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Speech by FS at Penta Forum


Following is the speech by the Financial Secretary, Mr Henry Tang, at the opening session of the Penta Forum this morning (February 9) (English only):

Mr Kwok (Kwok-chuen), Professor Tsui (Lap-chee), ladies and gentlemen,

I am very happy to have a chance to join you this morning to help open the Penta Forum. It is certainly a beautiful morning after a week of rain, and I hope this is a good omen. I would also like to take this opportunity to wish everyone in this Lunar New Year a very healthy and successful Year of the Monkey.

We are certainly starting 2004 on a strong note, with major economic indicators, local and global alike, turning for the better. We are, however, cautiously optimistic in the sense that although the figures are turning better, we are not out of the woods, and I do look forward that in future we should all work together towards a common goal. Even though recently our neighbouring regions have been plagued by avian flu, our people and our financial market have reacted rationally with no panic. The Administration has devised a comprehensive contingency plan to deal with possible scenarios, and our previous experience, a costly experience since 1997, in handling the avian flu has certainly heightened our Government's alert as well as the vigilance of the public, so I am confident that our economy will not be significantly affected. Of course, it still very much depends on how the avian flu plays out. We are so far rather lucky that we have not been hit by any yet, but even if we were to be hit by a case, an isolated case or two, I believe our people have had enough experience and SARS last year has built up our tenacity and resilience towards these incidents.

To sustain our economic growth, we must continue to harness our strengths and capture new growth opportunities. Among these opportunities is of course the CEPA. We have been in close liaison with the Mainland to ensure a smooth, timely and effective implementation of CEPA. Both sides are determined to resolve any difficulties and bottlenecks expeditiously to allow our businesses or our service industries to reap the most benefits.

We understand that more needs to be done to make the most out of this superior platform. On the part of the Government, I can assure you that we will continue to make our best efforts to help our businesses participate in, and contribute to the dynamic growth of our country.

Next week, I will be leading a high-level delegation of professional services representatives to Beijing. We have lined up meetings with the relevant ministries for these representatives to discuss qualification recognitions and entry thresholds issues. We hope that certain progress on this front could be made to enable our professional services to gain a larger market share in the Mainland.

CEPA is featured in one of the brainstorming sessions this morning, and we very much look forward to your feedback, views and ideas. It is true that many people have said we have not made the most out of this CEPA platform yet, but I do believe that it is widely recognised as one of the most superior platforms we have. CEPA is a landmark arrangement by the Central People's Government and Hong Kong and it is the first free trade agreement that both of us have signed in any way. So, I do think collective views gathering and collective brainstorming sessions like the Penta Forum will certainly help us make this platform even better.

A major economic initiative announced by the Chief Executive in his Policy Address in 2004 is the establishment of the Economic and Employment Council. This Council will advise me on policies and initiatives to promote economic activities, encourage inward investment, facilitate business and create employment opportunities.

These four inter-related issues are key to our economic prosperity. We envisage great synergies among them, but yet, compromises have to be made on some occasions. We call upon Council members from different backgrounds, including political parties, business and labour representatives and the academia, to participate constructively in policy deliberation and build consensus across policy areas.

The establishment of the Council is also a new attempt to improve our governance. We hope that through this Council, better communication between the Executive and the Legislature could be established, and good economic policies could receive the support of the Legislative Council Members if it is necessary to amend any Ordinance.

Of course, we cannot have a sustainable growth without the fiscal deficit being addressed. The Government has been running operating deficits for six consecutive years since 1998-99. Restoring fiscal balance is not only our constitutional responsibility, but also a wide consensus shared by most of our people.

To prepare for the 04-05 Budget, I have been consulting our community widely. One of the comments, which I constantly hear, is that the Government should seriously control our expenditures and improve our efficiency, before considering raising revenues. I agree with that.

I have announced in the Legislative Council last October that the target of restoring fiscal balance would be postponed to 2008-09 and in the coming five years, our recurrent expenditures would be gradually reduced to $200 billion. Under the principle of "Big market, Small Government", public expenditure would also be controlled and reduced to 20%, or below, of our GDP. As stated in the Policy Address, we will seek to strike a delicate balance between reducing the fiscal deficit and safeguarding people's livelihood, and give our community adequate time to recover.

I notice that the themes for the brainstorming sessions today do not touch on the budget issues specifically. Yet, I would like to ask you also to think about these issues while you discuss the topics this morning. I would very much look forward to your views.

On this note, I wish you all a very fruitful, productive and, I hope, fun session, and I look forward to hearing from you this evening your insights and suggestions to bring Hong Kong to new heights together.

Thank you very much.

Ends/Monday, February 9, 2004


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