Well-positioned on global stage

Hong Kong, a world-class business center, is ideally positioned to benefit from China’s Belt and Road Initiative but only if it can leverage its traditional strengths and find its competitive edge.This was the underlying message of a panel of top-level speakers who joined Hong Kong Chief Executive Leung Chun-ying in Hong Kong on Oct 29 for a China Daily Asia Leadership Roundtable to consider how the special administrative region can unleash the potential of the Belt and Road Initiative.
“For the country it is an unprecedented strategic vision, while the promise for Hong Kong is equally outsized,” said Leung.
Proposed by President Xi Jinping in 2013, the Belt and Road Initiative aims to boost trade ties and facilitate economic cooperation along the ancient Silk Road. With China as the starting point, the Silk Road Economic Belt and the 21st Century Maritime Silk Road will stretch to Eastern Europe, Central and South Asia and the coast of Africa.
Hong Kong is a relatively small economy by international standards, Leung said, but it is well-positioned as “an indispensable player in the global economy as well as in the national development of China”.
“The international landscape is changing fast,” added Leung. “To stay relevant, to remain competitive, Hong Kong must also adapt.”
Zhou Li, publisher and editor-in-chief of China Daily Asia Pacific, said the Belt and Road strategy holds great promise for Hong Kong “both in terms of its own economic growth and its ability to contribute to the prosperity of China and the region”.
“Hong Kong has everything going for this opportunity, but now it is the moment to reconsider how we can maximize the benefits of these opportunities,” he added.
Speaking in the United States last month, Xi said the aim of the initiative is to drive economic development throughout the region.
YK Pang, chairman of the Hong Kong General Chamber of Commerce, said at the roundtable event that the Belt and Road Initiative will present new prospects for Hong Kong’s business community and for its people.
“We need to get ourselves prepared and ready to participate,” Pang said.
“Our expertise in trade and logistics, financial services, professional services as well as tourism, hospitality and retail can play an important role in supporting China’s grand plan.”
The challenge for Hong Kong is that its competitiveness is being undermined.
“We have to hone our competitive edge and compete to secure opportunities,” Pang added.
Hong Kong’s strengths lie in the finance sector with its stock market being the seventh largest in the world and its world-class fundraising facilities. Other advantages include its trade facilities, yuan trade and Islamic finance facilities, asset and risk management, insurance services and logistics.
The city’s technology and creative sectors are also important for the Belt and Road countries.
“Opportunities are abundant,” said Chow Chung-kong, chairman of Hong Kong Exchanges and Clearing. “However, they are not going to be served to us on a silver plate. We have to work hard for them.
“Our biggest advantage … is the fact that we are part of China,” said Chow. “To make the One Belt, One Road (strategy) succeed, the commercial sectors must get involved.”
The Belt and Road Initiative, particularly the Maritime Silk Road, will link together the many developing economies likely to produce the next group of consumers for the world.
Victor Fung Kwok-king, chairman of the Fung Group, a Hong Kong-based multinational which comprises operating groups engaging in trading, logistics, distribution and retailing, said: “We have to learn to deal with large numbers of small and medium-sized enterprises.”
“It is not so much B2B but B2-small-b,” he said, referring to business-to-business companies.
“We need to use a lot of technology, a lot of innovation, and come up with new business models,” Fung added.
“If we grab that opportunity and do it quickly, we will be leading the world in the orchestration of the new supply chains.”
Hong Kong companies, including its small and medium enterprises (SMEs), are well-positioned to profit from Hong Kong’s role in the Belt and Road Initiative.
“It is a scheme that will change the world if it is successfully implemented,” said Vincent Lo Hong-sui, chairman of the Hong Kong Trade Development Council.
“This is a once in a lifetime opportunity.”
For the next year, the theme for the trade development council will be the Belt and Road, with a series of projects aimed at promoting the initiative and providing information.
Added Fung: “What we really need to do is push the whole concept of innovation. But when people talk about innovation, they identify it almost purely with technology.”
Fung said that innovative thought should be applied to creating new business models.
“What is happening on the Silk Road is a huge catalyst and opportunity for our young people.”
This can give entrepreneurs and businesspeople a focal point by tapping into the markets for the next generation, with 3.5 billion new consumers along the Belt and Road.
“That will be our next generation of entrepreneurs. That will be our next generation of SMEs,” said Fung. “That will give us the next generation of forward thrust for Hong Kong.”
As this happens, however, it will be important to ensure that the benefits of the Belt and Road Initiative flow in two directions.
Lincoln Leong Kwok-kuen, CEO of the MTR Corporation, the company running the city’s mass transit railway, asked: “How do you bring people into Hong Kong?”
“How do we reach out and how do we add value to those countries and for those countries along the Belt and Road?” he added. “It is a two-way flow.”
New business models are likely to be a powerful driver of growth.
“We now live in a world that is highly specialized,” said Chief Executive Leung.
For example, Hong Kong may not have a lot of expertise building railways but it does have great expertise putting those railways to the best and most profitable use possible. It is the kind of expertise that Hong Kong has long exported to the world.
Fung pointed out how the overland Silk Road is likely to drive a rising trade in commodities. The Maritime Silk Road, he added, is a key conduit for high-end products, many of which include technology and services.
“I see the Maritime Silk Road as the conduit for distribution of a lot of the products that originate in China, and of course in the region, and over to other parts of the Silk Road,” said Fung.
“That really plays into one of the roles that Hong Kong has always played, which is as a global supply-chain manager to orchestrate the movement of these goods.
“Every time there is an important change in the region, Hong Kong has played a major role,” said Fung.
A lot of companies are positive about the opportunities that the Belt and Road Initiative will create, said Pang of the chamber of commerce.
“This is China coming onto the world stage and really leading a world-changing initiative to accelerate the development of those countries in the Belt and Road,” he said.
There are more than 60 economies along the Belt and Road and they can provide a huge opportunity.
“We need to have a more complete and institutional framework with our prospective partners,” said Leung. “We need to complete the rest of the planning along with the rest of the country.”
“We need to deepen our knowledge of the Belt and Road economies,” he said. “We need to read up more. We need to meet up more.”
Source: http://www.chinadailyasia.com/2015-11/06/content_15340922.html