Monday, 14 September 2015

HK best for Aus business


Chief Secretary Carrie Lam
About 90,000 Australians live in Hong Kong, making Hong Kong home to the largest Australian expatriate community in Asia. They include teachers, lawyers, accountants, business people, even judges presiding in Hong Kong courts. Close to 80,000 people of Hong Kong origin reside in Australia, including about 18,000 here in Victoria. Australia is now one of the top destinations for Hong Kong students studying abroad.

Last year, about 600,000 people from Australia visited Hong Kong, making Australia our eighth-largest visitor market. Hong Kong was Australia's ninth largest source of visitor arrivals. Of those 202,000, some 74,000 headed to Victoria.

In 2014 our bilateral trade in goods and services reached over A$8.5 billion. Hong Kong and Australia are each other's seventh-largest trading partner in services.

Mutual investments
In addition to trading, we also invest in each other's economies. Last year Hong Kong was Australia's sixth-largest source of direct investment, with a total stock of A$77 billion. Think about the size of Hong Kong, which is just one seven-thousandth of Australia's.

Hong Kong investments in Australia go into infrastructure, mining, telecommunications, agriculture, banking and property development. Hong Kong's super-efficient metro operator, the Mass Transit Railway Corporation - in which our Government is the major shareholder - has a large stake of 60% of shares in Metro Trains Melbourne. The venerable old Hong Kong company China Light & Power fully owns EnergyAustralia. On the other hand, Australian companies are also well established in Hong Kong, not merely for the 7 million people's market but the vast 1.3 billion people's market in Mainland China.

As Australia's direct economic ties with Mainland China continue to strengthen and given the recent signing of a free trade agreement between Australia and China, will Hong Kong still be a preferred platform for Australian businesses? The answer is an unqualified yes!

Clean, transparent governance
Hong Kong's unique position under "One country, two systems" gives us powerful business and financial advantages. This constitutional status, guaranteed under the Basic Law, also gives Hong Kong its unique role as the "super-connector" between Mainland China and the rest of the world.

Under the "One country, two systems" principle, Hong Kong practises the "other" system - the capitalist one. We have a free and competitive economy. Our institutional infrastructure is rock solid. Similar to Australia, our legal system is based on English common law and is upheld by an independent judiciary. At present, three distinguished Australian judges are non-permanent judges of our Court of Final Appeal.

We have a clean, transparent and accountable government and regulatory environment. We strongly protect intellectual property. We offer a level playing field and rules-based system for business. We have a deep pool of managerial talent with international experience.

Hong Kong has a low and simple tax system with no GST or VAT. We have no inheritance tax. No capital gains tax. Profits tax is capped at 16.5%, no matter how great the profit. Maximum salaries tax is 15%. Information and capital flow freely in Hong Kong. These are some of the factors that made the Washington-based Heritage Foundation name Hong Kong the world's freest economy for the 21st consecutive year.

All these factors combined have served Hong Kong well, and will continue to provide a value proposition moving forward. That's because trade, business and investment - and the many services that support them - look for certainty, clarity and consistency. Hong Kong offers that.

For all these reasons, Hong Kong remains an attractive place for investing and doing business. The World Investment Report 2015 issued by the United Nations Conference on Trade & Development ranked Hong Kong number two in global FDI inflows (US$103 billion), second only to the Mainland of China. The latest Global Financial Centres Index rates Hong Kong third. About 7,600 companies from around the world maintain offices - half of them regional headquarters and offices - in Hong Kong.

Super connector
Hong Kong enjoys close and special connections with Mainland China. Our "super-connector" role does not only facilitate overseas companies investing in China through Hong Kong, but also helps Mainland companies "go global".

The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), made possible because of Hong Kong's status as a separate economy, enables companies based in Hong Kong to gain easy access to the Mainland market through various tariff-free privileges. It is, and will remain, the most preferential free trade agreement signed by Mainland China. Best of all, CEPA benefits are nationality neutral. That means Australian investors can set up a company in Hong Kong, partner with, invest in or even acquire service suppliers in Hong Kong to make use of a host of unbeatable CEPA benefits to reap the rewards of Mainland China.

As the world's premier offshore Renminbi (RMB) business centre, Hong Kong also plays a key role in the internationalisation of the Mainland currency. In 2014, RMB trade settlement handled by banks in Hong Kong grew a massive 60% year-on-year to reach RMB6.3 trillion. For Australian companies trading with Mainland China, the Hong Kong advantage is clear.

Australian financial institutions may also benefit from Shanghai-Hong Kong Stock Connect. Launched last November, it directly connects the stock markets of Hong Kong and Shanghai, enabling investors from all over the world to trade in some 570 Shanghai-listed shares, directly, through the Hong Kong Stock Exchange. We are now working on a Shenzhen-Hong Kong Stock Connect.

Hong Kong is poised to make an important contribution to the new Silk Road Economic Belt and 21st Century Maritime Silk Road programmes. The Belt-Road initiative is designed to expand Mainland China's transcontinental connectivity, and promote economic, political and cultural co-operation and development from Asia through Africa and into Europe. Hong Kong has everything, from financial and human resources to market infrastructure and networks to business and professional know-how, to contribute to the successful and sustainable development of the Belt-Road initiative.

In tandem with the Belt-Road initiative, the Mainland has mooted the Asian Infrastructure Investment Bank. Australia has already been accepted as a founding member of this AIIB. Committing A$930 million as paid-in capital to the AIIB over five years, Australia will become the sixth largest stakeholder. Building on our strengths on various fronts, namely financing, asset management, dispute resolution and arbitration, Hong Kong is seeking to play an active role in the AIIB. Indeed, we are pursuing the preparatory work for the AIIB to set up an office in Hong Kong. Australian businesses may wish to capitalise on Hong Kong's strong background to share the huge opportunities arising from the AIIB.

Overseas talent magnet
All these developments mean opportunities for talent, and I mean talent from around the world including Australia. We are keen to attract talent to strengthen Hong Kong's competitiveness. And you don't have to be successful businessmen - we also welcome students from around the world. Hong Kong is a regional education hub with world-class universities, and is one of the most popular destinations for scholarship students under Australia's New Colombo Plan.

To internationalise further Hong Kong's higher education environment, we have doubled the quota of non-local students to 20%. After graduation, they can remain in Hong Kong without restriction for up to one year to enable them to search for the right job or even embark on their entrepreneurial journeys as start-ups. They can also take up part-time on-campus work, internships and summer jobs while studying.

At the same time, we have recently enhanced our Admission Schemes for Talent, Professionals & Entrepreneurs. I encourage Australians to take advantage of the schemes. Apart from that, we have a reciprocal Working Holiday Scheme under which tens of thousands of Hong Kong young people have already benefited. I encourage more young people from Australia to take advantage of that, to come and gain from the experience and contribute to our city's diversity.

Australians who are thinking about taking up employment in Hong Kong will be pleased to know we have 51 international schools - the highest number in Asia. These schools offer a familiar learning environment for students from all corners of the globe. They offer over 10 curricula, including Australian ones.

Culture means business
Hong Kong is not just a premier business city. It's also an exciting centre of arts and culture, with a variety of events manifesting the diversity and vibrancy of Hong Kong's cultural life throughout the year. Those keen on performing arts will be spoilt for choice in a city that boasts nine major groups and nearly 1,000 troupes, staging over 8,000 performances a year.

Hong Kong is now the world's third-largest art auction market after New York and London. Art Basel in Hong Kong is a leading event in the international arts calendar. The 2015 edition showcased 233 leading galleries from 37 countries and territories, including eight distinguished galleries from Australia.

Our Government is making a major push to develop Hong Kong's appeal as a centre of arts and culture. For example, the Government-funded West Kowloon Cultural District, taking shape on a 40-hectare site, is one of the largest cultural infrastructure projects in the world. This cultural quarter, offering stunning views of Victoria Harbour and the Hong Kong skyline, will feature an exciting variety of arts and cultural facilities, including a splendid museum focusing on 20th and 21st century art. In this connection, I must place on record our appreciation of the good work done by the outgoing CEO of the West Kowloon Cultural District Authority Michael Lynch, who is from Australia, during his four-year tenure.

East meets West
Hong Kong, which packs surprising diversity, also has much to offer visitors. A unique blend of old and new, East and West. Our iconic harbour and skyline. Beautiful countryside. World heritage-listed geoparks. Chinese and Western historic sites. Enchanting local festivals. Food lovers can embark on a culinary odyssey of tastes from around the world right in Hong Kong. These are just a few reasons why TripAdvisor rated Hong Kong one of the top 10 Asian destinations in their latest Travellers' Choice awards. Hong Kong is well worth a visit.

For our friends from Australia, I must highlight the following key dates in our sporting calendar. The Hong Kong Sevens 2016 will take place on April 8 to 10 at the Hong Kong Stadium. The three-day tournament has become one of most popular sporting events in Asia, attracting the world's greatest rugby players and thousands of fans from around the world. If you want to avoid peak season surcharges, book your trip early.

I am also delighted that, for the first time in Hong Kong, people can enjoy close encounters with Aussie creatures such as koalas, wallabies and kookaburras at the new Adventures in Australia theme area at our world-class Ocean Park. I am happy to report that these animals - precious gifts from Australia - are adapting well to their new home.

Chief Secretary Carrie Lam gave these remarks at an Asialink business luncheon in Melbourne on September 15.

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