Speeches

Chinese New Year Reception in Penang Malaysia

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 Chinese New Year Reception organised by the Hong Kong-Malaysia Business Association (HKMBA) in Penang, Malaysia today (March 8):

Dixon (President of HKMBA), Jee Eng (Director of Hong Kong Trade Development Council, Kuala Lumpur), ladies and gentlemen,

A very good evening to all of you.

First of all, I would like to thank our good partner, the Hong Kong Malaysia Business Association, for co-organising this Reception. I am most delighted to join you all in celebrating the Chinese New Year. Kung Hei Fat Choy! Let me wish you all a very happy and prosperous Year of the Dog!

Let me introduce myself. I am DO PANG Wai-yee, the Director-General of the Hong Kong Economic and Trade Affairs, Jakarta. Our office in Jakarta commenced operation in June 2016 and we represent the Hong Kong SAR Government in matters between Hong Kong and ASEAN as a whole, and handle in particular matters between Hong Kong and four countries, namely Malaysia, Indonesia, the Philippines and Brunei. The remaining six countries continue to be covered by our Singapore ETO, which is established for over 20 years.

This is my second visit to Penang, while my first visit was quite some years ago as a tourist. Penang has never failed to impress with its friendly people, artistic heritage buildings, abundant authentic local foods and comfortable yet vibrant lifestyle. I understand many Hong Kong people visit Penang for these reasons, and many of you visit Hong Kong for a taste of the different lifestyle of our city. It is my pleasure to further promote the ties between our two cities.

The Year of the Rooster was a fruitful one for us. We moved our temporary office in Jakarta to a permanent one in May. We conducted promotion activities and did a lot of networking in various cities. We organised or co-hosted events and seminars in Kuala Lumpur and other cities in this region, to celebrate the 20th anniversary of the establishment of Hong Kong SAR as well as to promote Hong Kong, in particular our role in the Mainland’s Belt and Road Initiative. We received delegations from Hong Kong, with a view to exploring business cooperation and investment opportunities in ASEAN.

Hong Kong – ASEAN FTA

We are also delighted to inform you 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 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 Malaysia, one of the major markets in the region.

The Agreements are expected to enter into force, during the Year of the Dog, on 1 January 2019, subject to the completion of necessary procedures.

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

Indeed, the ties between Hong Kong and ASEAN have been growing stronger in the past few years. In 2017, ASEAN was our 2nd largest partner in merchandise trade, with the total value reaching nearly US$120 billion, an increase of some 11% over 2016.

As for Malaysia, our total merchandise trade in 2017 reached US$18.3 billion, compared to US$15.2 billion in 2016, an increase of about 22%! In 2017 Malaysia was our 9th largest trading partner and ranked 3rd among ASEAN nations.

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

This is the reason why we set up our Office in Jakarta, where the ASEAN Secretariat is located, 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 demonstrates our commitment and determination towards building stronger ties with ASEAN.

The 2018-2019 Budget

Before I conclude, let me update you a bit about Hong Kong’s 2018-2019 Budget, which was delivered by our Financial Secretary just a week ago. I would like to highlight three points which might be most relevant for you.

First of all, the Budget reiterated an announcement in our Chief Executive’s Policy Address that to encourage R&D, enterprises will enjoy a 300 per cent tax deduction for the first HK$2 million qualifying R&D expenditure, and a 200 per cent deduction for the remainder. Drafting of the legislation and consultation have already commenced.

Second, ASEAN countries will be included in the Enterprise Support Programme under the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund). The respective cumulative funding ceiling for enterprises undertaking projects in ASEAN markets will be HK$1 million.

Last but not least, profits tax for 2017-2018 will be reduced by 75 per cent, subject to a ceiling of HK$30,000. The reduction will be reflected in the final tax payable for 2017-2018.

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

Conclusion

To conclude, I thank you all for your support for the last year and look forward to continue working with all of you to further strengthen the ties between Hong Kong, Penang and Malaysia, as well as ASEAN, for an even more fruitful year of the Dog.

Please enjoy the evening. Thank you!

Ends/Thursday, March 8, 2018