Tuesday, July 25, 2017

HK’s rush to Southeast Asia is gaining speed

Hong Kong’s Financial Secretary John C Tsang will lead a delegation of business leaders from the Special Administrative Region of China to Myanmar later this month to deepen economic and cultural ties with Myanmar, Hong Kong officials said.

The sixth HK delegation in one year will comprise 25-30 chief executive officers and other business leaders from the financial services, logistics and trade industries, among others. They will arrive in Yangon on June 26 for a four-day visit.

The move is part of Hong Kong’s strategy to reduce its reliance on mainland China as a manufacturing base and re-establish a strong presence in Southeast Asia, Mr Fong Ngai, director of the Hong Kong Economic and Trade Office for the Association of Southeast Asian Nations, told The Myanmar Times on May 28.

Its members will meet Myanmar business leaders in Yangon and ministers in the capital. A meeting between Mr Tsang, the third-highest official in HK’s government, and President U Thein Sein or Vice President U Nyan Tun is likely, business sources said.

Dr Mg Mg Lay, vice president of the Union of Myanmar Federation of Chambers of Commerce and Industry, said there has been an upsurge in visits by Hong Kong executives as well as delegations and that the federation is helping arrange meetings with ministers for the next delegation.

It will be the highest-level visit so far as Hong Kong’s financial services industry makes a move to attract Myanmar businesses to use its banks for international transactions made in China’s currency, the renminbi, Mr Fong said.

Mr Fong described Hong Kong’s push into Southeast Asia as a return, saying it had been very active in the region prior to China’s opening to the global economy 30 years ago. Manufacturers based in Hong Kong subsequently shifted to mainland China due to its proximity and inexpensive labour market, but are now returning to Southeast Asia because its rapid economic development is increasing demand for trading, financial service and logistics expertise, all of which Hong Kong is renowned for.

Trade between Myanmar and Hong Kong rose swiftly last year to US$132 million, a 24 percent increase from 2011, according to official figures. The average annual growth rate was 8pc for the previous three years. Mr Fong said growth is likely to be “exponential” in the future, particularly in the garment industry, because it is starting from a low base.

Like South Korea, Hong Kong’s cultural assets, such as films and Cantonese pop, will be part of its strategic re-engagement with the region. Mr Fong’s office is also preparing a summer internship program that will place hundreds of Hong Kong university students in government agencies, non-governmental organisations, media outlets and private businesses throughout Southeast Asia beginning next year.

Mr Fong described Hong Kong’s strategic expansion in Southeast Asia as “investment with a human touch” due to its stress on cultural and “people-to people” exchanges.

Additional reporting by Vincent MacIsaac