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Hong Kong 2015 Budget To Target Growth

by Mary Swire, Lowtax.net, Hong Kong
15 January, 2015

In his 2015 Policy Address, Hong Kong Chief Executive Leung Chun-ying emphasized the importance of free trade, the maritime industry, and financial services to the growth of Hong Kong as an international financial center.

He pointed out that Hong Kong's primary advantage is that "it is an important link and a 'super-connector' between the Mainland and the rest of the world. To promote economic development, Hong Kong should put emphasis on building economic ties with both the Mainland and overseas countries. At present, more than 7,500 overseas and Mainland enterprises have offices in Hong Kong, of which about half are regional headquarters or regional offices."

Hong Kong is the world's eighth-largest trader of goods, with trade between Hong Kong and the Mainland accounting for more than half of its total trade flows. This sector is Hong Kong's largest in terms of the number of people employed.

Apart from active participation in the World Trade Organization's multilateral and plurilateral negotiations, Leung confirmed that the Government is seeking to negotiate and conclude bilateral or regional free trade agreements (FTAs).

Last July, formal FTA negotiations began with the ten countries of the Association of Southeast Asian Nations. The Government also aims to liberalize trade in services with the Mainland by the end of this year (following the signing of such an agreement with Guangdong Province last month).

Leung added that the Government will also maintain close collaboration with the Guangdong Government throughout the planning and development of the pilot free trade zone in the province, covering Nansha, Qianhai, and Hengqin, to "pursue new modes of co-operation, the most favorable treatment, and the biggest development opportunity for Hong Kong."

Leung also promised that the Government would further diversify financial services in Hong Kong. In that regard, he confirmed that HKD500m (USD64.5m) will be allocated to the new independent Insurance Authority to meet part of its initial operating expenses and for use as a contingency reserve. A new maritime body to promote Hong Kong's maritime services industry will also be formed.

He noted that Hong Kong is "well positioned to serve as a springboard for Mainland maritime companies looking to 'go global,' as well as a platform for international maritime companies to tap the Mainland market."

Hong Kong's tradition of the rule of law and its legal system are conducive to developing legal and dispute resolution services, he continued, and that will include maritime arbitration services.

Asked for his reaction to the Policy Address, Financial Secretary John Tsang said that he estimated it will cost the Government HKD8bn to implement the measures listed. He confirmed that he will deliver the 2015 Budget on February 25, which he said will support the objectives outlined in the address.

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