Zhang De Jiang HK Visit > Opinion
Thursday, May 19, 2016, 01:08

HK’s legal expertise will enrich B&R

By Leung Mei-fun

Leung Mei-fun writes that HK is particularly well-positioned with its sophisticated and transparent legal system to play a significant role in the Belt and Road Initiative.

Chairman of the Standing Committee of the National People’s Congress Zhang Dejiang’s visit to the SAR has whipped up a “Belt and Road” whirlwind. To tie in with the country’s Belt and Road (B&R) Initiative, the SAR, well-known for its sound legal system, can take full advantage of its legal expertise to help mainland enterprises go out and foreign companies come in.

HK’s legal expertise will enrich B&RHong Kong’s excellent legal system could serve as a good reference for various juristictions engaged in international trade. The mainland, for instance, suffered from a total lack of commercial and trade laws during the early years of reform and opening-up. The first laws enacted were criminal and then civil laws. With increasing commercial and trade activities and the development of processing trade and foreign-invested enterprises, associated economic and legal systems gradually developed.

Being one of the first ports in the region to trade with foreign countries, Hong Kong has been able to establish a favorable trade environment and legal system. It provides an ideal reference for the mainland to fill its legal vacuum. The mainland’s foreign trade laws were formulated against such a background. Similarly, Hong Kong, given its geographical proximity, could take the lead in helping the mainland formulate laws in association with the B&R Initiative. The implementation of “One Country, Two Systems” and the Basic Law could provide a good reference point for those countries along the Belt and Road, no matter whether they practice the common law or continental law.

Belt and Road is not a political term. Rather, it implies immense business opportunities. From Central Asia to Eastern Europe, the vibrant economic development of those countries along these ancient routes will create huge markets. Due to differences in language and culture, pioneers in these new markets will encounter a lot of problems, not only in commercial fields, but also in the civil realm. When opening a factory, for example, one may find what is in compliance with the labor law in one’s own country may not be so in the new market.

China is the driving engine behind the Belt and Road Initiative. With Beijing’s backing, Hong Kong investors running into trouble overseas could request the central authorities to help solve the problem through bilateral or multilateral trade agreements Beijing has signed. As a signatory of many international treaties and familiar with both Eastern and Western cultures, and equipped with legal talents proficient in both Chinese and English and a sound legal system, Hong Kong is well-positioned to provide an effective communication platform through which all enterprises in the world could safely take part in trade and commercial activities.

On the other hand, the Maritime Silk Road will also bring bountiful new opportunities. In the 1980s, the country established four special economic zones (SEZs) — Shenzhen, Zhuhai, Shantou and Xiamen — in order to encourage commercial activities in coastal cities. The Hong Kong and Macao special administrative regions (SARs) were established afterward. The creation of these SEZs or SARs was meant to maximize the benefits of trade and commercial activities. Property law, securities law and company law associated with these activities emerged from the commercial and trade cooperation and interaction and improved as time went by so that the interests of all stakeholders could be balanced.

As a legal intermediary with profound experience, Hong Kong could have access to first-hand information so it can dovetail with the mainland’s related reform and opening-up programs on one hand, and on the other help related parties understand the Belt and Road Initiative, especially the mainland’s legal system, in order to reduce the chances of disputes. Hence Hong Kong would be able to give full play to its significant legal status in international trade and investment.

Furthermore, the SAR could strive to become a major arbitration center for resolving new commercial disputes. Arbitration is an alternative mechanism for resolving disputes other than litigation. The ruling of the arbitration court is legally binding and final. Arbitration is a more flexible, confidential, efficient, economical and independent way to handle disputes than court litigations, and Hong Kong already has an outstanding reputation as an international arbitration center. According to the International Arbitration Survey 2015, Hong Kong was one of the countries or regions where arbitration service was employed most frequently, on the same level as London, Paris and Singapore.

With the launch of the Belt and Road Initiative, it is certain that Hong Kong’s cooperation and interaction with the countries and regions concerned will increase. The SAR must make good use of its own position and the golden opportunities provided by this grand venture by giving full play to its professional expertise in the legal field. It can become a key platform to resolve disputes and thereby bolster international trade.

The author is a barrister, Legislative Council member and an arbitrator of the China International Economic and Trade Arbitration Commission.

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