Hong Kong and China Edit
The autonomous region of Hong Kong in the southeastern region of China plans to also take part in the One Belt One Road project. As one of China's most major financial center, Hong Kong will be a vital capital center and service provider for the project.Though the entirety of Hong Kong's public benefits is not clear, there is a great possibility in reaping from infrastructure and strengthening their ties with Mainland China.
Hong Kong is experienced and internationally connected with a special combination of investors, intermediaries, partners, and project owners worldwide to take advantage of One Belt One Road Opportunities. They have such close proximity to Mainland China and connectivity to the rest of Asia that makes it the perfect fit for one of China's major partners in the project.
In an interview with Voice Of America this week, Regina Ip, legislator and chair of the Beijing friendly New People’s Party, said Hong Kong’s ties to mainland China and it’s neighbors make it an ideal gateway for the Silk Road strategy. Being an international financial center with strong networks with China and the world, Hong Kong is in the ideal position to manage investment projections and act as a connector between investment investors, projects, and service providers. They have the expertise in infrastructure development and fundraising/financing capabilities to help build a bridge between Mainland China and the other One Belt One Road Countries, as well to the rest of the world. This will enable efficient and smooth flow of goods, capital and services and allo Hong Kong to play as a connector for the countries in the initiative.
Providing Services For The Project
Hong Kong has a plethora of professionals in the fields of banking, accountancy, law, insurance, property valuation, infrastructure development, and construction, project, management, engineering technology, and telecommunications. They also have world-class experience in the areas of law, management and accounting consultancy through both local and international firms. Being by far the most popular offshore center for seeking professional services, Hong Kong is providing some 50% of professional services related to One Belt One Road businesses. These professionals advise on tax, legal risk, and assist in dispute resolution, especially in the area of arbitration. The Big Four accounting firms(Deloitte, PricewaterhouseCoopers, Ernst & Young, and KPMG) and the largest law firms all have a presence in Hong Kong and China. The local firms also have a wide range of experience in raising capital for Chinese and other Asian companies and infrastructure finance. Because of Hong Kong’s extensive involvement in operating and investing in Asia, they can thus offer all the necessary professional services for investments under One Belt One road.
Hong Kong will be playing a lead role in the fundraising that will be required for One Belt One Road. It has a vibrant capital market offering diversified fund raising channels and the world's most services-oriented economy with services accounting for more than 90% of GDP(Gross Domestic Product. Being a lead role in assisting companies investing in the One Belt One Road infrastructure projects will consolidate Hong Kong’s position as Asia’s leading financial center and as the primary gateway for funds to flow into China and the rest of the world.In July 2016 the Hong Kong Monetary Authority(HKMA) established the Infrastructure Financing Facilitation Office (IFFO). The IFFO provides a platform that enables interested partners to collaborate in identifying and working on infrastructure investment and other financing opportunities. It also includes promoting the advantages of Hong Kong as an infrastructure center. In December 2016, the HKMA signed a Memoranda of Understanding with The Export-Import Bank of China and the China Development Bank Corporation establishing a calculated framework for cooperation on facilitating the financing of infrastructure projects on the IFFO platform. As of the 28th of December 2016, the IFFO already had more than 50 partners, including public sector investors, private sector investors, development banks, and professional service providers.Due to a downturn in international shipping, Hong Kong's crucial shipping trade is hoping China's New Silk Road and closer business ties with Iran will reverse the recent downturn in commerce.
The global container sector as of recent years is struggling with a lack of ships as well a faltering global economy and decreased consumer demand. Jenny Koo with the Hong Kong Trade Development Council (HKTDC) stated, "You have a lot of building materials that will need to be transported. That will have demand for shipping". With trading and logistics accounting for 23 percent of Hong Kong's gross domestic product global container throughput through Hong Kong was estimated to grow this year by 4.1 percent and intra-Asia trade by 4.4 percent. At the moment more shipping trade with Middle Eastern countries including Iran after international sanctions on Tehran were lifted earlier this year are expected to expand.
"The early stage that the program is at, its massive propaganda campaign, and probably its slogan-like name, have raised doubts in Hong Kong and internationally about whether the ‘One Belt One Road’ is a credible strategy with real potential for the region.
Alan Leong Kah-kit, leader of Hong Kong’s Civic Party, referred to it as “an abstract Shangri-La,” pointing out that Leung cannot tout Hong Kong’s potential gains from it when himself isn’t sure that the project will ever materialize." Meaning that all the gains that Hong Kong might get and provide could never even occur due to uncertainty surrounding the globalizing project altogether, but if it all goes through Hong Kong as an international city will profit greatly as previously stated.
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Saul, Jonathan. "Hong Kong Eyes Shipping Boost from China's New Silk Road, Iran."Reuters. Thomson Reuters, 10 June 2016. Web. 24 May 2017
Hui, Peg Yoc. "Hong Kong's Leader Sidesteps Politics To Focus On Beijing's Silk Road." Forbes. Forbes Magazine, 26 Jan. 2016. Web. 23 May 2017