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Following is the transcript of the question-and-answer session given by the Chief Secretary for Administration, Mr Donald Tsang, at the Hong Kong Chamber of Commerce in China Business Breakfast this morning (May 23) in Beijing:

Question: Mr Tsang, could you please tell us your general impression on the Western Region of China after your visit to Xian with the delegation?

Mr Tsang: I think it would be very unfair of me to try to pontificate on the strengths or weaknesses of Xian after a visit of two days. I tried to do my very best, together with my colleagues, visiting as many places as possible - without visiting even the terracotta - seeing the areas, the business centres there. I visited, for instance, one very interesting agricultural research centre in Yangling, and my business colleagues visited the technology centre.

I find that the Western Region is a place of enormous tradition and history. It has a strong heritage. And again, it is a mixed system, in that there are some very advanced things as I have seen in Xian. We have heard about the cloning of the little lamb and we have heard about their very advanced research being carried out at the University of Communications in Xian. But then there are also poor people. So it is a region of great extremes. But then it means it is an area of great opportunity.

I have also seen the enormous enthusiasm of the leadership in Xian and in Shaanxi Province. As far as Hong Kong is concerned we have the largest investors in the whole of China, and indeed in all of the provinces in the autonomous regions of China - each and every one of them. But this is largely business connections in the Eastern Provinces, particularly in the coastal regions. And then also seen our competitors elsewhere. And over the years we have discovered that competition is very fierce, particularly if you go to Shanghai or Dalian. But the impression is very different, I discovered, when we were in Xian. I think there was a much warmer reception, a lot more candour and a lot more heart to heart talks on what the projects are and what projects we can do and what projects we cannot do.

My impression is a very fleeting one but I must say that I have left Xian with lots of good memories and lots of warmth for the place, and quite a lot of excitement. And sometimes I feel, looking at the wood and what have on earth, what I have seen over there, I do feel that I am genuinely Chinese and being proud of that.

Question: What I would like to find out is that with the nature of business we have in Hong Kong, what are the specific industry sectors do you believe that a Hong Kong company can come into China to develop and excel in?

Mr Tsang: It is not my specialty, I am a civil servant. I am here merely to open the doors for our businessmen. Which particular sector they will go into is a matter of their own choice and selection. But I did mention in general terms the complementarity between Hong Kong and the Mainland. We do have expertise in production engineering, we do have expertise in efficiency control, managing capabilities, marketing, packaging, design making, and particularly on funding and financing, and also in advertising and promotion. These are the things which Hong Kong would be good at and these are the sort of things which I think we can bring into this part of the world and join forces with the local businessmen and take their products out into the international markets. This, of course, I am saying in very general terms. As far as individual business decisions are concerned it is a matter for our own businessmen.

Moderator: Due to the limitation of time, I think we have to call a stop. I would like to thank Mr Donald Tsang for coming this morning.

Mr Tsang: Thank you very much. All of you have some strong connections with Hong Kong but please come back regularly, frequently, and see the change. I am very excited, even in Hong Kong I see the change. I hope you like our video too.

End/Wednesday, May 23, 2001

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