Hong Kong turns to mainland China for economic growth

Hong Kong's leader has his sights set on economic development in mainland China, but promised today in a speech to business leaders that he wouldn't turn a blind eye to international markets.

Leung Chun-ying told more than 1,000 people at a lunch hosted by the Hong Kong General Chamber of Commerce that mainland China holds great potential for Hong Kong's economic development, and he outlined measures the government is taking to strengthen business ties there.

Hong Kong, for example, is looking to set up more trade and liaison offices throughout China and there is a new working group to help certain sectors gain better access to the market. Help will be especially targeted at small and medium-sized businesses. Hong Kong's border is next to China's Guangdong province and efforts are also being heavily concentrated on deepening business relations there.

"I've centred my comments today mostly on the potential for Hong Kong to sustain economic growth by improving business relations in the mainland. After all, this is our strong suit," Leung said during his speech. "But that doesn't mean turning a blind eye to Hong Kong's other economic partners. We will continue to explore free trade agreements, investment promotion and protection agreements and double-taxation agreements with partners around the world.

"I also look forward to promoting Hong Kong as the best place to do business during official visits abroad," he added.

Canada and Hong Kong signed a double taxation agreement when Prime Minister Stephen Harper met with Leung while visiting Hong Kong in November.

Leung told the audience that he is concentrating his efforts in the coming months on meeting with officials in mainland China, particularly members of the new administration there, but later in the year he expects to make at least two "long-haul" trips abroad. He will announce the destinations once the host countries have confirmed the details, he said.  

"It is important for government leaders, not just myself, that also applies to my senior colleagues in government, to knock on doors overseas because after all, Hong Kong is very much a part of the international community," he said in response to a question from the audience about helping Hong Kong companies access overseas markets.

"We would like to build on the very solid foundation that we have, even stronger international economic ties," Leung added.

Canadian business leader looks for more specifics

David Nesbitt, executive director of the Canadian Chamber of Commerce in Hong Kong, said after listening to Leung's speech that the leader wasn't specific enough on how he plans to strengthen those ties.

"His approach was to emphasize a very, very pro-business, pro-Hong Kong address and the entire presentation was to show we're open for business, and the government is willing to listen. There were not many specifics for us to focus on," said Nesbitt.

"I wish there were more specific comments, even perhaps an overall vision. That's always one's hope, that there would be five specific recommendations or an overall vision."

The Canadian Chamber of Commerce in Hong Kong is one of the largest chambers outside of Canada with more than 1,200 members. More than 180 Canadian companies are in Hong Kong and after Japan, it is Canada's second choice in Asia for foreign direct investment.

"Canada is hugely important to Hong Kong but it wasn't specifically mentioned," Nesbitt said of Leung's address to the business crowd.

Leung, whose title is chief executive of Hong Kong, made his first policy address last week, a speech where the government's vision and policy proposals are laid out. He was elected last July but had waited until now to deliver it. He announced a number of new measures in it that are aimed at growing Hong Kong's economy, including the creation of several advisory committees.

Business leaders will be on those committees, and Leung said Wednesday he wants them to tell the government exactly what it should do "to make things happen."

He wants concrete recommendations, not just commentaries, he said. Leung said the new committees will help Hong Kong "move up the value chain" and "broaden its footprint" as an international financial centre and will also help develop the trade and transportation sectors.

Leung said boosting the economy is crucial for Hong Kong to tackle its social and economic concerns.

"Economic development is of particular importance to Hong Kong because we will only be able to properly address our housing, poverty, aging population and environmental issues with robust and sustained economic growth," he said.

Air pollution a concern for business community

He told the crowd that in his consultations with business leaders, he often hears that Hong Kong's air pollution is a concern and can be a barrier to increasing business. Leung said among the actions the government is taking to address the problem is helping companies phase out the use of diesel trucks.

The Canadian Chamber of Commerce in Hong Kong issued a letter to members Wednesday saying it welcomed that measure, and others that Leung announced in his policy address.

"Environmental concerns and poor air quality are key issues that impact Hong Kong's ability to attract global talent and to encourage global businesses to locate to or remain in Hong Kong," the letter said.

Robert Cook, president of the chamber, said in the note that the organization will continue to offer ideas and business solutions to the government to help fix the environmental problems.

"We look forward to making Hong Kong more livable – improved air quality and traffic management are fundamental for business to locate and thrive in Asia's World City," he said.