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Following is the speech by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, at AIESEC Hong Kong's Asia Pacific Exchange and Leadership Development Seminar - Learning Networks Day 2009 today (March 25):
Mr Cyrus Mak, Mr Nicholas Yang, distinguished AIESEC alumni, ladies and gentlemen,
I am delighted to be with you at this year's Asia Pacific Exchange and Leadership Development Seminar of AIESEC. Let me first extend a warm welcome to all overseas delegates.
It is heartening to see so many fresh, eager and young faces who will be our future leaders when the world is facing unprecedented challenges. Every economy is being battered by the financial tsunami, and Hong Kong is no exception. Our unemployment rate rose from a 10-year-low of 3.2% to 5.0% in a matter of six months. In January 2009, the value of our total exports fell by almost 22% - the biggest decline in 50 years. Imports dropped by an equally alarming level of about 27%.
The same worrying situations are being observed in other major economies. Unemployment in the US stood at 8.1% last month - the highest in 25 years. And it is widely expected that the rate would hit double-digit by 2010. Latest figure from the UK showed that the number of unemployed reached two million for the first time in more than a decade. Things in the Asia Pacific region are not any brighter: there were significant GDP contractions in the last quarter of 2008 in Japan (-4.6%), South Korea (-3.4%), Singapore (-4.2%), Taiwan (-8.4%) and Thailand (-4.3%).
Globalisation a fact of life
No one would have predicted that the financial turmoil would spread so quickly and extensively, with its contagious impact so intense and implications so far-reaching. Events in the past months have vividly illustrated what could happen to an increasingly "flat" and globalised world. The advent of information and communication technology has virtually removed all geographical barriers and time zones. Economies which are more advanced can take advantage of the lower labour and capital costs in places which are less privileged. This in turn brings jobs and know-how to the less developed world and opportunities and growth to both the developed and developing economies. This is essentially a good thing.
Globalisation also means that no place is insulated from the problems of their neighbours. There is an old saying that no man is an island. I think that it is true in the modern-day context that no economy can be an island. What has started largely as a sub-prime mortgage problem in the US has ultimately shaken the fundamentals of the international financial and monetary systems and resulted in a plunge in global trade in a matter of months. There is consequently a loss of employment and people's livelihood is directly affected - a decrease of demand in the US and European markets has instantaneously translated into fewer orders for factories in the Pearl River Delta of Mainland China and, as a result, less work for truckers in Hong Kong. The chain effect has hit both our domestic exports and re-exports.
Globalisation is now a fact of life. We cannot and should not turn the clock back. As a small, externally-oriented, and service-based economy with few natural resources, Hong Kong's advancement and prosperity has relied on cooperation and collaboration with our overseas partners through attracting investments and free trade. Our future development will hinge on the same essentials. While there is no text-book solution for the current crisis, there is certainly no room for protectionism or inward thinking, especially for a bona fide free economy like Hong Kong.
Experience in Europe at the earlier phase of the tsunami has shown that the "beggar thy neighbours" attitude and measures would simply be counter-productive and only bring out the worst of the problem. Indeed, the overriding message from recent international summits, including the G20 meetings and the APEC Economic Leaders Meeting, was a call for unity. It would take a unified approach and greater international co-operation to bring our economies back on an even keel.
HKSARG's response to the financial tsunami
Like many other economies, the HKSAR Government is responding to the current crisis with a multi-pronged approach. Our strategy is to stabilise our financial system, support enterprises and preserve jobs. We have made job preservation and creation our prime task. We have rolled out initiatives worth billions of dollars over the last 12 months. We have, among others, introduced a deposit guarantee scheme to instil confidence in our banking system. We have provided HK$100 billion (US$12.8 billion) in loan guarantee to help SMEs survive and continue to do business. Our latest budget comprised HK$10 billion (US$1.28 billion) worth of measures to create jobs and help ease the burden of the community. We are offering about 120,000 job and internship opportunities under different packages.
We will invest heavily in, and fast-track, our infrastructure programme. The advent of various cross-border highway and rail projects would not only create much-needed employment but help place Hong Kong in a more strategic position in terms of our connectivity when the economy recovers. These would enhance our overall competitiveness in the longer term. Last but not least, we have been actively seeking new opportunities for our enterprises and entrepreneurs through a much deeper and broader engagement with the mainland of China – one of the most populated manufacturing bases and consumer markets which is trying to maintain an economic growth of 8%.
Helping our youths
The current economic situation has no doubt brought unique challenges to our young people. Because of young people's lack of working experience, youth unemployment is often much higher than that of adults even at the best of times. This is a common phenomenon throughout the world.
Young people like you are our most valuable asset. They are our future and hope. Helping young people to transit from school to employment has always ranked high on the HKSAR Government's agenda. We will re-double our efforts in this area in view of the bleak economic outlook in the near term. For youths aged 15 to 24 with education attainment of sub-degree or below, we will integrate our two flag-ship youth employment programmes, the Youth Pre-employment Training Programme and the Youth Work Experience Training Scheme, to provide through-train training and employment support.
For fresh university graduates, in view of the expected marked decrease in vacancies in the coming months, we are mobilising the business sector to provide 4,000 internship places in local or mainland enterprises, with government subsidy. The scheme would provide a much-needed entry point into the employment market when vacancies are scarce. It will also present a valuable opportunity for work experience to be gained and a network of contacts to be built up. Seen in this light, the scheme is an anchor for fresh graduates during rough times, and will turn into a springboard for future career development when the economy bounces back.
A lesson to remember
In a global environment where the economic landscape is fast changing and competition fierce, a positive mindset and the right soft skills are more important than an impeccable academic record. People of my vintage often work for the same employer or stay in the same field throughout their career. This pattern of "lifelong employment", however, is unlikely to apply to many of you as the employment market has undergone sweeping changes in the last two decades.
Things are now more volatile; jobs are now more casualised and fragmented; outsourcing and short-term contracts are more prevalent; and services delivered on a freelance basis are increasingly common. Our next generation must therefore be more flexible and versatile. They must possess a sense of proportion and have the perseverance and resilience to turn adversities into opportunities for future prosperities.
The current financial crisis has no doubt given us much food for thought. There is a sobering lesson that I urge you to remember and that is the reckless and greedy actions of a handful of individuals have led to the miseries of so many people around the globe. As you move on, you must not relegate integrity, honesty, moral and family values to the backburner. These are basic values of intrinsic and enduring worth. They are the glue of society. I urge you, young leaders, to be tolerant, prudent and compassionate. More importantly, you must guard against greed and excesses and be prepared to place public interest before private gains.
A unity of mind, purpose and resolve
No one knows how long this economic downswing will last or how deep it will go. Things are likely to get worse before they get better. But we should not lose heart. The world had faced seemingly insurmountable challenges before but we managed to emerge stronger. Our experience in the past - including the Asian financial crisis a decade ago and the SARS crisis in 2003 - has taught us that recovery would be swifter and less painful if we act together in a spirit of openness, mutual understanding and transparency. In the final analysis, a unity of mind, purpose and resolve would enable us to pull through and forge ahead with renewed energy.
I hope that you will all have an interesting and rewarding seminar. I also wish you all overseas delegates a pleasant stay in Hong Kong.
Thank you.
Ends/Wednesday, March 25, 2009
Issued at HKT 11:36
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