Speech by SCED at breakfast roundtable at Chatham House in London (English Only)
Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at a breakfast roundtable at Chatham House in London, the United Kingdom (UK), today (May 23, London time):
Ladies and gentlemen,
Good morning. Thank you for attending this breakfast roundtable and for giving me this opportunity to update you on the latest situation in Hong Kong. This is my first official visit to London, though I have been here before. I am always struck by the pace of life here and its fascinating mix of old-world charm and forward-looking vibrancy.
Our long-standing links with the UK continue to go from strength to strength. On the business front, our bilateral trade in 2015 amounted to slightly over GBP9 billion. As at end-2014, direct investment from the UK in Hong Kong amounted to just under GBP12 billion, whereas in the opposite direction, the total stock of Hong Kong's direct investment in the UK amounted to over GBP21 billion. And of the Mainland and overseas companies setting up regional headquarters, regional offices and local offices in Hong Kong, more than 600 are from the UK.
Our people-to-people links are also deep and meaningful. According to the British Council, around 24 000 Hong Kong students are studying in the UK. We are also very pleased at the development of three new international schools in Hong Kong by some of the best educational institutions in the UK: Harrow (Harrow School), Shrewsbury (Shrewsbury School) and Malvern (Malvern College).
I am confident our links will only get stronger in the coming years, thanks to the ambitious and visionary initiative of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, commonly known as the Belt and Road Initiative, that was spearheaded by President Xi of China in 2013.
This grand and far-reaching initiative aims to expand trans-continental connectivity, and promote economic, political and cultural co-operation from Asia through Africa and on to Europe. I believe it will emerge as a driving force of the world economy in this 21st century.
Allow me, over the next few minutes, to share with you some of my thoughts on how Hong Kong can support the UK business, and how we can help you capitalise on the wealth of opportunities emerging from the Belt and Road Initiative.
Through the Belt and Road Initiative, we expect to see soaring investments in infrastructural facilities, deepening financial integration, expanding trade and the building of people-to-people bonds on a global scale. The Belt and Road Initiative covers various aspects and proposes co-operation in many sectors, but fundamentally the initiative is about making connections. And I am proud to say that facilitating connections is also what Hong Kong is good at. This is how we see Hong Kong will contribute to, and benefit from, the Belt and Road blueprint.
Hong Kong may play this facilitator role perfectly, thanks to the unique advantages presented by our "one country, two systems" arrangement. When you are in Hong Kong, you are in China - but a Special Administrative Region of China that provides the combined advantages of "one country" and "two systems". Hong Kong is an international gateway to Mainland China, offering unique physical and intangible connectivity to the Mainland with privileged trade and social access. On the other hand, Hong Kong has a well-established system that connects us to the international community in terms of our legal system, language, trade practices as well as lifestyle which international traders are familiar with.
Traders in all sectors, and from all jurisdictions, can trade freely in Hong Kong. And all people, businesses and organisations, regardless of their nationality, are treated exactly the same. Every business in Hong Kong can enjoy the same privileges and benefits provided by our international agreements.
Consider, for example, CEPA (the Mainland and Hong Kong Closer Economic Partnership Arrangement), Hong Kong's free trade agreement with the Mainland of China. CEPA provides preferential treatment to Hong Kong service providers, regardless of nationality, as well as tariff-free treatment for products that have been conferred the Hong Kong origin. Working with Hong Kong, the UK companies can gain the same access to the markets of the Mainland. It's your ticket to the massive Chinese consumer market and its fast-rising middle class.
"One country, two systems" has made Hong Kong the "super-connector", bringing together the rest of China and the rest of the world, and that, of course, includes economies along the Belt and Road. This also makes us a magnet for businesses - at last count, about 8 000 international companies have commercial presence in Hong Kong. Hong Kong has always been a preferred venue for hosting regional headquarters or trading offices for multinational companies to manage their businesses in the Asia-Pacific. And I hereby invite more British companies to come to Hong Kong and make full use of our advantages in tapping the massive Belt and Road markets.
Aside from trade, logistics is another key area that has been driving Hong Kong's development as an international business centre. The Belt and Road will catalyse the movement of people and goods, boosting demand for reliable logistics services. In this, Hong Kong is also well served. Indeed, Hong Kong boasts the world's fourth busiest container port, providing some 350 services a week to more than 500 destinations worldwide. Our 700 shipping-related companies offer a wide range of services, from ship management, broking and chartering to finance, marine insurance, legal, arbitration and many other support services. Our airport has been the busiest cargo airport in the world for more than 15 years. From Hong Kong, you can reach all major Asian economies within four hours' flight time. Half the world's population is just five hours away. The Maritime Silk Road will create fresh demand for shipping services. Logistics companies in the UK will find it advantageous to establish a presence in Hong Kong, using our maritime services to tap into the markets of the Belt and Road.
Among the Belt and Road's main goals is promoting big-ticket infrastructural development, from highways and railways to maritime and aviation transport, as well as telecommunications and energy projects. Hong Kong certainly will have a lot to offer and the expertise to share when it comes to international co-operation on infrastructural projects envisaged under the Belt and Road. Why? Because we have a deep pool of talented professionals, from engineers and surveyors to architects, designers and planners, not to mention other professionals specialised in financing, insurance, arbitration, risk management and project consulting. All of them are experienced and eager to partner with overseas businesses, including British companies, to take part in the development, management and operation of infrastructural projects under the Belt and Road Initiative.
One example of such collaboration is our subway system, the Mass Transit Railway (MTR). Aside from carrying 5 million passengers every weekday in our domestic lines, MTR is also managing many mass transit systems in the Mainland of China, Asia and Europe. I am particularly gratified to note that MTR is operating the London Overground as a joint venture partner, and will be responsible for the operation of Crossrail upon commissioning. I am glad that our expertise in railway operation is able to contribute to the transport system in the UK.
Other than professional services, financial services will of course be another important area for co-operation under the Belt and Road. Hong Kong is China's international financial centre and we are also one of the leading financial centres in the world. We have the experience, the expertise and the connections to serve as the fund-raising and financial management hub for the Belt and Road. We run the world's eighth largest stock market in terms of market capitalisation, and in 2015 we ranked first, globally, in terms of equity funds raised through initial public offerings.
Ladies and gentlemen, Hong Kong has what you need in a strategic partner for the 21st century. We welcome investment and talent from the UK. In Hong Kong, you can take advantage of our low taxes, our world-class business environment and our reassuring legal system, as well as our knowledge in tapping the massive Asian markets.
The Belt and Road will be built on collaborations - on deepening the bonds between nations, economies and cultures. In the rewarding future, it can offer much to the companies, and the people, of Hong Kong and the UK.
I look forward to welcoming our British friends to Hong Kong. And I hope to visit this captivating city again soon.
Ends/Monday, May 23, 2016