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Following is the full text of the speech (English only) by the Financial Secretary, Mr Donald Tsang, at a dinner co-hosted by the African Asian Society and the Trade Development Council at Johannesburg tonight (Tuesday, South African time):

Mr Botha, distinguished guests, ladies and gentlemen,

Thank you very much for those kind remarks. I am delighted to be here in Johannesburg, the "gold capital of the world", and leading the highest-level Hong Kong business mission to South Africa.

This is only day two of our visit, but the warmth and friendliness of your welcome has made us feel like old friends, despite the fact that it is my first visit to South Africa. It certainly is 'n lekker place to be. And this superb red wine is travelling very well! So, I promise, I will keep my speech as short as possible.

Although it is my first visit, some other members of our business mission have well-established ties with companies in South Africa, particularly in gold and diamond trading, textiles, jewellery and more recently in the wine industry.

What we are doing here is to further develop those links. To explore new business ventures. To expand our trade. To look in some detail at the prospects for investment. The Asian financial crisis has provided the impetus, if one were needed, to widen our horizons. To seek out new partners. And to seize the opportunities now.

Yesterday, I said that I hoped our visit would be the start of a new era in trade and economic ties between South Africa and Hong Kong. Tonight, I feel we have already laid the ground work and we are on our way to establishing a strategic economic and trade alliance. In fact, when President Mbeki kindly saw me earlier today, he left me in no doubt that we should put flesh to this alliance by drawing up firm plans with clear milestones for implementation.

There is much to be done and further discussions to be held at government and business levels. But the ultimate success of such an alliance will rest very much on the private sectors of both Hong Kong and South Africa. The business ventures are there to be negotiated. And partnerships to be formed.

From what I can gather, that process has already begun as a direct result of the series of meetings and briefings arranged yesterday by the Department of Trade and Industry. It's early days yet. But we are hopeful that new deals will eventually be struck for the mutual benefit of both our economies. Opportunities abound.

This simply reinforces our view that there is tremendous scope for further trade and investment between South Africa and Hong Kong - not simply to take advantage of the huge market potentials in both our hinterlands, but on a bilateral basis.

We only have to look at the figures to know that they represent enormous untapped opportunities. Together we could become a formidable force in trans-continental trade and investment. Harmonising the strengths of our respective economies. Yours which is currently driven by an abundance of natural resources; and ours which is largely services driven.

And what better time to embark on a new journey. There are early signs that East Asian countries are beginning to emerge from the debilitating effects of the financial crisis. And their economies should be in better shape than before, as a result of the readjustment and restructuring that has taken place over the past year or so.

But before developing that theme, I just want to say that despite dire predictions from commentators, our reunification with China on July the 1st, 1997 was virtually seamless.

We have taken the change - what little there was - in our stride. We are moving ahead under the concept of 'one country, two systems', with our capitalist way of life guaranteed for 50 years.

Hong Kong people are running Hong Kong with a high degree of autonomy. All our systems remain intact. The rule of law. An independent judiciary with the power of final adjudication. A free and open market. Freedom of the press. Freedom of speech. The protection of property rights and foreign investment. A freely-convertible Hong Kong Dollar. The freedom to run our own economic and fiscal policies without interference. Low and business-friendly taxes. (I don't want to boast, but that's 16% profits tax and a maximum 15% salaries tax.) A clean and efficient administration. And a level playing field for all those doing business in Hong Kong.

We continue to be separated from the Mainland by a physical and clearly defined boundary which is policed by our own enforcement agencies. And we operate as a separate customs territory.

These special characteristics are not found elsewhere in the rest of China. Hong Kong is different. And the Central Government in Beijing has been scrupulous in adopting a hands-off approach. They have readily offered to lend support. But they have made it clear they want Hong Kong to be governing itself in all areas except in defence and foreign affairs. After all, that's what the 1984 Sino-British Joint Declaration promised.

Nevertheless, the past two years have been most eventful.

The problems we've encountered have come not from political differences, as many had predicted, but as a result of the fallout from the Asian financial crisis. We have been battered, but we would never succumb to the ravages of the financial typhoon.

Our plans to 'energise' Hong Kong and to restructure the economy involve some important changes in direction. To diversify away from our former heavy reliance on property into new areas, such as innovation and technology.

This is crucial to economic growth and expanding our high-tech capabilities. They are the principal means of improving efficiency and productivity, adding value and enhancing our overall competitiveness.

Our sights are set on being a leading global city in the development and application of information technology, especially in electronic commerce and software engineering. A world-class design and fashion centre. A world centre for the development of health food and pharmaceuticals based on Chinese medicine. And the market place for technology transfer between the mainland of China and the rest of the world.

Projects we are pursuing vigorously include a proposed international high-tech multi-media and information services centre, known as Cyberport, and an international theme park. We have also embarked on a major infrastructure programme, involving an investment of US$30 billion in new rail, road, land, port and environmental projects.

Together these diverse projects will help put Hong Kong firmly on the global IT map, revitalise our tourism industry and enhance our position as a regional transport hub, improve the quality of life and create tens of thousands of jobs.

But even as we venture into new fields, we are firmly committed to building on our traditional strengths as a leading international financial, business and services centre. We are implementing a major reform of the securities and futures markets. This include the demutualisation and merger of the stock and futures exchanges and clearing houses, and introducing a new regulatory framework to take into account such things as e-commerce, internet trading and around-the-clock global securities market networks. We are streamlining our banking system to make it more competitive. We are developing a deeper debt market. And we are enhancing our role as the gateway to the mainland of China.

Despite the spill-over of the Asian financial crisis, the Mainland has continued to grow at a healthy pace. Last year it was almost 8% and this year, the official guidance growth target is a respectable 7% - by far the highest GDP target in the region.

Hong Kong is the undisputed bridge to China. We have a huge reservoir of talent, knowledge and experience and decades of business interaction through joint ventures and cross-boundary trade and two-way investment.

There's no doubt that Hong Kong's role as a facilitator of capital and expertise will increase. And this will be given added impetus when China finally takes its rightful place as a member of the World Trade Organisation.

I would say that if anyone here is looking for opportunities in mainland China then the best place to be is in Hong Kong. Already some 20 South African companies have done just that.

What we are doing in Hong Kong is establishing a distinct position for ourselves as Asia's most cosmopolitan city. We are continually reaching out to consolidate ties with our trading partners and develop new partnerships.

As I mentioned, our bilateral economic ties with South Africa are still in their early stages. But the interest is certainly there. As a small example -

In the two years since the South African Business Forum in Hong Kong was formally established, its membership has grown from 30 to almost 120. And it's now working towards becoming a Chamber of Commerce.

South African wines are growing in popularity in Hong Kong. They are readily available through our supermarkets and wine merchants and are now found on the wine lists of a number of leading restaurants. I expect this interest will expand now that Hong Kong investors have taken a stake in an estate near Cape Town. And we want to make Hong Kong the wine hub of the East.

Other Hong Kong investments have been made in your financial services sector, the textiles industry and in an electronics distribution network.

South African entrepreneurs have shown keen interest in the ability of Hong Kong's small and medium enterprises to quickly adapt to new and changing trends, particularly in jewellery design.

On Hong Kong's sporting front, South African jockeys are invariably amongst the winners. And just recently we "poached" your champion trainer, Tony Millard, who has been granted a trainer's licence by the Hong Kong Jockey Club for our new season. I understand he's the first South African trainer to be licensed in Hong Kong since professional racing was introduced in 1971.

Finally, Hong Kong people's thirst for Castle Beer continues. Not only is it good value-for-money, it just happens to be one of the best beers on the market. I'm also told, biltong, which is available in Hong Kong, goes very well with a cold Castle. And, believe it or not, there's at least one butcher in a rural village selling some of the best Boerewors you'll ever taste!

These are just some random thumbnail sketches of the growing links between our two communities. There is a vast untapped opportunity to be exploited to our mutual benefit.

Some of you here tonight may have met members of the Hong Kong business delegation accompanying me on this visit. They have the expertise and experience in a whole range of commercial developments. They have begun their networking. So, if you haven't already introduced yourself, now's the time.

We have embarked on an irreversible path to forging a new strategic economic and trade alliance. Let's ensure its success. Like the old saying - tall oaks from little acorns grow.

Keyale boha (Thank you).

Photo:The Financial Secretary, Mr Donald Tsang, delivers a keynote speech at a dinner in Johannesburg attended by 200 business people, academics, and the community officials. Mr Tsang told the guests that the ground work had already been laid for establishing a strategic economic and trade alliance between Hong Kong and South Africa.

End/Wednesday, July 28, 1999

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