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FS' speech at the launch of the Ireland Hong Kong Forum


Following is a speech by the Financial Secretary, Mr Antony Leung, at the launch of the Ireland Hong Kong Forum in Dublin, Ireland, today (November 29, Ireland Time):

Distinguished guests, Ladies and Gentlemen,

I am very happy to be with you today on what is my first visit to Ireland. I had heard so much about the warmth and friendliness of the Irish people. Even during such a short visit, I can see that everything I've heard is absolutely true. My colleagues and I have been touched by the generosity of your welcome.

I am doubly delighted because today I am also able to announce the launch of the Ireland Hong Kong Forum. The Dublin Chamber of Commerce will be the secretariat, with support from the Irish Business and Employers Confederation, the Irish Exporters' Association and the Hong Kong Trade Development Council. The Forum's goals are to promote increased business links, economic co-operation and two-way trade. Those goals are what I want to talk about today, especially in terms of how we can both gain from the economic revolution going on in Hong Kong's backyard.

The establishment of the Ireland Hong Kong Forum is an important step in our relationship. Our bilateral trade has increased dramatically in the past five years - at a rate of 25% a year. My predecessor as Financial Secretary - the current Chief Secretary for Administration, Donald Tsang - broke the ground for top-level relations between Ireland and Hong Kong with his visit here three years ago. Since then there has been steady growth in the number of contacts between Hong Kong and Irish trade bodies. The Dublin Chamber of Commerce made its inaugural trade mission to Hong Kong and China in November 2001.

The Forum will carry this forward by organising new trade missions and by convening seminars at which members can meet other business leaders and government officials. It will promote deeper cultural links, understanding and co-operation between Hong Kong and Ireland, and it also aims to hold four substantial promotional events a year in Ireland.

I have been struck by how much Hong Kong and Ireland have in common. We both belong to that select league of small economies that have succeeded - often against the odds. Our living standards have caught up with the most advanced in the world, thanks to the outstanding quality of our people and their faith in themselves. Both of us started the quest for prosperity from a low level about three decades ago. And we have achieved roughly the same heights. Today our per capita GDPs are very close.

For Hong Kong companies, Ireland is a gateway to Europe. For Irish companies, Hong Kong is a gateway to China and the rest of East Asia. We also share English as an official language, which makes communication so much easier.

Like Hong Kong, Ireland is predominantly an economy of Small and Medium Enterprises. Like us, you have recently transformed yourselves from a post-industrial model to an externally focused economy specialising in Information and Communications Technologies, new media and IT products.

Indeed, shortly before we came to this lunch, the Tor-nish-ta [Deputy Prime Minister/Ms Harney] and I exchanged joint statements on closer co-operation on ICT and SMEs. These joint statements envisage a wide range of co-operative activities, including exchanges, partnerships and information sharing. I look forward to many mutually beneficial developments in these two areas.

At our end, Hong Kong has established the Innovation and Technology Commission to lead our drive to be a knowledge-based economy. This year we opened both our Cyberport, which houses companies specialising in IT applications and multi-media content creation; and Science Park, which nurtures electronics, biotechnology and precision engineering enterprises.

As a telecommunications, Internet and broadcasting hub in Asia, Hong Kong has one of the most open and competitive markets in the world. Our mobile phone penetration rate, at 87%, provides great potential for small and innovative enterprises to develop mobile-commerce applications. At a cheap average monthly rental of 25 Euros, household broadband Internet access is so popular in Hong Kong that penetration is reaching 40%, supporting quality Internet applications. We are also pressing ahead with E-government development, with over 78% of our public services already providing electronic options.

Like you, we are also active in fostering SME development. We have several programmes that offer about 240 million Euros in loans and other financial assistance for SMEs.

In Hong Kong, as in Ireland, we recognise that investment in technology and hard infrastructure is not enough. More important still is our human capital, and in this field there is broad scope for educational exchanges between us. I look forward this afternoon to witnessing the signing of a co-operative agreement between the Chinese University of Hong Kong's award-winning Business School and prestigious Trinity College, Dublin. I'm honoured that my visit to Dublin has got the ball rolling on this exciting and important programme.

As we position ourselves for our future as 'Asia's world city', Hong Kong is mindful of preserving its freedoms. As promised before we returned to Chinese sovereignty, the Central Government has adhered to the principles of 'One Country, Two Systems'. We remain the strongest bastion of capitalism in Asia - in the world, for that matter. Just this month, the Heritage Foundation and the Wall Street Journal named Hong Kong as the world's freest economy for the ninth consecutive year. I should note that Ireland is also in the top five.

Being free and open, however, leaves us more vulnerable to the whims of the global economy. We're currently suffering from low GDP growth, four years of price deflation, and high unemployment. Meanwhile, we're restructuring our economy to take advantage of the boom across our boundary. China's economy has been growing consistently at over 7% a year since 1991. That growth rate is forecast to hold steady. Now that China is formally a member of the world trading community, its total trade is likely to reach 600 billion Euros this year. The World Bank predicts that China will be the world's second-largest trading entity within two decades.

What's especially exciting for Hong Kong is that we sit at the centre of China's fastest-growing, most prosperous region, the Pearl River Delta. Its area is only 60% of that of Ireland, but its population is nearly 12 times more than yours. Not too many years ago, the Pearl River Delta, or PRD, was a quiet agricultural region. Today it is a robust industrial zone, producing everything from furniture to watches to telephone sets. As a result, the PRD has become China's export powerhouse. In the centre of all this is Hong Kong, the region's international financial and business centre. We ship four-fifths of the PRD's products through our busy ports and airport. Our banks provide the trade financing. Our accountants and lawyers smooth the flows of money and goods.

You might be surprised to learn that the top three cities in per capita GDP in the Mainland of China are Shenzhen, Guangzhou and Dongguan. All three are in the Pearl River Delta. All three are wealthier than Shanghai and Beijing. So, not only is the PRD a major platform for manufacturing and sourcing products, it is becoming an affluent consumer market in its own right. Retail sales in the PRD topped 42 billion Euros last year and are growing fast.

So, there is much economic activity going on in our corner of the world. We welcome Irish companies, large and small, to come and join in.

You may ask now that China is a member of the World Trade Organisation, why bother to go through Hong Kong? The answer is straightforward - it's far easier to go into the Mainland of China through Hong Kong, especially if you're a small or medium enterprise. We enjoy comparative advantages that other Asian and Chinese cities do not. Besides our strategic location on the doorstep of China, we have linguistic and cultural links. While China has been opening up fast in the past 20 years or so, Hong Kong still possess a number of institutional strengths that the Mainland cities have yet to match, if ever. We have kept our own common-law legal system and an independent judiciary. Indeed, Hong Kong is a centre for arbitrating business disputes, and arbitration awards handed down in Hong Kong are enforceable in the Mainland. We remain a separate customs territory, and we maintain a strong regime of protection of intellectual property. We have a level-playing field for all companies, whether local or foreign, and a low, simple and predictable tax regime. We have free flows of capital, information and trade. The Hong Kong dollar is freely convertible. Our government is clean, efficient and pro-business.

Moreover, Hong Kong has gathered over 20 years of rich experience in trade, investment and business in China. Hong Kong entrepreneurs are the biggest external investors in every Mainland province, autonomous region and municipality. Wherever you go in China to do business, there will always be someone there from Hong Kong.

Our sophisticated and liquid financial markets have been the fund-raising centre for China enterprises as well as foreign businesses exploring the Asian market. This year, for example, we have seen the successful listings of the Standard Chartered Bank, a British bank with a primary listing in London but which wanted to raise its profile in Hong Kong and China. We have also seen the successful 2.5 billion-Euro Initial Public Offering of the Bank of China, the first state-owned commercial bank ever listed outside of the Mainland. The Bank has joined some 130 Mainland enterprises listed on our bourse, which had raised total equity capital of 92 billion Euros over the past 15 years or so. By listing in Hong Kong, not only can China enterprises raise funds for their expansion, they can also improve their competitiveness through compliance with our stringent corporate governance and transparency requirements.

For these reasons and more, Hong Kong is a popular place for foreign companies to set up. More than 3,100 have established regional headquarters or regional offices there, an increase of more than 30% since 1997. We invite Irish companies to consider taking advantage of our unique combination - the Pearl River Delta's manufacturing muscle and Hong Kong's expert services platform. Our colleagues in Invest Hong Kong, the Hong Kong Economic and Trade Office in Brussels, or the Trade Development Council will be most happy to help in any way they can.

I am very optimistic about our future relations and our future success. This launch of the Ireland Hong Kong Forum is a fine start for the development of people to people linkage between Ireland and Hong Kong. It has been a pleasure to come to Ireland, to visit with you today and to share some of our experiences.

Thank you. Or, if you will forgive my Gaelic, gurra ma hagut.

End/Friday, November 29, 2002


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