In an exciting development for businesses and economies in Southeast Asia, Hong Kong and Thailand are reinforcing their historic partnership through innovative economic collaborations. Parson Lam, the Director of the Hong Kong Economic and Trade Office in Bangkok (HKETO), recently shared insights with The Nation on initiatives designed to foster deeper trade, cultural, and tourism relationships between these two vibrant regions.

Hong Kong's Unique Economic Advantage

Hong Kong operates under the 'one country, two systems' framework, granting it a unique advantage as both a part of China and an autonomous entity with a distinct economic system. This autonomy facilitates a seamless flow of capital and information, making Hong Kong an ideal launchpad for international businesses seeking to access the vast Chinese market and beyond.

A Competitive Business Environment

One of the standout features of Hong Kong's business environment is its competitive tax structure. With profits tax capped at an attractive 16.5% and no capital gains or inheritance taxes, it's clear why entrepreneurs are flocking to the region. Coupled with its strategic location—offering direct access to half of the world's population within just five hours of flying—Hong Kong is swiftly becoming the logistics and aviation hub of the world.

2024 Policy Address: Strategies for Growth

The recent Policy Address from Hong Kong's government lays out a strategic vision aimed at bolstering its status as a premier international center for trade, finance, and shipping. Among the highlighted initiatives is a commitment to solidify Hong Kong’s position as a high-value-added supply chain service hub. Lam explained that the shifting global supply chain dynamics, particularly with the rise of the Global South and the Belt and Road initiative, are presenting unique opportunities for Hong Kong.

In an exciting move, the liquor duty for imported beverages exceeding HK$200 (about US$25.7) will be significantly reduced, further cementing Hong Kong’s reputation as a global leader in liquor trading. This adjustment follows the successful elimination of wine duties in 2008, which transformed the city into a key player in wine trade and auctions.

Leading Financial Hub of Asia

Hong Kong is poised to maintain its dominance as Asia's foremost international financial center, currently ranked third globally. It handles approximately 80% of global offshore RMB payments and boasts over RMB 1 trillion in offshore deposits. Looking ahead, initiatives to develop offshore RMB investment products and green finance will place Hong Kong at the forefront of sustainable investing in Asia.

In efforts to foster technological innovation, the Hong Kong Monetary Authority is collaborating with Thai financial authorities on Central Bank Digital Currency (CBDC) projects, promising to improve cross-border transaction efficiency. Such advancements will further enrich the fintech ecosystems of both Hong Kong and Thailand, promoting a synergistic relationship between the two.

Shipping and Sustainability: The Future Awaits

The Policy Address also reaffirms Hong Kong’s ambition to become a leader in maritime and shipping services. With tax incentives and an emphasis on value-added maritime services, Hong Kong aims to attract global maritime enterprises. As part of its strategy for developing a robust commodity trading ecosystem, the region is promoting itself as a hub for trading gold and non-ferrous metals.

In 2023, trade between Thailand and Hong Kong reached an impressive USD 19 billion, with Hong Kong emerging as one of Thailand’s top five foreign investors. The HKETO is dedicating its resources to further enhance these trade relations, stressing the importance of collaboration in maximizing opportunities stemming from regional initiatives such as the Belt and Road and the Greater Bay Area projects.

A Call to Action for Thai Businesses

Parson Lam emphasizes the need for Thai enterprises to engage with HKETO for tailored support, urging them to harness the burgeoning opportunities presented by Hong Kong’s business landscape. 'Together, we will explore innovative ways to enhance our economic ties and achieve mutual growth,' he proclaimed.

With a robust framework in place and a shared vision for the future, Hong Kong and Thailand are not merely maintaining their partnership but actively elevating it to new heights. Exciting times are ahead for businesses looking to thrive in this interconnected region!