*****************************************************************
Following is a speech delivered by the Chief Secretary for Administration, Mrs Anson Chan, at the Breakfast Seminar co-organised by the Hong Kong Trade Development Council, Hong Kong Economic and Trade Office, the Auckland Regional Chamber of Commerce and Industry and the Hong Kong-New Zealand Business Association in the Sheraton Hotel Rangitoto Ballroom, Auckland, today (November 7) (English only):
Distinguished guests, ladies and gentlemen,
Thank you for getting up at such an early hour to come and hear me speak. Fortunately, I am staying in this very hotel, so I had the luxury of lying in a little bit longer than most of you who have to drive into town each day. Some of you might also recognise the venue - last night we had our Gala Dinner here, which was very enjoyable and a big success. That was no doubt due, in part, to the superb quality of your food and wine.
It is a great pleasure to be in Auckland, this striking city by the sea - protector of the America's Cup; home to Eden Park, one of rugby's most hallowed grounds; a centre of Maori culture; the biggest Polynesian city in the world; and the playground of Hercules and Xena the Warrior Princess! But I'd have to say Hercules could probably learn a thing or two from Jonah Lomu after watching him carve a swathe through the opposition at our annual Rugby 7s tournament in Hong Kong.
Although this is our first official promotion in New Zealand we have for many years had a very close relationship, both in terms of trade and people-to-people links, with the "Land of the Long White Cloud". We are your seventh largest export market and the sixth-largest source of inward investment into New Zealand. On top of that, tens of thousands of former Hong Kong residents have migrated to New Zealand with many of them living here in Auckland. Thousands of our young people have studied in your schools and universities. So there really are very strong bonds already linking us. I hope that this promotion will further cement those trans-Pacific ties.
New Zealand is, of course, synonymous in Hong Kong - as it is elsewhere - with the freshest seafood, dairy goods and lamb and beef. The excellent quality of this produce means it will always find a ready market in Hong Kong. But I believe New Zealand has much more to offer us than crayfish, cheddar and chump chops. And that is why I am here today - to encourage more New Zealand companies to come to Hong Kong or to use Hong Kong as a springboard into China and other markets in East Asia.
Before I outline some of the areas which may be of interest to you, allow me to give you a quick rundown of how we have been doing in Hong Kong. As you would expect I am confident about Hong Kong's future as an economy and as the most vibrant international city in Asia.
The reversion of sovereignty over Hong Kong was a seamless and successful exercise. We have encountered a few bumps over the past three-and-a-half years as we set about implementing "One Country, Two Systems" within the framework of our constitutional document, the Basic Law. This we expected, given that such a concept has never been tried before. When you move into a new house, there are bound to be some creaking floorboards or squeaky doors while the foundations settle.
So, how do we judge the success of that transition? For a start, all the cornerstones of our past success remain in place. One of the most important is the rule of law upheld by an independent judiciary. Our highest appellate court, the Court of Final Appeal, includes two esteemed New Zealand judges on whom we call to preside as non-permanent judges from other common law jurisdictions. This rare arrangement, which also includes eminent judges from Australia and Law Lords from the UK, ensures that Hong Kong maintains contact with other common law jurisdictions as we develop our own post-1997 case law.
Other vital ingredients include a clean, efficient and impartial civil service, a level playing field for business and the free and unfettered flow of news and information. We have the same low tax policies, where salaries tax is capped at 15% and corporations pay only 16% profits tax. We remain a duty-free port. Our citizens are free to travel the world using the HKSAR Passport. We have our own shipping register and negotiate our own air services agreements. We have our own immigration controls and remain a member in our own right of organisations such as the World Trade Organisation (WTO), APEC and the World Customs Organisation. Some of you may have seen the Hong Kong team marching under our own flag at the Sydney Olympics. 'One Country, Two Teams' is yet another example of how China has scrupulously honoured its commitments to allow Hong Kong people to run Hong Kong with the high degree of autonomy that has been promised us.
But it has really been a case of economic, rather than political change that has occupied most of our energies in the past three-and-a-half years. The Asian financial crisis caught us by surprise and knocked the wind out of our sails. Our economy contracted by 5.1% in 1998 - the first time we have ever had to contend with a full-year recession. In the two decades prior to 1997, Hong Kong had enjoyed annual growth averaging 7%. Fortunately we have turned the corner and in the first half of this year our GDP has grown by some 12.5%. The figures have been so encouraging that we have had to revise our original GDP growth forecast for this year from 5% to 8.5%.
The financial crisis also exposed fundamental weaknesses that needed to be addressed if we were to remain at the forefront of international cities. It 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. 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. An energetic and diverse population.
We are already Asia's most cosmopolitan city. I suppose that is one reason why we remain the most popular Asian destination for New Zealand tourists. We are 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 - and we are doing more - to consolidate and enhance our position.
There are several areas where I think New Zealand expertise and experience can help us achieve our goals. As a market in its own right, Hong Kong offers a lot of potential for New Zealand goods and services. We have a population of 6.8 million, which is three million more than New Zealand. But we are confined within an area of about 1,100 square kilometres, which is not quite twice the size of Auckland.
One area of particular and pressing importance is environmental protection and environmental technology. Over the past two years we have embarked upon a concerted effort to clean up our environment, particularly air and water quality. We understand that if we are to attract and retain the best and the brightest in the world we need to be a great place in which to live as well as do business. New Zealand companies have a wide range of expertise in areas such as clean transport, solid waste management and recycling. Local authorities also have expertise and experience they may wish to share. We would welcome partnerships in any of these areas.
Another area is educational services. Australian universities and colleges have become leaders of educational services in Hong Kong, through a combination of specially-tailored distance learning programmes complemented by courses offered in Hong Kong at "local" campuses. Universities and colleges in New Zealand have not been as aggressive as your trans-Tasman cousins. This is despite the fact that your educational services are every bit as good. Education is the key to success of any community and of every economy. We already have quite a few New Zealand teachers in Hong Kong teaching English to our local students. New Zealand has a proven track record in teaching teachers. There are definitely opportunities in Hong Kong for top-rate educational institutions from New Zealand. All you need to do is a bit of homework on where you can best direct your particular strengths.
And I see opportunities opening up in the information technology sectors as Hong Kong positions itself as a hub for innovation, technology and e-commerce in the Asian region. To give you an idea of the potential in Hong Kong - we now have more than two million Internet users, that's one third of the population, compared to about 500,000 three years ago. The value of e-commerce transactions is estimated to reach NZ$5.9 billion by 2003 compared to just NZ$147 million in 1998. We are building a Cyberport on Hong Kong Island that has already secured 15 of the world's leading IT companies as anchor tenants. Another 150 companies have expressed interest in becoming tenants. We are building a Science Park to help bring innovative ideas onto the market place. We are interested in technology that will help upgrade our local industries. There are many possibilities for tech-related companies in New Zealand if only you come and visit us.
But there is a much greater dimension to all of this - the prospect of doing business in the Mainland of China with its 1.2 billion potential customers. All of the areas I have just mentioned are also worth exploring in the Mainland. And there are other sectors that will be of particular interest to New Zealand companies once China enters the WTO. Areas such as agriculture, high technology, wine, wood and paper, banking, insurance, telecommunications, distribution and trading rights, professional services and travel and tourism.
There are some who believe Hong Kong's star will fade - that our role as a gateway to the Mainland will diminish - once China joins the WTO. That is not how we see it in Hong Kong. We welcome China's accession and eagerly await the enormous opportunities it will bring.
There is an enormous economic interaction between Hong Kong and the Mainland in trade, investment and as our manufacturing base. We play a vital link as the springboard for international companies wanting to establish a foothold in China. So, there is a message here for New Zealand companies wanting to crack the China market: you will do no better than to find yourself a Hong Kong partner or facilitator. Our cultural, commercial, and historical links with the Mainland and the knowledge and expertise our entrepreneurs have built up over decades of trading and doing business with China give Hong Kong an unrivalled advantage.
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 - where New Zealanders are already quite strong in Hong Kong - management, logistics and distributive services, transport and communications.
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. As China embarks upon this profound economic transformation, Hong Kong can act as an agent of change by helping to enhance professional standards in the legal and accounting sectors in the Mainland. This in turn will lead to greater transparency and openness in the Chinese market and bring our country even closer to the international community.
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.
Thank you.
End/Tuesday, November 7, 2000
NNNN