RCEP to boost HK role as key trade, services hub

Prime Sarmiento

RCEP to boost HK role as key trade, services hub

The enforcement of Regional Comprehensive Economic Partnership will strengthen Hong Kong Special Administrative Region’s position as a key hub for trade and services and further promote integration in the Guangdong-Hong Kong-Macao Greater Bay Area, a GBA conference heard on Tuesday.

The RCEP – the world’s largest free trade pact which comes into force on Jan 1, 2022 – is the first free trade agreement between China and 14 other countries in the Asia-Pacific region which account for 30 percent of the global GDP and as much of the world population.

“Definitely in trade matters, Hong Kong is the super-connector of the world. We are one of the largest global trade hubs for both goods and services. Now we have a new boost. The RCEP is the largest free trade agreement ever forged,” Leung Chun-ying, vice-chairman of the National Committee of the Chinese People’s Political Consultative Conference, said in his keynote address at the conference co-hosted by China Daily and the Hong Kong Coalition.

Over 200 people including government officials, business leaders and members of academia exchanged views during the conference themed “Embracing New Opportunities: Connecting GBA with RCEP”. A hybrid event, the in-person component of the conference was held at the Hong Kong Ocean Park Marriott Hotel.

In his pre-recorded video speech, Leung said RCEP will enhance Hong Kong’s status as a regional hub for professional services. It will expand market access for services as it will open up about 65 percent of the service sector to foreign service-providers, he said, adding that such level of access is even higher than the free trade arrangements between China and member-countries of the Association of Southeast Asian Nations.

Saying that the Chinese mainland is the biggest market of professional services in RCEP, Leung pointed out that Hong Kong, as one of the world’s biggest overseas provider of services, is “extremely well placed” to facilitate foreign firms in using the new access to the Chinese mainland under RCEP. This is because Hong Kong has “a wealth of practical experience and a deep, diverse, bilingual and dual-culture talent pool in a user-friendly job market”, he added.

This also bodes well for the Bay Area. The Guangdong cities in the Bay Area have been Hong Kong’s “close working partners for over a century”, Leung said.

“As with other partners, Hong Kong has the trust, the relationships, the market intelligence and the language factors to extend our international trade functions to Guangdong. As the GBA strategy envisions many of the barriers between Hong Kong and Guangdong coming down, integration will unleash huge energy for growth in the trade and related sectors,” he said.

Liu Guangyuan, Commissioner of the Ministry of Foreign Affairs in the Hong Kong SAR, said Hong Kong has the strong backing of the motherland, a key hub in the Asia-Pacific and crucial bond of the whole world.

“As the central city of the GBA and the most international city in the region, Hong Kong enjoys remarkable advantages such as a steady financial market, free flow of capital, sound legal environment and professional services. It has also signed free trade agreements with 13 RCEP economies,” he said.

He cited the launch of the China-ASEAN Science, Technology and Innovation Enhancing Program, noting how China will take the RCEP as “a great opportunity” to expand cooperation on digital economy and green economy. This will also enhance the role of the Bay Area as a player, a contributor and a pioneer in the new round of global technological revolution and industrial innovation, he added.

Liu said the National Security Law and the improved electoral system have transformed Hong Kong from chaos to stability and prosperity, and has a big role to play in the 11-city cluster and China’s new round of opening-up.

“The positioning of Hong Kong in the 14th Five-Year Plan as an international financial, shipping and trading center and the global offshore RMB business hub will further strengthen Hong Kong’s role as a ‘super-connector, and boost the development of Hong Kong and the GBA.”

Eva Cheng, deputy secretary general of the Hong Kong Coalition, said Hong Kong, as a major metropolis, “has always been smart about integration”. When China started pursing Open Door Policy more than 40 years ago, Hong Kong businessmen were among the first to set up manufacturing base in the mainland, she added.

“Now, we are glad to see that for the first time in history, China’s National 14th Five-Year Plan mentioned integrated development with Hong Kong in its text. That’s certainly going to open another new chapter in the story of Hong Kong.”

During conference opening ceremony, speakers emphasized China’s commitment to multilateralism and how RCEP will benefit not only its members but the global economy too.

In his opening remarks, Zhou Shuchun, a member of the Standing Committee of the National Committee of the CPPCC, and publisher and editor-in-chief of China Daily, said the RCEP is a “win-win proposition” for both developed and developing economies.

In a speech delivered via a video link from Beijing, Zhou said the enhanced inflow of investment helps developing member states to raise the standard of production and income levels and move up the value chain. Developed economies, meanwhile, can cut down on overheads by setting up manufacturing bases in the ASEAN states while also catering to those markets.

He said this idea ties in with President Xi Jinping’s “notion of common prosperity- informed by the democratic philosophy that sharing of wealth and resources can only benefit everyone concerned in the long run”.

China practices “true multilateralism, firmly upholds the multilateral trading system with the WTO (World Trade Organization) at its core, takes the lead in approving the RCEP, and works for an open world economy”, Liu said.

Stressing that connected rules, smooth flow of factors and close ties between people are key cornerstones in the GBA, he said China will strengthen connectivity in the GBA and establish high-standard rules compatible with the RCEP.

“Market access in the GBA will be further eased by implementing a management system of pre-establishment national treatment plus a negative list. What’s more, we will promote ‘hard connectivity’ of infrastructure and ‘soft connectivity’ of rules and mechanisms, and accelerate efficient flow of factors,” said Liu. These efforts will help stabilize the global supply chain, advance economic integration and share benefits across the world, he added.

Contact the writer at prime@chinadailyapac.com