HK Remains Bridgehead for Inflow of Foreign Capital Into Inland Market

Liu Shan, deputy director of Central Government Liaison Office in HKSAR, said in Hong Kong on February 2 that although more transnational corporations will directly enter the inland after China's projected entry into the World Trade Organization (WTO), for a long period of time to come, however, Hong Kong will remain a bridgehead for foreign capital to enter into the hinterland and it will continue to provide services to aforementioned corporations.

Liu Shan made the above remarks at a seminar, titled "The WTO needs China, and China, on its part, needs the WTO". The meeting was jointly sponsored by Tsinghua University and Hong Kong Shue Yan College.

Liu believes that after China's entry into the WTO, HK's commodities and service trades will have more opportunities to enlarge the market, and the volumes of transit trade and offshore trade will be increased, thereby promoting the growth of service related to import and export. The further opening of the inland service trade will provide more opportunities for Hong Kong's banking, insurance, trade, and retail and other service trades to develop their business in the hinterland of China.

Liu emphasized that after China's projected accession to the WTO, the economy of both the inland and HK will face new challenges. To meet these challenges, the hinterland needs to speed up revising, making and perfecting related laws, accelerate the reform of the state-owned enterprises (the SOEs) and the construction of a market economy. It should intensify enterprises management, technological renovation, talents training as well as economic restructuring and enhancement of international competitiveness. While Hong Kong's enterprises are facing a new prospect for market development, they also need to enhance their economic strength so as to face up to the fiercer competition coming from inland enterprises and multinational corporations.

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