The following is a speech by the Financial Secretary, Mr Henry Tang, at the Sustainable Business in East Asia Conference co-hosted by the Financial Times and the International Finance Corporation at the JW Marriott Hotel this morning (October 16):
Thank you very much, Victor. Good morning ladies and gentlemen.
When I was a very small boy just a few years old in the 50's, we used to have a race called Cross Harbour Swimming Contest and at that time whoever jumped off on Kowloon side and swam to Hong Kong side, and whoever finished crossing the harbour won the race. It was cancelled about two decades ago simply because the harbour was getting so dirty. Maybe not quite to the extent that Victor has so grimly and so vividly described just a few minutes ago, but it was cancelled because the water was simply so unsafe that anybody who jumped into the water might not emerge on the other side. The Government actually put in very intense efforts about a decade ago because we wanted to clean up our harbour. So, for many of you visitors to Hong Kong, I hope you have a chance to enjoy one of the bargain tourist attractions of the world, which is to take a ride on the Star ferry going from Hong Kong to Kowloon and back, and you will find that the meaning of Hong Kong is a fragrant harbour and it doesn't stink any more. I do urge you to try that most popular and best bargain tourism destination in the world.
I would also like to extend our very warmest welcome, on behalf of the Hong Kong SAR Government, to all of you, and especially to all who are attending this Conference from overseas. You are visiting us in one of the best months of the year in terms of weather and in terms of the vibrancy that you will experience here. I hope you have a chance to visit our beautiful city outside this conference room and perhaps put a dent on your credit card .
I wish to congratulate the Financial Times and the International Finance Corporation on putting together this conference on "Sustainable Business in East Asia". You have assembled an impressive and distinguished list of speakers, who will be leading discussion on a wide range of stimulating topics. And you have certainly attracted a large and diverse and high calibre participation. These are the ingredients for a successful and productive conference.
It is an honour for us that you have chosen Hong Kong as the venue for this conference. Your choice is partly a reflection of the keen interest in this subject here in Hong Kong. It is also an indication of our facilities and our infrastructure amongst the many qualities and strengths that we have to offer as a platform for prominent regional events. It is also these strengths that led our two co-organisers to locate their regional headquarters in Hong Kong, and I thank you for it.
The strong business participation in today's conference has demonstrated that sustainability is not a threat to business. It is also clear, from the track records of many businesses, that sustainability is not a gimmick nor is it a fad.
To take the Hong Kong experience as an example: for at least a decade now, some of Hong Kong's most prominent and successful companies have been progressively taking on the idea of sustainability in their business plans and practices. It is also the private sector that has been behind - and has funded - two important initiatives: the Business Environment Council; and the Association for Sustainable and Responsible Development in Asia. They promote sustainable development and responsible investment practices in this region. A number of well-established advocacy groups and think tanks have also successfully brought issues of environmentalism and sustainability into our public's minds.
Sustainable business involves using resources in a responsible manner. It is being aware of long-term viability and not just short-term balance sheet profits; partnership with the community; and improvements in corporate governance and, above all, transparency. In a market-driven economy, such as Hong Kong's, it is absolutely right that the private sector should play a leading role in promoting and adopting all these objectives. The progress so far shows that there is vision, and consensus in our private sector, that go well beyond the bottom line.
But sustainability is a responsibility that cannot be shouldered by businesses alone. Our stakeholders comprise the whole community, our neighbours and our next generations. Its success will depend on action by individuals, as citizens and consumers, and on efforts by all sectors of the community.
Our Government too has an important role to play, both as a practitioner and as promoter of sustainable development. With this in mind, a Council for Sustainable Development was established earlier this year by the Chief Executive of the Hong Kong SAR. The Council is chaired by the Chief Secretary, Mr Donald Tsang, and its functions are, amongst other things, to advise on the preparation of a sustainable development strategy for Hong Kong that will integrate economic, social and environmental perspectives and to promote public awareness and community participation.
I read your programme today and it addresses many questions and challenges thrown up by sustainability. I would not wish to delay the proceedings by commenting in detail on these questions, fascinating as they may be. I would, however, like to draw attention to three challenges that arise in applying sustainability principles to business in Hong Kong.
The first is in bringing small and medium enterprises (SMEs) into the picture. SMEs are the backbone of Hong Kong's economy. Indeed, 90 per cent of our businesses are SMEs. They have a large share of our economy and the situation is the same in the rest of our region. Many SMEs in Hong Kong have adopted sustainable practices and they are rightly proud of this. But, for various reasons, many others have been slow on the uptake. This question is currently being actively addressed by advisory and mentoring programmes carried out by the Business Environmental Council and the Hong Kong Productivity Council with the support of the Trade and Industry Department. I hope these efforts, combined with the various other initiatives designed to help SMEs in difficult times, will bear fruit very soon.
A second challenge that we face is in cross-boundary issues. An essential element of sustainable development is that it must take account of, not just conditions within a particular economy or jurisdiction, but also the effects on our neighbouring jurisdictions, this region - or indeed the world as a whole.
Hong Kong enjoys a mutually beneficial economic relationship with the Mainland. The economic integration between our two places is rapidly deepening given the impetus of the Closer Economic Partnership Arrangement (CEPA), which greatly expands the business opportunities between Hong Kong and the Mainland.
At the same time, CEPA will undoubtedly increase Hong Kong's attractiveness to foreign investors who wish to gain greater access to the Mainland market. Greater access of this kind, whether in China or elsewhere in our region will bring with it an increased need for attention to sustainable business strategies.
Hong Kong's growing role as a financial services centre raises a third challenge: the need to improve our corporate governance. This is, of course, a global issue, particularly in the wake of recent corporate scandals in markets with well established regulatory regimes and traditions in corporate governance. Better standard of corporate governance brings with it greater accountability to stakeholders, greater transparency, and - not least - improved business performance.
We have in Hong Kong in recent years been giving priority to corporate governance reform. Working with the regulators and professional bodies, our Government has this year drawn up an action plan for completing and implementing reforms in a number of priority areas. These include upgrading the Listing Rules; tightening the regulation of IPO intermediaries; implementing the new Securities and Futures Ordinance; and proposing changes in the regulation of different aspects of directorship, shareholders' rights and corporate reporting. Our action plan, which is making good progress, will result in significant advancement of corporate governance here in Hong Kong.
Ladies and gentlemen, many recent visitors to Hong Kong have remarked on the energy and optimism they see in Hong Kong these days. I believe that, despite the many challenges that we still have to deal with, the latest economic indicators all point to a broadening recovery and a reassertion of our strengths. It also appears that other economies in the region are looking forward to renewed growth. This is certainly good news, I am, therefore, cautiously optimistic that this recovery can be sustained, and that the prosperity that comes with it is sustainable both for our own and also for future generations. Thank you.
Ends/Thursday, October 16, 2003