its partners in investment promotion. Presently working on KOTRA's behalf to mobilize interest among their client base in respect of the Mart are exhibitors the Pricewaterhouse Coopers Frankfurt branch and the Zurich-based Swiss Office for Facilitating Investments (SOFI). This latter organization is an instrument of the Federal Office for Foreign Economic Affairs of the Swiss Government (FOFEA), established two years ago to both facilitate long-term cooperation between Swiss enterprises and the private sector in countries with developing and transition econo-mies, and increase capital investment and know-how transfer from Swiss business to partner countries. The efforts of these and other organizations will be coordinated with those of the Mart's official public relations consultancy, New York-based Edelman Public Relations Worldwide, which is working through its 36 offices and 60 affiliates internationally to ensure maximal visitor attendance. Besides its promotional drive through the world's press and a direct mail campaign to investment decision-makers everywhere, Edelman has also selected prominent business leaders in both Hong Kong and the United States to act as "honorary investment ambassadors" on behalf of the Mart. The event is also expected to benefit from the synergy created by the holding of the Economist Conferences' Seventh Government Roundtable with the Government of the Republic of Korea immediately before the Mart begins. Emerging Potential Originally scheduled to be held earlier in May, organizers, Euro-Asian Business Consultancy rescheduled the two-day Roundtable to run May 31st and June 2nd so attendees may also take advantage of the Investment Mart. Focussing on contemporary Korean government policy issues such as corporate and financial restructuring, mergers and acquisitions (M&As), and labor relations, the Roundtable is expected to attract some 200 corporate decision-makers and world-ranking economists. To better facilitate the matching of potential investment vendors (exhibiting economies) and investment purchasers (potential investors) ahead of the actual event, KOTRA has devised an Internet home page at www.apecinvest.org in which all 21 exhibiting APEC economies have been provided with pages through which to promote their investment regimes or specific investment opportunities. "We are providing a system through which each economy may load information on its 'selling' projects or companies, so any interested investor may contact a vendor for further details," said Mr. Kim. "Also, the system can be used to 'matchmake' via a specific search engine which will contact any vendor to arrange meetings." A further service KOTRA will provide the member economies is the prioritization of their investment opportunities on offer. "We will provide the optimal listing for each economy," said Mr. Kim. "For example, Korea has six industries which represent the best choice for foreign investors, including the telecom and auto industries. We have already acted to clarify the most promising fields to attract foreign investment, so for other members we'll go through the same process of prioritization." At the end of May, the home page will become the Cyber Mart, a virtual representation of the exhibition. Four additional programs will run concurrently with the Mart to further bring home to international investors, the world's press, members of academia and other invitees to the event the changes the region has undergone, its emerging potential, and the cultural background against which these developments have occurred. The philosophical underpinnings of the Mart and its place in the wider context of international commercial exchange, will be examined in the Special Lecture Series to be held June 2nd and June 3rd, an event in which leading CEO's and economists will deliver addresses on the theme "Changing Investment Paradigms within the APEC Economies."
Human Dimension The keynote address will be delivered by at a luncheon June 3rd by Dr. Shoichiro Toyoda, chairman and CEO of Toyota Motors of Japan, and chief of the Keidanren, the powerful Japanese Federation of Economic Organizations. Earlier in the day, leading FDI specialist John H. Dunning, emeritus professor of international business at the University of Reading in the United Kingdom will speak on the topic of "Regaining Competitiveness in Asian Enterprises- the Role of Foreign Direct Investment in Assisting Asian Economies." A detailed 60-minute presentation will be given by each member economy on its investment regime followed by a question-and-answer period during the Individual Economy Sessions to be held June 3rd and 4th. The human dimension of Asia-Pacific will be portrayed through the Special Cultural Program, in which each member economy will mount an representative form of performance art typical of its traditional culture. To be held on a specially constructed stage in one corner of the Pacific Hall, the program will feature theatrical works, mask dances, musical performances and a host of other cultural events that will serve to bring home to visitors the nature and richness of the heritage of Asia-Pacific. A special feature of the Cyber Mart will be the live transmissions it will carry of the Special Lecture Sessions, the Individual Economy Sessions and performances of the Cultural Program. The fourth program, organized to give visitors first-hand experience of the economical miracle which has transformed much of Asia-Pacific and indicate the potential the region has for future advances, are the series of industrial tours to be held June 3rd to 5th. The manufacturing facilities to be visited, in the vicinity of Seoul, include Samsung Electronics Co. in Suwon; Daewoo Motor Co. Ltd. in Pupyong; and Hyundai Electronics Co. Ltd. in Inchon. Should the Mart achieve its aims, the world investment community will discover a matchless opportunity, while the aspirations and hopes of almost three million people will be fulfilled. Said President Kim: "The message of the APEC Investment Mart is clear - the Asia Pacific region is the place to invest, and the Asia-Pacific era is still the future to come."
by Charles Durerden
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