CRI听力: Optimism for HK amid Economic Downturn

Reporter:
The global economic downturn and rising cases of A (H1N1) flu might remind some peple of the sluggish economy in Hong Kong after the 1998 Asian financial crisis and SARS outbreak in 2003. But this time, the overall situation is deemed less serious.

Many people, including officials and experts, attribute it to Hong Kong's ever closer economic ties with the Chinese mainland, courtesy of the Closer Economic Partnership Arrangement,or CEPA.(www.hXen.com)

The CEPA, which facilitates cargo and service trading between Hong Kong and the mainland, was signed 5 years ago in 2003.

Statistics show that during the 5 years, Hong Kong's annual GDP growth rate reached over 6 percent, and its unemployment rate fell to 4.1 percent in 2008 from 8.7 percent in 2003. At present, there are more than 100 thousand Hong Kong businesses in the neighboring Peal River Delta region of the mainland.

Hong Kong's top official for mainland affairs, Stephen Lam Sui Lung, says CEPA will continue to bring investment incentives to Hong Kong, especially amid economic challenges.

"In the past 6 years, we have signed 6 additional agreements of CEPA. Now Hong Kong's service sector covers 7 million local people. We hope the industry can benefit 50 million people in the Peal River Delta and even more people in the future. That will help us boost the mainland market and stimulate Hong Kong's economy"

Hong Kong's economic performance also continues to capture international attention. Tom Plate is an internationally syndicated columnist who regularly writes about America's relations with Asia. He was also one of the first American experts to predict the Asian financial crisis in 1998. He believes that this time around, Hong Kong is poised to meet the economic difficulties.

"First of all, Hong Kong itself has made some changes in response to the challenges it faced in 1998. They are not going to have those problems again. Second, I think the economic relationship with the mainland has been on the whole a big plus. From what I've read, the property market is coming back. As I understand, in Hong Kong, the property market is a key to the entire of the economy."

This opinion is echoed by John Bucks. He is the regional director of Fortis Insurance Group in Hong Kong. Although he is not responsible for the company's business in the Chinese mainland, he says CEPA will bring more opportunity.

"Indirectly, we will benefit from the agreement. We are financial businesses, including insurance and wealth management. Our mother company, Fortis, has already got connections with China and operations there. So CEPA will help bring more Chinese people to Hong Kong. And in that way we could benefit."

Considering Hong Kong's status as an international financial center, one of CEPA's main points is opening mainland markets to Hong Kong-based banking corporations. Many insiders say this is good for their businesses, especially in times of financial challenges. Raymond Chan from Sumitomo Mitsui Banking Corporation is one of them.

"I remember CEPA was introduced after the SARS outbreak in 2003. During that time, Hong Kong's economy was stagnant. However, it recovered, thanks to the agreement. As far as our bank is concerned, our representative office in Beijing has been upgraded to a subsidiary bank this year. We have also opened a branch in Hangzhou. In addition, in late April this year, we set up a locally-incorporated company in the Chinese mainland. That shows our confidence in China's financial development."

Under agreements within the CEPA, an additional 28 categories of Hong Kong made products, including agricultural products and medical equipments will enjoy zero tariffs when entering the mainland market from July 1st.

Zheng Chenguang, CRI news