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Hong Kong will uphold its free market principles and its basic philosophy will continue to be "maximum support and minimum intervention for the private sector", the Financial Secretary, Mr Donald Tsang, told a luncheon meeting in Singapore today (Wednesday).

Speaking at a Hong Kong Networking Lunch, Mr Tsang noted that Hong Kong's recent moves to stimulate interest in innovation and technology as well as the tourism initiatives are examples of the government reacting judiciously to manifest private sector demands.

Mr Tsang said what the government was doing was positioning Hong Kong for the 21st Century, strengthening its systems and "fine tuning what is already the world's freest economy".

He noted that Hong Kong had taken advantage of the Asian financial crisis to initiate reforms and to explore new ways of expanding its economic base. These are essential to reinforce Hong Kong's position as a leading international financial centre and to develop Hong Kong as a world city.

On the financial services sector, Mr Tsang outlined the reform in three areas - the merger of the stock and futures exchanges; further reforms of the banking system; and enhanced powers for the Securities and Futures Commission.

"We are aiming to building the leading securities and futures exchange in Asia and one of the top five equities markets in the world," he said.

In telecommunications, Mr Tsang noted that Hong Kong had completely liberalised the market for Internet services and mobile phones.

"And, taking our external telecommunications policy one step further. From next January we will have an 'open sky' policy to encourage innovative uses of satellite and other wireless-based systems to provide broadcasting and multimedia services including Internet-from-the-sky," he added.

Mr Tsang said that the global and legal infrastructure which contributed to Hong Kong's success and resilience had remain unchanged.

"We jealously guard our freedoms which have remained the same since our reunification with China," the Financial Secretary stressed.

"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. Freedom of religion. The freedom to run our own economic and fiscal policies without interference.

"And the list goes on. So, with the reforms and restructuring under way, coupled with our vital constants, the pieces of the vast jigsaw of Hong Kong are gradually falling into place as we enter the new millennium," he said.

Earlier in the day, the Financial Secretary had a breakfast meeting with members of Singapore International Chamber of Commerce and visited the Singapore National Science and Technology Board (NSTB).

Mr Tsang noted that both Hong Kong and Singapore were on the same wave-length in giving priority to the development of broad band internet connectivity, innovation and technology, in order to become knowledge-based societies.

He was briefed by Mr Teo Ming Kian, the Chairman of the NSTB on its Techopreneurship 21 programme. The objective of the NSTB is to create a conducive environment for science and technology to flourish and to put them to enterprising uses. Initiatives undertaken by the NSTB include increasing expenditure on research and development, the establishment of a S$1 billion Technopreneurship Investment Fund to attract more venture capital activities, and to relax bankruptcy laws.

"The 21st century is an era for knowledge-based societies. Innovation and technology will affect virtually every facet of life, from financial services, manufacturing industries, education right down to recreational activities and artistic pursuits" Mr Tsang said.

The Financial Secretary briefed the NSTB on Hong Kong's efforts to improve the hardware as well as the software for innovation and technology. These include measures to strengthen the education system and the Cyberport project. The objective of the Cyberport project is to facilitate the development of enterprises using broad band and multi-media facilities. "The Government plays the second fiddle in all these, as the private sector has always been the engine for innovation and growth. We will continue to play a facilitating role," Mr Tsang added.

The second board, the Growth Enterprise Market (GEM), to be launched in Hong Kong in November will also play a vital part in opening up new sources of finance for emerging enterprises.

Mr Tsang and Mr Teo were happy to note that there were on-going discussions between the tow sides to finalise a Memorandum of Understanding on cooperation in the IT field.

The Financial Secretary will return to Hong Kong this evening after a three-day visit in Singapore.

End/Wednesday, October 20, 1999

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