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Following is a speech by the Secretary for Trade and Industry, Mr CHAU Tak Hay at the Breakfast Meeting in honour of His Excellency Ezer Weizman, the President of the State of Israel today (Thursday):

Mr. President, Consul General, Ladies and Gentlemen,

Just three months ago, I had the privilege and the pleasure of accompanying the Chief Executive on his official visit to your beautiful country. I am particularly delighted that we now have the opportunity to play host to Your Excellency and your delegation; and to reciprocate the generous and warm hospitality that you and the Government and people of Israel extended to us during our visit.

Our visit to Israel was most useful as well as most enjoyable and inspiring. We have a saying in China that hearing about something a hundred times is not as good as seeing it once. I had indeed heard and read a lot about Israel in the past several decades. And I have for a long time and from a distance admired Israel and all that the people of Israel have achieved. But what I saw and experienced in the space of a few days in Israel was even more impressive than what I had expected.

I was most impressed to learn that, with a population of only six million people, Israel's high-technology industry ranks among the top five globally; that, after the United States, Israel has the second largest number of companies listed on National Association of Security Dealers' Active Quotations (NASDAQ); that Israel has the second highest number of start-up companies in the world; that some 65 per cent of Israel's GDP comes from technology-related products; that in Israel there are around 100,000 high-calibre scientists and engineers, or what are known in the jargon as RSEs - research scientists and engineers; that the number of RSEs as a percentage of population is twice that of the United States and three times that of Germany. It was particularly gratifying to learn that as a result of all of these technology-related strengths, Israel's per capita GDP has risen from US$11,000 a few short years ago to over US$17,000 today.

I could go on and on about Israel's achievements, but I must not do so for fear that the Hong Kong media will accuse me of having become Israel's spokesman in Hong Kong. Although Hong Kong also has many many strengths and we expect to build on those strengths a prosperous and ever-growing economy that will see us into the new century and beyond, clearly we in Hong Kong have a great deal to learn from Israel, especially in respect of innovation and technology. Given Israel's strengths in this area and our Chief Executive's vision of developing Hong Kong into a centre for innovation and technology in this part of the world, there is clearly a great deal of scope for cooperation and collaboration between Hong Kong and Israeli companies and institutions in the technology and related sectors.

Hong Kong has developed to a stage where we are no longer able to compete on cost alone. We must make the very best use of new ideas and technology in order to add value to our goods and services, to enhance our productivity and to maintain our competitiveness in an increasingly integrated world economy. The Hong Kong Special Administrative Region Government is therefore committed to providing the best infrastructural support and a most conducive environment for technology development.

Our vision to make Hong Kong a centre of innovation and technology for the region is laid on a number of solid foundations. First, we have long been a provider of world class physical infrastructure in terms of, for example, transportation and telecommunications. Second, as a staunch believer in the free market, we do not impose any information barrier nor do we over-regulate our businesses. This enables our businesses to innovate and respond to market changes swiftly. Third, the Hong Kong Government invests heavily in education. We recognize that Hong Kong's future depends on its people. Education therefore remains the single largest expenditure item of our budget despite the impact of the recent financial turmoil in Asia. Fourth, we have a mature and well-developed financial market, which enables our businesses to raise funds efficiently and effectively. We also have a vibrant venture capital industry. The venture capital pool managed in Hong Kong is the second largest in Asia after Japan. Last, but definitely not the least, our long-standing and symbiotic relationship with the Mainland of China has put us in a uniquely advantageous position. This relationship has been greatly enhanced following our reunification with the motherland in 1997 and the full and faithful implementation of the one-country-two-systems policy.

Hong Kong and Israel have a great deal to offer each other. Hong Kong is one of the freest economies in the world. We occupy a strategic geographical location in the region. We are the gateway to the Mainland of China and China's window on the world. Most importantly, the entrepreneurial spirit and creativity of our people is almost unrivalled in the world.

In conclusion, I can see our bilateral ties strengthen in the years to come to our mutual advantage. I look forward to collaboration and cooperation between our two economies on many fronts.

Thank you.

End/Thursday, April 29, 1999

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