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Following is the full text of a speech by the Secretary for Economic Services, Ms Sandra Lee, at the 21 st Tripartite Shippers' Meeting today (May 28): (English only)

Chairman Lin, Mr Kamamurs, Mr Li, Distinguished Delegates, Ladies and Gentlemen,

I am delighted to be here this morning to share the rostrum with our distinguished guests from Japan, Korea and Hong Kong to officiate the opening of the 21st Tripartite Shippers' Meeting.

On behalf of the Hong Kong Special Administrative Region Government, I extend a warm welcome to our overseas visitors and I congratulate the Hong Kong Shippers' Council on their excellent arrangements for this meeting. This is an influential gathering bringing together members of the Hong Kong, ASEAN, Japan, Korea, Macau Shippers' Councils to discuss opportunities and challenges for shippers in the years ahead.

There are good reasons for international cargo business to choose Hong Kong as their base of operation. Trade is the backbone of the Hong Kong economy, and we are strategically located in the Asia Pacific Region. We are the gateway to China, - right at the doorstep to the Pearl River Delta, one of the fast growing region in China. Indeed Hong Kong is the main conduit for the movement of raw materials and finished products to and from the numerous factories and manufacturing plants in South China. In servicing this hinterland, we have developed an extensive transportation system making Hong Kong the nerve centre of what we call the Port Inland Distribution Network. This has also led to the rapid expansion of the Hong Kong container port and air services.

There is one other significant development I wish to mention. We have just launched a global programme to position Hong Kong as Asia's world city. But more of that later.

Hong Kong - A Leading Sea Transport Hub

Today Hong Kong operates the world's busiest container port with a throughput of 18.1 million TEUs in 2000. These containers are carried by some 380-liner services per week to over 500 destinations in the world. I know you are the shippers who have contributed to this record figure.

That Hong Kong can achieve this performance does not arise from sheer coincidence. It is due in no small part to the enterprising people who run our services and facilities, our entrepreneurial investors and our efficient workforce. Collectively, they have gained a reputation for Hong Kong of being the "can-do-port". It is also the successful result of a unique blend of public and private sector co-operation which sees Government concentrating on strategic planning while leaving the private sector to invest in and operate the terminal facilities, and of course to make their profit.

In the presence of such a distinguished group, let me take this opportunity to share with you and to update you on how the Hong Kong Special Administrative Government prepares ourselves for the opportunities and challenges in the 21st Century for our port and airport.

The recently completed Port Cargo Forecast predicts that the cargo throughput will grow to 30 million TEUs in 2010. This estimated growth is largely based on the forecast rapid growth of the cargo base in the Pearl River Delta (PRD) area, fuelled by an expected increase in world trade and foreign direct investment in the Mainland following China's accession to the WTO.

To meet future demand, construction works for a new Container Terminal 9 have started last year. We expect that the new terminal will be commissioned in phases between 2002 and 2004, adding 6 berths and an additional capacity of 2.6 million TEUs. Meanwhile, our Port and Maritime Board (PMB) is conducting the "Port Development Strategy Review" (PDSR) with a view to mapping out a plan for future port development.

Hong Kong - A Leading Air Transport Hub

Matching the container port's round-the-clock hyper-activity is our international air-cargo hub, also the world's busiest, handling some 2.24 million tonnes of cargo. Hong Kong has developed excellent air links with the rest of the world and is a centre of international and regional aviation. Currently, some 65 international airlines operate over 3,800 scheduled flights per week linking Hong Kong with nearly 130 destinations worldwide.

Like the port, our airport has benefited greatly from the rapid growth in the PRD hinterland, which has developed a very close and profitable economic tie with Hong Kong. We are determined to maintain our position as a dynamic air cargo and passenger hub. As a policy maker, I want to assure you that we will continue to liberalise our air services regime progressively. Since reunification, we have concluded 26 new Air Services Agreements, bringing the total to 47. We will continue to proactively expand Hong Kong's air services network. We will also, in partnership with the Airport Authority, seek to provide the best services expected of a world class airport. To facilitate inter-modal cargo handling, a marine cargo terminal on the airport island has commenced operation since March 28 this year. This terminal will help to reduce the time and cost needed for the transfer of air cargo between the Hong Kong International Airport and the PRD. To promote the development of the logistics industry, the Airport Authority has also granted a sub-lease for the development of a logistics centre on the airport island. Upon completion, the centre will help to attract more cargo to go through the Hong Kong International Airport to other places.

I hope this gives you some idea of the type of projects we are implementing to turn Hong Kong into a transportation and logistics centre for the region. As for the airport itself, it has been designed in such a way that there is ample room for expansion to its ultimate capacity of handling 87 million passengers and 9 million tonnes of cargo per year. To map out the long-term development strategy for the airport, the Airport Authority is conducting the Strategic Overview of Major Airport Developments (SOMAD) Study.

Hong Kong - An International and Regional Transportation and Logistics Hub

Geography has been very generous to us. Apart from having one of the finest natural harbours in the world, Hong Kong, as I mentioned earlier, is the gateway to China. The imminent accession of China into the WTO will bring new impetus to economic growth from which Hong Kong will benefit. This in turn is bringing a new focus on logistics and much of the technology that drives this logistics revolution is being developed in Hong Kong. This will further enhance our role as a global financial and services centre.

Logistics services span over sea, air and land transport, and involve various policy areas. To ensure a "through train", they also require the support of the private sector at different stages of the supply chain. Recognising this point, the Committee on Logistics Service Development (CLSD) was set under the PMB in May 2000. The Committee has actively studied the necessary measures to strengthen the three pillars for logistics development, namely physical infrastructure, human resources and cyber and regulatory infrastructure. It will also examine the necessary changes to the existing institutional arrangements so as to facilitate the development of logistics services. In the past year, we have also enhanced liaison with our Mainland counterparts with a view to strengthening the air, sea and land transport links between Hong Kong and the PRD.

We are conducting a consultancy study to map out a strategy to consolidate Hong Kong's position as the premium transportation and logistics hub in the region. This study together with the SOMAD study in respect of the Hong Kong International Airport and the Port Development Strategy Review in respect of our port, will be completed in the second half of this year. By then, we will formulate a set of comprehensive development initiatives, taking into account recommendations of the various studies.

Over the past 160 years, Hong Kong has been capitalising its favourable location and well-developed infrastructure to serve the transportation and logistics needs in the world supply chain.

I said at the beginning that we are positioning Hong Kong as Asia's world city. This position is built on our gateway role to Mainland China and as a hub for business in the Asia Pacific region. It is 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.

There are a number of factors that help in our positioning, and which have formed an integral part of our development as a world city. They 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 airport are but two examples. We have excellent educational and other institutions focused 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.

In short, ladies and gentlemen, Hong Kong is a partner that you can always rely on for quality, reliable and efficient service.

My best wishes to you all for a very successful meeting and a rewarding experience in Hong Kong.

End/Monday, May 28, 2001

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