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Pivot to ASEAN and RCEP for trade hub growth?

By Oswald Chan | HK EDITION | Updated: 2021-09-24 14:31
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'Dual-circulation' economy

In the 14th Five-Year Pan (2021-25), China identified "dual-circulation" as the engine to propel the nation's economic growth. While "external-circulation" serves export demand that is volatile, "internal-circulation" leverages domestic demand from domestic consumption, as the new source of economic growth.

Tao Zhigang, associate dean (human resources) of HKU Business School and HSBC professor in global economy and business strategy, said Hong Kong should develop the import intermediary business for the mainland's imports.

"While Hong Kong should participate in 'external-circulation' - value-adding the mainland export to overseas markets like the US and Europe, it should also participate in the 'internal-circulation' - the domestic market - by facilitating import of consumer goods, not just intermediate goods related to production, as the mainland gets richer," Tao said.

"Hong Kong is privileged as the bridge for internal and external circulation and can do something in-between. We should understand what mainland consumers need and know what the world has to offer. This is the competitive advantage that the city needs - understanding mainland consumers, to channel global producers," said Tao.

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