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Economy, Investment and Trade
FTA between Hong Kong and three ASEAN countries to take effect in June
(9 May 2019) The Hong Kong Special Administrative Region (SAR) government announced on May 9 that the ASEAN-Hong Kong free trade agreement (FTA) will come into force in June, starting with three ASEAN countries. More specifically, the FTA will come into force on June 11 for Myanmar, Singapore and Thailand. Under the agreement, Singapore will eliminate all tariffs, while Myanmar and Thailand will gradually reduce and eliminate tariffs on Hong Kong exports. This includes tariff reductions and eliminations on Hong Kong goods such as jewellery, apparel, clothing accessories, watches, clocks and toys. Furthermore, Hong Kong service providers will enjoy better market access in a range of service sectors. According to the SAR spokesperson, the FTA’s effective dates for the other seven ASEAN countries will be announced later because these countries are still in the process of ratifying the agreement.
China, Singapore renew currency swap agreement
(13 May 2019) The Monetary Authority of Singapore (MAS) and People’s Bank of China (PBC) announced on May 13 that the two countries have renewed their US$59.8 billion Bilateral Currency Swap Agreement (BCSA) for a three-year period. According to MAS, the agreement will help stabilise financial markets while giving both central banks access to foreign currency liquidity for trade and investment financing needs, including projects under China’s Belt and Road Initiative (BRI). Separately, MAS also announced that it has inked a cooperation agreement with the China-based Asia Pacific Future Financial Research Institute (AFF) to boost research cooperation and information sharing related to fintech between the countries.
Cambodia exports first cargo of bananas to China
(9 May 2019) Cambodia announced that it has made its first direct export of bananas to China as part of the countries’ plans for greater bilateral trade under the Belt and Road Initiative (BRI). The five-container shipment of 100 tonnes of bananas was exported from Sihanoukville Autonomous Port to Shanghai, making it the fourth agricultural produce from Cambodia to be exported to China. Speaking at a ceremony marking the inaugural shipment, Cambodian agriculture minister Veng Sakhon said that the country will be exporting around 130,000 tonnes of yellow bananas to China in 2019. According to Cambodia’s General Directorate of Agriculture head Ngin Chhay, the shipment follows the signing of agreements in August last year, after which Chinese customs finally approved exports from five Cambodian banana plantations and their packing factories.
Vietnamese firms advised to study Chinese trade regulations
(8 May 2019) Vietnamese firms doing business with Chinese firms should study China’s trade regulations and ensure that all transactions made are done through written contracts as per international trade practice, said the Vietnamese commercial counsellor in China Dao Viet Anh during a conference on Vietnam-China trade. Anh also urged local companies to enhance the quality and packaging of their products, develop their brand, gain a better understanding of local preferences, and increase promotion activities in order to establish themselves in the Chinese market. According to the Vietnamese trade office in China, Vietnamese farm and seafood exports face strong competition from other ASEAN countries, and that it was evident that exporters lacked an understanding of the Chinese market. Vietnam’s exports to China grew by 27% in 2018, reaching US$63.9 billion.
Indonesian firms cautioned over dealings with Chinese investors
(11 May 2019) Indonesian state-owned enterprises (SOEs) need to practice caution when bringing in Chinese investments because “good corporate governance is not a well-known concept among them,” said the Indonesian Corruption Eradication Commission deputy head Laode M. Syarif. He added that this was because Chinese investments are not as well regulated as those from Western Europe and the US. As such, he urged local SOEs to ensure that their Chinese investors follow local regulations and anti-bribery measures, especially since Indonesia’s Supreme Court now has laws in place to prosecute not only the individuals but also the corporations involved.