HK continues to play pivotal role between ASEAN and China

Geographically, Hong Kong is in the vicinity of south eastern Asia, and has been the gateway for tourists and commodities into the Chinese mainland over the past 170 years.

It is the bridging role of Hong Kong between the Chinese mainland and the rest of the world that makes it one of the world's leading trade hub. With China's participation into ASEAN+3 dialogue, Hong Kong's position as the "pivot" for the chunk of countries becomes more crucial.

According to the Hong Kong Trade Development Council, the international marketing body for Hong Kong-based traders, the territory's total trade with ASEAN in 2012 was 94.1 billion U.S. dollars, up by 0.5 percent year on year, and 43 percent from 2009.

Dickson Ho, the Council's principal economist of Asian and emerging markets, told Xinhua in a recent interview that the growth rate of trade activities of Hong Kong with ASEAN has been faster than that with many other parts of the world. So far, ASEAN is the second biggest trading partner of the city, just behind the Chinese mainland.

PRODUCTS TRADED

According to estimates, there are more than 130 million middle-class persons based in ASEAN member states. With a reasonable amount of discretionary income as their counterparts in other parts of the world, they are keen to splash on consumer goods, many of which are fashionable items. Thanks to the trend, in 2012, Hong Kong exported consumer goods with a total value of 6.44 billion U.S. dollars to ASEAN countries, up by 3 percent and 20 percent compared to 2011 and 2010 respectively.

Not surprisingly, Ho said, clothing and accessories are one of the key contributors of the city's trade with ASEAN. Hong Kong's total exports of clothing and clothing accessories to the bloc in 2012 were 753 million U.S. dollars, up by 1.5 percent compared to 2011.

But Ho added that it is electronic products that top the list in the amount of Hong Kong's traded products. Hong Kong's total export value of electronics products to ASEAN in 2012 was 15.32 billion U.S. dollars, an increase of 3.7 percent compared to 2011. Hong Kong's imports of electronics products from ASEAN in 2012 were 44.526 billion U.S. dollars, gaining 0.5 percent year on year.

DESTINATIONS

While Hong Kong is closely connected to many ASEAN countries, Ho said Singapore and Vietnam are now the top two markets of Hong Kong exports in ASEAN.

Singapore is the eighth largest export market for Hong Kong in the world. In 2012, Hong Kong's total exports to and imports from Singapore were about 7.17 billion U.S. dollars and 31.5 billion U. S. dollars respectively.

Although both figures contracted by 0.5 percent and 3.2 percent year on year respectively, Singapore remains Hong Kong's biggest trade partner amongst ASEAN countries. Major traded items, Ho said, are electronic parts and components. In 2012, Hong Kong's exports and imports of such products to Singapore were about 4 billion U.S. dollars and 22 billion U.S. dollars respectively.

As Hong Kong's second biggest trade partner in ASEAN, Vietnam imported about 6.5 billion U.S. dollars of goods from Hong Kong, and exported 4.7 billion U.S. dollars of goods to the city in 2012. Major traded items are meat and edible meat offal, telecom equipment and parts, rotating electric plant and parts, electrical apparatus for electrical circuits and so on.

Not only is Vietnam a rising star in international trade, Ho said it has also become increasingly attractive as a production base, in particular for Japanese companies, many of which have adopted a "China-plus-one" strategy.

Ho said China has always been the first choice to set up manufacturing base by foreign manufacturers. But given the surging costs of production in the "World's Factory," part of the operation processes, mainly the low-end, labor-intensive ones, would be shifted to one of its neighboring countries with lower costs of production. Vietnam is a popular pick as the "plus-one" among foreign manufacturers. "It is because Vietnam is easily accessible, including by land from Guangdong Province," said Ho.