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Under the principle of "One Country, Two Systems", Hong Kong, as part of China but strategically located outside the Mainland, serves as both a gateway to Mainland China and the business capital of Asia, said the Director of the Hong Kong Economic and Trade Office (HKETO) in Singapore covering the Association of Southeast Asian Nations (ASEAN), Mr Fong Ngai, in Bangkok, Thailand, today (October 11).
He was delivering a presentation entitled "Hong Kong - Asia's Business Capital: A Strategic Location to Seize Opportunities" at a dinner co-organised by the Thai-Hong Kong Trade Association and the Thailand-Hong Kong Business Council.
Mr Fong told members of the two business associations that the strategic location of Thailand simply places it as the business hub for the Indochina region.
Noting the well-established and growing economic ties between Hong Kong and Thailand, he said he believed that the trade and economic ties between the two places would further develop and strengthen, given their strategic locations and privileged positions in China and Indochina respectively.
"Indochina is an emerging market which Hong Kong has recently been investing in and trading with extensively. Hong Kong and Thailand should join hands to develop the trade and investment links between China and Indochina, capitalising on the business infrastructure and expertise of the two places," Mr Fong said.
He pointed out that Thailand is Hong Kong's second largest trading partner among ASEAN countries with a US$14 billion trade volume in 2010, growing on average 9 per cent each year from 2006 to 2010.
He added that the ASEAN region as a bloc has become Hong Kong's second largest trading partner, just after Mainland China, as the trade volume reached US$85 billion in 2010 and the annual growth rate averaged 8.2 per cent from 2006 to 2010.
In addition, following the conclusion of the Agreement on Avoidance of Double Taxation and the Investment Promotion and Protection Agreement between Hong Kong and Thailand in 2005, Thailand is now the seventh largest destination of Hong Kong's outward direct investment, with the total investment stock estimated at US$6.1 billion.
On Hong Kong's role as a gateway to Mainland China, Mr Fong said, "In China's latest 12th Five-Year Plan, Hong Kong is positioned as an offshore centre for business using the Mainland currency, the Renminbi (RMB); as China's global financial centre; and as an international asset management centre."
Hong Kong was the world's largest IPO centre in 2010, raising a total of US$58 billion. It has also become the offshore centre for RMB banking, RMB trade settlement and the issuance of RMB bonds.
RMB trade settlement conducted through banks in Hong Kong in the first seven months of 2011 amounted to RMB953 billion (US$150 billion), representing about 9 per cent of China's total trade. RMB deposits in Hong Kong totalled RMB570 billion (US$90 billion). Hong Kong is the largest offshore RMB bond market, having raised RMB50 billion (US$8 billion) in the first seven months of this year.
"Important infrastructural projects will connect Hong Kong seamlessly to the 100 million population in the Greater Pearl River Delta region for further economic integration," Mr Fong said, referring to the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge, which will be completed in 2015 and 2016 respectively.
Mr Fong also highlighted Hong Kong's strategic location to explore opportunities with major Chinese companies, as over 3 000 internationally minded Chinese enterprises are based in Hong Kong. He appealed to the participants to seize the business opportunities offered by Hong Kong for doing business in China.
In particular, Mr Fong introduced them to the nationality-neutral Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), a free trade agreement (FTA) covering trade in goods, services and investment facilitation. He said, "CEPA remains the most preferential among all Mainland FTAs. It is a win-win agreement, bringing new business opportunities to the Mainland, Hong Kong and all foreign investors."
To leverage CEPA benefits, foreign investors can establish their businesses in Hong Kong, to acquire or to join forces with enterprises in Hong Kong to make the full use of the CEPA opportunities in entering the Mainland market.
Under the "One Country, Two Systems" principle, Hong Kong continues to enjoy an independent judiciary, political stability, a low and simple tax regime, free market principles and a clean business environment that together underpin its success as an international business city, Mr Fong stressed.
Ends/Tuesday, October 11, 2011
Issued at HKT 18:35
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