Trading as usual? Navigating Hong Kong’s roles in global trade architectures

ABSTRACT

The successful maintenance of Hong Kong as a great “trading state” in the wake of its colonial era has been well recounted in the literature. However, the city’s continuing relevance as a key business hub depends on the extent to which the SAR authorities can respond to the challenges, and seize the opportunities, created by a trade governance terrain that has been evolving quickly over the last decade. This paper analyses how Hong Kong has performed as an actor in global trade governance, discusses the development of regional trade architecture, and offers a prospective assessment of how Hong Kong might calibrate its trade policies and strategies in response to the many political and economic shifts in the global trade system. The paper argues that Hong Kong should adopt a more pro-active outlook that goes beyond its long-standing defensive posture in order to carve out policy spaces over the next few years that might best ensure its economic interests and competitiveness within an uncertain landscape of trade architecture.

KEYWORDS:

• Free trade agreements
• global trade regime
• Hong Kong
• regional trade networks
• trade governance
• trade regionalism

Acknowledgements

The author would like to thank Daniel Yeung and Siwei Huang for their invaluable research assistance, and supports from EdUHK’s FLASS Strategic Area fund (#02178) for undertaking the project.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Data of individual economies and years available from the World Bank Data Bank at: https://databank.worldbank.org/home.aspx.

2. More specifically, Hong Kong was the eighth largest import and sixth export hub of goods and was respectively the 22^nd and 21^st largest economy in services trade imports and exports in 2020. For details, see Trade and Industry Department (TID) (2021) and WTO (No date).

3. In total trade volume’s term, the top five Hong Kong’s trading partners were the Mainland China (52.4%), Taiwan (6.7%), the US (5%), Singapore (4.7%) and South Korea (3.9%) in 2021. The SAR imported the most from the Mainland China (45.8%), Taiwan (10.3%), Singapore (7.8%), South Korea (6.1%) and Japan (5.1%); and exported the most to the Mainland China (39%), Taiwan (11.1%), the US (9.9%), United Kingdom (6.6%) and Switzerland (5.6%). As economic blocs, the ASEAN and EU were respectively the second and fourth largest trading partner of Hong Kong, making up 12.1% and 5.4% of all trade flows of the city. For details, see TID (2022b).

4. In addition to the TID and CEBD being the official policy actors within the SAR government dealing with multilateral and bilateral trade affairs, trade promotion and policy advocacy also involves Trade Development Council, a statutory body created in 1966, and the different chambers of commerce active in Hong Kong.

5. Data compiled from Asia Regional Integration Centre, Asia Development Bank: https://aric.adb.org/database/fta.

Additional information

Notes on contributors

Yu-wai Vic Li

Yu-wai Vic Li is Associate Professor at Department of Social Sciences, the Education University of Hong Kong. His main areas of research concern political economy of financial opening and regulation in East Asia and China, and Hong Kong’s positioning in global economic governance. His works have appeared in Global Policy, Political Science Quarterly, and Asian Survey.