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Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the session on "Association of Southeast Asian Nations (ASEAN) Economic Community - Creating Regional Prosperity, Resilience and Opportunities" of the ASEAN Leadership Forum session in Nay Pyi Taw, Myanmar, today (May 12):
His Excellency Mr U Win Myint, the Minister of Commerce, Myanmar; His Excellency Dato' Sri Mustapa Mohamed, the Minister of International Trade and Industry, Malaysia; honourable ministers, distinguished guests, ladies and gentlemen,
I am delighted to join all our friends from ASEAN at this Leadership Forum. The topic of "ASEAN Economic Community (AEC) - Creating Regional Prosperity, Resilience and Opportunities" is significant for all of us. Thank you for this opportunity to share with you Hong Kong (HK)'s perspective, and I can assure you that it is a very positive perspective of our region.
What AEC means to ASEAN
The ASEAN Economic Community is a visionary milestone towards establishing the ASEAN Community. The diversity and dynamism of individual member states of ASEAN is an enviable quality. This diversity is what makes individual members excellent partners in the pursuit of strong, sustainable and inclusive economic growth that benefits all. The AEC is a powerful tool to create regional prosperity, resilience and opportunities. The strengths of the AEC lie in the combined strengths of individual members of ASEAN and in the strength of the bond that connects them. In recent years, ASEAN member states have made great strides in boosting productivity by bringing down barriers to doing business and investing in human resources and technological development. Certainly, there is huge potential still to be unleashed.
To sail before the wind of globalisation, it is only natural for ASEAN member states to form the AEC to gain momentum and develop gravitas in the global economy. The AEC strives to ensure seamless connectivity to allow free flow of goods and services as well as labour, capital and skills. This will help to harness the power of a diverse region. An economically integrated ASEAN is an essential ingredient of common prosperity and stability.
Economic integration of this scale will enhance co-operation as well as competition within the AEC. Both are good and necessary for a brighter future. And both pose challenges and opportunities to individual member states and their constituents. Policy consistency, transparency and stability are conducive to business confidence by reducing risks and costs, and are thus important guides towards the desired economic outcome. Co-operation, in particular, lays the foundation for achieving plans and policies that match the common objectives of the AEC.
A community of 600 million people within the AEC represents an enormous human resource and a deep and broad pool of talent and ideas. We believe that innovation and creativity are key drivers for economic growth. Harnessing this human power requires joint efforts of government, industry, academia and research sectors. A diversified pool of talents from different sectors can support the healthy and sustainable development of the AEC. Savvy entrepreneurs can identify the best ideas as well as the skills and resources necessary to take ideas off of the drawing board and turn them into reality and core assets. Experienced entrepreneurs are also the best sources of ideas for optimum use of resources and effective policymaking. A more integrated and well-connected AEC can bring a triple win for the government, the business community and the society at large.
What AEC means to the world
The AEC must be outward looking. The AEC itself is a populous market, with increasing consumption power as the economy grows, living standards improve and the middle class expands. Ample business opportunities across the AEC will bolster the growth of local companies and support the local communities. But the world is rapidly becoming more integrated and interconnected. Technology has torn down barriers and made the business world a smaller and flatter place. Technology continues to revolutionise the way of doing business in more and more manufacturing and services sectors. Today, a competitor thousands of miles away on the map is just a click away on a computer. Global economic integration is being driven by innovation, notably advanced information and communications technology and development of global value chains. The AEC has to be a piece of the global jigsaw, and a rather large piece at that. It has to establish equally seamless connectivity to world markets, including traditional markets such as Europe and the United States as well as emerging markets such as Mainland China and India as well as less accessible markets across Africa and South America. I could go on, but I'm sure you get the point, and the point is that for the AEC to truly succeed it must be globally connected, it must bring down barriers to goods and services trade and it must facilitate direct investment flows.
Policymakers the world over are trying to keep up with the trend of globalisation. Trade agreements, be they multilateral, regional or bilateral, must bring outcomes that really meet today's business needs and prepare us for the future. In forging trade deals, we must not lose sight of their ultimate purpose of stronger, inclusive and sustainable economic growth. The private sector is not just a stakeholder in trade agreements or the regional architecture; the private sector is at centre stage of the process and its interests must be properly served.
At the same time, efforts to create and promote business opportunities do not stop at generating profits for the private sector; they must also bear fruit for the wider community in the long run.
What AEC means to Hong Kong
The establishment of the AEC turns a new page in the bilateral relationship between ASEAN member states and Hong Kong. We have been good neighbours and partners with a strong history of trade. The expansion of trade from primarily agricultural products and raw materials to a much wider range of goods and services, coupled with the surge in trade volume and tourists, are the testimony of our inter-connectivity.
Currently, ASEAN is Hong Kong's second largest trading partner in goods and fourth largest in the world for services. ASEAN is a major source of import of many of our daily needs, such as rice and petroleum. Within Hong Kong, residents of ASEAN member states make up our largest group of expatriates and foreign immigrants.
What Hong Kong means to ASEAN - the case for a Free Trade Agreement (FTA)
As an international financial and business centre, Hong Kong spares no effort to maintain a stable and dynamic business environment as well as positive relations with our trading partners.
Hong Kong thrives as a free and open economy. It is government policy to provide an enabling environment that gives businesses the best chance of success in Hong Kong. Our mantra is: "Market Leads, Government Facilitates". We keep taxes as low as possible, we cherish the rule of law and we don't tolerate corruption. Hong Kong's door is wide open to businesses and talents from around the world. We showcase and advocate the benefits of a free and open policy without imposing our values on others.
The remarkable pace and achievements of reform in many countries in our region and the proliferation of Free Trade Agreements all point to the attributes of free and open trade policy. We believe that good use of government-to-government (G2G) platforms would enable more regular and structured interaction and co-operation between governments to facilitate trade and investment, while avoiding the scourge of protectionism. This underpins our enthusiasm to conclude an FTA between Hong Kong and ASEAN. The ASEAN-HK FTA will not only help focus the attention of entrepreneurs on the substantial market opportunities available, but also provide a stable and transparent framework for commerce and industries to flourish and collaborate efficiently and effectively. The FTA will also bring about significant strategic benefits for achieving regional economic integration.
The ASEAN-HK FTA will enhance supply chains by facilitating movement of components and finished goods within the region. Given Hong Kong's well-developed trading and logistics infrastructure and high-quality services, ASEAN companies, particularly SMEs (small and medium-sized enterprises), will be able to save time and save money in connecting with suppliers and consumers, especially those in Mainland China. The trade creation effect for trade in goods arising from this FTA will also stimulate demand for trade-related support services.
Furthermore, with the Central People's Government's policy of helping enterprises in both the Mainland of China and Hong Kong to "go global" together, the potential investment from the Mainland of China to ASEAN through Hong Kong would be enormous. The complementarity and synergy so generated by closer economic integration would help create a bigger pie for ASEAN and Hong Kong.
With the establishment of the AEC, ASEAN member states will be the architects and champions of a new trade scene in Asia. With our status as the gateway to the Mainland China market, Hong Kong will continue to make the most of its cross-boundary connectivity to foster economic ties with ASEAN. The ASEAN-HK FTA will be the ideal platform for connecting opportunities and stimulating further integration and growth. I hope that negotiations of the ASEAN-HK FTA can be concluded as early as possible so that the business people and investors of both sides can reap the benefits of the FTA as soon as possible.
Ladies and gentlemen, I have provided Hong Kong's perspective on the establishment of the AEC. I have also mentioned some of the areas where our city can contribute to a more efficient, more integrated and more competitive region.
I thank you for your support of the ASEAN-HK FTA and I look forward to a bright and prosperous future for our economies and our communities.
Thank you very much.
Ends/Monday, May 12, 2014
Issued at HKT 14:54
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