Hong Kong authorities will help local firms partner with state-owned enterprises in expanding in the region amid the ongoing US-China trade war, according to the city’s commerce promotion chief.
Tycoon Peter Lam Kin-ngok, who took office as chairman of the Hong Kong Trade Development Council (TDC) in June, said attracting foreign investment remained as important as cross-border cooperation, as he unveiled the two-pronged trade strategy on the sidelines of a symposium in Los Angeles last week.
Hong Kong’s small and medium-sized enterprises (SMEs) have been suffering as the US-China trade war, as well as social unrest in the city, rages on. Asked if the council was doing anything to help local firms, Lam revealed he had discussed more partnership with state-owned enterprises with Beijing.
“We went to Beijing and different departments said they definitely support Hong Kong in doing this … because the Hong Kong government was also very worried about the SMEs,” he said on Thursday, a day before the TDC “Think Asia, Think Hong Kong” symposium Los Angeles on Friday.
Lam said there were at least 30 major industrial zones, owned by Chinese conglomerates, in mainland China and Southeast Asian countries such as Thailand. One of the proposals raised by Hong Kong authorities was to offer more funding and other incentives for the city’s firms, including manufacturers and traders, to relocate from mainland China to these industrial zones, and then sell their products to mainland Chinese and overseas consumers, Lam said.
This will help to boost the growth of those industrial zones, as well as to further open up the mainland market when the US market was hindered by trade disputes, he added.
“If the US market has problems, we can [go forward] in the mainland market,” he said. “We can also go forward in both markets at the same time, because when you do business, you can never just focus on one basket.”
Beijing’s tilt towards state-owned enterprises raises doubts about future of private sector in Chinese economy
Earlier this month, the Hong Kong government denied reports of plans for Chinese state-owned enterprises to step up investment and take control of major commercial assets in the city. The reports came two days after the State-owned Assets Supervision and Administration Commission (Sasac) chairman Hao Peng, and a group of executives from state firms, met Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor in Hong Kong.
Echoing the government’s denial, Peter Lam said he attended the meeting, and so he knew Beijing was not trying to let state-owned firms “replace” local firms, as some media reports and commentators suggested.
“The Sasac hopes to find new opportunities with Hong Kong firms in the Belt and Road countries, and open the mainland market for them,” he said.
“Hong Kong’s financial market, management expertise and professional services would be very helpful … They could not replace Hong Kong.”
Lam added that apart from eyeing mainland China, the TDC would also continue to attract investors from the United States and Europe.
The US Congress is likely to pass the Hong Kong Human Rights and Democracy Act, which would require the US government to assess Hong Kong’s level of political autonomy annually to determine whether it should continue to have a special trade status.
Lam said as he travelled to Los Angeles last week, one of his main responsibilities was to tell people that US-Hong Kong trade had been successful and there was no need for change.
“In some sectors, it is the US which needs Hong Kong, rather than the other way round,” he said. “For example, there is a quota system restricting American filmmakers and producers from working with their Chinese counterparts. But Hong Kong-US productions can enter the mainland market [without such restrictions].”
Speaking on the sidelines of the TDC’s trade symposium in LA, Nick Halla, senior vice-president of Impossible Foods, a US-based producer which develops plant-based “beef” patty and other food for restaurants, said his company is looking forward to entering the mainland China and other Asian market, after working with hundreds of restaurants in Hong Kong, Macau and Singapore since last year.
Wang Yangbin, chairman and CEO of the Vobile Group, a California-based tech company which specialises in online video content protection, also said his company had been aiming to reach out to more mainland Chinese internet users through its Hong Kong office.
Tony Cheung is reporting from Los Angeles