***********
Following is the speech delivered by the Chief Secretary for Administration, Mr Donald Tsang, to the Business Week 11th Annual Asia Leadership Forum this (June 26) morning:
Mr Chairman, distinguished guests, ladies and gentlemen,
Thank you, Robert, for those very kind remarks. It seems to me that congratulations are in order to the organisers of this conference for their foresight in presenting an Asian Leadership Forum in a week when we in Hong Kong have just unveiled the most radical changes in government in our 160-year history. That is a big statement, and it just happens to be true. Moreover this conference is taking place just days away from the fifth anniversary of one of the most remarkable diplomatic and constitutional experiments undertaken in the last century. Let's deal first with the latter.
I cannot tell you how happy I am as a citizen of Hong Kong, and a senior official of its government, to report to you how extraordinarily successful this extraordinary experiment has been. "One Country Two Systems" is a reality, a living testament to the wisdom and courage of the leaders of the two countries involved in the transfer of sovereignty over Hong Kong on 1 July 1997. And it is a monument to the vision of our leaders in Beijing and the pragmatism of our remarkable community in Hong Kong who, by their commitment and common sense, have ensured that the promises made to Hong Kong and the international community have been delivered.
There were many who said it would never happen. Well, we in Hong Kong have seen the future, and it works.
Now, I'm not suggesting that the past five years have been incident-free. Far from it. While the political transition has been relatively seamless, Hong Kong - like the rest of Asia - has had to cope with some pretty difficult issues. Like others in the region, we are still dealing with the fallout from the Asian financial crisis. But more about that later.
First, I want to deal with the point I raised at the beginning of this speech, namely the Accountability - or often called Ministerial - System of Government. This has taken centre stage in the SAR following the announcement by the Chief Executive two days ago of his new-look team to govern Hong Kong for the five years of Mr Tung's second term beginning next Monday.
As I have already noted, this new system represents the greatest overhaul of governance that we have ever known. We are not just talking about a rearrangement of the furniture. The whole political landscape has been irrevocably changed.
For the benefit of those in the audience not familiar with what is at foot, let me provide a few basic details. For most of our history, including the past five years since the Handover, Hong Kong has been governed by a model of administration which was the product of our colonial past. In a nutshell, this meant that professional civil servants acted as both formulators and spokesmen and defenders of policy. This meant that at the top of the tree, in particular, we civil servants had to perform the role of both professional head of department and political "Minister".
In the more somnolent and apolitical days of our colonial life, when rocking the boat was not the done thing, we managed this apparent contradiction. But in recent years, as Hong Kong moved from colonial administration to Hong Kong people running Hong Kong with a high degree of autonomy, the old ways were becoming increasingly difficult to sustain.
Times have changed. We have a demanding, elected legislature; a probing, prolific press; a critical mass of well-organised interest groups and NGOs; and a public with high and often unforgiving expectations of its government.
Something had to give. And it has. The old civil service-led system of government has given way to a more open and political process we call the Accountability System. This is a Ministerial system by another name.
The key difference is that the executive is now to be led by politically-appointed 'Ministers' who will be personally accountable for the success or failure of their policies. They are employed on contract for the duration of the Chief Executive's term and will serve at his pleasure, so to speak.
This is in contrast to their civil service predecessors who, as life time civil servants, could not be sacked for policy failures. The new Accountability Team steps into their offices on July 1 in the sure knowledge that the tenure of their new jobs depends on their making them a success. They will form the core of Mr Tung's Executive Council, or Cabinet, replacing the old arrangement under which the Executive Council was dominated by part-time members.
At the heart of these changes is the determination of the Chief Executive to head a government which is more accountable to the people, one that in his own words, is 'an open, enlightened and progressive government'. I don't think anyone in our community, or elsewhere, would argue with those aspirations.
The simple fact is that more focussed and effective government is good not just for the community it serves, but for the wider international community which counts on Hong Kong to act as a conduit to the great business opportunities that are abundant in our hinterland, and in the rest of this dynamic region as well.
I believe our Accountability System will deliver these goods. The new team is a well-balanced mix of highly-qualified people from the public and private sectors. Critically, they will be supported by a civil service which I regard as among the finest in the world.
The civil service will continue to function as it has always done - with honesty, political neutrality, intellectual rigour, diligent research and policy formulation based on objective analysis of the facts. Our new Principal Officials are fortunate to have such an experienced, motivated and committed civil service to back them up.
Mr Tung has made it abundantly clear that he will not allow the integrity and stability of the civil service to be compromised. There is good reason for that. Our civil service has always inspired confidence and respect among the community and investors. They have traditionally ensured clean administration and a level playing field for business. It is one of the key reasons why so many foreign investors are prepared to put their money into Hong Kong.
Mr Tung has promised to strengthen the core values of the civil service in the ongoing process of reform of the administration we have undertaken in recent years. As a 35-year veteran of the Hong Kong civil service, I welcome and endorse this commitment.
Mr Chairman, I am sorry if I have gone on at some length about these reforms to our system of government. But they are far-reaching, and important to the continuing success of Hong Kong as a great international city. It is therefore also important that they are well understood.
Of course, I hear people saying : these changes are all very well and good, but will the new system work? The proof of the pudding must be in the eating.
All I will say is this : we are entering new waters, and the new team must be given time to find its bearings. I fully expect there will be glitches, hiccups and hang-ups. I simply ask people not be harsh or dismissive when such thing happen. After all, we've had our share of mishaps under the old system.
That's what happens in government. It's the nature of the beast. We are in the business of balancing options, defining what's best in the public interest. It's more an art than a science. That means there is no magic formula.
What people must feel about government to give it their trust is that it is composed of men and women of goodwill, who bend their hearts and minds to problems and issues which affect the well-being and livelihoods of their fellow citizens and their families. If we succeed in convincing our constituents of this, they will give us the benefit of the doubt in difficult times.
It may be sometimes easy to overlook the fact that those of us in public service are just as much a part of the community as anyone else. It's not a case of them and us. It's more a case of you and me. We want the same things as everyone else: prosperity, stability, a well-balanced economy, decent schools, hospitals and social services, timely delivery of public services and a responsive government that cares for those less able to look after themselves. As I have said, I have faith that our new Accountability System will focus sharply on these goals.
In the broader context, our new style of government is compatible, and will be better able to get to grips, with the challenges we all must meet in the face of globalisation. Hong Kong's economy is in the midst of restructuring. The days of over-dependence on property and asset price inflation are behind us. We must concentrate on innovation, technology, logistics and services if we are to compete as a knowledge-based economy.
In this regard, we have much going for us. Services already account for 86% of our GDP. And as an icon of free trade which has historically leveraged its role as the gateway to the Mainland of China and the rest of Asia, we know a thing or two about logistics. We must build on this experience and apply technology and know-how to help us move up the value chain. We must exploit our unrivalled network of contacts and enterprises in the Mainland. We are already the largest investor in the Mainland as a whole and in each and every province and municipality in the Mainland. More to the point, we must do more to let the world know that this is where Hong Kong's advantage remains.
I firmly believe Hong Kong's role as the natural gateway to China is going to be vital in the years to come. With China's WTO accession and further opening up of the Mainland, there is no doubt that some will try to take the China market head on. But many more - the wiser ones - will want to use the commercial, cultural and personal connections Hong Kong traders and businessmen have built up over 160 years of doing business in the Mainland - in particular since Deng Xiaoping opened China to the rest of the world in 1978. Even after WTO, the Mainland will continue to be a complex and sometimes difficult market. But what a market it promises to be.
Years of strong economic growth in China have produced an accumulation of wealth and capital. China's GDP has reached US$1 trillion, and is growing at 7% per annum. Some think it could reach US$2 trillion within a decade. One estimate puts China's stock market capitalisation at US$2 trillion by 2011.
Such phenomenal growth will create great demand for a wide range of professional services - lawyers, accountants, fund managers, brokers, insurance agents. Hong Kong already has such services in abundance, and is perfectly positioned to stay ahead of requirements. This is what I mean when I talk about Hong Kong moving up the value chain.
Crucial to Hong Kong's positioning as Asia's world city and long-term success is greater economic co-operation and inter-dependence with our hinterland in the Pearl River Delta - the fastest growing and most affluent region in China. Including Hong Kong and Macau, the Pearl River Delta has a population of about 48 million - about 10 million more than Canada, or 10 million less than Italy. Total GDP is US$258 billion - more than Switzerland, Sweden or Austria. This places the Pearl River Delta among the world's top 20 economies.
Within China, the Pearl River Delta has the highest per capita GDP; it is the largest consumer market in the country, accounting for 12% of retail sales from less than 4% of the population; it has the country's highest export capability. The region was the first area in China to liberalise its services market; it attracts the most Foreign Direct Investment in China. It is where the action is.
The Pearl River Delta has specific advantages and significant potential as a consumer market, a trading hub, a manufacturing base, a services market and as a destination for investment. Hong Kong lies at its heart. It has been the principal driver of its growth for more than two decades. Hong Kong owned enterprises employ some five million workers in the region alone.
We are now working very hard to significantly boost cross-boundary co-operation to leverage this synergy, and maximize the region's potential. This is one of my key areas of responsibility as Chief Secretary for Administration. My goal is to smooth the flows of people, goods and capital between Hong Kong and the Pearl River Delta's other major cities, which include Guangzhou, Shenzhen, Zhuhai and Macau.
To do this, more resources will be devoted to such initiatives as co-located Customs and Immigration checkpoints; the development of an electronic cargo clearing system; and the opening up of new road and rail routes between Hong Kong and the region. There are plans for further co-operation in the logistics sector and to provide ferry services connecting the Pearl River Delta's major port cities with Hong Kong International Airport, so as to enhance the export efficiency of the region.
Mr Chairman, ladies and gentlemen, you have arrived in Hong Kong during a week of momentous change. Hong Kong has always lived in interesting times. I hope what you see and hear will remind you that nothing ever stands still in this dynamic place. We know we live in a changing world. We know that you have to run very fast to stay ahead of the game. Our economic imperatives are changing. We know that we must ensure that as we change pace, we don't lose our place. The major reform of governance is designed to ensure that fresh ideas, new perspectives and hard-earned experience are carefully blended to provide a cutting edge to drive the policies we need to ensure our position as Asia's world city.
Thank you very much.
End/Wednesday, June 26, 2002
NNNN
