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Following is the full text of a speech by the Secretary for Commerce and Industry, Mr CHAU Tak Hay, at the opening ceremony of the World Print Congress in Beijing today (May 21):

First of all, I would like to express my deep appreciation to the Organizing Committee of the Seventh World Print Congress for allowing me to address this important gathering of leaders of the printing industry from around the world.

This Congress has a special significance for two reasons. It is the first time that the World Print Congress is being held in China. It is also the first international congress of the world printing industry held in the New Century.

Hong Kong has long been one of the world's major printing and publishing centres; and, as its representative, I am deeply honoured to be given the chance to brief this distinguished audience on how well Hong Kong has fared in the past four years as a Special Administrative Region of the People's Republic of China.

The theme of this Congress is the "challenges facing the printing industry of the 21st Century in a knowledge-driven society". Talking about challenges, I am sure that, as entrepreneurs and leaders of the printing industry, my audience will readily appreciate that managing change is one of the most difficult challenges for any business and, indeed, for any government. Well, in Hong Kong, we have had to manage two major changes in the past four years.

The first change was brought about by China's resumption of sovereignty over Hong Kong. The second, by the Asian financial crisis. I am proud to say that we have managed both with considerable success.

On July 1, 1997, after 156 years of separation, Hong Kong became a Special Administrative Region of the People's Republic of China under the concept of "One Country, Two Systems". A concept that had never been tried before anywhere in the world. A concept that was bound to fail, according to some purveyors of doom, including especially Fortune magazine, which had erroneously predicted "the death of Hong Kong" in a cover story in 1995.

And we have proven all of them wrong. "One Country, Two Systems" is alive and well. Hong Kong is alive and well and getting better all the time.

The Basic Law of the Hong Kong Special Administrative Region promulgated by the National People's Congress provides a high degree of autonomy for Hong Kong under the principle of "One Country, Two Systems". This guarantees that Hong Kong's capitalist system and life style will be maintained for 50 years after 1997. In practice, this means that Hong Kong is able to exercise a high degree of autonomy in everything except foreign affairs and national defence.

It is now almost four years since Hong Kong's reunification with our motherland. In these four years, the "One Country, Two Systems" principle has become an everyday reality in Hong Kong. While an integral part of China, Hong Kong continues to exist as a separate economic entity.

Hong Kong's economy is managed by the Government of the Hong Kong Special Administrative Region, entirely on its own. We determine our own financial and monetary policies. The Hong Kong dollar continues to exist as a fully convertible currency backed by our own foreign exchange reserves, which at 115 billion US dollars, is the third largest in the world. Hong Kong's economy continues to be totally open and free, with no controls over the inflow or outflow of capital. We continue to maintain a low and simple taxation system and no taxes need to be paid to the Central People's Government.

Hong Kong continues to be a free port and a separate customs territory. The physical boundary between the Special Administrative Region and the Mainland continues to exist. Economic and trade policies are made by Hong Kong on its own. Hong Kong continues to be a separate member of Asian Pacific Economic Cooperation (APEC) forum, the World Trade Organisation (WTO), the World Customs Organisation and other international organisations whose membership is not restricted to sovereign states. Even after China has entered the WTO, which I hope will happen in the near future, Hong Kong will continue to be a separate member of the WTO, using the name "Hong Kong, China". The Hong Kong Special Administrative Region will have the same rights and obligations vis-a-vis the Mainland of China as other members of the WTO.

Hong Kong's common law system continues to exist and our judiciary continues to enjoy its traditional independence. The Hong Kong Special Administrative Region has its own elected legislature, which passes Hong Kong's own laws. The people of Hong Kong continue to enjoy all their traditional freedoms, including the freedom of speech, freedom of the press, freedom of religion and freedom of access to information.

My message is a clear and simple one: the unprecedented "One Country, Two Systems" principle is being successfully implemented in Hong Kong. The Central People's Government here in Beijing has faithfully abided by both the letter and the spirit of the Basic Law for Hong Kong. The Hong Kong Special Administrative Region Government has been able to exercise, to the fullest extent, the high degree of autonomy promised in the Basic Law.

I can think of no better third party endorsement of what I have just described than the fact that Fortune magazine, finding that Hong Kong is alive and well after 1997, recently held its prestigious Fortune Global Forum in Hong Kong. Furthermore, the author of the cover story entitled "the death of Hong Kong", on being asked in Hong Kong two weeks ago how he would describe today's Hong Kong, said that he would use the word "vitality".

Another resounding endorsement of the successful implementation of "One Country, Two Systems" in Hong Kong came in the form of the election earlier this year of the Permanent Representative of "Hong Kong, China" by the members of the WTO as the Chairman of the General Council, which is the WTO's highest decision-making body. Against the backdrop of China's imminent accession to the WTO, this important and prestigious appointment serves as a unanimous vote of confidence by the 140 members of the WTO in Hong Kong's ability to determine its economic and trade policies on its own and without any interference from the Central People's Government here in Beijing.

Let me now turn to the Asian financial crisis, whose full impact hit Hong Kong in late 1997, only a few months after the reunification. Since then we have had to go through a very painful period of adjustment; and the Hong Kong Special Administrative Region Government has had to take a series of measures to deal with the financial crisis, including effective measures to defend the Hong Kong dollar and our stock market against predatory attacks.

In 1998 our Gross Domestic Product (GDP) shrunk by 5.3 per cent - our first recession in decades. But in 1999 the economy was already bouncing back and our GDP registered a real growth of 3.1 per cent. Our economic performance was very impressive last year, when our GDP registered a real growth of 10.5 per cent. For the year 2001, we expect that our GDP will continue to grow, but at a more moderate rate. In short, we have come out of the Asian financial crisis in better shape and better prepared to face the challenges of globalisation and the knowledge-driven global economy.

While the financial crisis exposed our weaknesses, it also highlighted Hong Kong's strong fundamentals, including our strong legal system, a level playing field, a corruption-free government, open but well-regulated financial markets and a high standard of corporate governance.

These strong fundamentals together with our other advantages have enabled Hong Kong to develop strong economic links with the Mainland. These links are multi-faceted. They are mutually beneficial. Through them, Hong Kong has benefitted enormously from having the Mainland as our economic hinterland and has at the same time contributed substantially to China's modernisation.

Since the start of China's economic reforms in the late 1970s, Hong Kong has become the third largest trading partner of the Mainland, as well as her largest source of external direct investment. At the end of 2000, the cumulative value of Hong Kong's realised direct investment in the Mainland stood at 170.3 billion US dollars, accounting for about 49 per cent of total external direct investment in the Mainland.

In our neighbouring Province of Guangdong, Hong Kong's realised direct investment accounted for 74 per cent of the total Foreign Direct Investment (FDI) in that Province. Hong Kong companies now employ more than 5 million workers in about 60 000 wholly or partly owned manufacturing ventures in Guangdong Province alone. This is more than 20 times the size of our own manufacturing workforce or almost 74 per cent of Hong Kong's total population.

People often ask me whether China's WTO membership will reduce Hong Kong's role as a major conduit between the Mainland and the rest of the world. My answer is that, to the contrary, Hong Kong's role will be enhanced.

Following China's accession to the WTO, the level of China's external trade and foreign direct investment are both forecast to double in the next 10 years. The growth in trade will add significant traffic to our airport and our container port, which are already the busiest in the world. The growth in foreign investment will enhance our role as a financial centre. Already, of the 56 billion US dollars raised in the financial market in Hong Kong last year, three-quarters were for companies from the Mainland.

Furthermore, on China's accession to the WTO, Hong Kong's professional and service industries will be taking full advantage of the opening of different sectors of the Mainland economy. This will provide new opportunities to our service industries.

Additionally, ever-increasing prosperity in the Mainland will lead to a growing consumer market. Hong Kong's knowledge of the Mainland's manufacturing sector, as well as our ability to understand the Mainland's domestic market, is of great benefit to our multinational partners.

People also often ask me about the perceived competition between Hong Kong and Shanghai and whether Shanghai will one day replace Hong Kong. My answer is very simple: the Chinese economy is big enough to accommodate both Hong Kong and Shanghai. It is large enough to let Hong Kong and Shanghai both prosper and grow from strength to strength. Experts have forecast that, in about 20 years' time, China's economy will become the third largest in the world. I am confident that, by the second quarter of this century, the Chinese economy will be big enough to accommodate more than one Hong Kong and more than one Shanghai.

So, for the printing industry, what are the implications of the picture that I have just outlined? Hong Kong's strategic location within the region, our excellent transport and telecommunications infrastructure, our robust intellectual property rights protection regime, and the free flow of information already make Hong Kong an ideal publishing centre. We are also an ideal hub for the location of the regional headquarters of multinational companies. Hong Kong has the experience and expertise to help you capitalise on the new business opportunities that will arise as China deepens her economic reforms and opens up more sectors of her economy.

If you have not been to Hong Kong recently, please do come and visit us. I promise you that you will find it a rewarding and exhilarating experience! You will find in Hong Kong Asia's most cosmopolitan city. You will find in Hong Kong Asia's World City. You will find in Hong Kong a vibrant community with a global outlook and proud of our Chinese heritage.

Thank you.

End/Monday, May 21, 2001

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