Speeches

IDHKBA Year End Gathering in Jakarta Indonesia

Following is the speech by the Director-General of the Hong Kong Economic and Trade Office in Jakarta, Mrs DO PANG Wai Yee, at the year-end gathering organised by the Indonesia-Hong Kong Business Association (IDHKBA) in Jakarta, Indonesia today (December 13):

James (Chairman of the IDHKBA), Kwan Ho (Secretary of the IDHKBA and Director of Hong Kong Trade Development Council in Indonesia), Ladies and Gentlemen,

Selamat Malam! I am DO PANG Wai-yee, the Director-General of the Hong Kong Economic and Trade Office, Jakarta. I am very happy to meet you all and share this evening with you.

First of all, I would like to thank our good partner, the Indonesia-Hong Kong Business Association, for organizing this Year-End Gathering. I am sure this will be a rewarding event for all of us here, as we celebrate our achievements in 2017 and share our upcoming plans in developing further ties between Indonesia and Hong Kong.

As most of you already know, we represent the Hong Kong Special Administrative Region (SAR for short) Government in matters between Hong Kong and ASEAN as a whole, and handle in particular matters between Hong Kong and four countries, namely Indonesia, Malaysia, the Philippines and Brunei.

2017 is a fruitful year for us. We set up our permanent office in May. We conducted promotion activities and did a lot of networking, so some of you should have a better understanding of our work here and Hong Kong, our city. We organized or co-hosted events and seminars, in Jakarta and other cities, to celebrate the 20th anniversary of the establishment of Hong Kong SAR as well as promoting Hong Kong’s role in Mainland China’s Belt and Road Initiative. We received delegations from Hong Kong, with a view to exploring business cooperation and investment opportunities in Indonesia. We also communicated with the Indonesian Tax Authority regarding the implementation issue of the Double Taxation Agreement between Hong Kong and Indonesia. I am happy to report that the Indonesia Tax Authority have since issued a new tax regulation (Regulation 10/2017) this June which should smooth the operation of the Agreement.

Hong Kong – ASEAN FTA

We also delighted to let you know that after more than 3 years of negotiation effort, Hong Kong and ASEAN have signed a Free Trade Agreement and a related Investment Agreement last month (November).

The Agreements are comprehensive in scope, encompassing trade in goods, trade in services, investment, economic and technical co-operation and dispute settlement mechanisms. They will bring legal certainty, better market access and fair and equitable treatment in trade and investment, thus creating new business opportunities and further enhancing trade and investment flows between Hong Kong and ASEAN, including of course Indonesia, the major market in the region.

Subject to completion of the necessary procedures, the Agreements are expected to enter into force on 1 January 2019 the earliest.

In the foreseeable future, we will focus on promoting the Agreements, so that both Hong Kong and Indonesian companies could make the most out of the offers in the Agreements.

To this end, we have prepared a handy leaflet on the key features for you, so that you can get better understanding on the benefits of the Agreements at a glance. Please don’t forget to get your copy.

Indeed, the ties between Hong Kong and ASEAN have been growing stronger in the past few years. In 2016, ASEAN was our 2nd largest partner in merchandise trade. In terms of services trade, ASEAN was our 4th largest partner in 2015. As for investments, ASEAN ranked sixth among Hong Kong's destinations of outward direct investment as at end 2015, and sixth among Hong Kong's sources of inward direct investment.

Now, with the Free Trade Agreement and Investment Agreement signed, we expect the ties between Hong Kong and ASEAN to reach new heights in the near future.

This is the reason why we set up our Office here in Jakarta, to complement the work of our existing office in Singapore. In fact, in her Policy Address delivered in October, our Chief Executive, Mrs Carrie Lam announced the setting of up another office in Thailand, which will be our third office in ASEAN. This demonstrated our commitment and determination towards building stronger ties with ASEAN.

Policy Address

Talking about the Policy Address, I would like to take this opportunity to highlight a few initiatives that might interest you.

We constantly pronounced Hong Kong being a business friendly place, well, in the Policy Address, one of the new initiatives is to provide tax relief to SMEs: profits tax rate for the first $2 million of profits is proposed to be lowered to 8.25%, and standard tax rate at 16.5% for profits exceeding that amount.

Besides, to encourage research and development investment by enterprises, we are proposing to introduce a 300% tax deduction for the first $2 million eligible R&D expenditure, with the remainder at 200%.

We hope that these initiatives, together with other new and prevailing pro-business measures, could further improve Hong Kong’s investment environment for businesses, especially SMEs.

For those of you who want to expand your business to the mega Mainland market or globally, the time is now and the place is Hong Kong!

Youth development and student internship

Another key feature in the Policy Address is on youth development. Apart from encouraging more young people to participate in politics and policy discussion, the Chief Executive also would like more opportunities for youngsters to broaden their horizons and widen their perspectives. .

Indeed, our Singapore Office has since 2014 coordinated an ASEAN Internship Scheme for Hong Kong Higher Education Students. Our office joined the internship programme earlier this summer by having four Hong Kong university students to help out as interns in our Office. We would like to see this internship programme be expanded in Indonesia for the coming summer, and we are encouraged to have promising responses from some of the companies here. We believe that the internship programme will not only offer a valuable experience for the students, but may also help sparking off new perspectives and bringing in new ideas for participating companies. More importantly, the programme would help enhance people to people bonding between Hong Kong and Indonesia. If your company is interested to have one or more Hong Kong university students as interns in the summer next year, you are most welcome to talk to us.

Conclusion

In conclusion, I strongly encourage all of you to continue strengthening Indonesia and Hong Kong business ties and take advantage of the many new possibilities opened by the HK-ASEAN Free Trade Agreement as well as the Belt and Road Initiative. For our part, the Hong Kong Economic and Trade Office Jakarta will do our utmost to promote Hong Kong and provide updated information about Hong Kong to our friends in Indonesia and ASEAN and vice-versa to facilitate the establishment of closer relations between us.

Perhaps I should pause here. But before I stop, let me congratulate our friends here for a very fruitful Year 2017 and may I wish you all a very happy and prosperous New Year for the year 2018!

Thank you. Terima kasih!

Ends/Wednesday, December 13, 2017