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Following is a speech by the Secretary for Commerce and Economic Development, Mrs Rita Lau, at a business luncheon jointly organised by the Hong Kong Economic and Trade Office in Singapore and the Hong Kong-Singapore Business Association in Singapore today (July 23):
Distinguished Guests, Ladies and Gentlemen,
Good afternoon. A warm welcome to you all for joining us today. The last three days have been my first official trip to Singapore since I assumed office as the Secretary for Commerce and Economic Development last summer. I have been impressed by the vitality of the Lion City and its unique amalgamation of cultures, robust commerce and leisure. I would like to take this opportunity to extend our congratulations to Singapore for successfully hosting the Asian Youth Games 2009 earlier this month. Also, a happy 44th anniversary to the nation in about two weeks・ time. In the coming few minutes, I would like to share with you why Hong Kong represents a world of immense possibilities, where people, technology and ideas converge to create great value for your business amid the global economic downturn.
Hong Kong・s economy
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Being small and externally oriented economies, both Hong Kong and Singapore are vulnerable to the global financial crisis. I note that Singapore has just announced the latest GDP forecast for 2009, a figure of -6% to -4%. For Hong Kong, our real GDP registered a sharp year-on-year decline of 7.8% in the first quarter of 2009. Merchandise exports fell markedly by some 23% during the same period, representing the worst performance since 1954. Business receipts also dropped notably across most service industries. We expect that our full-year GDP forecast for 2009 will be contracted by 5.5% to 6.5%. Nevertheless, the economic growth on the Mainland and signs of the global economy stabilising suggest that the rate of economic contraction in Hong Kong will probably slow down in the coming quarters. With our sound fundamentals and flexible market institutions, we believe that our economy will be able to recover solidly once the global economic environment improves.
Support measures for SMEs
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In the face of a depressed world market and squeezed credit flows, we, like our Singaporean friends, are striving hard to put our economy back on a positive track. To assist the business sector to tide over these unprecedented challenges, the Hong Kong Government has quickly put in place more than $100 billion loan guarantees to business enterprises to ease their liquidity problems. To assist SMEs to develop their overseas markets during these difficult times, we have also increased the grant ceiling for our SME Export Marketing Fund, which aims at helping SMEs expand their businesses through participation in export promotion activities. The Hong Kong Export Credit Insurance Corporation has also enhanced its underwriting capacity and launched a series of additional support measures for providing better protection for our exporters.
Hong Kong・s Mainland advanatges
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Being at the right place at the right time can spell success for your business. While major traditional markets are shrinking, the rapidly growing market in our hinterland, the Mainland, as well as our increasing economic integration with the Mainland offer tremendous opportunities for businessmen from around the world. We concluded the Closer Economic Partnership Arrangement or CEPA in short, with the Mainland back in 2003, with six supplements signed every year since then. This free trade pact provides tariff-free treatment for all Hong Kong products as well as preferential WTO-plus treatments to Hong Kong service suppliers in a total of 42 service areas.
CEPA allows Hong Kong-registered companies, irrespective of their origins, to establish foothold in the Mainland market early. On the other hand, the Hong Kong business platform has been increasingly used by Mainland private enterprises to ：go out； to the international market. I urge all Singaporean companies to capitalise on the benefits of CEPA and our increasing economic integration with the Mainland by making the best use of Hong Kong as a two-way springboard for doing business with the Mainland. Hong Kong businessmen are all geared up to partner with their Singaporean counterparts in grasping the vast opportunities ahead.
Long-term economic development policies
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Crisis always comes with opportunities. Looking forward, the global economic downturn has put us at a juncture to re-visit our development strategy for sustainable growth. We are glad that the Singapore Government shares this view and has recently set up the Economic Strategies Committee to identify ways to enhance the long-term competitiveness of your economy.
In Hong Kong, just last month, the Task Force on Economic Challenges (TFEC), led by our Chief Executive proposed a number of measures to develop six knowledge-based industries in which Hong Kong enjoys advantages. These sectors are educational services, medical services, testing and certification, environmental industry, innovation and technology, and cultural and creative industries. I would like to spend the coming few minutes to share with you our plans for boosting the development of two of these sectors which are under my portfolio, namely the innovation and technology and the cultural and creative industries.
Innovation and technology
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Hong Kong possesses all the pre-requisites for developing the innovation and technology industries. Our world-class universities, sound and well-tried legal system, excellent infrastructure, robust intellectual property protection regime, business-friendly environment and entrepreneurial culture are all essential elements for supporting applied R&D work. These strengths are complemented by our proximity to the Pearl River Delta region, the economic powerhouse of the region.
With Shenzhen・s momentum in technology development and Hong Kong・s strengths in sales and marketing, capital formation and brand promotion, there are a lot of opportunities for the two places to co-operate with and complement each other in our economic development. For example, we have recently developed a collaboration model of ：R&D in Hong Kong, Manufacturing in Shenzhen； and the ：Shenzhen Hong Kong Innovation Circle； framework. Under this framework, DuPont, a world renowned US enterprise, opened its Global Thin Film Photovoltaic R&D Centre in the Hong Kong Science Park in March this year and is setting up its manufacturing facilities in Shenzhen. Separately, we are actively exploring the possibility of new financial or tax incentives to encourage the private sector to increase investment in R&D. We welcome Singaporean investors to make the best use of this framework to expand their innovation and technology businesses in Hong Kong.
Cultural and creative industries
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Over the years, our cultural and creative industries have become a major driving force of our economy, contributing more than HK$60 billion (US$7.7 billion), or around 4% of Hong Kong・s GDP on an annual basis. At present, we have close to 32,000 creative industry-related establishments, with more than 172,000 practitioners engaging in advertising, motion picture, television, design, architecture, planning, animation and comics as well as arts and digital entertainment.
To speed up the development of our creative economy, we set up ：CreateHK； on June 1 this year, a dedicated office to drive creative industries development, respond to industries・ demands more effectively and better serve the trade through one-stop shop services. We have also set aside HK$300 million (US$38.5 million) for the CreateSmart Initiative to support the development of creative industries in the coming three years. Other key initiatives include the setting up of the Digital Entertainment Industry Support Centre to support the development of our digital entertainment industry (including comics) and the second phase of the Cyberport Digital Entertainment Incubation-cum-Training Programme. I understand that the Singapore Government is also keen to develop the creative industries and have introduced different initiatives. There are plenty of rooms for co-operation and experience sharing between us in this area.
Closing remarks
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In closing, I would like to thank the Hong Kong-Singapore Business Association, the Singapore International Chamber of Commerce and the Singapore Chinese Chamber of Commerce and Industries for their efforts in helping to organise this luncheon. I welcome you all to visit Hong Kong for vacation and doing business. I look forward to meeting you in Hong Kong in the near future.
Thank you.
Ends/Thursday, July 23, 2009
Issued at HKT 16:03
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