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Following is the full text of the speech (English only) delivered by the Chief Secretary for Administration, Mrs Anson Chan, at a luncheon in Amsterdam (Amsterdam time June 20):
Victor, Mr Groenink, Mr Bauduin, Mr Van Valkenberg, distinguished guests, ladies and gentlemen,
It is a great pleasure to be here today in this most lovely and lively of European cities. The canals, the cobble-stone streets bustling with people, the markets and multitude of flowers makes any visit to Amsterdam most enjoyable. I only wish I could stay longer.
I must confess that when I realised our visit coincided with Euro 2000, and knowing that Amsterdam is a host city, I wondered whether we would be able to get anyone interested in our lunch today. But I am delighted to see that so many of you have taken the opportunity to spend an hour-and-a-half with us. I think you will find it a useful and worthwhile exchange, but I cannot guarantee it will be as entertaining - or as eagerly anticipated - as spending 90 minutes watching the men in Orange take on the Czechs or the Danes. Incidentally, the Dutch Business Association in Hong Kong recently reprinted a survey that showed a clear surge in the number of Dutch football fans who believe Holland will win the European Championship in 2000. Who am I to argue with the experts? All that remains for me to say is : Good luck!
I must also mention a visit to our shores last month by the Dutch Navy. I was surprised to learn they had not docked in Hong Kong for 14 years. I hope we don't have to wait so long for their return trip. The Navy's goodwill visit also promoted trade relations with The Netherlands and judging by the warm reception that the men and women of the Dutch Navy received, I would say their visit was a resounding success. And I was most happy to read that of all the ports they visited during their trip to the Far East - Singapore, Malaysia, Korea and Japan - your Naval officers said that Hong Kong was the best. It was then I realised that the Dutch are not only great mariners, but great diplomats as well.
But it is true that Hong Kong and The Netherlands do have a special bond, and share quite a few similarities. Hong Kong and The Netherlands are both important hubs for trade and shipping; Rotterdam is the busiest cargo port in the world, Hong Kong is the busiest container port; The Netherlands is the gateway to Europe, while Hong Kong is the gateway to China; Amsterdam is carving itself a niche as the Internet hub for Europe, Hong Kong is developing as an Internet hub for China and East Asia; we have both embraced information technology as a driving force for future economic growth; we are both very strong in the services sector; we are both logistical hubs.
These similarities have, in turn, nurtured a strong trade and investment partnership between Hong Kong and The Netherlands. The Netherlands is Hong Kong's fifth largest source of direct investment, the second largest in Europe after the UK, with investments worth more than 16.6 billion Euros; The Netherlands is our 5th largest trading partner within the EU, while we are your 7th largest outside the EU. Total two-way trade was worth more 4.6 billion Euros in 1999, and I am happy to report that bilateral trade for the first quarter is up by over 5% year-on-year. More than 250 Dutch companies are based in Hong Kong, which is also home to 4,000 Dutch nationals - probably one reason why Heineken is in such great demand. Hong Kong companies have major investments in your port and telecommunications sectors.
Our Airport Authority and the management of Schipol are developing closer ties as we draw on Dutch experience to maximise the use and potential of our magnificent new international airport. The Dutch dredging fleet was largely responsible for the reclamation of the 1248 hectare airport site, while a prominent Dutch company was recently awarded a 530 million Euro contract to form the site of our exciting Hong Kong Disneyland project, which will see Mickey Mouse in Hong Kong in 2005. It may have taken the Good Lord six days to create the world, but Dutch dredgers are still continuing to help create Hong Kong.
I mention all of this to highlight the foundations which underpin the existing trade, investment, business and people-to-people bonds between Hong Kong and The Netherlands. It is important to understand the strength and depth of this relationship because it will help you understand why it is poised to become even stronger and more important in the years ahead.
An integral part of this equation is why Hong Kong remains such an important hub for finance, trade, transport, communications and tourism in Asia. Prior to the Handover in 1997, there were many people who believed Hong Kong under 'One Country, Two Systems' would not work. Nowadays, people are skeptical that Hong Kong's role as the pre-eminent international conduit for China will diminish once China joins the WTO. My mission today is to dispel those misconceptions.
I know that there is still a great deal of misunderstanding about Hong Kong's future and role as a Special Administrative Region of China. I acknowledge that it must be hard for people overseas to fathom how a free-wheeling, capitalist society of seven million people can continue to enjoy all of their rights and freedoms in a unique, untested experiment that bestows on Hong Kong a high degree of autonomy, with the specific aim to keep our lifestyle and systems separate from those of our country, the world's largest socialist state with a population of 1.2 billion. Surely, I have heard it said, Hong Kong will be overwhelmed. Surely, the leadership in Beijing is pulling the strings in Hong Kong. I am here to tell you that this is definitely not the case.
The Beijing leadership has scrupulously honoured the promises and commitment to Hong Kong. There has been no interference from the Mainland in the running of Hong Kong. You will find no 'hotline' to Beijing in my office, nor in the Chief Executive's for that matter, that is ringing off the hook with instructions from the Central Government. We do enjoy a very close and cordial relationship with the leadership in Beijing - as you would expect. But it has been made abundantly clear - in word and deed - that the running of Hong Kong is entirely a matter for the people of Hong Kong. Let me elaborate.
Our systems are vastly different from those in the Mainland, and this is essential to our continued stability, prosperity and economic development. We are proud to be reunited with China, but we jealously guard the high degree of autonomy provided by the Basic Law. It sends an important message to the international community that their investments, their business dealings, their commercial contracts and their human rights and freedoms are protected by a trusted legal system and an independent judiciary based on English common law. We fully understand that our legal system is the bedrock of our success and if we lose that, we lose everything. That is why rule of law issues come under such close scrutiny in Hong Kong.
You may have read reports recently about statements made in Hong Kong by Mainland officials which raised concerns about press freedom and the freedom of businessmen to choose their trading partners. You will also have read - I hope - that the Chief Executive and myself responded in unequivocal terms on both issues. Let me give you two vivid examples of 'One Country, Two Systems'. Each year a large commemoration vigil is held in Hong Kong to mark the Tiananmen Square June 4 incident. And the Falun Gong, banned in the Mainland, is free to practice in Hong Kong, and does so. Our community expects us to be forthright in ensuring that the distinction between One Country and Two Systems is not blurred.
This distinction also allows Hong Kong to maintain a separate identity in the international arena in a wide range of areas except for foreign affairs and defence, which are the responsibilities of the Central Government. We are a member, in our own right, of the World Trade Organisation, and before that the GATT; the World Customs Organisation and the International Maritime Organisation. Hong Kong is a member in its own right of APEC, as is China. You may be surprised to hear that within APEC we do not necessarily agree with the Mainland's position on issues such as trade liberalisation - but we do agree to disagree. To draw a parallel in a Dutch context, this would be like Zeeland joining the WTO and, from time to time, opposing the view of your national government in that forum. As incredible as that arrangement might sound to you, it is exactly the way that 'One Country, Two Systems' can - and does - work for Hong Kong and China.
That is why Hong Kong today continues to be the same free, open, tolerant and pluralistic society it was before the Handover. 'One Country, Two Systems' has been transformed from a concept into a working reality. The ongoing and successful implementation has been acknowledged by various international agencies and governments, including the IMF, the British government, the US Congress and your own European Commission. And before I close on this subject, I would like to read to you an excerpt from the EC's Second Annual Report on the Hong Kong Special Administrative Region, published just last month. It states, and I quote :
"Hong Kong remains one of the freest societies in Asia. Hong Kong people are running Hong Kong and doing so effectively . . . The economy is gradually recovering from the Asian financial crisis and EU companies continue to invest heavily in Hong Kong. This demonstrates confidence in Hong Kong's future." End quote.
As you would expect I, too, am confident about Hong Kong's future as an economy and as the most vibrant international city in Asia. Hong Kong's political transition was a seamless exercise although, as I have outlined, we still need to do more in the international community to explain just how successful that transition has been. But it has been economic rather than political change that has occupied most of our energies in the past three years. The Asian financial crisis not only caught us by surprise, it knocked the wind out of our sails. Our economy contracted by 5.1% in 1998 - the first time we had ever had to contend with a full-year recession. For two decades prior to 1997, Hong Kong had enjoyed annual growth averaging 7%.
Once we had dusted ourselves off from the initial shock a period of quite intense soul-searching took place. And it soon became clear that we needed to reform and revitalise our economic and social fabric, across a spectrum of sectors, if we were to remain competitive in the knowledge-based, global economy of the 21st Century. The reforms and initiatives that have been set in train are very comprehensive, ranging from economic drivers such as banking, finance and the stock market, monetary policy, telecommunications, innovation and information technology through to economic support software such as education, health care, culture and arts, leisure, the environment and retirement protection. Some of the details may have been explained during the seminar that preceded lunch. I can think of no time in Hong Kong's history - most certainly during my 38 years as a civil servant - when such an ambitious yet vitally important reform agenda has been put in place.
There is a clear focus to all of these efforts, and that is to make Hong Kong the World City in Asia. What do I mean by World City? I mean a city with a vibrant economy in its own right. A depth of talent in every field of endeavour from the arts, culture and education to business and banking, technology and information and the media. A location of choice for the principal offices of major corporations. The service hub for a large hinterland. A vibrant and diverse population.
We are already Asia's most cosmopolitan city. There is much here that would be familiar to anyone from New York, London or Amsterdam, or for that matter any of the great cities of Europe. Hong Kong is a free society based on the rule of law. It is an international centre of finance and trade; services such as communications and transport; regional and international media; tourism; and home to numerous multi-national enterprises and a large international community. We remain a uniquely Chinese city where East comfortably meets and blends with West. We have a hinterland of vast potential. But we have to do more - we are doing more - to consolidate and enhance our position.
Of all the initiatives we are pursuing there is one key issue, above all else, that is our most visible problem - cleaning up the environment, in particular the quality of the air we breathe and the water we drink. Without this we cannot, in all conscience, or with any credibility, call ourselves a world class city.
So, we have embarked on an accelerated programme, first of all, to clear the air. The raft of measures we are implementing should see an improvement in air quality within the next 18 months to two years as we switch to cleaner fuels such as LPG and Euro III Diesel to power our taxi and bus fleets. In the longer term, we have already embarked on a programme to increase the size of our more environmentally-friendly rail network by 70 per cent over the next 16 years.
There is much we can learn from The Netherlands about protecting our environment. A Dutch company is already advising the Hong Kong government on certain safety aspects involving LPG vehicles. And we can certainly draw on the experience of The Netherlands, Germany and France in dealing with cross-border pollution problems. Hong Kong and our neighbours in Guangdong Province are now working together on this very issue, but we are starting from scratch, and your experience in these matters extends back 15 to 20 years.
Finally, I would like to touch on one matter that is important not simply for the region, but for the world economy generally : China's entry to the World Trade Organisation. The absorption of the world's most populous nation, and potentially its largest economy, into the multilateral, rules-based regime governing the international economy is a matter of profound significance. The implications for the restructuring of the Chinese economy are enormous and speak volumes for the vision of the leadership in Beijing.
You have probably heard during the seminar earlier this morning why Hong Kong will remain the ideal base for international companies to do business in Mainland China and the Asia Pacific region and why our in-built advantage as a middleman will be enhanced rather than diminished by China's accession to the WTO.
Hong Kong already has a very deep pool of experienced professionals who can be called upon as China's markets become more closely aligned with global practices. In particular, areas such as legal and accounting services, management, logistics and distributive services, transport and communications. Our sound legal system, for example, will provide international corporations with a tried, tested and internationally understood legal framework in which to work in areas such as contract law and arbitration services.
And here I would also like to stress that Hong Kong can only be of value in this process if we maintain our own unique identity under 'One Country, Two Systems'. We are in the best position to facilitate the significant changes that will take place in the Mainland within the next decade or two. Hong Kong is the best example I can think of to highlight the benefits of free trade, open markets and ongoing liberalisation. As China embarks upon this profound economic transformation, Hong Kong can act as an agent of change. This in turn will lead to greater transparency and openness in the Chinese market and bring our country even closer to the international community.
As you can see, China's accession is not just about business opportunities. It goes much deeper than that. It is about strengthening economic and social stability in the region. It is about ensuring that differences on trade issues are resolved sensibly. It is about developing the global economy on responsible, rules-based principles. It is about maintaining a steady momentum of growth for the betterment of people everywhere.
Ladies and gentlemen, I hope I have been able to leave you with a thumb-print of how Hong Kong has moved ahead successfully since 1997, and how we plan to continue that positive momentum in the future.
In this age of globalisation it does not make much sense to try to pigeon-hole this region or that part of the world. In the age of the Internet, the future surely belongs to all of us, no matter where we live or work or trade.
I am, however, convinced the brightest future will belong to those communities which dedicate themselves to the rule of law; to free trade; an open market in goods and services and ideas; clean, transparent and accountable government; respect for decent human values; tolerance of diversity; and intolerance of corruption and cronyism. These are the benchmarks we have set for ourselves in Hong Kong.
Ladies and gentlemen, thank you very much.
End/Tuesday, June 20, 2000
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