******************************************************
Following is the full text of the speech (English only) by the Financial Secretary, Mr Donald Tsang, at the Hong Kong Exporters' Association Annual Lunch today (December 8):
Jeffrey [Lam], other friends, ladies and gentlemen,
This is one speech I am going to enjoy delivering, so I'm doubly delighted to be here today. Not only am I amongst so many good friends and acquaintances, our economic recovery is largely being driven by our external trade - a key activity that is represented by the Hong Kong Exporters' Association and so ably run by Jeffrey and his General Committee.
I'm reminded of a story about an export trader, let's call him Mr Wong, who was alarmed when a new business, much like his own, opened an office and shop-front next door on his left. A huge sign was installed, reading BEST DEALS.
Mr Wong was troubled a second time when another competitor leased the building on his right, and erected a much larger sign, reading LOWEST PRICES. At this point, Mr Wong was really depressed until, with the flair of a true Hong Kong entrepreneur, he came up with the solution. He put the biggest sign of all over his own premises - it read MAIN ENTRANCE!
This may be a tall story, but it is a sign that has long-described Hong Kong's role as the gateway to China. Indeed, it has been underscored this year by the strong surge in trade passing through Hong Kong - a surge that is having such a significant impact on our economic recovery.
I don't want to numb you with statistics on this festive occasion, but I do believe it is worthwhile mentioning some of them to reinforce the remarkable growth in our trade. In the first 10 months of this year, as Jeffrey mentioned, total exports of goods has grown by over 18% over the same period last year. This has been more than matched by imports which have grown by over 20%. The impressive performance comes despite a higher base of comparison for the third quarter.
While we anticipate some moderation as we head into the new year, I believe 2000 will be one of the best years on record for Hong Kong's export trade and certainly the best since 1992.
I understand the returns to exporters may not be reflected to the same extent as the percentage growth in the volume of exports. However, there is no denying the non-stop activity during the year and the positive effect this is having on our GDP. We now expect the economy to grow by 10% - double the original budget projection I made back in March.
But this rapid growth cannot be sustained, nor would it be healthy for a mature economy like Hong Kong's. Indeed, we expect the situation to return to more normal single-digit growth next year. This would be reflected in slower growth in our major markets, particularly the United States, where some analysts believe the economy could register a growth of around 3%, down from this year's anticipated 5%.
And there are other blips on the radar screen that could alter our growth forecasts, such as continuing volatilities in oil prices and the U.S. stock markets, developments in our own asset markets which could affect sentiment and the level of domestic demand, and the pace of recovery in Japan.
All these are worth noting. But we should not overlook the positive factors working in Hong Kong's favour - the robust growth in our biggest market China and, more significantly, its imminent accession to the World Trade Organisation.
There has been apprehension on the part of some that the increased competition with the further opening up of China's market may leave Hong Kong flat-footed. I don't subscribe to that view.
I believe the latest business survey by the American Chamber of Commerce in Hong Kong is quite interesting. It reflects a growing confidence in Hong Kong's economic recovery and the positive investment climate in China over the next five years. The survey also indicates that not only will most AmCham member companies maintain their regional headquarters and expand their operations here, Hong Kong will also benefit from the expected increase in their investment in the Mainland with WTO membership.
Yes, there will be increased competition. Yes, many multi-nationals will deal direct with the Mainland. Some already do. But, Hong Kong is a unique place - politically, economically, geographically and constitutionally. We have free and open markets, the rule of law, an independent judiciary, a level playing field for business, a low and simple tax system, the freedom of speech and a free and unfettered flow of news and information, which is vital in today's global business environment.
However, we will have to work hard to reap the rewards. Proximity and early access to the Mainland market will not necessarily guarantee our edge over others. We have to secure a partnership with the Mainland. A partnership that leverages on the kind of expertise and experience that are in great demand by both the Mainland, in reforming its economy - such as trade, finance, and business services generally - and by international trading partners wanting to gain access to China's markets.
After many years of trading, investing, manufacturing and connecting with the Mainland, Hong Kong businesses and entrepreneurs have established an enviable reputation. They speak the same language, have a similar cultural background and act as a barometer for sensing changes to the landscape. The moves our businesses make now and over the next few years will be crucial to building and holding onto our market share.
We are already the largest external investor in the Mainland. These investments are heavily centred in the Pearl River Delta. But Hong Kong enterprises have not been content to draw the line there. They have been reaching into the heartland to pave the way for the opportunities now on the horizon, and in particular to capitalise on the Central Government's 'Go West' development campaign.
You might recall that just over two months ago, I made a special visit to Beijing to meet with officials from the Hong Kong and Macau Affairs Office to learn more about this exciting project. Although these discussions are continuing, I hope to be able to lead a high-powered mission into the Western region in the first half of next year.
I firmly believe the West offers the greatest potential for unlocking the opportunities for companies and entrepreneurs with a pioneering spirit. And it will be at a time when the Central authorities are formulating a package of proposals for the region in the context of China's accession to the WTO.
Over the past few years, we have spared no effort in exploring new markets and developing existing ones for our exporters. Our joint missions to countries in South America, to South Africa, Scandinavia, Australia, the Middle East and Central Europe bear testimony to that. Results may not flow immediately, but the contacts, the networking and the opening of political and trading doors in some of the more undeveloped markets will bear fruit.
I am sure that in view of the interest you have shown in those missions, you will not want to miss out on our own hinterland.
We are excited by China's imminent membership of the World Trade Organisation. The opportunities that will come with the opening up of what is potentially the world's biggest market to the rules-based global trading system are breathtaking. We know, too, that the challenges will be many, but we're not fazed by this. Hong Kong enterprises have thrived on challenges and I have no reason to doubt their ability on this occasion.
And, we're also looking forward to the early prospect of visa free access to the European market, which will make it so much more convenient for Hong Kong passport holders to access the Continent. The decision is the result of a team effort by the government, the business community and the EU member states. But we are not resting here. We will continue to lobby other major trading partners for similar arrangements as a way of further strengthening business, cultural and tourism ties.
Jeffrey, ladies and gentlemen, I have already spoken for too long. The Hong Kong Exporters' Association plays an important part in helping the advancement of international trade. I hope that next year we will continue to see steady growth in our exports. After all, trading is our lifeblood. It's what Hong Kong does best.
In closing, I would like to wish you all a very Merry Christmas - it is a time when people want their past forgotten and their present remembered.
Thank you very much.
End/Friday, December 8, 2000
NNNN