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Opening speech by STH at International Conference on Spatial and Social Transformation in Urban China (English only)
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     Following is the opening speech by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, at the International Conference on Spatial and Social Transformation in Urban China today (December 13):

Professor (Rick) Wong, Professor (Adrian) Bailey, Professor Wang (Donggen), distinguished professors and speakers, ladies and gentlemen,

     Good morning. It is my great honour to be here today with you at this two-day International Conference. I can detect some familiar faces in the audience. As a former academic myself, I am most delighted to see the growing network and collaboration amongst Hong Kong universities and overseas institutions. After joining the Government in July, I have to confess I have had less opportunity for academic conferences and intellectual discourses, and I do miss them. So thanks very much for giving me the opportunity to join this particular opening session and to have a feel of intellectuality.

     The theme of this conference, "Spatial and Social Transformation in Urban China", is a very important one at this particular critical juncture of China's modernisation and development against the backdrop of leadership succession. I'm told that you have 150 paper presentations. As a conference organiser myself previously, I know it's no easy task. So I have to congratulate Professor Wang and his team for such a great achievement.

     In this opening speech, as the Secretary for Transport and Housing, my focus is on Hong Kong - on Hong Kong's connectivity and housing challenge. I would try my best to cut a long story short. Located in a strategic geographical position in China, Asia and the world - in terms of economic development, finance, trade, transport, travel and cultural exchanges, Hong Kong's success as a major metropolis has attracted much attention in academic and popular literature.

     Hong Kong's history has been a history of sheer struggle amidst constraints, with a capacity to be creative with local solutions. We have a high concentration of population - over 7 million, on a land mass of approximately 1,100 sq km, much of which being hilly areas. We have few natural resources, but possess a good deep water harbour. Historically we had depended on external trade for economic survival and then affluence. Our economy is free and open, not necessarily out of any strong ideological inclination, but more out of pragmatism. Until the 1990s, Hong Kong was regarded as a case of exceptionalism among the four "Little Dragons" depicted by the World Bank as the East Asian miracle.

     Our economic success had first thrived on Mainland China's political and economic turbulence during the 1950s to '70s. Afterwards, as the Mainland began to reform and open up, our businessmen and -women were among the first to capitalise on the new opportunities and growth momentum unleashed. It would not be exaggerating to say that Hong Kong's future affluence depends as much on its determination to maintain its institutional strengths and international positioning, as on its ability to take advantage of China's continued economic growth and social transformation.

     Against this macro-scene, there is a new dimension in Hong Kong's development prospects and strategy. Within limited space, we have to cater for the residential, mobility, economic and environmental needs and aspirations of our urban population. We have also to respond to the needs of our growing numbers of visitors, transients and migrants, especially from the Mainland. Our transport policy aims at "moving millions" both within the city and around the region. Our housing policy aims at "accommodating millions" in tandem with demographic changes and rising expectations.

Moving Millions
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Road Networks within Hong Kong

     Let me start with the domestic scene. Within our densely populated city, we have over 2,000 kilometres of roads and over 1,300 road structures; 16 road tunnels, including the three cross-harbour tunnels; and five major cable supported bridges, linking up almost all areas. Hong Kong residents or travellers here can conveniently make use of land transport to travel to work, to school, to enjoy their leisure times and to access sight-seeing spots. We take pride in our public transport system which is modern and efficient, and provides affordable, comfortable and safe travel on a wide choice of carriers taking care of 90 per cent of our total passenger traffic. That 90 per cent figure is very unusual in the world. I think we have among the highest carriage of passengers through our public transport system. And the choices range from the Mass Transit Railway (including the Airport Express link), franchised and non-franchised buses, public light buses, ferries and taxis, to the tramway and the Peak Tram.

     A number of major road projects that will further enhance our internal connectivity are on the drawing board. To name a couple, the Tuen Mun-Chek Lap Kok Link, coupled with a new Hong Kong-Zhuhai-Macao Bridge, will provide a strategic link connecting the Northwest New Territories and North Lantau to enhance cross-boundary transportation. The Link will also serve as an alternative land transport access to the airport.

     We have also just kick-started the second stage public engagement process for the Central-Kowloon Route across the heart of Kowloon. When commissioned, sometime in the future it will reduce the travel time between East and West Kowloon to only five minutes during morning peak hours, resulting in a saving of 25 to 30 minutes, and more if congestion is more terrible.

Local Railway Development

     Railway is arguably one of the most environmentally friendly and efficient mass transportation systems. Over the years, our policy has been focusing on integrating transport and land use planning. We promote railway development as a mass transit mode to balance the public's demand on road-based transport, in turn alleviating traffic congestion and reducing roadside carbon emissions.

     A well-planned railway not only fulfils our residents' daily travel needs, but also unleashes the potential for strategic developments along the alignments. New Town development and railway expansion have a mutual and synergistic relationship. In the past few decades, we had witnessed New Towns springing up along major railway and subway lines, satisfying our ever-growing social, economic and residential needs.

     Since the turn of the millennium, we have introduced four new railway lines to improve connectivity between New Towns and the urban areas, namely the Tseung Kwan O Line (2002), the West Rail Line (2003), the Ma On Shan Line (2004) and the Kowloon Southern Link (2009), which extended the West Rail Line to Tsim Sha Tsui and Hung Hom. All these names I mentioned may sound unfamiliar to overseas professors, but for those from Hong Kong, I think you know the significance of connecting all these areas which many of us work and live in.

     Currently, we are taking forward five railway projects at full steam to come online before 2020, namely the Express Rail Link connecting Hong Kong to the Mainland, West Island Line, South Island Line, Kwun Tong Line Extension and the Shatin to Central Link. These new lines can serve major concentrations of population and employment presently not linked to our railway system. Upon their commissioning, Hong Kong's railway network will increase from 218km to about 280km in length, covering areas inhabited by more than 70 per cent of the local population. So the railway development initiatives have been greatly transforming Hong Kong.

     At the same time, we are also conducting a review and update of the "Railway Development Strategy 2000" in the light of the latest social changes, looking at major regional railway corridors and a number of local enhancement schemes. The entire study is expected to be completed in mid-2013, which would help us map out Hong Kong's long-term railway development blueprint up to 2031.

Connectivity to the Mainland
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Guangzhou-Shenzhen-Hong Kong Express Rail Link

     Our railway system not only connects people within Hong Kong internally, but also across the boundary to the Mainland of China. The Guangzhou-Shenzhen-Hong Kong Express Rail Link, or XRL in short, is the first-ever high-speed rail link in Hong Kong, connecting our direct railway services to the national grid, fostering closer social, cultural and economic ties between Hong Kong and other parts of China.

     Commenced in January 2010, the construction of the XRL Hong Kong Section is now in full swing, with completion targeted for 2015. The Hong Kong Section comprises a 26km underground railway corridor running from the West Kowloon Terminus, through the boundary at Shenzhen River and the 116km Mainland Section and to the terminus in Guangzhou.

     At the national level, the XRL will become part of the 16,000km-long high-speed rail network of China, shortening travel time between Hong Kong and various major Mainland cities. Take the train service between Hong Kong and Guangzhou as an example: the journey time between the two cities will be reduced from currently 100 minutes by over half to merely 48 minutes. And from Hong Kong to Beijing, it will only take eight hours by the high-speed railway.

     As more Mainland regions will be included in the daily commutable area of Hong Kong, the XRL will extend the city's reach into the Mainland hinterland, strengthening Hong Kong's strategic position as the southern gateway to China, and further promoting cross-boundary business, cultural and, of course, academic exchanges.

Hong Kong-Zhuhai-Macao Bridge

     On top of the high-speed railway link to Mainland China, we are pursuing a mega project to enhance our road connection with the Western Pearl River Delta region. The Hong Kong-Zhuhai-Macao Bridge, a direct land transport infrastructure, will link Hong Kong directly with Zhuhai and Macao. The cross-boundary transport infrastructure project is jointly taken forward by the Guangdong, Hong Kong and Macao governments. This is really unusual because it involves three different jurisdictions within one country. And of course, each of these three parts has its own rather different, distinct systems and ways of management. The three governments jointly finance the cost for the construction of the Main Bridge within Mainland waters, while each of them is responsible for the construction, operation and maintenance of the link roads and boundary-crossing facilities within their respective jurisdictions.

     Upon completion in 2016, the Main Bridge will become the longest bridge-cum-tunnel sea crossing in the world, totalling 29.6km in length with 6.7km of underwater tunnel.

     The Hong Kong-Zhuhai-Macao Bridge is strategically important. It will facilitate the further economic development of Hong Kong, Macao and the Western Pearl River Delta. The construction of the Bridge will significantly reduce transportation costs and time for travellers and goods on road, generating immense economic and social benefits. For instance, the travelling time from Zhuhai to the Kwai Chung Container Port in Hong Kong will be reduced from 3.5 hours to just 75 minutes, a reduction of more than 60 per cent, while travelling time from Zhuhai to the Hong Kong International Airport will be reduced even further, from four hours to just 45 minutes, a reduction of 80 per cent.

     With the connection by the Bridge, the Western Pearl River Delta region will fall within a reachable three-hour commuting radius of Hong Kong. Hong Kong will gain an added economic hinterland, as the vast human and land resources in the Western Pearl River Delta will provide new opportunities for its businesses.

     In particular, it will enhance Hong Kong's position as a trade and logistics hub as goods from the Western Pearl River Delta and Western Guangdong Province, Guangxi Province, etc, can better make use of the airport and container ports in Hong Kong.

Global Connectivity
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Airport Expansion

     In terms of global connectivity, Hong Kong is China's as well as Asia's global city. Equally important on our agenda are our aviation links, which connect Hong Kong internationally. The Hong Kong International Airport is the world's busiest cargo gateway and one of the world's 10 busiest passenger airports. It is now within a five-hour flying time of half the world's population, and all Asia's key markets are less than four hours' flight away.

     Our progressive liberalisation policy on air services has helped to inject vibrancy into our aviation industry, and opened up ample opportunities, strengthening our status as an international hub. Hong Kong has now signed Air Services Agreements with 61 aviation partners. We also have unlimited capacity arrangements with 24 aviation partners.

     Apart from five home carriers - there are five home carriers in Hong Kong. Most of us would know Cathay Pacific and Dragonair, but in addition to these two, we have Air Hong Kong, which is a cargo airline; Hong Kong Airlines; and Hong Kong Express. So there are five home carriers. But apart from these five carriers, there are over 100 foreign airlines operating in Hong Kong. They serve about 160 destinations worldwide, operating more than 900 air traffic movements per day and more than 6,000 flights per week. This excellent connectivity expands our passenger and cargo hinterland, bringing new impetus to the aviation sector.

     With the progressive increase of the runway capacity to 68 movements per hour by 2015, our Airport Authority is pursuing the midfield development project so as to increase the airport's handling capacity to 70 million passengers and 6 million tonnes of cargo, in order to cope with air traffic demand in the medium term, up to 2020.

     To cater for the air traffic demand in the long run, the Government has given approval in principle for the Airport Authority to adopt the three-runway system as the future development option for Hong Kong International Airport. With a third runway planned for 2023 subject to environmental impact assessment, the practical maximum capacity of the airport can reach 620,000 flight movements per year, accommodating about 97 million passengers and 8.9 million tonnes of cargo per year.

The Shipping Hub and International Maritime Centre
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     Let me now turn to seaborne transport. Consolidating and enhancing Hong Kong's role as an international maritime centre ranks high on the Government's agenda.

     For years, our city has been one of the busiest ports worldwide. We still are, but hardware aside, Hong Kong has a formidable cluster of quality maritime services, including ship broking, ship management, marine insurance, ship finance, and maritime law and arbitration. Today, there are about 700 shipping-related companies calling our city home. The Hong Kong Shipping Register and the Hong Kong Flag enjoy a high international reputation, and Hong Kong shipowners now control 9 per cent of the world's merchant fleet.

     Into the future, Hong Kong's competitive edge in the maritime industry will synergise well with the booming shipping and trading activities of Mainland cities and ports, making Hong Kong's position as a regional distribution centre even more robust.

Housing Millions
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     Ladies and gentlemen, our overall spatial picture will not be complete without a brief account on our housing challenge.

     Ever since the launch of an ambitious public housing programme by the colonial governor Murray MacLehose in the 1970s to accommodate over a million people living in poor conditions, Hong Kong has showcased one of the most successful public housing models - with both public rental and ownership housing - for many cities around the world.

     Today, 2.1 million people live in public rental housing, and another 465,000 subsidised flats have been sold to households of low- and middle-income groups at discounted prices under various government-subsidised schemes operated by the Hong Kong Housing Authority and the Hong Kong Housing Society.

     Our public rental housing stock has continued to grow at an annual rate of 15,000, but this is no match with the new demand. In terms of our public rental housing waiting list, as at the end of September this year there were 110,400 in the General Waiting List, so well past the 100,000 mark. But we're just talking about the General Waiting List, for which there is a target of a three-year average waiting time. But apart from this General Waiting List, we also have another 100,000 who are waiting under a Quota and Points System, and these are what we call non-elderly singletons, whose number is fast expanding, because a rather interesting feature is that over half of them are young singletons at the age 30 and below. This is really a new challenge to the Government of Hong Kong.

     Such growth tells a lot about the changing housing scene of Hong Kong. Amid rising property prices and rentals boosted by abundant liquidity and a super-low interest rate environment caused by a lax credit policy adopted by many developed countries, more local people have found it difficult, and some very difficult, to afford private housing.

     To give you a sense of the problem, just in the first 10 months this year, housing prices have gone up by some 24 per cent - just within 10 months, 24 per cent increase - and rents by 12 per cent. That's why the Government decided to introduce two stamp duty measures in late October to help dampen demand, in particular external investment demand, so as to arrest price escalation. Young people, even young middle-class professionals, have to increasingly look to public housing because they cannot aspire to buy their own flats in the private market.

     The Government is now conducting a long-term housing strategy review, both to forecast medium- and long-term demands from various sectors including the elderly, young people and those who are poorly housed, as well as to map out new policy thinking and strategies. We expect public housing to play a more important role than before in responding to the many challenges that Hong Kong now faces. Overall, we have also to identify new land and to optimise development potential of existing land and structures (through rezoning and other planning arrangements) in order to increase the supply of both public and private housing.

     In the past several years, there had somehow been a trend of local communities opposing the construction of additional housing blocks within their vicinity for various reasons. One of the big challenges to the present Government, which puts housing as the priority among priorities, is to overcome such local resistance, and to forge a social consensus on our way forward, which will include the formation of New Development Areas in the northeast and northwest New Territories, of a scale comparable to the development of New Towns in the last century.

Conclusion
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     Ladies and gentlemen, I think I have given you a long note on two important areas of growth in Hong Kong which involve our spatial use and transformation, and affect the quality of living and mobility of our expanding population. The challenges Hong Kong is facing are many and complex, but this city has a strong tradition of overcoming difficulties and working out innovative but pragmatic solutions. We believe such a spirit will continue to drive Hong Kong forward despite occasional doomsday predictions, such as the one made by Fortune magazine before Hong Kong's reunification with China that Hong Kong would be dead after 1997. Today, as you sit here and as we can all see, Hong Kong is very much alive and kicking - with more opportunities than before within a growing nation.

     Before I close, let me wish this conference a very productive dialogue and exchange, generating new ideas and intellectual perspectives. And also I would like to take this opportunity to wish you all merry Christmas and happy new year. Thank you.

Ends/Thursday, December 13, 2012
Issued at HKT 18:15

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