Hong Kong nearly trebles trade list with Asean

Hong Kong has nearly trebled the number of product categories covered under its free trade agreement with the Association of South Eastern Nations.

Secretary for Commerce and Economic Development Algernon Yau Ying-wah yesterday signed a protocol boosting the number of product categories covered under the FTA from more than 200 to almost 600.

The categories enjoying preferential tariff treatment now include jewelry, medicines, food and textiles.

The enhanced list will further drive growth in Hong Kong's economic and trade relations with the Asean states, said Yau.

The signing came as a new report showed that about 85 percent of companies in the Greater Bay Area will maintain or grow their sales in the 10-member Asean in the next three years. Asean is Hong Kong's second-largest trading partner in merchandise trade.

Since the signing of the FTA in 2017, trade with Asean has grown more than 38 percent to HK$1.29 trillion in 2022.

Malaysia, Singapore, Thailand, and Vietnam are key target markets to generate sales for GBA businesses, while Vietnam remains the top choice for procurement and production outsourcing, according to a report from the Hong Kong Trade Development Council and Singapore-based United Overseas Bank.

Malaysia's popularity across GBA companies fared much better compared to a similar survey in 2021, it noted.

For the latest report, 671 companies in the GBA were interviewed in the third quarter of last year.

In terms of challenges, GBA businesses regarded navigating local policies and regulations (48.6 percent) as the main challenge, followed by cultural or language barriers (38.7 percent) and difficulties in sourcing employees with required expertise (26.4 percent).

This differs from the 2021 survey, which identified inadequate infrastructure, difficulties in finding the right local partners, and the increasing cost of doing business as the top three challenges.

caroline.zheng@singtaonewscorp.com