*********************************************************

Following is the speech by the Secretary for Economic Development and Labour, Mr Stephen Ip, at official opening of DHL Central Asia Hub today (August 4) (English only):

John, David, PO (Chung), distinguished guests, ladies and gentlemen,

It is my great pleasure to join you this afternoon at the official opening of DHL Central Asia Hub. Today is not only an important day for DHL, but also an important day for the Hong Kong International Airport as the presence of the Central Asia Hub of DHL - the world's largest express cargo integrator - will strengthen our airport's position as the premiere air cargo hub in the region.

The importance of a strong air cargo industry for an externally oriented economy like Hong Kong can hardly be overstated. We are the world's 11th largest trading entity. One-third of our imports and a quarter of our exports move in and out of Hong Kong by air. We are proud to be the world's busiest airport for international air cargo, and we are determined to enhance our capability as a leading air cargo hub. This requires the concerted efforts of the Government, the Airport Authority and the air cargo industry.

A liberal air services regime is instrumental in the development of an air cargo hub. To this end, the Government has been progressively liberalising air services arrangements for both passenger and cargo traffic with our aviation partners. This has enabled airlines, both local and foreign, to operate more services to serve more markets from Hong Kong. We will continue our efforts to extend our aviation network.

Mainland China is the fastest growing economy in the world and the third largest merchandise importer. The World Trade Organisation (WTO) predicts that by 2020, China will become the world's second largest exporter. We need to enlarge our hinterland for cargo to capitalise on this thriving market. The Airport Authority has taken various initiatives to expand the catchment area of our airport into the Pearl River Delta (PRD), the "factory of the world". Our vision is to make HKIA the "home airport" for the entire PRD, which is the source of Hong Kong's air cargo.

Ladies and gentlemen, both the Government and the Airport Authority are firmly committed to providing a favourable environment for our cargo industry. But we also need investors to realise the business potential of this burgeoning market. The express cargo market in particular is expected to grow at a spectacular rate of 13% per annum in the next two decades. In this respect, I congratulate DHL on its smart decision to build the Central Asia Hub in Hong Kong, which is a vote of confidence in our airport and in the future of Hong Kong's air cargo industry.

As the Policy Secretary also responsible for employment, I must thank DHL for its $780 million investment, which will create 900 jobs for Hong Kong. I am sure DHL will find the investment very rewarding and I wish DHL every success in its future endeavours.

Thank you.

Ends/Wednesday, August 4, 2004

NNNN