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Following is the speech by the Secretary for Commerce and Economic Development, Mrs Rita Lau, at the Hong Kong Exporters' Association Christmas luncheon today (December 11):
Tom (Tang), distinguished guests, ladies and gentlemen,
Good afternoon. I am delighted to be here today to share with old friends and new acquaintances the joy of Christmas.
Christmas is a season for sharing love and gifts. It is also the period when our export trade usually reaches its peak. Around this time last year, however, Hong Kong exporters experienced the greatest challenge in recent decades. The global financial crisis resulted in weak overseas demand and a drastic decline in international trade. As an open and export-oriented economy, Hong Kong was hit hard.
To deal with the crisis, the Government has adopted the strategy of "stabilising the financial system, supporting enterprises and preserving employment". As the external economic environment began to stabilise and our relief measures started to take effect, Hong Kong's economy improved in the second and third quarters. This Christmas we see brighter economic prospects than what we saw last year.
While the global economy has entered the initial stage of recovery, we note that the merchandise export performance is still unsteady. As the recovery path ahead could be bumpy, there are reasons for us to be cautious. We consider it appropriate to continue to enhance the availability of trade finance to our enterprises, many of which are still coping with the impact of the financial crisis. The Government has therefore extended the $100 billion Special Loan Guarantee Scheme (SpGS) for another six months until June 30, 2010. The extension of this time-limited scheme, which was introduced to help enterprises tide over the credit crunch, could lay a solid ground to deepen the economic recovery.
Apart from the SpGS, since last year the Hong Kong Export Credit Insurance Corporation (ECIC) launched various enhancement measures to strengthen support for exporters. The ECIC is now providing higher cover for exporters where risks allow. For a number of emerging markets, i.e. United Arab Emirates, Kuwait, Chile, Brazil, the Czech Republic, Malaysia, Uruguay and Morocco, higher cover is provided and lower premiums are required. Moreover, the processing time for credit limit applications has been shortened.
Our experience in the latest financial crisis tells us how much prosperity suffers when trade suffers. We firmly oppose protectionist measures which hinder free flows of goods and services and remain a staunch supporter of free trade. APEC Leaders have made this clear again at the APEC CEO Summit 2009 last month.
As Hong Kong is committed to promoting free trade, we have to understand where the opportunities lie so that we can take full advantage of them. At this initial stage of economic recovery, we note that import demand in the advanced economies remains sluggish. However, improvements are apparent in emerging economies. Emerging markets provide new business opportunities, and we endeavour to support our exporters in opening up new markets.
Last month, Hong Kong and New Zealand concluded negotiations on the Hong Kong and New Zealand Closer Economic Partnership Agreement (CEP Agreement). Subject to the completion of necessary legal verification and domestic approval processes, signing of the Agreement is expected to take place in the first half of 2010. The Agreement will be Hong Kong's first free trade agreement with an overseas economy. The Agreement will provide Hong Kong exporters with enhanced market access to the New Zealand market, promote investment flows, and bring about significant benefits to both economies.
The fastest growing Mainland market is not a market we can afford to neglect. With the Central Government's policy of encouraging domestic consumption, huge business potentials are there for Hong Kong. CEPA facilitates local firms in opening up new markets on the Mainland for Hong Kong products, both goods and services. We have also been keeping close contacts with the Mainland authorities in helping our enterprises explore the Mainland market, including facilitating them in taking part in Mainland trade fairs to explore business opportunities.
To reach out to more buyers, enterprises can attend the numerous exhibitions and trade fairs brought by the Hong Kong Trade Development Council. To attend these activities, you are also welcome to make use of the SME Export Marketing Fund offered by the Trade and Industry Department.
Hong Kong is used to competition and challenges. With our resilience and determination, we have already sailed through the worst time of the latest financial crisis. There may still be uncertainties and difficulties lying ahead of our recovery path. But let's remind ourselves, Hong Kong has always emerged from different crises with renewed visions and strengths. There is no reason that we cannot do the same now and in the future. Christmas is always a time of hope. Let's keep the positive Christmas spirit alive.
Thank you.
Ends/Friday, December 11, 2009
Issued at HKT 15:35
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