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Following is the full text of the speech (English only) by the Financial Secretary, Mr Antony Leung, at the Opening Session of the PENTA Forum today (January 24):

Stanley (Ko), Professor Lee (Chack-fan), ladies and gentlemen,

I come to this forum with great pleasure and expectation.

This is the fifth time the Government joins hands with the Hong Kong Coalition of Service Industries and the University of Hong Kong to organise this important forum. It enables leaders from different sectors of our economy to come together to brainstorm on strategic issues confronting our service economy. And this year, to give this forum a new dimension, we have added a fifth element - media representatives. They are people who produce what we read and listen every day, and who reflect and shape public opinion. I welcome all of you to the forum.

One Western media has described 2001 as a year of two distinct worlds: the one before September 11 and the one after. We have witnessed a slowdown in our major export markets since early last year. The tragic events on September 11 not only further depressed consumers and investors' sentiments, they also created greater uncertainty in the global economy. Being one of the most externally-oriented economies in the world, the sharp downturn in the external market at a time when our economy is undergoing structural adjustments has put us in a particularly difficult position.

Now that a new year has begun, economists and analysts are polishing off their crystal balls and forecasting what 2002 would be. In my view, there are three factors shaping Hong Kong's economic landscape in 2002. One is the performance and the pace of recovery of our major markets. The second is our ability to tap the opportunities of the new economy and China's accession to the WTO. The third is our ability to tackle the fiscal deficit.

These are all issues racking my mind everyday and they are also relevant to our discussion today. With the further opening up of the Mainland market, how can we further develop ourselves into a financial, logistics and trading hub of China and of the region? How can we further promote Hong Kong's strengths, particularly in our services sector, in the Mainland now that China has become a WTO member? How can we provide ample employment opportunities to our growing labour force, a large part of it may not be adequately equipped to work within the knowledge intensive sector of the economy. How can the government continue to meet the ever-rising expectation of the public, and deliver to the community world-class public services given our large fiscal deficit?

I do not have all the answers right now, but I am optimistic that we will be able to resolve these issues and emerge from the current economic downturn with new vigour and brighter prospects. We have laid down solid foundations in our infrastructure and institutional framework over the years to make Hong Kong Asia's World City. We have a friendly business environment and a rich reservoir of professionals and businessmen with extensive Mainland experience. We have, with the support of the Central People's Government, started to explore the establishment of some form of free trade area with the Mainland under the framework of the WTO. To control Government expenditure, we have been vigorously exploring ways to streamline processes and shorten cycle time of the Government, and allow the private sector to take up a bigger role in delivering public services.

More important, we have your enthusiasm in coming together to map out with us robust strategies to meet the current economic challenges. While finding all the solutions in a single morning may prove too optimistic, discussion and debate in a forum like this will be invaluable. I ask you to be bold and provocative today. Let me assure you, your ideas and suggestions will not just rest on my desk. They will be food for thought, and where appropriate, action too.

I regret that I will not be able to join you personally again at the dinner session this evening, as I will be setting off for Beijing this afternoon to meet with the Ministry of Foreign Trade and Economic Cooperation on the subject of closer trade and economic ties. As you know, this is a very complex subject, and many more meetings would be required to address the various issues involved. This may take quite a long time, but it is indeed exciting that we are able to make a start so shortly after the Chief Executive has raised the subject with the Central People's Government. I look forward to taking this forward in earnest in the months ahead.

Coming back to the forum, I want to thank the Hong Kong Coalition of Service Industries and the University of Hong Kong for co-organising this meaningful event with us. We value our partnership with the private sector, the Legislature, the academia and the media. With your active participation, I am sure there will be a lively and productive discussion today. My colleagues and I look forward to receiving the main points of your deliberations and recommendations.

Thank you.

End/Thursday, January 24, 2002
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