TNAG-1415-FCO40-1896-Public-finance-in-Hong-Kong-1985 — Page 243

-a Trade Directory and Reference Library which provides information to those who want to expoTM t require

general background knowledge;

-trade exhibitions and overseas fairs which enable manufacturers who are at the stage of development when they have sufficient interest and product knowledge, production capacity and marketing skills to be able to compete with other international exporters to reach the markets of their choice; and

-a Publications Division which publishes six major product publications to satisfy the needs of those manufacturers who wish to advertise their products in specialized trade journals. Each publication is designed to satisfy the need of a particular class of traders at a different stage of their export experience.

173. I stated in my report for the year ended 31 March 1979 that I had expressed some concern at the apparent lack of any meaningful attempt to evaluate the results of the Trade Development Council's trade promotional activities in order to ensure that the funds provided to it were spent to good effect but I had been advised that the results obtained by the Council were not quantifiable in any objective sense. The Executive Director of the Council however had advised the Government that whilst no objective quantification was possible a measure of effectiveness was the extent to which the trade services and promotional activities of the Council continued to be utilized and supported by the Hong Kong trading community. Applying this measure during my recent study which I confined to trade exhibitions and overseas fairs I have found that not all the Council's overseas promotional activities to which commercial participants were invited were fully supported. Verbal enquiries by my staff have indicated that in 1984-85 out of some 40 trade fairs and missions in which commercial delegates were invited by the Council to participate there were about ten where the Council, despite heavy publicity, had difficulties in recruiting commercial delegates.

174. I have also found that during the three years 1983 to 1985, in order to generate interest amongst manufacturers and exporters to participate in the Council's promotional projects, the Council conducted a direct mailing campaign whereby copies of the Council's annual trade promotion programme were mailed to some 20 000 Hong Kong traders with a request that they should make enquiries about the fairs and missions in which they were interested. I have estimated that out of the 20 000 programmes mailed out in each of those years, the Council only received some 2% enquiries. The results of factory visits conducted by the Trade Development Council's Tsuen Wan Office of 5000 (mostly new) manufacturers over a five-year period from 1980 to 1985 designed to introduce the Council's services to small factories also indicated that whilst interest may have been generated in some of the Council's services, a large number of the manufacturers had no immediate interest in participating in the Council's overseas promotional activities.

175. The inadequate support for some of the Council's promotional activities might be linked to the manner in which such activities have been selected and evaluated. Following the launching of the direct mailing campaign of the trade promotion programme in 1983, the Council conducted an analysis of the respondents by industry and by popularity of the projects. Of the 165 replies from various traders to the 1983-84 trade promotion programme, which were received during the period March to June 1983, it was indicated that the Middle East was the most popular market - 50 firms out of 165 expressed interest - whereas less interest was shown in the United States of America (USA). Industrywise, greater interest was shown in general products than in garments which ranked third. However, of the total expenditure of $46.8 million on trade fairs, missions and other promotional activities in 1983-84, $3 million was spent in the Middle East compared with $12 million in the USA, and industrywise garment promotion was the largest item of expenditure. In the 1984-85 trade promotion programme, the budgetted expenditure in the Middle East was 7% compared with 18% in North America. No similar analyses were made of the responses received in 1984 and 1985. I have also observed certain opportunities for improving the post-show evaluation process. Whilst the Council has advised me that trade promotion is an on-going effort with emphasis on long-term objectives rather than immediate results, I found the evaluation was conducted at the end of each show and was usually limited to asking the commercial delegates to complete a questionnaire providing information on such immediate results as business gained and contacts made during the show, impressions of the show and of the Council's service and whether the delegates would participate the next year, and did not provide information which would facilitate a more systematic evaluation of the longer term effects of their participation.

176. The Executive Director of the Trade Development Council has informed me that in providing its services to the trading community he is guided by a Council which comprises the chairmen of Hong Kong's major trading and business associations as well as leaders of the business community appointed by the Governor. He is also advised by many advisory and steering committees, members of which are chosen for their standing and contacts and specialist knowledge in particular industries. In addition, there are the Council's overseas offices and a local branch office which provide information on the needs of the trading community and early warning as to shifts in demand and trends. He has advised me that before the Council's annual promotion programme is approved each year, it has to go through a vigorous screening process. The proposed programme is first compiled from recommendations supplied by the Council's overseas offices regarding overseas trade fairs and shows. Each project in the proposed programme is then subject to a thorough review based on such factors as cost-effectiveness, marginal return, the current needs of various industries and the guideline that no less than 30% of the Council's expected income should be spent on promotional activities. Taking 1984-85 as an example, the Executive Director has informed me that only three-quarters of the projects proposed were accepted and many good proposals had to be cancelled or postponed because of the lack of funds.

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