Hong Kong will defend its interests amid US-China trade war, minister vows

Commerce secretary Edward Yau says city will act to protect its business partners, though this does not mean it will serve US interests 

PUBLISHED : Thursday, 26 April, 2018, 9:26am
UPDATED : Thursday, 26 April, 2018, 4:43pm

Hong Kong’s trade minister has vowed that the city will continue to be a free and open place to do business, though he said this did not mean it would serve the interests of the US, which is inching closer to an all-out trade dispute with China.

As an independent member of the World Trade Organisation, Hong Kong would speak up to defend its interests, Edward Yau Tang-wah warned on Wednesday.

The commerce chief was responding to comments by the top US envoy to Hong Kong, who on Tuesday said he was seeking to ease worries that the city would be a “voiceless victim” of the escalating trade friction between China and the United States.

Instead, Consul General Kurt Tong said during a lunch at the Foreign Correspondents’ Club, “the current situation presents a real opportunity for Hong Kong to demonstrate its lasting value as a transformative portal linking China and the rest of the world economy”.

Hong Kong will not be a ‘voiceless victim’ in US-China trade war, top US envoy to city says

Tong blamed China for adopting “market-distorting policies and practices” and stressed that the US valued free, fair and open trade.

“Hong Kong has an opportunity to proactively use its autonomy to further strengthen its impressive economic competitiveness, as well as its inherent value proposition in the eyes of foreign partners,” he said.

Speaking on the sidelines of an official trip to Jakarta, Yau, the city’s secretary for commerce and economic development, said: “We will continue to be a voice of the multilateral rule-based free trade system … and a valued partner of all participants in the system, including the US.” 

“This does not mean that we will be serving US interests – but the interests of everyone who does business with Hong Kong,” he continued. “When we speak up we are also protecting Hong Kong’s business partners. So whether Hong Kong will be a victim might be determined by its circumstances, but Hong Kong will not be voiceless.”

Yau and other officials had previously cautioned that collateral damage to the city was unavoidable, as China reciprocated the US announcement of tariffs on US$50 billion (HK$392.3 billion) in annual imports of goods from each side.

US President Donald Trump launched this action to reduce the trade deficit between both countries and pressure China into investigating intellectual property violations, among other reasons. He has threatened to target an additional US$100 billion in Chinese imports.

On Wednesday, Yau gave the assurance that the list of about 1,300 Chinese exports that could be subjected to a 25 per cent tariff was not targeted at the city.

On April 19, he added, the government had made a formal request to join China’s dispute settlement consultation session with the US on the 23.6 per cent tariff proposed for aluminium products imported from five markets, including Hong Kong.

Yau was part of Chief Executive Carrie Lam Cheng Yuet-ngor’s delegation for her first official visit to the Indonesian capital. 

The two-day trip was aimed at strengthening ties between both economies. Indonesia is the largest country in the 10-member Asean bloc, with more than 260 million people and economic growth of 5 per cent last year.

“Indonesia is an important country along the belt and road,” Yau said, referring to China’s grand strategy to revive trade with more than 60 countries along the ancient Silk Road. 

Lam met Indonesian President Joko Widodo for an hour on Wednesday. 

At a lunch with 300 businessmen and officials, she promised to help Indonesia, an archipelago of more than 17,000 islands, attract more tourists from the city.

Hong Kong and Indonesia also signed an agreement to boost business ties. It was signed by Thomas Lembong, chairman of the country’s Investment Coordinating Board, and Vincent Lo Hong-sui, chairman of the Hong Kong Trade Development Council.

Lo was leading a six-day Hong Kong-Shanghai business mission to Jakarta and Manila in the Philippines to explore the infrastructure needs of the two Asean countries, which Hong Kong and mainland Chinese companies will be incentivised to fulfil under the belt and road scheme.

 

Su Xinqi is reporting from Jakarta