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Following is the speech by the Chief Executive, Mr Tung Chee Hwa, at the Conference on International Co-operation for Tourism Development Under a New Paradigm, which was jointly organised by Boao Forum for Asia and World Tourism Organisation this morning (July 14):
Mr Frangialli, Mr Long, Honourable Members, distinguished guests, ladies and gentlemen,
Today, I would like to begin with four simple words that, for many people in our tourism industry have taken on a special meaning over these past few weeks: "Welcome to Hong Kong." For our guests from outside of the region, I have another equally special greeting: "Welcome to Asia."
Thanks to the Boao Forum for Asia, and the World Tourism Organisation, we now have an opportunity to work together to make this a lasting welcome from our respective tourism industries.
There is no doubt that we all want to eliminate the spectre of SARS, and to see our tourism and related industries return to a healthy position and growth. In Hong Kong, as in other areas within and outside the region, the economic fallout of SARS has been very painful. First of all, let me share with you some of our experience in Hong Kong.
Over the past several years, because of the Asian financial turmoil, the bursting of the asset bubble in Hong Kong, and the rapid rise of the Mainland's economy, our own economy has to go through painful restructuring and adjustment. The task often appears to be daunting. But we do have some unique competitive advantages. We have the hardware and the software required of a world-class city, including our keen business acumen, a well-developed infrastructure, a versatile financial system, robust legal institutions, free and open society, a clean and efficient civil service, simple and low taxation, a large pool of talent and a cosmopolitan community. As long as we move with the times and play to our strengths, I believe the strategic position and the unique role of Hong Kong cannot be replaced. We will consolidate and further develop the four pillars of our economy, namely, an international financial centre, a centre for logistics, a premier tourist destination, and trade and trade-related support services.
In the third quarter of last year, our GDP grew by 3.4 % in real terms, and in the fourth quarter by 5.1%. In the first quarter of this year, our GDP continued to grow by a robust 4.5%. Tourism, one of our pillar industries, has also performed remarkably in 2002, with the total number of visitors reaching a record high of 16.6 million, an increase of some 20% compared with 2001. The strong growth of our economy in the last few quarters before the SARS epidemic took its toll shows that our economic policy is in the right direction, that our economy is on the road to recovery, and that the painful economic restructuring that we have been going through is slowly but surely beginning to bear fruit.
The SARS outbreak has unfortunately dealt a devastating blow to the recovery. The damage SARS has done to our economy is across the board, and the hardest hit are the tourism, hotel, restaurant and retail sectors. Since the outbreak of SARS in March, tourist arrivals have dropped by one-third as compared with same period last year. Our airlines have to cut the number of flights by half. Shops and restaurants have reported a sharp fall in business. To help reduce the short -term impact of the SARS outbreak on our economy, the Government announced in April a US$1.5 billion relief package to provide support for the various affected sectors. Now, the epidemic has come under control and the travel advisory by the WHO has been lifted, we are beginning to see the recovery of business in many sectors. We are already starting to see visitors coming back especially from Mainland China, while other key markets like the US, Europe, Southeast Asia and Japan are also showing gentle recovery.
With the general improvement of the external environment and the foundation work we have done, I am confident the SARS impact on our economic recovery, though severe, will be temporary. I am confident because the direction adopted by the Government in the past several years to reposition and restructure Hong Kong's economy is beginning to work. The rapid growth and expansion of the Mainland economy, particularly the Pearl River Delta, continues to benefit Hong Kong's trade, logistics, businesses as well as tourism. The Central People's Government of the PRC has pledged strong support for Hong Kong: we have just signed a Closer Economic Partnership Arrangement (CEPA) with the central authority and the arrangement will open up many new and exciting opportunities for Hong Kong. Similarly, arrangements for individual visitors from Guangdong Province to visit Hong Kong will give an enormous boost to our tourism industry.
Of course, a lot more additional work needs to be done. We must reassure the world that Hong Kong is a safe place to visit, a safe place to live and a safe place to work. We must remain vigilant and make Hong Kong a cleaner and healthier city. Therefore, we have set up a SARS Experts Committee comprising top international experts in epidemiology, hospital management and public health to undertake a thorough review of the SARS epidemic to see what lessons we can learn from the experience, and to make recommendations, so that we are better prepared next time for any epidemic attack. We have also set up a high-level task force - the Team Clean - to promote good personal and public hygiene, tackle the environmental hygiene black spots, and give Hong Kong a complete face-lift. Our hotels, entertainment and restaurant sectors have adopted enhanced cleansing measures and they will be subject to even more vigorous hygiene regulations and inspections. This will further enhance our attraction as a tourism destination renowned for the quality of our hotels, the diversity of our attractions, and huge variety of eating and entertainment outlets.
To revitalise our economy and to restore international confidence in our attraction as one of Asia's most popular destinations after the SARS attack, the Government has been working closely with the Hong Kong Tourism Board, hotels and airlines and the retail and restaurant sectors to prepare a comprehensive strategy to relaunch Hong Kong. Combining funding from the Government with the marketing skills of the Tourism Board, value-added offers from the different sectors with incentives draw visitors back to Hong Kong. Our relaunch programme will commence with this important conference. Over the next few months, apart from efforts to promote Hong Kong internationally, we will host a series of major events, including business conferences, exhibitions, and sports and cultural events. As a keen football fan myself, I am delighted that two great football teams, Liverpool and Real Madrid, together with some of the world's best football players, will be playing in Hong Kong on July 27 and August 8 respectively.
Furthermore, to promote intra-regional travel, the Hong Kong Tourism Board is working closely with the tourism authorities in major Asian destinations to launch joint promotional programmes in the long-haul markets. For example, the Tourism Board has partnered with Singapore and Thailand to promote our respective attractions to the UK audience under the banner "Together in Asia" and in North America, under the banner "Asia Now". There have also been similar partnerships with Singapore, Thailand, Malaysia, Indonesia, Korea and Mainland China.
These measures are designed to overcome the devastating impact of SARS, what SARS has done to our economy. Looking to the longer term, we are pressing ahead with major investments in our tourism infrastructure. Our investments over the next five years cover a wide range of new developments as well as renovations of existing facilities. We are keen to encourage private businesses to participate in the expansion of tourism in Hong Kong. Partnerships between the public and private sectors in Hong Kong is already well established in most parts of our economy: the tourism sector is no exception. Projects involving private sector participation cover everything from the Hong Kong Disneyland due to open in 2005 to a new cable car system being developed on Lantau. The upgrading of even existing attractions such as the Tsim Sha Tsui waterfront promenade is in part being undertaken by a private developer. Looking even further ahead, we have recently announced our intention to invite expressions of interest from the private sector for the development of a new cruise terminal.
Our investment in this sector is based on a practical reality: tourism offers wide economic benefits. The employment opportunities, the career development opportunities and the foreign exchange earnings from this source help to diversify our economy and provide jobs at all levels of our citizenship. I am sure this reality is one all of us attending this conference appreciate. I believe that investment in the tourism sector in Hong Kong not only benefits Hong Kong but also contributes to making Asia as a whole more attractive as a tourist destination.
Ladies and gentlemen, SARS has dealt us all, every one of us, a severe blow. But we are now all on the road to recovery. I have just shared with you what we are doing in Hong Kong to revive our economy, particularly our tourism sector. I hope that it provides some food for thought in our discussions and deliberations over the next two days. I am sure that this conference will help to revitalise the tourism industry in Asia and help map out a strategy to bring more visitors, more business people back to our home markets.
I wish you all a very successful conference and an enjoyable and memorable stay here in Hong Kong.
Thank you very much.
End/Monday, July 14, 2003
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