Closer US trading ties with global economy gathering pace

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Melissa Ng / David Hsieh at 212-752-3320
Daniel McAtee at 202-238-6360
Wing Yan Tong at 415-835-9315

 

February 11, 2011 -Hong Kong will serve as a lucrative end market for United States’ businesses and a valuable gateway to the Mainland China market with the strengthening of the global economy, Hong Kong Commissioner for Economic and Trade Affairs, USA, Mr Donald Tong, said today (February 8, New York Time).

Speaking at a spring reception attended by about 400 guests in New York, Mr Tong said there were many investment opportunities in store. A pilot program allowing HK and foreign companies to settle cross-border trade transactions in Renminbi (RMB) with eligible enterprises on the Mainland in Hong Kong has been launched.

Calling on US companies to consider taking advantage of this, Mr Tong said, "It would help offset the risks of exchange rate fluctuations and give more certainty to business transactions."

Hong Kong was also the only offshore jurisdiction to offer a RMB bond market with the introduction of RMB denominated bonds, or “dim sum bonds”, he added.

In the past year, Hong Kong saw increased activities in the RMB bond market. McDonald’s became the first foreign non-financial company to issue RMB bonds in HK last August. This was followed by other overseas companies and international organizations like Caterpillar, the World Bank, and the Asian Development Bank.

"The introduction of ‘dim sum bonds’ and other RMB banking services and financial products presents a unique opportunity for our American partners and for Hong Kong as we position the city as China’s global financial center," he noted.

On the development of Hong Kong as an international capital formation center, Mr Tong said HK led the world in IPO funds, raising a total of US$31 billion in 2009. Even more IPO funds were raised in 2010 – around US$57 billion. AIG’s Asia operations, AIA, alone raised around US$20 billion last year.

The growth on wine trade was equally spectacular. In the first half of 2010-11, global wine exports into Hong Kong amounted to US$420 million – a 70 percent increase over the same period the year before.

Hong Kong also recently became one of the two largest fine wine auction centers in the world (the other being New York). The auction sales in Hong Kong, many undertaken by New York-based wine auction houses, exceeded US$250 million in the past three years.

He foresaw brisk and vigorous business after the US and Hong Kong signed a Memorandum of Understanding on Cooperation to promote US wines in Hong Kong and via Hong Kong into Mainland and Asian markets.

The ranking as the world's freest economy by the Heritage Foundation and the Wall Street Journal for the 17th consecutive year also underpinned Hong Kong's strengths under the "One Country, Two Systems" and its business-friendly environment, that is, among others, its adherence to free market principles and the rule of law, Mr Tong said.

The US-Hong Kong business ties could not have been closer: Hong Kong is the 13th largest export destination for the US, while the US is our second largest trading partner and has over 1,200 companies in the territory which is the single largest source of overseas companies. New York exported nearly US$3 billion worth of goods to Hong Kong, making the city its 5th largest export destination.

Organized by the Hong Kong Economic and Trade Office, New York, the spring reception was attended by about 400 distinguished guests from various circles - trade and commerce, investment banking, tourism, etc. to usher in the Year of the Rabbit. There will be three more spring receptions in Chicago, Atlanta and Boston in the coming weeks.

Ends/ Tuesday, February 8, 2011