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Following is the transcript of a question-and-answer session by the Chief Executive, Mr Tung Chee Hwa, at the New South Wales State Chamber of Commerce luncheon in Sydney today (Monday, June 15):
Question: You were recently reported as saying that Hong Kong and Hong Kong's economy has taken a tumble but that you will be back to normal soon. How soon is soon?
Mr Tung: If I was an economist I would tell you - on the one hand it will be this, on the other hand it will be that. And I am not an economist, I am a politician so you won't get that answer from me either! I think we are in for a difficult period. There is going to be many quarters before we come out of the difficult period but let me assure you one more time that we are very focused on our future and we will rebound and we will rebound strongly.
Question: Next question is that you said Australia is a key player, you said that this morning and at lunch time today that we are a key player in the Asia-Pacific Region. What can Australia do to contribute to regional economic stability?
Mr Tung: I think that we are in all this together. Knowing what has happened last week in Japan is affecting us in Hong Kong and affecting you. I have just been told that interest rates in Hong Kong have risen sharply this morning as we expected. We are in this thing together and I know that my colleagues in the government, and the Australian government and all the other governments in the Asia-Pacific Region do talk to each other a great deal as to what needs to be done. And I think the important thing is now for us to work more closely together. At this moment, of course, the best thing to do is to persuade the Japanese government to get on with it.
Question: I think you have got a few supporters in the room Mr Tung for that point of view. We weren't going to get away in a lunch like this without having a Pauline Hanson question so here it is. Is Pauline Hanson a negative for Australia for the Asia markets and do you think the Queensland election result will affect Australia's attractiveness for Asian tourists?
Mr Tung: I am an invited guest to Australia and it is really not appropriate to make very specific comments on this particular issue. But let me say this, Australia has been successful because you are a tolerant society, you are multi-cultural society and there lies your strengths and I can't imagine Australia moving away from that.
Question: That's probably just the sort of comment we wanted to hear. The next question. Mr Tung are you confident about Hong Kong's preparations for the Year 2000 computer bug?
Mr Tung: I was asked this question recently in Hong Kong and I told them, I told the audience at that time, that being Chief Executive is really difficult because among all the things one has to learn, one has had to learn, to learn about the red tide, which killed a lot of our fish. One has to learn about the chicken, and how chicken flu had come about, these things, and suddenly you become expert in all these things. And the Millennium Bug is one thing which I haven't really quite understood. But I just want to tell you that our government is getting on with it very effectively and we are very confident we will be able to overcome this particular problem. But honestly I can't quite go into detail with you because I don't understand it!
Question: Mr Tung in preparing for today I was reading a little bit about your background and I notice that you have got a very heavy involvement in shipping, OOCL line. Can you tell us what the reaction in Asia to our waterfront issues here in Australia?
Mr Tung: You are really trying to get me into trouble! I think, from a shipping point of view, from a consumer point of view, the (inaudible) on productivity is really very, very important. In Hong Kong we became the largest container port in the world handling over 13 million TEUs every year. And we did this because we were the most efficient in the world also. So all I can say is that commerce and trade rely a great deal on efficient transport and on transport which is not too costly and I think Australia needs, as well as many other countries, needs to really to work harder at improving efficiency and getting on with it.
Question: I couldn't agree more. Mr Tung this is somebody else who has been doing their research before lunch today and this question is about 'tai chi'. Do you still find time to practice it every day and if so is it helpful for your health and for your work?
Mr Tung: I do practice 'tai chi' every day. It is a tremendously helpful and very healthy exercise. I must tell you that the success of 'tai chi' is only if you really focus yourself on 'tai chi' while you are doing it. And I have a teacher who comes to do 'tai chi' with me three times a week, when I am in Hong Kong, and he has been saying to me that my 'tai chi' is not as good as before because when I do it I am not concentrating on it! So for those people who want to do it I highly recommend it. When you do it, please focus.
Question: Mr Tung, personal trainers always say that, you need to concentrate more. Does China have any intention of devaluing the Hong Kong Dollar?
Mr Tung: I think, firstly let me say this it is the SAR Government's decision whether to delink the Hong Kong Dollar with the US Dollar or not. And I want to emphasise it is not, it is not an alternative. Hong Kong Dollar will stay where it is, firmly linked to the US Dollar. And we will not change the policy.
Question: The next question is about Hong Kong's capital works programme. Anybody that's been to Hong Kong has seen the fantastic airport, you'd know how important capital works is for Hong Kong. Do you see the capital works programme continuing at the same pace?
Mr Tung: As I said earlier on we are investing a lot of money in our future and that includes investments in railways, highways, schools and as well as information technology. Investments in improving our environmental situation. So all these things continue and in fact the commitment is larger than what we have made before. Our Australian fiends have many successes in these areas and we welcome the continued participation of our Australian friends.
Question: Just carrying on that theme, you mentioned in your discussion about the ties between Australia and Hong Kong and I think the audience in this room would be a demonstration of the business links. What other areas do you see as important, what new business activities or new community activities do you see could bind our two countries together?
Mr Tung: I think we share a very strong belief in free trade. We work together very closely as partners in WTO. Because of our sharing this particular vision we also work very closely in APEC. And I think these are the areas where we would want to see a further enhanced relationship as we move forward.
Question: Do you see Hong Kong's economic condition impacting on the outflow of migrants from Hong Kong?
Mr Tung: In 1997, Hong Kong's population increased by 190,000 people. Which is 3% of our population. Out of that, 54,000 are from the mainland of China. They are coming in to reunite with the family, the children, daughters and sons or wives and husbands. And there were maybe 50,000, or thereabouts, natural births minus that. But a huge number, close to 100,000 people to Hong Kong. Some expatriates coming to work in Hong Kong. Some come to work as domestic helpers, but by far the largest percentage are people who have previously migrated and decided to come to Hong Kong because they see a great future. They feel the pride, they see the opportunities. They come back and they want to in building our future. We are of course delighted with that but as the economy slowed down it also puts pressure on unemployment figures as you see that figure in Hong Kong deteriorating. In 1998, with the downturn of the economy we will probably see lesser people coming back from overseas but there will still be people coming back. In so far as migrants leaving Hong Kong, over the last five years the number has steadily declined. I think it was down to about 20,000 every year now so there is a huge net inflow of returnees to Hong Kong.
Question: How does Hong Kong intend to address the competition from Shanghai as the financial business gateway to China?
Mr Tung: I have been asked this question so often. Shanghai, for those of you have visited recently, will have noticed how well they have done in almost every respect and as a competitor we shall respect them very much from Hong Kong. China's economy is expanding. The World Bank says by 2020 China will be the second largest economy in the world. So there is room for more than one Hong Kong. Hong Kong will have a very, important useful role to play so would be Shanghai. Last night when I was asked this question I also mentioned this, I said in the future, as trade barriers start to come down, capital flows will become borderless and people move about a lot more freely than before, in addition to competition among nations, in fact competition among nations may reduce but it may be competition amongst communities. So Hong Kong will be competing with Shanghai, Singapore, and I have no doubt competing with Sydney, this lovely city, Tokyo, San Francisco, Frankfurt, London, Paris, what have you. Because in the age of electronic media and the age of very fast information transmission the competition will really be global and certainly in Hong Kong we need to look at it in that sort of basis, how can we compete not just with Shanghai or Singapore, how we compete successfully with Sydney. So, be on guard.
Question: Mr Tung I am mindful that you arrived in Australia this week and anyone who arrived in Australia this week would think that the whole country is besotted with politics. But we have some other loves and sport would come top of the list so I am going to finish with two sporting questions. The first one is, for the start of the 1998/99 horse racing season in Hong Kong what is your tip for the 1998 International Cup? This will probably get you into more trouble than the Pauline Hanson question!
Mr Tung: I am not, obviously I am not, a racing fan. I have no idea when that cup will be held and I certainly have no idea what so ever about who would be a winner. I do count the number of dollars that the Jockey Club brings into the Government coffers. That is important!
Question: Our last question today and probably the most important question also touches on a sporting theme. Will Hong Kong continue to host the Rugby 7s series?
Mr Tung: The answer is of course 'yes'. And I attended the opening ceremony this year. Its an event which is now part of Hong Kong's culture. We are very proud to be the host of Rugby 7s, it's put Hong Kong on the map in some different respect. But whoever is the gentleman who asked this question I would like to ask him: "Come be a sponsor next year for the 7s!
End/Monday, June 15, 1998
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