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Following is the speech (English only) by the Financial Secretary, Mr Henry Tang, at the Hong Kong Exporters' Association Christmas Luncheon at the Island Shangri-La Hotel today (December 12):

Cliff, Ladies and Gentlemen,

It is my great pleasure to share the joy of the season with you today. Not only am I amongst so many good friends and acquaintances, but also we are concluding the year with a much brighter note.

2003 is no doubt a roller-coaster year for Hong Kong. While we did rather well in the first quarter, we were hit by SARS in late-March, which only subsided in June. Our GDP took a plunge in the second quarter with tourism-related sectors taking the hardest hit. But I have always had a fundamental faith in our community and our people. And what we have witnessed in the past few months is again how Hong Kong's resilience and can-do spirit outshine the challenges.

A key pillar of our economy is of course our external trade sector. Even in the second quarter, our total exports grew undeterred by 12.2%, and a further growth of 7.1% was registered in the third quarter. It is no exaggeration that external trade is an anchor for Hong Kong, in both good and tough times.

I am cautiously optimistic that Hong Kong's economy has turned the corner. With the signing of CEPA (Closer Economic Partnership Arrangement between the Mainland and Hong Kong), with the launch of the "individual visit" scheme for Mainland visitors, with the trial run of personal reminbi businesses in Hong Kong, our budding growth is gaining strong momentum. What we now have to do is to make the best of these opportunities to sustain our economic recovery.

As exporters, you should pay your particular attention to CEPA, which offers Hong Kong goods and services preferential market access in the Mainland, ahead of and beyond China's WTO commitments. I am sure you are doing precisely that. On the goods side, which most of you are more interested in, 273 kinds of Hong Kong products will enjoy zero tariff starting 1 January 2004. It is not hard to imagine that manufacturers of brand-name or high value-added products, would be in a particularly good position to play out the combined strengths of Hong Kong and CEPA.

The government is doing everything we can to help you take advantage of CEPA and beyond. The Hong Kong Trade Development Council will set up CEPA Business Service Centres in Beijing, Shanghai, Guangzhou and Hong Kong to promote business partnerships between the Mainland and Hong Kong. We are also proactively exploring partnership opportunities arising from the 2008 Beijing Olympics and the 2010 Shanghai World Expo through missions to both Beijing and Shanghai.

Similarly, Hong Kong Export Credit Insurance Corporation will continue to offer tailor-made facilities to help exporters maximize the vast opportunities arising from CEPA and our tighter integration with the Pearl River Delta. It has undertaken to step up consultations with related trade associations so that more exporters can benefit from its services.

Ladies and gentlemen, I don't want to speak for too long on this festive occasion. I would like to offer my most sincere compliments to the Hong Kong Exporters' Association for promoting Hong Kong's export and re-export trade since its establishment in 1955. After all, trading is our lifeblood. It's what Hong Kong does best. I wish you all a Merry Christmas and good business in the year ahead. Thank you.

Ends/Friday, December 12, 2003

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