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Hong Kong must step up economic cooperation with its neighbors in the region to strengthen its industrial development.

Explaining her point, Ann Chiang, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), said yesterday that Hong Kong should join permanent regional economic cooperation organizations in order to enjoy reciprocal benefits which it has offered to other economies.

"Hong Kong has only signed the Closer Economic Partnership Arrangement with the mainland, but it is not part of any other major economic cooperation organization," she said after meeting Chief Executive Donald Tsang with fellow CPPCC members to offer suggestions for the October policy address.

"Regional economic cooperation has become a growing trend. In America, Europe and Asia. We have seen the world's three biggest economic cooperation organizations. But Hong Kong, given its independent economic entity, has not joined the ASEAN although it is part of China.

"This will affect Hong Kong as a free port, which offers tariff exemption on imported goods. Yet, Hong Kong products are subject to import duty by other economies. So the SAR government must do something to support Hong Kong industries and its hi-tech development."

To start with, she suggested cooperation with neighbors that have the same status as Hong Kong. "We should enhance cooperation with Macao, which is so close to us, as we are both special administrative zones of China," she said.

Fellow member Alan Hoo said this was the second time Tsang had consulted the CPPCC members with regard to the policy address.

He, however, said that the CPPCC members could play a bigger role instead of just putting forward their suggestions.

Hoo referred to the Blue Sky Campaign, for instance, to improve the air quality. It is a matter involving the economic interests of provinces and cities in South China, he said.

"If the factory owners use cleaner fuel than coal for their production, they need to pay more money," said Hoo, who is senior counsel by profession. "In such a situation, CPPCC members can do a bigger job by consolidating views among ourselves and even raising motions for the relevant departments to answer our queries."

On the proposed goods & services tax, he said that according to Article 108 of the Basic Law, the SAR government could levy a new tax item. But it needs to address the question if it will affect the simple, low tax regime in Hong Kong, he said.

He said that since the Basic Law was a constitutional document that outlined the major policy objectives, he hoped the government would do more to ensure a better understanding of the mini-constitution.

"I hope the chief executive will announce in the policy address the creation of a Basic Law professorship in the universities and a Basic Law research centre," he said.

(China Daily HK Edition August 31, 2006)