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Following is the speech delivered by the Chief Executive, Mr Donald Tsang, at the Joint Business Community Luncheon 2011 held at the Hong Kong Convention and Exhibition Centre today (November 2):
Distinguished guests, ladies and gentlemen,
Thank you for the invitation to speak with you today, following the tradition of having the Chief Executive to explain his thinking in the business community shortly after his Policy Address every year. As you know, I have delivered my last Policy Address.
In eight months' time - less two days - I shall no longer be the Chief Executive of this great city - I will simply be Donald Tsang, citizen. So, I cannot let this opportunity pass without first thanking the business community of Hong Kong for its unflagging support in helping to shape one of the world's great cities.
Business, as we know, is about making money - and Hong Kong is certainly a money town. That's why we will always try to create the best possible business environment for you to grow and prosper. When you grow and prosper, so does Hong Kong with the jobs you create, the salaries you pay, the goods and services you buy - and of course the taxes you pay.
At the same time, all over town, businesses big and small don't just ponder profits - they also care about the people of Hong Kong. They dig deep to support charities, social enterprises and all manner of good causes. I applaud these efforts - and I encourage you all to keep up this decent and meaningful work. Every little bit you do for the less fortunate, the sick, the elderly, or children with special needs helps to cement us together as a community, and help us grow as a society.
I know there will be times when we don't agree. But I also know that deep down, we're all working towards building a better Hong Kong.
In my many trips throughout the city every week - from public housing estates to the newest and most high-tech office space - I talk to people from all walks of life. One common thread is the love - and that is the correct word - that people have for Hong Kong. People want Hong Kong to succeed and thrive, underpinned by common love.
But people also want a fairer society, where we do more to look after the less fortunate and where everybody at least has the opportunity, if they want it, for social mobility through education and training.
My Policy Address this year has tried to address some of those issues with more services for the elderly, more help for lower paid workers and their families and more education and training opportunities.
But, these are long-term issues that will also need to be looked at, not only by me and addressed by me, but also by my successors. But they will also require the active support and participation of the business community, as well as NGOs and charitable organisations.
Another major issue we have tried to tackle is that of housing and land supply. This has already received much coverage and I do not intend to talk at any great length about it today.
All I will say, though, is that for Hong Kong to thrive and prosper we need to ensure that our people have a fair crack at being able to own their home. Low interest rates and high liquidity have skewed the market in recent years, with prices across the board growing rather robustly. The problem has been exacerbated somewhat by the fact that we stopped forming land, depleting the bank of land to draw on when demands for property rapidly grew.
We also tried to address this matter - not just by renewing our commitment to develop land and bank it if necessary, but also by pursuing other opportunities to free up land through rock cavern (development), by releasing industrial sites, by examining the use of sites designated for government and community use and those under-utilised in the New Territories, and by exploring reclamation on an appropriate scale outside of Victoria Harbour.
We need land not just for housing, but also for commercial purposes. The traditional business districts of Central, Admiralty, Wan Chai, Causeway Bay and Tsim Sha Tsui have reached almost saturation point. That is why we announced plans for a new CBD (Central Business District) at East Kowloon. This will provide up to 4 million square metres of Grade A office space once we realise the full potential of the Kai Tak Development and the urban regeneration now taking place in Kowloon Bay and Kwun Tong.
Kai Tak is essentially a greenfield site, so we have an opportunity here to do something special. We will increase connectivity around the whole area with a clean transport system, which will link up to the new MTR lines that serve the rest of the city.
We want the area to look beautiful and welcoming - so, we will look for attractive design, with plenty of green features and promenades to make the most of the prime sites we have at our disposal. And we will encourage the development of cultural, leisure and water sports activities so that the whole area caters for more than just business and office space - it creates an environment that people want to visit, and an atmosphere which will attract locals and visitors after office hours - not to mention a prime place from which to watch the fireworks at Chinese New Year and on National Day!
The new cruise terminal coming on stream in the year 2013 will be one of the major landmarks, as will our new multi-purpose stadium and associated sports facilities on the waterfront. I encourage active participation in all of these projects by our architects, designers, planners and construction companies.
I hope that we can really develop a superb CBD2 at East Kowloon. Along with the West Kowloon Cultural District and the new Central-Wan Chai waterfront, this project will inject new life and vitality into our waterfront areas. With all these plans in train, I am sure that over the next decade or so, Hong Kong's harbour, without any reduction in size, will blossom into a much more dynamic and iconic area than it is today - and this in turn will add to the attraction of Hong Kong as a great place to live and do business.
Apart from boosting the hardware of our business environment with projects such as those just mentioned, and infrastructure development generally, we also try our very best to enhance the software of the business environment in Hong Kong.
Recent surveys on global competitiveness and ease of doing business ranked Hong Kong first and second respectively. This has been borne out by figures released a fortnight ago that show the number of overseas and Mainland companies doing business in Hong Kong grew by about 6 per cent last year - up to almost 7,000 companies. In particular, we are seeing smaller, high-growth companies coming to Hong Kong to manage their regional operations.
We are of course very happy to see Hong Kong rate so highly in global rankings, and to see so many new companies voting with their capital to set up operations in Hong Kong. But that also means we need to constantly work hard to improve the business environment and business opportunities in Hong Kong.
The Policy Address this year builds on the foundations we have laid over the past few years to consolidate our strengths in traditional areas such as finance and business services and to look for new growth areas to expand our economic base.
We take a systematic and pragmatic approach in what we do.
For example, we will strengthen our institutional infrastructure by pursuing closer economic trade arrangements with trading partners. We are exploring an FTA with Chile, and will soon negotiate an investment promotion and protection agreement with Russia. Our stock exchange has just signed an MOU with the BRICS countries exchanges to cross-list benchmark equity index derivatives in each other's boards, paving the way for further links with the BRICS countries in a substantive and visible way. We'll also look for ways to join the trade and economic co-operation arrangements with East Asian countries.
Closer to home, we are working to sign Supplement VIII to CEPA (Mainland and Hong Kong Closer Economic Partnership Arrangement) by the end of this year - with a view to exploring new opportunities in the services sector on a pilot basis in Guangdong. We will set up liaison units in Chongqing and Fujian to deepen economic links in these major growth areas. And we are actively preparing the establishment of the Hong Kong Economic and Cultural Office in Taiwan. This new office will not only promote multi-level and multi-faceted co-operation between Hong Kong and Taiwan in trade and economic co-operation - it will also strengthen co-operation in the areas of food safety, healthcare emergencies, civil and commercial matters and education exchanges. All of this is designed to make it easier for Hong Kong businesses to access markets overseas, in Taiwan and in the Mainland.
On the practical side, we have set aside $1 billion to help Hong Kong companies build a brand presence in the Mainland and move up the value chain. We will reserve land for the development of data services, which are growing very quickly. And we have designated 2012 as "Hong Kong Design Year", which will include a number of mega events to consolidate Hong Kong's position as Asia's creative hub.
We are also keeping a close watch on global economic conditions and trying to anticipate any problems that will cause. The sovereign debt crisis in Europe and the continued economic frailty in the US mean that we may face a downturn next year. This could again lead to tighter lending policies by banks, which could impact on our small and medium enterprises. I assure you we will pay special attention to the plight of SMEs in the event of a downturn and introduce timely and appropriate measures to tide them over any difficult patch in the global environment.
Quality of life issues are also important to the business community. Hong Kong has to be a good place to live, as well as work. And I know that air quality has been a particular concern for a number of years. We will do more to improve air quality in Hong Kong and will particularly focus on reducing roadside air pollution.
Hong Kong's compact size and high population densities mean that we are ideally placed to test new types of transport technology. To reduce roadside emissions, we encourage bus companies to test hybrid vehicles. But we will do more. We will also set aside $180 million for the franchised bus companies to purchase and test 36 electric buses on different routes and under different conditions - not at their cost, but the Government will pay for these tests. Our aim is to gradually replace all the old buses with zero-emission vehicles or the most environmentally friendly types of buses available. We have also set aside a further $150 million as a one-off subsidy to owners of LPG taxis and minibuses to replace the catalytic convertors in their vehicles. That will improve the green performance of these vehicles.
We will also improve our institutional framework to monitor the air quality in Hong Kong. We have consulted the public on updating our air quality objectives and other improvement measures. These are statutory standards that will need to be met. We are now drawing up our final recommendations and will present them to the legislature as soon as we have sorted out the implementation issues.
Ladies and gentlemen, I cannot finish today's speech without mentioning the thing which you and I hold dear - the Competition Bill, now being discussed by legislators. There is a broad consensus in the community for a cross-sector competition law to tackle anti-competitive behaviour. I do believe that a competition law will not only enhance the transparency of market operations, it will also do good for business in the long run. We have always prided ourselves on providing a level playing field for business and the Competition law will enhance our institutional ability to do just that.
The business community, especially SMEs, have expressed concerns about some provisions in the Bill. We have taken their concerns on board. Their comments by a wide range of stakeholders, including the chambers of commerce present here today, trade associations and professional bodies. We accept that some provisions need to be revisited, and that is why last week we presented our revised proposals to Bills Committee, which is studying competition law.
I hope that these amendments can address the most practical concerns that have been raised. And we look forward to hearing the feedback from the business community and other stakeholders in our society as we work towards passing the law within this current term of government. There won't be any perfect law because this all ends up as a compromise among all sectors concerned. But it will be a significant step forward in the business environment in Hong Kong, making it truly global, that our business community deserves.
Ladies and gentlemen, once again I would like to thank the business community for all it does, for all it did, and for all it will do for Hong Kong. It has been a great honour and privilege to serve the people of Hong Kong as Chief Executive and of course to co-operate closely with the business community to make Hong Kong a better place to live and work.
I believe that Hong Kong has a very bright future and, by extension, business has a very bright future too. We are blessed with a prime location, a colourful history, a unique set of strengths, and an irreplaceable role as our nation's global financial and business services centre.
My government - and I am sure the governments to follow - will always do what we can to help business make the most of these assets, leading to a fairer and more caring and contented society. And our business community will continue to play a vital role in the ongoing reforms and opening up in the Mainland. I wish all of you the very best of business luck in the years to come.
Thank you very much.
Ends/Wednesday, November 2, 2011
Issued at HKT 19:14
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