19 October 2018
Hong Kong can utilize its strengths to play a key role in China's new plan to develop trade and transport links with other nations. Photo: HKEJ
Hong Kong can utilize its strengths to play a key role in China's new plan to develop trade and transport links with other nations. Photo: HKEJ

How HK can benefit from China’s ‘One Belt, One Road’ strategy

Hong Kong, as an international city with long history, can play a big role in China’s “One Belt, One Road” strategy.

The former British colony has been home to a number of internal organizations and serves as the regional headquarters for thousands of multi-national companies. The city has also been the ground for decision-makers to manage their businesses, teams and capital in the region.

Given these strengths, Hong Kong can act as a link for connecting China and other countries along the new Maritime Silk Road. To achieve this, the city needs to actively involve itself in the national strategy.

It’s quite obvious that Hong Kong has a lot to offer in implementing the strategy. The city serves as a hub for global financial, trading and shipping, and it has rule of law and extensive corporate management expertise.

Hong Kong is in negotiations with the ASEAN nations for a free-trade pact. The city has already established close trading ties with these nations, with the ASEAN bloc now its second largest trading partner. And Hong Kong also acted as a key gateway for goods from ASEAN nations to enter the China market and vice versa.

And corporates from ASEAN nations, in particular businesses owned by Chinese, usually set up their offices in Hong Kong to tap into the mainland market. Therefore, the free-trade deal will offer more opportunities for companies in Hong Kong and the mainland.

As a result, Hong Kong will have a new role in play, and businesses in Hong Kong and mainland can join hands to venture into the southeastern region and economies along the Silk Road route.

Also, as Hong Kong has a huge edge in offshore renminbi business as well as fund-raising, asset management and specialized services, it can utilize these strengths in the creation and operation of the Asian Infrastructure Investment Bank, and benefit from the framework of the “One Belt, One Road” strategy.

Some experts have noted that the strategy has brought a new opportunity for Hong Kong, especially for the city’s pillar industries like trading and logistics. If Hong Kong businesses capture the opportunity and cement business ties with the mainland, it will open up a massive market. Also, the city can assist as liaison platform in terms of holding exhibitions and negotiations.

In the meantime, the city’s sound legal system will guarantee a place for the city to play a role in the broader strategy, which may involve huge investment. Hong Kong is more neutral in terms of political issues, and it offers sufficient legal protection and supervision.

The oceans are full of untapped resources to support our future growth. Swiftly changing technology will fuel a marine economy, offering new solutions to tackle issues such as food and energy.

The geographical location of Hong Kong gives the city significant advantage in developing shipping, ocean financing and links with other cities.

China has approved five Sea Economic Zones involving Shandong, Zhejiang, Guangdong, Fujian and Tianjin. This will create new opportunities for Hong Kong to cooperate with these regions in developing a marine economy.

This article appeared in the Hong Kong Economic Journal on March 18.

Translation by Julie Zhu

[Chinese version 中文版]

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Permanent Honorary Chairman of Hong Kong Federation of Fujian Associations

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