european union - hong kong yearbook 2014 · yearbook 2014 eu-hong kong: the year in pictures....
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European Union Officeto Hong Kong and Macao
EUROPEAN UNION - HONG KONG
Yearbook 2014
EU-Hong Kong: The Year in Pictures
EU-Hong Kong Quick Facts
The EU consists of 28 Member States
1957 Belgium, France, Germany, Italy,
LuxembourgandtheNetherlands
1973 Denmark, Ireland and the United
Kingdom
1981 Greece
1986 PortugalandSpain
1995 Austria,FinlandandSweden
2004 Cyprus, theCzechRepublic,Estonia,
Hungary, Latvia, Lithuania, Malta,
Poland,SlovakiaandSlovenia
2007 BulgariaandRomania
2013 Croatia
EUROPEAN UNION - HONG KONG2014YEARBOOK
28 Member States
7 Percent of world population
20 Percent of Global GDP
55Combined Worldwide Official
Development Assistance
508Million
Combined population of the EU Member States
About the EU Office to Hong Kong and Macao
TheEuropeanUnionOfficetoHongKongand
Macaowasestablished in 1993.TheEUOffice
mission is to represent the EU political and
economic interests inHongKongandMacao.
TheEUOfficecontinuestoincreaseknowledge
andinformationaboutEUpoliciesthroughpublic
diplomacyefforts,dialogue
meetingsanddevelopment
ofacademicexchangesand
people-to-peoplecontacts.
TheHeadof theEuropean
UnionOffice toHongKong
andMacaoisVincentPiket.
About the EU Relations with Hong Kong
Bilateralrelationsandcooperationbetweenthe
EuropeanUnionandHongKongcontinue to
developandstrengthen.HongKongremainsan
importanteconomicplayerfortheEUandakey
conduitfortwo-waytradeandinvestmentflows
betweentheEUandmainlandChina.TheEUalso
maintainsactivepolicyexchangeswithHong
Konginareasofmutualinterests.Thishappens
intheannualStructuredDialogue,atthe level
ofseniorofficials.Prioritytopicsarefinancial
services, customs matters and intellectual
propertyrights,aswellasthereinforcementof
educationandresearchties.
Trade Relations
TheEU retained itspositionasHongKong’s
second largesttradingpartneraftermainland
Chinain2013.EUbusinessesareactiveinawide
varietyof sectors,mainly financial services,
trading, logistics,
construct ion and
retailing.
Bi lateral trade in
goodsbetween the
EUandHongKongrecordedagrowthof3.9%to
reach€46billionin2013,withtheEUenjoyinga
growingtradesurplus.Theinvestmentrelations
between theEUandHongKonghavegrown
significantly in recentyears:HongKongFDI
stockheldbytheEUrosefrom€90billion in
2009to€133billion in2012.Conversely, inthe
sameperiod,FDIstockintheEUalmostdoubled:
from€27billionto€50billionin2012.
TheEUbusinesscommunityprizesHongKong’s
respect for theruleof law,highstandardsof
transparency, freedomof informationandof
media, preferential access to the mainland
Chinamarketandtheavailabilityofhigh-quality
serviceproviders.
Education
http://ec.europa.eu/dgs/education_culture/
index_en.htm
The EU and Hong Kong are increasingly
cooperating in the fieldofhighereducation.
ThroughtheErasmusPlusprogramme,Hong
Kong students and PhD candidates receive
mobilityandfundingopportunitiestostudy in
variousEuropeanuniversities.
TheannualEuropean
HigherEducationFair
inHongKongisaprime
exhibitionofEuropean
universitiesandstudy
opportunities.
Culture
TheEuropeanUnionFilmFestival
is held annually to offer the
HongKongaudiencea tasteof
Europeanculturebyshowcasing
award-winningfilmsfromdifferentEUcountries.
Everyyear,theEUHongKongofficeinviteslocal
studentsfromprimaryandsecondaryschoolsto
takepart inthe“EUCalendar
DrawingCompetition”.The 12
winningpicturesarepublished
intheannualdesktopcalendar
which isdistributed to3,000
recipients.
November 2013: The European Union Office to
Hong Kong and Macao celebrated its 20th
anniversary
The20th anniversary of theEuropean Union
Office toHongKongandMacaowasmarked
by thevisitof thePresidentof theEuropean
CommissionJoséManuelBarrosoon22and23
November2013.Theceremonywasattendedby
the Honourable
CarrieLam,Chief
S e c re ta r y fo r
Administrationof
HongKongSAR
government.
SincethehandoverofHongKongtothePeople’s
RepublicofChina in 1997,theEuropeanUnion
and itsMemberStateshaveclosely followed
political and economic developments in the
HongKongSpecialAdministrativeRegion(SAR)
underthe‘onecountry,twosystems’principle.In
linewiththecommitmentgiventotheEuropean
Parliamentin1997,anannualreportisissuedon
developmentsinHongKong.Thisisthe16thsuch
report,coveringdevelopmentsin2013.
The EU believes that the principle of ‘one
country, twosystems’,enshrined in theSino-
BritishDeclarationandtheBasicLawofHong
Kong,continuedtoworkwellin2013.Therights
and fundamental freedoms of the people of
HongKongcontinuedtoberespected,therule
oflawwasmaintainedandthemarketeconomy
andbusinessenvironmentwaspreserved.
Bilateral relationsbetween theEUandHong
Kongcontinuedtodeepen,withavisittoHong
Kong in November by the President of the
EuropeanCommission,JoséManuelBarroso.
Tradeandeconomicrelationsdevelopedwell
The European Union Annual Report on Hong Kong 2013*
Summary
EUROPEAN UNION - HONG KONG2014YEARBOOK 01
and the EU and Hong Kong continued and
expandeddialogueandcooperation inmany
areas of mutual interest, including financial
services,customs, theenvironment, research,
educationandculture.
The EU attaches great importance to Hong
Kong’s stability, economic prosperity and
democraticdevelopment. Itbelieves thatan
accountablegovernmentcontributestostability
andprosperityandhelpsmaintainHongKong’s
positionasakeyinternationalbusinesscentre.
The EU continues to support substantial
progress towards thegoalof theHongKong
governmentand theStandingCommitteeof
theNationalPeople’sCongressofachieving
universalsuffrageby2017fortheelectionofthe
ChiefExecutiveandby2020fortheelectionof
theLegislativeCouncil, inaccordancewiththe
BasicLawoftheHongKongSARandthewishes
ofthepeopleofHongKong.
* Thereport isofficiallyadoptedbytheEuropeanCommissionandEuropeanExternalActionServiceon8May2014.
Inhisfirstpolicyaddress inJanuary2013,the
ChiefExecutiveChun-yingLeungsetouthis
long-termblueprintandobjectives forHong
Kongunderthemotto ‘seekchange,maintain
stability,servethepeoplewithpragmatism’.He
promisedtoupholdHongKong’scorevalues,
implement the ‘one country, two systems’
principle inaccordancewiththeBasicLawand
properlymanagetherelationshipbetweenHong
Kongandthemainland.
H e s a i d t h a t , a s
an SAR of Ch ina ,
HongKongreceived
strongandsteadfast
support from the
centralgovernment.
He bel ieved that,
capitalising on the
advantagesof the ‘onecountry, twosystems’
principle,HongKonghadnotonlyopenedupthe
vastmainlandmarketasitseconomichinterland,
butalsoenhancedHongKong’s statusasan
internationalhub.
Key policy initiatives focused on fostering
e co n o m i c d eve l o p m e n t by, i n te r a l i a ,
st rengthening economic re lat ions wi th
the Mainland and developing Hong Kong’s
financial services,businessandprofessional
services, internationalshipping, innovationand
testing; increasing land supply and offering
subsidised housing in the short to medium
Political Developments
02 EUROPEAN UNION - HONG KONG2014YEARBOOK
term;introducingmeasurestoalleviatepoverty,
improve care for the elderly, improve the
positionofwomenandethnicminoritiesand
further develop labour policy, and ensuring
environmental protection and conservation
by improvingairquality,managingwasteand
encouragingtheconstructionofgreenbuildings.
Asin2012,relationsbetweentheexecutiveand
thelegislatureweredifficultin2013.Legislators
blockedordelayedanumberof initiatives.The
executiveandlegislaturewerenotabletoreach
finalagreementonmattersofvital interestfor
HongKong,suchassolidwastemanagement,
particularlylandfills.Asin2012,afewlegislators
of theLegislativeCouncilused filibusters to
achieve theirgoals.Thedebateon the2013
budgetwasparticularlyaffectedby thisasa
smallnumberoflegislatorsproposedmorethan
700amendmentstothe2013AppropriationBill.
ThePresidentoftheLegislativeCouncil,Jasper
Tsang, suggestedastructural reason for the
poorrelationshipbetweentheexecutiveandthe
legislature,notingthatthecurrentgovernance
system did not provide the executive with
strong,reliablemajoritysupport intheCouncil.
He also noted that both the legislative and
executivebrancheshadtorespectandconsider
publicviews.Thechoiceofelectoralsystemfor
HongKong’sChiefExecutiveandLegislative
CouncilshouldmakeHongKong’sgovernance
moreefficient.
EUROPEAN UNION - HONG KONG2014YEARBOOK 03
Hong Kong maintained its commitment to
integrity and the Independent Commission
Against Corruption (ICAC) works with the
communitytofightcorruptionthrougheffective
lawenforcement,educationandprevention.
In2013, the ICAC received2,652corruption
complaints,adropof33%comparedtothe3,932
complaintsreceived in2012,withthenumber
ofpursuablecomplaintsdownbyby41%.The
exact reasons for this decrease are hard to
establish.TheChairoftheAdvisoryCommittee
onCorruptionsuggestedthatonefactormight
be greater public awareness of corruption
prevention,asaresultofthe ICAC’s increased
efforts inpreventiveeducation.Anotherfactor
mayhavebeenreducedpublicconfidenceinthe
ICAC,followingtherecentcontroversyregarding
overspendingonofficialentertainmentbythe
former ICAC Commissioner. An Independent
Review Committee on ICAC’s Regulatory
SystemsandProcedures forHandlingOfficial
Entertainment,GiftsandDutyVisits,appointed
bytheChiefExecutive,andthePublicAccounts
CommitteeoftheLegislativeCouncildealtwith
thematter.The ICACsaid itwould implement
all therecommendationsthetwocommittees
made.
Political discussions throughout 2013 were
dominated by the debate on introducing
universalsuffrageforthe2017ChiefExecutive
election. Avariety of initiatives in this area
werelaunchedbyacademicgroups,civilsociety,
businessorganisationsandpoliticalparties.
Mostofthemaimedtomakethefuturesystem
fornominatingcandidatesmoredemocratic.
Oneinitiative, Occupy Central, launched a
campaign forademocraticelectoral system,
announcing it would occupy Hong Kong’s
centralbusinessdistrict iftheHongKongSAR
government’s reform proposal fell short of
internationalstandards.
Membersof theHongKongSARgovernment
and thedirectorof theLiaisonOfficeof the
Central People’s Government in Hong Kong
joinedthepublicdebateaboutelectoralreform.
Thedirectorof theLiaisonOfficehighlighted
thelegalbasisforreformintheBasicLawand
thedecisionsoftheStandingCommitteeofthe
NationalPeople’sCongressonthemethodsfor
selectingtheChiefExecutiveandformingthe
LegislativeCouncil.Healso said thecentral
government expected the future electoral
system to ensure that only candidates who
‘lovethecountryandloveHongKong’wouldbe
electedandappointed.
On17October2013,ChiefExecutiveannounced
thesettingupofaTaskForceonConstitutional
Development,headedbytheChiefSecretaryfor
Administration, theSecretary forJusticeand
theSecretaryforConstitutionalandMainland
Affairs.On4December, theHongKongSAR
government launchedapublicconsultationon
electoral reformfor the2017ChiefExecutive
election and the 2016 Legislative Council
election.Theconsultationdocument1 invited
membersofthepublictosendtheirviewstothe
ConstitutionalandMainlandAffairsBureauby3
May2014.
The launch of the public consultation gave
more structure and direction to the debate
onelectoral reform.Viewsdivergedgreatly,
especially on the procedure for nominating
candidates.Thepositionstakenonthismatter
by theHongKongSARgovernmentand the
centralgovernmentontheonehand,andpan-
democracy parties and sympathisers on the
other, continued tobemutuallyexclusive. In
2015,acompromisewillneedtobefoundonthis
keytopic,andotherimportantissues,toensure
thatelectoralreformcanbeconcludedintime
for the2016LegislativeCouncilelectionand
the2017ChiefExecutiveelection,vital forthe
efficientgovernanceofHongKong.
ThemaintenanceofHongKong’shighstandards
ontheruleof lawandtheindependenceofthe
judiciarycontinued tobeasubjectofpublic
debate.Attheceremonial2013openingofthe
legal year, theChiefJusticeof theCourtof
FinalAppeal,theHonourableGeoffreyMaTao-
li,stressedtheneedforintegrityofthelawand
the importance of theconstitutional roleof
judgesandtransparencyinthejudicialprocess.
ChiefJusticeMaexpressedstrongconfidencein
thecontinuingindependenceofthejudiciaryin
HongKong.
TworulingsoftheCourtofFinalAppealin2013
bear out the Chief Justice’s view that high
standards for the rule of law in Hong Kong
continuetobeupheld.Oneconfirmedtheright
oftranssexualpeoplewhohadcompletedsex-
reassignmentsurgery tomarryanddeclared
thatanexisting legal impediment to thiswas
unconstitutional.Theotherdeclared that the
government’spolicyof limitingComprehensive
SocialSecurityAssistanceto thosewhohave
lived in Hong Kong for at least seven years
wasunconstitutional.Some legalprovisions,
suchasprovisionsfor legalaidfor low-income
individuals,couldbeimproved.
EuropeanfirmsbasedinHongKongcontinued
tocitetheruleoflawandthehighqualityofthe
judiciaryasoneofthekeyreasonsforsettingup
theirChinaorAsiaheadquartersthere.Based
on its rule-of-law credentials, the Secretary
for Justice, Mr Rimsky Yuen, continued to
promote Hong Kong as a regional hub for
international arbitration and legal services.
The China Maritime Arbitration Commission
announced itwouldsetupabranchoffice in
HongKong,andarrangementsarebeingmade
tofacilitatearbitrationhearings inHongKong
by thePermanentCourtofArbitration,with
headquartersintheHague.
Tobettermeetthechangingneedsofsociety,
theSecretaryforJustice, inhiscapacityasthe
ChairmanoftheLawReformCommission,also
undertooktostudypossible lawreforminthe
areasofarchiveslaw,accesstoinformationand
third-partyfundingforarbitration.
HongKongresidentscontinuedtoexercisethe
rightof freedomof speechandassociation.
Theannual4Juneand 1Julymarches took
place in2013,asdid twoother largepolitical
demonstrat ions. The Chair of the Equal
Opportunities Commission addressed the
annualgayprideparade,andnumeroussmaller
demonstrationsonpoliticalorsocio-economic
issues,relatingtoHongKongandthemainland,
were held throughout the year. The great
majorityofdemonstrationswerepeacefulandin
generalthepoliceactedproportionately.
Themedia,includingthedigitalmedia,continued
tobefreeandtogivevoicetoarangeofviews.
Nevertheless, therewasagrowing impression,
recordedintheannualreportoftheHongKong
JournalistsAssociation,thatboththeprintand
theelectronicmediaexercisedself-censorship,
especially when covering affairs concerning
mainlandChina.Basedon2013trends,the2014
PressFreedom Index fromReporterswithout
BordersdowngradedHongKongbythreeplaces
to61stplace,citingself-censorshipandagrowing
influenceexertedbythecentralgovernment’s
LiaisonOffice.Thecontinued functioningof
the ‘onecountry, twosystems’principle,and
HongKong’sreputationasaterritorywherethe
businessenvironmentbenefitsfromfreeflows
ofinformation,willcontinuetodependonmedia
freedom.StatementsbytheChiefExecutive in
supportofmediafreedomwerethereforevery
welcome.
HongKong’srelationswiththemainlanddrew
much public debate and media attention.
Occasionally, the fast-growingeconomicand
people-to-peoplelinks,includingtourism,caused
socialdisquiet inHongKongandposedpolicy
problems for theauthorities.These included
04 EUROPEAN UNION - HONG KONG2014YEARBOOK EUROPEAN UNION - HONG KONG2014YEARBOOK 05
1 ‘ConsultationDocumentontheMethodsforSelectingtheChiefExecutivein2017andforFormingtheLegislativeCouncil in2016.’ThisdocumentrelatestoformingtheLegislativeCouncil in2016,notin2020.
issuessuchas increaseddemandfrompeople
fromthemainland forhousingandplaces in
primary and secondary schools (especially
closetotheborderbetweenHongKongandthe
mainland), jobs formainland jobseekers, the
increasedpressureonpublic transportdueto
fastrisingnumbersofmainlandChinesetourists
(from35million in2012to41million in20132),
andrisingdemandforcertainconsumergoods,
includingbabymilkformula,whichoccasionally
causedscarcityinHongKong.
06 EUROPEAN UNION - HONG KONG2014YEARBOOK EUROPEAN UNION - HONG KONG2014YEARBOOK 07
Economic Developments
global surveysmeasuringeconomic freedom
and competitiveness3. Despite its economic
achievements, Hong Kong also faces new
competitive challenges from the economic
liberalisation of China and the rise of other
economiccentres in the region. Itseconomy
recordedsteadygrowthof2.9%inreal terms
in2013.Domesticdemandwasthekeygrowth
driver,while theperformanceof theexternal
sector remainedmodestdue toweakglobal
economicconditions.Employment levelswere
healthy,withtheunemploymentratehovering
around3.3%formostof theyear.Consumer
pricesroseby4.3%4.
With thesupportof thecentralgovernment,
HongKongcontinuedtobethelargestoffshore
renminbi (RMB)centre in theworld. Ithosted
the largestpoolof renminbidepositsoutside
MainlandChina,atmorethanRMB1trillion5as
attheendof2013. Itcontinuedtomaintainits
competitiveedgeoverotherfinancialcentresin
termsofmarketinfrastructureandliquidity,with
agoodrangeofRMBinvestmentproducts.The
“CNHHongKongInterbankOfferedRatefixing
(CNH HIBOR fixing)” was officially launched
on24June2013,settingbenchmarkratesfor
offshorelendingandfacilitatingthecreationof
morehedgingoptions.
The mutual recognition of fund products
betweenmainlandChinaandHongKongisseen
asthenextstep inestablishingHongKongas
theAsianhubforfundmanagement.Regulators
onthemainlandandinHongKonghavelaidout
plansfortheupcoming launchofthescheme,
whichwouldallow internationalmanagers to
sell fundproductsonthemainlandandallow
mainlandfundstobesoldinHongKong.
At the same time,China increased thepace
ofrenminbi internationalisation,withLondon,
3 HongKongwasrankedastheworld’ssecondmostbusiness-friendlyplaceafterSingapore in theDoingBusiness2014reportbytheWorldBankGroup.AccordingtoUNCTAD’sWorldInvestmentReport2013,HongKongwasthethird largestFDIrecipient intheworld(US$75billion),andthethirdlargestsourceofFDIinAsia(US$84billion)in2012.
4 AlleconomicindicatorspertainingtotheHongKongeconomyareofficialstatisticsreleasedbytheHongKongCensusandStatisticsDepartment.
5 AccordingtotheHongKongMonetaryAuthority,totalRMBdepositsandoutstandingcertificatesofRMBdepositsamountedtoCNH1053billionattheendof2013.TotalRMBdepositsandoutstandingcertificatesofRMBdepositasattheendof2012stoodatCNH720billion.2 Source:HongKongTourismBoard.
HongKongremainsoneoftheworld’s leading
financial centresand tradinghubs.The four
main industries in Hong Kong (f inancial
services, trading and logistics, tourism, and
professionalandproducerservices)havebeen
the driving force of Hong Kong’s economic
growth,providing the impetus forgrowth in
othersectorsandcreatingemployment.Riding
onChina’seconomicboom, thecityplaysan
importantroleintradeandinvestmentwiththe
mainland.HongKonghasbeenabletoprosper
onthebackofitscorevalues—theruleoflaw,
thefreeflowof information,transparencyand
itsstanceagainstcorruption.
In2013,HongKongperformedwelleconomically
andcontinuedtoscorehighlyonmanyofthe
Thegovernmentintroducedvariousmeasuresto
safeguardtheinterestsofHongKongresidents
andstabilisethemarketagainstfastrisingprices
andshortages.Suchmeasures,however,didnot
halt therise in thenumberofexpressionsof
anti-mainlandsentimentinthemedia(including
onsocialmedia)andtheemergenceofa few
radicalanti-mainlandgroups.
19,788
30,767
10,979
23,079
33,664
10,585
25,493
35,736
10,243
2011 2012 2013
Unit:€Million
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
EU-Hong Kong Bilateral Trade in Goods 2011-2013
Source:Eurostat
EUImportsfromHK
EUExportstoHK
TradeBalance
1,610
9,817
8,207
2,112
10,872
8,760
1,808
10,684
8,876
2011 2012 2013
Unit:€Million
12,000
10,000
8,000
6,000
4,000
2,000
0
EU-Hong Kong Bilateral Trade in Services 2011-2013
Source:Eurostat
EUImportsfromHK
EUExportstoHK
TradeBalance
08 EUROPEAN UNION - HONG KONG2014YEARBOOK EUROPEAN UNION - HONG KONG2014YEARBOOK 09
Paris,Frankfurt,SingaporeandTaipeiallnow
able to develop as hubs for offshore RMB
business.HongKongwasquicktoforgealliances
withotheroffshoremarkets.InDecember2013,
theHongKongandSingaporestockexchanges
signed a cooperation pact on developing
renminbi investmentproducts.Nevertheless,
externalcompetitionisexpectedtoincreaseas
newmarketplayersemerge.China’seconomic
reformscreatedopportunitiesandchallenges
forHongKong.Beijing’splantocreateapilot
free trade zone in Shanghai sparked strong
reactions inHongKong.Thepolicymeasures
neededtoallowShanghai’snewzonetopilot
wider convertibility of the RMB and freer,
market-oriented interestratesattractedmuch
speculationfromthemediaandbusiness.Some
fear that liberalisation in theseareaswould
threatenHongKong’spositionasAsia’s leading
financialcentre.Theconsensusinthebusiness
community was that Hong Kong needed to
sharpen its edge in order to maintain its
competitiveness.
EconomictiesbetweenHongKongandmainland
Chinawerefurtherstrengthenedbyexpanding
thescopeofservicescoveredbytheirfreetrade
agreement. On 29 August 2013, Hong Kong
andMainlandChinasignedSupplementX to
theCloserEconomicPartnershipArrangement
(CEPA).Bothpartieshavepubliclystatedthat
the scope and depth of liberalisation under
theCEPAgoesbeyondanyFTAthatMainland
Chinahasconcludedwithotherpartners. In
totaltherearenow403liberalisationmeasures
for trade in services under the CEPA. The
central government has pledged to achieve
liberalisationoftrade inservicesbetweenthe
mainlandandHongKongthroughtheCEPAby
late2015,i.e.beforetheendofthe12thFive-Year
Plan.TheGuangdongprovincialgovernment
launcheditsproposaltobringGuangdong,Hong
KongandMacaotogetherinafreetradezone,
aiming for liberalisation of trade in services
betweenGuangdongprovinceandHongKongby
theendof2014.
ThegovernmentsofHongKongandGuangdong
have jointly invested in large infrastructure
pro jec ts , c reat ing new t ranspor t l i nks
betweenHongKongandthePearlRiverDelta.
ConstructionoftheGuangzhou-Shenzhen-Hong
Kong Express Rail Link and the Hong Kong-
Zhuhai-MacaoBridge, started in2010and is
makingsteadyprogress.
In response to calls from the local business
community, Hong Kong has become more
active in regional andplurilateral initiatives
tomaintain itscompetitivenessasa regional
trading / services hub. Hong Kong initially
planned to join theAssociationofSoutheast
AsianNations(ASEAN)–Chinafreetradearea
buteventuallyacceptedASEAN’sproposal to
negotiateabilateralagreement. InMay2013,
Hong Kong announced that it would take
part innegotiations for theTrade inServices
Agreement (TiSA) involving 23 World Trade
Organisationmembers.InadditiontotheCEPA,
HongKonghassignedfreetradeagreements
with New Zealand, the European Free Trade
AssociationandChile.
Domestically, addressing the overheated
property market was a key priority for the
government in 2013. A series of measures
6 Thenumberofagreementsforpurchaseofresidentialpropertydeclinedto50,676 in2013from81,333 in2012,accordingtotheHongKongSARgovernment.
wererolledout todampendemand, including
sizeablestampdutiesonpropertytransactions
and tightening up mortgage lending rules.
Thegovernmentalsoabolisheda 14-year-old
applicationlistmechanismandresumedthelead
insellinggovernmentsites intheannualLand
SaleProgrammethroughgovernment-initiated
landsale.Housepricesstabilisednoticeablyasa
resultandthevolumeofsalesplungedby37.7%6
in2013.Facedwiththeriskofanassetbubblein
anextremelylowinterestrateenvironment,the
governmentrepeatedlyvoiceditsdetermination
tokeepthesestringentfiscalmeasuresinplace,
despitepressure fromthe realestatesector.
ChiefExecutiveLeungalsopledgedtoincrease
thehousingsupplytotacklethesoaringhouse
prices that were pushing home ownership
outofreachofthegeneralpublicandfuelling
socialdiscontent.Thegovernmentannounced
asupply-ledhousingstrategywithatargetof
creating470,000newhousingunitsover the
comingdecade,ofwhich60%wouldbepublic
housing.
The government stepped up its efforts to
addressthewidening incomeandwealthgaps.
Amajormovewasthepublication,forthefirst
time,ofanofficialpoverty lineforHongKong
in September 2013 which was set at half of
medianmonthlyhousehold income.Analysis
10 EUROPEAN UNION - HONG KONG2014YEARBOOK EUROPEAN UNION - HONG KONG2014YEARBOOK 11
trade,cateringandcareconsistentlysuffered
fromlabourshortages.Theissuemaygenerate
heated debates between labour unions,
legislatorsandbusiness leaders inthefuture.
Againstabackdropoffavourablelabourmarket
conditions, wages increased considerably
in2013.Lower-skilledworkersalso received
significant wage increases, reflecting the
generally tight labourmarketconditions.The
statutoryminimumwagewas increased from
HKD28toHKD30inMay2013.
The government rolled out two important
environmentalpolicyplans in 2013: ‘A clean
airplan forHongKong’and ‘Sustainableuse
of resources2013–22’. Italso replaced itsair
pollution index with a new health-based air
qualityindexprovidingpeopleinHongKongwith
informationontheshort-termhealthriskbased
on real time readingsofairpollution levels.
Withatargetofreducingsolidwasteby40%
withintenyears, theactionplanonresources
includes a possible waste-charging scheme,
expandingtheexisting landfillsandbuildinga
new incinerator,encouragingmore recycling
andwaste reductionat source.Thepublic is
increasingly concernedby and interested in
issuesrelatingtotheenvironment.Implementing
thesegovernmentplanswouldrequireastrong
political commitment, public engagement,
supportfromthecommunityatlargeandcross-
bordercooperationwithinthePearlRiverDelta,
particularlyforcleanairinitiatives.
of the situation in 2012 showed that before
intervention, therewere541,000households
witha totalof 1,312,000people fallingbelow
the lineandthepovertyratewas19.6%.After
intervention,aroundonemillionpeople lived
belowthepoverty line,representingapoverty
rateof15.2%.Thepublicationofthepovertyline
hasraisedexpectations that thegovernment
wouldputmoreeffectivemeasures inplaceto
alleviatepoverty.
The government launched a four-month
consultationonHongKong’spopulationpolicyin
October2013,withaviewtoforgingaconsensus
andformulatingsustainablepolicymeasures.
It isestimatedthatthe labourforcewillstart
declining from2018.Alleviatingpovertyand
helpingtheageingpopulationwillbothbekey
longtermfiscalchallenges.Thegovernmentwill
need tomanageacomplexandcontroversial
policyagenda in thecomingyears, including:
increasing productivity; attracting talent;
importinglabour;assimilatingnewimmigrants;
socialwelfare;elderlycare;fiscalsustainability;
managingeconomicgrowthwhilemaintaininga
balancedandharmonioussociety.
Hong Kong’s business community was vocal
onthe issueofmanpowershortage,callingfor
relaxationof the labour import regime. The
Hong Kong General Chamber of Commerce
claimedthattherewereupto 110,000unfilled
vacancies(asofJuly2013),closetothehistoric
highof 122,000 in 1989.Construction, retail
European Union-Hong Kong Relations and Cooperation
In 2013, bilateral relations and cooperation
betweentheEuropeanUnionandHongKong
continuedtodevelopandstrengthen.HongKong
remainsan importantplayer intheregionand
akeyconduitfortwo-waytradeandinvestment
flowsbetweentheEUandmainlandChina.
TheEU retained itspositionasHongKong’s
second largesttradingpartneraftermainland
China7.Bilateral trade ingoodsbetween the
EUandHongKong recordedgrowthof3.9%
to reachEUR46billion in2013,with theEU
enjoyingagrowingtradesurplus8.
TheEUwasthelargestsource
offoreigncompaniesinHong
Kong, with a total of 1921
companies, comprising452
regionalheadquarters,725
regionalofficesand744local
offices (as of June 2013)9.
EUbusinessesareactive inawidevarietyof
sectors,mainlyfinancialandbusinessservices,
trading, logistics, constructionand retailing.
EUcompaniesarekeyplayers inHongKong’s
banking, insuranceandsecuritiessectors.As
hometooneofthebiggestEuropeanbusiness
communities inAsia, itcontinuestoattracta
considerablenumberofEuropeancitizenstolive
andworkthere.
Investment relations between the EU and
HongKonghavestrengthenedsignificantly in
recentyears.EUforeigndirectinvestment(FDI)
outflows toHongKongquadrupled fromEUR
3.7billion in2009toEUR 15billion in201210,
reflectingEUbusiness’ sustained interest in
HongKongasan investmenthub.FDI inflows
fromHongKongtotheEUrecordedanannual
averageamountofEUR5.3billionoverthesame
period.FDIstockheldbytheEUinHongKong
rosefrom€90billionin2009to€133billionin
2012.Conversely,FDIstockheldbyHongKongin
theEUalmostdoubledfrom€27.5billionto€50
billionduringthesameperiod.
TheEUbusinesscommunityprizesHongKong’s
respect for theruleof law, itshighstandards
of transparency, its freedom of information
andofthemedia, itspreferentialaccesstothe
mainlandChinesemarketandtheavailabilityof
high-qualityserviceproviders.TheEUconsiders
these factors essential for Hong Kong’s
continuedprosperityand formaintaining its
strengthasaregionalandinternationalbusiness
centre.
7 TherankingisbasedonthetradestatisticsreleasedbytheHongKongCensusandStatisticsDepartment.
8 Source:Eurostat:Comextdatabase.
9 Source:HongKongCensusandStatisticsDepartment.
10 FDIdataretrievedfromEurostaton16December2013.
12 EUROPEAN UNION - HONG KONG2014YEARBOOK EUROPEAN UNION - HONG KONG2014YEARBOOK 13
The seventh structured dialogue meeting
between the European Union and the Hong
KongSARgovernmenttookplaceinHongKong
on14November2013.Thestructureddialogue
isaneffectiveplatformthatallowstheEUand
HongKongtodiscussissuesofmutual interest
andidentifyareasforfuturecooperation.Atthe
2013meeting,bothsidesagreedtostrengthen
collaboration and exchanges in relation to
education, innovation, the environment and
competition law. The EU appreciated Hong
Kong’sefforts toupdate its financialservices
regulationsand itsactiveengagementagainst
moneylaunderingactivitiesandthefinancingof
terrorism.TheEUexpresseditswishtoengage
HongKong in technicaldiscussionsabout the
automaticexchangeof tax informationtaking
intoaccount internationaldevelopments inthe
fieldof cooperationbetween taxauthorities
andtoseeswiftprogressonupdatingtheair
servicesagreementsbetweentheEUMember
StatesandHongKongso that theirbilateral
air servicesagreementscomplywith theEU
designationclause.TheEUalsoexpressedthe
wishtointensifyregulatorydialogueinthearea
ofinvestmentfunds.
2013sawanumberofhigh-levelvisitsfromthe
EuropeanUnion institutionstotheHongKong
SAR.Themosthigh-profile visit was thatof
EuropeanCommission
PresidentJoséManuel
Barroso in November,
during which he met
with the Hong Kong
Chief Executive and
the President of the
Legis lat ive Counci l .
PresidentBarrosospokeataneventmarking
the 20th anniversary of the European Union
Office toHongKongandMacao,underlining
thelongstandingtiesbetweentheEUandHong
KongandtheEU’scommitmentatthehighest
leveltocontinuingtodevelopthisrelationship.
Anotherhigh-levelvisitwasthatoftheChairof
theEuropeanBankingAuthority,AndreaEnria,
inMarch.Regularvisitsbyseniorofficialshave
ensuredexchangesinareasofcommoninterest
includingEuropeanUnionexternal relations,
financialservicesregulation,macroeconomic
issues,tradeandinvestment,productandfood
safetyandtheenvironmentandcompetition.
Fourdelegationsof theEuropeanParliament
alsovisitedHongKongandhelpedto further
improvebilateralrelationsandcooperationwith
theLegislativeCouncil.
Europeanbusiness inHongKong isprimarily
represented by the European Chamber of
Commerce, which carr ied out a number
of activities to facilitate dialogue with the
governmentandenhanced theprofileofEU
business and industry in 2013. Some of the
Chamber’s activities during the year were
carriedout inpartnershipwiththeHongKong
EUAcademic Programme (EUAP) which was
launchedon1September2012.EUAPcomprises
a consortium led by the Hong Kong Baptist
University, including the Chinese University
of Hong Kong, the University of Hong Kong
andLingnanUniversity. Itpromotesacademic
research, develops outreach activities to
enhancethevisibilityoftheEUandstrengthens
academiccooperationwithEUhighereducation
institutions.
To further strengthen ties with Hong Kong,
diplomaticmissionsfromtheEUanditsMember
Statescontinued topursuepublicdiplomacy
effortstoraisetheEU’sprofile inHongKong,
increaseknowledgeofEUpoliciesandprovide
more informationabout them.Thesepolicies
includetradeandregulatorypolicies,energyand
climatechange, financial servicesregulation,
customs matters, gender equality policies,
interculturaldialogue,academicmattersandthe
EU’sroleintheworld.Akeyvehicleforthishas
beenthefruitfulseriesofmeetingsbetweenthe
EUHeadsofMissions,seniormembersof the
HongKongGovernmentandLegislativeCouncil
andotherleadingfigures.
14 EUROPEAN UNION - HONG KONG2014YEARBOOK
The EU diplomatic missions also worked
togethertoenhancepeople-to-peoplecontacts
andpromoteacademicexchanges,with joint
activitiessuchastheEUHigherEducationFair,
theEUFilmFestivalandthe‘ModelEU’initiative.
TheEUwillcontinuetonurtureitsrelationship
with Hong Kong, increase economic, trade
and investment links, furthercooperationwith
businessandcivilsocietyandpromotemobility
andexchangeswiththepeopleofHongKong.
Keyprioritiesfor2014include:financialservices
regulation and taxation; customs matters;
intellectualpropertyrightsenforcement;further
developing education, research, trade and
investmentties.
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European Union Office to Hong Kong and Macao
N O R W EG
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Map of the European Union 2014
European Union Office to Hong Kong and Macao19/F, St. John’s Building, 33 Garden Road, Central, Hong Kong
Tel: (852) 2537 6083 I Fax: (852) 2522 1302
Email: [email protected]
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