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Hong Kong’s opportunities in Bridging the world

I attended the 130th session of the China Import and Export Fair (Canton Fair) in Guangzhou last week. The Canton Fair is a comprehensive international trading event with the longest history, the largest scale, the most complete exhibit variety organised by our Country. That is why it is also regarded as a “barometer” on China’s external trade. The latest session is the first physical fair organised since the outbreak of the pandemic early last year, which is also the biggest fair held in physical form under the pandemic around the world. This not only reflects our Country’s capability and confidence in controlling the pandemic, but also our Country’s steady economic growth, which plays an important role in supporting global trade and economic activities.

During the latest session of the Canton Fair, the national-level Pearl River International Trade Forum was held for the first time with the theme of “The new development of China providing new opportunities to the world”. The Forum serves to provide a high-end discussion platform for important topics on international trade. In one of its sub-forums, I delivered a remark on Hong Kong’s advantages and opportunities in the cooperation of international trade in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).

I attended the 130th session of the China Import and Export Fair in Guangzhou last week, and delivered a remark in one of the sub-forums of the Pearl River International Trade Forum.

Although in recent years international political and economic situation has undergone significant changes with occasional tensions sprung out in geopolitics, it did not deter our Country’s determination in further opening up and promoting free trade. Taking the Canton Fair as an example, its annual transaction volume has increased almost 680-fold since its establishment 65 years ago, from about US$87 million to US$59 billion at the time just before the pandemic. China is not only a major exporter, but also a significant importer in international trade. In recent years, the growing rate of import of China has exceeded that of export and China’s import last year amounted to 11.5% of the world’s total import. The gigantic size of its market and the overall positive trend in economic growth will continue to support the development in international trade of our Country. And indeed China has already become an indispensable part in international production and supply chains.

As the Premier Li Keqiang pointed out in his keynote speech in the opening ceremony of the Canton Fair, although faced with many internal and external challenges, our Country has been seeing a steady economic recovery since this year and various major indicators of the macro-economy are still staying within a reasonable range. In the first nine months of this year, there were more than 78 000 daily new registers of market entity and over 10 million of new employment in urban area. The profit of industrial enterprises, fiscal revenue and residents’ income have shown a faster pace in growth. Although the economic figures receded in Q3, with the resilience and strong vibrancy of the economy, our Country is confident that the whole year economic growth target would be achieved. In the new phase of development, our Country will continue to deepen cooperation in external trade, create a market-oriented, rule of law-based and internationalised environment for businesses, and promote liberalisation in trade and investment.

Looking back in history, Hong Kong’s path of development has been deeply connected with our Country’s development. Following our Country’s economic transformation, Hong Kong’s trade sector started from exporting products in the Pearl River Delta to overseas market, and then transformed to providing broader services to the growing domestic demand in the Mainland. Mainland is the largest market for Hong Kong’s export in goods. Our export to the Mainland has increased from 35% of our total goods export in 2000 to 59% last year. Looking ahead, with the continuing growth of people’s income level, the mid-level income population in our Country is expected to increase from currently 400 million to 800 million in future, bringing a much bigger consumption power. In addition, with the development strategy of internal circulation as the mainstay as proposed in the Outline of the 14th Five-year Plan, demand for high-quality products and services will continue to grow in the Mainland. As such, Hong Kong’s export of goods to the Mainland will certainly continue to grow with a notable speed.

With the institutional strength of our “One Country, Two Systems” arrangement and the geographical advantage of being the south gate of the Country, Hong Kong has been serving as an important gateway of our Country to trade with the world. The success of this role also comes from our long time effort in building a global network of trade and commerce, our commercial rules that up to international standard, the highly efficient financial, transport and logistic services, the zero tariff and free trade port policy, highly efficient custom clearance services, and our world-class infrastructure such as airport and container terminals.

The Outline of the 14th Five-year Plan supports Hong Kong’s status as an international financial, shipping, trade centre and an international aviation hub, and supports Hong Kong’s service sector to develop towards the high-end and high value-added direction. Being an international trade and shipping centre, Hong Kong has always been promoting the development of modern logistic industry, enhancing our competitiveness as a regional logistic hub, particularly in providing high value-added services and handling goods of high value.

With further growth in external trade in the GBA, particularly the booming of e-commerce, the personalisation of consumer demand and fast-changing taste of fashion, orders received by manufacturers are becoming small in amount with a narrow delivery window. There has been an increasingly keen demand for air cargo services in the region, so as a higher level of demand on the service capability and capacity of the airport. Hong Kong has to dedicate investment in this area that we have competitive edges to further develop our strength.

As such, the Airport Authority Hong Kong (AA) is going to build a premium logistics centre at the airport cargo area. The centre is expected to start operation in 2023 to promote the high value-added third party logistic services. At the same time, redevelopment of the Air Mail Centre at the Hong Kong International Airport (HKIA) is being planned to introduce more advance equipment to enhance its efficiency and capacity. Strategic partner may also be engaged with a view to enhancing the Centre’s competitiveness. Together with the commissioning of the Three Runway System in 2024, HKIA's annual cargo handling capacity is expected to exceed 9 million tonnes, which can fulfil the needs in the coming ten plus years.

In addition, to promote development of regional logistics, Hong Kong has to co-develop with other brother cities in the GBA in order to achieve a greater synergy. AA is planning to set up a HKIA Logistics Park in Dongguan and an airside intermodal cargo handling facility at the newly reclaimed area of the third runway, with a view to creating a brand new mode of whole industrial chain cooperation. With this new facilities, customs clearance, security screening and other services for Mainland exports could be completed in the Dongguan Logistics Park before shipping the goods to the cargo handling facility in the restricted area of HKIA by sea, and transferred to other places around the world directly. The same channel can be applied to the air cargo imported to the Mainland, i.e. goods can be shipped directly from the restricted area of HKIA to Dongguan and then deliver to other places in the Mainland.

At the same time, we will continue to expand Hong Kong’s trading network and sign Free Trade Agreements (FTAs) with more trading partners, so as to consolidate our role as a regional and international trading hub. So far we have already signed FTAs with 20 economies. Moreover, with the support of the Ministry of Commerce of our Country, we are seeking to join the RCEP as soon as possible to assist Hong Kong enterprises and investors in exploring a bigger market.

The future of Hong Kong’s economic development is deeply connected with the Country’s development. We have to help Hong Kong young people to better grasp the opportunities brought by the GBA and the fast development of our Country, so that they could enjoy a broader space of career prospect. With this in mind, I met and exchanged views with young Hong Kong entrepreneurs working in Guangzhou during my trip to learn more about their start-up experience and work and life in the Mainland, as well as the challenges they faced and the support they needed in starting businesses in the Mainland. In fact, the Mainland government authorities have rolled out a number of facilitating policies and initiatives to support Hong Kong young people to start business and work there. HKSAR Government will also continue to support and assist them.

Hong Kong has experienced many challenges in the past two years. With the implementation of the Hong Kong National Security Law and the enhancement of the electoral system, Hong Kong has stepped out from chaos and is now moving towards governance and prosperity. Under the national development strategy of domestic and external dual-circulation, Hong Kong will integrate into the national development plan more proactively. By working closely with fellow cities in the GBA, we could further upgrade our trade, shipping and logistics sectors, and build a world-class bay area and cluster of cities. By doing so, we could serve the needs of the Country and at the same time realise a sustainable economic development for Hong Kong.

October 17, 2021