MOTION ON “STAYING FIRM AND UNITED TO COUNTER THE TARIFF TRADE WARS AND STRENGTHENING HONG KONG’S ROLE AS AN INTERNATIONAL GATEWAY”
Deputy President, in launching the tariff war in April, the United States (“US”) is antagonizing the whole world for its own selfish interests. Our country’s stance on this is to “fight to the end” if fighting is what it takes but “keep the door open” when it comes to talks, and it will firmly safeguard its own development interests and sovereignty. In response to the US’ outrageous tariff hike that brings the tariff rates on Chinese goods to 145%, China has demonstrated its strategic confidence by taking reciprocal countermeasures.
In addition to causing major disruptions to the global supply chain, the trade war is also mounting pressure on global economic growth. In the US itself, price hikes and stagflation are looming. Even investment guru Warren BUFFETT commented that weaponizing tariffs is a big mistake. However, it is believed that unilateralism will remain the driver of US policies, and rational thinking will not be given a lot of weight. In the face of the current challenge, we must firmly safeguard the core interests of our country and Hong Kong.
I am grateful to Mr MA Fung-kwok for proposing the motion. As an international financial and trade centre and an important international gateway for our country, Hong Kong should leverage its unique advantages under “one country, two systems” to support the country’s strategy, so as to turn the current challenge into an opportunity. As a free port since far back, Hong Kong imposes no tariffs on nearly all imported goods. As an important hub of Sino-US trade, Hong Kong has always cooperated closely with the US in commerce and trade. According to statistics, Hong Kong’s exports to the US totalled HK$590 billion last year, half of which were re-exports. In the past 10 years, the US has realized a cumulative trade surplus of more than US$200 billion with Hong Kong. Despite that, the US has not only imposed the so-called “reciprocal tariffs” on our goods recently, but also cancelled the tax exemption for small-value parcels from Hong Kong destined to the US. Coupled with the escalation of the tariff rates, the “reciprocal” rhetoric is nothing but an excuse.
Under the trade war, re-export trade of Hong Kong will inevitably decrease, causing impacts on industries including logistics and warehousing. I am glad to learn that the SAR Government has promptly put forward its seven-point counter-strategy which covers areas including policy, finance and industrial upgrading. I also support the series of measures taken by the Government and local manufacturers, including the signing of 9 free trade agreements with 21 economies, the signing of 24 investment agreements with 33 economies, and the active efforts to expand markets such as ASEAN, the Middle East and Belt and Road countries, so as to open up new markets for our exports far and wide.
The trade war will also aggravate the uncertainty in the global financial market. As a highly open economy, Hong Kong will inevitably experience greater volatility in the capital market and in the exchange rate of Hong Kong dollar. The SAR Government should pay close attention to the changes in the financial market and take decisive financial measures when necessary to stabilize market confidence. Meanwhile, as Chinese concept stocks may be forced to delist from the US market, we should introduce corresponding measures promptly. That includes a review or revision of the relevant listing rules in Hong Kong, so that those companies will have an option of return by listing their stocks for continuous trading in the Hong Kong capital market. In the current moment that is unlike any other, it is imperative that we also create an even more business-friendly environment and maintain our tariff-free regime, so as to ensure the free flow of goods, capital and talents and attract capital and talents to Hong Kong while the window is still open.
What I have discussed above focused on the external environment. On the internal side, the SAR Government should expedite the development of innovation and technology industries in implementing its industrial policy, develop high value-added industry chains, and enhance the core competitiveness of Hong Kong products. As an international financial centre, we should continue to improve our trade finance service system, including optimizing the cross-boundary payment and settlement system and developing green trade finance products, so as to comprehensively enhance our professional capabilities to serve foreign enterprises and foreign financial institutions. The financial sector should also continue to provide the support that traders and SMEs need by initiatives such as extending the period for loan repayment and lowering the costs of financing, so as to help them tide over the difficult times.
At a time of global paradigm change, Hong Kong should act proactively to explore new opportunities while bracing for external risks, and respond flexibly to any further assaults from the US that may come with even stronger ferocity. Holding fast to our role of “leveraging our own strengths for meeting the country’s needs”, Hong Kong has every chance to upgrade itself from being the “super connector” to becoming a strategic pivot and achieve new development in the paradigm shift.
I support Mr MA Fung-kwok’s original motion and the two amendments.
Deputy President, I so submit.