It’s impossible to browse the news without seeing at least one article detailing the consequences of the US-China trade war that have been escalating since 2018 . With another increase in tariffs projected for July of this year, $250B worth of Chinese imports to America will be taxed heavily. Rightfully so, you’re not alone if you are scrambling to get your business plans in order before this bomb hits--no wonder this has been called the Cold War of the 21st century.
Chinese exporters should be scared for the tariffs they might have to absorb, but they should be even more fearful of the potential drop in demand. With reluctance to take a hit to their bottom line, most of the time these tariffs will end up being transferred to American importers and consumers, directly impacting demand from the source. With China historically being second only to the U.S. in international trade, the plummet of overall demand from the West is bound to have a ripple effect over smaller countries in Asia who also bank on American consumers.
Hong Kong holds a unique position between the two countries--caught between a rock and a hard place. However, with intimidation ploys and dramatic political declarations playing in the media on both sides, it may be difficult to separate 1) the obvious obstacles to Asian trade and 2) its hidden benefits. Let’s take a look at both.
Re-exports: the heart and soul of HK traders. With hundreds and thousands of (typically) small businesses in Hong Kong handling exports from the mainland to be exported again overseas, the economy is bound to be affected by the reduction in trade. Fortunately for the city, the U.S.-Hong Kong Policy Act exists to maintain the existing robust trade relationship between the regions. Unfortunately, it doesn’t help that close to half of Chinese exports shipped via HK are still taxed. From HK’s perspective, 28% of all re-exports would be impacted by the tariff and the re-export business tends to take up a larger part of HK economy than domestic exports. The tariffs make it difficult for these export companies, who make profit from their markups on re-exports.
The most obvious detriment to Hong Kong businesses would be the ones with branches of operations in China. In the coming months, the cost of operating a business in the mainland will only become less appealing as they become outweighed by export taxes--especially since a large part of the goods taxed are consumer products constructed using locally sourced parts. For these unlucky companies, the best idea may be to jump ship and swim to the nearest island, likely one of the other quickly developing nations in Asia (eg. Vietnam, Malaysia, Philippines) where companies can outsource their operations.
Without diving into the political aspects, it’s safe to say China has been benefitting from the One Country, Two Systems relationship with Hong Kong, especially now that China’s trade market is under fire. While the HK economic turbulence largely reflects that of China’s, the city’s own strengths in technology and infrastructure development over the years as well as the unique trade relationship established with Western countries may help the companies on this side of the war glean some unexpected benefits.
For the West, the strategic importance of Hong Kong as a middle ground has already been identified, with easy access to mainland as well as other ASEAN countries in terms of geographic location and trade agreements. American companies will also be trying to move out their imports from China as soon as possible, whether it’s sourcing through a different country or somehow circumventing the tax. Chinese businesses trying to shift operations to go through HK may see it as a loophole but American companies would be more than happy to oblige and continue importing mainland priced parts without the premium payment--at least until US makes a move to prevent businesses dodging its blockade.
Whether or not the previously mentioned benefit is temporary or long lasting (should US choose not to ruin the historically established trading relations with Hong Kong), the lasting impact will be felt by businesses across the city. HK is already well known for having a friendly business environment with comparable financial infrastructure, both attractive feats to investors hoping to gain profits from a nation quickly developing in technology and living up to its hope of becoming Asia’s Silicon Valley. Despite the negative impacts of lower trade from re-exporting China’s goods, businesses might expect some growth in domestic trade that truly stems from domestic entities. Perhaps this is the boost HK businesses needed to diversify their operations to other countries in the Asia-Pacific region, which happen to be both fruitful in resources and cost-efficient.
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當你睇新聞的時候，無可避免會留意到至少一兩篇詳細講述中美貿易戰後果的文章，這場貿易戰自2018年起至今不斷升溫。隨著今年7月開始再次上調關稅，價值250億美元的中國貨進口到美國時將會被開徵重稅。理所當然地，在這一枚關稅炸彈重重擊潰你的生意之前，你跟其他人一樣會爭先恐後希望可以盡早擬定你的商業計劃去應對這場貿易戰 – 難怪中美貿易戰被稱為21世紀的冷戰。
轉口貿易：是香港從事貿易商的核心和靈魂。香港有成千上萬的（通常）小企業處理來自大陸的出口貨品再將它們轉運到並出口到海外，香港的經濟必然會因為進出口貿易減少而受到影響。幸運的是，現行的美國 - 香港政策法案能夠維護香港與美國之間的強勁貿易關係。不幸的是，接近一半的中國出口貨品經香港口岸轉運到美國時仍然會被徵收關稅。從香港的角度來看，28％的轉口貿易會受到關稅的影響，跟本地出口貿易相比，轉口業務佔的比例要大得多，是香港經濟的一大命脈。關稅會使那些從事出口的公司經營困難，他們會難以從轉口貿易中收取溢價來賺取利潤。
於中國設有分支廠房去生產營運的香港企業是最明顯會受到波及的一群。未來幾個月開始，在大陸進行生產營運的成本會變得不再吸引，以往的優勢會比關稅抵銷-- 特別是大部分被徵稅的貨品都是使用當地採購的部件而製成的消費品。對於這些倒霉的公司，最好的辦法可能是跳船並游到附近的口岸，可能是其中一個在亞洲發展迅速的國家（例如: 越南、馬來西亞、菲律賓）並將公司的業務外判到這些地區。
對於西方國家而言，香港作為中西方之間的橋樑，背靠中國而且在地理位置和貿易協定的層面上都可以與其他東盟國家緊密連繫，無可否認在商業戰略上香港扮演著重要的角色。相信美國公司亦會盡快試圖減少從中國進口貨品，並轉移至到其他國家去進行採購，或者以其他方式逃過被徵稅的厄運。中國企業可能會看到徵稅的漏洞而試圖將業務轉移到香港，但相信美國公司會非常樂意在無需支付額外費用的情況下，繼續進口大陸的廉價部件 -- 至少在美國採取行動阻止企業逃避這方面的封鎖前狀況都會大概如此。