Speech by the Chief
Executive at the 140th anniversary celebration of the Hong Kong General Chamber of
Commerce
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Following is the speech by the Chief Executive, Mr Tung
Chee Hwa, at the 140th anniversary celebration of the Hong Kong General Chamber of
Commerce today (February 22)
Continuity and Change: HK's Economy Forging Ahead
C C, Consul Generals, distinguished guests, ladies and
gentlemen:
First of all let me say how pleased I am to have this
opportunity to be with you today celebrating a remarkable milestone. It may be 12 years
now since I stepped down from the Chamber's General Committee, but I remember well and
still cherish the very fruitful years I spent working with you as friends and colleagues.
I do not know of any other institution that has so consistently and continuously
contributed over such a long period of time to the development and well being of our
shared home.
In one respect, the Chamber has been an exact mirror of
Hong Kong, in that it has managed to drive constant - and often radical - change while at
the same time preserving a strong sense of stability and continuity. A dip into the
archive of the Chamber unearthed interesting facts that are reminders of this constant
change: of the Chamber's original 62 subscribers in 1841, only two are left - Jardine and
Standard Chartered (then the Chartered Bank). The Hongkong Bank was not then even a glint
in anyone's eye to look where you are today. And more, a century and a half later, our
membership boasts great companies from all over China, US, Europe, Japan, Korea and a host
of other economies and countries around the world.
In Hong Kong we are used to change and we have not only
managed change well, but indeed we thrive on change. This particular strength of Hong Kong
has come out even more strongly since our reunification. In the past three-and-a-half
year, we have gone through some very momentous changes. The first is, of course, the
establishment of the Hong Kong Special Administrative Region. With the firm support of the
Central Government and the commitment of the Hong Kong people, we have turned the concept
of "One Country, Two Systems" into an everyday reality. Making the "One
Country, Two Systems" concept a dynamic, working reality is no small challenge. In
this effort, we have been focusing on ensuring that those quintessential qualities that
have made Hong Kong such a unique and successful city - qualities such as the rule of law,
the civic freedoms and the commitment to allowing the market to lead, with the government
facilitating with the provision of indispensable infrastructure - are rigorously
protected. In these important aspects of our governance, I can assure you that our
commitment is total and unflagging, and will remain so going forward.
The second huge change is brought about by the impact of
the Asian financial crisis. The bursting of the economic bubble had brought us one of the
worst recessions Hong Kong has experienced in recent years. The underlying strengths of
Hong Kong - our open and free economy, the resilience, enterprising spirit and
self-reliance of Hong Kong people, coupled with the fiscal measures which the Government
introduced to boost the economy, have once again served us well. We have managed from the
crisis with a strong recovery. The economy is estimated to grow by 10% last year and
unemployment is falling gradually from the peak of 6.3% to 4.3% now. We recognised not all
of our citizens have benefited from a strong recovery, but as economy continues to expand,
more will benefit.
Hong Kong's success in implementing "One Country, Two
Systems", our commitment to the rule of law, to providing a level playing field and a
business friendly environment, and our ability to manage change while maintaining
continuity have been given full support and a strong vote of confidence by investors both
at home and abroad. According to the latest available figures, Hong Kong received a total
of 23 billion US dollar direct foreign investment in 1999, the second largest in Asia
after China. Last year, US net portfolio investment in Hong Kong amounted to 5.3 billion
US dollars, which is the highest in Asia and close to three times that of the second one
on the list. The number of multinational companies using Hong Kong as the base for
activities in Asia Pacific Region has increased from 2,500 to 3,000 within one year.
These are no small feats. Hong Kong should take pride in
what we have achieved together as a community. And while taking on these challenges, we
have not lost sight of our longer term future to realise the goal we have set for
ourselves and that is to become one of the most important cities in China and the world
city in Asia.
To do so, we need to address some of the long-term problems
affecting our competitiveness. I am pleased that we are beginning to see the results of
the range of reforms we have introduced to tackle these issues. The work of the Innovation
and Technology Commission has galvanized the community's interest in information
technology and heightened public awareness of the importance of IT and innovation to our
future.
The public sector reform has improved the efficiency and
responsiveness of our civil service, and at the same time produced substantial savings
from our recurrent budget to help finance improvements to other public services. This
saving will reach $5.8 billion per annum by 2003. The reorganisation of municipal services
has brought about much improved food hygiene, leisure and recreational services. Although
a lot more still needs to be done, there is already noticeable improvement in the air
quality following the implementation of the measures to reduce diesel vehicle emissions.
Continued efforts are being made to improve water quality and waste disposal.
Although the result may take some time to go through, we
are geared up for the education reform which is vital to upgrade our human resources and
assure that we are able to produce enough high quality and talented young people to
support the continued growth and development of Hong Kong. The success of all these
measures will ensure Hong Kong remain at the forefront of the global knowledge economy,
secure our continued prosperity, and prepare us for the next great opportunity unfolding
before us - the accelerated pace of development of the Mainland economy.
Ladies and gentlemen, for nearly half a century, Hong Kong
has coped with the tremendous changes that have taken place in the Mainland - and derived
great benefits from them. In the 1950s, we saw a huge influx of entrepreneurs and business
elite from the Mainland, which turned Hong Kong into a highly competitive and efficient
export economy virtually overnight. The change brought about by Mr Deng Xiaoping's
"Open door" policy in 1978 gave Hong Kong manufacturers an opportunity to expand
and migrate across the boundary and successfully turned Hong Kong into one of the world's
most remarkable trade and financial centre as it is today. Throughout this process, Hong
Kong has made enormous contributions to the opening up of the Mainland economy, and in
return, we have gained tremendous benefits. It has always been a "win-win"
situation and will continue to be so.
Today, 40% of our trade is accounted for with the Mainland.
Of the 18 million 20-foot-equivalent containers our port handled last year, some 14
million, or three-quarters, were related to the Mainland, mostly to and from the Pearl
River Delta. Everyday, we have on average 31 000 vehicles and 270 000 people travel
between the boundary. Mainland companies account for some 30% of the Hong Kong stock
market capitalisation. Of the 13 million tourists that visited Hong Kong last year, over 3
millions are from Mainland China, ranking them ahead of any other countries or communities
in the world. All this shows that our economy is intrinsically linked with the Mainland.
China is undertaking yet another major change. This time it
is the accession to WTO. China's entering the WTO will not only provide greater market
access to its trading partners, but it will also become more rule-based. The trade and
investment systems in China will become more transparent, more business friendly and more
aligned with international practices, areas in which international and Hong Kong
businesses attach great importance to. WTO entry will provide greater opportunities not
only for the multinational corporations but also for small and medium sized enterprises
around the world to participate. While some of the multi-national businesses may choose to
go into China direct, others will continue to use Hong Kong as the base of operations. Few
of the international SMEs have the capability to move into China directly and they will
need a partner who knows Mainland China well and this fits in perfectly with Hong Kong
strengths. Hong Kong's position as an international financial and business centre, a
transportation and communication hub, a centre for professional services and our
traditional role as a gateway to the Mainland will be further enhanced.
But a further and perhaps even greater opportunity for Hong
Kong is the growth of the domestic market of the Mainland of China. Since the opening up
of the Mainland economy 23 years ago, the size of the Mainland economy has been growing by
leaps and bounds, and by last year, the GDP has reached one trillion US dollars. A lot of
wealth has been created in the process and a strong domestic economy is taking shape.
China's entry into WTO and the development of the Western Region are set to accelerate
this process. We have seen in history and in our own Hong Kong development over the last
few decades that once per capita GDP has reached beyond certain subsistence level, we will
see an explosion of demand for high value and quality consumer products and different
types of services. From all indications, China, particularly the coastal regions and the
Pearl River Delta, is on the verge of this economic leapfrogging.
Indeed, the Pearl River Delta is a microcosm of the future
development of the Mainland. With perennial double-digit growth and one of the most
dynamic and open economies in the Mainland, the population of the Pearl River Delta has
accumulated a significant amount of wealth over the years. Shenzhen's per capital GDP in
2000 has risen to 4 300 US dollars; it is estimated to grow to 7 000 US dollars in five
years' time. Guangzhou, Dongguan, Zhuhai, and other cities and townships are following
closely.
I know there are people who are concerned about the huge
change taking place in the Pearl River Delta. The fear is that a closer integration or
even working together with the Pearl River Delta will have a negative impact on our
property market, restaurants and retailing business. This worry is understandable and may
be true in the short term. But, in my view, the integration with the Pearl River Delta is
a natural process that we should not resist, but rather we should embrace. We should be
confident of Hong Kong's strategic location and our role as a conduit to the outside world
for Southern China. We should understand that the faster the cities and townships in the
Pearl River Delta grow, the more trade they will generate through Hong Kong. The more
wealthy the people in the Pearl River Delta become, the more demand for consumer goods and
services they will create for Hong Kong. And the more affluent the Pearl River Delta is,
the more people will travel through Hong Kong or to Hong Kong as tourists. And the more
prosperous the Pearl River Delta is, the more opportunities for Hong Kong businesses to
invest in the area. All these are pluses for us and will contribute positively to our
economy. The faster the Pearl River Delta gets rich, the better Hong Kong will be. It is a
"one plus one equals three situation", provided we do not stand still ourselves.
We must see the future of Hong Kong and the Pearl River Delta as a regional economy,
manage the change leading to this process, seize the opportunity, and ensure Hong Kong
remains the economic driving force for the whole region.
Many of you all know that during the last Christmas
holiday, I visited Guangzhou, Shenzhen and Dongguan and had the opportunity to hold
discussions with the provincial and municipal leaders. Last year, I also visited Macau and
met with the Chief Executive of Macau SAR. We all shared the same vision of a Pearl River
Delta regional economy and saw many opportunities for cooperation and collaboration
between Hong Kong and the region to realise this vision. The areas that we see offer great
potential are IT development, financial services, retail and distribution, import and
export, professional services especially in legal services, construction and project
management, and transport and logistic services. In months ahead, we will study and hope
to identify some measures to promote cooperation in these areas. I should however
emphasize that the initiative must come from the private sector. Only you know what you
want. The Government will act as a facilitator by pointing you the direction and helping
you clear the path and remove the hurdles if need be. I challenge you to look into these
opportunities seriously, offer your advice; and I assure you we will listen.
I can assure you that the SAR government will endeavour to
provide a conducive environment for attracting investment and promoting the free flow of
people, talents, and goods and services. This includes tackling the boundary congestion
problem and improving the air and water quality and the natural environment we share. I am
most encouraged that in all my discussions with the Mainland provincial and municipal
leaders and the Chief Executive of Macau SAR, I have been assured of full commitment to
resolve these issues through joint cooperative efforts.
I know as we begin to take practical steps to plan for and
to tackle our joint problems together, we need to bear in mind the challenge that arises
from the differences in our two systems. The practical reality of "One Country, Two
Systems" means that Hong Kong's future relationship with its hinterland will not be
totally identical to that of New York with Connecticut and New Jersey, or London with
Essex and Surrey. The task we face is to establish a framework of arrangements that
facilitates seamless interaction while not at the same time in any way compromising the
differences that underpin the "One Country, Two Systems" concept. We on both
sides of the boundary need to act boldly, share creative ideas and cooperate, and I am
confident we have the ability to do so.
Ladies and gentlemen, in the last half-a-century, we have
experienced several momentous changes in the Mainland of China and we have never let any
one of them pass without capturing a significant benefit for Hong Kong. And in the
process, we made enormous contributions to the Mainland. Momentous changes are once again
taking place on the Mainland and in time China will emerge as a major economic force in
the world. I have every confidence that we will be as nimble as before in capturing the
advantage from these changes and maintaining our continued success. I look forward to
working together with you to take on this challenge, create new opportunities and bring
more prosperity to Hong Kong.
Thank you.
End/Thursday, February 22, 2001
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