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Following is the speech by the Chief Executive, Mr Donald Tsang, at the annual reception for new foreign investors at JW Marriott Hotel, Admiralty this afternoon (July 14):
Ladies and Gentlemen, good afternoon, and thank you for joining us today at this annual reception for new foreign investors.
Hand on heart, this event never fails to inspire, and always makes me happy. Every year since Invest Hong Kong was established, in July 2000, the number of new investors has reached a record high. In 2007, the department assisted about 253 new completed investment projects. That's one new completed project per working day. The Director-General assures me that in 2008 he will try to do even better.
Traditionally, we have marketed our city as a place to do business at four distinct levels: first, as a market in its own right; second, as a co-ordination centre for South China; third, as a base for the whole of China; and fourth, as a base for the East Asian region. I will speak briefly about each of these areas, but I also wish to highlight two emerging trends.
Hong Kong as a market in itself might seem to be rather modest bearing in mind that we have a population of only seven million. But, with a per capita GDP of almost US$30,000 we are a market with substantial spending power. On top of that, we should also add to our seven million residents the 28 million visitors we entertained last year. More than half of those visitors were from the mainland of China, and many of them came here with the specific purpose of shopping.
So, our domestic market is actually much larger than the size of the resident population suggests. Many luxury brands have spotted these opportunities and set up flagship stores to capture this business. That is why Hong Kong is home to the largest Armani store in the world outside Milan, and why LVMH, Hermes and many more leading brands see Hong Kong as such an important market.
Hong Kong's role as a nerve centre for South China manufacturing and procurement is well known and understood. Our neighbouring hinterland is now widely recognised as the factory of the world. Hong Kong has provided much of the capital, the managerial expertise and the design capability to make that possible. Just a generation ago, Shenzhen was a small fishing and farming village. Today, it stands as a modern testament to the determination, flair and acumen of entrepreneurs and business people in Hong Kong and our cousins in adjoining Guangdong. It shows that when we work together, enormous potential can be unleashed.
The same applies to Hong Kong's role as a springboard for international companies entering China, whether to source quality products or as a platform for sales and marketing. Although there are other options – thanks to China's opening-up policies introduced some 30 years ago – Hong Kong is still by far the most reliable route, particularly for small and medium enterprises (SMEs) that need to manage China business.
The number of overseas and Mainland owned regional operations in our city is now approaching 4,000. Scarcely a week goes by without news of another company setting up here in Asia's world city. We are the Number 1 base for regional operations, and we work hard to maintain this position.
Now, to the two emerging trends.
The first is the increasing use by Mainland companies of Hong Kong as a springboard for entry into global markets. Just six years ago, Invest Hong Kong did not have any Mainland clients. In the first six months of this year, Mainland companies accounted for almost 20% of our completed investment projects. Many are using Hong Kong as their base for all international operations. With the launch of Invest Hong Kong's nationwide campaign in June last year, I am sure these figures will continue to grow. And of course we will continue to reach out to Mainland companies and deepen economic engagement in our country through our Hong Kong offices in Beijing, Guangzhou, Shanghai and Chengdu.
The second is new impetus to Hong Kong's development as a global financial centre. Earlier this year TIME magazine coined the phrase "NyLonKong" – the grouping together of New York, London and Hong Kong as the three major cities that will manage global financial flows in different time zone. This is a great vote of confidence in our future; and also an acknowledgement of how Hong Kong has positioned itself already. In financial services, companies including Deutsche Bank, J P Morgan, ANZ, and Credit Suisse, to name just a few, have planned for major expansion locally. Some companies are relocating key personnel with global responsibilities to Hong Kong from their previous bases of New York and London. This is a trend we welcome wholeheartedly and is set to continue and deepen as Hong Kong further develops its role as China's major international financial and business services centre, and as a vital cog in the management of global financial flows.
Ladies and gentlemen, thank you once again for attending our reception this afternoon. More importantly, thank you all for your vote of confidence in Hong Kong. We are very happy that you have chosen to establish your businesses here in Asia's world city, and to enrich our society with your talent, your drive, your ideas ... and of course your investment!
Thank you very much.
Ends/Monday, July 14, 2008
Issued at HKT 18:28
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