HK rep urges Thai firms to boost links to city

Fong Ngai, Asean director of the Hong Kong Economic and Trade Office, speaking in Bangkok to the members of two business associations, said Thailand was strategically placed as a business hub for the region.
He delivered a presentation titled “Hong Kong – Asia’s Business Capital: A Strategic Location to Seize Opportunities” at a dinner co-organised by the Thai-Hong Kong Trade Association and the Thailand-Hong Kong Business Council.
“Indochina is an emerging market which Hong Kong has recently been investing and trading with extensively. Hong Kong and Thailand should join hands to develop the trade and investment links between China and Indochina, capitalising on the business infrastructure and expertise of the two places,” Fong said.
Noting the well-established and growing economic ties between Hong Kong and Thailand, he said he believed these would strengthen, given his city’s strategic location in China and the Kingdom’s privileged position in Indochina.
He pointed out that Thailand was Hong Kong’s second-largest trading partner among Asean countries with US$14-billion (Bt431-billion) trade volume last year, growing on average of 9 per cent each year from 2006 to 2010.
In addition, Asean as a bloc had become Hong Kong’s second-largest trading partner, just after mainland China, as the trade volume reached $85 billion last year and the annual growth rate averaged 8.2 per cent from 2006 to 2010.
After the conclusion of the Agreement on Avoidance of Double Taxation and Investment Promotion and Protection Agreement between Hong Kong and Thailand in 2005, the Kingdom is now the seventh major destination of outward direct investment of Hong Kong, with total investment stock estimated at $6.1 billion.
On Hong Kong’s role as a gateway to mainland China, Fong said: “In China’s latest 12th Five-Year Plan, Hong Kong is positioned as an offshore centre for business using the mainland currency, the renminbi [RMB, or yuan]; as China’s global financial centre; and as an international asset management centre.”
Hong Kong was the world’s largest IPO (initial public offering) centre last year, raising a total of $58 billion. It has also become the offshore centre for RMB banking, RMB trade settlement and the issuance of RMB bonds.
RMB trade settlement conducted through banks in Hong Kong in the first seven months of 2011 amounted to 953 billion yuan (Bt4.6 trillion), about 9 per cent of China’s total trade. RMB deposits in Hong Kong totalled 570 billion yuan. Hong Kong is the largest offshore RMB bond market, raising 50 billion yuan in the first seven months of this year.
“Important infrastructural projects will connect Hong Kong seamlessly to the 100-million population in the Greater Pearl River Delta region for further economic integration,” said Fong. He referred to the Guangzhou-Shenzhen-Hong Kong Express Rail Link, which is to be completed in 2015, and the Hong Kong-Zhuhai-Macau Bridge, due for completion in 2016.
Fong also highlighted Hong Kong’s strategic location to explore opportunities with major Chinese companies, as more than 3,000 internationally minded Chinese enterprises are based in the city. He appealed to members of the two Thai organisations to seize the business opportunities offered by Hong Kong for doing business in China.
He outlined to them the nationality-neutral Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the mainland, a free-trade agreement (FTA) covering trade in goods, services and investment facilitation.
 “CEPA remains the most preferential among all mainland FTAs. It is a win-win agreement, bringing new business opportunities to the mainland, Hong Kong and all foreign investors.”
To leverage on the CEPA benefits, foreign investors could establish their businesses in Hong Kong, to acquire or to join forces with enterprises in the city to make full use of the CEPA opportunities in entering the mainland market.