SCED's speech at Hong Kong-ASEAN Business Partnership Symposium
Following is the speech titled "Seizing Opportunities in Evolving ASEAN" (Association of Southeast Asian Nations) by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Hong Kong-ASEAN Business Partnership Symposium today (October 22):
Honourable Ministers, distinguished guests, ladies and gentlemen,
Good morning! Welcome to Hong Kong, a thriving and dynamic business hub as well as the gateway to China. It is my great pleasure to be with our friends from ASEAN at this Hong Kong - ASEAN Business Partnership Symposium. ASEAN Economic Ministers are embarking on a "roadshow" to several cities in China. I would like to begin by expressing my gratitude to ASEAN for choosing Hong Kong as their first stop of the "roadshow".
Hong Kong entrepreneurs are among the earliest and most prolific in establishing businesses in ASEAN. They bring not only capital investment to ASEAN but also a great deal of expertise and experience in manufacturing and service industries, in developing effective supply chains, in adopting new technologies and in identifying new growth opportunities.
The economic co-operation and exchanges have paid big dividends. Today, ASEAN is Hong Kong's second largest goods trading partner and fourth largest service trading partner. Reciprocally, Hong Kong is ASEAN's eighth largest trading partner in terms of goods. Between ASEAN and Hong Kong, the average annual growth rate was 6 per cent in goods trade and 8 per cent in services trade in the past few years. ASEAN is also the sixth major source of inward direct investment into Hong Kong and the fifth major destination of outward direct investment from Hong Kong. These positive figures demonstrate convincingly the close economic relationship between ASEAN and Hong Kong. Facing global economic challenges and sluggish growth in the Western markets, ASEAN and Hong Kong should continue to work together and strengthen our co-operation to achieve win-win results for our economies.
With the collaborative efforts of ASEAN, Mainland China and Hong Kong in enhancing economic partnership, I strongly believe that we can together achieve the shared goal of regional economic integration. Let me share with you the role Hong Kong can play in this process.
Hong Kong is a staunch supporter and forerunner of free trade, having attained the top place in the Heritage Foundation's Index of Economic Freedom for 19 consecutive years. The Government has been maintaining our role as a facilitator by reducing red tape, ensuring a level-playing field and upholding the rule of law, while leaving businessmen to do what they do best.
We create an environment that is conducive to business operation. In addition to a low and simple tax regime, we also have an efficient regulatory environment, making it easy for investors to set up businesses in Hong Kong. Hong Kong, as you know, is a duty-free port, and is a place that allows the free flow of capital and information, with our legal system underpinned by an independent Judiciary. These are the fundamentals that uphold Hong Kong's position as an international business and financial centre.
ASEAN companies setting up their businesses in Hong Kong will be able to enjoy all these advantages. Furthermore, they can make use of Hong Kong to establish a strong foothold on the doorstep of Mainland China. Our economic integration with our motherland was further enhanced by the launch of the Mainland and Hong Kong Closer Economic Partnership Arrangement, or CEPA in short, in 2003. Under CEPA, all goods made in Hong Kong enjoy tariff-free access to the Mainland, and Hong Kong incorporated firms enjoy preferential treatment in accessing services areas on the Mainland. Each year, further liberalisation has been extended through supplements, the latest one being the Supplement X signed this year. Supplement X alone included an additional 73 services liberalisation and trade and investment facilitation measures. CEPA provides a unique and excellent opportunity for ASEAN companies incorporated in Hong Kong to enjoy easier market access to the Mainland.
Hong Kong is now performing the role of a two-way bridge between Mainland China and the outside world. With the Mainland's "Go Global" policy, Mainland companies are encouraged to join hands with Hong Kong entrepreneurs in pursuing overseas investments. The National 12th Five-Year Plan of China also sets out support for Hong Kong's development as China's offshore Renminbi centre and an international asset management centre.
The liberalisation of the Renminbi is probably the most important financial development globally today. ASEAN firms can make use of Hong Kong as their offshore centre for Renminbi business. Hong Kong was the first place outside Mainland China to provide Renminbi banking services in 2004, the first place to issue offshore Renminbi bonds in 2007, and the first place to conduct offshore Renminbi trade settlement in 2009. Being the most competitive offshore Renminbi business centre, we have the largest pool of Renminbi capital outside the Mainland. We are keen to share our experience and opportunities in offshore Renminbi business with our partners in ASEAN.
Turning to the ASEAN side, I understand that ASEAN is currently busy with many important initiatives, notably the establishment of the ASEAN Economic Community (AEC) and the Regional Comprehensive Economic Partnership (RCEP). The ASEAN Economic Community is a visionary blueprint for ASEAN that has the characteristics of (a) a single market and production base; (b) a highly competitive economic region; (c) a region of equitable economic development; and (d) a region fully integrated into the global economy. On the other hand, the Regional Comprehensive Economic Partnership aims to be the largest free trade bloc in the world, comprising 10 ASEAN nations and six other countries with which ASEAN has free trade agreements, i.e. China, India, Japan, South Korea, Australia and New Zealand. Both initiatives are aimed to be accomplished by 2015. These are to be congratulated.
Hong Kong is keen to play a part in the regional economic integration process and contribute to the common prosperity of our region. In this regard, the pursuit of a bilateral free trade agreement (FTA) between ASEAN and Hong Kong is a very significant milestone. The FTA will facilitate the flow of goods, services and investment between the parties, thereby enabling ASEAN and Hong Kong to participate more efficiently in the global supply chains. Its trade creation effect will result in more business opportunities for traders and stimulate further growth in our region. Furthermore, the FTA will provide a platform for regular dialogue between ASEAN and Hong Kong to discuss further economic co-operation and to share expertise and experience in economic development. The tangible and strategic benefits to be brought about by the FTA are therefore tremendous. Hence, we are eager to commence the negotiation of the FTA promptly with a view to completing it as soon as possible, so that all stakeholders can reap the benefits early.
The Hong Kong Trade Development Council (HKTDC) with which we co-organise the symposium today is active in connecting the business community in Hong Kong with partners in ASEAN nations. The HKTDC has been organising many ASEAN trade fairs, exhibitions and trade missions with themes ranging from manufacturing and trading to logistics services and infrastructural development. This symposium can provide further insights for HKTDC on its future work and I look forward to HKTDC launching even more trade promotion activities relevant to ASEAN in the years to come.
Ladies and gentlemen, East Asia is now the locomotive of the world's economic growth. The symposium today provides not only a good chance for our ASEAN friends to explain to our business community the vast business and investment potentials in ASEAN, but also a platform for networking between our business community and their ASEAN counterparts to exploit opportunities and explore collaboration. As I look around, I see the richness of our individual cultures, resources, skill sets and opportunities. This is a beautiful tapestry and a strong foundation for prosperity. I wish today's symposium a great success and our ASEAN friends a fruitful and enjoyable stay in Hong Kong.
Tuesday, October 22, 2013