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Speech by SEDL at Hong Kong Gala Dinner in Kuala Lumpur


Following is the speech by the Secretary for Economic Development and Labour, Mr Stephen Ip, at the Hong Kong Gala Dinner in Kuala Lumpur today (August 11): (English only)

Distinguished Guests, Ladies and Gentlemen,

It is a great pleasure to join you tonight for this Hong Kong Gala Dinner.

This is my first official visit to Malaysia since taking up this job in July last year. But, it is not my first visit to this wonderful country. I am a long-time fan of Malaysia and have always received a warm welcome from Malaysians whenever I visited Malaysia. As you know, we Chinese love food and there is definitely no shortage of great places to eat in Kuala Lumpur.

Malaysia's economic development has been most impressive. In the midst of a global slowdown, Malaysia posted 4.1% real growth last year and is on track for 4.5% growth this year. That's quite an achievement given the world's current economic uncertainties.

Hong Kong and Malaysia have enjoyed a long and prosperous trading relationship. In 2002, Hong Kong was Malaysia's seventh largest trading partner, while Malaysia was our ninth largest. Total trade between Hong Kong and Malaysia last year was more than US$7 billion, and is destined to continue rising as we both make the best use of our complementary strengths - Hong Kong as the major platform for accessing the Mainland market, and Malaysia as a major platform for accessing ASEAN.

As we all know, Asia suffered terribly during the SARS outbreak from March until the end of June. I am glad to see that the outbreak has now been brought under control in every country it affected, no doubt due to the courage and selflessness of our respective medical professionals and researchers. In Hong Kong, we remain vigilant against the threat of another outbreak and have pledged to maintain our stringent screening regime for all arriving and departing visitors to Hong Kong. We do not want to see SARS taking hold again.

The disease dealt Hong Kong a heavy blow, particularly our tourism, retail and catering sectors. But since Hong Kong was declared a SARS-free city on June 23, the government and people have focused our efforts on revitalising and re-invigorating our economy. We will never forget the painful lessons learned during the SARS outbreak, but we also want to put the tragedy behind us and move on.

Tourism is actually one of my major portfolios, and the tourism sector is tremendously important to Hong Kong's economic development. So tonight I would like to share with you some of our plans to ensure Hong Kong remains one of Asia's premier business, cultural and leisure hubs.

Our objective in the past few weeks has been to bring back business and leisure travelers - and to bring them back as quickly as possible. The government and the tourism industry have been working very closely together to make that happen.

Our strategy has been to put together a package of events, attractions and experiences designed to showcase Hong Kong in the best possible light. This in turn will provide an incentive for people to visit Hong Kong, and hopefully visit us again. The Government has also provided funding for a worldwide publicity campaign to alert potential visitors about all the events coming on stream over the next six months or so.

As part of our efforts to rebuild confidence in the Asian tourism experience, we recently hosted a major international tourism conference jointly sponsored by the World Tourism Organisation and the Boao Forum for Asia. This 'Revitalising Asian Tourism' conference attracted over 1,000 tourism ministers, senior government officials and leading members of the travel trade, the media and international organisations from 48 economies, including, of course, Malaysia. I am happy to say that the conference did generate a lot of positive coverage about the revival of the Asian tourism industry.

Another important part of our strategy is to host big events. We've recently played host to not one, but two, of the world's greatest football teams - Liverpool and Real Madrid. I know that Kuala Lumpur has also recently hosted three of the top English Premier League teams. So I am sure you know from first-hand experience that these type of sporting events are very popular, and a great way to attract international attention and visitors. For us, the proof was in the playing - both Liverpool and Real Madrid entertained capacity crowds of 40,000 during their games in Hong Kong. And we usually only see those types of crowds at the Hong Kong Stadium during our world-renowned International Rugby Sevens tournament that is held each year at the end of March. World-class events will attract world-class crowds.

There is a lot more coming on stream. The Hong Kong Tourism Board has rolled out the welcome mat during 'Welcome Month' to attract visitors to Hong Kong with various offers and promotional programmes. During 'Welcome Month' - which will actually run for two months from mid-July - more than HK$15 million (RM 7.3 million) worth of prizes will be offered to visitors and residents in a Grand Lucky Draw. A series of mega events and promotions will be held between now and March next year. These will include a massive lantern display in September, a musical fireworks competition in October and a new and exciting Harbour Lighting Show that will light up the Victoria Harbour from December. And we have also got many international business conferences and exhibitions planned, as well as a host of cultural and leisure activities.

I am pleased to say that these efforts are beginning to pay dividends. We have seen very encouraging signs of a pick-up in tourist arrivals. In June, we welcomed more than 725,000 visitors, an increase of 70% over May. Among these, our friends from Mainland China have been the fastest to react: their arrivals in June 2003 surged by 51% over May. But what's more impressive is that the June figures this year were 11% up on last year's figures. This rapid recovery has had pleasing knock-on benefits for other tourism related sectors. For instance, hotel occupancy has risen quickly from a low 18% in May to more than 60% in July. Our airline and retail businesses have also shown good signs of recovery.

While the number of Mainland visitors to Hong Kong is most welcome, there still remain considerable restrictions on the number and manner in which they can visit us. We have been trying to address this issue with the Mainland government, who, I must say, has been most helpful in this regard.

To provide more flexibility, a pilot scheme was recently launched that allows for 'individual visits' to Hong Kong by residents of four cities in adjoining Guangdong province - that is, they can visit in their personal capacity and will no longer have to visit Hong Kong as part of a tour group. But even more exciting is that the pilot scheme will be extended to all of Guangdong Province, home to almost 86 million people, in May 2004. You can see that such a decision will provide enormous potential to grow for Hong Kong's tourism industry. And - there's even more good news - Beijing and Shanghai residents, together with residents of Guangzhou, Shenzhen and Zhuhai will also be added to this pilot scheme starting from next month. We expect that these more flexible arrangements will lead to a surge in Mainland visitors to Hong Kong. And of course, the existing tour group permits will continue to be available for visitors from other parts of Mainland China.

In addition to the relaxed travel arrangements for Mainland tourists, we also have in place a whole range of long-term plans to boost our tourism sector. We are investing heavily in new infrastructure and we will continue to upgrade existing tourist attractions.

Many of you have probably seen a Hong Kong movie. I know that many of our Hong Kong stars are very popular here in Malaysia. We will soon have a prime site on the harbour front dedicated to the art of the movies and the Hong Kong stars who have made them name internationally. We're calling it 'The Avenue of Stars' and we expect it to be opend early next year.

We are making good progress on the Hong Kong Disneyland project, the first phase of which is due to swing its doors open to the public in 2005. We are also building a cable car system to improve access to the giant Buddha on Lantau Island, which is just next to our international airport. We are also making good progress on an International Wetland Park in the northern part of Hong Kong, adjoining our world heritage-listed marshlands that are an important stop-over for migratory birds. This, too, is due to open in 2005.

Apart from tourism, the Hong Kong government has devoted considerable time, energy and resources to the development of the logistics sector, which has enormous potential and is another important economic driver for Hong Kong's economy.

The logistics sector accounts for about 4.8% of our GDP, and contributes more than 200,000 jobs or 6.3% of Hong Kong's workforce. Because of our prime geographical position, our deep-water port and world-class transport infrastructure, Hong Kong has excelled as a transport and logistics hub. We have been the world's busiest container port for 10 of the past 11 years - and last year, we saw a world-record throughput of 19.1 million TEUs (twenty-foot equivalent units). We are on target to beat that record again this year.

Hong Kong is also the world's seventh largest shipping centre - our Shipping Register has hit a record high of 18 million gross tonnes and we expect to hit 20 million gross tons in 2004. Last month I witnessed the opening of the first berth of our new Container Terminal 9, which on full commissioning in 2005, will add more than 2.6 million TEUs to our container handling capacity.

We're not just doing well on the high seas - our airport has been the world's busiest for international air cargo since 1996 and last year handled 2.5 million tonnes of freight.

We are determined to strengthen Hong Kong's status as an international logistics hub in Asia, and enhance our infrastructure further. We plan to develop a Value Added Logistics Park near the airport to provide 'one-stop' integrated logistics services. We have also invited proposals to develop a Digital Trade and Transportation Network (DTTN) System to facilitate information flow in the supply chain, and enhance the overall competitiveness of our logistics industry.

But our logistics industry can't develop fully if we stand alone. Co-operation is extremely important for our logistics sector to flare. We are extremely fortunate to be sitting on the doorstep of the world's fastest growing economic star. We are well positioned to be the major services center for the rapidly growing and increasingly affluent Pearl River Delta, what many people refer to nowadays as the 'factory of the world'.

So, we will join hands with other cities in the Pearl River Delta, to pursue logistics co-operation and enhance our attraction as an economic super zone. We have already implemented various initiatives such as extending the operating hours for cross-boundary freight clearance, as well as the construction of new land transport links with neighbouring cities in the Mainland. Plans for a bridge to connect Hong Kong with Macau and Zhuhai are now under study. This massive project will enlarge our cargo catchment area, open up new business opportunities for our logistics industry and open up new tracts of land for development on the western banks of the Pearl River.

Ladies and Gentlemen, I have shared with you just some of our plans to revitalise and re-energise our economy. The signing of the landmark trade agreement with the Mainland on June 29 - the Closer Economic Partnership Arrangement - is a significant event for Hong Kong and our Mainland trading partners, especially those in the Pearl River Delta. The agreement will substantially enhance the business opportunities for our manufacturing and services sectors, and strengthen our economic links. There is no doubt that Hong Kong will continue to be the major gateway for trade, investment, financial services in China. And I welcome you all to come and see for yourself all that is happening in Hong Kong, whether for business or pleasure.

I wish you all a very enjoyable evening. Thank you very much.

End/Monday, August 11, 2003


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