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Secretary for Commerce & Economic Development Gregory So
Chile is our important trading partner, not only because you are our second largest trader partner in South America, but also because we see Chile's great potential as an emerging market and our gateway to the Latin American markets.
That Chile is our first free trade agreement (FTA) partner in Latin America clearly manifests our strong determination to strengthen our bilateral relationship.
While Chile and Hong Kong might be half the globe apart, the physical distance has not hindered bilateral trade. Our bilateral merchandise trade has grown at an average of 7% per annum since 2010. And I am glad that many high-quality Chilean goods such as wine, fruits and seafood have found favour with discerning consumers in Hong Kong.
The FTA between Hong Kong and Chile, which signifies a major milestone of our trade relations, is approaching its anniversary since its implementation last October.
Under the FTA, all Chile-origin products enjoy the certainty of tariff-free access to Hong Kong. Chilean services providers also benefit from enhanced legal certainty of market access in Hong Kong for a wide range of sectors.
With the FTA in place, I am sure business sectors of both sides, including those present here today, will factor this into their business plans and make the best use of the valuable new market opportunities.
To enhance investment flows between the two economies, Hong Kong and Chile are currently negotiating a more comprehensive agreement on investment promotion and protection under the FTA. I look forward to an early and successful conclusion of the agreement, which would certainly add further impetus to our bilateral investments.
Solid investment conduit
Speaking of investment, Hong Kong is both a prominent source and destination for foreign direct investment, or FDI. According to a recent report of the United Nations Conference on Trade & Development, Hong Kong ranked number two in global FDI inflows, second only to Mainland China.
We were also the world's second largest outward investing economy, second only to the United States. In particular, we have a very significant volume of trade and investment flows with Mainland China.
With the Central People's Government's policy of helping enterprises in Mainland China and Hong Kong to go global together, we are confident that Hong Kong would remain the most important investment conduit for businesses in the Mainland.
Chinese companies nowadays are very eager for opportunities to invest and establish a presence overseas. The potential investment from Mainland China to Chile through Hong Kong could be enormous.
Besides the role of an investment conduit, Hong Kong also serves as an excellent base for foreign businesses with an eye on the markets of Asia and the Mainland.
Level playing field
Hong Kong is strategically located at the heart of Asia - at the doorstep of Mainland China and the Association of Southeast Asian Nations region. We have an open and business-friendly environment with low and simple taxes. We practice the rule of law, underpinned by judicial independence. We embrace the internationally recognised codes of practice in business and commerce. And we guarantee a level playing field for all companies, and free flows of capital, information and talent.
In a nutshell, Hong Kong provides a familiar financial, legal and cultural environment for Chilean companies to access a wide audience in our part of the world. Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained top spot in the Heritage Foundation's Index of Economic Freedom for 21 years in a row. This status reflects real advantages for doing businesses with Hong Kong and in Hong Kong.
What's more, Hong Kong is also an ideal showcase for Chilean firms to promote their high-quality goods to consumers across Asia. On its own, Hong Kong is a relatively small city with a population of just 7 million. But when you consider that we received about 61 million visitors last year, including more than 47 million from the Mainland, Hong Kong is an ideal platform for premium Chilean products, such as food and wine, to reach a wide audience in our part of the world.
It is no secret that visitors from Mainland China recognise brands and products they see in Hong Kong as something reliable and of premium quality.
Partners in wine
Speaking of wine, Hong Kong, being a successful regional wine hub, is Chile's ideal partner. Our success can be attributed to, among others, the removal of all our wine duties in 2008. Since then, Hong Kong's wine imports have thrived with a twofold increase to around US$1.1 billion in 2014.
I am proud to let you know that Hong Kong has been the world's number one wine auction centre for the last five years, and the outlook of our wine business remains very positive.
Hong Kong and Chile have long been close partners in wine trade. Chile is Hong Kong’s 5th largest wine importing origin by value, and 4th largest by volume. Our close partnership was exemplified in the wine memorandum of understanding signed between the two sides in 2010.
Hong Kong has a sizeable group of wine connoisseurs who appreciate good wine and fine cuisines from around the world. And we love Chilean wines. A vivid example is the establishment of the Wines of Chile Academy in Hong Kong earlier this year. Chilean wines like Chardonnay from Casablanca and Cabernet Sauvignon from the Central Valley have quite a following in Hong Kong.
Super-connector role
Hong Kong is more than being a major market, but also the gateway to the growing wine market in Mainland China. Our wine re-exports to the Mainland grew 3.5 times since we removed our wine duty in 2008.
Our wine hub role becomes even more relevant to Chile, since the Mainland's tariff for Chilean wines was eliminated earlier this year under the Chile-China Free Trade Agreement.
Since the FTA was signed in 2006, the Mainland's demand for Chilean wines has leaped. So has re-exports through Hong Kong, which has increased over 10 times to US$5.6 million in 2014. There is much room for further expanding our wine trade given the growing demand for wine from the Mainland.
Hong Kong has always been the super-connector connecting Mainland China with the rest of the world. As your friend and business partner in Asia, Hong Kong is ready to facilitate your ventures and help grow your businesses.
I invite and encourage you all to make greater use of Hong Kong's unique advantage in terms of our physical proximity with the Mainland, as well as our first class infrastructure and our highly competitive business and professional services.
Secretary for Commerce & Economic Development Gregory So gave these remarks at a networking luncheon with the Chilean business community organised by the Hong Kong Trade Development Council in Santiago.
