SCED speaks on visit to Vietnam (English only)
Following is the transcript of remarks by the Secretary for Commerce and Economic Development, Mr Edward Yau, at a media session on his visit to Vietnam after attending a business luncheon seminar entitled "Hong Kong: Your Partner in Exploring New Business Opportunities" in Ho Chi Minh City, Vietnam, today (March 21):
Secretary for Commerce and Economic Development: Good afternoon, friends from the media. I am very happy to be here today, leading a delegation of businessmen from Hong Kong. The purpose of this visit is to bring along business chambers, professionals, start-ups and also industrialists from Hong Kong to see if there are more opportunities for Hong Kong businessmen to come here for more trade and investment.
We believe that we come at the right time where Hong Kong and Vietnam’s trade and investment relations have scaled new heights since the signing of the ASEAN (Association of Southeast Asian Nations) - HK Free Trade Agreement (FTA). Hong Kong and Vietnam have always been very close trading partners. In the past couple of years and decades, Vietnam ranked fourth among all the ASEAN countries in trading with Hong Kong. The total trade volume between Hong Kong and Vietnam amounted to US$18 billion in 2017 and also keeps on increasing on a double digit basis.
We believe that with the signing of the FTA and also with China's Belt and Road Initiative, there would be a lot of room and scope for more business interests from Hong Kong in Vietnam and also the other way round. We also believe that Hong Kong can serve as a gateway, a springboard and also a crucial link for joint business between Vietnam and China. So, we believe that also opens up a lot of demand for professional services from legal, accounting, insurance, construction, architecture, city development and arbitration, just to name a few. We are hoping that this visit would also open new doors.
Reporter: As a leader who has held many ministerial positions in the Hong Kong Government, can you share with us the advantage of Hong Kong that can benefit the co-operation among Vietnam, ASEAN and Hong Kong?
Secretary for Commerce and Economic Development: At least I can find two major areas that Hong Kong can serve as a crucial link for Vietnam businesses. One of course is the trade in goods, Hong Kong and Vietnam have all along been enjoying very strong trade where you have a lot of goods exported to Hong Kong and also through Hong Kong, the traditional business that has been established over the years.
I can see another major area that stands a very good chance for further collaboration which is the provision of professional services. When we look at ASEAN as a whole, we see there will be a lot of infrastructural developments, for instance in Vietnam, be they railway development, port development, highway or city construction and development. All these mega projects might require a lot of professional services, including the project funding for these projects to go ahead. It may also involve business consultancy in assessing and managing the risks, and also pricing for the loan or project finance. You also require, for instance, architects, engineers and surveyors to help in these major deals and these professionals are in abundance in Hong Kong. So, we believe that Hong Kong could be the professional service provider in striking a deal in Vietnam and also ASEAN.
Furthermore, I believe that there would be a lot of scope for Hong Kong to be used as your financial trading centre because we have that service provided for the entire world, and ASEAN has already been the second largest trading partner of Hong Kong. So, there is no reason why you can't use Hong Kong, come to Hong Kong or count on Hong Kong services.
Reporter: I want to ask you what are the prospects of Hong Kong investment into Vietnam, especially after the signing of the ASEAN-Hong Kong Free Trade Agreement? What is the aim of the delegation?
Secretary for Commerce and Economic Development: The signing of the Free Trade Agreement between Hong Kong and ASEAN opens up a much stronger trade flow between Hong Kong and the 10 ASEAN countries. And I think Vietnam stands to gain the most because you are already our fourth largest trading partner within ASEAN. With the very strong and robust growth in Vietnam, and also the long-time investment that a lot of Hong Kong businessmen already put in this country, I think that has already laid down a very firm and strong framework for more trade and investment. But I would also say that with this Agreement, which also provides greater market access for trade and services, as we see ASEAN as a whole has grown substantially, and there will continue to be more major developments like infrastructural developments where you will require professional services, I think that is where Hong Kong can come in. And that's why in my delegation today, the 41 members include not just traditional chambers or industrialists, they also include people from the legal profession, accounting profession, insurers, real estate developers and also some start-ups. These are professionals that find Hong Kong their home, but also they are not just there to serve small Hong Kong, they are there to serve the entire region. For instance, in a new development area like fintech, financial technology, they are there to use Hong Kong as a home base but serving the entire region. I have today coming with me a new start-up company using an electronic payment system which is targeting ASEAN countries. A lot of people work in Hong Kong where they may not have their bank accounts in Hong Kong, they are actually using this software to transmit money. This is how new technology comes into daily living, helping people to work in Hong Kong from your country.
I also mentioned just now that in major deals, Hong Kong has a lot of professionals that can help bridge between Vietnam, China and other parts of the world, (in areas) including investment projects, project financing and insurance, etc. These are areas that we hope to see more prospects in the time to come.
Reporter: Is there any policy in Hong Kong to facilitate overseas enterprises that want to invest in Hong Kong?
Secretary for Commerce and Economic Development: I would mention two things. First, Hong Kong will be drastically reducing our tax for enterprises in Hong Kong. You know Hong Kong already has a very low and simple tax for companies in Hong Kong. The profits tax at the moment stands at only 16.5 per cent. But we will be reducing this profits tax by half to 8.25 per cent for all companies earning the initial profit of a quarter of US$1 million in Hong Kong. That is a level playing field for all. That would put Hong Kong as one of the world’s lowest tax regimes. So people coming to Hong Kong would enjoy this very very low tax. And the other area that would attract more trade investment and promotion between Hong Kong and Vietnam is the government funding that supports SMEs (small and medium enterprises) in doing brand building or upgrading of services, including doing trade promotions in this part of the world. We have injected US$300 million into our SMEs funding, allowing our small companies to come to ASEAN countries including Vietnam to do trade promotions, so that their brand names and services can be more easily known here. Hopefully these two measures, which will be put in place this year, will allow more trade and investment interactions, and also marketing, and help Hong Kong businessmen to connect even closer with your business sector.
Ends/Wednesday, March 21, 2018