This photo shows a general view of a Hong Kong container port at the Kwai Chung Customhouse Cargo Examination Compound in Hong Kong, Sept 5, 2018. (ISAAC LAWRENCE / AFP)
China’s accession to the Regional Comprehensive Economic Partnership, which came into force on Jan 1, represents a new opportunity for the Hong Kong in the context of China’s regional trade partnership under the high tariff regime of the United States, the Hong Kong Trade Development Council said on Wednesday.
Hong Kong’s exports are expected to grow by around 8 percent this year, which is higher than the average growth over the past 10 years, as the global economy grows and governments continue to introduce economic stimulus measures.
The value of China’s re-exports to the Association of Southeast Asian Nations via Hong Kong grew by 15 percent year-on-year in the first 10 months of 2021
The value of China’s re-exports to the Association of Southeast Asian Nations via Hong Kong grew by 15 percent year-on-year in the first 10 months of 2021, while ASEAN’s re-exports to China via Hong Kong increased by 26 percent, said Irina Fan Yuen-yee, newly appointed research director of the HKTDC, at a forum.
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The 15 participating nations in RCEP have a combined GDP of $26 trillion and a total export volume of $5.2 trillion, accounting for about 30 percent of the global total.
Hong Kong’s economic ties with ASEAN will be further strengthened with the enforcement of the RCEP agreement, Fan said.
She believes that Hong Kong has much potential to intensify its overseas business in Southeast Asia, as tariffs are expected to be gradually reduced, smoothing the supply chain and lowering restrictions on foreign investment.
However, she noted that companies suffering from the impact of the COVID-19 pandemic are expected to shift from relying on the global supply chain to a balanced supply chain in order to avoid a shutdown that would bring shipments to a halt.
This would lead to higher production costs which would be passed on to consumers, thus fueling inflation, Fan said, adding that inflation is unlikely to return to the levels of the past decades in the medium to long term.
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Fan said that the global supply chain pressures caused by the recent outbreaks were beginning to ease and that stable transport prices are expected to ease inflationary pressures.
However, the outbreak of the omicron variant remains a challenge to the recovery of the whole economy at this stage, she added.