Tuesday, 25 August 2015

HK connections open up new markets

Secretary for Commerce & Economic Development Gregory So

Chile has long and strong ties in our part of the world. Your country was the first South American nation to establish an office in our neighbouring Guangdong Province in 1845. Back then, Hong Kong was nothing more than a fishing village.


Today, our region is at the heart of global trade and Hong Kong is right in the thick of the action. More than 7,500 overseas and Mainland Chinese companies maintain offices here. About half of them use Hong Kong as regional headquarters or offices.


Hong Kong is also a prominent source and destination for foreign direct investment (FDI). According to a recent report of the United Nations Conference on Trade and Development, Hong Kong ranked number two in global FDI inflows, second only to Mainland China. We were also the world's second largest outward investing economy, second only to the United States. In particular, we have a very significant volume of trade and investment flows with Mainland China.


We are a dynamic global city thanks to a number of enduring advantages. These include the rule of law supported by an independent judiciary, a low and simple tax system, and an open and business-friendly environment.


We embrace the internationally recognised codes of practice in business and commerce. And we guarantee a level playing field for all companies, and free flows of capital, information and talent. Add it all up, and you can understand why the Washington-based Heritage Foundation has named Hong Kong the world's freest economy for the past 21 years.


We welcome more companies from Chile to take full advantage of Hong Kong's strengths to connect with new markets in Asia and Mainland China in particular.


Enhanced connectivity

Speaking of new markets in Mainland China, I would like to share with you the latest vision from our Central Government, the Belt & Road initiatives. The Belt & Road is a development strategy designed to enhance connectivity and co-operation, and integrate China more fully into the world economy.


The "Belt" refers to the New Silk Road Economic Belt, which will link China with Europe through Central and Western Asia. The "Road" is the 21st Century Maritime Silk Road. It will connect China with Southeast Asian countries, as well as Africa and Europe.


The Belt & Road initiatives seek to link up different regions in Asia, Europe and Africa, and promote policy co-ordination, infrastructural facilities connectivity, unimpeded trade and investment, deeper financial integration and stronger people-to-people bonding among countries along the routes.


The Belt & Road will generate demands and increase the volume and intensity of international trade and investment flow among countries on the routes, as well as the two-way traffic in and out of China.


Super-connector role

Hong Kong is well placed to serve as the super-connector for all these exciting developments. For example, being an important financial, commercial and maritime centre in the world, Hong Kong will provide a wide range of professional services for the Mainland enterprises to go global in pursuit of the Belt & Road opportunities.


Foreign investors, including those beyond the Belt & Road region, will definitely benefit from these initiatives by establishing a foothold in Hong Kong to seize the business opportunities.


Chile is Hong Kong's second-largest trading partner in South America. Chile has extensive free trade agreements with trade partners, including China and Hong Kong. All these come together nicely when we explore commercially valuable co-operation opportunities between Hong Kong and Chile in the context of the Belt & Road. We encourage Chilean businesses to make use of Hong Kong as an investment springboard or a logistics hub when they venture into the markets of the Belt & Road countries.


Free trade commitment

Hong Kong has accumulated a lot of experience in opening up new markets and establishing strong links with partners around the world. For more than three decades, our city's commitment to free and open trade has contributed to the opening up and reform policies in Mainland China.


Hong Kong has always been the "super-connector" connecting Mainland China with the rest of the world. We are happy to share our experience and business connections, as we believe in making the pie bigger rather than getting a bigger share of a small pie.


Hong Kong has open borders and, more importantly, our people - including our business people - are very versatile and have open minds. We welcome partners from different parts of the world, and that of course includes Chile.


I encourage Chilean companies to take advantage of our Trade Development Council's close contacts with Mainland businesses. The TDC has a great deal of expertise in matching overseas companies with the right partners in the Mainland. I know the TDC's representatives here today will be happy to share their insights with you.


Tariff-free access

I also encourage Chilean companies to take advantage of the Free Trade Agreement (FTA) between Hong Kong and Chile. Under this FTA, all Chile-origin products enjoy the certainty of tariff-free access to Hong Kong. Chilean services providers also benefit from the enhanced legal certainty of market access in Hong Kong for a wide range of sectors.


Beyond that, Chilean companies may also take advantage of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), which provides preferential treatment for Hong Kong service suppliers as well as tariff-free treatment for products of Hong Kong origin. CEPA is nationality-neutral. With CEPA, Latin American companies set up in Hong Kong can gain greater and easier access to the Mainland market through Hong Kong.


Chile and Hong Kong may be separated by almost 20,000 kilometres of the Pacific Ocean, but we have all the right connections to work together closely. We treasure our partnership with Chile. Not only are we both strong advocates and practitioners of free and open trade and investment, we have also been working side-by-side in numerous fora, including the World Trade Organisation and Asia-Pacific Economic Cooperation (APEC).


I look forward to exploring new ways to further strengthen our partnership during this trip. Together, Chile and Hong Kong can enjoy the fruits of stronger bilateral trade. We can also shine a light on the opportunities that free markets bring to our economies, our APEC region and to the rest of the world.


Secretary for Commerce & Economic Development Gregory So gave these remarks at a luncheon organised by the Asia Pacific Chamber of Commerce, HSBC and the Chile Pacific Foundation in Santiago, Chile.

Otmane El Rhazi
Department of Commerce
Economic Development
Text/Mobile, +44 7414 782 320

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