Following is a speech by the Secretary for Commerce, Industry and Technology, Mr John Tsang, at the opening ceremony of Asian Electronics Forum today (May 17) (English only):
Dr Chan, Distinguished Guests, Ladies and Gentlemen,
Good morning to you all. This is the first Asian Electronics Forum, and it is my great pleasure to speak at the opening of the inaugural function today. First of all, I would like to extend Hong Kong's warmest welcome to all our guests who have come a long way to join us here today at Asia's World City. And let me wish the Forum every success and everyone a most pleasant stay in Hong Kong.
The electronics industry is one of the foundation industries in Hong Kong. Indeed, our electronics industry is the largest merchandise export earner, accounting for some 40% of our total exports. We are one of the largest exporters of calculators, radios and telephone sets in the world. In 2003, the total export of electronics products amounts to HK$732 billion, increasing by some 20% over the previous year.
The success of Hong Kong's electronics industry is attributed to our industry's commitment to product quality, sensitivity to market trends and responsiveness to changing customer needs. Of equal importance are our fundamental strengths which include our world-class infrastructure, our low and simple tax system, our level playing field, the rule of law, our robust and effective intellectual property protection regime, and the free flow of capital, information, people, services and goods. These attributes also explain why we have continued to fare impressively in attracting foreign direct investments. In fact, we are the second largest recipient of foreign direct investment in Asia, after the Mainland.
While our industries are very successful businesses by international standard, the question is how can we move even further up the value chain, take an even bigger portion of the world market and create new wealth for our people.
In this regard, we are taking a multi-pronged approach to carry Hong Kong to a new level of achievement, and I would like to share with you today our initiatives in three major areas; namely, promotion of innovation and technology; leverage of our strengths and experiences; and deeper integration with our neighbour, the Pear River Delta.
First, innovation and technology. When I assumed office last August as Secretary for Commerce, Industry and Technology, I held a firm commitment and a clear vision to drive innovation and technology developments to fuel our economic growth and facilitate our economic restructuring. I was convinced that we must capitalise on innovation and technology in order to upgrade our industries, enhance our competitiveness and create business opportunities.
The provision of technology infrastructure is an area where we attach great importance. Our Science Park opened in June, 2002, with strong occupancy of innovative and forward looking tenants from Hong Kong, and from different parts of the world. I understand that you will see the Science Park tomorrow. I am sure that many of you will be interested in our excellent facilities. These infrastructure investments have been developed with the concept of clustering and knowledge spillover in mind. It is, indeed, gratifying to see the aggregation of electronics and integrated circuit design companies in the Science Park, and they are set to provide new impetus for Hong Kong's industrial and technological developments.
We recognise that innovation and technology developments cannot succeed without an adequate pool of professional talent. With the building up of a respectable science base in Hong Kong over the past six years, we have been able to draw eminent and world-class scientists and researchers from all over the world to come to Hong Kong.
At the same time, we make the promotion of entrepreneurship a cornerstone of our innovation and technology initiatives. Good technological developments are made more valuable if they are commercialised and made applicable to industry. In fact, we have just spun off a photonics packaging technology business, and we are looking forward to more commercialisation efforts.
Ladies and gentlemen, to stay ahead of the game in this competitive global environment, not only must we break new ground through the application of innovation and technology, we must also build upon our own strengths and experiences. Financial services, logistics, tourism, and professional and producer services are among our leading service sectors that have the best potential to grow. They are externally oriented, with a large proportion relating to service trade with the Mainland and other economies in the region. This unique attribute dovetails nicely with Hong Kong's role as a service hub for the region, as well as the major platform for China's trade with the world.
In our globalised market place, no one should be shielded from competition. The manufacturing sector, including the electronics industry, is undergoing transformation to re-position itself at the top of the value chain. We are seeing encouraging signs that our industries are engaging in more and more original design manufacturing (ODM) by providing their own engineering and design solutions to customers, instead of following the traditional original equipment manufacturing (OEM) mode.
So much for our effort in empowering our businesses to break new grounds and build upon past successes. Now let me talk a little about what we are doing to boost our competitiveness as an economic entity. For Hong Kong, our future hinges very much on how best we could capitalise on the enormous comparative advantages of combining our innovation and technology in a successful service economy with the spectacular manufacturing base in the Pearl River Delta.
Hong Kong and the Pearl River Delta have a combined population of almost 50 million people. The Pearl River Delta is the most prosperous region in China. It is the largest exporter in the Mainland; and, it is, by far, the most popular destination for foreign investment. It is also estimated that the Pearl River Delta region produces US$300 million worth of goods for export everyday. With 60,000 strong Hong Kong related enterprises employing more than 11 million people in the Pearl River Delta region, Hong Kong could become the research hub in facilitating the technology upgrading of the whole region. With the signing of the Closer Economic Partnership Arrangement (CEPA) between the Mainland and Hong Kong, there will certainly be far greater co-operation and interaction by both the public and private sectors on both sides of the boundary in making full play of our complementary assets and abilities.
Ladies and gentlemen, Hong Kong is not standing still. We are moving to tackle the many challenges confronting us. We are adding value to our economic activities through the application of innovation and technology, through the leveraging of our strengths and experiences and through the deep economic integration with our neighbours in the Pearl River Delta. We are laying the foundation for sustained growth in an even high plane of prosperity.
Ends/Monday, May 17, 2004