SCED's speech at fDi Forum Asia 2015 (English only)
Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the fDi Forum Asia 2015: Capitalising on a global investment today (June 30):
Ladies and gentleman,
Good afternoon. I am delighted to be here at the fDi Forum. It is an excellent platform for executives, business leaders and strategic thinkers to share insights on investment. And it is fitting for today's forum to focus on Asia and to take place in Hong Kong, because Asia represents one of the best opportunities for FDI (foreign direct investment) globally, and Hong Kong is well positioned to both attract FDI and to facilitate FDI throughout Asia.
Why? Because FDI is one of the big success stories for Hong Kong. According to the World Investment Report 2015 published just last week by the United Nations Conference on Trade and Development, Hong Kong ranked number two in global FDI inflows, second only to Mainland China. At the same time, Hong Kong was the world's second largest outward investing economy, second only to the United States. In particular, we have a significant volume of trade and investment flows with Mainland China. As at the end of 2013, inward direct investment (IDI) from the Mainland to Hong Kong was HK$3.3 trillion, accounting for 32 per cent of the total IDI in Hong Kong. Reciprocally, outward direct investment from Hong Kong to the Mainland was HK$3.95 trillion, accounting for nearly half of the total for Mainland China.
What these figures demonstrate is that Hong Kong is both a prominent source and destination for FDI, and that Hong Kong remains the most important investment conduit for Mainland China. You may ask, what makes Hong Kong such an ideal place for investment? First, Hong Kong is a free and competitive economy. We follow the common law legal system and adopt internationally recognised codes of practice in business and commerce. We have a low and simple tax system with no GST (goods and services tax) or VAT (value-added tax). We have a clean and efficient government and a level playing field for all companies. Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained the top spot in the Heritage Foundation's Index of Economic Freedom for 21 years in a row. This status reflects real advantages for investing and doing businesses in Hong Kong.
Of course, we are also blessed with the geographical advantage. Our location has enabled us to become the key platform between Mainland China and the world in business collaboration and investment flows. We are strategically located at the heart of Asia and on the doorstep of Mainland China. Half of the world's population can be reached within five hours' flight time from Hong Kong. For businesses and investors looking to tap into Asia's huge market potential, we are the most convenient base, providing world-class transport, and unrivalled logistic and ICT (information and communication technology) infrastructure.
Speaking of location, I must mention the "One Belt, One Road" initiatives announced by the Central Government. The "Belt-Road" initiatives will certainly expand Mainland China's transcontinental connectivity, and promote economic, political and cultural co-operation and development from Asia through Africa and into Europe. These initiatives will bring tremendous business and investment opportunities to those economies situated along these land and maritime silk roads. As Hong Kong is a major international financial centre for Mainland China, we have the experience, the expertise and the connections to serve as the fundraising and financial management hub for "One Belt, One Road". Foreign investors will definitely benefit from the "One Belt, One Road" initiatives by establishing a foothold in Hong Kong to seize the business opportunities.
What's more? We are making great efforts to improve investment and trade facilitation and to remove investment and trade barriers with the rest of Asia. Our focus is on the ASEAN (Association of Southeast Asian Nations) countries, India and countries in the Middle East. We are striving to conclude Free Trade Agreements as well as Investment Promotion and Protection Agreements with these countries to promote free flow of trade and investments.
And in recent years, Hong Kong has signed Comprehensive Double Taxation Agreements (CDTAs) with major trading partners to promote Hong Kong's favourable tax status and enhance its tax transparency internationally. At present, we have signed 32 CDTAs, including 11 with Asian countries. We will spare no effort to enter into more CDTAs.
Ladies and gentlemen, we believe that by providing an investment- and business-friendly environment, we can attract not only conventional business and investments, but also new and innovative companies. In fact, we have quite an increasing number of entrepreneurs and start-ups setting up new business in Hong Kong. Over the past couple of years, there has been an upsurge in private incubators, accelerators and shared working spaces in Hong Kong. For example, the number of co-work spaces in Hong Kong continues to climb to well over 40, from just three in 2010. These platforms offer valuable networking opportunities for start-ups. They build connections with potential investors, with business professionals for advice and training, with seasoned entrepreneurs for mentoring, and with industrialists for co-operation opportunities. In fact, quite a number of our start-ups have made remarkable achievements - some have secured substantial investments, some have been acquired by large corporations, while others have carved their niches in the global marketplace.
Ladies and gentlemen, you are indeed looking at a future of great opportunities here in Hong Kong. We encourage overseas and Mainland companies, large or small, as well as start-ups and entrepreneurs, to establish a presence or expand their business in Hong Kong. We stand ready to offer one-on-one facilitation services to them through the dedicated efforts of our government agency, Invest Hong Kong. Our aim is to make investing in Hong Kong as simple and easy as possible.
I hope you all will capitalise on the opportunities here in Hong Kong. Thank you very much.
Tuesday, June 30, 2015