The governments of Myanmar and Hong Kong have agreed to negotiate a bilateral investment promotion and protection agreement and another on double taxation will follow, the financial secretary of the special administrative region of China said.

John Tsang said the deal “will provide certainty and clarity” to businesses in both jurisdictions and that negotiations “should be fairly straight -forward”.

He made the comments following a luncheon in Yangon for a delegation of officials and executives from Hong Kong on June 27. The luncheon was organised by the Hong Kong Economic and Trade Office in Singapore and the Union of Myanmar Federation of Chambers of Commerce and Industry.

Federation chairman U Win Aung urged Hong Kong manufacturers to “concentrate on businesses that can create better jobs for our people”.

Myanmar’s recent readmission to the European Union’s generalised scheme of preferences creates opportunities for companies seeking duty-free access to that market, he said.

Mr Tsang said there is an upsurge of interest in Myanmar among Hong Kong businesspeople, describing them as “very excited” about opportunities here. “These are extraordinary times for Myanmar’s development,” he said.

Hong Kong-owned factories in China’s industrial heartland, the Pearl River Delta, are shifting to Southeast Asia because of labour shortages and rising prices there. Myanmar will be a beneficiary of this trend, Mr Tsang said.

He also encouraged executives in Myanmar to consider Hong Kong as a platform for accessing mainland China and other markets, saying that companies incorporated in Hong Kong have tariff-free access to mainland China. Hong Kong banks also offer renminbi trade settlement, allowing companies to reduce volatility and currency risk by conducting trade in China’s currency, Mr Tsang said.