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Driving China Investment

Liu Haiqun
Assistant Minister of Commerce Liu Haiquan says the mainland economy can achieve a medium-to-high growth rate of 6.5 per cent or above.

As the premier gateway for the two-way flow of investment to and from the Chinese mainland, Hong Kong’s central role was reinforced at this year’s China Investment Policy Seminar, held in Hong Kong in March. Jointly organised by the Hong Kong Trade Development Council (HKTDC) and the Ministry of Commerce (MOFCOM), officials from the Ministry and the People’s Bank of China briefed Hong Kong businesses on the latest policy thinking and direction of the Central Government.

“The Chinese mainland economy absolutely has the basis and conditions to realise a medium-to-high growth rate of 6.5 per cent or above,” said Liu Haiqun, Assistant Minister of Commerce, in his keynote speech. “As the mainland is still undergoing industrialisation and urbanisation, resources are being continuously diverted from low-efficiency sectors to high-efficiency ones, so the potential for economic growth is huge. Given that mainland consumer spending is also entering an upgrading stage and industries are entering a transformation stage, new hotspots in consumption and investment are turning up continuously.”

Hong Kong, Mr Liu said, has long been the mainland’s most important trading partner, as well as the largest source of external direct investment and the largest destination for its outward direct investment since the start of the mainland’s opening up and reform. The expansion of the pilot free trade zones (FTZs) will lead to further relaxation of investment restrictions, according to Mr Liu, as well as boost the use of foreign capital platforms in devising new models for liberalising inland and coastal regions. It will also speed up reform of the foreign investment system and IPR protection, he added.

Gao Shangde
Gao Shangde, Director-General of the Department of Foreign Investment Administration, MOFCOM, says the Chinese economy has entered a “new normal” growth phase

“In order to remain an attractive destination for foreign investment, we will create an open and transparent legal environment, an efficient administrative environment and a level market environment,” said Mr Liu.

With the mainland’s economy entering a “new normal” pattern of slower but more sustainable growth, the FTZs will help deepen economic reforms and further liberalise the market, according to Gao Shangde, Director-General of the Department of Foreign Investment Administration, MOFCOM. Since the launch of the Shanghai Pilot FTZ in 2013, three other FTZs have subsequently been set up in Guangdong, Tianjin and Fujian. In Guangdong, FTZ districts have been launched in three locations: the Nansha New Area of Guangzhou, the Qianhai-Shekou Area of Shenzhen, and the Hengqin Area of Zhuhai. With the expansion of pilot areas, collaboration in trade in services among Guangdong, Hong Kong and Macau will be enhanced, he said.

Achieving Connectivity

Li Jigang
Li Jigang, Deputy Director-General of the Comprehensive Department, MOFCOM

Investment is at the heart of China’s Belt and Road Initiative, which envisions stronger links between the mainland and more than 60 countries across Asia, Europe, the Middle East and Africa through greater connectivity in trade and development.  

Li Jigang, Deputy Director-General of the Comprehensive Department, MOFCOM, pointed out that the Belt and Road consists of five routes and six economic corridors, which will achieve connectivity in five areas: policy coordination, facilities connectivity, trade and investment, financial integration, and cultural exchange.

Mr Li said that the recently launched Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund will be important sources of funding for development projects.

CEPA Update

Kang Wen
Kang Wen, Deputy Director-General of the Department of Taiwan, Hong Kong and Macao Affairs, MOFCOM

Meanwhile, Hong Kong can tap the latest expansion of the free trade pact known as the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA). The newest annual Supplement to CEPA takes effect on 1 June, and will see the opening up of additional mainland sectors to Hong Kong companies.

Kang Wen, Deputy Director-General of the Department of Taiwan, Hong Kong and Macao Affairs, MOFCOM, said that the number of sectors covered by CEPA will increase to 153, which would be in line with international standards. Meanwhile, the number of restrictive measures in the negative list has been cut from 132 to 120, with all mainland provinces now offering eligible Hong Kong companies preferential treatment under CEPA.

Dr Ding Kang
Dr Ding Kang, International Department of the People’s Bank of China, explains the mainland’s financial liberalisation plan

Given the recent volatility of the renminbi, Dr Ding Kang of the International Department of the People’s Bank of China said that there is no basis for the further depreciation of the mainland currency, noting that the mainland’s finances are in good shape and its trade surplus remains high. He said mainland authorities will focus on further banking reforms, including establishing a sound market interest rate formation and transmission mechanism, and continuing capital liberalisation.

Margaret Fong
HKTDC Executive Director Margaret Fong

In her opening remarks, HKTDC Executive Director Margaret Fong said that Hong Kong’s services industries are well-positioned to tap new mainland business opportunities under the Central Government’s newly announced blueprint for development. “One of the key focuses of the 13th Five-Year Plan is to help new industries flourish by driving development of the Belt and Road Initiative, stepping up infrastructure development and fostering technology innovations. In the course of doing so, Hong Kong’s services in finance, construction, urban greening, property management, logistics and e-commerce can play a useful role and participate in various investment areas.”

Related Links
Belt and Road Summit
Belt and Road

 

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