Dr Jonathan CHOI Koon-shum (Chairman of the 50th terms of office) October 2017
As an international financial center, Hong Kong can form a win-win alliance with Singapore and other ASEAN financial hubs to serve as a connection platform for international capital investing in ASEAN, East Asia and markets along the B&R.
Hong Kong and ASEAN concluded almost three years of Free Trade Agreement negotiations last month. This is a new milestone for the two region’s cooperation in trade and investment. More frequent trade of merchandise between Hong Kong and ASEAN is expected and restrictions on trade in services will also be relaxed. Specifically, Hong Kong can ride on her advantages in financial and professional services to further collaboration with ASEAN countries. Working together, we can play important roles in the construction of the “Belt and Road” (B&R) Initiative.
Free Trade Agreement (FTA) supports the exploration of ASEAN consumer markets
Hong Kong pursues a free trade policy and the majority of imported ASEAN goods are not subject to tariff. However, tariffs of various rates are charged on Hong Kong exports to ASEAN markets. With the FTA in place, Hong Kong products will enjoy tariff reduction and exemption in ASEAN.
The rapidly growing ASEAN middle class has offered Hong Kong products important space for market expansion in recent years. We hope the HKSAR Government can negotiate bigger tariff reductions for Hong Kong exports to ASEAN countries, and ultimately achieving zero tariff. The Hong Kong and ASEAN governments can also promote cross-border e-commerce to support the huge e-commerce market of China in the long run. A regional e-commerce collaboration platform should be developed to drive economic activities in the region.
Broad space for collaboration between service industries
At present, the service industries of Hong Kong and ASEAN are different in terms of openness and restrictions. The FTA is expected to strengthen collaboration between the two regions and in turn enhance overall quality of the industry. Hong Kong and ASEAN countries can also team up to provide quality service support to development projects along the B&R. These endeavors will unfold unprecedented new business opportunities for service businesses of Hong Kong and ASEAN countries.
I attended a number of forums and symposiums on regional collaboration earlier, and also led a CGCC delegation to the 14th World Chinese Entrepreneurs Convention (WCEC) in Myanmar. On these occasions, I proposed that Hong Kong, in promoting cooperation with the ASEAN service industries, can play the role of C.I.O., which means capitalizing its unique advantages and functions in being a "connector", "investor" and "operator".
As an international financial center, Hong Kong can form a win-win alliance with Singapore and other ASEAN financial hubs to serve as a connection platform for international capital investing in ASEAN, East Asia and markets along the B&R. Many ASEAN countries have close ties with the Islamic Economy, and Hong Kong has been actively exploring the financial markets of Islamic countries in recent years. More effective docking in related business activities would drive diversification of the financial sectors on both sides. Besides, Hong Kong is one of the major platforms for cross border Renminbi settlement; overseas funds enjoy free flow in Hong Kong. This, coupled with Hong Kong-Mainland equity and bond market interconnections, makes Hong Kong a pivotal entrepot for overseas funds (including ASEAN funds) investing in China.
Hong Kong is the freest economy in the world. It has always been an ideal platform that facilitates mainland businesses to go global and bringing in overseas capital. The FTA between Hong Kong and ASEAN will provide the two-way investment flows with better protection and promote mutual efforts to explore the mainland market. At the same time, Hong Kong businesses can seek further collaboration with State-owned enterprises and central enterprises in opening up markets in ASEAN countries and along the B&R, thus realizing Hong Kong’s unique capacity as a regional investment platform.
The operation and management of many infrastructure projects in Hong Kong are world-class, and Hong Kong businesses are highly experienced in port operation. Hong Kong International Airport ranks first globally for cargo throughput; it is also one of the busiest passenger airports in the world. The implementation of FTA will be instrumental to all-round collaboration between Hong Kong and ASEAN on the operation and management fronts.
We really look forward to the official signing of the Hong Kong-ASEAN FTA in November, which will provide specific policy support for the business sector to further explore the ASEAN market. We also hope the HKSAR Government would consider setting up more economic and trade offices in ASEAN countries. By providing the latest information and services and organizing business study tours and promotional events, these offices can help Hong Kong companies develop the ASEAN market more effectively and facilitate Hong Kong to perform well in her role as C.I.O.