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Following is the speech by the Chief Executive, Mr Tung Chee Hwa, at the Hong Kong Business Community Luncheon on the Policy Address 2005 at the Hong Kong Convention and Exhibition Centre this (January 17) afternoon:
Anthony, Ian, chairmen, consuls-general, distinguished guests, friends, ladies and gentlemen,
I am getting a free lunch. You have to pay to get in to hear me talk. I am sorry about that. I'm happy to see so many representatives of the Hong Kong business community gathered here today, and to have this opportunity to speak to you at the traditional post-Policy Address luncheon. The SAR Government remains committed to working closely with you, the people who generate economic activities, because such co-operation is crucial to the future development of Hong Kong.
This Policy Address was delivered against a background that under "One Country, Two Systems", our society remains free, pluralistic and based on the rule of law. This Policy Address was also delivered against a background that our economy is now in its best shape since the Asian financial crisis. This recovery is unique. After six years of deflation, our economy is leaner and a lot more competitive. Property prices have rebounded but there is no bubble. Indeed the recovery is based not on speculation, but on adding value to our vibrant service sector. The recovery is also broadbased and supported by both domestic spending and domestic investment. We are optimistic that this year our economy will continue to grow although at a more moderate pace.
We have taken most seriously the criticism levelled against us on governance. There have clearly been inadequacies. We have done much soul searching in the areas we have failed and taken stock of the experiences gained and lessons learnt. Indeed, over the past year, we have focused on improving our governance, raising the quality of our administration and delivering "people-based" governance. In the months ahead, we will continue our efforts in this direction.
The title of this Policy Address is "Working Together for Economic Development and Social Harmony". Social harmony is the prerequisite for social stability and economic prosperity and economic prosperity is a prerequisite for social progress and better livelihood for all.
People attach great importance to social harmony. In the face of fundamental political changes and rapid economic and social changes since 1997, the Government has been working hard in this area on many fronts.
We will ensure the efficiency of our free market and its capacity to create wealth. We will take practical measures to mitigate antagonism between different strata. We will seriously address the problem of poverty to break the cycle of inter-generational poverty.
We will do our best to maintain the stability of the middle class. We will create a favourable environment for their personal advancement by providing more learning opportunities, enhancing the quality of education, increasing training and retraining opportunities. We will work hard to provide more opportunities for their participation in public affairs.
We will work hard to enhance Hong Kong people's understanding of our great country as she develops into a great economic power and as she takes her rightful place in the community of nations of the world.
We will promote inclusiveness, unity and respect for different viewpoints. On the basis of upholding the "One Country, Two Systems" principle and Hong Kong's prosperity and stability, we will advocate rational discussion on different issues to seek common ground while accommodating disagreements.
The Government has an undeniable responsibility to promote social harmony and stability. Our most important task is to implement "people-based" governance. All our policies must be based on our community's core values and contribute to the long-term and overall interest of Hong Kong. But building a harmonious and stable Hong Kong requires the active support of different sectors of the community. In this respect, I am sure the business community has an active and decisive role to play.
The Government's work for the next two and a half years will be focused on economic development. Let me first remind you of the unique competitive advantages we have. Under "One Country, Two Systems", Hong Kong continues to be a free, pluralistic society based on the rule of law. We have a mature market economy and world-class infrastructure, a clean government and a highly professional and dedicated civil service, a simple tax system and low taxes, good social and public order. Hong Kong benefits from rapidly expanding Mainland economy which is supportive to our overall efforts. If you look around, you will find Hong Kong is the only city in Asia endowed with these advantages.
In the years to come, these competitive advantages will continue to serve us well. We will continue to strengthen our capabilities in the four core industries of Hong Kong, namely financial services, logistics, tourism and trade supporting services sectors so that they will continue to hold their leadership position in Asia. Furthermore, we will continue to deepen and broaden CEPA and strengthen the co-operation between Hong Kong and Guangdong. We will actively participate in the development of the Pan-Pearl River Delta and foster bilateral co-operation with other Mainland provinces and cities.
Further efforts on these fronts are important because they will help to sustain our economic growth. However, in the longer term, the rapid pace of globalisation and advances in science and technology will continue to bring about changes in the way we live and in the way we do business. To maintain and enhance our living standards, Hong Kong must move towards higher value-added outputs. Only by increasing the knowledge content of our economy and continuing to innovate can we maintain our advantages and sustain our development.
Overseas experience shows that during economic restructuring, cultural and creative industries can help to propel the economy forward. In the United Kingdom, for example, after its government adopted a policy to promote creative industries, this economic sector achieved average annual growth of 8% from 1997 to 2001, far exceeding the overall economic growth rate.
In the Asia-Pacific region, with over two billion people, Hong Kong is well positioned to develop cultural and creative industries: we have a highly open and free society, where information, capital, talent and goods can move freely. We have the rule of law, providing effective protection for intellectual property. We are a pluralistic and inclusive society, a confluence of Eastern and Western cultures, and a cultural cradle for overseas Chinese. We have a rich variety of cultural activities and life-styles conducive to inspiring creativity. We stand to benefit from the many opportunities now arising in the Mainland following its own promotion of cultural industries in recent years. We have people who have always been good at learning, skilful at adaptation and strong on creating things.
I first mentioned about the culture and creative industries in my Policy Address two years ago. Although some progress has been made, we have seen limiting factors in some key areas, such as cultivating creative talents, fostering creativity, commercialising creative ideas and financing of culture and creative industries, which have held back the full development of this sector.
We recognise the Government's role is an enabling one. In order for us to move this forward, we will establish, as soon as possible, a consultative framework for cultural and creative industries, so that relevant representatives from these industries including outstanding personalities from outside Hong Kong can participate. We will work together to develop vision, to set direction and organisational structure that is necessary for us to move forward.
How can we leverage on our competitive advantages, how can we consolidate and put to better use of the resources we have already deployed and what are the key areas of focus? I hope our work will lay a strong foundation for the development of the cultural and creative industries into the future.
Social progress depends on the availability of talent. We have been investing heavily in education to nurture local talent and to give everyone the opportunity to pursue excellence. At the same time, like other world cities, Hong Kong must attract talent from around the world. In a knowledge-based economy, knowledge is more important than capital. The larger the pool of talent, the easier it is for a place to attract investment, thereby promoting economic development and increasing employment. We need to broaden existing policies in order to attract the best and the brightest talent from the Mainland and around the world. We are working on a new strategy and we will take this forward during the course of this year.
I also want to take this opportunity to emphasise to you the Government's determination to continue the long-held policy of maintaining a business friendly environment which is conducive to investment. This has to be a cornerstone to "people-based" governance for investment is crucial for economic growth. We will continue to promote a level playing field for all. We will reduce unnecessary regulations. And we will continue to make efforts to reduce bureaucracy and administrative inefficiency.
In order to be successful in our development strategy, the Government will continue to invest in education, in environmental protection, in maintaining a good health system and law and order.
Earlier on, I spoke of the importance of social harmony. Unfortunately, for those who are not equipped for the knowledge economy, their livelihood is worse off than before the recovery. Increasing poverty will further divide our society. We are a compassionate society and we need to extend a helping hand for those truly in need.
Our strategy to fight poverty is through economic development, education, and training and retraining. We also have a comprehensive social welfare system. However, we must urgently address the issue of inter-generational poverty. These children must be given the opportunity to blossom into their full potential through the rich soil of education and the sunlight of opportunity. We need to address poverty from a macro perspective. We need to explore practical ways to address immediate needs. I have asked the Financial Secretary to chair a commission to alleviate poverty.
Fighting poverty is the responsibility of the Government but it cannot just be the Government. The business sector can also step in to help. Many of you are doing this already. Let us together do more. I hope with the NGOs (not-for-profit sectors), the business community and the Government, this tripartite effort will not only be effective in fighting poverty, but also help to build a more harmonious society together.
Ladies and gentlemen, as I said at the beginning, the Government remains committed to working closely with the business community, and listening to your concerns. It is your effort, your investment and your dynamism that has made Hong Kong into a success story. Let us work together to lift Hong Kong to new heights as Asia's world city.
Thank you very much.
Ends/Monday, January 17, 2005
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