Hong Kong has an essential role to play in easing China's transition into the World Trade Organisation (WTO) and in developing the western region of the country, government officials and China experts said at the Chamber's China Business Conference 2000.

China's WTO accession will also affect Hong Kong, but its impact is expected to be generally positive, Jiang Enzhu (left), director, Liaison Office of the Central People's Government in the HKSAR said in his opening remarks at the conference on Dec. 14.

He pointed out that many studies on the impact of China's WTO accession reconfirm that the Mainland's entry into the world trade body will only strengthen Hong Kong's role as a financial, trade and maritime hub.

"Some people think that with China's accession to the WTO, Hong Kong's role will be weakened. I think that is a misunderstanding," he said. "With our economic reforms, Hong Kong still has an irreplaceable role to play."

President of the U.S.-China Business Council Bob Kapp (right), a speaker at the con-ference, was equally optimistic: "It is beyond doubt to me that Hong Kong is destined to continue to play an absolutely critical role, not only for its own citizens, but also for the entire citizenry of the People Republic of China in its relations to the world."

China's entry into the WTO and the development of the western region are expected to accelerate ongoing reforms in the country and spur demand for professional services which Hong Kong excels in.

Investment opportunities are also expected to mushroom. But Mr Kapp pointed out that the question for opportunities for investment in China after entering the WTO, in the final analysis, depends on how China is able to implement and carry forward the terms with which it joins the WTO. While once limited mainly to financial, telecommunications and tourism industries, Mr Jiang said other sectors will be much more open to investment than in the past.

The fact that China is walking willingly ?though with difficulty ?into a whole new set of economic and commercial agreements with the world which will have to be carried out should be commended, Mr Kapp said.

"The agreements of investment will rely on China's fulfilment and implementation of those things that it subscribes to," he said.

"Hong Kong has a critical role to play in assisting the PRC in coming to the terms with the full implications of the WTO demands, requirements, and opportunities and helping their colleagues in China to adjust patterns of behaviour, adjust business methods, accounting systems and so forth."

Intermediary role
Hong Kong's role as intermediary between China and the rest of the world will also be enhanced as the western development plan picks up steam. Forecasts predict China's exports will reach US$455 billion upon accession to the WTO, and further opening up of its markets will only accelerate exports and trade channels. Hong Kong, as a whole, will benefit from this overall growth in trade, Mr Jiang said.

The long-term development of the programme relies on China developing its global markets as well as its domestic markets, and Hong Kong lies in the middle of these two markets, he said.

"With the increased development and the domestic market moving inline with international practice, we will be able to use Hong Kong's capital markets to raise capital to improve and penetrate overseas markets," he said.

Mr Jiang said he also believes that the development of the western region and accession to WTO will help drive the transition of Hong Kong's economy forward. The last 20 years have seen the service industry develop rapidly in Hong Kong. With globalisation, Hong Kong is now on a new road of structural reform which will benefit capital movements, telecommunications, financial services and deepen its pool of talent.

Hong Kong's track record in maximising its ability to judge correctly where the economy is going and be ready to meet the opportunities that those changes provide is second to none, Mr Kapp said.

Challenges
Though speakers at the conference believe that this new chapter in China and Hong Kong's development will generally be positive, they recognise that challenges abound, too.

"Everyone worries about the future," Mr Kapp said, referring to the heated debates in the United States which expressed concern that certain sectors of the U.S. economy would be hurt if China were granted Permanent Normal Trading Relations (PNTR) status.

He said he also disagrees with critics that say China's WTO entry is nothing more than an investment agreement to take investment out of the U.S. and plant it in China where cheaper labour will simply result in a huge loss of jobs to the U.S.

In general, China's WTO accession presents a rich mix of opportunities and challenges, and many international businesses are very pleased that China will soon be entering the world trade body and are making plans to capitalise on the new era, Mr Kapp said.

Hong Kong, likewise, must continue to move its economy forward or risk slipping behind, Mr Jiang said. Local entrepreneurs must continue to seize opportunity when it comes calling, because it is this entrepreneurial spirit which has made Hong Kong the success it is today, and will ensure it continues to thrive in the future.