HK's services industry will greatly help mainland firms 'go overseas': Official

Hong Kong will be a perfect bridge for mainland enterprises to explore the international market and the city's professional services industries will help mainland firms enhance their competitiveness, a Ministry of Commerce official stressed at the 16th Beijing-Hong Kong Economic Cooperation Symposium on Tuesday.

Officials from Beijing and Hong Kong witness the signing of cooperation projects on Tuesday. [Photo/China Daily]

"There is a bright prospect for mainland and Hong Kong to cooperate in the services industries in view of the city's matured industrial chain, rich talent and broad international network," said Lu Jijian, deputy director-general of the Department of Trade in Services and Commercial Services at the Ministry of Commerce, adding that the mainland is embarking on fast development of its modern services industries.

According to Financial Secretary John Tsang, Hong Kong has become a leading economy driven by the services industries which accounted for 89 percent of its employment in 2011.

The mainland has now opened 93.1 percent of its services sector to Hong Kong investment and the Supplement IV to the Closer Economic Partnership Arrangement, or CEPA, which was signed in June 29, has further lowered the threshold for Hong Kong businesses to engage in the mainland's services industries, Lu said.

The first China Beijing International Fair for Trade in Services, held in Beijing from May 28 to June 1, saw the signing of $60.11 billion worth of agreements. And one third of the agreements' value was from Hong Kong enterprises, according to Su Bensheng, head of the trade in services division of Beijing Municipal Commission of Commerce.

The second fair will be held in Beijing from May 28 to June 1, 2013.

"In addition to showcasing the progress in the services sector, the fair next year will bring in more enterprises to meet the demand of modern services and to help promote the combination of services and manufacturing to lead the latter's upgrading," said Xu Kang, deputy head of Beijing Municipal Commission of Commerce.

The expansion of services industries will not only lead China's economic growth in the future, but also improve GDP quality as the country restructures its economic growth model amid the global economic slowdown, Lu said.

According to Lu, China's trade in services will grow at least 10 percent year-on-year in 2012 to reach $450 billion, a very satisfactory growth compared with developed economies in the context of slowed world economic recovery.

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In contrast, the goods trade is likely to expand by 6 or 7 percent this year, he added.

"Trade in services has become the new engine for global economic growth" and it has been less affected from a slower world economic recovery and sluggish international demand troubled by the European debt crisis, Japanese economic recession and slower growth in emerging markets, according to Hong Kong Trade Development Council Executive Director Fred Lam who spoke at the symposium.

"China's trade in services maintained stable development despite rising protectionism in global services trade," Lu said.

In 2011, trade in services of the mainland recorded $419.1 billion, up 15.6 percent from a year earlier and was the fourth largest one in the world, according to the Ministry of Commerce.

Hong Kong remained the mainland's biggest partner of trade in services with a 26.8 percent share. The mainland's services export to Hong Kong increased by 23.5 percent year-on-year to $73.34 billion while its import rose by 15.1 percent to $38.87 billion, according to data from the ministry.

"However, the services sector contributed just 43 percent to China's GDP growth in 2011, lower than that in developed economies of around 50 or 60 percent, or 93-percent in Hong Kong. In addition, the quality of China's trade in services is not very good," Lu said.