Free Newsletters - Space News - Defense Alert - Environment Report - Energy Monitor
. Earth Science News .




TRADE WARS
Hong Kong under threat from new Chinese trade zone: analysts
by Staff Writers
Hong Kong (AFP) Sept 06, 2013


Exports to China, Russia lift Italian trade data: Istat
Milan, Lombardy (AFP) Sept 06, 2013 - Italian exports to China and Russia rose sharply in July, official data showed on Friday, bringing hope to government forecasts of a recovery starting this year.

The trade figures showed exports rose 3.5 percentage points in July compared to July 2012, with increases of 23.4 percent for China and 17.2 percent for Russia.

But the data from the Istat agency showed exports had fallen by two percentage points from the level in June, particularly in consumer and intermediary products, while imports had risen by 1.6 points.

The trade surplus to countries outside the European Union was 2.8 billion euros ($3.7 billion), far bigger than a surplus of 1.9 billion euros in July 2012.

Imports fell by 1.9 percent on a 12-month comparison.

Hong Kong's status as a financial powerhouse is under threat, analysts say, after plans for China's first free-trade zone revealed a large-scale push to create a new international hub.

Draft proposals for the zone in Shanghai, seen by AFP, showed it goes beyond greater liberalisation of trade to take in investment and financial services -- including free currency convertibility.

Chinese Premier Li Keqiang, who took office in March, is backing the FTZ, which his cabinet approved last month.

"They want an offshore harbour, basically like Hong Kong," said a financial industry executive briefed on the plans.

Hong Kong analysts say the city -- which promotes itself as the business gateway to the world's second-largest economy but is facing challenges such as high labour and rental costs -- must now rise to the challenge.

"In one to three years time, if Hong Kong cannot revamp itself, it will lose its competitiveness to the trade zone," chief China economist of ANZ Banking Group, Liu Ligang, told AFP.

Shanghai flourished during the period of stellar economic growth overseen by president Jiang Zemin, a former mayor of the city, as doubts were cast over Hong Kong's ability to retain its status as a trade and finance hub after the handover from Britain to China in 1997.

But after Jiang retired from the last of his national posts in 2005 several members of his powerful "Shanghai Gang" political clique were dismissed in corruption trials, widely seen as a move by new president Hu Jintao to rein in the city's powerbase.

With Xi Jinping taking over from Hu in March this year, it seems that Shanghai may be back on the map, at a time when mainland critics are increasingly gunning for Hong Kong over anti-Beijing democracy protests.

Hong Kong has sought to become a major offshore management market for China's yuan -- also known as the renminbi -- but the opportunity for free currency exchange offered by the new FTZ will draw business to Shanghai.

"Some of the businesses in Hong Kong could be shifted to the free-trade zone if people don't need to use Hong Kong banks anymore," warned Liu.

"Hong Kong's renminbi assets could also flow to the trade zone."

Officials in Hong Kong, a semi-autonomous region under Chinese rule, remain confident and say it offers a unique bridge for international businesses.

But the city's de-facto central bank warned Friday that the city must not become complacent.

"It is no good for Hong Kong to sit on its laurels and just hope or pray that other financial centres do not or cannot catch up," Hong Kong Monetary Authority chief executive Norman Chan told a financial summit in the city.

Sung Yun-wing, director of the Hong Kong Shanghai Development Institute, told AFP the Shanghai FTZ will serve as a "wake-up call".

"Hong Kong has to face international global competition, whether from Shanghai or New York and London," he said.

ANZ's Liu also believes that, in the short term, Hong Kong has attributes that will help it withstand competition from the FTZ.

"Hong Kong has an effective regulatory institution and its rule of law is well respected. It will take time for the trade zone to develop as it is starting from scratch," he told AFP.

But Hong Kong's long-term prospects as an offshore business centre to China will need a proactive approach including reducing business costs, says Liu.

According to China's Ministry of Commerce, the 29-square-kilometre (11-square-mile) FTZ comprises four existing areas in Shanghai: the international airport, deepwater port, a bonded zone and a logistics area.

The draft plan said the new zone would support the establishment of foreign and joint venture banks and welcome privately funded financial institutions.

At present China's banking sector is overwhelmingly dominated by state-run institutions.

The FTZ project as a whole "will be a bold step to escalate China's economic development to the next level", an ANZ research report this week said.

Under British rule, Hong Kong was transformed into one of the freest world economies and an international finance centre, outpacing economic development in Chinese cities.

Hit by the Asian financial crisis of 1998 and the 2003 SARS epidemic, China turned its focus on boosting the Hong Kong economy, while at the same time developing the Pudong financial district in Shanghai.

A scheme allowing residents of wealthy Chinese cities to travel to Hong Kong and an economic partnership to strengthen trade and investment were among measures introduced.

But as the city's growth was again hit by the effects of the 2008 global financial crisis, Shanghai's economy surpassed Hong Kong in 2009 in terms of GDP as Chinese stimulus focused on averting a national crisis.

.


Related Links
Global Trade News






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





TRADE WARS
BRICS urge careful US tapering as Putin hosts mini summit
Saint-Petersburg (AFP) Sept 05, 2013
The world's leading emerging economies urged the United States on Thursday to show caution in any tapering of its economic stimulus, as Russian President Vladimir Putin hosted a mini summit of the BRICS states ahead of the G20 meet. In a demonstration of their importance despite worries about developing economies, Putin held talks with five BRICS states before the G20 summit proper got under ... read more


TRADE WARS
Niger asks for foreign help for flood victims

Olympics: Tokyo 2020 is a bid in the shadow of Fukushima

Italy says Syria crisis to worsen refugee problem

Australian police arrest suspected people smugglers

TRADE WARS
World's First Full Color 3D Desktop Printer Destined For High Schools

Lockheed Martin-Built A2100 Satellites: Over 400 Cumulative Years In Orbit And Counting

GSAT-7 Satellite Placed in Geosynchronous Orbit

A completely new atomic crystal dynamic of the white pigment titanium dioxide discovered

TRADE WARS
Submarine canyons a source of marine invertebrate diversity, abundance

Morphing manganese

Ocean fish acquire more mercury at depth

Sea otters promote recovery of seagrass beds

TRADE WARS
East Antarctic Ice Sheet could be more vulnerable to climate change than previously thought

On warming Antarctic Peninsula, moss and microbes reveal unprecedented ecological change

Arctic Sea Ice Update: Unlikely To Break Records, But Continuing Downward Trend

West Antarctica ice sheet existed 20 million years earlier than previously thought

TRADE WARS
Chinese dairies seek French tie-ups to shore up image

Peking duck not all it's quacked up to be

Crop pests moving polewards through global warming

New Zealand wants answers on milk 'botulism botch-up'

TRADE WARS
Vietnam flood toll hits 21

Supervolcanic Ash Can Turn To Lava Miles From Eruption, MU Scientists Find

Tropical Storm Lorena lashes Mexico Pacific coast

6.0 magnitude quake strikes off northern Philippines

TRADE WARS
Origin of state of ancient Egypt given new time line

Defence chiefs meet over DR Congo conflict

Kenyan soldiers kill al-Shabaab guerillas

Kenya looks east, signs $5-bn China deals

TRADE WARS
Researchers reveal hunter-gatherers' taste for spice

Building better brain implants: The challenge of longevity

Researchers say human foot not unique, more like those of great apes

Archaeologists find evidence of separate Neanderthal cultures in Europe




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement