Hong Kong considered as a professional services, financial center for RCEP

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February 22, 2022

HONG KONG – Hong Kong may envision becoming a hub for financial services and professional services for the entire region of the regional comprehensive economic partnership as the world’s largest free trade agreement stands poised to boost inter-regional trade, panellists said at an RCEP event organized by the Hong Kong Coalition on Webinar Monday.

The RCEP, which went into effect last month, aims to encourage cross-border investment, strengthen regional talent and data flows, and strengthen global supply chain reconfiguration, panellists said.

The agreement covers 30 percent of global GDP, 30 percent of the world’s population and 27 percent of world trade. The 15 participating economies are the 10th Association of Southeast Asian Countries, Australia, China, Japan, New Zealand and South Korea.

The agreement covers 30 percent of global GDP, 30 percent of the world’s population and 27 percent of world trade. The 15 participating economies are the 10th Association of Southeast Asian Countries, Australia, China, Japan, New Zealand and South Korea.

Key milestones of the RCEP agreement include eliminating 92 percent of trade tariffs, opening up 65 percent of the service sector, aligning disparate rules and origins in an RCEP framework, and other trade and investment facilitation measures.

“RCEP is a modern, comprehensive and win-win trade agreement,” said Brian Lo Sai-hung, director-general for trade and industry, in the keynote address.

“The deal allows Hong Kong to further integrate into overall industrial chains and also benefit from tariff reduction, market access, elimination of trade barriers and simplification of tariff regimes, so trade costs can be lower and then more opportunities for.” Hong Kong companies.”

Lo added that the Hong Kong government will remain in close contact with RCEP members and seek to join as soon as possible.

Wang Huiyao, founder and president of the Think Tanks Center for China and Globalization, said Hong Kong could become the RCEP’s financial center because the city has very convenient trade and investment mechanisms and facilities.

“And that it is about the reorganization, restructuring of industrial or value chains, especially trade in services, we can find our appropriate role. Hong Kong can pool its resources to build a research center, and the second suggestion is to build an international talent center in the city,” Wang noted.

Tang Heiwai, an economics professor at HKU Business School and deputy director of the Hong Kong Institute of Economics and Business Strategy, said Hong Kong should strive to become the legal assistance center for RCEP economies and further strengthen its role as an offshore renminbi financing center. The city should also think about how to cement its role in the big data business and foster an innovative startup ecosystem.

“There will be some non-trade benefits for Hong Kong as an RCEP member,” Tang said. “As a high-end service center in the world, Hong Kong should think more about how to leverage its strengths. We can live out our soft power better.”

Hong Kong Trade Development Council Deputy Executive Director Patrick Lau Hui-ping added, “Mainland companies want to go abroad as they have aspirations for internationalization. Hong Kong companies can help mainland companies as business consultants, and at the same time Hong Kong can facilitate business by identifying projects. There will be tripartite collaboration to work on investment projects.”

Lau said he believes ASEAN countries offer great business potential for service providers in Hong Kong in areas such as infrastructure facility upgrades, smart city solutions, innovative technology and professional services. The RCEP would be a very large market for Hong Kong companies engaged in offshore trading, he added.

“The RCEP will be a gradual development rather than from zero to one,” said Zhu Haibin, executive director, chief economist for China and head of economic research for Greater China at JP Morgan. “We want to look at the overall integration of Asia and the rise of Asia. How can we make better use of this opportunity to enhance the development of mainland China and Hong Kong? That should be the focus.”

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