Md. to close Hong Kong trade office

March 05, 1995|By Ian Johnson | Ian Johnson,Beijing Bureau of The Sun Thomas Easton of the Tokyo Bureau and Sun staff writers Alec Klein and Jay Hancock contributed to this article.

BEIJING -- In a budget-cutting move, Maryland will drastically reduce its trade-development presence in Asia by closing its Hong Kong trade office this month and reducing its Japan outpost to part-time status.

The move, criticized as shortsighted by some Maryland business people, reduces the state's Far East trade outposts from three to two. It cuts staff in the region from four full-time employees and three part-timers to one full-time employee and two part-timers.

As part of the shuffle, Maryland's Taiwan office will grow, gaining a full-time staff member to be transferred from the Japan branch.

Top state officials said yesterday that they're continuing to analyze Maryland's need for Asian trade branches. But for now, they said, they favor an approach that would employ fewer people in the area and base most of them in one place -- possibly Taiwan.

"We want to make sure Maryland's interests will be protected, but the initial recommendation is that it's far more effective to have one good strong regional base," said Gov. Parris N. Glendening. "We're probably spread too thinly."

James T. Brady, the state's new economic development secretary, said, "The solution is not necessarily throwing a lot of people out there. A slight reduction is not an indication of less interest."

The Hong Kong office, in operation since 1988, has three full-time employees and one part-timer, with a budget of $500,000 a year. Its lease expired in January, forcing the Glendening transition team to decide whether to renew it.

The shutdown has been unpopular in some quarters. Small companies that can't afford permanent overseas offices or to hire full-time representatives have complained that the closure will hurt their chances of doing business in the burgeoning economies of the Far East.

"The Hong Kong office has been a useful tool, not only for doing business in Hong Kong but also in China. They were very effective in finding partners for us," said Joe Daly, president of Daly & Associates Inc., a business consulting firm.

"It's tragic that the state is closing it now when it's really hitting its stride."

Others said the decision reflected the state's traditional orientation toward Europe.

"They have no conception of what is happening in the most important part of the world," said Steven N. Dreyfuss, president of Arnold-based World Link Group Inc., which helps companies import products from Asia.

"They are making a great effort to bring the budget in line, but that brings out the shortest-term thinking."

But the new administration believes that upgrading the eight-year-old Taiwan office as well as other efforts -- such as affiliations with other trade offices -- would save money and be just as effective, one official said.

"The general thrust is that Governor Glendening would like to do more to increase trade but to do it in a more cost-effective way. It's not at all failing to recognize the importance of the Pacific market," said John D. Porcari, the governor's liaison to the business community.

Mr. Porcari said 40 percent of the budget for the international division of the state Department of Economic and Employment Development (DEED) is spent on its overseas offices, which he said is too much.

Most states do not have a Hong Kong office, Mr. Porcari added, and many that do have contracted with private individuals who act on their behalf.

The Port of Baltimore and 13 other port authorities have trade offices in Hong Kong.

The state's main overseas trade office is in Belgium and is responsible for Europe.

The state has had a presence in Japan since at least the early 1980s. The Yokohama office, which was moved from Tokyo to save money, has one part-time employee and a full-time staff member.

The Yokohama office's director, Paul-Albert Gans, will move to Maryland's office in Taiwan, a DEED spokesman said.

The Yokohama office's mission probably will be limited to maintaining trade contacts between Maryland and Japan, rather than mounting aggressive efforts to market state companies or bring in direct investment, officials said.

Joseph Yip, who heads Maryland's Hong Kong office, said he was informed last month by letter of the decision to close.

No public announcement has been made, but Mr. Yip said he has felt obliged to tell business clients that the center won't be open after March 31.

Mr. Yip said he was not asked to offer alternatives to closing the office, such as laying off some staff members or finding a lower-rent office.

The center -- with one part-time and three full-time employees, all of whom will be laid off after March 31 -- provides a variety of services for businesses, such puting business people in touch with local partners and providing meeting rooms for small businesses that can't afford to rent hotel conference rooms.

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