Chen Maobo: The reshaping of trade patterns will bring new opportunities for the development of trade, shipping, finance, and professional services in Hong Kong.

On August 17, Hong Kong Financial Secretary Paul Chan Mo-po wrote in his blog that against the backdrop of geopolitical tensions and trade wars reshaping the international trade landscape and supply chain layout, Hong Kong, as a transshipment port for goods, has seen double-digit percentage growth in commodity trade in recent months. This reflects, on one hand, some exporters rushing to ship goods ahead of the temporary ceasefire in the trade war. On the other hand, it also reflects the changing international trade landscape, especially the opportunities brought about by deepening regional trade cooperation. For example, in the first half of this year, Hong Kong's overall merchandise exports to Vietnam and Malaysia increased by over fifty percent and thirty percent respectively, while the value of goods imported from these two places also increased by around seventy percent and thirty percent respectively. In fact, the Association of Southeast Asian Nations (ASEAN), Hong Kong's second-largest trading partner, saw its share of Hong Kong's total trade increase from 12.1% in 2021 to 14.8% in the first half of this year. The integration of supply chains and the reshaping of trade forms will bring new development opportunities for Hong Kong in trade, shipping, finance, and professional services. For example, commodities, especially non-ferrous metals, play a crucial role in the industrial and industrial development of various countries worldwide and support half of global shipping volume. China, as a global leading industrial nation and a major consumer and producer of non-ferrous metals, holds an important position in the global metal industry chain. In the current geopolitical situation, enhancing the stability and resilience of national and regional supply of non-ferrous metals is of strategic significance. Paul Chan Mo-po continued that from the reshaping and integration of the international trade landscape to the accelerated establishment and deepening development of multinational supply chain management centers, we are actively responding to the evolving international market. In this process, the roles and advantages of Hong Kong as a "super connector" and "super value-added person" are becoming more apparent. As long as we continue to explore new business areas and growth points, continue to leverage our strengths and serve the needs of the country, we will be able to pave a broader path for the sustainable development of the Hong Kong economy. The original text is as follows: New Opportunities in the Reshaped Regional Trade Landscape The international geopolitical situation continues to evolve, with market watchfulness for changes following the meeting of the leaders of the United States and Russia. At the same time, US tariff measures will continue to suppress global trade performance, and the uncertainty of tariff policies may also affect corporate confidence, investment, and supply chains. Although the macro situation and technological changes have brought enormous challenges and uncertainties to the economic outlook, they also present enormous opportunities. If we can seize the opportunity, the tension between the traditional and emerging models during the transformation of the Hong Kong economy can be transformed into a driving force for promoting economic upgrade transformation, creating new growth points for Hong Kong. Taking export trade as an example, against the backdrop of the reshaping of the international trade landscape and supply chain layout due to geopolitical tensions and trade wars, Hong Kong, as a transshipment port for goods, has seen double-digit percentage growth in commodity trade in recent months. On the one hand, this undoubtedly reflects some exporters rushing to ship goods ahead of the temporary ceasefire in the trade war. On the other hand, it also reflects the changing international trade landscape, especially the opportunities brought about by deepening regional trade cooperation. For example, in the first half of this year, Hong Kong's overall merchandise exports to Vietnam and Malaysia increased by over fifty percent and thirty percent respectively, while the value of goods imported from these two places also increased by around seventy percent and thirty percent respectively. In fact, the Association of Southeast Asian Nations (ASEAN), Hong Kong's second-largest trading partner, saw its share of Hong Kong's total trade increase from 12.1% in 2021 to 14.8% in the first half of this year. The integration of supply chains and the reshaping of trade forms will bring new development opportunities for Hong Kong in trade, shipping, finance, and professional services. For example, commodities, especially non-ferrous metals, play a crucial role in the industrial and industrial development of various countries worldwide and support half of global shipping volume. China, as a global leading industrial nation and a major consumer and producer of non-ferrous metals, holds an important position in the global metal industry chain. In the current geopolitical situation, enhancing the stability and resilience of national and regional supply of non-ferrous metals is of strategic significance. Last year's Policy Address proposed the construction of a "commodity trading ecosystem," and relevant work is steadily progressing. Earlier this year, Hong Kong successfully joined the London Metal Exchange (LME) global warehouse and delivery network, bringing the most active metal trading market in the world and China closer together, which is a significant milestone. The establishment of LME-recognized warehouses in Hong Kong helps improve the efficiency of non-ferrous metal allocation, reduce the time and cost of related logistics, and also contribute to the stable supply of key metal resources within the region. This taps well into the advantages of Hong Kong under the "one country, two systems" framework, such as an international free port with zero tariffs, efficient customs clearance, a smooth logistics network connecting globally, and more. On the other hand, trading and delivery activities of commodities in Hong Kong not only increase the demand for relevant shipping services but also drive the development of trade finance, insurance, risk management, hedging, and derivative instruments in the financial services sector. In the long run, we will create more favorable conditions to promote more commodity trading priced and settled in Renminbi, adding new momentum to the development of Hong Kong's offshore Renminbi business and making a more positive contribution to the prudent promotion of Renminbi internationalization. In fact, since Hong Kong became an LME licensed delivery location in January this year, all eight approved warehouses have been put into operation in just seven months; by early August, there were over 8,000 tons of LME registered warehouse receipts, supporting the delivery of LME contracts. The Special Administrative Region Government has also established a dedicated task force to review various aspects related to gold financial transactions and promote Hong Kong as an international gold trading center, including supporting physical gold delivery, with relevant plans expected to be announced within the year. Another area we are actively promoting is the establishment of multinational supply chain management centers. With the reshaping and integration of global supply chains and trade, combined with the upgrading and transformation of mainland industries as well as the development strategy of high-level two-way opening of the country, a large number of mainland enterprises are accelerating their "going global," including deploying industrial and supply chains in the "global south" and "Belt and Road" regions. For these "going global" enterprises, Hong Kong's international capital convergence and free flow, vibrant financial services and full chain, efficient global airport and port connections, trade networks bringing together global suppliers and buyers, as well as professional forces familiar with international business, are highly attractive, making Hong Kong the preferred platform for setting up overseas financial centers and multinational supply chain management centers. To better leverage this platform function, the Invest Hong Kong and Hong Kong Trade Development Council have jointly established a high-value supply chain service mechanism to provide one-stop advisory services for enterprises intending to "go global" through Hong Kong. The Hong Kong Productivity Council, the Hong Kong Export Credit Insurance Corporation, and other agencies are actively involved in this effort. For example, many excellent mainland science and technology innovative enterprises often face multiple challenges such as technical standards docking, product localization, and intellectual property protection when expanding into overseas markets. Recognizing this, the Hong Kong Productivity Council established "The Cradle Go Global Service Center" in collaboration with mainland innovation and technology organizations in April this year, providing research and development support, application and technology assessment, as well as professional advice on overseas regulations for mainland enterprises "going global" and setting up offices in Hong Kong. From the reshaping and integration of the international trade landscape to the accelerated establishment and deepened development of multinational supply chain management centers, we are actively responding to the evolution of the international market. In this process, the roles and advantages of Hong Kong as a "super connector" and "super value-added person" are becoming more apparent. As long as we continue to explore new business areas and growth points, continue to leverage our strengths and serve the needs of the country, we will be able to pave a broader path for the sustainable development of the Hong Kong economy.