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Following is the speech by the Chief Executive, Mr Tung Chee Hwa, at the Hong Kong International Races Gala Dinner at the Hong Kong Convention and Exhibition Centre this (December 12) evening:
Chairman Ron Arculli, Consul-Generals, distinguished guests, ladies and gentlemen.
It is, as always, a pleasure to be with you to celebrate the Hong Kong International Races. And I would like to echo Ron's words of welcome, most especially to those of you who have travelled from overseas. I trust you will enjoy your stay in our city and enjoy the very best of Hong Kong hospitality that we can offer.
Over the last few years, Hong Kong had to face many challenges on the economic front. Since the Asian financial crisis in 1997 and the bursting of the asset bubble in Hong Kong, our property prices have fallen off very substantially to date. This has led to serious deflation. In the last five years, our GDP deflator has fallen 21%. Also, as a result of globalisation, we have seen jobs migrated from Hong Kong to lower cost economies. This has meant that our unemployment rate has risen to new heights. Household incomes have fallen, particularly for our lower income groups. All of these factors have placed a serious strain on government finances, and has created a serious budgetary deficit.
Throughout these difficult years, my government has a vision and a strategy to reposition Hong Kong and provide a basis for its continued economic prosperity. Our strategy has been to leverage on our competitive advantages - our world-class business services, our logistics and financial services, legal system, and the quality of our financial markets. It is our intention to be the most sophisticated and efficient platform for the world to do business with China, and for China to do business with the rest of the world.
Our great strength has been the full backing of the Central Government. CEPA, or the Closer Economic Partnership Arrangement, which we signed recently with the Central Government, reflects the support we are receiving. Under CEPA, Hong Kong companies will be able to get into the Mainland market ahead of the rest of the world. In addition, we have entered into a closer working relationship agreement with the Guangdong province to create a dynamic economic region in the greater Pearl River Delta. Furthermore, a similar agreement for closer working relationship has been made with Shanghai to enable our businesses and professionals to participate in the economic development of Shanghai and the Yangtze River Delta.
I am glad to report that since the signing of CEPA and the other agreements on closer collaborations, business confidence in Hong Kong has improved. Our GDP grew by 4% in the third quarter of 2003 and despite SARS we now forecast a 3% growth in GDP in real terms this year. We have double digit growth in exports, and there has been a sharp upturn in growth in the services sector. Unemployment has been trending downward, property market is trending up, and the stock market is at a two-year high. Most importantly confidence is returning. A great deal more still needs to be done but I think at last we are seeing the light at the end of the tunnel.
Our ambitions for Hong Kong are aptly paralleled by the achievements of the Hong Kong Jockey Club. In just a few years it has grown from a regional racing club to a sporting organisation of international stature.
Yet providing betting on horse races is just one dimension of the Club's contribution to Hong Kong, a very important sporting contribution. It is an important source of government revenue, providing 9.5 billion dollars in betting duty last year. Through the one billion dollars it regularly donates to Hong Kong charity it makes a very significant contribution to the development and well-being of our entire community. Most recently the Club was given with a licence to provide legal football betting service to help, among other thing, counter the problem of illegal gambling in Hong Kong. Given the Club's substantial experience, high standards of integrity and wide public support, I trust that the Club would provide a football betting service that works in the best overall interests of Hong Kong.
The Jockey Club, like the rest of Hong Kong, has been facing major challenges as a result of betting environment outside of Hong Kong, as well as the declining betting revenue as a result of economic restructuring in Hong Kong. I am glad that the Jockey Club management has risen up to these challenges and continued to contribute substantial tax revenue to Hong Kong and substantial donations to charities in our community. I would like to take this opportunity to express my appreciation, Ron , to you, to the entire Jockey Club for what you have done. Keep up your good work. You have the support of the Government and the entire community.
Let me conclude by once again thanking the Club for this magnificent event. It has already brought Hong Kong a week of world class sporting entertainment, and on Sunday we will see the culmination in four outstanding races. I wish all of you, all those who are betting, the best of luck!
Thank you very much.
Ends/Friday, December 12, 2003
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