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Monday, August 1, 2016, 22:57

UK-HK trade and investment links to boom

By Oswald Chan
UK-HK trade and investment links to boom
President Xi Jinping (left) shakes hands with then UK prime minister David Cameron during the UK-China Business Summit in London on Oct 21, 2015. Due to a weaker British pound, the UK is believed to be an attractive destination for Hong Kong and Chinese mainland buyers to shop and pick up properties. (Provided to China Daily)

Hong Kong is expected to continue as a huge hub and platform for UK businesses in the post-Brexit era as the UK is eyeing expansion of trade and investment in Hong Kong and on the Chinese mainland, said Jo Hawley, director of trade and investment at British Consulate General Hong Kong, at the sidelines of a China Daily roundtable on Friday in Hong Kong.

“The UK has focused on Europe for a long time and now we get the opportunity of a fresh start to grow our export market. Hong Kong and the Chinese mainland are incredibly important export markets for the UK,” Hawley reckoned.

The trade investment promotion team of British Consulate General Hong Kong works with the Hong Kong Trade Development Council, Invest Hong Kong and British Chamber of Commerce in Hong Kong to support UK businesses’ expansion in Hong Kong. Promotional events on trade with the UK are held twice a month in Hong Kong, with six to 30 UK firms from different sectors invited in every trade mission.

Hong Kong is a barrier-free market for UK businesses — with a low threshold to set up a business, English as an official language, and adopting a legal system similar to the one in the UK.

UK financial technology company Fraedom, the technology arm of global corporate services provider Hogg Robinson Group, in July opened its first Asian office in Hong Kong to launch its cloud-based payments, expense and travel technology solutions in Hong Kong, leveraging the city’s strengths in financial services and technology applications, as well as proximity to the mainland and Asian market.

Fraedom is just one of the various UK enterprises setting up a presence in Hong Kong. Currently there are 630 UK companies headquartered in Hong Kong to do business with Hong Kong and mainland peers, according to Hawley.

Hong Kong is also one of the UK’s important trade partners and investment destinations.

Approximately 56 percent of the UK’s export goes to countries and regions outside the European Union (EU), whereas the UK exports goods and services worth 8 billion pounds ($10.6 billion) to Hong Kong every year, Hawley added. The UK accounted for about 1.5 percent of Hong Kong’s total goods exports and 6.6 percent of total services export, according to Hang Seng Bank data.

According to Invest Hong Kong, the government’s promotion agency to attract overseas investments, the UK was ranked as the third biggest single source of investments into Hong Kong in the first six months of 2016.

UK-Hong Kong bilateral trade and investment relationships not only welcome UK investments into Hong Kong, but also Hong Kong investments into the UK.

“The UK is an attractive market now for people having the money to spend and pick up the assets. More investors and entrepreneurs are thinking it is time to buy in the UK because a weaker sterling means assets are much cheaper,” Hawley said.

The British pound had tumbled to a three-decade low against the US dollar after the UK referendum to break away from the EU on June 23.

Looking ahead, the British Consulate General Hong Kong will continue to facilitate UK firms’ expansion in Hong Kong and, at the same time, help them benefit from the growing offshore yuan market.

Education is also one of the cooperation areas between the UK and Hong Kong. The British Council in Hong Kong is going to launch its first International Pre-School here starting in August this year to cater to the increasing demand for English education for children aged between two years and eight months and six.

Despite the rosy prospect of trade and investment links between Hong Kong and the UK, the Brexit decision will unleash massive uncertainty in the years ahead, Bernard Yeung Yin, dean and Stephen Riady distinguished professor in Finance and Strategic Management at National University of Singapore Business School, told a business forum on Thursday.

“The Brexit decision will dampen consumption and investments, necessitates adjustment in trade/direct investment and portfolio investment, as well as interrupting trade openness and economic integration in other parts of the world,” Yeung told the Hong Kong Economic Forum 2016 organized by Global Commercial Newspaper Union and Hong Kong Global Vision Center for Strategic and International Studies.
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