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East Asia

I will of course bear your remarks in mind, Mr. Benton, but I make this observation, which needs to go on the record: having chaired the International Development Committee in the previous Parliament, I had always understood that in debates on Select Committee reports, anything in the report was within order and relevant. I have to say that, having fortunately taken part in many such debates in Westminster Hall, I have never hitherto heard of the Chairman of Ways and Means seeking to prescribe what can take place. If that does happen, his advice ought to be shared with the House before the debate takes place. If it had happened, I would have raised the matter as a point of order with Mr. Speaker this afternoon after business questions. This is not a criticism of you, Mr. Benton, but it would be ludicrous and give grave offence to the people of both Hong Kong and China if, on the 10th anniversary of the sovereignty of Hong Kong passing to China, the House were to assert that discussion on Hong Kong was out of order in a debate on China. I can see that leading to considerable misunderstanding in both Hong Kong and Beijing. I cannot believe, on reflection, that that was what the Chairman of Ways and Means intended to indicate. Hong Kong is in the wonderful position of having access to the opportunities in the rest of China while possessing the institutional, infrastructural and, importantly, legal arrangements to take advantage of them. We should never underestimate the potential for UK business in Hong Kong. First, there is the widespread use of the English language, which alone makes Hong Kong a convenient place in which to do business. Then there is the security of the rule of law, and I do not believe that there is any dispute that Hong Kong has an effective legal system with a competent and impartial judiciary. A number of senior judges from other common-law jurisdictions serve on the Court of Final Appeal, including a former Lord Chief Justice of England, a former Chief Justice of the High Court of Australia and two former presidents of the Court of Appeal of New Zealand. In one of the earlier conclusions in the report, on the People’s Republic of China, the Committee observed:"““We further conclude that the protection of intellectual property rights is essential for the effective functioning of a creative, innovative economy. Unless the Chinese government takes greater steps to establish secure intellectual property rights, tensions between China and its trading partners will grow and domestic innovation will suffer.””" Hong Kong already has in place such protection. Intellectual property rights, including rights on trade marks, patents, copyrights and designs, are protected in Hong Kong, as are brand names, logos on clothes, layout designs of integrated circuits and plant varieties. Under articles 139 and 140 of the ““basic law””, Hong Kong has the exclusive right to determine its own law in those areas. It has signed up to international conventions such as the Berne convention, which, as the House will know, systemises international copyright for commission. It is always worth commenting on the fact that one of the more notable features of the business environment in Hong Kong is the strength and breadth of its legal protection of intellectual property and other such rights. Indeed, Hong Kong trade mark law protects foreign-registered trade marks, even though a trade mark is usually solely a national right so that it cannot be copied in the country where it is registered. Hong Kong offers protection to foreign trade mark owners. The Committee rightly concluded that"““despite some concerns, overall Hong Kong remains a vibrant, dynamic, open and liberal society with a generally free press and an independent judiciary, subject to the rule of law.””" We should focus a lot more attention on how, collectively, the UK Government and other agencies can maximise the potential for British business that Hong Kong offers. UK exports to Hong Kong exceed those to mainland China, which is obviously partly because of the distinctive British legacy in Hong Kong. British business, financial and cultural interests there remain extensive. There is considerable good will towards Britain and businesses of British origin, but it goes much wider than that. The rapid growth of the Chinese economy is concentrated in three regions: the Bohai rim around Beijing, the Yangtze river delta around Shanghai and, significantly, the Pearl river delta. As the Committee reports, the closer economic partnership arrangement signed in 2003 allows Hong Kong products to be exported tariff-free to the mainland and gives preferential treatment to Hong Kong-based service providers. That agreement has given considerable impetus to the integration of the pan-Pearl river delta economic area, and, as the British Chambers of Commerce told the Committee, that integration has created a Pearl river delta common market. Indeed, there are now an estimated 60,000 Hong Kong-owned businesses in the delta, employing 11 million people—more than three times the work force of Hong Kong itself. Hong Kong has provided about 70 per cent. of foreign direct investment in the Pearl river delta region over the past 20 years. That has led to the creation of further enterprise in Hong Kong with the expertise needed to establish and manage manufacturing opportunities in mainland China and co-ordinate Chinese exports to the rest of the world. Hong Kong therefore has the best of both worlds: an economically privileged relationship with mainland China and the resources, both human and capital, to exploit it to the full. It has the opportunity to benefit enormously from the rapid growth of China. A couple of years ago, I spent some time in the Pearl river delta on business, seeking to negotiate joint ventures for a plastics company called 3DM plc, in which I am still a shareholder. It is only by going to the provinces of the Pearl river delta that one can get a proper impression of the scale and speed of development there. Cities of which we have never heard, larger than Coventry, seemingly grow up overnight and compete with the rest of the world. Understandably, we need to do more in mainland China. I repeat that the Committee notes, in a single, stark, two-line sentence:"““We conclude that the United Kingdom’s market share in China is lagging behind its competitors, and that the Government must do more to support British business in China.””" However, the House should note that, if one sets aside the curious quirk of the sizeable quantity of British investments in Hong Kong that are held through special financial institutions in the Netherlands because of tax and administrative advantages that I do not pretend fully to understand, the UK is undoubtedly the largest European investor in Hong Kong. British investments there are very large indeed—in the order of £18 billion—which represents a strength that we should be spending every effort to build on. Understandably, the Committee recommends in its report that"““the Government ensure that its strategy on China recognises the continuing economic importance of Hong Kong in its own right, and its role as a gateway to China. We recommend that the Government work with business organisations to identify priority sectors which could benefit from opportunities in Hong Kong, and to offer assistance in delivering market research and trade promotion.””" We have the Asia Task Force and the China Task Force, as well as a UK trade and investment strategy. I would like the Minister to explain how those task forces and strategies will focus on maximising UK business opportunities in Hong Kong and, through Hong Kong, in the rest of China. Even Hong Kong’s challenges, such as poor air quality, lack of space and local landfills, present obvious opportunities for British companies that are skilled in renewable energy and recyclables. The forthcoming six-monthly visits to Hong Kong by an all-party group will, I hope, enable Members of Parliament to, among other things, maintain a focus on Hong Kong’s potential and on what the UK Government and UK plc can do together to maximise that potential.