As an international trading and logistics hub, Hong Kong, China stands to benefit from more convenient and efficient transport infrastructure, logistic operations and customs clearance in the region.
After the historic breakthroughs in trade, investment and sustainable development achieved in APEC during China’s host year, Hong Kong, China Chief Executive Leung Chun-ying sees potential for even greater progress at the dawn of the Philippines’ year as host in 2015. In an interview ahead of an appearance with private sector representatives from the APEC Business Advisory Council, the Chief Executive described how Hong Kong, China plans to support this effort and the underlying benefits.
APEC: How would you describe the development of cooperation between Hong Kong, China and other APEC economies?
Chief Executive Leung: Hong Kong, China is a staunch supporter of free and open trade and investment. This coincides with APEC’s primary goal to support sustainable economic growth and prosperity in the Asia-Pacific region by championing free and open trade and investment. To this end, we joined APEC in 1991 to cooperate with like-minded economies to build a dynamic and harmonious Asia-Pacific community.
Hong Kong, China has all along been actively contributing to the APEC process. We have been working closely with other APEC member economies to pursue projects of value to the APEC region. For example, the latest projects initiated by Hong Kong, China, such as those promoting global data standards and the Hague Conventions, have been well received by other APEC economies.
We have also co-sponsored and participated in various projects initiated by other member economies and benefited from the process tremendously. Through such interaction and cooperation, Hong Kong, China and other APEC member economies have not only jointly contributed to the overall APEC goal but also fostered closer partnership among ourselves.
APEC: Tell us about the value of APEC to Hong Kong, China’s economy, businesses and people.
Chief Executive Leung: APEC member economies account for about 80 per cent of Hong Kong, China’s external trade. In this regard, APEC provides Hong Kong, China with a good platform to cooperate with other member economies on a wide range of economic, trade and investment issues in the region.
APEC’s 21 member economies are home to around 2.8 billion people and represented approximately 57 per cent of world GDP and 47 per cent of world trade in 2012. Their real GDP doubled from USD16 trillion in 1989 to USD31trillion in 2013, at a pace faster than the rest of the world. APEC as a whole reduced average tariff rates from 17 per cent in 1989 to 5.2 per cent in 2012. As a trading hub in the region, Hong Kong, China’s economy stands to benefit from these APEC achievements, which present huge room for growth in trade and investment.
Our businesses have been benefiting from various APEC trade liberalization and business facilitation measures. APEC’s Trade Facilitation Action Plan, which included streamlining customs procedures, reached its target of region-wide reduction in costs at the border by 5 per cent between 2004 and 2006. A further 5 per cent decrease was achieved between 2007 and 2010, which saved businesses in the Asia-Pacific a total of USD 58.7 billion.
Under the Ease of Doing Business Action Plan to make doing business cheaper, easier and faster, APEC improved the Ease of Doing Business by 11.3 per cent between 2009 and 2013. APEC has also been harmonizing standards and regulations, and streamlining customs procedures. Between 2009 and 2013, the lead time to import and export goods dropped by more than 20 per cent.
APEC’s initiatives to enhance business mobility, notably the APEC Business Travel Card, are of particular value to the people in Hong Kong, China. As an international business center, many of our businessmen and businesswomen travel frequently across the region. The APEC Business Travel card provides substantial time and cost savings to them.
APEC has also been promoting the mobility of students, researchers and education service providers in the region. Last year, APEC launched the APEC Scholarships and Internships Initiative creating over 150 APEC scholarship and internship places, of which more than 40 places were from Hong Kong, China. Over the years, APEC’s economic and technical cooperation programs have provided valuable opportunities for experience sharing and capacity building among APEC member economies to enable people in the region to gain the necessary sills to meet their economic potential.
APEC: What are Hong Kong, China’s interests and priorities within APEC today?
Chief Executive Leung: Hong Kong, China is interested in engaging in economic dialogue and cooperation with other APEC member economies, enhancing trade and investment flows through market liberalization and facilitation, and fostering closer regional integration.
Supply chain connectivity has been one of Hong Kong, China’s priorities in recent years. As an international trading and logistics hub, Hong Kong, China stands to benefit from more convenient and efficient transport infrastructure, logistic operations and customs clearance in the region.
Last year, we contributed USD150,000 to the APEC Sub-fund on Supply Chain Connectivity Fund, established to provide financial support to APEC member economies for launching projects to enhance the efficiency of supply chain for goods and promote connectivity in the region. We hope to see more projects coming on stream from APEC member economies to take advantage of this Fund.
Hong Kong, China has also been working together with New Zealand to promote the wider use of standardized codes for trade data, which can be shared by all relevant parties in a fast and secure way. The adoption of such codes would enhance supply chain connectivity and risk management. With member economies’ support as stated in the 2014 Leaders’ Declaration, Hong Kong, China will work with the private sector, including the APEC Business Advisory Council, to further our work on this front in 2015. We hope that this would help contribute to achieving the APEC-wide target of a 10 per cent improvement in supply chain performance under the Supply Chain Framework Action Plan.
As one of the world’s leading economies in Ease of Doing Business, Hong Kong, China has been an ardent advocate for trade facilitation. We ranked third in Ease of Doing Business according to the World Bank’s Doing Business 2015 Report. We have been active in participating in APEC’s Ease of Doing Business activities. Specifically, in the past two years, we organised capacity building workshops to demonstrate how the Hague Conventions could complement the Ease of Doing Business initiative by facilitating cross-border transactions and dispute resolution. We are very pleased that these efforts were recognised by fellow APEC Leaders in the 2014 Leaders’ Declaration. We would continue to encourage the wider use of these instruments to contribute to APEC’s regional integration, connectivity and structural reform agenda.
APEC: What are your thoughts on progress achieved during APEC China 2014?
Chief Executive Leung: We are very glad that during APEC China 2014, APEC Leaders endorsed the Beijing Roadmap for APEC’s Contribution to the Realization of the Free Trade Area of the Asia-Pacific. This was one of the most important deliverables for APEC China 2014, demonstrating APEC’s serious commitment to the FTAAP, which has been advocated strongly by the business community for a long time. The Beijing Roadmap will guide our future steps in realizing the FTAAP to further APEC’s regional economic integration agenda. Hong Kong, China will participate actively in the related activities to help realize this long-term vision.
Last year, APEC Leaders also endorsed the APEC Connectivity Blueprint for 2015-2025. The Blueprint will chart our future work to achieve the mission of transforming the Asia-Pacific into a seamlessly and comprehensively connected and integrated region.
We also thank the China APEC Chair for putting together the APEC Strategic Blueprint for Promoting Global Value Chain Development and Cooperation. Global Value Chains have become a dominant feature of the global economy, bringing significant benefits to both developing and developed economies in terms of economic growth and creation of employment. Hong Kong, China has long supported APEC’s work in this area. We do so by providing an open market with virtually no trade barriers. This Blueprint will provide a useful guide for APEC’s further work on global value chains.
APEC: What are your expectations for trade, growth and economic cooperation in the APEC region in 2015 during the Philippines’ year as host?
Chief Executive Leung: Under the theme of Building Inclusive Economies, Building a Better World, the Philippines host this year has chosen four priorities, namely: Enhancing the Regional Economic Integration Agenda; Fostering SME’s Participation in Regional and Global Economy; Investing in Human Capital Development; and Building Sustainable and Resilient Communities.
Hong Kong, China fully supports the 2015 theme and priorities, and will work with the APEC host and other member economies in advancing the APEC 2015 agenda, and continuing APEC’s work mandated in previous years, such as the FTAAP and connectivity agenda.
APEC has always been a strong force behind the multilateral trading system, and has been playing an important role in sustaining the momentum of the World Trade Organization negotiations. As a staunch supporter of the multilateral trading system, Hong Kong, China is the first of the 160 WTO Members to have joined the WTO Trade Facilitation Agreement—the first multilateral agreement concluded since the establishment of the WTO. I hope that other APEC member economies would gain inspiration from Hong Kong, China’s proactive step and follow our lead soon. I also hope that APEC member economies would work together with a view to facilitating more concrete deliverables at the 10th WTO Ministerial Conference by end 2015.