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Following is the speech by the Chief Secretary for Administration, Mr Henry Tang, at Hong Kong Trade Development Council Luncheon in Paris, France today (May 14, Paris time):
Distinguished Guests, ladies and gentlemen,
I am delighted to be here in Paris. This is one of my favourite cities, and I have visited many times. I admire the Parisian architecture, the vibrant arts and culture scene, the high quality products and designs. I have also made a number of friends in this great city; it is good to see so many of them here today.
It is also encouraging to note the strong relations between Hong Kong and France. Our bilateral relations date back more than 150 years. Today, they are stronger than ever. More than 600 French companies have a presence in Hong Kong, including some of the world leaders in banking, engineering, transportation telecommunications and fashion. They bring expertise and more than a touch of the world famous French flair to our city.
From 2003 to 2007, trade between France and Hong Kong grew at an average annual rate of 11.2 per cent. That is quite good and I am confident we can do better still.
In the next few minutes, I hope to persuade more of you to take a fresh look at Hong Kong and explore the new possibilities in our part of the world.
I assure you there are plenty of opportunities to launch new operations or expand existing ones in Hong Kong.
As we are enjoying lunch, served with a glass or two of French wine if we choose, it is appropriate that I begin by highlighting a new opportunity for the wine trade in Hong Kong.
From February 27 this year - the start of our financial year - we have exempted duties on wine. As you may expect, it was a generally popular decision. Up to mid-April 2008, the volume and value of wine imported into Hong Kong has increased by about 78% and 215% respectively, compared with the same period last year.
Hong Kong already has an advantageous location, world-class transport and logistics infrastructure and experience in promoting, storing and distributing wine. I hope French wine merchants will be attracted by the new opportunities that duty free trade will undoubtedly bring, and help make Hong Kong the centre of wine distribution in Asia.
When I spoke at the Hong Kong-France Business Partnership Plenary Session in Hong Kong last October, I mentioned that we were planning to lower our tax rates. That has happened. From this fiscal year, profits tax has been lowered by one percentage point to 16.5 per cent. Salaries tax was also lowered by one percentage point to 15 per cent.
We have no GST, no VAT, no capital gains tax and only income sourced in Hong Kong is taxable. And when it comes to the very moment when your soul bids farewell to your body, the good news is: you don't have to pay any inheritance tax!
Low and simple taxes are a significant draw for overseas companies setting up a base in Hong Kong. More than 6,400 overseas and mainland companies have a presence in Hong Kong, including the more than 600 French firms I mentioned earlier.
In addition to a low and simple tax system, Hong Kong retains all the characteristics that have served the city well for over a century. We uphold the rule of law underpinned by an independent judiciary, we protect free flow of capital and unfretted flow of news and information, and we maintain a level playing field for business, no matter where you come from.
Since the establishment of the Hong Kong Special Administrative Region 11 years ago, our way of life has not changed and we still remain a capitalist city. We continue to run our city with a high degree of autonomy, thanks to the unique "One Country, Two Systems" formula. The promise laid down by the Basic Law, our constitutional document, has been kept.
Indeed, not only have we managed to remain unchanged, but made steady and progressive pace in our constitutional development. Both the Central Government and the Hong Kong Government are fully committed to attaining the ultimate aim of universal suffrage to elect the Chief Executive and to form the Legislative Council in accordance with the Basic Law.
Responding to the Hong Kong people's wish to have universal suffrage, the Standing Committee of the National People's Congress in December 2007 made it clear that the Chief Executive may be elected by universal suffrage in 2017 and that our legislature may be formed by universal suffrage in 2020. Meanwhile, we have to build consensus on the two electoral methods for 2012 to lay a solid foundation for attaining universal suffrage in 2017 and 2020.
We have also remained in step with the advances of globalisation.
In its January 28th edition, TIME Magazine coined the name "Nylonkong", placing Hong Kong alongside London and New York as examples of globalisation. It was quite a compliment for us, although, as the youngest city of the three, we still have some catching up to do. And indeed we have a great deal to learn from great cities like Paris.
We are working hard to further streamline procedures and improve the efficiency of our international trade. One major initiative in these aspects is our landmark free trade pact, the Closer Economic Partnership Arrangement, or CEPA for short with the mainland of China, which was launched in 2004. It currently covers 30 services areas, including banking, logistics, insurance, tourism, convention and exhibition and professional services.
Under CEPA, companies in Hong Kong can gain preferential access to mainland markets. All it takes is that you have to be nationality neutral. So French firms incorporated in Hong Kong can enjoy no less benefits as our local companies.
Although Hong Kong is our country's most important international centre for business, cross-boundary co-operation extends beyond the realms of doing business. One important area is the environment.
Environmental protection always remains high up our agenda. Because much of the pollution in our region comes from outside our own jurisdiction, we are working with our neighbours in Guangdong region to clean up the air according to some ambitious pollution reduction targets aiming to be reached by 2010.
Ladies and gentlemen, in Hong Kong we like to describe ourselves as Asia's world city. To enhance our status as a modern international city, we have a strong focus on developing arts and culture. We are firming up plans to establish a world-class cultural hub on a 40-hectare site on the Kowloon waterfront. It will be home to a variety of performing arts, galleries and museums, as well as commercial enterprises. Our goal is to enrich our people's lives, stimulate our cultural and creative industries, and attract visitors from around the world.
No doubt we will be looking to France as an example of how to nurture our cultural heritage and promote the arts, innovation and creativity.
In a little less than three months, our city and our country will be in the global spotlight. The Beijing Olympics will open on August 8th and Hong Kong has the honour of being a co-host city for the Games. We are proud and privileged to have the once-in-a-lifetime opportunity to stage the Olympic and Paralympic Equestrian events.
I wish the French team well at the Olympics and look forward to even closer relations between Hong Kong and France.
Thank you.
Ends/Wednesday, May 14, 2008
Issued at HKT 22:04
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