Following is the speech by the Chief Executive, Mr Donald Tsang, at the Hong Kong - New Zealand Gala Dinner in Auckland, New Zealand today (September 11):

Distinguished guests, ladies and gentlemen,

     It is a great pleasure to join you tonight.  This is my first visit to New Zealand as Chief Executive and I have thoroughly enjoyed it.  I am most grateful to the New Zealand Government, and to Prime Minister Clark in particular, for such a warm welcome.  The big turnout tonight has made me feel even more at home.

     I know it is extremely hard to compete for attention at the moment with the Rugby World Cup in full swing.  And, I know that for the next month or so the major talking point will be whether the All Blacks can lift the trophy again, 20 years after they won the first World Cup right here in Auckland back in 1987.  One might say I am caught between a ruck and a hard place trying to drum up interest in our small part of the world!  But anyway, I'll have a go, if for no other reason than to remind you all to come up and see us in Hong Kong next year when, yet again, we will host the world’s best Rugby 7s tournament.

     This raises an interesting point: How is it that the world's best Rugby 7s tournament is held annually in a small, Asian city not usually mentioned as a major rugby powerhouse - though we do have an excellent Rugby Union promoting the sport locally and in China?  The secret is a combination of instinct, location, luck, hard work, commitment, and quality.

     Just over 30 years ago a couple of diehard rugby fans looking for a way to promote the sport - and their companies - came up with the idea of hosting an international Rugby 7s tournament in HK.  It was one of the first rugby tournaments in the world to attract commercial sponsorship - so, let's add innovation to that equation for success. Incidentally, a New Zealand team won that first tournament back in 1976 - Kiwis have been with us right from the get-go.  They saw an opportunity to compete internationally that did not previously exist, and they seized that opportunity. New Zealand teams have been with us ever since.  And, nowadays, the tournament is eagerly anticipated by teams from all around the world.  Over the past 30 years the tournament has evolved and progressed to meet, and often exceed, rising expectations.  Now, it is an international brand.  It sets the standard. It has cachet. It has a reputation for excellence.

     In many ways, the Rugby 7s is a reflection of Hong Kong's own strengths and progress over the past three decades.  Our entrepreneurial people have an instinct for a good deal - when they see an opportunity they pick up the ball and run with it.  We are blessed with a prime, deep-water location on the southern coast of China.  As for luck, well no-one can deny we are in the right place at the right time - but we have also made our own luck through hard work, commitment and a dedication to quality.  We have built up Hong Kong as a place of excellence and Asia's world city.

     Like that original Rugby 7s tournament back in 1976, we want New Zealanders to be successful in Hong Kong - today.  We want New Zealand business to set up in Hong Kong.  We'll happily welcome more New Zealand produce, products and services because we know you share the same commitment to quality that we espouse and seek out.  We want New Zealand's professionals to come and work with us, to share their expertise and experience.  We encourage your young people to consider studying in Hong Kong, or to make use of our working holiday scheme.  I'm sure we won't disappoint New Zealand tourists with our eclectic mix of East and West, of new and old, of verdant and vertical, of shopping, eating and entertainment.  And, we even have an investor migrant scheme for those looking for business opportunities in a low-tax environment.

     Despite the distance and differences in cultures, Hong Kong and New Zealand are similar in many ways.  We are both small, open economies.  We have both become much more engaged with the global village over the past two decades - and we have seen the positive results that this has brought to us.  We share the same common law legal system -, esteemed New Zealand judges sit on our Court of Final Appeal.  We both believe in a fair go, and a level playing field for business.  And we both understand - as I mentioned earlier - that a commitment to quality is absolutely essential if you want to make your mark in this world.

     The trouble with small, open economies such as ours is that we have relatively small home markets.  In New Zealand, you have just over 4 million people - we have almost 7 million.  What we've both done, what we need to keep doing, is to look beyond our own backyard for opportunities elsewhere.  For New Zealand, there would be a natural inclination to look across the Tasman for opportunities in Australia, with its population of around 19 million.  That's perfectly understandable given the close links between your two countries.

     What I'm asking you tonight is to look a bit further north, across the South China Sea, to explore opportunities in our neck of the woods. There's a number of advantages we offer that you won' find anywhere else in Asia.

     For a start, you'll find it relatively easy to settle into life in Hong Kong.  English is an official language, along with Chinese.  We have a clean and efficient government.  We have a duty-free port.  We don't have any capital controls.  And, we have low taxes and a simple tax system -16% maximum salaries tax, and 17.5% maximum corporate profits tax. No capital gains tax.  No Death Duties. No VAT or GST.  We have a wide selection of international schools where your children can receive an excellent education.  And if you feel like pulling on the rugby boots, wielding the willow, hiking the hills, or sailing into a beautiful sunset - well, you can do that too.

     If you're wondering how to get started, we've also got that covered. Invest Hong Kong is a government department whose sole purpose is to attract international and Mainland businesses to our city.  They have a concierge service that will help you negotiate the paperwork, which I have to say is quite minimal.  If you are an entrepreneur or a small concern, you can register your business in a day.  Our Trade Development Council also has an extremely comprehensive business-matching service - if you want to source a product, or are looking for a partner in any number of sectors, they can help you do that.  The Pearl River Delta might be the factory of the world, but Hong Kong is the biggest investor in this area by far - and with that investment comes connections and know-how.  We are not just the shop-front, we're the financier and banker as well. Hong Kong people nowadays own roughly 80,000 factories in the Pearl River Delta and we employ 11 million workers there.

     Hong Kong is now home to more than 3,800 international companies with regional operations - that is, companies not just managing their businesses in Hong Kong but managing their Asian operations from Hong Kong.  That's 50 per cent more than we had in 1997. So, we have a broad, deep pool of experience and talent in important sectors such as financial services, accounting, legal services, insurance, transport and logistics, import and export, tourism, retail and catering.  And serving these businesses is a highly educated, outward looking, eager and ambitious workforce.  Our central location in East and Southeast Asia puts you no more than four hours' flying time from any other major cities in the region.  All of this combined provides the perfect platform for New Zealand companies wishing to make a foray into Asia.

     For those wishing to test the waters with products and services, Hong Kong provides an ideal location.  We combine the best of Oriental and Occidental taste and style. People in Hong Kong are eager adopters of new technologies and fashion.  And because we are such an externally-oriented economy on the crossroads of global trade routes, the market will give you fairly quick feedback on whether your product will take off ... or take a dive.

     For those wishing to test the waters in China, Hong Kong offers unrivalled advantages.  Our Closer Economic Partnership Arrangement with China - what we call CEPA - provides Hong Kong companies with supra-WTO access to the Mainland market.  All Hong Kong manufactures enjoy tariff-free access to the Mainland under CEPA, while 27 services sectors enjoy enhanced access.  And, because it is an ongoing concern, 11 new services sectors will be added from January 1 next year.  This free-trade pact with our sovereign underlines how the 'One Country, Two Systems' concept works in practice.  And because Hong Kong has a 'nationality neutral' policy, foreign-owned or controlled companies incorporated in Hong Kong benefit fully from CEPA.  This free trade pact applies nationally - to all of China and its 1.3 billion potential customers.  Since its introduction on January 1, 2004, just over HK$9 billion (NZ$1.67 billion) worth of goods have entered the Mainland market tariff-free under CEPA.  About 480 foreign-linked companies have gained preferential access in the various services sectors ahead of other international competitors.  That's around 45 per cent of all service suppliers approved under CEPA. Alas, we don't seem to have had any New Zealand companies making use of this exceptional opportunity. Ladies and gentlemen, consider this an invitation.

     Leveraging on CEPA is another exceptional opportunity, what we call the Pan-PRD initiative.  This brings together the nine southern provinces of China plus the two Special Administrative Regions of Hong Kong and Macau - that's why it is sometimes also referred to as the '9+2' initiative.  What we are trying to do here is to break down the barriers to trade and investment within China itself.  China is not a unified market by any stretch. Rules, regulations, even Customs procedures can vary from province to province, and even from city to city within a province.  Pan-PRD aims to streamline rules and regulations. It boosts co-operation across many sectors, including trade, commerce, investment, infrastructure, education and culture, IT, environmental protection, tourism, as well as health and disease prevention.  We will play to our respective strengths, with Hong Kong serving as a knowledge bank of international best practice in financial services, shipping and logistics, business and professional services and tourism.  Our goal is to create a South China economic caucus serving some 470 million people - about the same size as the EU or NAFTA. But remember, this is a huge market within a single country, sharing the same language and culture but at different stages of development. So there is considerable potential - and I have to say considerable commitment from those involved - to make rapid progress and advancement.

     Hong Kong will continue to contribute to our country's development in the key areas that define us as a global player, and where we have considerable strength and depth - financial services; professional services, information and technology and tourism; trade and business; and, maritime, logistics and infrastructure.  This is another example of how 'One Country, Two Systems' works - in this case making the most of our advantages and separate systems to assist the development of our country.

     The 'One Country, Two Systems' concept itself reached a milestone this year, when we celebrated our 10th anniversary as a Special Administrative Region of China on July 1.  Over the past 10 years we endured a number of hardships - none of which we were expecting.  The Asian financial crisis, a long bout of deflation, avian influenza, the bursting of the dot.com bubble, international fallout from the 9/11 attacks, and the SARS outbreak in 2003 - all of these were a severe trial to the resilience and determination of Hong Kong people. We also had to find our feet, and define our identity, as a special part of China.  Our new status, coupled with the trials and tribulations we endured, prompted considerable soul searching.

     Now, we have a much better understanding of our place and role in the world.  We continue to engage the international community, to reach out, to play a role in fora such as APEC and the WTO in our own right.  We remain an open, free and progressive society and a city of opportunity; a tolerant and pluralistic society that welcomes people from around the world to come and live and work.  We have also evolved and developed our role as the most international city in China, the major investor in our country and a knowledge bank of international best practice that can be used to help our country grow and develop.  An international city, and a major city in China. 'One Country, Two Systems'.  One city, two roles.

     Ladies and gentlemen, just like the first Kiwi team in the Rugby 7s, New Zealanders have been with us in Hong Kong, sharing our ups and downs, for many, many years.  Today, our economy is in the best shape it's been for decades.  We are deepening our links with the world, and deepening engagement within our country.  We have the contacts, expertise and human resources to help you settle into Asia ... and China.  We have CEPA, which can give you early and enhanced access to one of the fastest growing and most promising markets in the world. We have the Pan-PRD initiative, with all the opportunities that represents in a common market of 470 million people.  And, we have our country's unwavering support to leverage our international contacts and experience globally and nationally, in our development as the premier financial centre in the East Asian time zone.  Just like the All Blacks, it is a winning combination.

     The World Cup comes once every four years.  The convergence of these factors in Hong Kong, now, is a once in a lifetime opportunity. And we would like New Zealanders to share in those opportunities.

     Thank you very much.

Ends/Tuesday, September 11, 2007
Issued at HKT 18:37

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