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China's Entry into the WTO and the Impact on Hong Kong's Investment Sector

18 January 2000

What HK Business Can Do

Foreign Direct Investment

• Not assume an assured protective barrier

• Reposition and revise business strategies to fit in the new competitive environment

  - interim period: 3 to 5 years

• Identify sectors which are not currently prioritized by other countries

- e.g. the film industry, travel related industry

Portfolio Investment

• Be prepared for structural changes

- today's springboard and logistics hub for multinationals may not be for tomorrow

- interim period: 5 to 10 years

• Identify niche areas to remain competitive

- possible area: online securities trading

- jointly develop online trading with Chinese counterparts

Enhance Dialogue

• Clarify HK status vis-a-vis the Mainland

- e.g. in the area of dispute settlement

• Negotiate for market access for HK investors and service providers

- e.g. help HK brokerage houses in the award of licenses

• Help convince the Mainland to relax its stock listings procedures

• Push for a more transparent investment policy and tax regime

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