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C. Direction of Economic Development
14. As we move into the 21st century, we are faced with a revolution in information technology and accelerating globalisation. In the 1960s and 1970s, before the Mainland's opening up and reform, we seized the opportunity to transform ourselves into an international trading hub. Financial services, trade, logistics and tourism have gradually become the four main pillars of our economy. Following nearly 30 years of reform and opening up, China has created a world economic miracle and emerged as one of the world's most important economies. In today's world, all developed countries are contemplating their economic and trade relations with China. If Hong Kong is to embrace the era of globalisation, our primary task must be to find an appropriately important role in the development of our country. Globalisation and the rise of China are now synonymous - adapting to globalisation and integrating with the Mainland are not two contradictory paths of development for Hong Kong. Given that Hong Kong has been reunified with the motherland, there is all the more reason for us to develop into a cosmopolitan city in which we can all be proud, that can play an important role in the peaceful rise of our country, and can also exert a positive, international influence.
15. The National 11th Five-Year Plan states clearly that "support will be given to Hong Kong's development on fronts such as financial services, logistics, tourism and information services, and the maintenance of Hong Kong's status as an international centre of financial services, trade and shipping". This recognises our dominant industries and their important function in our country's development. In this regard, amongst all the cities in China, Hong Kong's role is unique and irreplaceable.
16. At the Economic Summit convened last month, we explored not only the opportunities and challenges brought about by the National 11th Five-Year Plan but also took a critical look at our weaknesses and shortcomings, and endeavoured to chart the way forward for our sustainable development.
Financial Centre
17. We need to consolidate and enhance our position as an international financial centre in the Asian region. This is consistent with our national and regional interests. Our leading position on the financial front is underpinned by various factors, including the rule of law, market system, freely convertible currency, protection of property rights, sound infrastructure, good corporate governance, the free flow of information, high efficiency, a business-friendly environment, and business practices aligned with international standards. To maintain our leading position, we must pursue further liberalisation. For instance, the source of enterprises seeking to list in Hong Kong should be broadened. We should quickly amend existing listing rules to enable well-established and qualified foreign enterprises from different parts of the world to list in Hong Kong. We also need to continue to enhance our regulatory regime to keep it in line with international standards. The Financial Reporting Council will come into operation early next year. It can help attain world-class standards by strengthening corporate governance and investor protection. In addition, we will host the Asian Financial Forum to reinforce Hong Kong's prestige as an international financial centre.
18. Hong Kong is now experienced in the Renminbi (RMB) business after running it smoothly for two years. Expanding RMB business represents a natural progression and a development priority for Hong Kong that is consistent with the national policy. The State Council is actively studying the scope for further expansion of RMB business in Hong Kong, which includes allowing Hong Kong importers to settle in RMB the accounts of direct imports from the Mainland and the issuance of RMB bonds in Hong Kong. The SAR Government is fully prepared to launch these two types of new business as soon as possible.
19. To meet the demands of the Mainland market, Hong Kong can develop a whole range of risk management instruments. In this regard, we will conduct an in-depth study on the development of the commodity futures market. We will also endeavour to attract to Hong Kong some of the offshore securities investment business of Mainland insurance agencies. The international insurance and reinsurance markets in Hong Kong can provide reinsurance services for the Mainland's fast-growing insurance industry.
Trade and Logistics
20. The trade and logistics sectors account for a significant share of Hong Kong's output value and employment. As China emerges as the "factory of the world", with growing affluence and increasing consumption, many new opportunities arise for Hong Kong's trade and logistics sectors. Since the implementation of CEPA, domestic exports have started to pick up again. From January to September 2006, the value of exports to the Mainland with Hong Kong Certificates of Origin rose by 37% year-on-year.
21. Hong Kong is a founding member of the World Trade Organisation (WTO). At present, we rank 11th in the world trade hierarchy. Over the years we have built a prominent image in promoting international free trade. Last year we hosted the WTO's Sixth Ministerial Conference and succeeded in putting the Doha Development Agenda negotiations back on track. Regrettably, subsequent negotiations were unable to sustain the momentum created at the Conference. Negotiations were suspended in July this year, as key members could not narrow their differences. We nonetheless persevere and seek key members' support to reopen negotiations as soon as possible. Meanwhile, in response to new trends in world trade, we will seek to enter into more economic and trade arrangements with our trading partners, so our goods and services can gain access to overseas markets under more favourable conditions.
22. As regards logistics, our cargo catchment has in recent years gradually extended from the eastern to the western side of Pearl River Delta (PRD). Large volumes of cargo are being transported via river. To enhance efficiency, the Government will amend the law to introduce multiple entry permits for river trade vessels, reduce permit fees, and streamline application and entry procedures.
23. To enhance the air cargo handling capacity of Hong Kong International Airport, continuous efforts will be made to increase the number of cargo freighter parking stands and to expand its air cargo terminal facilities. The SAR Government has been taking progressive steps to expand the city's air transport network, conclude more bilateral air services agreements, and take practical follow-up action to expand our air transport capacity. All these serve to reinforce our position as an international and regional aviation hub.
24. To enhance the efficiency of cross-boundary cargo flows and inspection, we have reached a consensus with Dongguan authorities for an express clearance system to be introduced at the Liaobu inland control point when it comes into operation later this year. The SAR Government and the Mainland authorities will continue to communicate and jointly study the development of cross-boundary infrastructural projects.
(To be continued)
Ends/Wednesday, October 11, 2006
Issued at HKT 11:20
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