Big potential for synergy in RCEP-GBA
HK can play crucial ‘super-connector’ role to integrate markets, experts say
The launch of the Regional Comprehensive Economic Partnership, touted as the world’s largest free-trade pact, will strengthen the Hong Kong Special Administrative Region’s position as a global “super connector”, which will in turn promote further integration of the Guangdong-Hong Kong-Macao Greater Bay Area, panelists said at the GBA conference.
The GBA conference on “Embracing New Opportunities: Connecting GBA to RCEP” was organized by China Daily and the Hong Kong Coalition. The Nov 30 event was held both online and offline. Over 200 people including government officials, business leaders and members of academia attended the in-person component of the event that was held at the Hong Kong Ocean Park Marriott Hotel.
“Definitely in trade matters, Hong Kong is the super-connector of the world. We are one of the largest global trade hubs for both goods and services. Now we have a new boost. The RCEP is the largest free-trade agreement ever forged,” said Leung Chun-ying, vicechairman of the National Committee of the Chinese People’s Political Consultative Conference, China’s top political advisory body, in his keynote address.
RCEP is composed of the 10 member countries of the Association of Southeast Asian Nations as well as China, Japan, South Korea, Australia and New Zealand. Members of the trade pact account for 30 percent of the world’s population, one-third of global GDP and nearly one-third of global trade. RCEP will come into force on Jan 1.
In his pre-recorded video speech, Leung said the RCEP’s significance to Hong Kong does not lie in Hong Kong itself being a producer or a consumer as “we are too small for that, but in our close relationships with the Chinese mainland, a huge producer, assembler and ultimate consumer”. He said the GBA is a “significant part in this equation”.
The GBA, consisting of nine mainland cities in Guangdong province and the two special administrative regions of Hong Kong and Macao, has a total population of more than 86 million and a combined GDP of nearly $1.67 trillion.
Hong Kong has an important role in the merchandise trade between ASEAN and the Chinese mainland, Leung said. As such, Hong Kong needs to “rediscover its role in north-south trade between the mainland and ASEAN”.
He added that RCEP will expand market access for services as it will open up about 65 percent of the service sector to foreign service-providers. Such level of access is even higher than the free-trade arrangements between China and ASEAN.
“Four years ago in a speech to the Hong Kong and Macao delegation to celebrate the 40th anniversary of the country’s Reform and Openingup, President Xi Jinping expressed his four hopes for Hong Kong and Macao, namely, more proactively contributing to the country’s new round of opening-up, more proactively integrating into the country’s overall development, more proactively participating in national governance, and more proactively promoting exchanges of humanities on the international level. The words that I would borrow today are ‘more proactively’,” Leung said.
Other panelists in the conference echoed Leung’s remarks, urging people in Hong Kong to proactively explore more opportunities in GBA and RCEP.
Liu Guangyuan, commissioner of the Ministry of Foreign Affairs in the HKSAR, said that as the central city of the GBA and the “most international city in the region”, Hong Kong has remarkable advantages including a steady financial market, free flow of capital, sound legal environment and professional services. It has also signed free trade agreements with 13 RCEP economies.
He said the positioning of Hong Kong in the nation’s 14th Five-Year Plan (2021-25) as an international financial, shipping and trading center and the global offshore RMB business hub will strengthen Hong Kong’s role as a “super-connector”, and boost the development of Hong Kong and the GBA as a whole.
“We are determined to help Hong Kong to engage more deeply with the GBA and the Belt and Road Initiative, so as to contribute our share to deepening the China-ASEAN Comprehensive Strategic Partnership under the RCEP,” Liu said.
Liu said focusing on three words — development, connectivity and innovation — will lead to better implementation of national opening-up measures, promote regional integration, and speed up global economic recovery.
Liu cited the launch of the ChinaASEAN Science, Technology and Innovation Enhancing Program, noting how China will take the RCEP as “a great opportunity” to expand cooperation on digital economy and green economy. He said this will also enhance the role of the GBA as a player, contributor and pioneer in the new round of global technological revolution and industrial innovation.
Eva Cheng, deputy secretary-general of the Hong Kong Coalition, said in her welcoming remarks that the GBA is “China’s most powerful economic growth engine”, and added that the “RCEP is the world’s single largest freetrade agreement”.
The theme of the GBA conference “is about connecting the two. It is about integrating the largest with the most powerful”, she said. “Integration is a key word.”
Hong Kong has expressed a strong interest in joining the RCEP. Business leaders who were in the panel discussion had exchanged views on the benefits of the trade pact and what Hong Kong and the GBA can offer RCEP members.
Victor Fung, group chairman of the Hong Kong-based consumer goods export trading giant Fung Group, said a GBA with RCEP can potentially create “the next generation of global trade. It is the new WTO (World Trade Organization). It has the opportunity (of) expanding globally to encompass a new multilateral system.”
Jonathan Choi, chairman of Guangdong-Hong Kong-Macao Bay Area Entrepreneurs Union, sees Hong Kong “at the very center of RCEP, acting as a promoter and a facilitator”.
Choi said Hong Kong is a “CIO” — a connector, an investor and an operator. The SAR is a super connector on business and investment. It also serves as an investor, given its status as an international financial center. Hong Kong enterprises have also been operating many factories in the GBA for the past 40 years, Choi noted.
David Liao, co-chief executive of the Hong Kong and Shanghai Banking Corporation Limited said Hong Kong
is “a great gateway for the Chinese mainland to come out to the world, a phenomenal platform and legal infrastructure (provider) for international finance”.
Witman Hung, principal liaison officer for Hong Kong at the Shenzhen Qianhai Authority, said that Hong Kong can serve as a talent and education hub for RCEP. He said that five Hong Kong-based universities are among the world’s top-ranking universities, and this advantage will allow Hong Kong to attract talent from RCEP member-economies.
George Lam, chairman of the Hong Kong Cyberport Management Company, said Cyberport is supporting over 70 startups providing innovative solutions to help fight COVID-19.
“It’s already called the ‘new export’. We are sharing best practices and ideas and solutions with many countries in the region. That’s one example of (how) Hong Kong can help (other RCEP economies),” Lam said.
Participants in the GBA conference have likewise emphasized China’s commitment to multilateralism and how RCEP will benefit not only its members but also the global economy.
Zhou Shuchun, a member of the Standing Committee of the CPPCC National Committee, who is also the publisher and editor-in-chief of China Daily, said the RCEP is a “win-win proposition” for both developed and developing economies.
Zhou said the enhanced inflow of investment helps developing economies to raise the standard of production and income levels and move up the value chain. Developed economies, meanwhile, can cut down on overheads by setting up manufacturing bases in the ASEAN states while also catering to those markets.
He said this idea ties in with President Xi Jinping’s “notion of common prosperity — informed by the democratic philosophy that sharing of wealth and resources can only benefit everyone concerned in the long run”.
President Xi is a vocal advocate of “building the Asia-Pacific community with a shared future”, Zhou said.
“Such fraternal vibes make us optimistic about the future of China’s relationships with her trading partners in the Asia-Pacific,” he said.
Liu, the HKSAR Foreign Affairs commissioner, said China practices “true multilateralism, firmly upholds the multilateral trading system with the WTO at its core, takes the lead in approving the RCEP, and works for an open world economy”.