Hong Kong Told To Strengthen Its Position As A Bridge To China

by Mary Swire, Tax-News.com, Hong Kong

08 March 2006

Hong Kong's Chief Secretary Rafael Hui stated on Monday that the SAR should take advantage of its geographical position, and enhance its role as a bridge between the Chinese Mainland and the rest of the world to maximise its strengths.

Speaking at an economic seminar, Mr Hui told delegates that there are three ways that Hong Kong can strengthen its connections with the Mainland and engage itself globally: firstly, by encouraging Mainland enterprises to use Hong Kong as their base to explore international markets; secondly, by providing services to support regional commercial co-operation; and thirdly, by helping Mainland enterprises to find venture capital.

Attracting overseas and Mainland enterprises to invest in Hong Kong is one of the government's key priorities, explained Mr Hui.

"With our world-class international business environment and other supporting facilities, Hong Kong has become a popular investment destination for various Mainland enterprises," he noted.

"In recent years, Hong Kong has been a springboard for Mainland enterprises to expand their business into the global market. To further promote economic integration between Hong Kong and the Mainland, we must introduce Hong Kong's diversified services into the Mainland," Mr Hui added.

The Government has been promoting Hong Kong's service industry on the Mainland through the Closer Economic Partnership Arrangement, which makes it easier for Hong Kong enterprises to enter the Mainland market.

Moreover, with a flexible and stable financial system, as well as a regulatory system of international standard, Hong Kong should also be using its international financial status to help Mainland corporations find financing, Mr Hui suggested.

Up to the end of 2005, 335 Mainland corporations had been listed in Hong Kong and had raised more than $1 trillion in capital since 1993.

It is also expected that capital from the Mainland will be transferred overseas for investment as the Chinese government allows enterprises - including insurance companies and the China National Social Security Fund - to invest overseas.

Mr Hui stated that it is essential to consolidate Hong Kong's role as an international commerce, information, finance and services centre in advancing trade co-operation with the Mainland, and he added that the government will continue to strengthen the territory's position as the freest economy for business and the best market for the Mainland and overseas investors.

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