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Following is a speech by the Chief Executive, Mr Tung Chee Hwa, at a dinner hosted by the Republic of Korea's Minister of Foreign Affairs and Trade Mr Hong Soon-young Seoul tonight (Tuesday, December 7):
Minister Hong, distinguished guests, ladies and gentlemen,
Thank you very much for those warm words of welcome. I am delighted, as is the entire Hong Kong delegation, to be here in Seoul to further strengthen the very close bonds that exist between our two communities.
Minister Hong, I had the pleasure of meeting you in November last year during the historic visit of President Kim. I am extremely happy to renew our acquaintance and grateful to President Kim and the government of Korea for the kind invitation which has made this visit possible.
This afternoon, we had a very useful meeting at which we discussed a wide range of subjects such as promoting trade and investment, market liberalisation, financial sector reform and information technology development.
We also shared our experience of the Asian financial turmoil and exchanged views on the need for more international co-operation to prevent an occurrence of similar events in the future.
Tomorrow, I look forward to meeting President Kim, your colleagues in government and private sector leaders to discuss initiatives to strengthen the partnership between the private sectors of South Korea and Hong Kong.
Minister Hong, last year when we met, we in Hong Kong spoke from personal experience when we said that we shared the pain and economic hardship the people of your country had endured. But after one year, we can now speak with one voice by saying that the prospects for both of our economies today are decidedly better and brighter than they were a year ago.
Both Hong Kong and Korea have undertaken some bold but necessary reforms over the past two years to pave the way for renewed and sustainable growth in the new millennium. Much more still needs to be done. But it looks as though all of our efforts are at last beginning to bear fruit. I know that the Korean economy has staged a quite remarkable rebound this year. The economy recorded a strong growth of 12.3% in the third quarter, foreign reserves now stands at more than US$66 billion, and the unemployment rate has fallen to 4.8%.
The fallout from the Asian financial turmoil has deeply affected us in Hong Kong too. However, like Korea, we are beginning to see the first glimmer of recovery. The revised third quarter figures showed our economy grew by around 4.5% in real terms. Trade figures have improved and private sector consumption expenditure is improving.
We are embarking on an extensive programme to reform and realign our economy to maximize the benefits of recovery. This has meant reforming our financial services market; and promoting high-tech, high value-added industries as part of our drive to become the innovation and technology centre for Asia and beyond. A number of projects are also being planned to consolidate Hong Kong's position as Asia's premier city. These include, amongst others, the cyberport and, on tourism, the construction of a Disney theme park.
Tourism has been an important sector of our economy. We are pleased that together with the economy, it is recovering quickly - arrivals in Hong Kong are up 11.8% to 8.73 million for the first 10 months of the year. And within that figure there has been exceptional growth of 45% in arrivals from Korea. For the first 10 months of the year, some 208,000 Koreans visited Hong Kong, which is already 30,000 more than for the whole of 1998. I am happy to note that it hasn't been a one-way street. Hong Kong tourists have also been doing their bit to help along the Korean economy. In 1998 more than 310,000 Hong Kong residents visited Korea, which was a hefty 89% increase over 1997. The mutual extension of visa-free travel between our two destinations is no doubt a factor in these trends. But ease of travel is not just about making it easier for tourists - it also greases the wheels of trade and investment and forges closer business links.
Minister Hong, Korea and Hong Kong already have a very close and mutually beneficial trading relationship. Our bilateral trade has grown by an average of 5.7% in the past five years and amounted to more than US$10.5 billion in 1998. You are our seventh largest trading partner, while we are your fourth largest. South Korean companies have voted with their capital by investing more than US$1.2 billion in Hong Kong, while Hong Kong companies have invested some US$700 million in Korea. Hong Kong is home to more than 350 Korean corporations, of which about 90 have established a regional headquarters or office in Hong Kong to control their operations in the Asia-Pacific region.
The Hong Kong and Korean shipping industries, in particular, have a long and strong history of partnership. In the past 10 years, Hong Kong shipowners have placed orders and received delivery of some 75 ships from Korean shipyards, valued at over US$3.4 billion. I am pleased that two members of our delegation, Mr Steve Hsu of Oak Maritime and Mr K.H. Koo of Tai Chong Cheang will be signing contracts with Korean shipyards tomorrow for the delivery of three ships, valued at over US$100 million. We are actively promoting our shipping register and have received indications that 63 ships of 1.5 million tons will join the register within the next year. I am sure many of these ships will be built by Korean shipyards.
Trade and business are not the only bonds. Hong Kong is a home away from home for more than 5,700 Korean citizens. Our Korean International School has not only played a vital role in providing a quality education for Korean children, it has also helped enrich the diversity of education choices in Hong Kong. And of course all of this enhances Hong Kong's attraction as one of Asia's most cosmopolitan communities. So, these are the strong foundations upon which we can build even closer ties in the years ahead.
President Kim's ground-breaking visit to Beijing and Shanghai last year was a milestone in relations between the two countries. China's accession to WTO, which we expect early next year, will open many exciting opportunities for Asia and the world. One New York based financial institution has estimated that China's trade and direct foreign investment will double within the next six years after accession. The alignment of China's practices and regulations with the world's trade system will make market access easier for all. The opportunities brought by the opening up of China's services sector in areas such as telecommunications, finance, banking, insurance and transportation will be enormous. As close and important trading partners of China, Korea stands to benefit significantly. So do we in Hong Kong.
Minister Hong, ladies and gentlemen. In just over 20 days we bid farewell to the 20th Century. Over the past 50 years, the thrift, hard work and sheer determination of people all over Asia has profoundly transformed our societies and improved living standards for tens of millions of people. For China and Korea, the achievements have been particularly outstanding. In Hong Kong, we were proudly reunited with the Mainland after a long separation and in the two-and-a-half years since our reunification the unique concept of 'one country, two systems' has been successfully turned into reality.
More recently, the difficulties that we have all experienced over the past two years are now behind us as the region begins to see a general recovery. We now stand at the threshold of a new beginning, a new opportunity to divest inefficiencies and to rebuild and restructure. I am extremely confident that as the 21st Century unfolds Korea will continue to develop as one of the world's leading industrialised nations. I am equally confident that China will continue to open up its markets, assume an even more prominent position in the global trading village and take up her rightful place as amongst the leaders in the community of nations of the world. And I am certain that Hong Kong will make the most of opportunities that flow from such developments and that we will share with Korea, the goal and commitment to promote trade, economic opportunities, cultural development and to bring greater prosperity to the Asian region.
Thank you.
End/Tuesday, December 7, 1999
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