"Make use of our CEPA with China"
Hong Kong Trade Development Council (HKTDC) organized a practical business seminar "Hong Kong: Your High Speed Connection to China Opportunities" in association with FIEO on 14th December at New Delhi. While addressing the seminar as the Guest of Honour, the Financial Secretary of Hong Kong Special Administrative Region, Mr. John C Tsang invited Indian companies to make use of their CEPA with China. Excerpts from his address:
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"I can assure you that Hong Kong is firmly on the front foot when it comes to global finance, trade, logistics and tourism. This year we are celebrating the 10th Anniversary of the establishment of Hong Kong Special Administrative Region. I am pleased to tell you that our reunification with the Mainland of China has been a success. Today, we are very confident of our place in the world and the role we have to play, both as a global financial centre in Asia and as a conduit for trade between the Mainland of China and the international business community. |
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| Mr. Ajay Sahai, DG, FIEO (left) in conversation with Mr. Mr. John C Tsang (centre) amidst visiting delagates from Hong Kong |
What remains unchanged is the raft of freedoms that people in Hong Kong cherish - freedom of belief, freedom of association, freedom of speech, freedom of assembly etc. In the economic realm, we believe in the primacy of the market - that’s why we have no investment restrictions in Hong Kong; that’s why we are a duty-free port; and that’s why we have a simple and low-tax system - no capital gains tax, no VAT, no death duties. Profit tax is currently levied at 17.5 per cent but will be lowered by one per cent in our next fiscal year. Similarly, salaries tax, which currently stands at just 16 per cent, will be lowered to 15 per cent from our next fiscal year.
As the most open, free and cosmopolitan city in China, Hong Kong has a dual role to play. You can look at Hong Kong as the all-rounder in the team. On the one hand, we are Asia’s world city - a global centre for financial services, business services and trade. On the other hand, we are an international city in China, with a unique and irreplaceable role to play in our nation’s continued opening up and engagement with the global village. We are both major investors in China as well as an usher for investment in China from elsewhere. We are also helping Mainland companies to upgrade and move up the value chain by listing in our stock market, by drawing on our broad, deep pool of international best practices in key sectors such as accounting and legal services, and by leveraging our global network of contacts.
One of Hong Kong’s advantages is our free-trade agreement with China - our Closer Economic Partnership Arrangement, or CEPA for short. This is possible because under the concept of "One Country, Two Systems," Hong Kong remains a separate member of the World Trade Organisation. CEPA was launched in mid-2003 and offers Hong Kong companies enhanced access to the Mainland - above China’s WTO commitments - in both manufactures and services.
For manufactures, any product made in Hong Kong that meets origin requirements can enjoy tariff-free access. On the services side, currently 27 service sectors enjoy enhanced access - including prime sectors such as banking, insurance, logistics, and legal services. Another 11 service sectors will be added to the list from January 1 next year.
Because we have a nationality-neutral policy, foreign services firms incorporated in Hong Kong can leverage on CEPA to do business in the Mainland. For new arrivals wishing to benefit from CEPA, there are plenty of opportunities to partner with companies already in Hong Kong. It is also worth noting that CEPA applies nationally - in every province in China.
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Ladies and Gentlemen, today I’m asking Indian companies to join us in Hong Kong, to make use of CEPA to access the Mainland market, and to look to our stock market as a source of capital and diversification for your fund-raising activities. Indian entrepreneurs are already well known in our city - we have about 1,500 firms operated by Indian business people. These include some big names such as Air India, Bank of India and Infosys Technology. But, the list also includes many small and medium sized enterprises - entrepreneurial people, creative people, dynamic people who feel at home in a city where hard work and commitment are rewarded. |
| 1st row from left: Mr. Ajay Sahai, Mr. Anil Agarwal, Past President, ASSOCHAM and Mr. John C Tsang |
We are home to a 40,000 strong Indian community - people who contribute to the pluralism and diversity that makes us Asia’s world city. For Indian companies wishing to venture a little further East, our Trade Development Council and InvestHK can help you get established, or help you find a business partner. For individuals looking for a new challenge or new opportunities, we have immigration schemes to attract talented people, as well as investor migrants".
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Indian exporters may target 2010 Soccer World Cup: South African Minister Federation of Indian Export Organisations (FIEO) organized a meeting on 7th December at New Delhi with 20 member Trade and Investment Delegation led by Mr. Neo Masithela, Minister, Tourism, Environmental and Economic Affairs, and Mr. S. J. Mohal, Minister for Public Works, Roads and Transport, Free State Province of South Africa. Leading businessmen from sectors like biofuels, ict, jewellery, leather processing, chemicals and arts & crafts were part of the delegation. Mr. Masithela said as a follow up of the visit of South African Premier earlier this year, this delegation has come to explore the possibility of trade and investment between the two countries. "South Africa has been able to sustain its economy for many years in a row and growth in the economy of Free State Province has surpassed even the growth of South Africa," he said. Mr. Masithela added that the capital city of Free State Province was to host the 2010 Soccer World Cup and massive infrastructure development work was going on. He invited Indian businessmen to explore opportunities for exporting the products which could sell on this occasion in South Africa. He said that India could supply cement to South Africa does and Indian infrastructure engineering companies might undertake many World Cup related projects. The minister also mentioned about a jewellery hub being developed in Free State Province. He assured full support of the Provincial Government to Indian companies interested in doing business with South Africa. Earlier, while welcoming the delegation, Mr. Subhash Mittal, Convenor, FIEO Committee on IT & EP said it is interesting to note that after observing a negative growth of nearly 5% in 2003-04, the trade between the two countries observed a growth of 30% and 25% in the next two years. In 2006-07 the total trade observed 17% growth and it reached US$ 4.7 billion. In 2006-07, India’s exports to South Africa were US$ 2.24 billion and imports were US$ 2.47 billion. "It is a healthy sign that both the countries are realising each other’s competitiveness in various products. World Bank has also ranked South Africa at 29th for ease of doing business - the highest score in Africa and ahead of similar emerging markets." He added. Mr. Mittal went on to say that hospitality industry, which is developing new properties to cope up with the demand for Soccer World Cup in 2010 would require floorings and carpets which can be sourced from Indian exporters at better prices. At 6.6% of the country’s GDP and 17.7% of total government spending, the country’s education spending rate is among the highest in the world. Nonetheless, it is acknowledged that a skills shortage stands in the way of both the government’s massive public infrastructure programmes and private investment. As the South African economy moves into higher gear, it can take advantage of the vast resource pool available in India to meet its requirement. Mr. Ajay Sahai, Director General, FIEO said there is a huge potential for investment in South Africa. GDP - Investment ratio for South Africa will reach to 24% from 18% by 2011, which by any measure is commendable. The Free State is encouraging investment in mining, agriculture, petro-chemicals, pharmaceutical, real estate and hospitality sector, he addedn |
