Why the AHKFTA Is Important
There are several reasons why the AHKFTA is important. One of the primary reasons relates to the increasingly close economic ties which connect Southeast Asia and China. Hong Kong is able to play a role which would connect both. This is possible through Hong Kong’s Closer Economic Partnership Arrangement (CEPA) with mainland China. The CEPA provides as well as tariff-free treatment for Hong Kong products which are exported to China. It also grants preferential market access to service suppliers based in Hong Kong who seek to enter China. In this way, Hong Kong serves as a conduit for businesses in Southeast Asia to enter the mainland Chinese market.
At this point, we should mention that we at Paul Hype Page & Co are able to assist you with company incorporation in any of three Southeast Asian countries. These countries are Indonesia, Singapore, and Malaysia. Should you desire a company of your own based in any of these countries, just contact us and we will supply you with the necessary feedback, information, and assistance.
Re-exports of goods from Southeast Asia to China have been increasing rapidly. Every year since 2012, the increase in value of such re-exports has typically been at a rate of around 6.4% per year. Many of these goods pass through Hong Kong on their way to mainland China. The AHKFTA has done much to both simplify this complex process as well as bring economic benefits to both Hong Kong and Southeast Asia.
Furthermore, the value of commodity products which are traded between Hong Kong and Southeast Asia has risen tremendously. Well over US$100 billion worth of commodities are traded between Hong Kong and Southeast Asia. This figure is almost seven times as much as the value of services traded between Southeast Asia and Hong Kong. The AHKFTA has permitted this high value of commodity trade to persist.