Following is the full text of the welcoming remarks (English only) delivered by Acting Secretary for Financial Services, Ms Au King-chi, at the Opening of 2001 APEC Economic Outlook Symposium today (June 28):
Distinguished speakers, guests, ladies and gentlemen,
It gives me great pleasure this morning to open the 2001 APEC Economic Outlook Symposium. May I first of all extend to you my warmest welcome.
This is the first time Hong Kong, China is given the honour to co-sponsor this regional symposium with the APEC Economic Committee. Through exchanges in APEC, we seek to strengthen market infrastructure and human capacity in our economies and enterprises, and reaffirm our concerted efforts to ensure high standards of openness, transparency, and corporate governance in our financial markets. We believe this is the most effective strategy for our enterprises to gain reliable access to capital for innovation and creation of wealth. This, we also believe, is the key to sustainable growth and expanding employment, and the ultimate source of stability, security and prosperity for our peoples in the region.
In cognizance of this common interest amongst our APEC colleagues, Hong Kong, China, as the coordinator of this year's Economic Outlook Report for the APEC Economic Committee, has specifically made the study of financial development and economic growth in APEC the main theme for this year's Report.
We hope that through the pooling of expertise from the academia, international organisations and governments in this Symposium, we could achieve synergies and cross-fertilization of ideas. We believe we together can contribute positively to the common goal of APEC in knowledge building and experience sharing. While the experience of Hong Kong in financial development should render us a relevant case for this thematic study, your views will no doubt help shape this year's Economic Outlook Report. We also hope to learn from the Symposium for the betterment of our financial structure in the longer term.
Hong Kong has long been serving as a major trade, finance and business services centre for the Asia-Pacific region generally, and for China in particular. We are credited for our superb performance in the rule of law, absence of trade barriers, low tax rates, a free press, as well as freedom of exchange in the financial world. We endeavour to provide efficient services in the fields of energy, transportation and telecommunications at reasonably competitive prices.
Indeed, we have one of the world's most outward looking and non-discriminatory financial systems, buttressed by robust hard and soft infrastructure. There is a critical mass of financial institutions as well as professional talents from around the world, rendering a full range of support services.
We attach great importance to education and the training of our labour force. The traditionally liberal immigration policy has also allowed us to attract expertise from all round the world. These are not enough. Recently, we have introduced new measures to facilitate talented professionals from the Mainland of China to take up employment in Hong Kong in two specific areas, financial services and information technology.
Drawing on these attributes, the financial services sector has made substantial contribution to our economy. In the 1990s, the sector grew by an average annual rate of 15% in nominal terms, much faster than the average annual nominal GDP growth rate of 8.6%. The share of financial services in GDP rose from 7% to 12% over the period. We are now the world's tenth largest banking centre, seventh largest foreign exchange market and third largest stock market in Asia. Over the last decade, we have developed ourselves into the premier capital formation centre for the Mainland of China. From 1993 to 1999, over HK$70 billion, or some 94% of the total amount of capital raised by H-share Chinese enterprises outside the Mainland, was raised through Hong Kong.
Experience tells us capital would flow naturally into a market which is fair, transparent and efficient, supported by a high level of corporate governance. Such a market would be the preferred base for corporations, and a safe haven for capital when the global economy undergoes volatility.
Bearing evidence to this, Hong Kong is a favoured location for multinational corporations to oversee their business operations in the region generally, and in China in particular. More than 3000 foreign corporations have established their regional home in Hong Kong. This represents a 50% increase over the past five years.
The UN World Investment Report put Hong Kong as the second largest recipient of foreign direct investment in Asia after China, as well as the largest source of foreign direct investment in the region in 1999. We expect further surge of foreign direct investment flows in and out of Hong Kong with the coming accession of China into the WTO.
The business world is ever changing; globalization and opening up of new markets around us provide new opportunities as well as new challenges. We are not complacent. We are particularly mindful of the need to attract more talents and liquidity to our markets, in order to maintain and strengthen our competitive edge. We are at the moment undergoing a series of reforms to our financial markets, in particular the securities market, with a view to bringing our market structure, clearing and settlement infrastructure and regulatory framework on par with international standards, to facilitate market development and protect market users.
Last but not least, I would like to express my appreciation to colleagues who have worked so hard to organise this event, and my heartfelt thanks to our distinguished speakers and guests for their participation. I am sure this Symposium will stimulate insightful exchanges on such important issues as finance, growth and our near-term prospects. I wish you all a very fruitful discussion.
End/Thursday, June 28, 2001