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Following is the speech by the Financial Secretary, Mr John C Tsang, at the Hong Kong Exporters' Association Christmas Luncheon 2014 today (December 1):
Ivan (Ting), distinguished guests, ladies and gentlemen,
Good afternoon.
I am indeed really pleased to join you here today for the Christmas luncheon hosted by the Hong Kong Exporters' Association.
It's actually been seven years since I last had the pleasure of addressing you over Christmas lunch. I hope I did not misbehave so badly seven years ago that I was not invited again until now.
Actually, a lot has happened over those seven years. In 2008, of course, we discovered that there is really no Santa Claus. Even though our tables got Santa Claus. Or, at least, Mr Claus had taken an extended sabbatical that holiday season, leaving very little joy to the world.
It was not until 2010 when the trade engine that powers Hong Kong started to regain its momentum, thanks mainly to the strong growth of the Mainland market. Consider the numbers. In 2007, Hong Kong was the world's 11th largest trading economy. Last year, we were the eighth largest, and the ninth largest exporter in terms of merchandise trade.
In 2006, our total exports were about HK$2.5 trillion. Last year, our export figures hit HK$3.6 trillion. That's up over 40 per cent in seven years, although our exports to the US and to Europe have yet to recapture the lost ground. Our exports this year are again on the rise, up 3.8 per cent over the first 10 months, year on year, despite a much slower growth of only 2.5 per cent to the Mainland.
The journey in the last seven years has been rough. Given the challenges of the global economy, I would say those are rather comforting figures, and it reflects the hard work by you all, the export community.
Looking ahead in 2015, the external environment is still full of challenges. Europe is still suffering from high unemployment, they are still suffering from political turmoil arising from austerity measures as well as geopolitical tensions. The increase in sales tax in April has slowed down Japan's economic momentum. We have yet to see any concrete evidence to suggest that the quantitative easing measures in Europe and in Japan will put their economic growth back on track.
The US, on the other hand, seems to be making some steady and sustained recovery. However, the improved economic performance of the US has yet to be translated into strong demand for our exports. Moreover, the US labour participation rate remains on the low side. Recent signs seem to suggest that the property market is also slowing down. The political struggle between the two parties is already intense, and the President's effort to go solo on immigration will add to the problem.
The ongoing economic reform of the Mainland is necessary for healthy and sustainable economic development of our nation in the medium and longer term. However, it also means that in the short run, the Mainland market may not be able to provide our export sector with the timely cushioning effect that we saw in the last seven years.
Domestically, if the occupy movement and the irrational political behaviours were to continue, Hong Kong's international reputation and the rule of law, which is our basic core value and the foundation of our competitiveness, could be seriously damaged, making the healing process a long and painful one. Everyone in Hong Kong, including the exporter community, would be affected.
But despite all these factors, I am confident that Hong Kong will continue to be resilient and all of you would be able to meet these challenges with flying colours and the export sector would become an even stronger driver of our economy.
In terms of business establishments and employment, I cannot overstate the importance of our import-export sector. As of June, more than 100,000 companies were engaged in import-export trade in Hong Kong. Those companies employed about half a million people, which is the largest share of our total employment.
Those numbers reflect your relentless efforts over the years. Whatever the product, whatever the service, in the end it is your hard work, your dedication and your ability to seize the opportunity, wherever it may lie, that drive Hong Kong's exports and global confidence in our exports.
For that, you have my thanks and you have the gratitude of the Hong Kong people. And more than that, you can count on our continuing support.
Meanwhile, I wish you all happy holidays and a prosperous and successful New Year - with or without Santa. Thank you very much.
Ends/Monday, December 1, 2014
Issued at HKT 17:40
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