Dear Hong Kong fellows,

Under the shadow of the China-U.S. trade war, the business community in Hong Kong is generally downbeat about the economic outlook for 2019. However, the signing of the new Agreement on Trade in Goods between the Hong Kong Special Administrative Region Government (HKSARG) and the Ministry of Commerce under the framework of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) on December 14, 2018 could be said well-timed and offered relief for local businesses and companies under the current climate of uncertainty.

According to the new agreement, starting from January 1, 2019, much more goods of Hong Kong origin can be imported to the Mainland with zero tariff. In addition, pilot scheme on liberalization of the servicing industries including finance, education, tourism and culture, will be launched in the Guangdong-Hong Kong-Macau Greater Bay Area (GBA).

This CEPA Upgrade is a more comprehensive free trade agreement with enrichment in contents covering four major areas, namely trade in goods, trade in services, investment, and economic and technological co-operation in response to the National 13th Five-Year Plan. It, to a great extent, elevated the co-operation and exchanges on both sides setting a new milestone and laying a solid foundation for further economic integration and trade development.

One will be pleased to see that the new agreement unifies, refurbishes and enhances the level of commitments on liberalization and facilitation of trade. It also opens up more economic and investment opportunities between the Mainland and Hong Kong as well as gradually addresses the issue of ‘big doors lay open while small doors remain shut’. In particular, the zero-tariff arrangement for goods will inevitably save manufacturers’ time in tackling product specific rules of origin (PSRs) and encourage them to develop new products in Hong Kong and export them to the Mainland market in full gear. Besides, trade facilitation measures among the cities within the Greater Bay Area and Hong Kong will keep to boost the manufacturers’ confidence in upgrading their production lines for high value-added products, to speed up the pace of expansion of SMEs in the Mainland market and to provide stronger support to Hong Kong's participation in the Belt and Road Initiative. The description - “Made in Hong Kong” is going to be loved.

The agreement supports Hong Kong to cultivate a greater and broader export market in order to boost its own economic growth. This could be seen as the country's new measure to further support Hong Kong's economic development.

The agreement is a 'New Year gift' for Hong Kong, which serves to combat the adverse consequences of the trade war and carve a way out for the trade sectors. However, to ensure successful implementation of the Agreement, it is important that the government of each side shall take necessary measures, whether in the form of law, regulation, rule, procedure, decision, and administrative action, etc. to ensure observance of the agreement by its competent government authorities.

2018 marks the 40th anniversary of the nation's reform and opening-up, and the 15th anniversary of the signing of CEPA as well. It is of special and epochal significance to Mainland and Hong Kong to have this CEPA Upgrade last year. It reflects the country’s full recognition of Hong Kong’s tremendous contribution to the success of the reform and opening-up process.

As a matter of fact, the current international political and economic environment is complicated and unpredictable, particularly trade protectionism is escalating rapidly, posing a major threat to global economy. The Chinese economy also faces downward pressure, as reflected by the economic data in recent months. The industrial output growth and Purchasing Managers' Index (PMI) reveal signs of slowing down. In addition, enterprises in various industries are facing significant challenges in the process of transformation and upgrading. Nevertheless, China has the capability and confidence to maintain the economic fundamentals sustaining its development in the long run. Medium-to-high speed growth of China’s economy is an important stabilizer for Hong Kong’s economy. When China gradually expands its domestic demand, the demand for imported goods and services becomes increasingly strong. Hong Kong, with the strong support of Mainland, will benefit the first and the most. Looking ahead, growth for trades in goods and services in the future remains great, which will not only inject new energy into Hong Kong's economic development but will also strengthen its capability to resist adverse impacts by, say, a trade war.

2019 is expected to be a challenging year. The Sino-U.S. trade war is still in the process of endless talks and discussions without constructive conclusion. As a representative of The Chinese Manufacturers' Association of Hong Kong (CMA) in the Legislative Council and one of the Vice Chairman of the Business and Professionals Alliance for Hong Kong (BPA), I will use my best endeavor to speak for them and assist the government in formulating policies conducive to the development of SMEs. Say, calling on the government to offer incentives in encouraging high value-added and highly automated industries to open their factories in Hong Kong. For what concerns the industry most, such as revitalization of industrial buildings and the offsetting of MPF, I will make every effort to achieve the highest common factor between the interest of the industries and society. I shall look forward to everybody’s continue support to me. Let’s go hand in hand to achieve a better Hong Kong.

Let me take this opportunity to wish everyone a fruitful New Year.

Member of the Legislative Council Jimmy Ng Wing Ka