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Following is a speech (English only) by the Chief Secretary for Administration, Mr Donald Tsang, at a reception hosted by the Hong Kong Economic and Trade Office, Brussels at the Four Seasons Hotel in Milan today (May 20, Milan time):
Distinguished guests, ladies and gentlemen,
It is a great pleasure to be here in this magnificent city of Milano, and to see so many friends joining us. Tonight's reception is our small way of saying "thank you" for your support and interest in Hong Kong.
In particular, I would like to express my sincere gratitude to President Formigoni and the Lombardy Government for their invitation and their excellent arrangements during our visit. I sincerely hope we can repay your hospitality one day soon.
We have had a very full and fruitful day. I have met a broad cross-section of key business people, as well as political leaders in the Lombardy regional and Milano municipal governments. We have had some very good exchanges about how to boost links between Hong Kong and Italy, but in particular here in the Lombardy region.
I was happy to note that our bilateral air services agreement was recently enhanced to allow more flights between Hong Kong and Italy, but in particular to Milano.
Hong Kong and the Lombardy Region share similar traits - we are both hubs for air transport, banking and international finance, convention and exhibitions, communications, tourism as well as design and fashion. We both place great emphasis on delivering the highest quality services and providing the highest quality products.
There was a lot of common ground to help us take forward our bilateral relationship both at the government level, and at the commercial level.
In all of my meetings I have basically spoken on two broad themes. The first concerns Hong Kong's development as a Special Administrative Region of China.
The second is how we are positioning ourselves to become the world city of Asia and how we will leverage our unique strengths and advantages to make the most of China's accession to the World Trade Organisation.
In a little over a month - on July 1 - we will celebrate the fifth anniversary of the Hong Kong Special Administrative Region. I want you to know that Hong Kong remains a free, open, tolerant and plural society under the rule of law.
All of the key institutional strengths that are so important to international business have been preserved. These include a tried and trusted legal system, a level playing field for business, the free flow of information, and a clean administration.
Our pro-business policies remain a big drawcard : low and simple taxes - that is, a maximum of 15% salaries tax or 16% corporate profits tax; the free and unfettered flow of goods, capital, securities and gold; world-class communications and physical infrastructure; a safe environment to do business and bring up your families; easy access to the Asia-Pacific region.
All of these ingredients are among the main reasons why international companies continue to flock to Hong Kong - including the more than 300 Italian companies based there. Our last survey found that there were more than 3,200 international companies with regional operations in Hong Kong - that's the highest number on record and it is still growing.
And why are they attracted to Hong Kong? Well that brings me back to my second point. There is no doubt in my mind that most if not all of these companies - and many of them are small and medium enterprises like those we find here in Lombardia - look to Hong Kong to get a foothold in the Mainland market.
Consider the experience you draw on when you come to Hong Kong. For more than 150 years we have been trading and investing in the Mainland.
You have access to high quality professionals who speak the same language and share the same culture, but at the same time they have a global outlook and understand international business practices.
That's why we have a Trade and Development Council office here in Milan and in 50 other cities around the world - because, we reach out to the world and we want the world to reach into the Mainland market through Hong Kong.
Of course, China's WTO accession will throw up new challenges for us. We know what they are likely to be, and we are positioning ourselves to make the most of this change and the new dynamics of a more open China market more closely aligned to the world's rules-based trading system.
But I do not subscribe to the view that our pre-eminent gateway role will be eroded. We are talking about a market of 1.3 billion people; a market where GDP is predicted to double to US$2 trillion, and where stock market capitalisation is predicted to reach the same levels, all within the next decade.
There will be plenty of business for us in Hong Kong for a long time to come.
We are also working hard to smooth the flows of people, goods and capital between Hong Kong and our economic hinterland in the Pearl River Delta.
I believe that the Pearl River Delta will become one of the world's great economic regions. And sitting at its heart will be Hong Kong.
Ladies and gentlemen, I do not want to speak for too long. But I want to leave you with a strong impression that Hong Kong is not standing still, nor would we ever think to.
As we approach our fifth anniversary as a Special Administration Region of China, the successful implementation of the unique social and political experiment that is "One Country, Two Systems" gives us every reason to have confidence in our future and the stability of our institutional foundations.
At the same time, we are positioning ourselves to be the most vibrant city in Asia as well as a major city in China - a progressive, free and stable community where opportunity abounds and quality is premium.
And of course, you are all most welcome to come and visit us any time to see for yourselves the dynamic and vibrant society and economy that is Hong Kong and hopefully strike a few business deals in the process.
Thank you.
End/Tuesday, May 21, 2002
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