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Financial Secretary John Tsang
A vibrant and energetic business sector has always been the cornerstone of our economic success. The synergy and the close co-operation between government and business has always been the underlying foundation that fortifies the enterprising spirit that permeates our society. Our trade is more than four times our GDP. Last year, our export value reached $3.6 trillion. That was 1.8% down compared with the 2014 total, but these are tough times for exporters - we all know that. And still, last year I am proud to say, we maintained our standing as the world’s eighth-largest trading entity, and the world’s seventh-largest exporter in merchandise trade.
The global economy in the coming year will be affected by a number of uncertainties and you can name them, but, thankfully, we are still continuing on a modest growth path. The Hong Kong economy picked up by 1.9 % in real terms in the third quarter of 2016 over a year earlier, following a 1.7% growth in the preceding quarter. Domestic demand gathered further pace, while external demand also saw relative improvement. That should offer some support and perhaps relief to Asia’s trade as well as your exports.
Let me assure you that the Government will continue to provide support to the industry in the pursuit of sustainable growth. The Trade & Industry Department will continue to operate a variety of funding programmes to enhance the competitiveness of our SMEs, the heart and soul of our economy.
One programme that you should all be familiar with is the SME Export Marketing Fund. I am sure that many of you here today have taken good advantage of the Fund in expanding your businesses through export-promotion activities that were supported by the Fund.
Over the years, we have continued to fine-tune this Fund, relaxing conditions for the use of the grant and expanding the Fund's scope to cover activities such as electronic and media promotion.
I announced also in my Budget this year the extension of the application period for the special concessionary measures under the SME Financing Guarantee Scheme for the fourth time, now to the end of February 2017. And the annual guarantee fee rate for the measures has been reduced by 10%. In addition, the minimum guarantee fee rate for the measures has been totally removed, in order to help companies obtain loans and reduce the cost of financing.
The Hong Kong Export Credit Insurance Corporation has been playing a key role in facilitating Hong Kong’s export trade as well.
It has put in place a wide variety of initiatives to support our exporters, especially SMEs. In 2013, the Corporation introduced the Small Business Policy, targeting exporting companies with an annual turnover of less than $50 million.
And in March this year, the corporation offered another boost to SMEs by waiving the full annual policy fee permanently, while offering a 20% premium discount for all Small Business Policies. The point here is clear: we simply want to enhance the competitiveness of our SMEs.
At the G2G level, we are working hard to strengthen ties with our trading partners in order to help our exporters explore and enter into new markets.
More than 50% of our exports are destined for the Mainland of China, and our largest trading partner continues to hold great potential for exporters. And we shall, rest assured, continue to strengthen co-operation with Mainland authorities at all levels to enhance the competitiveness of Hong Kong products in the Mainland market.
I visited Beijing just a few days ago and had meetings with a number of central authorities. The talks have been useful and very constructive. At my meeting with the Minister of Commerce, Mr Gao Hucheng, we agreed to further explore new facilitation measures under the framework of CEPA. And the work is in progress.
The ASEAN bloc, I want to mention, a market with more than 600 million people, is our second-largest trading partner. Last year, the total value of merchandise trade between Hong Kong and ASEAN exceeded US$106 billion. And that, ladies and gentlemen, is bigger than Hong Kong-US trade or Hong Kong-EU trade.
And we are confident that our trade will continue to expand, following a Free Trade Agreement that we are aiming to finalise with ASEAN in the near future. We are still sorting out a few details, but we are hopeful that we would be able to complete the negotiation in a timely manner.
The Hong Kong-ASEAN FTA will help stimulate further flow of goods, services and investment between Hong Kong and the ASEAN countries, and help expand the wide spectrum of opportunities for exporters of Hong Kong.
And opportunities ahead will not get any bigger than the Belt & Road Initiative, which will no doubt become the driving force of the global economy in this 21st century.
Structured along the framework of connectivity, the Belt & Road Initiative will, for certain, engender further demand and stimulate even stronger international trade and investment flow.
As China’s international financial and commercial centre, Hong Kong is perfectly positioned to become the hub for trade, for business and for investment of the Belt & Road region.
Now you can find political and economic information on the 60-plus markets along the Belt & Road on the websites of the TDC (Trade Development Council) as well as the ECIC (Export Credit Insurance Corporation). This useful information will certainly help you better understand the Belt-Road markets and the business opportunities that they promise.
In the past two years, I have led a number of business missions to major economies along the Belt & Road, including for example Poland, Germany, Hungary, Kazakhstan, the UAE as well as Iran, and many of our enterprises and professionals were able to see for themselves the massive business opportunities and potential that these emerging markets can offer.
So I am glad to say that these trips have all been very truly rewarding and fruitful. And from what I have seen and heard, I am also glad to say that the future of our export sector will continue to be promising as well.
Financial Secretary John Tsang gave these remarks at the Exporters’ Association annual Christmas luncheon on December 2.
