AEC adds fuel to booming HK-Asean trade
As the Asean Economic Community approaches in 2015, there has been much interest in investment in the region. Krungthep Turakij TV's Chaowarat Yongjiranon talks to Fong Ngai, director of the Hong Kong Economics and Trade Office for Asean. He gives his views on how Hong Kong investors plan to enter the Myanmar market and what Asean needs to do to become more attractive to investors.Since the implementation of the China-Asean Free Trade Agreement a few years ago, Hong Kong-Asean trade has been growing steadily at an average of 7 per cent per year. That provides a very good platform for Hong Kong to capitalise on the trade relations between Asean and the mainland, Fong Ngai said.
About 12.6 per cent of the trade between Asean and mainland China goes through Hong Kong, he said. Asean-Hong Kong trade stood at US$93.3 billion (Bt2.83 trillion) in 2011, making Asean the city's second-largest trading partner - even bigger than the European Union and the United States. So Asean is gaining importance for Hong Kong as well as for the mainland.
Meanwhile, Hong Kong investors are everywhere. That is the nature of Hong Kong, but mainly in the services sector, as the economy is 93-per-cent services with four pillar industries - trading and logistics, financial services, business professional services, and tourism.
"So our investments are mainly in these four areas," Fong said.
Hong Kong and Thailand have signed an investment, promotion and protection agreement as well as a pact on avoidance of double taxation in 2005, so Hong Kong has a long cooperative relationship that evokes confidence in each other's economies.
The Hong Kong-Thai trade and investment relationship has been growing steadily even amid the turbulence in the past three or four years. It shows average growth of 8 per cent. Hong Kong-Thailand trade was $15.3 billion in 2011.
There is another development, which is the building of a cruise terminal in Hong Kong that is due to be completed midyear. The new terminal will be able take two of the world's biggest cruise liners at the same time, handling more than 10,000 passengers in one go.
"So we are now working together with other cruise partners in the region, including Thailand, to build a regional route for the new cruise opportunities, and we wish to bring more visitors from around the world into the region," he said.
Besides Thailand, Hong Kong investors are getting very interested in the Myanmar market. Last year there were two business delegations - in March/April with 30 people and in June with 70 people. The investors are now looking into the possibility of setting up an industrial park for some businesspeople from Hong Kong to set up textile factories in Myanmar.
This year, two business delegations from Hong Kong are lining up in the first half to go to Myanmar again, Fong said.
"So definitely it is a market worth watching, and we are also looking at the investment law passed in November and we are monitoring it closely on how it could possibly benefit investors from Hong Kong."
The Asean Economic Community aims at creating a single market and production base, but connectivity in terms of both hardware and software is crucial. There are about 600 million people in the region, and they need to be connected. The AEC needs the hardware infrastructure to connect them by railways, highways, ports, ships, and so forth. This is something Hong Kong can offer because it is strong in logistics, Fong said.
"Trading and logistics services constitute a quarter of our GDP, so this something we are strong at, and we would love to be able to contribute in developing the connectivity in Asean. I think this is crucial in the next stage here in Asean."