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Following is the speech (English only) by the Financial Secretary, Mr Henry Tang, at the Presentation Ceremony of 2004 Hong Kong Awards for Industry this (November 15) evening:

Distinguished guests, ladies and gentlemen,

I am most delighted to join you this evening for the Presentation Ceremony of the Hong Kong Awards for Industry. Being an industrialist myself before I joined the Government, I do feel like home coming to see so many familiar faces among you.

The role of the manufacturing industry in Hong Kong's economy cannot be over-emphasized. Even though we have seen the majority of our factories moving northwards, there are still many high value-added factories, flourishing in various specialised areas.

More importantly, Hong Kong has expanded its manufacturing hinterland across the boundary over the Greater Pearl River Delta and beyond. At present, Hong Kong industrialists are employing over 10 million people in the Pearl River Delta alone, that is about three times the working population of Hong Kong, or more than our entire population. The Mainland has indeed provided a much bigger platform for our industrialists to flex their muscle and achieve their full potential.

The relocation of our factories also helped release the precious human capital in Hong Kong for deployment in higher value-added activities and enabled us to serve more efficiently as the command centre for the region. And Hong Kong continues to be the best location for the headquarters of these industries where strategic decisions are made, control of diverse plants is exercised, R&D are conducted, prototypes are perfected, marketing efforts are synchronised, logistics are coordinated, and so forth.

And in the process, the services industry in Hong Kong, many of which are manufacturing-related, has expanded exponentially, transforming Hong Kong into a high value-added and knowledge-based business services hub underpinned by a strong manufacturing base in the Mainland. The HKSAR Government recognizes that creativity is a key to development of a knowledge-based economy. Over the years, we have developed a body of intellectual property laws which aims to reach the highest international standards and assure our investors of a free and fair environment in which to do business.

Recent developments of the Mainland economy have given a fillip to our economic growth. No doubt you would expect me to say a few words on CEPA. Indeed I would. CEPA is a living document which provides a framework under which the Mainland and Hong Kong continue to explore ways to further our economic co-operation to the benefits of both sides. It has ushered in a new economic order for Hong Kong and the Mainland, and provides a conduit for greater regional synergy as Hong Kong participates actively in the Pan-Pearl River Delta economic co-operation and development.

As you are well aware, just three weeks ago, I signed the legal text on further trade liberalization under the second phase of CEPA. In addition to products under the 374 tariff codes already enjoying zero tariff for import into the Mainland since January 1 this year, products under 713 additional tariff codes will also enjoy tariff-free access starting from January 1 next year. For those goods which are not yet produced in Hong Kong, they will start to enjoy zero tariff after both sides have confirmed the commencement of their production. Virtually all of the Mainland's major consumer goods and manufacturing components have been covered by CEPA. So far, the Hong Kong SAR Government has approved over 2 600 applications of certificate of Hong Kong origin for CEPA on goods produced in Hong Kong valued at close to $1 billion, covering textiles and clothing, medicine, plastics, electrical and electronic products, chemicals, etc.

The objective of CEPA is to foster closer economic ties between the Mainland and Hong Kong and to allow industries in both places to realize the fullest potential of that co-operation. CEPA has much inducement to Hong Kong industrialists to expand their existing local production facilities or to establish new plants in Hong Kong. For instance, there are already two Chinese pharmaceutical companies deciding to move into the industrial estates for production of Chinese medicine. We expect the export value of goods under CEPA to pick up further as new manufacturing facilities are established in Hong Kong.

To succeed in the ultra-competitive global market, a simple cost advantage is definitely not enough. It is important that we continue to enhance our competitiveness, move up the value chain, adopt innovation and technology, and develop our own products and own brand names. Through the Hong Kong Awards for Industry, we promote and give due recognition to the pursuit of excellence in product design, technological application, care for the environment, expansion of export market, productivity enhancement and adherence to quality management. And our world standard intellectual property regime will help create an environment where creativity can flourish and hard work can be rewarded.

Ladies and gentlemen, I have always been impressed by my fellow industrialists about their perseverance, their "can-do" spirit and their relentless pursuit of excellence. I am equally impressed tonight by the achievements of the winners of the Hong Kong Awards for Industry who rightly deserve the praise the awards endow. My congratulations to the winners as well as to every one who has entered into the competition. You have demonstrated your commitment to achieve the best and provided role models for others in your fields to emulate.

Thank you.

Ends/Monday, November 15, 2004

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