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FS's speech at US Chamber of Commerce Luncheon (English

Following is a speech by the Financial Secretary, Mr Henry Tang, at Luncheon hosted by the US Chamber of Commerce today (October 14, San Francisco time):

Governor Huang, Lieutenant Governor Bustamante, Mayor Newsom, Mr. Brilliant, distinguished guests, ladies and gentleman,

First of all, I would like to thank the US Chamber of Commerce for organising this luncheon, and for providing me with this opportunity to address the American business community on this special occasion.

Mr. Mayor, it's really great to be back in one of my favourite cities.  It also is a great pleasure for me to participate in this event today with the Honourable Huang Huahua, Governor of Guangdong Province.  This is another demonstration of the growing and mutually beneficial co-operation within our region.

You have just heard from Governor Huang about the remarkable and exciting developments in Guangdong Province.  Today, I would like to give you a brief idea on our close economic ties with the Mainland, especially on how we position ourselves as an international financial centre and capital formation centre for Mainland China.

As part of China, Hong Kong has the privilege of both witnessing the Mainland's rapid growth and fully participating in it.  The continued reform and opening up of the Mainland economy, along with cooperation initiatives like the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Mainland, have further strengthened our economic ties. China's growth has created immense new opportunities for Hong Kong and for international investors in many different areas, such as trade manufacturing, tourism and services.

Increasing economic prosperity in the Mainland has also spurred greater demand for high quality services, and Hong Kong is well placed to take advantage of this development.  Our professionals in the service industries now have more opportunities to establish businesses or work in the Mainland under CEPA. At present, CEPA cover 26 service sectors, including banking, securities, accounting, management consulting, logistics, legal and information technology.
Financial services is unquestionably one of Hong Kong's greatest strengths.  In the Mainland, continued restructuring of the state-owned sector and the flourishing of private enterprises have generated substantial financing needs for their business activities. Given our world-class, well-regulated and highly liquid financial markets, as well as our proximity to the Mainland, Hong Kong has naturally become the venue of choice for Mainland enterprises tapping the international capital market.  The majority of Mainland enterprises that have listed outside the Mainland have chosen the Hong Kong stock market.  For those that have listed in Hong Kong and overseas concurrently, about 70% of the trading is done in Hong Kong. Mainland enterprises are attracted to our equity market not only for efficient access to capital, but also for the badge of quality from our internationally recognised regulatory standards.

Since the listing of the first H-share in Hong Kong in 1993, a total of 316 Mainland enterprises have raised more than US$120 billion through listing on our exchange.  This accounts for 40% of the total funds raised by our stock market. Mainland enterprises currently account for about 30% of the listed companies and the market capitalisation in Hong Kong.  Investor interest in those enterprises is even more impressive trading of shares of Mainland enterprises accounts for 45% of total market turnover.  The 10 largest IPOs in Hong Kong's history all involved Mainland enterprises.  The presence of Mainland enterprises has significantly increased depth and breadth of Hong Kong's equity market.

We expect that the Mainland will continue to be the principal growth driver of our capital market as more state-owned enterprises undergo restructuring.  And our financial services industries will continue to play an important role in this development.

The dynamic of growth works both ways. While Hong Kong has been able to capture the vast opportunities arising from the opening up of the Mainland, the Mainland also benefits from the capital and expertise brought in by Hong Kong.

Hong Kong's advantages are many and well-known - the world's freest economy; rule of law; a level-playing field; a clean government; free flow of information; a low and simple tax regime; and world class infrastructure.  All help strengthen Hong Kong's position as Asia's world city and as the pre-eminent international financial and services centre for the Mainland, and also for international companies which would like to set up their business in the Mainland.  We have not lost sight of the competitive forces unleashed by the increasing globalisation of the world economy, and will continue our efforts in promoting a fair, efficient and quality financial market.

On this strong foundation, we are enhancing our attractiveness as a place where you can take part and have a share of China's growth.  Initiatives like CEPA and the Pan Pearl River Delta co-operation forum produce a win-win-win situation, benefiting both the Mainland's economy and Hong Kong's, along with the foreign companies that invest here.  We are also boosting our cultural, entertainment and recreation offerings so that we are not only a great place to work, but also a great place to live.

Ladies and gentlemen, Hong Kong is Asia's world city because it draws people and capital, goods and tourists and entrepreneurs from all over the globe.  Hong Kong is also the primary platform for doing business with China, and for China to do business with the world.  We look forward to exploring with you these immense business opportunities.

Thank you very much.

Ends/Saturday, October 15, 2005
Issued at HKT 12:14


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