Hong Kong politics

Hopes and fears: Zhang Dejiang visits Hong Kong

For first time, Zhang Dejiang spells out how Hong Kong can seize key role in One Belt, One Road

Senior state official highlights four areas for city to focus on in future

PUBLISHED : Wednesday, 18 May, 2016, 10:52am
UPDATED : Wednesday, 18 May, 2016, 11:22pm

Beijing is going all out to bring Hong Kong on board its “One Belt, One Road” trade strategy, with

the nation’s third-highest-ranking leader identifying four key areas for the city to focus on.

In his keynote speech yesterday at the Belt and Road Summit, Zhang Dejiang highlighted the professional sectors, financial services, “people-to-people exchanges” and cooperation with the mainland on developing businesses along the land and sea routes connecting China with the rest of Eurasia.

It was the first time a mainland leader has spelled out details of the city’s role in the trade initiative first announced by President Xi Jinping in 2013.

“The central government ... holds the view that Hong Kong possesses a multitude of unique strengths in the development of One Belt, One Road, and is capable of performing such functions that are of high importance,” Zhang said, addressing a local and international audience.

The state leader who oversees Hong Kong affairs also called on the city to participate in the nation’s development “more proactively” with Beijing’s backing.

At the same time, the local business community is gearing up for the mainland’s “go global” initiative, with major trade bodies looking to undertake more fact-finding trips to 64 countries along the belt-and-road route and organise forums to learn more about the initiative.

Stanley Lau Chin-ho, honorary president of the Federation of Hong Kong Industries, said they would respond to Zhang’s ­encouragement by spreading the word through forums and tours.

“Local merchants need to learn more before they feel comfortable to exploit business ­opportunities under the initiative.”

An eight-day tour to Iran – one of the belt-and-road countries – was organised by the Hong Kong General Chamber of Commerce last month. The delegation found the country was in need of new infrastructure and public utilities which suffered under sanctions.

“Iranian SMEs are eager to partner with Hong Kong companies for trading in goods and ­services,” the chamber said.

Zhang also urged deeper economic cooperation between Hong Kong and the mainland in going global together, which he said would benefit both sides.

A Hong Kong-listed company, Kaisun Energy, agreed. Its chairman, Joseph Chan Nap-kee, said it was easier to conduct business with state-owned enterprises, which helped reduce political and investment risks. The energy company has invested more than US$100 million in several countries in Central Asia and Southeast Asia, developing projects through joint ventures with big state-owned firms.

“Usually, our side would do the initial research and use our connections to secure the project,” Chan said. The state-owned companies would send workers to do the rest, and they preferred to hold controlling stakes in these oversea projects, he added.

However, some merchants were still hesitant to make the first move. Sunny Ho Lap-kee, executive director at the Hong Kong Shipper’s Council, said the initiative was still at a very “early stage”, so he did not expect an increase in shipping volume in the near term.

“A lot of work needs to be done before we see any concrete results,” Lap-kee said.

“[The governments] have created an environment that welcomes investment, but do they also protect investments?”

Zhang also advised the city to take the advantage of its status as

a prominent offshore renminbi trade settlement centre, provide financing for infrastructure projects and offer insurance and reinsurance services.

Nathan Chow Hung-lai, senior vice-president and economist at Singaporean bank DBS said Hong Kong was fully equipped to provide all types of financial services that Chinese companies needed to participate in the initiative.