************************************************************
The ASEAN business community has been encouraged to focus on the distinct advantages of Hong Kong as a strategic gateway to access the Mainland China market with the implementation of the Closer Economic Partnership Arrangement (CEPA) and the launch of the Pan-Pearl River Delta (PPRD) Regional Co-operation initiative.
Deputy Secretary for Commerce, Industry and Technology (Commerce and Industry) Ms Linda Lai and Director of the Hong Kong Economic and Trade Office (HKETO) in Singapore Mr K K Lam today (December 8, Malaysia time) provided an overview of CEPA and PPRD initiatives respectively to the audience at the ASEAN-China Business Forum 2006 "ASEAN and China: Forging New Partnership in a Changing Era" in Kuala Lumpur, Malaysia.
In her presentation, Ms Lai emphasised that Hong Kong's closer economic ties with the Mainland would reinforce its role as a two-way springboard for the flow of people and capital from overseas to the Mainland and vice versa. She said CEPA presented Hong Kong and the Mainland together as a stronger proposition to foreign companies.
She told the participants at the forum that the free trade pact had enhanced the attractiveness of Hong Kong to foreign investors wishing to gain greater access to the Mainland China market. Investors could set up manufacturing processes in Hong Kong and immediately export products meeting CEPA origin rules tariff-free to the Mainland. They might also choose to manufacture products with substantial intellectual property (IP) content, thereby taking advantage of Hong Kong's legal system and IP protection regime.
"As for services liberalisation, we believe that the measures to be agreed will have to take effect by phases and it would be more opportune to seize the 'first mover' advantage that CEPA offers. The long-standing experience of Hong Kong in doing business with the Mainland should also help foreign firms understand and explore the market. The potential offered by CEPA is unlimited," Ms Lai said.
"I would encourage all ASEAN enterprises to take a closer look at CEPA and take immediate steps to make the most out of it," she added.
On the PPRD initiative, Mr Lam said that in ensuring that "9+2" (i.e., nine provinces in southern China and two special administrative regions under the PPRD concept) would become the bridgehead for promoting "10+1" (i.e., ASEAN and China), Hong Kong would play an important role. He said that in trade, Hong Kong had developed close ties with ASEAN countries. ASEAN ranked as Hong Kong's third largest trading partner.
"ASEAN enterprises may take Hong Kong as the base to access PPRD. By making good use of CEPA, and co-operating with Hong Kong enterprises, they can open up the market in the PPRD more effectively. By end-2005, ASEAN enterprises had set up 57 regional headquarters and 111 regional offices in Hong Kong. In return, PPRD enterprises may also use Hong Kong as a base to open up the ASEAN market.
"As PPRD is in need of substantial capital for its development, Hong Kong may leverage its status as an international financial centre and CEPA to facilitate ASEAN countries to invest in the infrastructure projects of PPRD," he said.
Today's forum was organised by the Asian Strategy and Leadership Institute, a major think-tank in Malaysia. The institute is also the Secretariat to the Malaysia-China Business Council.
The HKETO in Singapore will continue its efforts to promote the business opportunities arising from the CEPA and PPRD initiatives to various sectors in the ASEAN to encourage them to further exploit Hong Kong's competitive advantages.
Ends/Friday, December 8, 2006
Issued at HKT 18:42
NNNN