**************

Following is the speech by the Secretary for Commerce, Industry and Technology, Mr Henry Tang, at a Chinese New Year lunch hosted by the Hong Kong Economic and Trade Office and Finland-Hong Kong Association at Helsinki, Finland today (March 13, Finland time): (English only)

Minister Sasi, Mr Erkki Virtanen, Mr Kari Cairenius, distinguished guests, ladies and gentlemen,

It is a great pleasure to be in Finland and celebrating with you the start of a new year in the Chinese calendar, the Year of the Goat. The goat is a symbol of steadfastness in the face of challenge. With steadiness I believe we can lay the foundations of future success in the year ahead.

It is an exciting time for you in Finland with the prospect of elections on Sunday. Thank you for giving us your welcome and your attention when you have so much else to think about.

Finland is no stranger to us in Hong Kong. By this I mean not only your beautiful lakes and authentic sauna baths. (And indeed, your Consul General is certainly doing an excellent job. He represents you well in Hong Kong). The young in Hong Kong have heard of Linus Torvalds and the Linux computer operating system.

And in a recent market study report, Nokia was found to be the most popular brand name among office ladies of Hong Kong. We will be visiting Nokia during this trip, and I am sure our female delegates will be checking out the latest Nokia models.

We also associate Finland with being among the most competitive economies. Yours is a very good example of the successes of an innovation-driven economy. It is internationally labelled as the world's telecommunications test laboratory. And your designs are among the world's most sophisticated. So our delegation will have a lot to learn from you during this trip.

In Hong Kong, we also have a clear vision to position ourselves as a leading digital city in the globally connected world. We have taken major steps to enhance our information infrastructure, including the building of a Science Park and the development of a Cyberport, the IT flagship of Hong Kong, where Sonera is an anchor tenant. We have a Digital 21 IT Strategy, which sets out our IT agenda and aims to position Hong Kong firmly in the e?business community.

We have been making good progress, and have been ranked as the world's No.1 in the recent International Telecommunications Union Mobile/Internet Index. Our mobile penetration rate has reached 91 per cent, which competes with Finland to be among the highest in the world. We have an excellent telecommunications infrastructure: our broadband networks cover all commercial buildings and over 98 per cent of households. We have a PC penetration rate of 62 per cent and Internet penetration rate of 53 per cent among our households, with more than one-third of them using broadband services.

We are well linked to Mainland China and all major cities in the world, with an external connectivity of 900 Giga bits per second, which is the second highest in Asia, only next to Japan.

We have fully liberalised all sectors of our telecommunications market. We do not set any limit on the number of licences, except where there are capacity constraints. Currently, we have eight fixed line network operators, six 2G mobile operators, and we have issued four 3G licences. One of our 3G operators will roll out its service very soon this year.

The Government has also taken the lead in electronic business by providing public services on-line under an Electronic Service Delivery Scheme, which won the world renowned Stockholm Challenge Award. By the end of this year, 90% of amenable government services will come with an e-option. The next challenge is to increase the take-up rate among ordinary citizens.

Like Finland, Hong Kong is also an ideal test-bed for innovative technologies. We were one of the first in Asia to introduce General Packet Radio Services (GPRS) and we were also the first in Asia to launch a multimedia messaging service (MMS).

To drive our design industry, we have recently opened the Hong Kong Design Centre, which is a multi-disciplinary centre to promote design as a value-added activity, to enhance design standards, to foster design-related education, and to raise the profile of Hong Kong as an innovation and creative hub.

I am glad that we will have opportunities to visit the Design Forum of Finland and the Helsinki University of Art and Design during this trip. I am sure we will be able to gain useful insights from the visit, which will help us improve our own design industry.

Hong Kong and Finland signed a Memorandum of Understanding (MOU) on ICT co-operation in January 2000. Since then, various exchange activities and collaborations have taken place under its auspices. Last year, a technology delegation led by the Hong Kong Science Park Corporation visited Finland and had some very useful exchanges. An engineering service agreement was signed during the visit.

And on this trip, I am delighted that agreements on academic exchanges between the Helsinki University of Technology and the University of Hong Kong, and between the Helsinki University of Art and Design and the Hong Kong Polytechnic University, will also be concluded. I sincerely hope that we can build on these successes to enhance further the cooperation and exchanges between Finland and Hong Kong.

For Finnish companies interested in exploring the Asia Pacific market, Hong Kong has much to offer you. We are right at the doorstep of Mainland China, which has been growing at around 7 to 8 per cent each year. Our cultural affinity, language capability and over twenty years of experience of doing business there, make us the best launching pad for venturing into the huge China market.

Now, what is important is that one must not view the 1.3 billion population as a single market. It is a diverse country, and should be considered that way where doing business is concerned.

Take the Pearl River Delta alone: including Hong Kong and Macau, the Pearl River Delta has a population of almost 50 million, that is already a good-sized European country. This region has an overall GDP of USD 270 billion, which is bigger than Switzerland and Sweden. It is the most affluent 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 companies have been investing in the Pearl River Delta. That explains why there are more than 65,000 Hong Kong-linked enterprises employing an estimated 7 to 10 million people in the area. We are therefore an ideal operational base for overseas companies to launch into the Pearl River Delta.

First of all, we speak the language. We have the business connections. And most importantly, we have enough experience operating in that environment to tell what might work and what probably would not!

Under the "one country, two systems" concept, we in Hong Kong practise a system that westerners are familiar and comfortable with. We have a sound common law judicial and legal system, an international financial system with free flow of capital, freedom of speech as well as a clean and efficient government.

Added to these strengths is our steadfast commitment to protecting intellectual property rights - a critical pre-requisite for any knowledge-based economy. This commitment, which is underpinned by our comprehensive IP legislation, and vigorous enforcement actions have won us international acclaim, and is what sets us apart from other Chinese and Asian cities.

In fact, our strategic role in the Asia Pacific has been well recognised by many multi-national companies. There are now over 3 100 overseas businesses, which have set up regional headquarters or regional offices in Hong Kong. These include familiar names like Philips, Deutsche Telecom, Samsung, and of course, Nokia. And if Finnish companies want to identify a strategic partner in the Asia-Pacific, Hong Kong companies have to be your prime choice.

Finally, I would like to thank the Finland-Hong Kong Association and the Hong Kong Trade Development Council for helping to organise this very successful luncheon. We will be relying on your efforts to develop and enhance trade and business ties between Finland and Hong Kong. I think Finnish and Hong Kong businesses, with their famous entrepreneurial flair, can do a lot of things together.

And I would also like to take this opportunity to thank publicly the Finnish Government for your very kind hospitality and for making such wonderful arrangements for this visit. I wish all of you a very prosperous Year of the Goat. Thank you very much.

End/Thursday, March 13, 2003
NNNN