Bangkok-based Hong Kong Economic Trade Office (HKETO) executive director Lee Shueng Yuen outlines how the major international financial hub has contributed to the Cambodian economy.
Please share with us how successful has HKETO been in accelerating trade and investments to Cambodia over the years.
Hong Kong Economic and Trade Office (HKETO) in Bangkok was established in February 2019. It is the newest and 13th overseas office representing the Government of the Hong Kong Special Administrative Region.
Our mission is to facilitate the development of bilateral relationship between Hong Kong and Cambodia, and also three nearby countries, namely Thailand, Myanmar, and Bangladesh, with a view to taking Hong Kong’s cooperation with these countries to new heights and in fresh directions.
In 2019, the bilateral trade between Hong Kong and Cambodia reached $1.2 billion. Comparing with 2016, the bilateral trade recorded an overall modest increase of 4.3 per cent. In this context, we are working closely with the Cambodian Ministry of Commerce for the ratification of the Asean-Hong Kong Free Trade Agreement by Cambodia.
The agreement would bring increased and better market access to both sides, create new business opportunities and further enhance trade and investment flows.
Separately, Hong Kong and Cambodia signed a comprehensive avoidance of double taxation agreement in June last year, promoting further bilateral investment and trade between both sides.
The agreement sets out the allocation of taxing rights between the two jurisdictions and helps investors better assess their potential tax liabilities from cross-border economic activities.
How do Hong Kong entrepreneurs view Cambodia’s economy?
According to the Council for the Development of Cambodia, Hong Kong is one of the major foreign investors in Cambodia. In 2019, Hong Kong was the second largest foreign investor with an investment of $913 million.
Hong Kong entrepreneurs have invested in different business sectors in Cambodia, including textiles and clothing, hotels, construction, retail and logistics.
With a young and energetic labour force, relatively low production costs, and a stable and open business environment, many Hong Kong investors consider Cambodia an ideal location for expansion and the relocation of production capacity.
How can Cambodia rely on Hong Kong– a global business and financial centre – as a gateway for trade and investment?
Hong Kong offers a unique advantage for Cambodian companies as it is the most accessible, safe and secure gateway into China. There is one single and simple advantage - the “One Country, Two Systems” principle in Hong Kong.
We are part of China and enjoy the natural advantages of having common language and culture. Through our free trade agreement with China, companies in Hong Kong, including Cambodian firms if they are established in Hong Kong, enjoy greater market access and easier inroads into the world’s biggest and fastest-growing market.
With established international trade networks, world-class infrastructure, well-connected communication and transport networks, Hong Kong is well placed to act as the Belt and Road platform for finance and professional services.
The Covid-19 pandemic continues to rattle global economies and trade. Did the outbreak have any serious bearing on trade relations between Hong Kong and Cambodia?
While the Covid-19 pandemic has inevitably caused practical difficulties for face-to-face interactions, there is no barrier for continued cooperation between Hong Kong and Cambodia on the trade front.
For example, the economic ministers of 10 Asean member states and Hong Kong, China – HKC – met virtually on August 28 this year for the Fourth Asean Economic Ministers-HKC Consultations.
They agreed to enhance economic relations between HKC and Asean, including Cambodia, through, among others, utilisation of the Asean-HKC Free Trade Agreement and the Asean-HKC Investment Agreement.
In what areas can Hong Kong contribute to Cambodia’s development, for instance in urban planning and infrastructure?
Hong Kong enterprises and professionals contribute to Cambodia’s development through the Belt and Road Initiative, which offers ample opportunities for mutual co-operation and collaboration.
Riding on the various unique advantages as an international financial centre and the rich pool of professionals operating under international standards and practices, Hong Kong is best placed to be the platform for providing the whole spectrum of professional services, as well as in facilitating capital flows and project financing.