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Following is the remarks made by the Chief Executive, Mr Tung Chee Hwa at the Marine Department's Annual Cocktail Reception today (January 5) to celebrate the breakthrough of 10 million gross registered tonnes of the Hong Kong Shipping Register:

Good afternoon Ladies and Gentlemen,

Coming to this gathering, seeing so many old friends and many familiar faces is like coming home. And I know that I am amongst friends. On this occasion when we mark the 10 million gross registered tonnes milestone for the Hong Kong Shipping Register, I want to say a few words today about the maritime industry in Hong Kong.

The maritime industry has been part of Hong Kong's growth and prosperity for many many years. Throughout Hong Kong's history, shipping has provided Hong Kong with a vital link and a crucial role. During the days when Hong Kong was a manufacturing centre, shipping served as a conduit for goods to and from Hong Kong. As Hong Kong slowly evolved into a regional service centre, the expertise of Hong Kong maritime industry enabled Hong Kong to emerge as the gateway of goods coming in and out of Mainland China, a major shipowning centre, as well as a sophisticated service centre for shipping-related activities. I am proud of our industry's contribution to Hong Kong. I believe the maritime industry will continue to play a vital role in Hong Kong in the years to come.

The maritime industry in Hong Kong can be largely grouped into two categories. The first category is the ownership, control and management of ships, and secondly, the facilities that make Hong Kong the largest container port in the world.

Under the category of ownership, control and management of ships, Hong Kong's pre-eminence needs no further elaboration. The fact is that the last statistics I saw there are over 50 million deadweight tonnes of ships under the management, control or ownership of Hong Kong, making Hong Kong one of the largest centres in the world rivalling also Oslo, London, New York, and Piraeus. As a container port, in the year 2000 which had just passed, we handled altogether 17.8 million TEUs (Twenty-foot Equivalent Units) making Hong Kong the largest container port in the world. We are indeed very proud of this enormous achievement.

I believe Hong Kong's role as a maritime centre will continue to expand. All we have to do is to look at the economy of China. Today the Chinese economy is already the seventh largest in the world. And according to the World Bank, by 2020, the Chinese economy will be one of the largest in the world. The need for importation of raw materials in China is enormous. In the eighties, Mainland China imported five million tonnes of iron ore. By last year, the total import grew to 70 million tonnes. In the eighties, Mainland China imported a hundred thousand barrels of oil a day. By last year, it was at one and half a million barrels a day.

And as the economy continues to expand, the need will surely grow. For instance, today Mainland China's steel production has already surpassed Japan as the largest steel producer in the world. Similarly, in the container trade, much of the 17.8 million TEUs of container throughput through our port is actually related to trade to and from China. And China's external trade continues to grow. This year, her external trade growth is close to 30 percent. Ship capacities and port facilities will continue to be very much needed. And think of this when China enters the WTO in the very near future, the demand for shipping and the demand for port facilities will be enormous. And Hong Kong, with our unique location, with our common culture, with expertise in the maritime industry, actually we will be unrivalled in trying to take advantage of the growth of requirement in the maritime sector of the mainland of China. So there we are, another reason why your fleet should come home. We are proud of our container port facilities. The development of Hong Kong's maritime business has created and attracted world-class shipowners, ship managers, ship insurers, ship financiers, legal and arbitration professionals, import and export firms and trading companies. Furthermore, we are working hard in developing logistic business, particularly for the mainland of China.

Indeed, the continued development of Hong Kong into a maritime centre is consistent with our goal of becoming a professional, high value-added service centre for the Mainland, for the region, and for the world as a whole. I encourage continued co-operation between the private sector and the Marine Department, the TDC and the Port and Maritime Board and other government and quasi-government bodies to further this very important objective. Our ambition and achievement is perhaps best represented by the efforts and achievements behind the development of the Hong Kong Shipping Registry. The hard work by the Marine Department, the PMB, a combined co-operation with the private sector resulted in almost doubling the GRT registered in Hong Kong which we had a target to achieve in three years but we made it in 20 months. So my congratulations indeed and we have done it, making sure Hong Kong is a quality registry, a registry all shipowners should be very proud of.

Before I close, I thought it would be very interesting for me to share with you some numbers which I have come across today, and some which I came across recently that may be of interest to you. There were, of course, a lot of concern, a lot of doubt about what will happen post-1997 July 1. Would "One Country, Two Systems" work? Would Hong Kong be as operational as before? Let me quote you some figures which you will be very interested in. For the past year, foreign direct investment into Asia No.1 ranking is People's Republic of China at US$40 billion. Hong Kong ranked No.2 at some US$23 billion and the others are all rather smaller, less important figures. And I want to remind you of this US$23 billion is a lot of foreign direct investment. During the course of last year, the portfolio investment from the United States coming into Hong Kong was US$5.3 billion, again ranking far ahead of any other community, country or city in Asia. The next one is nowhere near whatever the number is and many of these areas actually have negative influx. So you can see the international community today is full of confidence in Hong Kong because the capital flow is moving in this direction. At the end of 1999, there were 2,500 companies who chose to make Hong Kong their Asia Pacific Headquarters or their office for Far East, for Asia. By the end of last year, a few days ago, that number has gone beyond 3,000, an increase of over 20 percent. I mention these numbers to you just to say that Hong Kong is moving ahead fine. There is a lot of confidence overseas. And that I hope, in addition, to the ships that might come home, the ships owned locally, there are a lot of other shipowners around the world, we will welcome you to come to Hong Kong also. You will find a quality registry that you will find a very business friendly environment here in Hong Kong. Really, I am proud of what we have achieved specifically on this 10 million gross registered tonnes. And I am sure with a similar amount of dedication and

determination, we will be able to further enhance Hong Kong's position as a premiere business hub for Asia. Thank you very much.

End/Friday, January 5, 2001

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