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Hong Kong economy

Britain, Hong Kong eyeing free-trade deal, looking to collaborate on fintech, visiting minister says

  • Mark Field says innovation and technology is the priority in deepening ties, but adds that journalist Victor Mallet’s expulsion from the city undermines civil liberties and risks damaging business confidence
PUBLISHED : Monday, 12 November, 2018, 8:03am
UPDATED : Wednesday, 14 November, 2018, 4:19pm

Britain and Hong Kong will work more closely to push forward innovations in finance and medicine, as London and Beijing seek stronger ties amid the US-China trade war, according to a visiting British official.

Minister of State for Asia and the Pacific Mark Field also said his country was in talks with the Hong Kong government to strengthen the trading relationship between the two economies, including the possibility of a future free-trade agreement.

“Hong Kong is a very important trading partner for the UK, and we have a very high level of ambition for our trading and investment relationships,” he said. “We’re working very closely with the Hong Kong government to support a full range of options.”

Britain is Hong Kong’s 13th largest trading partner. Last year bilateral trade amounted to HK$99 billion (US$12.64 billion), or 1.2 per cent of the city’s total.

Field arrived in Hong Kong on Thursday as part of an East Asia trip to meet officials and British communities in the region. He was scheduled to meet Hong Kong’s No 2 official, Chief Secretary Matthew Cheung Kin-chung, on Sunday to discuss bilateral issues, including the government’s recent decision to deny entry to British journalist Victor Mallet, who was refused a work visa renewal and forced to leave the city after chairing a talk featuring a separatist activist.

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In an interview on Friday, Field said the incident undermined civil liberties and risked damaging business confidence in Hong Kong. But he added that the “one country, two systems” principle under which the city has been governed since 1997 had generally worked well.

In recent months Beijing and Hong Kong have been keen to promote innovation and technology as a new driver of economic growth to reduce Hong Kong’s reliance on the financial and real estate sectors.

The local government has signed deals with research institutes in France, the United States and mainland China to enable them to set up branches in the city.

Field said innovation and technology would be a priority as London deepened ties with Hong Kong.

“It is very much in the UK and Hong Kong’s interests to ensure we strengthen further our close bilateral relationship, and that includes … financial technology and it includes the broad area of technology,” he said.

He hoped to see academics working together on areas such as artificial intelligence, medical diagnostics, as well as “in areas at the moment we can’t foresee”.

British and Hong Kong authorities have also in recent months signed a memorandum of understanding on allowing for the cross-border sale of retail funds. Greater cultural cooperation is also under consideration.

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Field said with Britain set to leave the European Union in March next year, the country would “even more strongly embrace” its involvement in other parts of the world.

Back in 2015 during an official visit to Britain, Chinese President Xi Jinping announced a “golden era” in Sino-British trade.

In reference to that notion, Field said: “We can have a golden era there and we can also continue to cooperate more strongly with the United States, with Hong Kong and many other countries.”

Asked if the US-China trade war was bringing Britain and China closer together, Field would only say that starting a trading dispute was not an appropriate or justified way to resolve differences.

“We feel a trade war is bad for everyone … I hope US President Donald Trump and President Xi will be able to come to the table to resolve these issues,” he said.