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Following is the speech (English only) delivered by the Chief Secretary for Administration, Mrs Anson Chan, at the Tufts Institute for Leadership & International Perspective Lecture Series today (July 21):

Jeffrey, Professor Davies, Professor Young, Professor Zhong, ladies and gentlemen, and students from Tufts, Chinese University, Hong Kong University and Beijing University,

When Professor Mel Bernstein approached me last March to give the keynote address at the Tufts Institute for Leadership and International Perspective, I had no hesitation in accepting his kind invitation. Over the years, Tufts University has built up a reputation for teaching, for scholarship and research dedicated to solving the most critical problems facing the international community. This lecture series with its general theme of "Globalisation and Culture" fits neatly into the University's aims and the changing tenure of society today as we come face to face with the realities of a world without walls.

The student internship programme run by the Tufts Institute, and one in which the Hong Kong government is providing two research projects during the summer months, brings a human touch to the global village in which we now make our homes. In some ways, these student exchange programmes are a precursor to the forging of closer relations between countries and cultures and peoples. They are, in effect, a microcosm of the idea of the disappearing border.

So, I would like to give a very warm welcome to students from Tufts and other institutions who are in Hong Kong for study, research or exchange programmes. I wish you well in your endeavours. I hope that what you see and learn and experience in our city will encourage you to return again and again, perhaps to work and live among us.

I suppose there is no more striking icon of the new century than the Internet. So it is germane that one of the summer internships we have arranged this year involves the setting up of an interface between our flagship IT project, the Cyberport, and universities and research institutes around the world. The interface will be one of a range of facilities and services that will be available to help IT companies to succeed in the Cyberport.

Now, you might well be asking yourselves : why is she raising this rather abstract point here? The answer is simple. The Cyberport, has become the tangible symbol of Hong Kong's leap into the 21st century's world of innovation and technology - a diversification of our economy away from the traditional bricks and mortar to 'clicks and portals'. It is a phenomenon driven by what seems to be a headlong rush to find new and even faster ways to channel a never ending stream of information, and to transact greater volumes of businesses through the Internet.

There is no doubt that the impact of the information and technological age on the 21st century and the way we work, do business, enjoy ourselves and go about our daily lives will be as profound as the Industrial Revolution which shaped the 20th century. We already live in the Information Age. Information pours in every second, twenty-four hours a day. It transcends national boundaries in a nano-second. Anytime, anywhere, as long as we have a computer, hooked to the net, we can have ready access to virtually whatever information we want. And a lot, sadly, that we don't want. To my mind, one of the greatest challenges of the Information Age is to learn how to manage this mountain of data now; to use a distinctly pick and shovel-age metaphor - to separate the wheat from the chaff.

Hong Kong has embraced this new age with typical passion. Our professionals, our businessmen and women and our entrepreneurs have recognised the opportunities presented by the Internet and the new horizons that it opens up. They are seizing these opportunities with a determination to make them work. And the administration is helping to stimulate this interest as Hong Kong gears up to take its place in a borderless world.

The speed and scale with which the economic transformation is taking place is quite remarkable. In 1997, it was estimated there were half a million Internet users in Hong Kong. Today, that figure stands at around two million and rising. The latest industry survey shows that more than one in three adults in Hong Kong is logging onto the net - the highest percentage in Asia and the 8th globally. Last year, the value of products and services transacted over the Internet in Hong Kong was put at US$145 million. That amount is estimated to jump to US$5.3 billion in 2004. And in the same year on a global scale, forecasts indicate that 8.6 per cent, or some seven trillion US dollars worth of sales in products and services will be conducted on the net.

It is no wonder then that so much of the New Economy is focused on telecommunications. The scramble is now on to find new and innovative ways of pushing even more information and services through the air waves and into a dizzying array of phones, computers, palm tops and the next generation of mobiles, or cell phones, as they would say in the US.

You come from a generation that takes all this for granted. These days, it is commonplace to see people speaking into mobile telephones which can also be used to receive and send e-mail and faxes as well as locate a variety of services from restaurants to service stations to the location of the nearest ATM. The extraordinary thing for those of us who come from an earlier generation is that these devices are slimmer, more compact, lighter and certainly more elegant looking than the pencil cases we used to take to school. I hope that does not date me too much, but it is a reminder of how much change there has been in my lifetime. It's mind-boggling to think how much change there might be in yours.

I am sure scientists and engineers are already looking into ways in which the human body can be wired up in some way to receive messages without the need to carry any communicating device at all - although I for one do not want to be part of that experiment if it ever comes to pass!

Whatever happens, it will be important to ensure that innovation and change becomes a catalyst for enhancing direct human communication, and not a barrier to it. No machine can ever replace inter-personal relationships, the spiritual bread of life that makes the unique human experience so very rewarding and enjoyable.

Certainly Hong Kong, in the narrower context, is well positioned to serve as the telecommunications, Internet and broadcasting hub of our region. There are two good reasons for this, the first of which is the kind of place that Hong Kong is. First and foremost, what is the Internet all about? It is about the free and unfettered flow of information. And for that to work, you need a free and open society which values and places no restrictions on the free flow of information and ideas. You need a society which understands the need for transparency and accountability under the rule of law. You need a tolerant society where discourse and disagreement, open hearts and open minds are a matter of fact. Hong Kong is just such a society. In short, we have the fundamental software.

Secondly, beyond that, what is required is the hardware, if you like. We have that too. We have excellent infrastructure to support the industry. We are one of the few places on earth to have 100 per cent of our commercial buildings and nearly 90 per cent of our residential properties covered by broadband networks. Our mobile services penetration stands at 64% of the total population - the highest in Asia.

This is supported by an open and totally liberalised telecommunications market. We don't believe in putting restrictions on foreign ownership which means that local and overseas companies compete on the same footing. A level playing field for business, local and foreign, is fundamental to our economic philosophy. It also means competition is fierce. In telecommunications, the market rules. This has helped drive down costs and open up a range of services that may not otherwise have been available to consumers for the e-revolution now sweeping the world.

The rapid development of electronic commerce has been spurred by the exponential growth in the use of the Internet and is transforming the way in which business is conducted. Hong Kong is a city that has gained a reputation as being always open for business. I once saw Hong Kong described as a 24-hour money making machine. But with the global reach of the Internet and its round-the-clock availability, that distinction may become a little blurred.

The Internet has underlined the true meaning of the 24-hour day. With the click of a 'mouse', businesses can reach their customers, or potential customers, in every corner of the globe at any time of the day or night. Like New York, Hong Kong is a city that never sleeps. No wonder that our entrepreneurs are embracing the New Economy with such enthusiasm.

This is not a fad. Hong Kong has rejuvenated itself as a financial centre over the last couple of years to take account of it. Our stock market is forming strategic alliances and the government has provided the necessary infrastructure for Hong Kong to open the 8-hour window in Asia for stock trading in both New York and London. That is all part of the new 24-hour on-line trading today.

We shouldn't overlook the role the government is playing in all of this. Nor should we overstate it. Hong Kong's credo is that business decisions are best left to businessmen, not to bureaucrats. We see our role as providing the legal, administrative and physical environment in which free enterprise can flourish.

We have established procedures to enhance the security of electronic transactions. We have put in place the legal framework for conducting this type of business, which includes giving digital signatures the same legal status as their paper-based counterparts. As an aside, our legislation came into force at the beginning of this year. I notice that the US Congress only approved a similar bill last month.

As an efficient civil service, we are also taking a lead in the use of e-commerce with the introduction in the next few months of an Electronic Service Delivery system. The ESD, as it is known, will provide a whole range of on-line services to the public, including payment of bills and the renewal of driving and vehicle licences. This can be done either from the comfort of home or from special information kiosks around the city. A cyber city for the cyber century. The scope of such services in the future will be almost limitless. And why not? Nobody thinks anything these days of using ATMs to do their banking whether they are in Boston or Bombay, Sydney or Sacremento.

It should come as no surprise that Hong Kong should have so readily adapted itself to the e-revolution. So much of it involves e-commerce. As a small, externally-oriented economy vulnerable to the ebb and flow of international economic forces beyond our control, we have for many years been at the forefront of efforts to liberalise world trade. As a text-book free trade economy, we believe that our experience shows that it is the most liberating of all economic forces. For an even more dramatic example, look at the impact of economic liberalisation over the past 20 years on the people of China.

Trade liberalisation and technological advancement have unleashed the forces for globalisation. In doing so, they have raised living standards worldwide, increased productivity, reduced production costs and widened consumer choices to an extent never before seen in the human experience. As a result, world trade has increased 15-fold since the establishment of the General Agreement of Tariffs and Trade (GATT) some 50 years ago.

The world economy nowadays is so increasingly intertwined as a result of globalisation that the strength and performance of one piece in the jigsaw can easily affect the economic prospects of another. The question now is not whether, but how we manage this irresistible and irreversible trend so that all countries and all people can benefit. If we don't, the protests we saw in Seattle last year will not be seen as just an abberation.

As the key driving force behind globalisation, technology not only transforms the workplace, but has also speeded up the pace of globalisation to a degree not conceivable even a decade ago. The information technology revolution challenges traditional modes of trade, as e-commerce makes transactions borderless.

Take manufacturing as an example. IT allows faster turnaround time, compresses planning cycles, improves quality and lower prices. The development of e-commerce also enhances the ability to match buyers and sellers, removes physical trade boundaries and traditional trading practices involving wholesalers and retailers.

I raise these points because they have a real context in the here and now. Hong Kong is a tiny place of 1,100 square kilometres and fewer than 7 million people perched on the edge of China. Since 1 July 1997 we have once again become part of our great nation. Our future is more than ever inextricably bound to that of China. This means a lot to the people of Hong Kong in emotional terms. Under One Country Two Systems, it means that we are responsible for running our affairs in everything but foreign affairs and defence. Beijing has been scrupulous in honouring its commitment to the high degree of autonomy guaranteed to Hong Kong in our constitution, the Basic Law.

In economic terms, One Country Two Systems offers Hong Kong the unrivalled opportunity to take part in the next crucial phase of the opening up of the Mainland economy. That is already happening with China's imminent accession to the World Trade Organisation. The implications of this for the Mainland, for Hong Kong, indeed for the whole of the world economy, are immense.

It is useful to remind ourselves that we are talking about a country of 1.3 billion people with intrinsic qualities of ingenuity and hard work. China's leaders have felt the benefits of giving freer rein to their talents and energy, and have embarked on the bold step of reforming their state-owned-enterprises. This is a daunting challenge but one that has great potential.

Hong Kong has long been a vocal supporter of China's accession to the WTO. We also fully realise we will face increased competition as the Mainland's markets open up further to the world. But we believe the gains will far outweigh the losses. Why? One reason is that Hong Kong is strong in those very areas which the Mainland needs most to develop its economy - trade and travel related services, finance, insurance, transportation, tourism, telecommunications and business services generally.

And because Hong Kong probably understands the Chinese market better than most - after all we have been doing business there for decades and we have the cultural advantage. We will still remain the best place for international companies to access the Mainland. We're also a pragmatic people. More foreign businesses may go directly to China, but as the market expands, our slice of the bigger pie is larger in the long run.

But China's entry to the WTO is not just about opportunities, it is also about strengthening economic stability generally in the region. It is about ensuring the differences on trade are resolved sensibly. It is about developing the global economy on responsible rules-based principles. It is also about making friends at enterprise, factory and shop level, and between peoples across international boundaries.

That's the real significance of WTO membership and the strength of globalisation. It is the right way to go and will ultimately benefit all mankind. And Hong Kong, which has thrived on open market and free trade policies, will continue to be a pacesetter in the 21st Century.

Let me conclude my lecture with a few words about leadership. Tertiary institutions, whether in Hong Kong, the United States or the far flung corners of the globe, are generally looked upon as the breeding ground for the leaders of the future. I am sure that in the audience here today, many of you will rise to the occasion and become leaders in your chosen fields.

But leadership is not simply about excelling in a particular career. It is about creating a vision and a sense of community, fostering commitment rather than compliance, providing inspiration and hope - the promise of a better tomorrow even when things look their darkest. Leaders must be open to ideas. But if they become too concerned with the opinion of others, it can sometimes distract them from their original vision. I feel that learning and leading go hand in hand. The Greek philosopher Epictetus said "Nature has given to men one tongue but two ears that we may hear from others twice as much as we speak." A good listener is one of the most important traits any leader can have. Listening is one of the best way of learning.

Hong Kong has certainly been through some tough times in the recent past, particularly with the Asian financial crisis, but it is as well to remember an old saying - tough times don't last but tough people do. Be enthusiastic in whatever you do and be dedicated to accomplishments and to results.

Thank you very much.

End/Friday, July 21, 2000

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