Dr Charles YEUNG (Chairman of the 48th, 49th terms of office) January 2016
China’s “13th-Five-year” Plan will fully drive the economic structure towards upgrading and transforming into the service industry direction. The strategic development of “One Belt and One Road” will also further generate momentum to the vast demand for trade in services in the region.
Hong Kong’s market was steady over the last year. It has overcome a string of challenges and difficulties amidst a fluctuating global economy and a slowdown in the Mainland’s economy. As we face the recent volatility of the international financial market and interest rate hike, downward pressure on economic growth for the next year is expected. With the Competition Ordinance coming into effect, and potential policy reform areas such as standard working hours and MPF offsetting arrangements, business operating costs and the business environment shall expect significant impact in the long run. The business sector must make early preparation for the new year in response to the changes in the external economic environment and the local business atmosphere. Fortunately, there are a number of positive factors that could provide ample room for growth for Hong Kong companies and the local economy. These include the planning of the “13th-Five-year” Plan, the full implementation of the “One Belt and One Road” strategy, and the continually deepening liberalization of the service trade between the Mainland and Hong Kong.
Balancing the interests of the businesses and the society
Competition Ordinance came into full effect in December 2015. We believe that the Ordinance would not only effectively safeguard fair competition and maintain Hong Kong’s edge as a free market, but also provides companies with a better business environment and a more comprehensive system to protect their operation. Consumers will also benefit from the Ordinance. Now that the law is in effect, the authorities must assess its impact on Hong Kong’s economic development from time to time. The focus of the implementation, in particular, should be on effectively regulating any monopolizing behavior of sizeable corporations. To relieve the doubts of the business sector, and to ensure that companies do not violate the law by mistake, the authorities should augment its promotion efforts, so that the companies and the public become more informed and educated of the Competition Ordinance. By doing so, positive competition can be promoted to drive the stable and continuous development of Hong Kong’s economy and society.
At present, there are different views regarding standard working hours. We think that implementing standard working hours will produce strong ripples in the employment market, as it will create an extremely large burden on the operation costs and manpower arrangement for companies. We agree that the contractual working hours and overtime arrangements and compensation should be stipulated clearly in the employment contract. By providing the necessary protection for employees and by giving both the employers and employees the room and flexibility to negotiate, this would be a more flexible approach than standard working hours.
We are also concerned about the suggestion from different sectors of the society to cancel the MPF offsetting arrangements. The cancellation would on one hand increase operation costs, and on the other, weaken business competitiveness, which will affect the overall business environment of Hong Kong. Before the arrangement is hastily rolled out, the SAR government must conduct a thorough assessment, especially on the impact on small and medium enterprises. We hope that the authorities could conduct a comprehensive review and integrate MPF, severance pay and long service pay, instead of unilaterally changing the MPF offsetting arrangements. This would help provide more effective retirement protection for employees.
Deepening Mainland-Hong Kong cooperation in the service trades
Besides actively responding to the changes in the local business environment, companies must also pay close attention to the latest economic situation and development of China, and how these create different opportunities for Hong Kong. Earlier on, the Ministry of Commerce and the SAR government signed a new Agreement on Trade in Services under the CEPA framework, further opening up the scope of the service industry by covering all over the Mainland. The move serves as an important foundation to deepen the collaboration of the service trades of both sides.
Both the depth and breadth of the new agreement have exceeded previous CEPA measures. The new arrangement offers Hong Kong service operators with national treatment, so that Hong Kong service companies and professionals can enjoy equal market standing, which would help Hong Kong merchants to resolve difficulties they encountered in expanding into the Mainland market. In addition, the implementation of the negative list management and reducing the restrictive measures in the list can effectively shorten the time required for project approval, as well as simplify the approval process, which in turn, could significantly improve the efficiency of service trade collaboration.
We are confident that China’s “13th-Five-year” Plan will fully drive the economic structure towards upgrading and transforming into the service industry direction. The strategic development of “One Belt and One Road” will also further generate momentum to the vast demand for trade in services in the region. We will help our members and the Hong Kong businesses to leverage on the competitive advantages of the SAR in the fields of finance and professional services, etc., so as to fully exploit the business opportunities in the service industry of the Mainland; to strengthen the exchange and connection between the service trades of both sides; to boost each other’s competitiveness and developmental potentials; and to work together to create a bigger scope for international growth for the service industry of both China and Hong Kong.
