Trans-Pacific twins strengthen ties

Hong Kong Trade Development Council Deputy Executive Director Raymond Yip, welcoming Mr Valera, said the volume of trade between Panama and Hong Kong had leapt 29%, to almost US$300 million in 2018, while the value of exports from Hong Kong to Panama soared 33%, reaching US$262 million. He expected this trade momentum to continue, fuelled further by two significant developments driven by Mainland China.

“The first is the Belt and Road Initiative − a grand vision that aims to create common prosperity among nations and economies through improving trade, infrastructure and social exchange,” Mr Yip said. “The Belt and Road is making its presence felt across Asia and into the Middle East, Africa, Europe and beyond, including the Americas. I am sure you are all aware that in 2017 Panama became the first Latin American country to sign a memorandum of understanding with China to promote the Belt and Road Initiative.”
 
Linked in with the Belt and Road is the Guangdong-Hong Kong-Macao Greater Bay Area, he said. The 11-city cluster has a population of 70 million people and a GDP equivalent to that of Korea and Australia combined.

“The blueprint for the Bay Area was published in February, with an aim to develop a vibrant word-class city cluster and globally influential innovation and technology hub,” Mr Yip said. “Hong Kong is playing a pivotal role in these initiatives, serving as a centre for financing, investment, logistics, trading, infrastructure and real-estate services, and a whole range of professional services including dispute resolution, risk management and more. This makes the city an ideal partner for Panamanian enterprises looking to seize opportunities in this region.”

Mr Valera said that expansion of the Panama Canal, as well as investment in new ports and other large infrastructure projects, meant the country’s competitiveness would continue to improve.
“One of the main factors behind all of Panama’s growth is our logistics platform, which is consistently among the best in the region,” he said. “Our objective, in terms of competitiveness, is not to lead regionally, but to compete globally.”

Panama ranks fifth in the world in terms of port infrastructure, he said, with the main ports in Latin America moving more than 7 million containers per year combined. “Panama is the only country on the planet with a terminal that has access to the two oceans,” Mr Valera said.

“From Panama, you will have access to a much larger market: 300 million middle-class consumers in Latin America, the same number of middle class consumers as Mainland China,” he said. “Beyond that, the reach and connectivity of Panama can help you reach a wider market of 1.3 billion consumers.”

The World Economic Forum says Panama is globally recognised for the development of its financial market, strength of its banks and availability of financial services that meet the needs of the market. “Currently, we have 90 international and local banks,” Mr Valera said, adding that many multinational companies have set themselves up in Panama.

“A great reason why we have so many multinationals in Panama is because of our location and also because of our Multinational Corporation Headquarters [SEM] regime laws. Today, more than 150 companies have established their regional offices in our country, generating more than US$800 million in investments and more than 5,000 new jobs,” Mr Valera said.

Of these companies 12 are from Mainland China, such as China Harbour Engineering, China Construction Bank, Huawei, Power China and the Bank of China. “These companies have chosen Panama as the country to establish their regional headquarters and are comfortable with the business environment in Panama. Some have even made the decision to expand their operations,” he said.

The president was in Hong Kong to inaugurate the Consulate General of Panama.

Hong Kong's Chief Executive Carrie Lam, accompanied by the Secretary for Transport and Housing, Frank Chan, and the Acting Secretary for Commerce and Economic Development, Bernard Chan, met Mr Varela at Government House during his visit. Panama's Minister of Commerce and Industry, Nestor Gonzalez, and Minister for Canal Affairs, Roberto Roy, also attended the meeting.

Mrs Lam welcomed Mr Varela's visit to Hong Kong, which came almost two years after Mainland China and Panama established diplomatic relations in 2017.