Speech by Minister of State for Trade and Industry Teo Ser Luck at the “Forum on Hong Kong-Singapore Partnership – Sharing for Development & Opportunities”, on 24 July 2015, 1.25pm, Shangri-La Hotel
Mrs Carrie Lam,
Chief Secretary for Administration of Hong Kong Special Administrative Region
Dr Jonathon Choi,
Permanent Honorary President, Chinese General Chamber of Commerce, Hong Kong
Distinguished Guests,
Ladies and Gentlemen,
Good afternoon. It is my pleasure to be here at today’s forum. I would like to extend a warm welcome to Chief Secretary Mrs Carrie Lam and her delegation to Singapore.
Singapore-Hong Kong Economic Relations
Singapore and Hong Kong share a close and complementary economic relationship. The strong turnout at today’s forum is a testament to the robust economic cooperation between both sides. Over the past decade, our total trade has grown by more than 40 percent to reach S$61.3 billion in 2014, making Hong Kong our 6th largest trading partner. Singapore is also Hong Kong’s largest trading partner in ASEAN[1]. As of end 2013, Singapore’s cumulative FDI into Hong Kong reached S$41.7 billion, making Hong Kong our 4th largest investment destination. Singapore’s investments in Hong Kong are diversified, ranging from real estate development, financial services, transportation, F&B to education.
At the regional level, ASEAN and Hong Kong are in talks on a Free Trade Agreement. We have just concluded the 4th round of negotiations in Singapore earlier this week. When completed, the FTA will help to deepen ties and boost trade and investment between Hong Kong and ASEAN.
SME Development in Singapore and Hong Kong
SMEs are an integral component of both Singapore and Hong Kong’s economies, and there is scope for us to collaborate further in developing our SMEs. In April this year, I had the opportunity to lead the SME Workgroup Study Mission to Hong Kong to study the policies and programmes aimed at developing Hong Kong’s SMEs. One of our key observations was the support given by the Hong Kong Trade Development Council (HKTDC) to help with the venturing out of Hong Kong SMEs. This was done through timely dissemination of market information as well as the provision of advisory services for the SMEs.
Given our small domestic market, Singapore similarly places a strong emphasis in encouraging our own SMEs to go global. This includes International Enterprise Singapore’s Global Company Partnership Programme and Market Readiness Assistance Programme, which have helped over 28,000 companies in 2014, 80% of whom were SMEs, to build their capabilities, develop manpower, source for financing and gain market access beyond Singapore, particularly in markets such as ASEAN.
ASEAN as a New Frontier for Growth
As a growing market of 620 million people, ASEAN made up the third largest combined GDP in Asia at US$2.3 trillion in 2013[2], with a projected average annual growth rate of 5.4% from 2014 to 2018[3]. By 2030, ASEAN’s growing middle class is expected to account for 59% of global middle-class consumption[4]. This will make ASEAN a key final demand market and generate opportunities for businesses to grow their consumer-centric activities in the region.
ASEAN is also working towards the establishment of a single market. With the formation of ASEAN Economic Community (AEC), businesses operating in ASEAN can look forward to free movement of goods, progressive reduction of service barriers as well as stronger, pro-business investment rules.
Areas for Closer Collaboration
With opportunities arising from the AEC, there is room for further partnership between Singapore and Hong Kong companies, especially SMEs. Hong Kong companies can leverage on Singapore’s connectivity and expertise in the ASEAN market to venture into the region.
Apart from ASEAN, China is also another important market where Singapore and Hong Kong companies can share our networks and partner each other. Singapore was China’s largest foreign investor in 2013 and 2014. With Hong Kong’s closer economic integration with Mainland China, companies from Singapore and ASEAN can use Hong Kong as a launchpad to enter the vast Mainland Chinese market.
Conclusion
Hong Kong and Singapore are both well placed to serve a vibrant and growing Asia. The business and people linkages we have built over the years are valuable foundation for further cooperation. I hope today’s forum will provide a good opportunity for the business community from both sides to make new contacts and forge more win-win partnerships.
I wish everyone a fruitful day ahead. Thank you.
[1] Source: Hong Kong Trade Development Council, 16 Mar 2015
[2] Source: “Understanding ASEAN: Seven Things You Need to Know,” McKinsey and Company (May 2014).
[3] Source: OECD Development Centre’s Publication on “Economic Outlook for Southeast Asia, China and India 2014’.
[4] Source: PWC, 2015