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Speech by PSED at Inaugural Ceremony of Emirates Shipping (HK) Ltd (English only)

    Following is the speech by the Permanent Secretary for Economic Development, Ms Eva Cheng, at the Inaugural Ceremony of Emirates Shipping (HK) Ltd today (May 24) (English only):

Mr [Abdulaziz] Bannai, Mr [Vikas M] Khan, distinguished guests, ladies and gentlemen,

     I am delighted to be here this afternoon to celebrate the inauguration of the headquarters of the Emirates Shipping Line in Hong Kong.

     Emirates' decision to expand its business to Hong Kong represents a vote of confidence in Hong Kong's strength as an international maritime hub and business centre. They join the ranks of some 1,160 international companies that have established their headquarters here in Asia's World City. These companies have made this important decision based on a set of advantages we offer to investors:
* an open and externally oriented economy with an understanding of international markets as well as the Mainland and Asia;
* the autonomy and the free market provided for under the "one country two systems" principle;
* our rule of law;
* a clean government;
* free flow of information;
* and last but not least a simple, low tax system with no capital gains tax or, should I mention, the just abolished estate duty.
     Hong Kong therefore has a very favourable landscape for doing business. On top of this, for companies in the shipping sector, Hong Kong has much to offer as an international shipping and maritime centre. This is the result of a successful partnership among the world's largest maritime services providers, our world-class port, and the large number of shipping lines operating in Hong Kong and today we are celebrating the addition of a new member. Our shipowners currently hold, control or manage 39 million tons, which is equivalent to 7% of the world's total tonnage, a volume comparable to the shipping centres of Greece, Norway and London. Since 1997, the total tonnage on the Hong Kong Shipping Register has increased by an awesome 527%, from 5.7 million to over 30 million tons, concrete evidence of the international maritime community's rising confidence in our shipping register and the quality service we provide.

     The steady increase in our registered tonnage has spurred the growth of other maritime sectors and benefited the overall economy of Hong Kong. The loans and advances for use by the shipping sector in Hong Kong reached HK$26.5 billion in December 2005. The gross premium generated in the ship underwriting business by Hong Kong insurers in 2005 amounted to over HK$1 billion, representing an increase of 80% over the annual premium in the year 2000. In 2004, the revenue from ship brokerage grew by over 80% to HK$287 million. These statistics show that Hong Kong will continue to be a leading ship brokering centre for the expanding market on the Mainland and for new building contracts at Chinese shipyards.

     As the focal point for maritime related services in the region, Hong Kong provides financing, insurance, legal, arbitration, management and other services for the industry. Fuelled by the rapid development on the Mainland, the demand for container transport, crude oil, and other raw materials will continue to grow, creating attractive opportunities for the international shipping market.

     In Hong Kong we aim to capitalise on these trends to enhance our position as an international maritime centre; 2005 saw the production of 12 million tonnes deadweight of new ships in China. They provide ready clients for our maritime services business in Hong Kong, where we can offer high quality support services, with the added advantage of proximity in terms of location, culture and language.  

     Under the Closer Economic Partnership Arrangement (CEPA), Hong Kong service suppliers can set up wholly-owned enterprises on the Mainland to provide certain international ship management and shipping related services. CEPA arrangements are available to companies registered in Hong Kong. Emirates' establishment in here like other international companies registered in Hong Kong, opens the way for potential expansion on the Mainland.

     The Hong Kong Government seeks to enhance cooperation with the international and the Mainland shipping industry to realise our advantages as a leading shipping and maritime centre, to contribute to the development of the Mainland and to add new momentum to our economic growth, an impressive 8.2% for the first quarter. Hong Kong's achievements demonstrate the benefits of a close partnership between the Government and the industry. We will continue to engage the industry and seek its views in charting the development of the maritime sector.

     I am confident that Hong Kong will continue to provide a very favourable business environment in which Emirates and other shipping lines will be able to grow. Today's inauguration of Emirates Shipping (HK) Ltd strengthens the facilities and services offered to the shipping and maritime industry. The Government will continue to take the necessary steps to maintain Hong Kong's position as a centre for world-class shipping and maritime services and to facilitate a favourable environment for business.

     Finally, I wish Emirates great success and prosperity in Hong Kong.

     Thank you.

Ends/Wednesday, May 24, 2006
Issued at HKT 15:57