Lam draws up battle plan to deal with trade war
Hong Kong should foster economic integration with the mainland, enhance economic diversification and elevate the city’s international status as the three key strategies to help mitigate any negative spillover effects from the Sino-US trade dispute, says Chief Executive Carrie Lam Cheng Yuet-ngor.
Many legislators have raised concerns as to whether Hong Kong is adequately prepared as the trade friction between the world’s two largest economies escalates.
“The government has taken a proactive approach in responding to future changes brought by the Sino-US trade war,” Lam said during a question-and-answer session in the Legislative Council on Thursday.
The US government announced last Tuesday that an additional 10-percent tariffs would be levied on a further $200 billion worth of imports from the Chinese mainland, and are expected to be imposed in September.
An earlier 25-percent tariffs on $34 billion of Chinese imports, targeting a range of intermediate goods and capital goods, were imposed on July 6. A second list of imported goods from China worth of $16 billion is upcoming.
The Chinese government retaliated in kind by imposing additional 25-percent tariffs on $34 billion of imports from the US, targeting agricultural products, vehicles and aquatic products.
At the LegCo meeting, Lam said the first strategy is to integrate with the mainland proactively, hoping that integration with national development goals will give the city more economic opportunities.
“I and other government officials have spent a lot of time promoting Hong Kong businesses under the mainland-led macroeconomic blueprint Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area,” she said.
“The second is to bolster economic diversification in Hong Kong, as the city can no longer purely rely on the four traditional pillars (financial services, tourism, trade and logistics, as well as professional services) to propel economic growth.
The first strategy is to integrate with the mainland proactively, hoping that integration with national development goals will give the city more economic opportunities.” Carrie Lam Cheng Yuet-ngor,
Technology and innovation is one of the sectors in focus and the government had earmarked HK$78 billion to promote this economic segment last year.
Lam also said Hong Kong needs to explore more international markets — the Association of Southeast Asian Nations being one of them. In November last year, Hong Kong and ASEAN inked a free-trade agreement to boost reciprocal trade and investment flows.
“We had done a great deal to tap the ASEAN market and the government is mulling to establish an economic and trade office in Thailand, the third office of this kind in ASEAN countries,” she said.
Apart from the above three strategies, Hong Kong shall also leverage the unique advantages bestowed by “one country two systems”, Lam noted. She highlighted that Hong Kong can rely on its independent judicial system to foster the legal arbitration industry.
At a forum held on July 7, Lam hinted that “some countries” had violated the multi-lateral international trade system, adding that the SAR government will remain vigilant to assess the effects on the city brought by the Sino-US trade row.
The dispute must affect Hong Kong as the city relies heavily on international trade, Lam told mainland reporters during a visit to France last month.
As the world’s seventh-largest trading economy and a member of the World Trade Organization, Hong Kong champions and promotes free trade, Lam said.