Following is a speech by the Secretary for Economic Services, Ms Sandra Lee, at a luncheon jointly organised by the Hong Kong Economic and Trade Office in Brussels and the Trade Development Council yesterday (May 14) in Amsterdam:
Distinguished guests, ladies and gentlemen,
It is a great pleasure for me to begin my European visit here in Amsterdam, the capital of the Netherlands and a dynamic city that, in one way, has shaped its economic future around its superb facilities and the historic nature of its surroundings. Indeed, I was unaware until only recently that Amsterdam is among the top five international congress destinations in the world. I hope we can take a leaf out of your book as we embark on a mission that aims to position Hong Kong as Asia's world city. But more of that a little later.
First, I would like to say how pleased we were to be visited about six weeks ago by a delegation from the Netherlands led by your Transport and Public Works Minister, Mrs Tineke Netelenbos. In her speech she reminded me of the deep involvement of Dutch companies in our major infrastructure projects - an involvement that at one stage had me wondering whether you had cornered the market for Hong Kong's development! Our new airport, the Hong Kong Disney theme park, a new vessel traffic management system for our port are just some of the projects with Dutch involvement.
The list of companies and projects serve to reinforce the close ties we have established with the Netherlands over many, many decades, in fact, going back more than a century. And I can assure you that our development plans will continue well into the future. The commercial opportunities will be just as abundant with some of the new infrastructure projects on the drawing boards. Perhaps I can give you a few examples. Between now and 2016, a dozen railway projects costing some US$25 billion will need to be built and another US$5 billion has been earmarked for roads. The rail projects in themselves amount to more than we spent in building our new airport. And even now a study is under way to identify additional passenger and cargo facilities for our Hong Kong International Airport. These will be required in the future to enable our airport to realise its ultimate design capacity of handling 87 million passengers and 9 million tonnes of cargo a year.
All these projects are designed to capitalise on the developments taking place in the Asian region, in particular China's impending accession to the World Trade Organisation, which will create further opportunities for Hong Kong. Our aim is to stamp Hong Kong as Asia's world city. Indeed, my visit to Amsterdam coincides with the launch of a global programme to communicate this message. Our positioning as Asia's world city is built on our gateway role to China and as a hub for business in the Asia-Pacific region. The programme and the new visual identity associated with it, i.e. a sleek modern interpretation of a dragon, is a cultural icon long associated with Hong Kong. They have been designed to remind the world that the spirit of dynamism and openness that have made Hong Kong so successful over the years are alive and well.
You might wonder why Hong Kong needs to launch such a global programme. The simple answer is that it stems from the recommendations of a Commission on Strategic Development established by our Chief Executive in 1998 - less than a year after the Handover - to review Hong Kong's long-term development needs and goals. Extensive research amongst business and government leaders internationally and in Hong Kong showed that while we are held in high regard overseas, not everyone understands the dramatic changes that have made us one of the world's most modern and dynamic cities. Therefore, we must explain in a more powerful way the added value Hong Kong brings to the international community. And we need to do this if we are to expand investment, trade and other links that are so important to our economy and our continued development as a world city.
The message is reinforced by the fact that we continue to have the world's freest economy as ranked by the US-based Heritage Foundation and Cato Institute. It's a position we have held virtually since the global rankings of the two organisations began and certainly in the case of the Heritage Foundation. This openness, this respect for freedom in all its forms - economic and personal - has been the driving force that has taken our small Special Administrative Region of Hong Kong in China to such a competitive global position. So much so, that the Swiss-based International Institute for Management Development has just ranked us 6th in a global competitiveness survey - an improvement of six places over last year's result.
There are a number of key factors that are helping our positioning. They form an integral part of Hong Kong's development as a world city and include our role as a manager and co-ordinator of global economic activity. We have a core of world-class service providers and a highly productive workforce. Our modern infrastructure is continually being upgraded - our port and new airport are but two examples. We have excellent educational and other institutions which focus on knowledge-creation and enhancing the quality of life. We are firmly committed to maintaining the rule of law, freedom of expression and association, the free flow of information, openness and diversity. We have strong links with our hinterland, the Mainland of China, and we have a clean and highly professional administration.
But to be successful in the 21st century, a city also has to be truly wired. And Hong Kong has the hard and soft infrastructure to keep pace with a community wanting to keep up with technological innovation and application. We were the first city to have a fully digitised telecommunications network. Now our broadband coverage is available to every business and more than 95 per cent of households. We have the highest utilisation rate of smart card technology in the world. Seventy-eight people out every 100 now have mobile phones.
We're also investing heavily for the future as we prepare to ride the next wave of the e-revolution. We have established a US$640 million Innovation and Technology Fund, we are constructing a US$2 billion Cyberport as an international IT centre with state-of-the-art facilities, and creating a world-class Science Park. Our external connectivity is also second only to Japan in Asia. Certainly, the 3 000-plus international corporations that have set up their regional headquarters or regional offices in Hong Kong can attest to how our present infrastructure supports their business ventures in the Asia-Pacific region.
Another important reason Hong Kong is viewed as a world city and a world hub is the added value we bring to the global community. We are home to the world's busiest container port and our airport has just been named the world's best for 2001 by a leading international air-travel research company. Tourist numbers rose by 15 per cent in 2000 to more than 13 million, and Hong Kong's position as Asia's most popular tourist destination can only be strengthened by the arrival of our own multi-billion-dollar Disney Theme Park in 2005. This development alone is expected to generate economic benefits of US$19 billion over the next 40 years.
Hong Kong, with its population of 6.8 million and millions more visiting us each year, with an imposing skyline and our famous harbour, captures the very essence of the word 'city'. Yet first-time visitors are invariably surprised that such a 'shrine' to the skyscraper and the business ethic should also be so green, with some 70 per cent of its surface undeveloped. But business is at the core of Hong Kong's being. We are both the gateway to business in China as well as the biggest external investor in that fast-growing economy. And Hong Kong's investment flows are not just one-way. Figures show that a staggering US$64 billion in foreign direct investment flowed into Hong Kong last year.
Part of that FDI is destined for the Mainland, quite possibly into the adjoining Pearl River Delta, which is, and will continue to be, one of the most dynamic economic growth regions in the Mainland and, indeed, the world. With the imminent accession of China to the WTO there will be a new impetus to this growth. Not just in the Delta, but in the nation generally, as the economy opens up further to the world. Hong Kong, situated at the mouth of the Pearl River and the gateway to the Mainland, is poised to benefit from these developments.
It has been estimated that in a matter of years, China's external trade and foreign direct investment will double and much of the increased trade and investment will flow through Hong Kong. Already we handle some 40 per cent of all China-related trade and Mainland companies are increasingly using Hong Kong's financial markets and financial institutions to raise capital. Last year these companies raised over US$40 billion through Hong Kong, which has helped reinforce our status as a leading international financial centre.
Indeed, we are already seeing significantly increased world interest in China not only as a vast market, but as a global manufacturing resource. This in turn is bringing a new focus on logistics and much of the technology that drives this logistics revolution is being created in Hong Kong. In turn it further enhances our role as a global financial and services centre.
So, I think you can gather from what I have been saying that Hong Kong never stands still. It is a city of constant change. As such the positioning programme launched last week on May 10 in Hong Kong reinforces our determination to spread the message globally that four years after the Handover, Hong Kong continues to thrive by playing to our strengths. 'One country, two systems' the concept under which we were reunited with China is a successful living and working principle. The rule of law and all the freedoms we have come to expect, and our way of life have not changed. What started out as a small fishing village built around a fine natural harbour has developed into a cosmopolitan, bustling Asia-Pacific hub. And Hong Kong's position as Asia's world city stands as testimony to the power of freedom and openness in creating and sustaining economic success.
Ladies and gentlemen, I extend an invitation to you all to Hong Kong and be part of our success story.
End/Tuesday, May 15, 2001