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The Financial Secretary, Mr. Donald Tsang, said in Singapore today (Tuesday) that both Hong Kong and Singapore had reformed and repositioned themselves after the Asian financial crisis to face up to the challenges of the 21st century. There is ample scope for partnership and cooperation between the two economies in various areas.

The Financial Secretary had meetings with the Prime Minister of Singapore, Mr. Goh Chok Tong and the Deputy Prime Minister, Mr. Lee Hsien Loong. They noted that both Hong Kong and Singapore were on the road of economic recovery, and both economies were pursuing similar measures to enhance competitiveness and to strengthen their respective economic fundamentals. These measures include the emphasis placed on education, innovation and technology, plans to merge and demutualise the stock exchanges and clearing houses, and like Hong Kong, Singapore is planning to privatise the Mass Rapid Transit.

"Both Hong Kong and Singapore are no longer taking the narrow view of mutual rivalry. Competition is now on the international plane in the increasingly globalised market. Indeed there are opportunities for partnership and cooperation between Hong Kong and Singapore to our mutual benefit," Mr. Tsang said. Both Mr. Goh and Mr. Lee agreed to this view.

"We can work together to be the greening agents in Asia, helping to spread the awareness on environment protection to the rest of the region, and at the same time opening up a new supporting industry," the Financial Secretary said.

There are also opportunities for closer cooperation in the areas of information technology and education, and the two economies are actively considering signing Memorandum of Understanding to formalise cooperation in these areas. Mr. Tsang proposed to Mr. Lee the possibility of cross-fertilsation between the Hong Kong and Singaporean civil service by allowing participation in each other's training programmes.

The Financial Secretary spoke on the importance of good governance to the national and international financial system at today's plenary session of the World Economic Forum East Asia Economic Summit. He said that a good system of governance was vital to protect shareholders and creditors against expropriation by insiders.

"Corporate self-discipline is ineffective and breeds suspicion in the market place. The protection must be visible and certain. Protection can only come from a legal system with appropriate enforcement," he said.

Mr. Tsang told the participants of the forum that Hong Kong Government was in the process of consolidating the local legislation "which will strike a balance between facilitating innovation and growth on the one hand, and minimising market misconduct and systematic risks, together with providing a reasonable degree of investor protection on the other".

"We do not try to be heavy handed in seeking to improve corporate governance. With the right mix of checks and balances, our system will provide the optimum rules of the games played in the market," Mr. Tsang said.

The Financial Secretary had meetings with Mr. Stanley Roth, the U.S. Assistant Secretary of State, and Dr David Syz, State Secretary for Economic Affairs of Switzerland, during which they exchanged views on the latest situation in Hong Kong.

End/Tuesday, October 19, 1999

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