CE: HK key to regional connectivity

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Chief Executive John Lee

I would like to offer my sincerest gratitude for your confidence in Asia’s world city, for joining us in person here in Hong Kong, and some online because of the typhoon.

 

Typhoons are no stranger to coastal countries and cities throughout Asia. Every time, we show resilience and join hands to overcome challenges. Every time, we emerge stronger than ever. That applies not just to typhoons, but also to regional co-operation, a very significant topic that has brought us together here today at this summit.

 

For that, I would like to thank the South China Morning Post (SCMP), which celebrates its 120th anniversary this year, for hosting this international gathering of significant, and growing, importance.

 

Hong Kong is proud of having the SCMP. Proud to be home to this high-quality multi-platform media, that informs government officials – including myself, business leaders, and citizens from all walks of life, from every corner of the world. My congratulations to the SCMP for your remarkable achievements over the past 120 years, in telling your readers the exciting stories of Hong Kong, Mainland China, Asia and the world.

 

For all the business leaders, senior government officials and consuls-general joining us here and online, you are all believers in ASEAN (the Association of Southeast Asian Nations). I should say we are all believers in ASEAN, in its rising economic power and its expanding connectivity.

 

Last November, just two weeks after I attended the inaugural edition of this summit, I made my first overseas visit as the Chief Executive of the Hong Kong Special Administrative Region, to Thailand. This July, I led another high-level Hong Kong delegation to visit Singapore, Indonesia and Malaysia.

 

It is against this backdrop that I would like to share with you today my views on our long-lasting, longstanding, and long-rewarding, relations with ASEAN, and how Hong Kong can build on those manifold ties and the promise they offer us.

 

Deepening HK-ASEAN ties

ASEAN is a thriving regional trade bloc. ASEAN is the world’s fifth-largest economy, with a GDP of US$3.3 trillion. Given ASEAN’s young, energetic and ambitious workforce, I have no doubt that it will continue to grow. It will continue to create business and investment opportunities on a global scale.

 

Hong Kong has long-established trade and economic ties with ASEAN. Since 2010, it has been our second-largest merchandise trading partner. Our ASEAN trade last year reached an all-time high of US$165 billion, accounting for nearly 14% of Hong Kong’s total trade with the world. In 2021, our bilateral trade in services climbed 6.8%, year-on-year.

 

We like to invest in each other’s business opportunities. In 2021, ASEAN was the sixth-largest source of inward direct investment into Hong Kong and the third-largest destination of our outward investment.

 

And there is more encouraging news. Last year, 15 new offices with parent companies located in ASEAN, were set up in Hong Kong, taking the total to about 650 ASEAN offices ­– local and regional offices and regional headquarters – that now call Hong Kong home. That, I would say, is a tangible expression of our strong and growing trade and economic ties.

 

So, too, is the free trade agreement (FTA) we signed with ASEAN. Since the FTA was signed in 2017, our merchandise trade has soared almost 40%.

 

Hong Kong has always been a strong advocate for free trade. That is why we have been actively working towards early accession to RCEP, the Regional Comprehensive Economic Partnership. RCEP is the biggest FTA in the world, and all 10 ASEAN states are its founding members.

 

In my meetings with government leaders of various ASEAN states, they have all reaffirmed their valuable support of Hong Kong’s accession to RCEP.

 

Last month, when Premier Li Qiang spoke at the ASEAN Plus Three Summit in Jakarta, he emphasised the importance of upgrading trade and investment, and Hong Kong’s prowess in that regard. Hong Kong, he said, and I quote, “is widely regarded as one of the world’s most open economies, and is an important trade and investment partner of RCEP members”. The premier appealed for the support of RCEP participants to Hong Kong’s bid in becoming one of the first economies to join the agreement.

 

Also last month, addressing the Belt & Road Summit here in Hong Kong, Dr Kao Kim Hourn, the Secretary-General of ASEAN, told the high-profile audience that he welcomes Hong Kong’s request to join RCEP.

 

What HK can offer

We are thankful for this overwhelming confidence in Hong Kong, from home and abroad. Hong Kong has long played a key role in the region’s economic development, and we are determined to contribute to the sparkling growth in this part of the world.

 

And, ladies and gentlemen, that is all thanks to the “one country, two systems” principle. This unique principle bestows upon us the unparalleled connectivity to the Mainland of China and the rest of the world.

   

Hong Kong is uniquely placed to add value to the member states of RCEP. Last year, about US$79 billion worth of merchandise trade between ASEAN and Mainland China was routed through Hong Kong.

 

We are the value-adding gateway connecting our country to the rest of the world, and that very much includes ASEAN. Value-adding, because in addition to our outstanding connectivity, we offer a business-friendly environment, a robust financial regulatory regime, and a simple and low tax system to traders, investors and companies, large, small and just starting up, all premised on the rule of law.

Despite complexities posed by geopolitical tensions, high interest rates and the pandemic, Hong Kong’s financial system remains resilient. As an international financial centre, we continue to be Asia’s largest hedge fund hub and cross-border wealth management centre, as well as the world’s largest offshore renminbi service centre.

 

We welcome global family offices and asset owners from ASEAN and beyond to prosper with us here in Hong Kong. We have introduced profits tax exemption measures for family offices. We are streamlining the procedures to make things simple and easy for family office investors, all in all, to build an ecosystem for the wealth management sector to break new ground.

 

Meanwhile, our pivotal role in the National 14th Five-Year Plan, the Guangdong-Hong Kong-Macao Greater Bay Area, the Belt & Road Initiative, and other national strategies can contribute, and significantly, to regional co-operation and connectivity, long down this 21st Century road of promise and boundless possibilities.

 

Consider the Greater Bay Area, or GBA, and its huge domestic market of more than 86 million consumers. Bringing together nine cities in southern China, as well as the special administrative regions of Hong Kong and Macau, the GBA had a combined GDP of US$1.9 trillion last year, equivalent to the world’s 10th-largest economy.

 

Through our prospective RCEP membership, and other channels, Hong Kong can create connections and partnerships, helping ASEAN and RCEP members get the services and technical support they need to enter the GBA and Mainland consumer market with confidence.

 

Both Hong Kong and ASEAN attach great importance to diversifying local industries and developmental opportunities. Hong Kong can capitalise on its strengths as a professional services hub to help ASEAN countries realise projects in urban and infrastructural management, logistics, architectural design and engineering, legal and trade arbitration and much more.

 

Exchanges on all fronts 

And, let me add, these and other potential exchanges will have received a boost, thanks to the MOUs signed during my visit to ASEAN states in July. The wide-ranging areas included trade and commerce, investment, finance, innovation and technology, logistics, academic research and cultural exchange.

Among the many recent developments on our growing ties with the region, a travel facilitation measure was particularly well received in the Hong Kong community. In July, the Malaysian Government extended its visa-free entry period for Hong Kong SAR passport holders, from one month to three months. It has certainly bolstered the people-to-people ties between our two economies.

Fostering people-to-people bonds, as you would know, is a key co-operation priority of the Belt & Road Initiative. It is, therefore, encouraging to note that we have seen a strong rebound of visitor arrivals to Hong Kong from Southeast Asia. For example, the visitor arrivals in Hong Kong from Thailand and the Philippines have reached more than 90% of pre-pandemic levels this summer.

 

Meanwhile, the magnificent culture, mesmerising landscape, vibrant city life, as well as world-class hospitality of different ASEAN countries continue to draw Hong Kong tourists, as they holiday and rejoice in your charming countries that share a common Asian heritage with us. We look forward to working with ASEAN countries in strengthening travel convenience to the people of our places.

 

The growing bonds between Hong Kong and ASEAN will certainly reaffirm our mutual commitment to globalisation, free trade and open markets – common ground integral, and essential, to deepening our bilateral trade relationship.

 

Then there is the ever-changing global economy and other challenges we have experienced in recent years. Strengthening mutual co-operation, taking full advantage of Hong Kong’s and ASEAN’s complementary strengths and resources, can only help our economies, societies and peoples confront them and overcome them.

   

Ladies and gentlemen, the Hong Kong SAR Government is committed to creating new prospects for regional co-operation and mutual prosperity. We welcome our ASEAN friends to visit us, to experience first-hand the energy, the opportunities and the many pleasures on offer, right now, in the revitalised Hong Kong.

 

Chief Executive John Lee gave these remarks at the Hong Kong-ASEAN Summit 2023 on October 9.



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