Hong Kong - EU Economic Ties Reinforced by Business Co-operation Committees

Business ties between Europe and Hong Kong were reinforced when the European Union/Hong Kong and Hong Kong/European Union Business Co-operation Committees held their second joint meeting in London yesterday (October 27).

During their plenary session the Committees, which comprise chairmen and chief executives of major companies in both regions, reaffirmed their aim of promoting and expanding trade, investment and understanding between the two business communities at both government and private sector level.

The European Union / Hong Kong Business Co-operation Committee is chaired by Mr. Peter Sutherland, Chairman of Goldman Sachs International and BP Amoco plc, while the Hong Kong Committee is chaired by Dr. Victor Fung, Chairman of the Hong Kong Trade Development Council.

The Committees received messages of support from Romano Prodi, President of the European Commission and from the Hon. Tung Chee Hwa, Chief Executive of Hong Kong Special Administrative Region (HKSAR) of China.

At the meeting the European side was represented by Mr. Jean Peyrelevade, Chairman of Credit Lyonnais; Dr. Gunter Dunkel, Member of the Board, Nord Deutsche Landesbank; Mr. Belmiro Mendes de Azevedo, President, Sonae Investimentos SGPS SA; Mr. Cees Van Der Hoeven, Chairman, Koninklijke Ahold NV; and Sir Richard Greenbury. The Hong Kong was represented by Mr. Christopher Cheng, Chairman, Wing Tai Corporation; Mr. Vincent Cheng, Vice Chairman and Chief Executive, Hang Seng Bank; Mr. Alasdair Morrison, Managing Director, Jardine Matheson; Mr. Jack So, Chairman, Mass Transit Railway Corporation; Mr. Zhang Hong Yi, Deputy Chief Executive, Bank of China; and Mr. Peter Woo.

At the meeting Committee members agreed that the two sides met at a time of steady economic recovery and renewed dynamism for both regions. They noted that Hong Kong is emerging from the Asian crisis with its economy in good shape and making strides towards greater competitiveness, while Europe is looking forward to a period of renewed growth after successfully introducing the single currency, and is now dealing with the challenges of enlargement and of internal reform.

They emphasised the potential for deepening EU-Hong Kong co-operation, especially in the area of services, and gave particular attention to the growing impact of e-commerce on global business.

They also look forward to China entering the WTO on mutually acceptable terms and to the accompanying reforms of the mainland's economy and institutions. Hong Kong's position as business intermediary and regional service hub will be important for European businesses, enabling them to approach China's market by taking advantage of Hong Kong's established legal, administrative and managerial capacities, and its expertise on the mainland.

They agreed that enlargement of the European Union and the modernisation and restructuring of its economy that is now underway opens new prospects and opportunities to Asian trade. Members stressed that it also requires an increase in the breadth and depth of business contacts.

Both sides firmly intend to continue this high level dialogue and to follow-up on the ideas addressed during the meeting. The dialogue is contributing to the development of much needed informal networks which can promote issues of mutual interest to business and governments.

Specific recommendations and ideas emerged from this meeting. In following up, the two sides will urge the European Commission and the Hong Kong Special Administrative Region to:

• Continue to support and intensify on a regular basis all visits and contacts that could help reinforce bilateral economic trade relations, and to use all existing instruments and to develop new ones that could contribute to strengthening business to business contacts.
  
• Underpin and support the central role that business plays in helping to create prosperity in Asia by fostering positive business conditions .
  
• Understand that Europe could be more present in Hong Kong and Hong Kong in Europe and take steps to strengthen cooperation in priority fields of mutual interest, such as the environment, information technology, financial market, regulation, expertise for small and medium enterprises and enforcing legal protection of intellectual property rights.
  
• Support Hong Kong's strong position to engender more business between Europe and China.
  

The Committees agreed to monitor the progress of these recommendations during the year and to convene their third joint plenary session in Hong Kong in 2000.

Total trade between the EU and Hong Kong last year exceeded US$ 46 billion. Many EU companies have used their operations in Hong Kong as a springboard to the Asia-Pacific region. There are currently 261 EU companies with regional headquarters in Hong Kong, while another 460 have regional offices.

The EU has substantial investment in Hong Kong, particularly in the services sector where investment amounted to HK$241.8 billion at the end of 1997, equivalent to 36% of total foreign direct investment in non-manufacturing sectors. Reflecting the EU's widespread interest in Hong Kong some 46,000 EU citizens currently reside in the SAR.

The two Committees were established in 1997 with the support of the European Commission and the government of Hong Kong. The Hong Kong Trade Development Council rendered assistance, as it did in helping establish bi-lateral business co-operation committees with the US and Japan in the early 1980's.

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