As Hong Kong’s reversion to Chinese rule on July 1 approaches, the American Chamber of Commerce there is optimistic about the territory’s business prospects for the future, Marc Blacker, a representative of the Hong Kong-based organization, said at a breakfast meeting in Atlanta May 7.
But he added annual reviews of “most favored nation” (MFN) trading status with China is “just not necessary” annually, much less every six months as recently recommended by House Speaker Newt Gingrich (R-Ga.). “If MFN were to be revoked, it would take 2 1/2 to 3% off of Hong’s Kong GDP, and as many as 80,000 people in Hong Kong would be put out of work,” he said.
According to Mr. Blacker, participants in the recent Congressional delegation to Hong Kong, which was led by Mr. Gingrich, expressed interest in the flat tax system as a stimulus to the territory’s economy. The system involves a flat 16 1/2% tax rate for corporations and a 15% flat rate for individuals.
“We told speaker Gingrich to send back a delegation to study this tax system,” he said, “but we’re not sure if he really listened to that idea.”
Mr. Blacker, a former general manager of the American Express Bank in Asia, is a vice president of the chamber , which has some 2,800 members. The meeting was held at the Metro Atlanta Chamber of Commerce.
A survey of the American chamber’s members revealed widespread confidence about the reversion Chinese rule on July 1, according to Mr. Blacker. Any fears people may have for their future in Hong Kong, he added, are mitigated by the significant presence of Americans and U.S. companies. He said that there were 36,000 U.S. passport carriers living in Hong Kong and more than 1,000 U.S. companies based there, with 400 having their regional offices in the territory.
Significant trade between Hong Kong and the U.S. also allays business fears, he said. The U.S. exports $14 billion to Hong Kong and imports $10 billion from the territory, making the U.S. its second largest trading partner after China, he added.