Annexes to JOIN(2013)13 - Hong Kong Special Administrative Region: Annual Report 2012 - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | JOIN(2013)13 - Hong Kong Special Administrative Region: Annual Report 2012. |
|---|---|
| document | JOIN(2013)13  |
| date | June 17, 2013 |
The Closer Economic Partnership Arrangement (CEPA) Supplement IX between China and Hong Kong was signed on 29 June 2012 to implement economic integration measures and facilitate cooperation between the two parties. The latest supplement introduced 43 services liberalisation and trade facilitation measures, and further liberalised restrictions on market access in 21 existing sectors. The Central Government has pledged to fully liberalise services with Hong Kong by the end of 2015. However, implementation of the CEPA on the ground in mainland China continued to be challenging in some sectors, as a result of which Hong Kong-based businesses, including EU ones, did not always reap the full benefits intended under the CEPA.
European Union – Hong Kong Relations and Cooperation
In 2012, bilateral relations and cooperation between the European Union and Hong Kong continued to deepen. Hong Kong remains an important player in the region and a key conduit for trade and investment flows between the EU and mainland China.
In 2012, the EU retained its position as Hong Kong’s second-largest trading partner after mainland China. Hong Kong was the EU’s 20th largest trading partner in 2012. Bilateral trade between the EU and Hong Kong recorded a steady growth of 5.9% to reach €44.2 billion in 2012.
The EU was the largest source of foreign companies in Hong Kong with 453 regional headquarters, 740 regional offices and 697 local offices (as of June 2012). The EU’s businesses are active in a wide variety of sectors, mainly financial and business services, trading, logistics, construction and retailing. Among others, EU companies are key players in Hong Kong’s banking, insurance and securities sectors. As home to one of the biggest European business communities in Asia, Hong Kong continues to attract a large number of European citizens to reside and work in the territory, totalling around 31 390 at the end of 2012.
Hong Kong ranked seventh on the list of the most popular destinations for EU direct investment, taking up 2% of EU’s global FDI stock in 2011 with an amount of €124 billion. On the other hand, Hong Kong investment into the EU grew rapidly in recent years. In terms of investment flows, Hong Kong was the fourth largest source of foreign direct investment in the EU in 2011, after the United States, Switzerland and Canada. Direct inflows from Hong Kong to the EU and investment stock originating from Hong Kong amounted to €6.5 billion and €63.9 billion respectively.
Hong Kong continues to serve as a major hub for flows of foreign direct investment from the EU into mainland China and vice versa. The reasons for this include Hong Kong’s proximity to and established business ties with mainland China, its tax system, the availability of high-quality service providers in areas such as finance, accountancy and law, and the presence in Hong Kong of an increasing number of EU and mainland Chinese companies. In addition, Hong Kong provides an ideal venue for raising capital for investment or expansion of business operations, through IPOs, secondary listings or bond issues (including RMB-denominated bonds).
The 6th Structured Dialogue meeting between the European Union and the Hong Kong SAR Government took place in Brussels on 3 December 2012. The Structured Dialogue is a well established platform that allows the EU and Hong Kong to discuss issues of mutual interest. The meeting covered a range of issues: economic relations, trade and investment, aviation, the environment, innovation and educational cooperation, financial services regulation, competition legislation, and customs matters.
The 9th Joint Customs Cooperation Committee in November 2012 launched expert collaboration on IPR and initiated Hong Kong’s participation in the EU-China Smart and Secure Trade Lanes project. The EU continued to seek exploratory talks on possible cooperation in the area of taxation of savings, taking into account recent international developments in the field of exchange of information between tax authorities and the need for international level playing field.
2012 saw a number of high-level visits from the European Union institutions to the Hong Kong SAR including the High Representative/Vice-President Catherine Ashton in July, Internal Market and Services Commissioner Michel Barnier in January, and Trade Commissioner Karel De Gucht in February. A delegation from the European Economic and Social Committee visited Hong Kong in April. Regular visits by senior officials have also helped keep substantial exchanges in areas of common interest including financial services regulations, macro economic issues, consumer and health protection, and multilingualism. Delegations of Members of the European Parliament have also visited Hong Kong and helped to improve our cooperation.
The activities of the EU Business Information Programme for Hong Kong and Macao (EUBIP), which is run by the European Chamber of Commerce (ECC) in Hong Kong and co-funded by the EU, gave priority to activities related to the EU’s response to the sovereign debt crisis, financial services regulations, the environment and climate change, CEPA and trade relations between the EU and Greater China. Business councils for sectors in which EU businesses and industries enjoy a leading position, e.g. information and communications technology (ICT), luxury and other consumer goods and financial services, provided important industry input to the government-to-government dialogue. The EUBIP programme was concluded in November 2012; its core activities will be taken on by the ECC, and a successor project will be launched in 2013.
To further intensify ties with Hong Kong, diplomatic missions of the EU and its Member States in the region increased their public diplomacy efforts, to make the EU more visible in Hong Kong and to increase knowledge and information on EU policies. These include trade and regulatory policies, energy and climate change, financial services regulation, customs matters, gender equality policies, intercultural dialogue, academic matters, and the EU’s role in the world.
The EU diplomatic missions also worked closely together to enhance people-to-people contacts and promote academic exchanges with joint activities such as the EU Higher Education Fair, the EU Film Festival and the Celebrating European Languages initiative.
On 1 September 2012, the Hong Kong EU Academic Programme commenced operations. This consortium comprises the Hong Kong Baptist University, the Chinese University of Hong Kong, the University of Hong Kong and Lingnan University. The objective of the Programme is to promote academic research, develop outreach activities to enhance the visibility of the EU and strengthen academic cooperation with EU higher education institutions.
Following a ferry accident on 1 October, the High Representative extended her profound condolences to the families and loved ones of the 39 victims. She took the opportunity to emphasise how much the EU valued Hong Kong as a friend and a partner.
The EU will continue to nurture its relationship with the Hong Kong SAR, increase economic and trade links, enhance cooperation with business and civil society, and promote mobility and exchanges with the Hong Kong people.
[1] The World Economic Forum in its Financial Development Report 2012 ranked Hong Kong first among 62 of the world’s leading financial systems and capital markets for the second consecutive year. Hong Kong is ranked the world’s freest economy for the 19th consecutive year in the Heritage Foundation’s Index of Economic Freedom. According to UNCTAD’s World Investment Report 2012, FDI inflows to Hong Kong amounted to US$83 billion in 2011, making it the fourth largest recipient in the world.