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HK accession means opportunities

The Star, Malaysia

HK accession means opportunities

By Liz Lee

14 July 2012

KUALA LUMPUR: If Hong Kong accedes to the China-Asean Free Trade Area (CAFTA), Malaysia would find opportunities to expand its services sector through Hong Kong’s established service-based economy.

In a chain reaction, the expansion could also open up doors for foreign investments to Malaysia, according to Prof Lim Chin Leng, a law professor at University of Hong Kong and a member of the Committee on Pacific Economic Cooperation in the Hong Kong Special Administrative Region.

“We can find gains in the services sector from Hong Kong’s accession to the CAFTA. Hong Kong has fairly few restrictions on any business in Malaysia going there and setting itself up physically as a Hong Kong business,” he said in a talk hosted by the Malaysia External Trade Development Corp.

Among the services sub-sectors he pointed out as fairly unrestricted were financial services, logistics and trading, tourism and retail.

The Penang-born professor said bringing Malaysian services over to Hong Kong could provide a link to inbound investments from China later on.

“When you have (professionals like) lawyers and accountants in Hong Kong, they are looking for work and clients in China,” he said. “Our services providers could become a support industry for inward investments (through that interaction).”

Apart from that, Lim said Malaysian firms and professionals that do well there can ride on Hong Kong’s reputation and raise their own profile internationally.

“(We) build intellectual capital by letting Hong Kong brand us as we go over providing services,” he said, noting Hong Kong’s robust talent pool.

Lim is also optimistic about the Tran-Pacific Partnership Agreement (TPP) and what it can do for Malaysia, given the preferential access to the US market.

“I think the TPP is beneficial, it fits what we’re trying to do in this country, I think it will make our country more competitive.

“We are going to face a little bit more competition,” he told the media.

He said certain sectors will be especially concerned but it was natural as businesses are not always in favour of competition.

“We have to figure out where we want to compete and where we want to buy some time for our sectors (to catch up) and if we can get that right, I am very optimistic,” he said.

As for protecting the local sectors, Lim said it was important to make sure Malaysia gained access for its export markets so that it did not lose out.

“We may want to caliberate the liberalisation of the procurement market in such a way that fits our own policy preferences,” he said. “We should also understand that we’re imposing procurement disciplines on our trading partners that gets us excess.”

Lim added that if businesses were well-placed, they could be suppliers to Malaysian public agencies and future trading partners.

He said: “The liberalisation (of the economy) is now a matter of how fast and how far, not whether we should or should not.”

In time, he said the Malaysian economy would resemble the United States’ open economy.

Lim said the TPP negotiations were not likely to be finalised this year but hoped that it would come into being by October next year.

“I know it’s the US government’s position that it will be concluded by this year but we have Canada and Mexico which have just come in to be included in the negotiations,” he explained.