HK can remain top regional hub: FS

The formation of the European Union, at one time, raised deep concerns in Hong Kong and other Asian exporting economies about what was dubbed “For tress Europe”, protected by tariffs and other barriers against the free flow of goods and services.

Now we know that those concerns were greatly exaggerated. The benefits of globalization in the past few decades have contributed greatly to breaking down many trade barriers, and protectionism is seen to have been in retreat almost everywhere in the world.

In his Sunday blog, which is in Chinese only, Financial Secretary John Tsang, who was in the United States on a business tour, wrote that the US-led Trans-Pacific Partnership (TPP) agreement, signed by 12 participating economies last week, was formulated in the spirit of free trade. Such an agreement would be rendered ineffectual if it sought to exclude or isolate particular countries or economies, he added.

Tsang said he noticed that there was no shortage of commentaries that the TPP would hurt Hong Kong by seeking to encircle the mainland. This was not the case, he wrote, explaining that globalization of the manufacturing process has fostered close cooperation between many different economies in the region and around the world.

For that reason, any agreement that promotes the econo- mies of the participating economies would lead to an increase in the demand for goods and services in those economies. This would help boost their external trading ac tivities, Tsang wrote. This would also benefit many economies outside the pact.

As an open economy, Hong Kong, of course, welcomes any international agreement conducive to free trade, Tsang said.

The TPP agreement must be ratified by the respective governments of the member countries. This could be a lengthy and, sometimes, contentious process that could take months, if not years, to complete. In the US, for example, there are opponents to the agreement in both major political parties in Congress.

Hong Kong business people should take this time to pre- pare themselves to take advantage of business opportunities arising from the agreement. Tsang’s advice is to upgrade and strengthen Hong Kong’s own advantages. These, as is well known, include excellent infrastructure facilities, expertise in finance, marketing and logistics, knowledge of the global marketplace, an efficient civil service and adequate protection of intellectual property rights.

Tsang said that the government would be working closely with the business sector in exploring new markets, promoting the development of new industries and supporting efforts to upgrade existing industries.

“I believe Hong Kong has the capability to maintain its lead” as the region’s hub of commerce and finance, he wrote.