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Speech by Secretary for Commerce and Industry

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Following is a speech by the Secretary for Commerce and Industry, Mr CHAU Tak Hay in the Seminar on Business Opportunities in Malaysia today (April 27):

Minister Rafidah, distinguished guests, ladies and gentlemen,

I am greatly honoured and happy to be here today. On behalf of the Government of the Hong Kong Special Administrative Region, I wish to extend our warmest welcome to the Malaysian Trade and Investment Mission led by the Honourable Minister of International Trade and Industry of Malaysia, Dato Seri Rafidah Aziz.

We Chinese have an old saying for every occasion. And for this occasion, the old Chinese saying is one from Confucius, which says : it is always a great pleasure to welcome good friends from afar. Minister Rafidah and I go back a long way. I first met her in 1991 when I attended my first APEC Ministerial Meeting and I have been an admirer of her great ability and flair ever since.

It was said of Margaret Thatcher when she was British Prime Minister that she was the only person wearing trousers in her cabinet. My limited knowledge of Malaysian politics does not permit me to say whether this is also the case where Minister Rafidah is concerned. What I can tell you is that in all the ministerial meetings that I have attended together with Minister Rafidah - and there have been many such meetings since 1991 - she has always stood out as the most robust and the most tenacious among her fellow Ministers.

Minister Rafidah, I am glad to say that you and your mission have chosen a good time to come. The Hong Kong that greets you today is a city that has rebounded strongly from the Asian financial crisis. Our economy grew by 10.5 per cent in real terms last year, the highest growth rate recorded since 1987. Operating costs have come down. Tourism and retail sales have gone up. And in 2000 we were Asia's second largest recipient of foreign direct investment. Although the pace of our economic growth will be less dramatic this year, we are still expecting a GDP growth of around 4 per cent.

What does all this mean for my audience today? It means that you are catching Hong Kong when its economy is strong and growing. It means more investment and business opportunities, more buyers for your products, and more partners for your businesses.

Similarly, the significance of Malaysia's economic achievements in the last two years has not been lost on us. We are most impressed by your rapid recovery from the Asian financial crisis. After a contraction of 7.5 per cent in 1998, your GDP registered a substantial growth of 5.4 per cent in 1999 and enjoyed an impressive 8.5 per cent increase in 2000. Such a strong rebound would not have been possible without the prompt and effective measures taken by the Malaysian Government. Nor could this have been achieved without the hard work and resilience of the people of Malaysia. But what has impressed us most of all is that Malaysia has done this entirely on her own and without any assistance from outside. I recently came across a comment in the "Asia Today" magazine which I think is most apt : "Malaysia's stand against the International Monetary Fund and the world community at large during Asia's recent economic crisis has given others a new model to economic development and international diplomacy." This is high praise indeed and well-deserved too.

Malaysia and Hong Kong share a similar vision for our future economic development. In his Third Outline Perspective Plan, Prime Minister Mahathir foresaw that the future productivity gains of the Malaysian economy will arise from improvements in technology and production processes, coupled with the greater use of information and communication technology. While emphasizing the importance of developing a knowledge-based economy in Malaysia, he proposes to improve the level of education, intensify skills training, and attract talented foreigners to work in Malaysia as part of a "brain gain" strategy.

Here in Hong Kong, our Chief Executive has also identified innovation and technology as key drivers for our long-term economic growth. We too are putting a great premium on the quality of our workforce. In gearing up for the knowledge economy, we have embarked on reforms in our education system and introduced more and better training for our workers. And we are equally keen to attract the best brains from around the world.

Where the relationship between Malaysia and Hong Kong is concerned, I would like to see a greater bilateral flow not just of trade and investment but also of people and ideas, in our common pursuit of sustainable growth.

The stage has been set for this to take place. Hong Kong and Malaysia already share strong and stable economic ties. Last year, Malaysia was our 9th largest trading partner, and Hong Kong ranked 6th among Malaysia's trading partners. We are also active investors in each other's economy. At the end of 1999, our total investment flow represented an almost 100 per cent increase from the previous year. We are also a popular holiday destination for each other. Your attractive and vibrant cities and your many excellent holiday resorts have for long been favourite destinations for Hong Kong people. In return, we have also been receiving more visitors from Malaysia in recent years.

Hong Kong and Malaysia are also friendly partners in the international and regional economic arena. As active trading economies, we have both participated fully in the discussions and activities of the WTO and APEC. Although we may not always see eye to eye, we have grown to know and respect each other's positions. We have taken every opportunity at such forums to increase our mutual understanding and to build closer ties. I look forward to working even more closely with Malaysia and Minister Rafidah in particular towards creating a global trading environment that is increasingly liberalised and conducive to economic growth for all.

Looking ahead, I see abundant opportunities for closer commercial partnership between us as we complement each other's role in the region. Malaysia is strategically located as a hub for South-East Asia and a springboard for the growing ASEAN market. As for Hong Kong, we are the natural gateway to the Mainland of China and the ideal base for businesses wishing to enter this huge and growing market. This role will be further enhanced when China becomes a member of the WTO.

As an open economy with a diverse range of products and services, and a business-friendly environment, Malaysia has much to offer as a place for business and investment. I know that there will be sessions this afternoon for the business sectors of our two economies to meet and explore new avenues for co-operation. I have no doubt that they will be useful and productive sessions for both sides.

I would like to conclude by wishing you, Minister Rafidah, and members of your Mission every success in all your endeavours.

End/Friday, April 27, 2001

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