Dr Charles YEUNG (Chairman of the 48th, 49th terms of office) January 2015
Looking back at the past year, the global economy in general kept recovering at a moderate pace. But the recent fluctuations in the international foreign exchange market and oil prices, together with the upward pressure on the US interest rates, will add uncertainty to economic prospects and financial markets in the new year. It is expected that Hong Kong will be facing more challenges, and attention should also be paid to the impact of the “post-Occupy Central effects” on the business environment and overall economy of Hong Kong.
Fortunately, the Mainland economy is still expanding steadily. This, coupled with the Central Government’s efforts in pushing the “One Belt and One Road” strategic plan and the free trade zones construction forward, will inject fresh economic momentum into Hong Kong and even the whole world. Earlier on, the State Council has announced the setting up of the Guangdong Free Trade Zone (FTZ), and the Ministry of Commerce and the HKSAR Government have signed the Agreement between the Mainland and Hong Kong on Achieving Basic Liberalization of Trade in Services in Guangdong. These developments will not only provide unprecedented room for Hong Kong service sectors to further expand in the Mainland market, but also carry significant implications for Guangdong and Hong Kong to have more comprehensive service trade cooperation and boost their respective competitiveness. We expect that the Guangdong and Hong Kong governments would strengthen communication in facilitating cooperation between the two places’ service industries and encourage business enterprises’ participation, striving for the effective implementation of the policy measures conducive to Guangdong-Hong Kong economic partnership.
Taking Active Part in Guangdong FTZ Construction
Last month, the Chamber’s newly-formed Committee visited Guangzhou to meet with the leaders of Guangdong Province and Guangzhou Municipality. During his meeting with us, Secretary Hu Chunhua pointed out that the Guangdong FTZ will put a focus on augmenting partnership between Guangdong, Hong Kong and Macau, and it will promote the three places’ collaborative development in finance and modern services through Qianhai, Nansha and Hengqin - the three districts designated for the province’s cooperation with Hong Kong and Macau. We believe that Hong Kong can maximize its unique advantages in finance and, on the premise that the financial security of China is ensured, use Qianhai as a pilot place for further Guangdong-Hong Kong partnership in financial innovation. To this end, efforts can be made to, for example, explore the establishment of various financial bourses in the district and further develop offshore RMB businesses, encourage enterprises to engage in cross-border financial transactions, and provide clients with diversified choices of RMB investment products (e.g. bonds and investment funds) and private wealth and asset management services. Besides, Nansha has been striving to develop professional legal and arbitration services in recent years. These services in Hong Kong have already aligned with the international standards. With this advantage, Hong Kong should enhance cooperation with Nansha in these professional areas. The two places should also strengthen their exchange of professional talents, working together to make Guangdong, Hong Kong and Macau an excellent and efficient international arbitration hub in the region.
We believe that in Guangdong-Hong Kong partnership, Hong Kong can play the role of a “super connector” who is readily to provide more diversified financial and professional supporting services for the future Guangdong FTZ. In the long term, the city can serve as a model and a gatekeeper for the healthy growth of China’s financial regime and modern service industries.
Prompting Implementation of Service Liberalization Agreement
The newly-signed Agreement between the Mainland and Hong Kong on Achieving Basic Liberalization of Trade in Services in Guangdong (hereinafter referred to as “the Agreement”) contained liberalization measures in a number of service sectors. Moreover, it was the first time under the CEPA framework that national treatment was granted to Hong Kong service sectors and a negative list was adopted. Also included in the Agreement was a most-favored treatment provision. With its breadth and depth of liberalization surpassing the previous CEPA measures, the Agreement will in the long run give huge impetus for services sectors in Guangdong and Hong Kong to forge closer ties, and it will also lay an important foundation for the realization of service liberalization between the Mainland and Hong Kong by the end of the “12th Five-Year Plan” period.
CGCC had offered many ideas on perfecting the mechanisms for service liberalization under CEPA. For instance, we had proposed that national treatment for market access be granted to companies and professionals from Hong Kong’s service industries, so that they could be equally treated in the Mainland as far as market status, operation requirements and practicing qualification requirements were concerned. We had also proposed the management practice of negative lists, which could enable much more efficient interaction between Guangdong and Hong Kong service industries by shortening and simplifying the approval time and procedures. We are very delighted to see the related proposals were put into the Agreement for implementation. And we hope that governments in Guangdong and Hong Kong can have closer discussion on details about the implementation of the Agreement. For instance, the functions of the “Guangdong/Hong Kong Expert Group on Implementing CEPA Services” under the Hong Kong/Guangdong Co-operation Joint Conference can be further enhanced to provide comprehensive support to address the problems possibly faced by Hong Kong traders expanding into the Guangdong service market.
The two governments should also step up publicity efforts to let service enterprises and professionals have better understanding of the contents of the Agreement. Furthermore, the two sides can facilitate closer cooperation between service trade associations, institutes and chambers of commerce, while exploring further relaxation in mutual recognition of qualifications, professional examinations and qualification framework recognition. These concerted efforts will propel the more effective implementation of liberalization measures under the Agreement and bring positive outcomes for the service liberalization between the two places.
In conclusion, the comprehensive and closer economic partnership between Guangdong and Hong Kong will give fresh momentum to the long-term development of the service sectors and overall economy of Hong Kong. Looking into the new year, CGCC will remain committed to its bridging role, rendering full support in areas such as strengthening Hong Kong’s cooperation with Qianhai, Nansha and Hengqin, catalyzing the implementation of Guangdong-Hong Kong service liberalization and assisting in the building of the Guangdong FTZ, so as to help drive Guangdong-Hong Kong partnership towards a new milestone.