Hong Kong is already one of the world's most open economies, but Asean will still benefit from a free-trade agreement (FTA) with the city as it will get more investment and access to its financial market, said its chief secretary.

Carrie Lam, who wrapped up a four-day trip to Singapore, told reporters that Hong Kong industrialists are already seeking investment opportunities in the region, given rising costs in mainland China.

"The manufacturing cost in some of the Asean states is lower than in the mainland," she noted.

But she also acknowledged that Asean may not benefit as much in concessions on the goods trade because Hong Kong already has very few tariffs.

Singapore had previously voiced concerns about its gains from a free-trade deal between Asean and Hong Kong, due to similarities between the two cities.

It is difficult to say how Singapore will benefit from such a pact, but Hong Kong is looking for a "win-win" situation for all parties, Lam said.

"Singaporean companies trading with the mainland could make use of Hong Kong's clearing and settlement in renminbi business, because we are the biggest offshore renminbi business center," she said.

She added that Singapore companies that want to raise capital in the yuan may issue yuan-denominated bonds in Hong Kong.

To facilitate negotiations expected to start early next year, Lam said Hong Kong is now "doing its homework" and its leaders will visit all the 10 Asean countries.

Hong Kong this week announced a new scheme to send its university students on internships in Asean countries to further enhance bilateral relations.

Asked about tycoon Li Ka Shing's plan to sell the ParknShop supermarket chain, Lam dismissed suggestions that the city is becoming less attractive to businesses.

"We remain very competitive in terms of our business environment," she pointed out.

"But this doesn't mean we can be complacent," she added, citing the lack of international school places, high property prices and poor air quality as areas the government needs to tackle.

She also said Hong Kong could learn from Singapore's "progressive" strategy on retaining talent, which includes offering scholarships to young people and engaging with its citizens who are overseas through its embassies.

"That's why…one of my first official functions was to have lunch with 50 Hong Kongers living in Singapore," said Lam, who is chairing a government committee on population policy.

By McClatchy-Tribune News Service
businessmirror.com.ph

The post Asean 'will gain from FTA with Hong Kong' appeared first on Asean Investment | Marc Djandji Blog.