During a visit to Bangkok last week, Lam – commonly known as the second-most-influential official of Hong Kong – said her government saw potential to diversify its economy by venturing into the largely untapped market and cheaper labour costs of the 10-nation ASEAN group. As the wind shifts to the Eastern Hemisphere, it sees much room to grow in every way.”Without economic progress, it will be very difficult for any government to resolve other social issues like housing, poverty, environment and ageing populations.”Asean becomes “a very ready candidate”, as it is already one of Hong Kong’s largest investment and trading partners after mainland China – second-largest in terms of trading goods and fourth in trading services, Lam said during an interview with The Nation.

Some Hong Kong firms have relocated their manufacturing bases from the motherland to Cambodia. Phnom Penh alone already has some 60 garment and shoe factories and 24,000 workers, Fong Ngai, director of the Hong Kong Economics and Trade Office overseeing Asean, said in July.

Lam said Hong Kong, a predominantly service economy with that sector accounting for more than 90 per cent of gross domestic product, is looking for investment that is a “win-win” proposition for all parties.

Hong Kong mainly re-exports goods. Products are manufactured outside the city and distributed via Hong Kong. Its exports to ASEAN were worth more than US$29 billion (Bt934 billion) last year, while imports from ASEAN were valued at $65 billion. Total services trade with ASEAN is valued at $13.7 billion annually.

Hong Kong positions itself as a gateway to mainland China, receiving trade privileges from the Closer Economic Partnership Arrangement, thought to be the most liberal kind of free-trade agreement Beijing has ever signed with any party.

“So you can imagine that under the [proposed Asean-Hong Kong] free-trade agreement, and also taking advantage of CEPA, we do expect trade to be enhanced on both sides,” she said, referring to her city and Asean.

Senior officials from the Hong Kong government have been visiting several ASEAN countries in the past couple months, including Myanmar, Cambodia, Singapore and Thailand, to facilitate negotiations for an Asean-Hong Kong FTA, expected to commence early next year and hoped to be concluded by 2015.

Hong Kong is seeking a more comprehensive agreement with Southeast Asia. Looking ahead, it plans to continue to perform the role of logistics hub for the Greater Mekhong Subregion, with added-value services. Further expansion of Hong Kong International Airport and the cross-boundary infrastructure of the Hong Kong-Zhuhai-Macau Bridge, costing almost 200 billion Hong Kong dollars (Bt830 billion), are now under way.

Lam said she also wanted to see closer linkage in terms of a non-economic relationship between Hong Kong and ASEAN through higher education cooperation and cultural exchanges. Her government plans to send university students over to ASEAN countries on an internship programme designed for young people to “gain some experience and perhaps develop a career in one of the countries”.