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|Vietnam is expected to gain the most from the AHKFTA, Photo: Le Toan|
Edward Yau, secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region Government, told VIR that among ASEAN countries, Vietnam is expected to gain the most from the ASEAN-Hong Kong Free Trade Agreement (AHKFTA), as the country is Hong Kong’s fourth-largest trading partner within ASEAN.
Yau led a high-level Hong Kong business delegation which came to Vietnam last week to explore opportunities for more trade and investment in Vietnam.
According to Yau, there are many attractive infrastructure developments in Vietnam, including railway, port, highway, and city construction. These projects require professional services, including funding, business consultancy, architecture, and engineering, which have reached a high level of development in Hong Kong.
“Hong Kong can be a professional service provider as well as a financial trading hub for Vietnam,” Yau said.
The businesses and startups that use Hong Kong as a home base to serve the whole region are also interested in the Vietnamese market.
Margaret Fong, executive director of the Hong Kong Trade Development Council, said that Hong Kong-based companies have been investing in Vietnam for many years, some for over half a century, mainly in the manufacturing and real estate sectors. She expected that this trend will continue into the future in anticipation of the AHKFTA.
A new sector for Hong Kong investment will be the financial technology (fintech) industry, which is attracting new companies to Vietnam. Another type of technology which has seen good development in Hong Kong is biotech, which is also an area of interest for Vietnam.
Hong Kong is home to many companies specialised in branding, marketing, e-commerce, and e-logistics. With extensive expertise, these companies are looking to go international and Vietnam is emerging as a market with great potential for them. On top of that, Hong Kong can provide professional services such as legal, accounting, and business consultancy services to serve the country’s fast-paced development, according to Fong.
The AHKFTA is expected to boost and facilitate trade and investment between Hong Kong, the Chinese mainland, and ASEAN economies. The agreement will reduce the customs duties imposed by ASEAN and improve Hong Kong’s overall competitiveness in the international market.
ASEAN was already Hong Kong’s second-largest trading partner in merchandise trade in 2016 and the fourth-largest in service trade in 2015. As the sixth-largest economy of ASEAN, Vietnam is set to become a close economic partner of Hong Kong.
Indeed, Vietnam and Hong Kong enjoy strong bilateral business ties. In the first seven months of 2017, foreign direct investment (FDI) from Hong Kong to Vietnam reached $600 million, which made Hong Kong the fifth-largest source of FDI for Vietnam. FDI from Hong Kong to Vietnam more than doubled between 2012 and 2016, from $373 million in 2012 to $848 million in 2016.