Following is a speech by the Secretary for Commerce, Industry and Technology, Mr Henry Tang, at the Hong Kong dinner, WEF Annual Meeting in Davos, Switzerland today (January 24, Davos Time):
Distinguished Guests, Ladies and Gentlemen,
It is an honour to welcome such accomplished and distinguished people to our dinner this evening. I hope you will allow me to share with you how Hong Kong is tackling the economic challenges we're facing, and how we have taken and will continue to take advantage of the huge business opportunities emerging from the Mainland of China.
At the outset, I want to remind you that Hong Kong has a remarkable track record of overcoming challenges and emerging stronger. That has been the story of our history for 160 years, ever since we started out as a so-called "barren rock". And as we have done in the past, we are today embracing the changes we face, spearheading structural reforms, and paving the way for our businesses to move up the value chain.
The government is taking a multi-pronged approach. I would like to talk this evening about our initiatives in three major areas: how we're promoting innovation and technology; how we're leveraging on our strengths and experience; and how we're deepening our co-operation with our thriving neighbours in the Pearl River Delta.
As the Secretary for Commerce, Industry and Technology, I am committed to driving innovation and technology developments to fuel economic growth, upgrade our industries, enhance our competitiveness and create business opportunities.
The government got the ball rolling with our e-Government initiative to deliver public services to the community. In 2000, we launched the Electronic Service Delivery scheme, or ESD, to provide customer-oriented public services efficiently online. More than 140 public services are now available to businesses and individuals around the clock. We are committed to providing 90% of amenable public services online by the end of this year. The quality of our ESD scheme has been recognised with the prestigious Stockholm Challenge Award, and we are actively working to encourage higher usage.
It's not enough, of course, for the government alone to capitalise on innovation and technology. So we have established a portfolio of investment schemes to encourage applied R & D projects by local research institutions and companies. Among the more important initiatives are the Innovation and Technology Fund, which supports innovation and technology upgrading in industry, and the Applied Science and Technology Research Institute, which takes on quality downstream research and development for transfer to industry with a view to commercialisation.
Infrastructure is also important. Our Science Park opened last June, with innovative and forward-looking tenants moving in from Hong Kong, the US, Canada, Europe and Japan. Our Cyberport is enjoying similar success. We are gradually building up a strategic cluster of IT and multimedia companies. Among the anchor tenants are some well-known companies including Microsoft, GE Information Services, Sonera and Sybase. Indeed, when we hosted the ITU Asia 2002 Conference, Cyberport was the most popular visit for our overseas participants.
At the same time, we have made the promotion of entrepreneurship a cornerstone of our innovation and technology initiatives. Technological breakthroughs become far more valuable when they are commercialised and applied to industry. The Hong Kong Science and Technology Parks Corporation is set to bolster its incubation programme, and to encourage more campus-based entrepreneurial activities in collaboration with local universities. We are confident that this process will help spawn new technology-based industries and innovation-driven companies. I want to assure you that innovation and technology will continue to be among our top priorities.
To stay ahead in the competitive global environment, we must also build on our strengths and experience, and focus on areas where we have an advantage. This is the second area on which we are focusing.
Hong Kong's advantages are myriad. We are strategically located, with easy access to the mainland of China and other markets in our region. Our infrastructure is second to none. We have a world-class airport that can handle 35 million passengers and 3 million tons of air cargo each year. Our modern container port is located at the focal point of all maritime activities in southern China, and offers the most efficient vessel turnarounds. Our fully digitised telecommunication system and 100% broadband coverage offer businesses seamless connections to the rest of the world. Indeed, Hong Kong was recently ranked first in the International Telecommunication Union Mobile/Internet Index, which reflects our commitment to telecommunication infrastructure.
We practise free trade, impose no tariffs and allow the free flow of capital. The government's role is confined to upholding the rule of law and maintaining a level playing field for all. We take pride in the fact that the Heritage Foundation in the US has ranked Hong Kong as the world's freest economy for the past nine years.
Hong Kong has served as the gateway to the mainland of China for decades. There is nowhere better than Hong Kong to obtain the expertise, information and facilities needed to tap into the immense Mainland market. With China's accession to the World Trade Organisation a year ago, our businesses are combining Hong Kong's sophisticated institutional structure with the Mainland's rapidly developing manufacturing and services capacity to fuel their growth.
We recognise that we can add value by improving the quality, efficiency and creativity of the products and services we provide. Financial services, logistics, tourism, and professional and producer services are the sectors with the best potential. They are externally oriented, dovetailing nicely with Hong Kong's role as a service hub for the region, as well as the major handler for China's trade with the world.
Let me use the financial services sector as an example of how the value-added approach works in Hong Kong. We are an important fund-raising centre for Mainland enterprises. The successful listing last July in Hong Kong of the Bank of China, which raised 2.5 billion US dollars, highlights this strength. By listing in Hong Kong, Mainland enterprises can tap into a deep and mature market to raise funds for expansion. And by following the international legal and accounting standards in Hong Kong, these enterprises can boost investor confidence.
Another good example of how we leverage our strengths is our airfreight services sector. As I mentioned earlier, our strategic location and world-class infrastructure are unrivalled in our region. But these are not enough. We understand that international connectivity, reliability and a sound regulatory system are key ingredients to ensure the seamless flow of goods.
Our international airport is served by nearly 70 international airlines, providing 3,900 scheduled flights every week to more than 130 destinations around the world, including 40 cities in the Mainland. Our state-of-the-art Super Terminal 1 is the world's largest stand-alone air cargo facility, with fully computerised systems keeping track of 3,500 containers at once. Add in our efficient customs clearance regime, and we are well positioned to capture the high-value-added airfreight business growing from the expansion of China's trade. In the 12-month period ending November 2002, the Hong Kong International Airport handled some 2.5 million tonnes of cargo. This represented an 18% increase compared with the same period of the preceding year.
This leads me to the third area I mentioned, nurturing closer economic links with the Pearl River Delta. In my view, Hong Kong's future hinges on how best we can capitalise on the enormous advantages of combining our successful service economy with the great manufacturing capacity of the Pearl River Delta.
Including Hong Kong and Macau, the Pearl River Delta has a population of almost 50 million, about the same as Canada and Australia combined. It is the most prosperous and fastest-growing region in China. It is the largest exporter in the country; and, it is, by far, the most popular destination for foreign investment. For 25 years, Hong Kong's private sector has been investing in the Delta. That explains why there are more than 65,000 Hong Kong-linked enterprises employing an estimated 7 to 10 million people in Guangdong Province. Now that China has entered the WTO, we are taking steps to smooth the flows of people, cargo, capital, information and services between Hong Kong and our economic partners in the Pearl River Delta.
We are examining new passenger and cargo rail links. We will make it a lot quicker for container trucks from all over the Delta to access the excellent intermodal logistics network in Hong Kong. We are enabling businessmen and ordinary people to cross the boundary more conveniently. Travel documents on both sides are being upgraded to allow speedier processing. Co-located Customs and Immigration facilities are being developed. We are discussing options for further co-operation in the financial markets. And in the IT field that I spoke about moments ago, we are teaming up with Shenzhen to organise a mission to Silicon Valley to attract high-tech companies to invest in the Pearl River Delta.
Ladies and gentlemen, there is no doubt that Hong Kong is facing tough circumstances at the moment. But as you can see, we are not standing still. I have today just touched the tip of the iceberg in terms of what we are doing to lay the foundations for sustained growth.
More than 3,100 overseas enterprises have already cast a vote of confidence for us by establishing their regional headquarters and offices in Hong Kong. They recognise the core values that underpin Hong Kong's position as Asia's world city - progressive, free, stable, opportunity, and high quality. We are, as always, determined to enhance our advantages and reputation as the best place for business in Asia.
Thank you very much.
End/Saturday, January 25, 2003