LEGCO WORK

Motion on “Establishing sound industry and supply chains and related services and developing Hong Kong into a multinational supply chain management centre”(2024.06.27)

Thank you, President. In recent years, our country has been striving for a peaceful rise but has been facing hostility and suppression from Europe and the United States (“US”). The international landscape has become increasingly tense, leading to multiple rounds of trade barriers and even trade wars, resulting in the disruption of industrial and supply chains of many enterprises. Some Mainland enterprises plan to relocate their manufacturing processes overseas to rebuild their industrial chains and avoid tariffs imposed by Europe and US. Meanwhile, Hong Kong’s export trade has been affected by geopolitics and the pace of recovery has been slow and coming to a standstill, so there is a pressing need to promote the upgrading and transformation of Hong Kong’s export trade. The Financial Secretary has put forward a new and visionary proposal to develop Hong Kong into a multinational supply chain management centre to attract Mainland enterprises to set up regional headquarters in Hong Kong for managing their offshore trading.

I would like to thank Mr Martin LIAO for proposing today’s motion, and I fully support the Secretary’s proposal. The proposal is an important development direction for Hong Kong to create a new mode of foreign trade. The so-called “multinational supply chain management centre” is a single window set up by the SAR Government to provide one-stop services to enterprises, offering consulting services such as business operation, production mode, market information, supply chain management, trade financing and talent supply, etc. to Mainland enterprises which intend to go global but lack overseas experience, thereby attracting them to set up their regional headquarters in Hong Kong. As a result, the management centre can be regarded as a command tower in the production process and its importance is self-evident.

As a matter of fact, Hong Kong possesses significant advantages in developing the management centre. Firstly, as an international financial centre and a trade centre, Hong Kong is equipped with comprehensive financial and professional support facilities that are on a par with those of the world, and has access to the latest international information, providing ample support for enterprises coming to Hong Kong. Secondly, there is the convenience of financing and cross-border settlement. The Government will provide export credit insurance for enterprises coming to Hong Kong through the Hong Kong Export Credit Insurance Corporation, and enterprises can use mBridge for cross-border settlement, which can eliminate their concerns about fund mobility. Thirdly, Hong Kong is a hub of innovation and technology (“I&T”) and is pressing ahead with I&T development, with five top 100 universities and numerous I&T enterprises offering the latest technologies such as artificial intelligence, Internet of Things and big data. Lastly, Hong Kong has an abundant supply of international talents, so enterprises do not need to worry about talents.

However, despite Hong Kong’s many strengths, we have a number of challenges to overcome in the face of such a wide-ranging programme. Firstly, the target countries of Mainland enterprises will not be Europe and US, with which Hong Kong is familiar, but rather the Belt and Road countries such as ASEAN, Africa and the Middle East. While Hong Kong has been actively developing relations with the Belt and Road countries in recent years, it is not yet ready to lead the way for enterprises, so it must step up its efforts. Secondly, assisting enterprises in expanding their production bases overseas encompasses a broad scope, and the Government may lack sufficient and comprehensive experience in this aspect. However, Hong Kong people have always embraced the spirit of learning as they work, so I believe we can overcome such challenges. Furthermore, we hope to adequately provide one-stop services in the future. In the past, Hong Kong merely played an intermediary role, but this time we have to actively participate in the relevant work, or even serve as a manager to proactively assist enterprises in addressing their difficulties, or even be a staunch support to them, allowing enterprises to come to Hong Kong for development with ease. Thirdly, Europe and US will continue to suppress Hong Kong and they may step up their suppression if the management centre made achievements in the future, so Hong Kong also needs to study counter-measures and be well-prepared.

In addition, I think Hong Kong should consider inviting Mainland cities in the Greater Bay Area (“GBA”) to participate in or assist in the development of the management centre, with a view to achieving a win-win situation for all parties. As far as I know, there are tens of thousands of manufacturing enterprises in GBA, many of which have overseas businesses and some of their processes need to go global. These enterprises are target customers of Hong Kong. Of course, enterprises do not go global because of Hong Kong, but as a member of GBA, Hong Kong should assist other cities in reducing the impact associated with enterprises going global, such as working on the plan to develop a bilateral multinational supply chain management centre to help Belt and Road enterprises attract investment. At the same time, GBA cities can also cooperate to restructure their industrial and supply chains in the region, or promote the upgrading and transformation of their industries, thereby exploring new opportunities.

Thank you, President.

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