Email this article Government Homepage
Speech by SFST at the Opening Ceremony of the Citigroup
International Case Competition 2005 (English only)

    Following is a speech (English only) by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, at the Opening Ceremony of the Citigroup International Case Competition 2005 today (October 24):

Professor Chan, TC, Distinguished Guests, Participating Team Members, Ladies and Gentlemen,


     I am most delighted to join you again at this year's Opening Dinner of the Citigroup International Case Competition.  First of all, may I extend my warmest welcome to all of our overseas participating teams.  Hong Kong is well known as Asia's world city.  You will find here our sophistication of being an international city, characterized by rich cultural diversity and cosmopolitan lifestyle, and an Asian flavour, combined with global connections.  I hope you will enjoy a most unforgettable visit here.  May I also congratulate the HKUST Business School and the Citigroup for your success in staging this major event for another time.  Last, but definitely not least, may I express my appreciation for Citigroup Foundation's generous and continuous support for this meaningful educational activity.

     Tonight, we are here to kick off the third Citigroup International Case Competition in Hong Kong.  The remarkable success of the event in the last two years is a showcase of how Hong Kong could excel itself in the cultivation and promotion of business and financial education.  Also, as what Professor Chan has acclaimed, the success has further strengthened our position as an international centre for intellectual exchange.

     This year, we have 19 teams of outstanding students from renowned business schools worldwide to compete for the championship.  In the rest of the week, you will be competing against the best.  You will be resolving managerial dilemma and strategic challenges faced by global business leaders.  And I am sure you will be excited to know that this year's case is even more dynamic than before.  You will be working on an Asian actual business study. While only one of the teams will win the trophy, all members will bring home the more valuable experience of cross-cultural exchange of ideas and team work.  And of course, the new "Explore Hong Kong" activity will certainly glitter up your good memory of this event and your stay in this city.

Hong Kong as an International Financial Centre

     As the Secretary for Financial Services and the Treasury, this evening I shall also take the liberty to briefly talk about our financial services industry and the role that our industry is playing in the further development of the Mainland's financial sector. I would like to highlight particularly the position that Hong Kong is placing in the grooming of financial services talent for both Hong Kong and the Mainland.

     Hong Kong is a leading international financial centre. We are one of the major global providers of financial services and products.  We now run the 9th largest stock market in the world and 2nd in Asia in terms of market capitalisation which exceeded US$970 billion as at the end of September 2005. Indeed, in 2004, our market capitalisation was more than five times of our GDP. This ratio was much higher than that in the United Kingdom of 1.3 times, the United States of 1.4 times and Japan of about 70%. The presence of Mainland enterprises, which I will elaborate further later, and some large international corporations has greatly increased the depth of our stock market.

     Meanwhile, our foreign exchange market is the world's 6th largest in terms of daily turnover.  The outstanding amount of external transactions has reached US$783 billion, leading us to become the 15th largest banking centre in the world and the 3rd largest in Asia.  And on the insurance side, our market has been developing rapidly over the past decade.  In 2004, total gross premiums reached US$15.7 billion, representing a strong growth of 19.5% over the previous year. With just about five years' implementation since December 2000, the total net asset value of our Mandatory Provident Fund Schemes already accumulated to US$17.8 billion.  I am also glad to tell you that Hong Kong is one of the most prominent asset management centres in Asia.  According to the Fund Management Activities Survey conducted by our Securities and Futures Commission, the total assets of our fund management business reached US$464 billion at the end of 2004, representing a significant increase of 23% over the previous year.  

     Today some 3 800 international companies have their regional offices in Hong Kong. Our free capitalist economy, level playing field for business and sound legal system have nurtured entrepreneurship and plenty of business activities here. Our robust financial regulatory framework, which is on a par with the international standards, together with a critical mass of foreign investors and extensive global links, have further strengthened Hong Kong as the prime choice for investing in the region and amongst the global economies. In 2004, Hong Kong was the largest equity fund-raiser in Asia and the largest recipient of foreign direct investment in Asia, both ahead of Tokyo. Yet, above all, the key to Hong Kong's continual success as a leading financial centre is the existence of our rich pool of local and overseas financial services talent who possess ample knowledge, experience and exposure in the international market. Coupled with our decades of experience in servicing the Mainland market, our financial services professionals from all fronts, such as asset management, debt financing and capital formation, are all well qualified to support also the further development of the Mainland economy.

Strengthening Hong Kong's Position in Mainland's Development

     You all know that the Mainland economy is expanding robustly. Its GDP has grown at a rapid rate to US$1,417 billion in 2003 which accounted for 12.4% of the global GDP in Purchasing Power Parity terms.  Its economy grew by over 8% for the past ten years. China's impressive growth rate, with its scale of development, has been presenting enormous opportunities for the world. Being at the doorstep of China, Hong Kong is a natural choice for overseas investors to enter the Mainland market, as well as for the Mainland economy to gain access to the world's arena. The further development of the financial markets of both places is being sustained by Hong Kong's key economic strategy of "Leveraging on the Mainland, Engaging ourselves globally".

     Great opportunities are in front of us. Today, Hong Kong has become the prime capital formation centre for the Mainland. Our stock market provides a useful channel for Mainland enterprises, including financial institutions, to raise capital from investors in Hong Kong and overseas. In Hong Kong, Mainland enterprises have raised over US$128 billion since the listing of Tsing Tao Brewery as the first H-share company in 1993.  Currently, about 30% of listed enterprises in Hong Kong are from the Mainland. These 318 listed enterprises, of which only a minority is also listed in other overseas markets, account for roughly 34% of our market capitalisation and 45% of our market turnover. About 70% of their trading is conducted in Hong Kong. And I firmly believe that our role in raising funds to support the further development of the Mainland economy will continue. With our favourable debt financing infrastructure, I also hope that more Mainland enterprises could raise funds by issuing bonds in Hong Kong.  

     Towards this end, we will continue to strengthen our relationship and co-operation with the Mainland.  The Closer Economic Partnership Arrangement, also known as CEPA, has been implemented since January 2004.  CEPA has further strengthened the investment co-operation for both places.  Our financial services providers are given first mover advantages to enter the Mainland financial markets. We are in a much more favourable position than the rest of the world.

     Looking ahead, we will work further to enhance the business opportunities for both places through the Pan-Pearl River Delta ("Pan-PRD") Region Co-operation Framework. The region covers Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou, Yunan, Macao and Hong Kong.  We accord high priority to this task.  Just to give those of you from abroad some sense of scale, when we talk about the Pan-PRD region, we are talking about the equivalent of one-fifth in geographic size but one-third in demographic population of the Mainland. There we have a huge concentration of newly affluent customers. On the financial services front, the Pan-PRD regional co-operation will certainly broaden Hong Kong's market access to the Mainland's financial ventures including capital raising, fund management and investment consultation.

     The highlight in the coming year will be a Pan-PRD Regional Co-operation Financial Services Forum hosted by us in next March.  This coming forum, with the theme, "Hong Kong as the Prime Capital Formation and Global Investment Platform for the Mainland", will have the participation of relevant leaders of the Mainland government authorities, as well as representatives from enterprises in the region.  We aim to enhance their understanding of various financial services offered by Hong Kong, and to encourage them to use our fund raising and investment services to access the international market through this occasion.

Talent Grooming for Both Places

     I strongly believe that the strengthened economic cooperation between the Mainland and Hong Kong has been providing engines for grooming financial services talent for the Mainland.  A number of Hong Kong's financial institutions have now established a presence in the Mainland through setting up branches, representative offices, joint ventures or acquiring stakes in Mainland financial institutions. And through CEPA, greater access of Hong Kong's financial institutions into the Mainland market has been facilitated. Hong Kong's financial institutions, which subscribe to the best international practices of accounting, auditing, disclosure and governance, could contribute positively and directly for better internal control and higher corporate governance standards in the Mainland. As Hong Kong's financial institutions expand business in the Mainland, we are bringing with us not only capital, but also professional expertise, market and product knowledge and advanced management systems to the Mainland's financial sector. Capitalising on our advantages as an international financial centre, it will be encouraging to see that Hong Kong is also well positioned to play such a key role in talent grooming for the Mainland financial institutions.

     Side by side with this grooming of talent for the Mainland is competition from the Mainland. No matter whether you are interested in the financial services industry or in other professions, you are not competing just with people in Hong Kong. You are also competing with people from the Mainland and in the Mainland, and indeed, people from all over the world. On the part of the Government, we attach great importance to enhancing the quality of education and the grooming of talents in various professions. The fact that we devote around one-quarter of our budget to education speaks for itself. Certainly, our tertiary institutions like the HKUST and professional bodies also play a key role in expanding and upgrading our pool of human resources.  One of the best examples is the significant growth in the number of Chartered Financial Analysts in Hong Kong.  I was told that in 1992, we had only 40 CFAs.  But through our continued efforts over the past years, now we have over 2 500 of them serving in different financial services sectors.

     To foster better co-ordination of efforts made by the Government, the industry and the academia on financial services manpower development, we have set up the Advisory Committee on Human Resources Development for the Financial Services Sector in June 2000.  The Committee comprises members from respective government bureaux, regulators, industry and professional associations and training providers.  The incumbent Chairman of the Committee is Mr TC Chan, Citigroup Country Officer, Hong Kong & Head of Greater China, who is with us tonight.  

     Under the leadership of TC, the Committee has formed four working groups dedicated to deliberate measures to enhance human resources in the financial services. I certainly would lay my full confidence on TC's work and are looking forward to this quest for excellence.

     On the part of the students, I would encourage you to better prepare and establish yourselves in this globalized economy. To be a world-class financial services talent, you need to be well equipped and to get connected with people from different places. Speaking from my personal experience, after joining the Chase Manhattan Bank in 1973, I was posted to its New York Office in 1976 where I stayed for about three years. I have also worked in Toronto and London for a total of seven years. Not only has the overseas exposure enriched my knowledge in banking and securities, it has also broadened my perspective and horizon, laying a solid foundation for my subsequent career development. I would encourage you to look beyond Hong Kong to identify opportunities in the Mainland and in the rest of the world.

Closing Remarks

     Ladies and gentlemen, the Citigroup International Case Competition is the first international business case competition held in Hong Kong and it has by now been held for its third time.  This meaningful event is providing a forum for exchange of ideas and sharing of experience among top students around the world.  I wish the Competition every success and all of our visitors a pleasant and enjoyable stay in Hong Kong.  Thank you very much.

Ends/Monday, October 24, 2005
Issued at HKT 20:49


Print this page