think GLOBAL think HONG KONGAdvantages of Pearl River Delta Plus:Leveraging Hong Kong Service Platformto Support Cross-border Business Operation

Hong Kong’s Role in International Co-operations

Dr. Jonathan Choi

Chairman, Hong Kong – Japan Business Co-operation Committee

15 May 2012

HK-PRD: Geographic Superiority

HK-PRD: Inseparable Relations

Pearl River Delta (PRD)– The first economically liberalized region since China’s Refo

rm and Opening Up in 1979

Investment of HK based companies– Foreign direct investment– Skilled workforce

HK-PRD China's economic growth hub

Guangdong-Mainland’s economic growth hub

Guangdong has strong manufacturing industry and export capabilities

Guangdong is in the critical stage of upgrading and transformation

Gradual shift of global economic focus to the East PRD enterprises grow rapidly and develop high value-added industries HK’s prominent superiority: Infrastructure, Finance, Professional services, etc. Continuous policies in strengthening HK-PRD co-operation

− The National 12th Five-Year Plan

More specific and focused separate chapter for HK for the first time

Specifies development of new district zones (Qianhai, Nansha and Hengqin)

closer ties among Guangdong, HK and Macau

− Vice Premier Li Keqiang’s 36 new policy measures HK and Mainland co-operations

− Supplement VIII to CEPA:

Further enhance economic, trade and financial co-operations between Mainland and HK

Helps accelerate HK’s professional services in entering Mainland market

Acts as key platform in further promoting the HK-Guangdong economic integration

− Outline of Plan for Reform and Development of the PRD 2008-2020

Framework Agreement on Guangdong-Hong Kong Co-operation Regional Co-operation Plan on Building a Quality Living Area

HK-PRD's Role between China and Overseas: Increasingly important

HK-PRD Region: Integration of Infrastructure Network

Promote co-operation of aviation industry– Improve coordination mechanism – Perform airspace management mechanism

Strengthen HK-PRD transport networks – Increase frequency of HK-PRD shipping routes– Provide efficient and private services: yachts and aircrafts– Provide speedy commercial aircraft and helicopter services

Strengthen the role of HK as a hub of transportation – HK-Zhuhai-Macau Bridge (3-hour radius)– Guangzhou-Shenzhen-HK Express Rail Link (“1-hour living

circle”)

Enhance electronic clearance technologies

HK as the Logistic Gateway

World-class cross-boundary infrastructure

Highly efficient customs services and competitive advantages in – Handling high value goods – Providing high value-added services

Satisfy needs of foreign sales and domestic distribution of PRD-based factories

Integrate HK’s professional business services with Guangdong’s strong export capabilities

Seize the development opportunities arising from the rapid growth of Mainland and Asian economy

HK’s roles as Offshore RMB Centre and Asset Management Centre

CEPA VIIICEPA VIII Support Mainland banks to make use of HK's international

financial platform to develop international businesses

Support HK insurance companies to enter the market through setting up business institutions or capital participation

HK’s AdvantagesHK’s Advantages World’s largest offshore RMB centre – continue to expand and

reach new milestones, increase liquidity and maturity

Free capital flow

Market-determined RMB exchange rates

Important entrepôt of Mainland China

Further advantages

- Extend settlement periods cover trading hours in Europe and the U.S.

HK as a Financial Centre - Further Strengthened Role and Functions

Expansion of the RMB trade settlement scheme to entire country

Support HK enterprises’ use of RMB for direct investment in the Mainland

Introduction of a RMB QFII scheme for investing in the Mainland’s securities markets

Expansion of number of enterprises issuing RMB bonds in HK and scale of their bond issuanceSource: CEIC

Hong Kong’s RMB Deposits, Remittances and Clearing Transactions

Third Quarter of 2011 – HK handles 90.1% of the world’s RMB trade settlement

Enhance Regional IntegrationHK as platform for East Asian Economic Co-operations

Economic relations with its neighboring economies, including Japan, have deepened with time

Perfect platform for Japanese companies esp. SMEs entering the southern China market− Mainland enterprises HK-PRD connections

Japanese market− HK-PRD: Japan’s economic interaction with China

and the neighboring regions

A more important role in promoting East Asian regional economic co-operation

A platform in the future financial development in East Asia

Enhance Regional IntegrationHK as platform for East Asian Economic Co-operations

HK Government has conveyed the wish to join the ASEAN-China Free Trade Agreement (ACFTA)

Central government also supports HK to join ACFTA Make good use of HK’s connections with Asian countries HK can strengthen economic ties between China and

ASEAN HK plays a strategic role to the region as

– International financial centre– International business centre – Trading hub

CGCC will organize a forum on East Asian Regional Co-operation in July 2012

– 10 + 1 (ASEAN + CHINA)– 10 + 3 (ASEAN + CHINA, JAPAN, S. KOREA)

THANK YOU!