October 16, 2023
HONG KONG – Hong Kong and the Association of Southeast Asian Nations, with a free trade agreement in effect, possess promising economic and trade cooperation potential, fueling the growth of small and medium-sized enterprises and startups in the region, officials and industry leaders said on Friday.
ASEAN has been Hong Kong’s second-largest trading partner in terms of merchandise trade, just behind the Chinese mainland, since 2010, with the value hitting an all-time high of $165 billion last year, said Francis Ho Siu-hong, deputy director-general of Trade and Industry of the Hong Kong Special Administrative Region government.
The two sides saw a 6.8 percent year-on-year growth in bilateral trade in services in 2021, Ho said during a session titled Electronics Industry and Startup: Outlook in Hong Kong and Cooperation with ASEAN at the Hong Kong Electronics Fair (Autumn Edition).
READ MORE: SAR calls for continued ASEAN backing for accession to RCEP
Ho said that one of the key factors contributing to the robust and growing trade and economic relations between the two economies is the enforcement of the ASEAN-Hong Kong, China Free Trade Agreement (AHKFTA), which was signed in 2017 and came into force in full in 2021.
Hong Kong is an important trading hub for ASEAN countries, as it is a good platform for facilitating marketing and investment in the international arena.
Wing Chu, Principal Economist (Greater China Research Team), HKTDC
“The agreements (referring to the AHKFTA as well as the Investment Agreement) enhance trade and investment opportunities, reduce trade barriers and foster economic cooperation, benefiting enterprises, including startups,” he said.
“I know that there are a number of startups from Malaysia that have come all the way to Hong Kong to join this electronics fair under the economic and technical cooperation work program developed under the free trade agreement.”
Kris Sandhi Soekartawi, senior project officer of AHKFTA ECOTECH Support Unit of External Economic Relations Division at the ASEAN Secretariat, highlighted the benefits that AHKFTA brings to SMEs in the region.
According to Soekartawi, the agreement grants ASEAN member states greater market access to Hong Kong’s dynamic economy, which allows ASEAN businesses to seize new investment opportunities, broaden their customer base and enhance their market share in the city.
It also incorporates provisions to aid SMEs in the region. “The support includes capacity-building initiatives, technical assistance, and information-sharing platforms. These measures aim to assist SMEs in seizing the opportunities presented by the agreement and fostering their integration into regional and global value chains,” he said.
Wing Chu, principal economist (Greater China Research Team) of the Hong Kong Trade Development Council, stressed that Hong Kong serves as a good platform for companies in the region to conduct business given its edges in financial, trading and professional services.
ALSO READ: HK developing linkage with ASEAN, ME economies thanks to GBA
“Hong Kong is an important trading hub for ASEAN countries, as it is a good platform for facilitating marketing and investment in the international arena,” he said.
“We also offer a wide range of professional services, encompassing investment planning, legal counsel, etc, that cater to the needs of businesses in ASEAN countries.”
Jayne Chan, head of StartmeupHK at InvestHK, said she believes Hong Kong provides a fertile ground for startups to grow.
“Hong Kong as one of the world’s financial centers, we’ve got a lot of e-commerce companies, management as well as logistics technology companies setting up here,” she said.
“We found that Hong Kong’s startups are very resilient, and there is still a business opportunity here in Hong Kong.”
READ MORE: Pivot to ASEAN and RCEP for trade hub growth?
With the Chinese mainland boasting the largest e-commerce market globally, Chan said many international businesses that are interested in selling to the mainland market would choose Hong Kong as their initial entry point.