China's role in the global supply chains saw a key change in 2009 when authorities started to push for economic restructuring and sustainable growth, said William Fung, chairman of Hong Kong-based trading firm Li & Fung Group.
Addressing a business forum in Singapore on Wednesday, Fung said China started to be part of the global supply chains after its opening up in the late 1970s and gradually came to be known as the "world factory" over a course of three decades.
A key change came in 2009 when authorities started to push for economic restructuring and more sustainable growth, as it is clearly not sustainable to rely on cheap labor and cheap exports.
Fung said he sees a change for China to be eventually both a source of exports and a global consumer market over the next three decades as authorities try to boost domestic demand.
He also said at the forum that both Hong Kong and Singapore are among the world's leading trade and logistics hubs in terms of the supply chains. Hong Kong is the gateway to the Chinese mainland, while Singapore's hinterland is the Association of Southeast Asian Nations (ASEAN).
Gregory So, secretary for commerce and economic development of the Hong Kong Special Administrative Region (HKSAR) government, also said that the two free trade hubs share many strengths, including rule of law, internationally recognized codes of practices in business and commerce and clean and efficient governments.
So said the close links between Hong Kong and the Chinese mainland, and similarly those Singapore with the ASEAN, are likely to offer one another vast potential in expanding access to each other's huge hinterland.
"Hong Kong and Singapore serve naturally as the nodes to connect their respective huge hinterlands. Here we can clearly see a strong complementary role between Hong Kong and Singapore in the regional as well as in the global supply chain," he said.
So called for support from the business community for Hong Kong to join the China-ASEAN free trade agreement.
"I look forward to ASEAN agreeing to formally start negotiations with Hong Kong for us to join the FTA at the earliest opportunity," he said.
Simon Galpin, director-general of investment promotion at Invest Hong Kong, said the role of Hong Kong in the global supply chains is making many multinationals to set up their regional or even global headquarters in Hong Kong recently, including retail giant Tesco and industry leader General Electric.
He said he is seeing opportunities for both Hong Kong and Singapore from the growing number of high net worth individuals in the region and the growing demand for business-to-business services such as those offered by law and consultancy firms.
The ASEAN-Hong Kong Business Forum, with theme of global and regional supply chains, was organized by the Hong Kong Economic and Trade Office as part of its celebrations marking the 15th anniversary of the establishment of the Hong Kong Special Administrative Region.