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The following is the full text of a speech by the Secretary for Economic Services, Ms Sandra Lee, at the opening of the Hong Kong Supply Chain Management CEO Summit today (June 20): (English only)

Distinguish guests, ladies and gentlement,

It gives me great pleasure to join you this morning at the opening of the Hong Kong Supply Chain Management CEO Summit. Looking at the audience I can see we have a who's who of CEOs here and this underlines the importance of supply chain management in today's global business environment and the importance of Hong Kong in global trade. The theme of this prominent event "Creating Opportunities Amidst Change after China's Accession to WTO" is most timely. First of all, as the TV shows used to say, " a word about our organisers".

I congratulate the Hong Kong Article Numbering Association or HKANA and Efficient Consumer Response (ECR) Hong Kong for making this Summit an event on the CEO's calendar. In the last two years, people have taken to the terms SCM (Supply Chain Management) and logistics in Hong Kong: warehouse logistics, transport logistics, logistics solutions. Does that mean that logistics are new to Hong Kong? I would say a definite NO. Hong Kong has always been at the forefront of modernising our supply chain and logistics services.

We have been a major manufacturing and transportation center for more than half a century. In addition, of course we are a financial centre to be reckoned with. We actively contributed not only to developing the concept of a free port system, we actually invented the prototype. We put the KON in container and continue to be the world's leading container port. And of course, with Dr Fung's presence, I am very proud to say, we have also been the number one airport for cargo in the last two consecutive years. New technologies to smooth transport processes such as EDI and barcodes have been developed elsewhere in the world but have been taken up with gusto by businesses in Hong Kong, well supported by organisations like HKANA and ECR Hong Kong.

In 1989 when the HKANA was formed, barcodes were not so common in Hong Kong and probably were something we had seen when we travelled to Europe or to the United States. With the support of the HKANA and other organisations, and with Government's earnest support, it has now become the choice of business in Hong Kong, in wholesale and retail, and all lines of business, and in fact in Government as well.

Hong Kong has always soaked up new technologies and management techniques because we are open, adaptive and, more importantly, competitive. China's recent entry into the World Trade Organisation (WTO) presents a whole range of opportunities and challenges to SCM and logistics business in Hong Kong, and again, I plead and I urge, we must adopt new technologies, new thinking and new processes to retain our leading edge as a transport and logistics hub.

I don't want to linger on the challenges which in simple terms resolve themselves in one key factor: all of us, those of us in Government, those of us in businesses and those in professional organisations, we must think innovatively out of the box. We need to think beyond the geographic confines of Hong Kong Special Administrative Region and indeed beyond our present catchment of the Pearl River Delta to reach out to the rest of Mainland China on the one hand, and to the rest of the world on the other. Hong Kong has always been the gateway. We also need to think beyond the present range of technologies available to smooth out supply chain and logistics services as we expand our coverage. The opportunities are obvious, and we must expand cargo volumes going through Hong Kong. The Mainland's accession to WTO will be translated, in terms of imports and exports, into surges. I leave it to experts later to discuss the potential. Hong Kong's core strengths lie in our undisputed capability in trading and managing production capacities and delivery services from the Mainland through Hong Kong to the world wide consumer markets.

We have always excelled in logistics because we are reliable and efficient. That said, of course we are never complacent and we need to move as we have done in the past a step ahead of our competitors.

As Chairman of the Hong Kong Logistics Development Council (LOGSCOUNCIL) I fully embrace the critical importance of co-ordinating the efforts of all the relevant regulatory and industry bodies to aim for the maximum cost effectiveness of logistics businesses to further sharpen our competitive edge. We must together, you and government, foster and strengthen this business and government partnership, all for your business and for the greater good of Hong Kong.

I have never claimed to be either an SCM or logistics expert and I defer to all of you present. But I do have a clear vision of what needs to be done. Also, as those who work with me would attest, I am quite impatient and I ceaselessly encourage all sectors to put in that extra effort and this I am sure we will do in the months and years ahead. A little bit of advertising for what we have done at the LOGSCOUNCIL?

Since the first meeting of the LOGSCOUNCIL some six months ago, we have completed a transport logistics manpower survey which will be released shortly. The 'E' logistics Project Group, that is the Electronic Logistics Project Group, has commissioned a study to develop a Digital Trade and Transportation Network (DTTN) System. The objective of the DTTN System is to provide an open, neutral and secure interface for logistics players and to exchange information to conduct business and to put your data back to use. This will not only enhance the status of Hong Kong as a leading transportation and logistics hub, but also narrow the "digital divide" between the various players in the supply chain.

Enhancing the efficiency and cost competitiveness of logistics SMEs is also one of our major objectives. Workshops were held to assist SMEs to embrace the use of 'e' technology in logistics. Our SME Project Group is examining measures to enhance the cost competitiveness of trucking, barging and forwarding. We will focus on analysing the cost structure and mode of operation of the transport logistics sectors and comparing their competitiveness with counterparts elsewhere outside Hong Kong. This is important in this state as we are very, very cost conscious about costs of business.

On the infrastructural side, we are discussing measures to speed up the flow of goods across the boundary with our counterparts in the Mainland. On this issue, whilst I share the wishes of the industry and many of you here to see immediate progress, we also recognise that the solution to infrastructural issues are complex and take some time to plan and construct. I would like to reassure you that every effort on the part of government is being made to eliminate red tape and streamline regulatory processes, e.g. our customs procedures. While maintaining the integrity of our customs regime, which is important for you, we are also migrating the data input to electronic form.

The future of Hong Kong's development as a logistics hub on China's accession to WTO is exciting. With so many experts present I am humble and I would not venture into these areas. Let me in concluding, once again, commend the HKANA and ECR Hong Kong for organising this event to address the business opportunities and the challenges. I wish the summit every success, and I am certain that both your speakers and participants will have a most rewarding experience.

Thank you very much.

End/Thursday, June 20, 2002

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