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Following are the welcome remarks by the Permanent Secretary for Financial Services and the Treasury (Financial Services), Mr Andrew Wong, at the keynote luncheon of the Asian Financial Forum 2015 today (January 19):
Distinguished guests, ladies and gentlemen,
A very good afternoon.
We are slightly less than three weeks into 2015. The economic outlook for the year continues to dominate many of our daily conversations, especially with the enormous uncertainties we have inherited from last year.
Hong Kong, as a small and open economy, is particularly sensitive to the ebbs and flows of global capital. Our financial services industry is a key growth driver in Hong Kong given our status as a premier international financial centre. And being one of the four pillars of the Hong Kong economy, the industry contributes about one-sixth of our GDP and offers gainful employment opportunities for over 230 000 professionals.
The high value-added nature of the industry also provides impetus to Hong Kong's overall competitiveness and transformation into a knowledge-based economy. Moreover, a robust and resilient financial services industry can better support our commerce and enterprises, especially by ensuring a steady flow of credits to our small and medium-sized enterprises during the ups and downs of the business cycles.
Ladies and gentlemen, with distinctly divergent paths in economic growth among major advanced economies, tensions in a number of geopolitical hotspots and market volatility in a number of emerging economies over the past few months, the global economic outlook seems as uncertain as ever.
When we seek expert views on the global economy, we often look to the International Monetary Fund. That is why we are honoured and privileged to have Dr Olivier Blanchard, Economic Counsellor and Director of Research Department of the IMF, to shed light on the global economic outlook for 2015.
Born in France, Dr Blanchard has spent most of his professional life in the US. After obtaining his PhD in economics at the Massachusetts Institute of Technology in 1977, he taught at Harvard University and returned to MIT in 1982. He is the Robert M Solow Professor of Economics, and past Chair of the Economics Department. He has been on leave from MIT since 2008 to serve as the Economic Counsellor and Director of the Research Department of the IMF.
Dr Blanchard is a renowned macroeconomist. He has worked on a wide range of issues, from the role of monetary policy and the nature of speculative bubbles, to the determinants of unemployment and forces behind the current crisis. In the process, he has worked with numerous countries and international organisations. Dr Blanchard is the author of many books and articles, including two very famous textbooks in macroeconomics, one at the graduate level with Stanley Fischer, and the other one at the undergraduate level.
At a Research Conference on "Cross-Border Spillovers" held in November last year, Dr Blanchard said that for any financial spillover, and I quote, "we have partly discovered it as the result of the crisis, and I think we are still a long way from fully understanding that".
Hong Kong, with a highly open and liquid market and being an integral part of the global financial nexus, cannot be immune from any financial spillover. I could not agree more that we are still a long way from fully understanding such spillover, even when Hong Kong has seen its fair share of market turbulence in the past two decades.
Nevertheless, we are encouraged by the IMF's Financial Sector Assessment Programme report released in May 2014 which commended the quality of microprudential and macroprudential oversight in Hong Kong - including the intensity of supervision, comprehensiveness of risk assessment, and active use of macroprudential policies. But there is no room for complacency, especially under the flux in the external environment. That is why the Hong Kong SAR Government, together with our financial regulators, strives relentlessly to enhance our regulatory regime and market quality as well as keep up with the international standards. This is to ensure that the local financial system is well regulated and resilient to any unexpected shocks.
Ladies and gentlemen, I am sure you are all looking forward to hearing Dr Blanchard's views on what is in store for the global economy. Without further ado, I would like to invite Dr Blanchard on stage. Thank you.
Ends/Monday, January 19, 2015
Issued at HKT 15:20
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