Speech by CE at "Think Asia, Think Hong Kong" symposium in London (English only) (with photos/video)
The Right Honourable Greg Hands (Minister of State in the Department for International Trade), ladies and gentlemen,
Good morning. A very warm welcome to you all for joining the "Think Asia, Think Hong Kong" symposium.
The first "Think Asia, Think Hong Kong" symposium was held here in London in 2011. In addition to a main symposium in London, there were also a range of seminars held in Leeds and Edinburgh. Following the overwhelming response to that very first series, the "Think Asia, Think Hong Kong" symposiums were then held in Japan, the United States, France, Italy, Canada and Germany. In my former capacity as the Chief Secretary for Administration, I attended last year's "Think Asia, Think Hong Kong" symposium held in Düsseldorf after a short London programme.
These promotional and business events were very warmly received. The year of 2017 marks the 20th anniversary of the establishment of the Hong Kong Special Administrative Region (HKSAR). To further enhance bilateral trade ties between the United Kingdom (UK) and Hong Kong, we are returning to the UK to stage the "Think Asia, Think Hong Kong" symposium in London. Bringing together some 50 high-profile speakers, the symposium and thematic sessions will showcase Hong Kong's role as Asia's service centre and a gateway to business opportunities in the East.
We treasure our long-standing trade and economic relationship with the United Kingdom. In 2016, the UK was Hong Kong's second largest trading partner among the European Union (EU) member states and we were the UK's eighth largest trading partner outside the EU. As at end-2015, the UK was also the eighth largest source of inward direct investment into Hong Kong, with a total stock amounting to GBP21.6 billion. Some 650 British companies have set up their businesses in Hong Kong; more than half, 347 to be exact, are using Hong Kong as their regional headquarters or regional offices.
Despite the continuous opening up of the Mainland China economy, Hong Kong continues to be an ideal gateway for foreign companies, including, of course, British companies, to tap the fast-growing Greater China market. The unique advantages that Hong Kong enjoys under "one country, two systems" and our very strong commercial links with the Mainland of China naturally make us the preferred location for doing business in Asia.
Added with our fundamental strengths, including the rule of law, free flow of capital and information, a business-friendly environment, a diverse and international talent pool, and a low and simple tax regime, Hong Kong is named the most competitive economy in the world in the International Institute for Management Development 2016 and 2017 Yearbooks, and one of the top five in the World Bank's chart for ease of doing business. We also take pride in being named as the world's freest economy for 23 consecutive years by the Heritage Foundation. Talking about low taxes, I should add that as promised in my election manifesto, we will introduce measures to make our tax system even more competitive by reducing the tax burden on SMEs and start-ups through a two-tier profits tax system and providing a higher level of tax deductions to incentivise corporations to invest in R&D. In addition, I will convene a Tax Summit later this year to receive more feedback and ideas.
Hong Kong's position as a gateway for business to tap into the Mainland China market is supported by facilitating policies adopted by the Central Government. For instance, the Closer Economic Partnership Arrangement, or CEPA in short, signed with Mainland China in 2003 and enriched annually thereafter provides tariff-free treatment for trade in goods and liberalisation measures for trade in services for Hong Kong service providers. Under the CEPA framework, the two sides signed the Agreement on Achieving Basic Liberalisation of Trade in Services in Guangdong in 2014 and the Agreement on Trade in Services in 2015. The former, the first one drawn up by the Mainland in the form of pre-establishment national treatment and a negative list, achieves early basic liberalisation of services trade between Guangdong and Hong Kong. It was followed by the latter which further enhances the liberalisation in both breadth and depth, and extends the implementation of the majority of Guangdong pilot liberalisation measures to the whole of the Mainland. The beauty of CEPA is: it is nationality neutral. British companies establishing a presence in Hong Kong or working with a Hong Kong partner can enjoy the same access treatment to the massive market of Mainland China.
Apart from the Mainland market, we are strengthening our relationship with the ASEAN economies which are growing fast and have tremendous collaboration potentials with Hong Kong. Our negotiation with ASEAN on a free trade agreement has concluded recently and we will sign the free trade agreement, together with a related investment agreement, in November this year. Our agreements with ASEAN, coupling with CEPA, would provide a solid platform to further enhance the flows of trade and investment between Hong Kong and ASEAN. Again, British companies could enjoy the unimpeded trade flow and facilitation measures if they use Hong Kong as a base in Asia or partner with Hong Kong service providers.
Beyond China and ASEAN, Hong Kong now enjoys unique opportunities under the Belt and Road Initiative. First announced by President Xi Jinping in 2013, "Belt and Road" refers to the land-based Silk Road Economic Belt and the seafaring 21st Century Maritime Silk Road. The Initiative spreads across Asia, Europe and Africa, covering over 60 countries, accounting for 30 per cent of the world's GDP and more than 30 per cent of the world's merchandise trade. It is forecast that by 2050, the countries and regions along the Belt and Road will contribute 80 per cent of global GDP growth.
The Initiative will be the main global growth engine over the next few decades, with strong emphasis on connectivity and international co-operation. It features co-operation priorities in enhancing policy co-ordination, strengthening infrastructural connectivity, facilitating unimpeded trade, deepening financial integration and building people-to-people bonds among countries along the routes. In short, the Belt and Road Initiative offers numerous and substantial opportunities to participating economies.
In addition to Hong Kong's strategic location at the centre of Asia, our extensive international trade networks, world-class infrastructure, well-connected communication and transport networks, and a rich pool of professionals have underpinned our role as a key financial, trading and logistics centre in the region.
Specifically, the Belt and Road Initiative will increase the volume and intensity of international investment flow, as well as the two-way investment traffic in and out of the Mainland. Hong Kong is experienced in carrying out project finance in both public and private markets, and makes available a great variety of financing avenues - we top global ranking in fund-raising in initial public offerings, and offer syndicated loans, private equity funds, bonds, sukuk, etc. We are also Asia's centre of asset and risk management, insurance and re-insurance, and corporate treasury services. Hong Kong is well placed to meet the rising demand for fund-raising and financial management services for the Belt and Road projects.
Behind the investment projects in the Belt and Road, a variety of professional services are required to turn plans into reality: investment and risk assessment, research, financing, insurance, accounting, legal services and dispute resolution, consultation, planning, design, construction and project development, operation management and capacity building, etc. With our clear competitive edge in the provision of professional services, one shining example is our MTR Corporation Limited which will operate Crossrail in London. Hong Kong is best positioned to play a key role in translating the Initiative into tangible benefits for Hong Kong enterprises and professionals. Indeed, many Hong Kong-based companies are already participating in projects in countries along the Belt and Road.
As in the case of CEPA, the Central Government provides great backing and support to Hong Kong's participation in the Belt and Road Initiative. During my first visit to Beijing as Chief Executive last month, I have secured upon my request the agreement that the HKSAR will enter into a comprehensive agreement with the National Development and Reform Commission of the Central People's Government on Hong Kong's participation in the Belt and Road. We are earnestly working on the draft which will cover all the five areas of connectivity and we expect to have this signed within this year.
Meanwhile, we are already preoccupied with promotions and business matching. We have so far held two Belt and Road Summits in Hong Kong in May 2016 and September 2017, that is earlier this month, respectively. This year's Summit, with the theme "From Vision to Action", attracted around 3,000 government and business leaders from some 50 countries and regions. They gathered to discuss the Initiative's latest developments and examine the opportunities for different sectors. The Summit had included project presentations and one-on-one business matching meetings, connecting investors, project owners and service providers, demonstrating Hong Kong's role as an effective platform and a key link for the Belt and Road.
Hong Kong will also play an important role in what is now called the Guangdong-Hong Kong-Macao Bay Area development, another major initiative announced by Premier Li Keqiang in his annual work report earlier this year. The fast growing Bay Area covers Hong Kong, Macao and nine cities in Guangdong Province and has a total population of over 66 million. The gross domestic product of this city cluster is over US$1.3 trillion, comparable to that of Australia or the Republic of Korea. The Bay Area is also the most affluent region in China. Thanks to enhanced connectivity through major transport infrastructure such as the Hong Kong-Zhuhai-Macao Bridge and the Guangdong-Shenzhen-Hong Kong high-speed rail, this development plan will further facilitate the flow of people, goods, capital and information in the region, and presents enormous business opportunities for Hong Kong and overseas businesses. One of the highlights in the blueprint for the Bay Area economy is the development of an international innovation and technology hub, combining the strength of Hong Kong and our neighbouring city Shenzhen. A deal has already been signed in January this year to set up a joint Hong Kong-Shenzhen Innovation and Technology Park on an 87-hectare site in Hong Kong, adjacent to Shenzhen.
Being the country's most international city, not only can Hong Kong benefit from the advantage of "one country" and the convenience of "two systems", it can also serve as a "a hub for international trade and investment" in the Bay Area. Fully leveraging its unique position as international financial, transportation and trading centres, a global offshore Renminbi business hub and an international asset management centre, Hong Kong will become a platform connecting the Bay Area with the rest of the world, bring in foreign businesses and investment, and join hands with Mainland companies to "go global".
As Asia continues to drive the global economy's growth, we welcome British companies interested in exploring new business opportunities in the East to partner with Hong Kong in their search for success. I am delighted that the Hong Kong and UK Governments have agreed to launch a Strategic Dialogue on Trade Partnership, where we can examine the existing trade environment of both markets and identify priority areas to strengthen our mutual trade interests for future collaboration. Our aim is to build on our already very strong economic ties. I look forward to our Governments working together, and with businesses, to identify further enhancements that may facilitate and grow our bilateral trade and investments over the coming years.
I must also add that the strong ties between Hong Kong and the UK are not only about business. We do also have a lot of collaborations between our Governments and our people, say in education, design, and arts and cultural fields. I am glad to note that our multifaceted exchanges with the UK will be given further impetus, with the UK Government set to launch the GREAT Festival of Innovations in Hong Kong next March, showcasing what the UK can offer in terms of trade, professional services, innovation and creative industries. I am sure that the campaign will bring us even closer in all respects.
Ladies and gentlemen, Hong Kong has what you need in a strategic partner for the 21st century. The opportunities before us are in abundance. As the new Chief Executive of the HKSAR who has over 37 years of solid experience in government, I want to assure you not only through my promising words, but rewarding deeds. I look forward to joining hands with our friends in the United Kingdom to realise the opportunities ahead.
May I offer my thanks to the Hong Kong Trade Development Council for staging another memorable Hong Kong event in London today, and giving me this opportunity to return to London, a place I called home for 18 months some 10 years ago when I headed Hong Kong's economic and trade office here. I wish you all a very fruitful seminar.
Thank you very much.
Ends/Thursday, September 21, 2017
Issued at HKT 19:45
Issued at HKT 19:45