Analysis comment
Written by: Gu Meiyi
2020-11-19 21:00
Last update date: 2020-11-19 21:05
Hong Kong has always regarded itself as a free trade and duty-free port. Facing the introduction of the Regional Comprehensive Economic Partnership Agreement (RCEP), which accounts for 30% of the world’s population, the 15 countries (ten ASEAN countries plus China, Japan, South Korea, Australia and New Zealand) finally broke their differences this year To cast a vote of confidence in global trade, Hong Kong naturally welcomes it.
However, many people have overlooked a key point, that is, Hong Kong is not a member of RCEP.
Facing the trend of East Asian economic integration, does Hong Kong need to join RCEP?
How should we strive to join?
RCEP focuses on reducing tariffs and non-tariff barriers in various countries, and strives to gradually reduce tariffs to zero within ten years.
In terms of tariff reduction and exemption, since Hong Kong itself is a duty-free port, foreign goods do not have to pay tariffs when they come to Hong Kong. As for the local manufacturing industry in Hong Kong, the local manufacturing industry has already been transformed. The factory has opened production lines in the north, and the proportion of local manufactured goods is very small. Trade has little effect.
On the contrary, the two chapters of "service trade" and "investment" in the RCEP agreement are the most suitable for Hong Kong's industrial advantages.
Hong Kong has advantages in finance and service trade
The article refers to the "payment and settlement system" clause-"According to the terms and conditions for granting national treatment, each contracting party shall allow the financial institution of the other contracting party established in its territory to enter the payment system operated by a public entity And the clearing system, and obtain official financing and refinancing arrangements under normal commercial operating conditions.” At the same time, the development of new financial services is also mentioned in this chapter.
Official Document of the Regional Comprehensive Economic Partnership Agreement
In short, the agreement promotes countries to further open up the development of the financial industry. Hong Kong should take advantage of the advantages of an international financial center to design financial-related products that fit ASEAN's transnational trade.
However, as Hong Kong is not a member of RCEP, it will inevitably lose its advantages. I believe that it will be more difficult to develop the above-mentioned financial innovation business in the 15 Asia-Pacific countries in the short term.
Singapore is expected to use RCEP to promote cross-border payments
On the contrary, Singapore, which also has a leading position in the Asian financial industry, happens to rely on the foundation of RCEP to further promote its financial business, especially the depth of its bond market, which is conducive to corporate debt issuance for long-term financing.
Furthermore, the country’s largest DBS Bank has always had advantages in cross-border payments, and the bank has also actively promoted the development of offshore renminbi. It just signed a contract this month as a pilot bank for a cross-border renminbi trade financing transfer service platform. As one of the ten core members and five foreign banks designated by the People's Bank of China.
With the huge market share of cross-border payments in the RCEP area in the future, Singapore is expected to gain another victory.
Global cost of living rankings: No. 4 Singapore (Index 102) (Getty)
In the above-mentioned financial services sector, Hong Kong should have seized the opportunity. If the RCEP agreement can be passed, it will certainly further strengthen its role as a financial and trade center in the Asia-Pacific region.
Conversely, if the advantage is handed over to others, the "super contact" is positioned to protect itself in the future.
Strengthen free trade cooperation with Japan and South Korea
Furthermore, RCEP is a free trade agreement concluded with 15 countries in one go. It is an agreement covering 2.3 billion people around the world, and there are many business opportunities.
Although Hong Kong itself has signed the Free Trade Agreement and the Investment Agreement with ASEAN and Australia last year and early this year; it also signed a Closed Economic and Trade Cooperation Agreement with New Zealand in 2010; however, Hong Kong and Japan, the world’s third largest economy , And South Korea does not have a free trade agreement, only signed the "Agreement on the Promotion and Protection of Investment" during 1997.
If Hong Kong joins RCEP, it is expected to further strengthen free trade cooperation with Japan and South Korea.
To restore its competitive advantage, Hong Kong should think about how to join RCEP.
The Japanese economy has gradually recovered its vitality after experiencing the "lost thirty years."
(Visual China)
Joining in a moment is not easy
According to Article 116 and Article 151 of the Basic Law, Hong Kong, as a separate customs territory, can sign and perform agreements in economic, trade and other fields with trading partners in the name of "Hong Kong, China".
The Secretary of Commerce and Economic Development Yau Tenghua said recently that Hong Kong is eager to join the RCEP; when the time is ripe and member economies allow new partners to join, Hong Kong is willing to start a dialogue on joining RCEP.
However, RCEP has gone through more than 30 rounds of formal negotiations for more than eight years to balance the interests of all parties. At present, RCEP member states have also expressed their position and only welcome India to join in the short term (because India has been one of the negotiating countries of RCEP for many years, but because Worried about the entry of cheap goods into the country, and officially announced its withdrawal from the negotiations at the end of last year), so it is not easy to allow other economies to join the agreement at one time or three.
I believe that the feasible way is to use the positive international image of Hong Kong’s previous trade agreements and the reform and innovation advantages that can be brought to the countries in the region in the financial services industry to lobby countries to agree to Hong Kong’s accession; plus China is a member of RCEP , Naturally willing to endorse Hong Kong.
Generally speaking, Hong Kong should grasp the tide of East Asian economic integration, strive to join RCEP, make good use of Hong Kong's financial innovation and service trade advantages, and consolidate its position as a financial and trade center in the Asia-Pacific region.
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