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Following is a speech by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, at the Hong Kong Association Membership Forum and Reception in London, United Kingdom today (September 25, London time):
James Hughes-Hallett, Robert Elliott, distinguished guests, ladies and gentlemen,
Good afternoon. I feel deeply honoured to have the opportunity to address such a distinguished audience, and am truly delighted to meet old faces, new faces, and friends from afar who yet still maintain a keen interest in Hong Kong.
I would like to, first, express my special thanks to the Hong Kong Association and Linklaters for organising this luncheon seminar, which as some of you might know, ought to have taken place on June 5 if not for some circumstantial reasons. Despite that, I understand that my speech prepared for that occasion had already been published.
So today, I am not going to repeat what I said in that speech. Instead, I would like to expand on the "connectivity" theme - what it means to Hong Kong and how that would shape the city's future.
East-West connectivity
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Throughout the 150 years of British rule until June 1997, Hong Kong had been a strategic trading port between the West and China, and subsequently thrived as an international business and financial centre. It was a cosmopolitan city where the East meets the West. Indeed, its colonial history has left Hong Kong with a legacy of British institutions, with strong East-West connectivity, but it has remained "a very Chinese city", in words of the last British Governor Chris Patten in his departure speech in 1997, making it somewhat a cultural hybrid, as depicted by renowned Hong Kong writer Chan Koon-chung.
Under the "One Country, Two Systems" constitutional framework upon reunification with China, the new Hong Kong Special Administrative Region (SAR) has continued to be one of the most open and vibrant cities of the world - underpinned by a set of westernised systems, values, and professional and business practices. The Heritage Foundation has ranked Hong Kong as the world's freest economy for 20 consecutive years.
Enriched China dimension in wider regional context
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Not only has the East-West connectivity not been lost, post-colonial Hong Kong has acquired an enriched China dimension in terms of closer connectivity to the Mainland. If we look back at history, during the 1950s-1970s, Hong Kong was able to thrive, ironically, thanks largely to the post-revolutionary turbulence and turmoil in China. But ever since China began to adopt the "opening up and reform" policy from the 1980s, the destiny of both Hong Kong and China have been put back on a converging track - Hong Kong will continue to grow and prosper only if the Mainland is stable and booming.
Since 1997, our connectivity with the Mainland has grown exponentially at all levels. The number of Mainland visitors has grown 16 times to some 41 million in 2013. The number of Mainland enterprises listed on the Hong Kong Stock Exchange has increased by sevenfold to 797. And, the amount of Reminbi (RMB) deposits (which started in 2003) has expanded from RMB12.1 billion Yuan in 2004 to RMB860.5 billion Yuan in 2013 - an increase of 70 times within 10 years! The list can go on.
With its strategic location, Hong Kong continues to play an important trading role between China and the world. Hong Kong's exports are predominantly re-exports (98 per cent). Last year, 62 per cent of re-exports were of Mainland origin, and 55 per cent headed for the Mainland. Of the total freight throughput handled by Hong Kong, about 70 per cent are either coming from or heading for South China, mainly the Pearl River Delta (PRD) region which forms Hong Kong's at-large hinterland. The PRD has become the Mainland's single largest GDP contributor and largest exporter, producing about 27 per cent of its exports.
The shift of international trade to the East is becoming obvious in the new Pacific Century. Of the world's top 10 busiest container ports, nine are in Asia and of these, seven are in China, including Hong Kong. Between 2004 and 2013, the average annual container throughput handled by the Hong Kong port exceeded 23 million TEUs (20-foot equivalent units), making our container port one of the world's busiest. The GDP growth among the 29 Asian developing economies during the last 10 years was on average 8.6 per cent, compared with the world average of 3.8 per cent. China's nominal GDP (excluding Hong Kong and Macao) has shot up by over six times between 1997 and 2013!
Connectivity infrastructure
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Hong Kong has always thrived in its "blue economy" - namely sky and sea trade. We have a world-class airport. We can reach all major Asian economies within four hours' flight time and half of the world's population within five hours, that is so close to the Mainland China, Japan, Korea, part of India, Indonesia and Southeast Asia.
The Hong Kong International Airport has been consistently ranked among the world's best and busiest airports, registering an average of more than 1 000 daily flights. Last year, over four million tonnes of cargo and close to 60 million passengers were handled. In order to cope with ever-growing air traffic demands, and to maintain our global competitiveness, we are now planning for the third runway which will increase the practical maximum capacity of the airport by over 60 per cent, to handle about 100 million passengers and 8.9 million tonnes of cargo per year by 2030.
Hong Kong has a long maritime history, with a strong base of ship owners together owning and managing 9 per cent of the deadweight tonnage of the world's merchant fleet, and a cluster of diversified maritime services in ship agency and management, ship finance, ship broking, marine insurance, ship registration, and maritime legal and arbitration services. The Hong Kong Shipping Register ranks number four in the world, with 2 337 ships carrying 89 million total gross tonnage. We are also a major dispute resolution centre in Asia. And for your information, the China International Economic and Trade Arbitration Commission has established in Hong Kong recently.
In particular, Hong Kong is well-positioned to act as the springboard for Mainland shipping companies to go global and for foreign companies to enter the China market, thus becoming the preferred base in Asia for international maritime business, at this critical juncture when China is embracing bold plans for expanding and modernising its maritime industry. Some of you might have noticed that earlier this month, I think on September 3, there was an announcement by the State Council in this regard. China has also set a mission for a 21st century Silk Road on sea.
Such two-way facilitation makes Hong Kong a "super-connector", in the words of our Chief Executive. To enhance our role as a maritime services hub, the Government has plan to set up a new statutory maritime body, and we are studying the experience of Maritime London which I visited yesterday for insight and good practices. We have recently set up a HK$100 million Maritime and Aviation Training Fund to support manpower training and professional upgrading. A Civil Aviation Training Institute is also being planned.
Our Mainland connectivity, will be further strengthened by the 29.6 kilometre mega-bridge linking Hong Kong, Macau and Zhuhai, now under construction, which will expand linkage to the booming western PRD. The Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, when commissioned in a few years' time, will connect us to China's fast-expanding national high-speed railway network, taking only 10 hours and 48 minutes respectively to reach Beijing and Guangzhou, for example, compared to 24 hours and two hours today.
Hong Kong's global-ness as an international hub
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After 1997 there have been worries from time to time about either Hong Kong being 'marginalised" during China's rise because of the emergence of other big cities on the Mainland like Shanghai, Beijing, Chongqing and Guangzhou, or Hong Kong becoming "mainlandised" because of reunification. While Hong Kong must not become complacent, neither should it lose self-confidence because statistics speak for themselves.
Hong Kong is a part of China and yet a distinctive part of China. After three decades of reform, and social and economic transformation, President Xi Jinping describes the present period as one of "deepening reforms" and rebuilding the China dream. Geopolitically, Hong Kong must care for developments on the Mainland. As an SAR, Hong Kong should rightly play a supportive role to the nation's reform and modernisation - and that is not "mainlandisation".
Not only does Hong Kong stand to benefit from China's economic rise. Under "Two Systems", we enjoy an edge over other Mainland cities. Our worldwide connectivity, free port status, rule of law and independent judicial system, free flow of information and capital, efficient management, and other institutional strengths have enabled us to ride on the economic development of China and the region to become an international hub in finance, business, shipping and aviation. Hong Kong has one of Asia's clusters of world-class universities. Our governance capacity in terms of government effectiveness, regulatory quality and anti-corruption has consistently been top-rated by the World Bank Institute's governance indicators.
Hong Kong, together with New York and London, form the financial nexus for the global economy. We are the fifth largest foreign exchange market in the world, and the first and largest offshore Renminbi business centre. We host some 7 500 overseas companies, including some 4 000 regional headquarters and offices. Seventy of the world's top 100 banks operate in Hong Kong. We are also the second largest IPO (initial public offering) market in the world. The Hong Kong International Airport is the world's busiest cargo airport and the Hong Kong port ranks third among 46 of the world's major ports and cities in the 2014 Xinhua-Baltic Exchange International Shipping Centre Development Index.
Like New York, Hong Kong is a melting pot - a melting pot of Chinese people coming from different parts of China, different cities, provinces, ethnic and dialect groups, and also an East-West melting pot for local people and those foreigners taking the city as their home and/or place of work. That's where our vibrancy and openness come from. Our comparative advantage and soft power continue to drive Hong Kong forward, despite occasional doomsday predictions of Hong Kong losing its competitiveness and vigor, or even "dying".
Of course Hong Kong is not without problems of governance, like other big cities, but these problems have to be put in context and in proportion. Hong Kong cannot afford to be complacent and living in past glory; but neither should it underestimate its potential and its impact, whether on China or the world. Our main risk, in my view, comes from any inward-looking "fortress" mindset.
Globality under "One Country, Two Systems"
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Before I conclude, let me say a few words about the latest controversy over Hong Kong's constitutional development, which has bearing on the political future of "One Country, Two Systems".
For those of us, myself included, who have been actively involved in the discussions during the 1980s Sino-British negotiations, the drafting of the Hong Kong Basic Law, and the transition towards reunification with China in 1997, we know well that "One Country, Two Systems" represents a historical compromise which, if deployed effectively, could provide institutional flexibility and imagination rather than a straitjacket.
When it comes to constitutional design, China has always been much concerned about preserving Hong Kong as an SAR, Special Administrative Region, deriving its authority though with a high degree of autonomy from the Central People's Government, with no residual powers of its own as typical within a unitary state. Any constitutional change has to be agreed within Hong Kong by two-thirds majority vote of the legislature and consent of the Chief Executive and approved by the National People's Congress Standing Committee, within the confines of the Basic Law and relevant National People's Congress Standing Committee decisions.
In practice this means we must work on mutual trust and common goals in order for Hong Kong to achieve constitutional progress. There is no one-size-fits-all democratic model even though some core principles and aspirations can be derived from the democratisation experience of different nations over the course of political history and practice. Democracy in Hong Kong has to be compatible with its status as an SAR under "One Country, Two Systems", and will embrace unique characteristics resulting from compromise between the "Two Systems" and mutual accommodation of Hong Kong and Central Government needs.
Should Hong Kong succeed in achieving the goal of direct election of the Chief Executive in 2017 by universal suffrage, it will be the first city in China to be able to directly elect its own municipality head. The significance of this political milestone to both Hong Kong and the rest of China cannot be understated. The "Two Systems" within "One Country" may well display tensions at times, but "Two Systems" should also embrace a common "national" destiny that binds them together.
Thank you very much.
Ends/Thursday, September 25, 2014
Issued at HKT 22:11
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