Following is the speech by the Financial Secretary, Mr Henry Tang, at the 18th Congregation for the Conferment of Honorary Degrees, held today (November 12) at the City University of Hong Kong:
Mr Chairman, Council Members, Mr President, distinguished guests, ladies and gentlemen,
I am delighted and privileged today to speak on behalf of Mr David Eldon, Professor Andrew Yao and Professor Zhang Junsheng, on this memorable occasion, where the City University of Hong Kong has so graciously conferred upon us Honorary Doctorate Degrees.
Mr David Eldon is a very successful banker who has made a significant contribution to the development of the banking industry in Hong Kong and the Pan-Pacific Region. Besides his distinguished professional career, he has also devoted himself to various public services, from charitable organisations to other activities, which have made major contributions to our community. He has certainly made a difference to this community of Hong Kong.
Professor Yao is a world-renowned scientist and the very first Chinese to receive the prestigious Alan Turing Award, in recognition of his profound contributions to the theory of computation and communication complexity. Professor Yao is currently the William and Edna Macaleer Professor of Engineering and Applied Science at Princeton University. He is still contributing his intellectual input to the field of computer science.
Professor Zhang is currently the Chancellor of Zhejiang University. Besides his outstanding contributions to university education in China, he served as the Deputy Director of the New China News Agency (Hong Kong branch) between 1987 and 1998. In that position, he played a pivotal role in enhancing communication between Hong Kong and the Mainland.
Today, I am indeed very honoured to be counted among these very distinguished individuals to receive Honorary Doctorate Degrees from the City University.
In early August, I was privileged to be nominated by the Chief Executive and appointed by the Central People's Government as the third Financial Secretary of the Hong Kong Special Administrative Region. I am keenly aware of the heavy responsibilities bestowed on this position and Hong Kong people's expectation on me. From the very beginning, I have placed the revitalisation of Hong Kong's economy as my foremost priority.
Today, I am very pleased to see that indeed, there has been a visible upswing in economic activity and sentiment over the past few months. Our stock market is moving higher, and the turnover on average has doubled in the third quarter. Property transactions are picking up, and the number of homeowners in negative equity is declining. Visitor arrivals have rebounded sharply after the SARS outbreak, and the retail sales have risen for the first time in seven months. The unemployment rate and deflation are both easing off.
In the context of these encouraging signs, there are those who feel we could be well on our way to an economic revival. Yet, we must not be complacent. Economic restructuring takes both time and effort. We are faced with many challenges still, both as an economy and as a society. The mismatch of our human capital has to be addressed. The policy-making process of our government needs to be improved to take more into account the views of the public, and the aspirations of our community. The competitiveness of our businesses has to be enhanced as well.
Notwithstanding the challenges, I am confident that our future is bright. Our economic fundamentals remain strong. We are blessed with a natural hinterland that is among the fastest growing economies in the world. The huge Mainland market has played a key role in our economic development for the past two decades. I envisage that the further opening up of the Mainland will underpin our economic growth in the coming years.
The signing of CEPA provides the opportunity of a lifetime for Hong Kong manufacturers and service providers alike to gain preferential access to the huge Mainland market ahead of and beyond China's WTO commitments. CEPA also expands our businesses' horizon far beyond the physical boundary, and provides a launching pad for our entrepreneurs to benefit from the Mainland's rapid economic growth. Together with the renewed up-trend of our economy and the global economy, Hong Kong is poised to relaunch.
I am very pleased to see that a new corps of young people is graduating from this great university. They are marching towards the future with aspirations, vision and commitment to our community. We need these young people to succeed in the knowledge-based economy. We need these young people to challenge conventional thinking and known boundaries. We need them to bravely explore uncharted water. Hong Kong has long been famous for our "can do" spirit. I am confident that these leaders of tomorrow can live out this spirit and bring Hong Kong to a new height of prosperity and harmony.
Before ending my statement, I would like to take this opportunity to say a few words on the funding for education, which has caught much public attention these days.
Both the government and the public recognise that it is not sustainable to run fiscal deficits year after year. To address the problem, I have announced that we will control government operating expenditure and to bring it down gradually to $200 billion by 2008-09. This means an 11% cut, spread over five years.
The reductions are moderate and are not uniform across all policy bureaux, having regard to the special needs of certain policy areas and the human elements involved.
The funding for education should therefore be considered under this broader context. Beyond a doubt, education is an investment for our future generations. The Government has always accorded a very high priority to it. In fact, we spend close to one-quarter of our overall budget on education. In absolute terms, the expenditure has been growing from $36.7 billion in 1997-98 to the estimated $49.3 billion in 2003-04. That is a 34% increase over the past seven years.
Whereas all sectors in our community should contribute to the efforts in containing public expenditure, I would like to tell you categorically that the reductions to be shouldered by the education sector will be lower than the average 11%. Indeed, the total resources available to education in 2004-05 will be comparable to that in 2003-04. The allocation for subsequent years is subject to further deliberations and discussions, against the background that my target is to achieve fiscal balance by 2008-09 and my promise that there will not be uniform cuts across the board.
It thus boils down to the question of making the most value out of an individual spending envelope. Each Principal Official has the full discretion to set his spending priorities within his envelope and to conduct functional reviews across programme areas under his or her responsibility.
It will therefore be entirely up to Arthur, as the Secretary responsible for education and manpower, to decide how to distribute the eggs in his basket - whether he is going to put more on primary, secondary or tertiary education - in order to get the best return on this society's substantial investment in education. I do not underestimate the challenges Arthur has to face. I understand he has been conducting consultations among the various constituencies in the education sector (including university funding for the next triennium from 2005-06 to 2007-08) and I believe you will certainly help him arrive at a consensus that reflects the aspirations of this great community.
With the support of the Central People's Government, with all our joint efforts together, and especially, with all the bright young graduates you see today, I have no doubt that together we will be able to make this a success. We will be able to build a stronger Hong Kong and we will make the "One Country, Two Systems" a success.
Thank you very much.
Ends/Wednesday, November 12, 2003