By seeking to export its business-friendly policies and economic freedom, Hong Kong can have a profound impact on economies within the Belt and Road Initiative
Two years ago, China concluded the Belt and Road Forum which sought to kickstart the Belt and Road Initiative (BRI), an ambitious plan to bring infrastructure development and investments to 125 countries in Europe, Asia, Middle East, Latin America and Africa. Already the BRI covers 62 per cent of the world’s population and more than 65 countries with a combined GDP over US$23 trillion. Despite its huge geographic scale, Hong Kong can play an important role in the BRI given the Special Administrative Region’s (SAR) own success as a business, transport and infrastructure hub.
Here are three areas where Hong Kong can play a leading role:
- Tax and regulation – Hong Kong is one of the easiest places in the world to set up a new business and as such has become a hub for foreign investment. There are a number of reasons this has come about including being located next to China – one of the world’s largest markets. Low taxes and low regulations are two key reasons with corporate taxes starting at an internationally competitive 8.25% and a wide range of options available for entrepreneurs and businesses looking to incorporate in Hong Kong. Hong Kong’s low tax, economically free business environment is something that can and should be replicated – at least in part – by many of the BRI nations.
- Infrastructure – Hong Kong has one of the most efficient mass transit systems in the world and an airport that is second to none. One only has to look at the city’s skyline to know that the city understands how to do mega-projects. Years of experience and expertise has been built up in the areas of project management, tendering and procurement, bidding and construction. There is a deep pool of legal and intellectual professionals in the city as well as a robust legal system designed to facilitate large infrastructure projects. Countries along the BRI could benefit greatly from this expertise with the additional economic benefits to Hong Kong through greater connectivity to emerging markets in Asia.
- Common law system – Hong Kong’s legal system is based on a combination of English common law and local legislation codified in the Laws of Hong Kong. The judiciary also has a reputation for fairness, impartiality, independence and efficiency. It is for this reason that Hong Kong is seen as a responsible international stakeholder and is a hub for arbitration and has allowed business to come and thrive in a free and open environment. Hong Kong is home to some of the world’s leading legal minds and can apply many of its legal standards and practices across the BRI economies. Furthermore, by standardising regulations, rules, laws and codes it can help spur economic activity.
There are certainly other areas where Hong Kong can help too including public policy and welfare. However, by offering guidance on key areas such as tax, regulation, law and infrastructure, Hong Kong and help transform many BRI countries in its image with significant benefits to their economies.
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