CE calls on business leaders to support RCEP bid

Chief Executive John Lee on Thursday called on business leaders to help with Hong Kong's bid to join the Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement. In a speech at the Hong Kong General Chamber of Commerce International Business Summit, Lee said with growing partnership between Hong Kong and Asean countries, it's clear that the SAR is ready to join RCEP. "I believe that the next natural step in our growing ties with Asean is for Hong Kong to become a member of RCEP," Lee said. RCEP is a free trade pact for the Asian-Pacific region that includes all 10 Asean member states. "Hong Kong is fully prepared to join RCEP. Doing so will boost our ties in trade and benefit companies and investors throughout the nations of Asean and also RCEP," the CE said. "And I continue to count on business leaders like your good selves, people who know Hong Kong well and appreciate the value that Hong Kong can add to RCEP, to speak up in support of our accession bid." Financial Secretary Paul Chan, who also attended the summit, said Hong Kong has a unique role in connecting the markets in the Global South, including mainland China, to the rest of the world. Chan noted that many mainland companies have established supply chains in the Global South and Belt and Road countries, and Hong Kong can play the role of a super-connector. “[Mainland firms] need project and trade financing. They need world-class professional services. They need global capital and global talent. In order to do this, Hong Kong would be a very unique platform,” he said. “We are encouraging mainland companies coming to Hong Kong to set up their regional offices, even international offices, to support their global ambition.” The financial secretary also spoke about challenges facing the world "underscored by geo-economic fragmentation", such as threats by US President-elect Donald Trump to raise tariffs on goods from China, Canada and Mexico. Despite that, Chan said the US and Europe remain important and valuable partners, saying cooperation remains possible in "non-sensitive areas" such as infrastructure and climate-related activities. He stressed the SAR needs to engage proactively with the West and reach out to their markets to tell the true Hong Kong story, to tackle misconceptions and biases. Standard Chartered's President, International, Benjamin Hung, said business people he'd spoken to around the world were all discussing the possibility of higher US tariffs. He said with China having the world's largest production capacity, firms shifting their manufacturing elsewhere may lead to rising costs and higher inflation, adding to consumers' burden. "Right now, diversification is the name of the game... This is like insurance, this is like buying protection, because nowhere in the world, unfortunately, can produce the quantity, the quality, and at the cost level that China can," Hung said. "So a 'China+1' is never going to be enough because 'China+1' isn't enough to compensate the volume of China. You need 'China+2', 'China+N'." He said Hong Kong’s role amidst the challenges isn't just to be a centre for supply chains, but also to manage capital.