Business in HK to remain as usual after handover

JAKARTA (JP): Hong Kong's secretary for trade and industry, Denise C.Y. Yue, assured Indonesia's business community yesterday that Hong Kong's economic regime would be unchanged after the colony was transferred to China.

Yue said businesspeople and investors should not feel reluctant to continue operating there after China takes over on July 1.

"It is business as usual in the area of trade and investment ... 1997 should not be considered a factor when making business decisions," she said after speaking at a seminar on implications for business in Hong Kong under Chinese rule.

She said that under the "one country-two systems" concept, Hong Kong would continue as a capitalist economy and an international business center.

"Hong Kong will continue operating under the rule of law, with its cosmopolitan life unchanged for 50 years beyond 1997," she said.

Yue said the 50-year period would effect business decisions.

"Business people usually think in the framework of between two and 20 years," she said. Those wanting to invest in major industrial projects consider a 15 to 20 year span, while those engaged in manufacturing and trading have a time horizon of only 12 to 36 months, she said.

She said investments had continued to enter Hong Kong in the past couple of years and was likely to continue after July 1.

"As far as outward investment from Hong Kong is concerned, that has been continuing and we predict it will continue to happen," she said.

According to the latest report published by the United Nations Conference on Trade and Development (UNCTAD) Hong Kong was the world's fourth largest provider of foreign investment after the United States, Britain and France.

"The reason for this is that about 50 million overseas Chinese are using Hong Kong as the conduit for their investment in other places," she said.

Yue said that despite the optimism, Hong Kong people realized there were many problems to resolve with mainland China.

"But the people of Hong Kong are very used to dealing with adversities ... They have been known to turn adversities into opportunities," she said.

"We are optimistic with good reasons but we do not underestimate the difficulties that we still have to resolve with mainland China. But we have been dealing with mainland China for the last 13 years of transition, so we have also developed a much better knowledge of the systems in mainland China and of managing our relationship with them," she said.

Yue said Hong Kong's government reserves and taxes would remain in Hong Kong and be used in and by the colony.

Thus there was no question of Hong Kong taxes and government reserves being used in mainland China.

After July 1, Hong Kong would continue to maintain a level playing field for all business entities there, she said.

"We are, in Hong Kong, nationality blind. All companies that are registered in Hong Kong under the laws of Hong Kong are treated in exactly the same way," Yue said.

The chairman of the Indonesian Chamber of Commerce and Industry, Aburizal Bakrie, said yesterday the main concern of Indonesia's business community was not on the integration of China and Hong Kong, but whether or not it would be followed by change.

"We might worry if the integration means investments from Hong Kong would decline, or if trade relations would be disrupted or if doing business in Hong Kong would become difficult," he said.

Bachrum Harahap, an assistant to the Coordinating Minister for Production and Distribution, said that in the last 30 years Hong Kong companies invested in 360 projects worth US$18.6 billion in Indonesia.

Hong Kong is the third largest foreign investor in Indonesia after Japan and the United Kingdom. (pwn)