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Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the "Made in Asia" symposium organised by the French Chamber of Commerce and Industry in Hong Kong (French Chamber of Commerce and Industry) today (March 10):
Mr Borit (President of the French Chamber of Commerce and Industry, Mr Nicolas Borit), Mr Bailey (Principal of Business Development of KPMG, Mr Anson Bailey), distinguished speakers, ladies and gentlemen,
Good morning. It gives me great pleasure to join you all today at this "Made in Asia" symposium. I would like to thank the French Chamber of Commerce and Industry for organising such an excellent event for senior executives, sourcing and supply chain professionals and social experts to exchange insights on how innovations can enhance sourcing and supply chain management.
The theme of today's symposium is "Evolution or Revolution", which is rather spot on. Winston Churchill once said, "To improve is to change; to be perfect is to change often." Hong Kong is certainly no stranger to change, be it evolutionary or revolutionary. Over the past few decades, Hong Kong has changed dramatically from a fishing port, to a traditional OEM (original equipment manufacturer) manufacturing base and on to a global financial centre and services-oriented economy. Our entrepreneurs embrace change and thrive on challenges.
The sourcing industry has also faced a lot of change and challenges at different levels. Mounting protectionism, market penetration, pressure of cost increases and currency devaluation of buying countries are typical challenges besetting sourcing companies nowadays. To survive, sourcing companies must adapt to and manage these changes and challenges.
Hong Kong can give you a head start in coping with and managing some of these changes and challenges. How? First of all, our business-friendly environment is very conducive to sourcing activities. We practise free trade and we do not impose any tariffs or maintain any trade barriers. Regulatory measures are kept to a minimum to ease trade flow. We follow the common law legal system and adopt internationally recognised codes of practices in business and commerce. We have a low and simple tax system with no GST (goods and services tax) or VAT (value-added tax). We have a clean and efficient government and a level playing field for all companies.
Indeed, you would expect nothing less from an economy that is consistently ranked as the freest in the world. We have retained top spot in the Heritage Foundation's Index of Economic Freedom for 21 years in a row. This status reflects real advantages for businesses in Hong Kong
Sourcing business is also about "just-in-time" delivery to the destination. Location is therefore a very important factor in the industry. Hong Kong is strategically located at the heart of Asia and at the doorstep of Mainland China. This makes us an ideal springboard to reach out to the prosperous markets in our neighborhood. Half of the world's population can be reached within five hours' flight time from Hong Kong. We also have world-class transport and information technology infrastructure, and one of the world's busiest container ports.
Apart from excellent hardware, our software, particularly our reliable and professional services as well as our business-friendly environment, also contribute to our supremacy in the sourcing business. Our trade professionals in product sourcing are able to cater for the preferences of a diverse customer base and are acclaimed for speedy delivery within a short lead time.
The China factor also comes into play. Hong Kong is China's international financial capital and one of the world's premier financial centres. With Hong Kong serving as China's biggest offshore Renminbi (RMB) market, the city is ideally positioned as an RMB trade settlement centre for sourcing businesses. This is especially attractive for the growing number of traders and investors wanting to tap into the Mainland market.
These are the reasons why Hong Kong is favourably regarded as Asia's hub for sourcing. And these are the reasons why we have attracted many international companies to set up their sourcing operations here, as they want to ensure "just-in-time" delivery throughout the Asian region.
We are obviously on the right track, but we can always do better. We need to change and equip ourselves to face the challenges ahead.
For the sourcing industry, we can all agree that information technology is the key driver to enhance efficiency in supply chain management. For example, the emerging big data technologies will bring about breakthroughs for market research and spending analysis, bringing the level of analysis and trend prediction to a new dimension.
Likewise, e-Commerce portals now provide unmatched experience in identifying potential suppliers, as compared to the traditional approaches of requesting information and attending trade shows. The development and application of emerging technologies like the Internet of Things are also revolutionising supply chain management, improving logistics and enhancing visibility of shipments.
And what have we done to ride this global tide? We have been exploiting the latest technologies like cloud computing, big data analytics, the Internet of Things, mobile technologies, adopting them in various sectors to power their further advancement.
One example is our "E-Lock" invention. Our Hong Kong R&D Centre for Logistics and Supply Chain Management Enabling Technologies invented "E-Lock" to simplify customs clearance procedures and enhance security and visibility of cargo, thereby saving clearance time and smoothing logistics.
We will set up a steering group to explore the development of financial technologies. We will launch "e-cheque" by the end of the year to enable users to make cheque payment or receive cheques on the Internet, thus saving time, cutting cost and ensuring security.
We will also provide more funding to drive innovation. We will earmark $50 million to set up a corporate venture fund for co-investment in start-ups located in the Science Park or to participate in its incubation programs. In addition, we are injecting $5 billion into the Innovation and Technology Fund to sustain our support for research and development in different industrial sectors.
Innovation in ICT (information and communications technologies) and applications spurs evolution and revolution of businesses, enhancing efficiency through the entire supply chain. Together, let us adapt this changing landscape and bring our economy to the next level.
"To improve is to change; to be perfect is to change often."
Thank you.
Ends/Tuesday, March 10, 2015
Issued at HKT 11:39
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