Monday, March 16th 1998

Welcome to Hong Kong. This is our first update on Monday. Today is March 16th, it's a very special day because it's Terri's birthday. Our day is just about to end, it's almost 11:00 PM at the time of our first update report, and for most of you, your day is just beginning. 13 hours Central time zone difference, 14 East coast here in Hong Kong, which is about 7,500 miles from the Midwest, Milwaukee and Chicago. Hong Kong's a city of 6 million people. It is now the financial center of the PRC, the People's Republic of China. It is a SAR, a Special Administrative Region, of China and a very exciting and amazing city, in many ways, the entrepreneurial capital of Asia. Our view is quite spectacular from our hotel room in a Hyatt adjacent to the Conference and Civic Center here which overlooks the harbor of Hong Kong which is about as busy as Main Street in any town in America, with ships, boats and ferries transporting people across from one side of the harbor to the other. The weather here is sticky, muggy, cloudy, drizzly, it's not ideal weather conditions, but no way is it the hard winter of this time in the Midwest. Well I'll be joined here in a moment by my co-driver for this trip, birthday girl Terri, who will be giving her first update comments in just a moment, but let me share a few thoughts about our three days here in Hong Kong thus far.

First we're healthy and enjoying the food and enjoying the people who are really very, very gracious and hospitable. Today I had an opportunity to tour the Hong Kong stock market. It was very impressive - all electronic trading. They have no market makers, nobody who physically handles market trades and cries the amount of the trade, like at the Chicago Merchantile Exchange or the New York stock market. It's all done electronically. If somebody wants to sell a stock, it's entered on a computer and they have 1100 people who sit in a room and monitor the computers and the buyers then buy the stock electronically right on the computer. It's very impressive. The stock market in Hong Kong is down about 30%. The PE (Price Earnings) Ratio on all the stocks traded is only 6, that compares with about 26 for the average for the New York Stock Exchange PE Ratios, which are quite high at this time.

The entire region of southeast Asia has been affected by the currency devaluation of Thailand and Indonesia, but the Hong Kong economy appears to be quite strong. The economy of China is undergoing a stunning, spectacular infusion of capital for public works projects, estimated to be several trillion dollars. Hong Kong alone is to receive something like $80 billion in public improvements in the coming year. The amount of economic activity in this region of the world is something that we'll probably be commenting on throughout our updates all this week. One of the main reasons that we're spending time here is to get a first hand insight into this part of the world. In North America, in America, it's pretty easy to not understand, to not pay attention to what's going on here, but increasingly it appears that in the coming century that this part of the world is going to be very influential, very dominant in geo-politics and geo-economics. We received quite an intellectual briefing on all of China today by the department head of foreign studies at George Washington University in Washington and by a number of Chinese, both business and political leaders here in Hong Kong.

We traveled safely from Milwaukee to Los Angeles and then traveled on the world's number one noted airline for service and accommodations, Cathay Pacific, which is the official airline of Hong Kong and southeast Asia. The routing was really quite interesting for the flight, because it went north to Anchorage, Alaska and then across to the Russian Federation. Inland, rather than over the seas of this part of the world. Inland, down Russia and directly down to China, on the western side of Beijing, in fact, and right on into Hong Kong. A flight of 14 1/2 hours in a 747 at altitudes of 40,000 feet at times, really quite an uneventful and very pleasant air flight, almost two days in time traveling because of passing through the International Day Zone.

We arrived Saturday in Hong Kong. We had a couple of days to get acclimated and our conference began today and we've had a full day of activity. We just returned from a wonderful Chinese sort of Disneyland, I would describe it. Terri will be here in a moment to describe her impressions. There are 400 people attending this conference, all CEOs, Chief Executive Officers of companies around the world. It would appear to be half North America, maybe a fourth from Europe and a fourth from Asia and other parts of the world, so a very international group as part of the group here. Well, that's an oversight. We promised you daily updates so that you could come along with us on this journey and there are a lot of things that we can see coming down the road. We'll be leaving Hong Kong this coming weekend, going to Singapore and Malaysia and will be traveling in that region for 10 days and looking forward to sharing some of our observations from this region of the world.

There's a lot of negative news in this part of the world. There's an alarming breakout of cholera in Thailand and people who fly into Hong Kong are not being allowed to get off of airplanes until they receive health examinations as they try to control the spread of cholera. There's a considerable amount of unemployment. Unemployment's about 25% because of the economic downturn, but there's a massive shift in construction, public works, and the people here are just on fire with entrepreneurial creativity and ingenuity.

Well that's my update. Let me ask Terri, who has sort of collapsed on the bed here to come to phone and give you her update. It's her birthday and she's at various opinions about whether she would rather be with family and friends this day or out here traveling. So, Terri, would you like to come here and participate in the update like we think that would be a word consistent with the Wisconsin tradition and it might be hard to believe that, but policies and actions on the part of China indicate that it is being very, very progressive in its attitude about its relationship with not only Hong Kong, but Taiwan and soon Macau, which it resumes control of in 1999, as being very progressive with regard to its policies, not the hard line Communistic approach that we probably grew up thinking and perceiving China to be. So it's a period of awesome change that has tremendous implications for the future. I think in the lifetime of our children, Asia/China will be an extraordinary part of what transpires in the world.

Well with those observations, I think we'll sign off and wish you well. We're well. We're in Hong Kong all this week and we'll be back with you tomorrow with another update. Thanks for joining us and all the best to you.

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