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Following is the speech by the Financial Secretary, Mr John C Tsang, at the Forum on China's 30 Years of Reform: The Way Forward and Hong Kong's Role at Hong Kong Baptist University this morning (December 10): (English only)
Professor Ng (Ching-fai), Sir David (Akers-Jones), Dr (Vivienne) Luk, Distinguished Guests, Ladies and Gentlemen,
Good Morning.
I am deeply honoured to have been invited to participate in this forum celebrating three decades of economic reform in China. This has been the world's greatest transformation in the history of human civilisation, and we in Hong Kong have been fortunate enough to be living in the midst of this momentous change and benefitting from the growth of our nation. I shall present a brief discourse on this remarkable exercise from a Hong Kong perspective.
Looking back at the enormous changes that have taken place and looking at the achievements that have been made, it is hard to believe that only 30 years have passed. During that time, our nation's economy has grown 61 times and from one of the poorest countries in the world, China now ranks as the world's 4th largest economy. Today, China's sustained growth and China's overall economic health have an important bearing on the global economy. It is, indeed, an amazing transformation.
Two main areas of reform account for this meteoric growth. The first concerns the opening up of China's economy and its integration with the rest of world through international trade and foreign direct investment. Most notable in this respect was the Mainland's accession to the World Trade Organisation in 2001. Today, China's exports cover a wide range of manufacturing goods from garments to sophisticated machinery. Exports and imports have each grown at an average annual rate of 25% since 1979.
Foreign direct investment (FDI) has provided important support for this huge growth in trade, and Hong Kong has played a major role in this, providing more than 50% of China's total FDI during much of the 1990s. With a developed financial market and close ties with the Mainland, Hong Kong will likely continue to be the most influential source and the principal channel of FDI to China in the years ahead.
The second main area that helps explain the Mainland's success is its continued pursuit of market-oriented reforms. Overall, China's approach has been progressive but sensible, a philosophy that has been famously described by Deng Xiaoping as "crossing the river by touching the stone".
Over the last 30 years, reforms have touched every aspect conceivable from the rural sector, state owned enterprises to wages, prices, trade and the exchange system, just to name a few. Most recently, the financial sector and capital market development have been particularly prominent.
As China's international financial centre, we in Hong Kong have played an essential role in these developments. We like to describe our city as the 'gateway' between the Mainland and the international community, and it is an apt description indeed. Hong Kong has brought together Mainland's fund-raisers and international investors and provided an effective international financing platform for China.
Today, about 450 Mainland-related companies are listed on our stock market. They account for about half the market capitalisation and two thirds of the market turnover.
Ladies and Gentlemen, as the Mainland enters a new phase in its opening up and reform process, Hong Kong will continue to be an effective testing ground and a knowledge bank of international best practice.
This is an exciting time to hold this forum. I wish you all an enjoyable time, and I look forward to hearing your thoughts about how Hong Kong can serve the reform process in our nation in the next 30 years.
Thank you.
Ends/Wednesday, December 10, 2008
Issued at HKT 10:28
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