HK continues to play pivotal role between ASEAN and China(2)

MYANMAR: THE NEW WONDERLAND

Ho said the "head to toe changes" in Myanmar have opened up the door to business opportunities for itself and the rest of the world.

Myanmar has registered fairly steady economic growth in recent years. After expanding 5.5 percent in 2011, its economy is expected to hit a growth rate of 6.2 percent in 2012, with the IMF denoting Myanmar as a country with a "high growth potential." Cumulative FDI into Myanmar reached 42 billion U.S. dollars as of January 2013. Major sources of FDI were the Chinese mainland, Thailand, Hong Kong and the Republic of Korea. Myanmar's continued liberalization progress is expected to encourage greater inflows of foreign investment from western countries.

Hong Kong's exports to Myanmar expanded by 44 percent to 84 million U.S. dollars in 2012, surpassing the 10 percent export growth reported in 2011. Major Hong Kong exports to Myanmar in 2012 included optical goods (31 percent), telecom equipment and parts (23 percent), textiles and fabrics (8 percent) and watches and clocks (6 percent).

But Ho said that Myanmar should better equip itself with fundamental facilities, such as transportation system and electricity supplies.

HONG KONG-ASEAN WIN-WIN SITUATION

There have been some analyses asserting that Hong Kong would be the "unwitting victim" of moves towards the elimination of duty rates on most goods traded between ASEAN member states, due to the loss of its attractiveness as a tax effective "go-between" location through which transactions between ASEAN countries are channeled. Ho roundly rejected this assertion.

"Hong Kong mainly deals with electric products. Before 2005, the WTO passed an Information Technology Agreement, under which tariffs for many kinds of electric products had been drastically reduced, if not down to zilch. As such, tax effectiveness may not necessarily be the sole or upmost consideration for countries trading through Hong Kong, even though the city is not a member of the ASEAN-China Free Trade Area (ACFTA). It would be the other edges of Hong Kong that really matter to them." said Ho.

HONG KONG'S EDGES

As businesses between China and ASEAN keep swelling, Hong Kong can serve as the "midpoint" to provide various kinds of services for the two economies, such as logistics, Ho said.

"For the time being, no airport in southern China can match the Hong Kong International Airport in terms of throughput and efficiency," he added.

To examine more closely, he said, Hong Kong is in fact a preferred location for regional headquarters for many multinational corporations (MNCs), and it is a good starting point for companies from ASEAN countries to expand their businesses abroad, especially if they wish to cover the Northeast Asian market, including the Chinese mainland.

"As they stand, the ACFTA commitments between China and ASEAN countries have been phased in since its establishment in 2010, contrasting with the Closer Economic Partnership Agreement (CEPA) between the Mainland and Hong Kong, under which a new supplement in liberalization measure is added every year," said Ho.

"In other words, the Chinese mainland market gets more and more open to Hong Kong year after year."

Ho added that over the past nine years, there had been nine supplementary clauses added on top of the preexisting terms of CEPA. Sectors of services accessible to Hong Kong increased from 27 to 48, with more than 300 liberalization measures unfolded.

Ho said the ASEAN-China bilateral trade will continue to blossom in the future. As the linchpin between the two gigantic economies, Hong Kong's status is unlikely to be replaceable or decay. With the innate advantages in logistics, expertise and accessibility to the Chinese mainland market, Hong Kong can and will continue to play a pivotal role between ASEAN and China, and enhance the prosperity of the region.