Dr Jonathan CHOI Koon-shum (Chairman of the 51st terms of office) December 2019
Hong Kong plays a significant role in the transformation of the country, it should leverage its strengths and proactively seek to take part in the country’s development, while continuing to bolster its global network and serve as the springboard for the country to connect with the rest of the world.
The impact of the months-long social unrest triggered by the now withdrawn Fugitive Offenders Ordinance amendments proposal as well as external factors including the ongoing Sino-US trade conflict is making itself felt on Hong Kong’s economy and business prospect. Inevitably, Hong Kong’s integration into national development and strengthened cooperation with other regional economies are key to the city’s long-term economic growth. It is crucial for the Hong Kong business sector to closely follow the economic and trade developments in the region and strive to diversify. In particular, there are a few recent development trends that should draw our attention.
Tapping into the service market in the Greater Bay Area
The Ministry of Commerce and the HKSAR Government have recently signed the Agreement Concerning Amendment to the Mainland & Hong Kong Closer Economic Partnership Arrangement (CEPA) Agreement on Trade in Services. The agreement introduced new liberalization measures in several important services sectors, and made it easier for Hong Kong service suppliers and professionals to set up businesses and practice in the Mainland respectively.
Meanwhile, the Leading Group for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area (the Greater Bay Area) has announced 16 new measures which included multiple facilitation measures for Hong Kong service professionals to develop in the Greater Bay Area. All these, together with the various existing facilitation measures, will surely increase the appeal for businesses and individuals from Hong Kong’s services sectors to enter the Mainland market and help enhance their competitiveness.
Seizing opportunities to expand into the Mainland market
The second China International Import Expo, which was successfully staged last month, provided an important platform for Hong Kong businesses to tap into the Mainland market. Featuring a number of Fortune Global 500 companies as well as small and medium-sized enterprises from around the region, the expo showcased a wide variety of products, technologies and services. Among the participants were around 200 Hong Kong enterprises, 20% more than last year, with the Hong Kong exhibiting area 70% bigger than in the inaugural edition.
Over the years, the Central Government has been encouraging Hong Kong businesses to partake in Mainland development through a string of favorable policies. In recent years, the HKSAR Government has also been upgrading the “BUD Fund” and other funding schemes continuously to help SMEs tap into the Mainland market. These policies help to consolidate Hong Kong’s role as an entrepot connecting the Mainland with overseas markets. Leveraging the systemic advantages enjoyed by Hong Kong, Hong Kong businesses can introduce products and services from other parts of the world to the Mainland. It will not only allow Hong Kong to further function as a bridge but also promote closer cooperation among the “Belt & Road” countries.
Expanding cooperation opportunities in East Asia
Not long ago, China had finalized the Regional Comprehensive Economic Partnership (RCEP) negotiations after seven years with member states of the Association of Southeast Asian Nations (ASEAN), Japan, South Korea, Australia and New Zealand. Upon the signing of the official agreement, which is hoped to take place next year, the world’s biggest free-trade market which comprises about 30% of the world’s GDP will be born, and a new milestone in regional cooperation erected.
While Hong Kong maintains good economic and trade relations with the founding countries of the RCEP, the HKSAR Government should actively explore how to help the Hong Kong business sector capture the enormous opportunities presented by the RCEP, and allow businesses to obtain the latest information regarding RCEP cooperation through a one-stop information and support platform, supplemented by more comprehensive support measures. In the long run, the HKSAR Government can seek the support of the Central Government and more ASEAN countries to endorse Hong Kong’s participation in the RCEP, which will strengthen the city’s role as a “super connector” and secure better conditions for Hong Kong products as well as financial and professional services to enter other markets.
The current geopolitical climate and local social atmosphere have no doubt presented challenges to Hong Kong. Nevertheless, Hong Kong plays a significant role in the transformation of the country, and with the latter further opened up and building closer ties with other countries and regions, Hong Kong should leverage its strengths and proactively seek to take part in the country’s development, while continuing to bolster its global network and serve as the springboard for the country to connect with the rest of the world.