In addition, the value of bilateral commodity trade between Hong Kong and ASEAN members has increased by 72 percent over the past decade. ASEAN is Hong Kong`s second-largest trading partner in raw materials. In 2016, trade in raw materials between ASEAN and Hong Kong reached $107 billion (HK$833 billion), while trade in services in 2015 was $15.4 billion (HK$121 billion). Hong Kong also provides access to the Pearl River Delta Metropolitan Area (PRD), an economic center in China, and with the signing of the framework agreement to deepen cooperation between Guangdong, Hong Kong and Macau in the development of the Bay Area in July 2017, regional cooperation will continue to grow. The focus is on increasing infrastructure connectivity, improving market integration, developing innovation hubs, building modern industries and intensifying international cooperation. The implementation of AHKFTA will enable Vietnam to further improve its network of competitive trade agreements. It will continue to help the economy move up the value chain, moving from exporting low-tech manufacturing products to exporting high-tech goods such as electronics, machinery, vehicles and medical devices. The free trade agreement will reduce tariffs imposed by ASEAN and improve Hong Kong`s overall competitiveness in the international market. The AHKFTA, in collaboration with the China-ASEAN FTA and the Mainland China-Hong Kong Hong Kong CEPA, will strengthen Hong Kong`s position as a hub for international trade and services. Hong Kong`s importance as an entity for trade between mainland China and Vietnam will continue to grow with the entry into force of the free trade agreement.
Re-exports of goods of ASEAN origin to China via Hong Kong have grown at an average annual rate of 6.4% since 2012. With regard to trade in goods under the free trade agreement, the Philippines will phase out and reduce tariffs on goods from Hong Kong. The Philippines` tariff commitments cover various types of Hong Kong products, including jewellery, clothing and clothing accessories, watches and toys, a spokesman for the Hong Kong Special Administrative Region government said. With the increasingly close economic and trade relations between China and Southeast Asia, Hong Kong plays an important role as a trade link between the two. For example, through its Closer Economic Partnership Agreement (CEPA) with mainland China, Hong Kong offers preferential market access to Hong Kong`s service suppliers as well as duty-free treatment for hong Kong-originating products in China. This has therefore created a close link connecting foreign companies (mainly asEAN companies) to China via Hong Kong. ASEAN Economic Ministers and the HKC Secretary for Trade and Economic Development signed the ASEAN-Hong Kong Free Trade Agreement (AHKFTA) and the ASEAN-Hong Kong Investment Agreement (AHKIA) on the sidelines of the 31st ASEAN Summit in Manila, Philippines. In terms of business travel, business travelers from Hong Kong can stay in an ASEAN country for 90 days. Currently, seven of the ASEAN member states allow hong Kong travelers to stay 14 to 30 days without a visa. A product subject to the Product Specific Rules (PSR) will be considered originating if it complies with these PSRs in accordance with Annex 3-2 (Product Specific Rules) of the AHKFTA Agreement. China`s heads of state and government and ASEAN (AMS) members signed the China-ASEAN Comprehensive Economic Cooperation Framework Agreement at the sixth China-ASEAN Summit in November 2002.
In November 2004, Chinese Premier Wen Jiabao and AMS leaders witnessed the signing of the China-ASEAN Trade Agreement on Trade in Goods, which entered into force in July 2005. In January 2007, both sides signed the Agreement on Trade in Services, which entered into force in July 2007. In August 2009, both sides signed the investment agreement. The establishment of the China-ASEAN Free Trade Area strengthens the close economic and trade relations between the two sides and also contributes to the economic development of Asia and the world as a whole. Among the various member states, Singapore, Thailand and Vietnam are Hong Kong`s main trading partners, accounting for 38.8%, 15.7% and 15.2% of Hong Kong`s total goods trade with the region respectively. ASEAN members have a combined population of over 650 million. Indonesia accounts for more than 40 percent of the region`s population and its population has expressed the greatest opposition to the deal. [17] [13] With regard to trade in services, Hong Kong`s service providers will benefit from better business opportunities and greater legal market access certainty for a wide range of services sectors in the Philippines under the FTA.
Hong Kong is one of the most open economies in the world, and with its liberal tariff regime, the free trade agreement aims to increase the flow of goods and services from Hong Kong to ASEAN countries. With better access to Hong Kong`s trade network, its proximity to mainland China and China`s Belt and Road Initiative, foreign and domestic companies should prepare to take full advantage of the free trade agreement. China first proposed the idea of a free trade area in November 2000. The heads of state and government of ASEAN and China therefore decided to consider economic integration measures in the region[1][2] In Brunei the following year, they approved the establishment of an ASEAN-China Free Trade Area. [3] Due to HKC`s unique economic status, there is also an ASEAN-Hong Kong Autonomous Investment Agreement (AHKIA) alongside the AHKFTA Main Convention, in which the Parties grant investments fair and equitable treatment, as well as full protection and security. In 2018, ASEAN is Hong Kong`s second largest trading partner in merchandise trade and fourth in services trade. Hong Kong`s total exports to ASEAN rose 7.3 percent year-on-year to $2.8 billion, while imports totaled $73 billion, up 20.1 percent year-on-year. With China being ASEAN`s largest trading partner since 2009, trade is expected to continue to grow as Hong Kong increasingly handles re-export trade. In terms of trade restrictions, Hong Kong and ASEAN countries will remove barriers to the participation of foreign capital and the number of foreign workers employed. Foreign companies can benefit significantly from the AHKFTA as the agreement will extend Hong Kong`s network to all major Southeast Asian economies. Since all ASEAN member states are also economies along China`s Belt and Road Initiative (BRI), the closer ties between Hong Kong and ASEAN will help foreign companies take advantage of the business opportunities offered by the BRI.
On January 1, 2010, the average tariff rate on Chinese products sold in ASEAN countries increased from 12.8 percent to 0.6 percent until other ASEAN members implemented the free trade area. Meanwhile, the average tariff rate on ASEAN products sold in China rose from 9.8% to 0.1%. [13] In 2015, ASEAN`s total trade in goods with China reached $346.5 billion (15.2% of ASEAN trade), and ACFTA accelerated the growth of China`s direct investment and trade cooperation. [6] Among ASEAN member states, Thailand, Singapore and Vietnam were Hong Kong`s top three trading partners in 2018, with $13.4 billion, $12.3 billion and $10.7 billion of Hong Kong`s total exports with ASEAN, respectively. Investment Agreement Parallel Agreement with Brunei Darussalam, Malaysia and Singapore Parallel Agreement with Singapore Hong Kong is one of the freest and most open economies in the world. However, the tariffs imposed by ASEAN on Hong Kong products put Hong Kong at a serious disadvantage in terms of trade relations with Southeast Asian countries. The newly signed AHKFTA aims to change that. On the 12th. In November 2017, the Association of Southeast Asian Nations (ASEAN) and the Hong Kong Special Administrative Region (SAR) of China signed a free trade and investment pact aimed at strengthening economic cooperation between the two regions and boosting economic development.
The two ASEAN-Hong Kong agreements, the Free Trade Agreement with China (AHKFTA) and the ASEAN-Hong Kong Investment Agreement (AHKIA), were signed at the 31st ASEAN Summit in Manila and will enter into force on 1 January 2019. The free trade agreement lowered tariffs to zero on 7,881 product categories, or 90% of imported goods. [15] This reduction entered into force in China and the top six ASEAN members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The other four countries are expected to follow suit in 2015. [16] For more information on AHKFTA, please contact the following representatives: The ASEAN-China Free Trade Area (ACFTA) is a free trade area between the ten member states of the Association of Southeast Asian Nations (ASEAN) and the People`s Republic of China. Hong Kong has a distinct advantage in the Asia-Pacific region in terms of unique location and close ties to international markets as well as mainland China. Although Hong Kong is part of China, it conducts its economic and trade relations separately from the mainland and serves as a bridge between mainland China and Southeast Asia. On the other hand, re-exports of mainland Chinese origin to ASEAN via Hong Kong have increased at an average annual rate of 3.7% since 2012. Vietnam was Hong Kong`s sixth largest export destination in 2018, with 60% of re-exports from mainland China. .
