Joint Statement by the Inaugural Joint Meeting of the Hong Kong /EU & EU/ Hong Kong Business Co-operation Committees

The Hong Kong/European Union and the European Union/Hong Kong Business Co-operation Committees held their inaugural meeting yesterday (Monday 20th October 1997) in Brussels. The meeting was chaired by Dr. Victor Fung and Mr. Peter Sutherland.

The Chief Executive of the Special Administrative Region (SAR) of Hong Kong, Mr Tung Chee Hwa, and the Vice-President of the European Commission, Sir Leon Brittan, both addressed the session. They described the formation of the Committees as a milestone in the expanding Hong Kong/EU business relationship.

The purpose of the two Committees, comprised of chairmen and chief executive officers of major companies in both regions, is to promote and expand trade, investment, and understanding between the two business communities.

They act as a conduit between the two regions for high level private sector exchanges on the latest business trends and opportunities.

Members agreed that the inauguration of the Committees now was timely since both Hong Kong and the European Union are at the start of new economic eras. Hong Kong, following its return to Chinese sovereignty, will play a key role in the development of the mainland's economy; Europe is embracing the new opportunities brought by an expanding membership and the introduction of economic and monetary union. Both regions are in the process of forming their economic strategies for the new century.

Dr Victor Fung, Chairman of the Hong Kong/European Union Business Co-operation Committee said: "The private sector is increasingly setting the agenda in international trade. Through their trans-national and inter-regional operations, Hong Kong and European companies are in their daily conduct of business promoting the cause of trade liberalisation and greater economic co-operation. This has created a powerful new dynamic in world trade, and these new Committees will give added impetus to that trend."

Dr. Fung went on to say that the fact that Hong Kong has entered its new era with its freedoms and key institutions firmly intact, including Hong Kong's independent legal and judicial system, a strong anti-corruption commission, freedom of information, an unfettered free-market system, a low and predictable tax regime, equal treatment for local and foreign companies, a strong and stable currency linked to the US dollar, and a government closely attuned to the needs of the free market.

Mr Peter Sutherland, Chairman of the European Union / Hong Kong Business Co-operation Committee said: " I welcome the inauguration of the Hong Kong / EU and EU / Hong Kong Business Co-operation Committees as an important step towards broadening and deepening inter-regional trade, investment and economic co-operation. This meeting is not an end in itself but should form the basis for strengthening vital relationships at a time of rapid economic and political change in both regions. Within this framework, I hope that our respective business and government leaders will seize the opportunity to press forward with further trade liberalisation and deregulation. "

Mr Sutherland went on to discuss the opportunities for Asian trade and investment created by the further integration of the European market, already the largest single market in the world, and by the development of a single currency. These opportunities will be significantly enhanced by the enlargement of the EU. Mr. Sutherland stressed that it was critical that liberalisation of EU trade policy was not impeded by the enlargement process.

During the meeting, Hong Kong members briefed their European counterparts on the continuing strength of the SAR's economy, which is forecast to achieve 5.5 per cent GDP growth this year. Per capita income is now estimated at around US$26,550, making Hong Kong an attractive market for European products. In addition Hong Kong's foreign exchange reserves have risen to US$85 billion, the fourth largest in the world.

Particular note was made of the fact that the new SAR is taking a longer view of its economic development, now that the uncertainties of 1997 and its return to China have been removed. Hong Kong members said local companies were now looking forward with new confidence, planning new partnerships and investments to capture fresh opportunities, especially in the markets on the mainland.

Members discussed how, by using Hong Kong as a springboard, EU companies will be able to access the booming economy of China, which is growing at 9% per year and is predicted to account for 10% of world trade by 2020. Both parties regard the strengthened ties between Hong Kong and Beijing as an opportunity to enhance and expand trade between Europe and China, especially given the commitments of the 15th Party Congress to reform the state sector.

Committee members believe that Hong Kong, with its strong services sector and long-standing experience in international partnerships, will also help European companies access new markets in other parts of the Asia-Pacific region.

European Members analysed prospects for the European Union during the next five years. They briefed their Hong Kong counterparts on the effects of European economic and monetary union and the possible expansion of EU membership to include market economies in Eastern Europe.

The Committees agreed that their second Plenary Session will be held in Hong Kong in 1998, probably in April. Members of the Hong Kong Committee will also organise a high-level visit for the Committees to Beijing at that time.

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