Following is a speech by the Secretary for Commerce, Industry and Technology, Mr John Tsang, at the 2003 Victorian Pearl Awards Gala Dinner organised by the Hong Kong Australia Business Association (HKABA) in Melbourne, Australia today (November 21): (English only)
Distinguished guests, ladies and gentlemen,
It is a great pleasure for me to be here tonight to share an enjoyable evening with so many friends of Hong Kong. Like many of my fellow citizens of Hong Kong, I have visited Australia a number of times already, but this is my first visit to Australia as Secretary for Commerce, Industry and Technology, and it is doubly delightful for me to start my tour of Australia in this great southern capital of Melbourne. As your State slogan says, it's "the place to be". If I may be so bold as to extend that a little further beyond the boundaries of Victoria: from everything that I have read and seen, Australia is the place to be at the moment. And I'm not just talking about the World Cup, although everyone else seems to be after Australia's great victory over the mighty All Blacks last Saturday. It's a good thing we're having this dinner tonight, rather than tomorrow, when the Wallabies face England in the World Cup final. Otherwise, I suspect I'd be talking to an empty room.
Ladies and gentlemen, Australia has earned much admiration for the way in which your country has managed to power through the global downturn that has affected many other economies, including Hong Kong, and is continuing to outperform most developed nations. This is an inspiration to us all.
Fortunately, as things stand, we in Hong Kong are beginning to see the first real signs that our economy is emerging from the doldrums. Our exports are recording double-digit growth - a trend that started at the beginning of the year and continued even through the SARS outbreak. There has been a noticeable upturn in the services sector. Unemployment is trending downwards. The stock market is much livelier, reaching a 27-month high recently. The slump in property prices seems to have bottomed out. Our competitiveness has also improved - the cost of doing business has been reduced significantly due to lower rents and lower wages brought on by economic restructuring over the past five years. This increased level of activity has led us to revise again recently our GDP growth rate upwards to 3% for 2003, compared with our 2% revised forecast in August. So, the mood generally in Hong Kong is getting more positive by the day. I tested that out recently with a taxi driver, the true mood barometer in Hong Kong, and the result correlates positively with our statistical observations.
In part, this renewed mood of confidence can be linked to Hong Kong's closer economic interdependence with the Mainland. This has been a natural progression since China began opening its doors to the world in the late 1970s. As you are aware, Hong Kong entrepreneurs were quick to take advantage of the vast areas of land and plentiful labour available just across the boundary in Guangdong Province to relocate their manufacturing operations. So much so, that today, the Pearl River Delta has become "the world's factory" producing some US$300 million worth of goods everyday.
Much of this has been driven by Hong Kong capital and expertise. According to a recent study prepared by the Federation of Hong Kong Industries, there are now about 53,000 factories in the Pearl River Delta that are owned or jointly owned by Hong Kong concerns employing over 10 million workers. And, it's getting bigger. We have recently reached agreement with our colleagues in Guangdong to work even closer together as a regional economy, which includes Hong Kong, Macau and the dozen or so cities of the Pearl River Delta, each leveraging on our own strengths. In our case, as a premier financial, business and logistics hub, tourist destination, and centre for innovation and technology.
To give you some idea of the strength of this region, the Pearl River Delta has a population of about 50 million with a GDP of just over US$270 billion - that compares to Australia's GDP in 2002 of just under US$400 billion. Taken as a single economic entity, the PRD would rate as one of the top 20 largest economies in the world. The PRD region is also the most prosperous in the Mainland with the highest per capita GDP.
In addition to this powerful economic force, Hong Kong and the Mainland have signed a Closer Economic Partnership Arrangement, a free trade agreement which provides Hong Kong manufacturers and service providers with enhanced access to the Mainland market. From the beginning of next year, 273 items of Hong Kong manufactured goods will be given tariff-free entry to the Mainland market. Together with the Mainland's commitments on accession to the WTO, some 90% of Hong Kong exports will be able to enjoy the zero tariff preference. This landmark free trade pact will be able to provide tremendous advantages for Hong Kong companies, most of them small and medium sized enterprises, in entering the Mainland market. These advantages will flow to global companies that do business in Hong Kong as well.
And, in another move for closer co-operation with the Mainland, we recently identified eight specific areas in which we will start strengthening economic and trade ties with that other renowned commercial and industrial city of China - Shanghai. It includes areas like the management and development of airports and ports, logistics, travel and exhibitions, investment and trade, education, health and sports, financial services and exchanges of talent.
This co-operation between Hong Kong and Shanghai is not only a major fillip for the two cities; it will also have the effect of helping to consolidate co-operation between the Pearl River Delta and the Yangtze River Delta, which is also one of the fastest growing areas in the Mainland. There is no doubt that, economically, Hong Kong and Shanghai are China's two most important cities. So, our collaboration will make significant contributions to the continuing development of China.
I hope from this thumbnail sketch, you can get a feel for how Hong Kong's economy is picking up after a sustained period of fluctuating economic fortunes. Some might say we are putting all our eggs in a closer economic partnership with the Mainland. To this I would simply say that a small open and free economy such as ours, with virtually no natural resources, must have the support of a strong economic hinterland for our survival. For Hong Kong, that hinterland is the Mainland.
We are an integral part of China, but we leverage on our strengths as a Special Administrative Region with our own separate systems based on the rule of law, a level playing field for business, low and simple taxes, our freedoms such as the free flow of news and information; and our clean and efficient administration. These fundamental attributes are the reason we have developed into one of the great global market places, where information is shared, deals struck and the movement of capital and goods is managed: a home to thousands of international companies and tens of thousands of expatriates from all corners of the world.
I am pleased to say that Australians are an important part of our vibrant, cosmopolitan world city. Hong Kong and Australia have traditionally enjoyed close ties going back over a century - not just in business and commerce, but legal, educational, cultural and government-to-government links as well. And recently this link has expanded even further. A real life Aussie "crocodile Dundee" is lending us his expertise and helping us to catch a confused croc stranded somehow in a pond in the New Territories. This is what I call working closely together. Australian expertise is, indeed, at the forefront of Hong Kong's development in every conceivable field of endeavour.
And there are countless Australian companies that give full meaning to the objectives behind this year's business awards, including the participants anxiously awaiting tonight's results. I would like to congratulate the HKABA for recognising the ever closer relationship between Hong Kong and Mainland China, especially the Pearl River Delta, by renaming the awards the Pearl Awards. As the Association so aptly put it, the new name emphasises Hong Kong as the "Pearl of the Orient" and the gateway to the Pearl River Delta and Greater China.
Ladies and gentlemen, it only remains for me to wish the HKABA every success in the future, and to offer hearty congratulations to the winners and all the worthy nominees.
Ends/Friday, November 21, 2003