************************************************************
Following is the speech by the Chief Executive, Mr Donald Tsang, at a business luncheon co-organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the National Association of Software and Services Companies (NASSCOM) in New Delhi, India today (October 26):
Distinguished guests, ladies and gentlemen,
It is a great pleasure to be here in New Delhi.
This is the first full day of my visit to India, so allow me to thank you for your warm welcome and generous hospitality.
I also thank you all for attending this lunch arranged with the Federation of Indian Chambers of Commerce and Industry and National Association of Software and Services Companies.
I was struck when visiting the website of FICCI, "India rnd", by the statement on its first page that said, and I quote: "The tradition of science and technology in India is over 5,000 years old."
This duration of scientific tradition perhaps can only be matched by that of Chinese science and technology, as shown in Joseph Needham's "Science and Civilisation in China".
Hong Kong and India have been firmly connected for many years.
We are connected by trade; we are connected by modern telecommunications; and we are connected by international finance. And - given the emerging nature of the Indian and Chinese economies - we are increasingly connected by new opportunities. I believe that there is much in modern-day science and technology that Hong Kong and India can offer each other.
Hong Kong has a vision to develop itself into a hub for innovation, technical co-operation and trade.
Just last year, we identified innovation and technology as one of six new growth industries to drive our economy forward. As part of this vision we are expanding our infrastructure and we have introduced a tax rebate scheme for companies engaged in R&D activities in combination with our principal research centres.
Hong Kong has established a solid foundation for information and communications technology, including excellent infrastructure and a highly professional ICT workforce, which in turn are crucial to supporting and sustaining our economic growth.
Our Applied Science and Technology Research Institute (ASTRI) was set up just 10 years ago with a mission to develop the ICT sector. Today, it has more than 560 staff, the vast majority of whom are researchers.
The institute is already carving out a niche for itself to support Hong Kong industries in areas such as antenna design for telecommunication purposes and in the medical field for improved, cheaper MRI machines; for integrated circuit design to facilitate multi-standard consumer electronics; and for LED lighting.
At the turn of the century, Hong Kong Government introduced a novel "Digital 21 Strategy" for promoting advanced technology and innovation and for developing Hong Kong as a hub for technological co-operation and trade. This strategy aims to position Hong Kong as a digital leader in the region and reduce the digital divide in Hong Kong.
In its latest release of the Digital Economy Rankings 2010, the Economist Intelligence Unit ranked Hong Kong 7th among over 70 economies in the world and No. 1 in Asia. This underscores Hong Kong's advanced position in connectivity and technology infrastructure development, consumer and business adoption, legal environment and government policy support.
Our vibrant ICT industry comprises over 66,000 professionals and contributes about 3.6% of our GDP, or over US$7 billion a year. This highlights that Hong Kong is well placed to serve as an international hub for innovation, co-operation and trade in ICT.
Hong Kong's telecommunications market is fully liberalised. There is no pre-determined limit on the number of licences, except those licences dependent on limited radio spectrum.
Hong Kong adopts a light-handed regulatory approach, with no foreign ownership restrictions. This helps to promote fair and vibrant competition.
We have high mobile and broadband penetration rates. As at May this year, our mobile penetration rate was over 180%, and our household broadband penetration rate was around 82%.
Hong Kong is well positioned as a testing ground for new telecommunications and convergent services. If your product works in Hong Kong, with our mountainous topography and dense skyscraper canyons, then it can work almost anywhere.
Our technology-savvy consumers are happy to be first adopters for new technology.
Hong Kong is on the road to rolling out 4G mobile services and mobile TV services, and we will continue to do as much as we can to facilitate the introduction of new services that will benefit the market.
In Hong Kong, we have set up major technology infrastructure, including the Cyberport and the Hong Kong Science Park, with an emphasis on promoting ICT.
Cyberport on Hong Kong Island provides state-of-the-art infrastructure, supporting facilities and a campus environment for the development of a strategic cluster of ICT and related enterprises. It is also a home base for academic, research and industry support organisations.
The aim of Cyberport is to promote Hong Kong as a leading digital city in the region. It builds networking relations with international counterparts, including hi-tech parks in Mainland China and overseas. It also promotes technological collaboration and exchanges.
The Hong Kong Science Park, in our New Territories, is home to over 300 R&D technology companies, over half of which come from outside Hong Kong.
Such is its success that we recently announced a US$360 million extension, which will start to come on-stream in late 2013. ICT companies are well-represented in the Science Park and we are looking to develop this further, as well as promote green innovation.
Hong Kong is the location of first choice for overseas companies seeking to tap the huge market in the Mainland of China.
The Mainland's ICT market is growing quickly, together with its economy. Hong Kong's geographical proximity to Mainland China and our deep understanding of the Mainland market and business culture are essential to success. Hong Kong companies have close business relationships with Mainland firms, particularly in the adjacent Pearl River Delta, or PRD, region.
There is good potential for Indian enterprises to use Hong Kong as a stepping-stone for gaining entry into the Mainland market.
This can be readily achieved by adapting technology developed and commercialised in India for the Mainland market.
In order to benefit from our unique free trade pact with the Mainland, what we call the Closer Economic Partnership Arrangement, or CEPA, Indian enterprises may move some of their business functions to Hong Kong. These could include regional management, customer service, software customisation, data centres and so on.
It can be achieved either through direct investment in Hong Kong or through partnering with Hong Kong enterprises - the choice is yours.
As the No. 1 external investor in the Mainland of China, we have cultivated a deep knowledge about how businesses operate in the Mainland, as well as understanding of its language and its culture. Hong Kong ICT enterprises have clear advantages that can help Indian businesses to explore the China market.
Ladies and gentlemen, the spirit of collaboration between Hong Kong and our neighbours across the boundary in Guangdong Province is in full evidence during this India visit.
Tomorrow we will stage a Hong Kong-Guangdong joint promotion event at the Taj Palace Hotel. And on Thursday in Mumbai, there will be a Lifestyle Expo jointly staged by Hong Kong and Guangdong.
In Hong Kong, expos and trade fairs are an excellent way to connect buyers from around the world to suppliers in Hong Kong and the Mainland. In 2009, the first Indian Sourcing Fair was held in Hong Kong. It was the first such event outside India and is currently held every six months to meet demand.
The most recent Indian Sourcing Fair ended just last weekend and the next one will be held from April 20 to 23 next year. So please do mark your diaries.
I encourage ICT companies to come to Hong Kong to see the business opportunities in our city and throughout the Pearl River Delta region.
I look forward to seeing you in Hong Kong developing your ICT businesses and finding new markets.
Thank you very much.
Ends/Tuesday, October 26, 2010
Issued at HKT 18:56
NNNN
Windows Media format
Real Media format