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Following is a speech by Secretary for Information Technology and Broadcasting, Mrs Carrie Yau, at the Hong Kong Networking Dinner held at the World Economic Forum in Davos on January 26 (Davos time):
It is great to be in Davos and to see so many good friends and supporters of Hong Kong here tonight. It is a pleasure for me to continue the long tradition of other Hong Kong officials who, with your support, have made this one of the better known and more enjoyable events of the Annual Forum.
Before I say anything else, I would like to belatedly wish everyone a happy and healthy 2001. As some of you already know, tonight is also the third day of Chinese New Year, so I must wish everyone 'kung hei fat choy' for a prosperous Year of the Snake. To help us celebrate, we have left a 'lai see' packet as a small token of our appreciation at each setting. It's the usual tradition to put money inside these lucky envelopes but I'm afraid I was fresh out of Swiss Francs this morning so you'll have to settle for a chocolate coin instead!
Although this is my first visit to Davos, Hong Kong itself is an old World Economic Forum hand. We've been here every year since 1988. In the early days it was a rather serene affair but the protests last year have added a whole new dimension. While it is true that we in Hong Kong are staunch supporters of free trade, the multi-lateral trade system and globalisation I also think it would be foolish of us to ignore or dismiss out of hand some of the messages that we have been hearing in recent years, even if we don't always agree with the manner or style in which they are delivered. I think the Forum understands this perfectly. This year's meeting under the theme 'Bridging the Divides: Creating a Roadmap for the Global Future' addresses some of the concerns and issues facing developed and developing economies alike now and in the future.
On a personal level, I am grateful for the opportunity to meet such a wide cross-section of people in such a relaxed and informal atmosphere. It is an excellent chance to hear what you have to say about Hong Kong and how you think we're doing three-and-a-half-years after the Handover.
It also allows me to tell you why I believe I have one of the best and most exciting jobs in the Hong Kong government. I firmly believe that our future development is closely tied to leveraging the information age. The major new areas of economic growth will be in the telecommunications, IT and multi-media sectors. So, I consider myself very fortunate to have been given this relatively new portfolio at such an exciting time. I am only the second person to lead this bureau since it was established in 1998.
So much has been happening that I sometimes find myself dazzled by the speed at which Hong Kong is able to embrace and exploit new technologies and new ideas. At the heart of that, of course, is the entrepreneurial spirit that has been allowed to flourish in a free and open market with low taxes and a minimum of red tape. We believe the government's role is to facilitate business rather than hinder it.
Take telecommunications and IT. Following the liberalisation of our telecommunications sector, we now have one of the most open and competitive markets in the world. There is fierce competition for customers, which has taken service standards to new highs and prices to new lows. Three-quarters of our population own mobile phones. Together with Finland, this is the highest penetration rate in the world. We expect to issue four Third Generation(3G) licences this year so that 3G services can come on stream about the same time as they do in Europe and the United States.
We are opening up the broadcasting industry to increase competition and programme choice. Our external telecommunications connectivity via satellite or cable will increase nine-fold over the next three years following liberalisation of the external facilities market. And while our Internet business has been riding the same roller coaster as the rest of the world, it has a solid core. Internet Services Providers have complete freedom to start operations and at present we have more than 200 in Hong Kong. We have about 42,000 'dot-com-dot-hk' domain names registered, and more than 2,000 dot-com companies incorporated in Hong Kong. We have a CyberPort and a Science Park coming on line that will attract a whole range of IT, innovation, technology and multi-media companies to Hong Kong. That's just some of what is happening, by no means all.
On the economic front, we have had a good year. GDP is expected to grow by about 10 per cent for 2000, which is double the rate we were predicting back in March last year. Prices are stable, with slight deflation. This has helped keep costs down, particularly rents. The unemployment rate is steadily edging down. The recent cut in interest rates is likely to boost consumer sentiment and alleviate the burdens of mortgage holders. And of course our currency has remained rock solid thanks to the linked exchange rate with the US Dollar.
Over the past year we have also seen a resurgence of interest in Hong Kong as a regional base - the number of companies using Hong Kong as a regional HQ or office jumped by more than 500, or 20 per cent, to just over 3000 last year. I am sure this renewed interest is in part due to China's imminent entry to the WTO. Hong Kong companies are already looking at ways to leverage their existing contacts, experience and operations in the Mainland market to get the 'first mover' advantage over other competition. International companies seem to be doing the same.
However, we do have our share of challenges. We have had to face up to the fact that our education system is outmoded and has to change if we are to tackle the challenges and opportunities of the information age which has also exposed a skills mismatch in the profile of our workforce. We need urgently to equip more people with the skills required for the IT revolution and are introducing major training and re-training programmes to do just that. In particular, we need imaginative educational initiatives to avoid bottlenecks in the supply of IT talent. We must also ensure high levels of bilingualism in our education system.
In the immediate term on the economic front, we are carefully and closely monitoring developments in the U.S. economy following the slowdown we've seen in the past month or so.
Notwithstanding all this, Hong Kong really is the best place in Asia to do business. This has happened because we have stuck to our tried and tested tenets of success: the rule of law upheld by an independent judiciary; open and accountable government; a clean civil service; a level playing field for business; a duty-free port; low taxes; free movement of goods, capital and people; the free and unfettered flow of news information and ideas; and a whole range of freedoms guaranteed and protected by our constitution, the Basic Law - for example, freedom of the press, freedom of religion, of expression, freedom to travel. In a changing world, some things don't change.
Well, I've taken enough of your time. Once again, thanks for all of your support. I'll happy to take any questions that you may have.
End/Saturday, January 27, 2001
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