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Hong Kong assigned crucial middleman role

Dutch companies doing business in the region have always valued entry possibilities to the mainland

QUEEN BEATRIX - the Netherlands' head of state - celebrates her silver jubilee, or 25th year on the throne, this year.

'She is very important to all of us,' said Jan Revis, Consul-General of the Kingdom of the Netherlands in Hong Kong. 'Most of us enjoy having a royal family. If there was a referendum, I am sure 85 per cent of us would support it.'

As a constitutional monarchy, the Netherlands has an open economy that depends heavily on foreign trade. The country is the world's sixth most important exporting nation. It is also one of Hong Kong's most important trading partners. The city exported $33.141 billion worth of goods to the Netherlands last year; imports amounted to $13.995 billion.

'Taken together, we are talking of a balance of almost $50 billion, making us Hong Kong's fourth largest trading partner in Europe, on par with France,' Mr Revis said. 'Only Britain, Germany and Italy are larger.'

The Netherlands imports from Hong Kong parts and accessories for office machines and computers, clothing and clothing accessories, audio and video recorders and players, computers, telecommunications equipment and parts, electrical machinery and apparatus, and footwear.

Hong Kong's imports run from alcoholic products to telecommunications equipment and parts, milk and cream products, and machinery and equipment for particular industries.

The Netherlands is also the source of a disproportionately large amount of direct foreign investment in countries around the world. In Hong Kong, Dutch investments come in third, with only China and the British Virgin Islands staking a larger claim.

'There are historical reasons for this,' Mr Revis said. 'We have been trading all over the world, and in Asia since the 17th century. The tradition of the Netherlands is that of a trading country. Commerce in the Netherlands is always written with a capital C.'

As an important trading nation, the Netherlands - not surprisingly - is an important transport hub. Amsterdam Schiphol Airport, ranked the world's eighth best by Forbes, handled a record 42.5 million passengers last year, up 6.5 per cent from 2003. A 4.5 per cent rise in passenger traffic is expected this year. Cargo throughput rose 8.5 per cent to more than 1.4 million tonnes in 2003, with 328 million tonnes of cargo passing through the port of Rotterdam. The same year, more than 9.1 million people visited the country, with foreign tourists spending about Euro7.5 billion ($75.53 billion) a year during their visits.

As China's economy continues to experience exponential growth, Hong Kong is expected to continue to play a crucial role as go-between for the Netherlands and the mainland.

'With a population of just 7 million people, Hong Kong cannot compete with the mainland as a market,' Mr Revis said. 'Its value is, and always has been, its ability to provide entry possibilities to the mainland. Hong Kong will continue to have an edge over possible competitors in the country.'

A Dutch consulate was opened in Guangzhou in 1997 because of a growing presence in Guangdong province of Dutch businessmen and women. However, most of them continue to base their regional operations in Hong Kong.

'We believe it is a smart decision for Dutch companies to operate from Hong Kong because they can use all of the services available here, whether it is banking or finance or consulting,' Mr Revis said. 'There are lots of people here who can advise you on how to do business in China.'

The Netherlands' economy is noted for its stable industrial relations, moderate unemployment and inflation, and a large current account surplus. Food processing, chemicals, petroleum refining and electrical machinery are the most important industries.

The agricultural sector, which is highly mechanised and employs no more than 4 per cent of the labour force, provides large surpluses for the food-processing industry and for exports.

The Netherlands began circulating the euro currency on the first day of 2002.

The global economic downturn considerably slowed the country's economic growth in 2001. In the four previous years, annual growth averaged nearly 4 per cent, well above the EU average.

'It is still a bit sluggish,' Mr Revis said. 'We were expecting things to pick up in 2004, but based on what we have seen so far, it looks like we will have to wait a little longer.'

A major issue facing the country - and the rest of Europe - is the European Convention, which would result in a new constitution. A referendum will be held in the Netherlands on June 1. The outcome is anyone's guess.

'According to public opinion polls, the anti-vote is on the increase,' Mr Revis said. 'It is now about 50-50.'

As a founding member of the original European Community, established in 1957, the Netherlands has always been a firm supporter of European unity. The country wholeheartedly accepted the adoption of the euro. But the European Convention is proving a harder sell, with opposition coming from both the extreme left and the extreme right. The mainstream parties support the move.

It all comes down to a fear of a loss of identity, a loss of control, and what some see as an endless line of member state hopefuls knocking on the door.

'Whether or not it passes, Europe will continue to exist,' Mr Revis said.

'Nevertheless, all over Europe we are very nervous about the outcome. Obviously, we don't expect Europe to fall apart, but it would create certain backlashes against certain governments.'

Official name (in English): Kingdom of the Netherlands

capital: Amsterdam, The Hague is the seat of government

Largest city: Amsterdam

Government: Constitutional monarchy

Head of state: Queen Beatrix (since April 1980)

Prime Minister: Jan Peter Balkenende (since July 2002)

Area: 41,526 square kilometres

Population: 16.41 million (July 2005 estimate)

Currency: euro

Offical languages: Dutch, Frisian

GDP: US$481.1 billion

Per capita GDP: US$29,500

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