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Following is the transcript of remarks by the Chief Executive, Mr C Y Leung, at a media session in Mumbai, India, today (February 3):
Chief Executive: Hello. Good afternoon. I'm very pleased to be in Mumbai. This is the first leg of my three-day visit to India, and it is my first official visit as the Chief Executive of the Hong Kong Special Administrative Region. On this trip I've brought with me a large government and business delegation totalling 70 delegates, 40 of whom are top leaders of the various business sectors in Hong Kong including banking, other financial services, professional services, trade, infrastructure and logistics, and we attach a great deal of importance to trade and other bilateral relations with India.
If one looks at trade, our bilateral trade has been doing quite well. We are each other's seventh and eighth largest trading partner and the rate of growth has been quite remarkable. Between the years of 2010 and 2014, the volume of merchandise trade between Hong Kong and India grew at an average rate of 7 per cent per annum, and in the year 2014 the rate picked up to 12 per cent increase. And we can see a lot more potential, not only in the area of merchandise trade but also in, for example, services including, as I said, financial services, banking, logistics services, trade services and professional services. And the fact that this visit has attracted interest of 40 top leaders of the various business sectors in Hong Kong very much underlines their assessment of the potential between Hong Kong and India.
On the non-economic front, I should also say that we welcome the very strong people-to-people ties between Hong Kong and India. In fact, there is a very strong and active Indian community in Hong Kong, many of whom have been living in Hong Kong for generations. We also host nearly 300 Indian students studying full-time at our government-funded universities and tertiary education institutions.
So that's the purpose of the visit. This is the second and last day of my visit to Mumbai. After the luncheon speech, the entire delegation will head for the airport and will leave for New Delhi, where we will continue the New Delhi leg of our visit.
Reporter: You set up a start-up fund in Hong Kong to encourage start-up investments in Hong Kong sponsored by the Government. There were discussions about you looking overseas. So would India be one of the markets, maybe, you would like to set up? And, if yes, how much would you be investing here?
Chief Executive: Yes, we very much appreciate the fact that India is a very strong innovation and technology base, particularly on the information technology side. My Government is very much into innovation and technology, so much so that we have just set up a new bureau which is equivalent to other governments' ministry. It's known as the Innovation and Technology Bureau. In the Policy Address that I delivered about two weeks ago, there are a number of major initiatives to give our innovation, science and technology sector a big boost, including helping start-up businesses. So that is one of the areas in the scope of collaboration between Hong Kong and India in future. We very much like to encourage people, particularly young people, in the innovation and technology sector to come and visit Hong Kong. And similarly, we'd like to in the reverse direction facilitate Hong Kong young people coming to India to learn from you.
Reporter: Is there any specific sector that you're looking at to invest in India? Do we expect any bilateral agreement between government to government, or government to any particular corporate house? And secondly, sir, on the financial sector, do we see any collaboration, because you were at the Bombay stock exchange today morning to ring the bell? Do we see any collaboration happening between Indian stock exchanges and Hong Kong, because of Hong Kong being a financial centre?
Chief Executive: The scope of possible collaboration between Hong Kong and India really covers the entire spectrum. If one looks at the economic sector, one should look at not just trade, as I said. Manufacturing is actually quite strong on the Hong Kong side and also on the India side. We have a strong manufacturing sector, although the actual manufacturing is not done in Hong Kong. But Hong Kong owns and also manages quite effectively and efficiently a large manufacturing base, for example in the Mainland of China. We are also in Vietnam, other parts of the ASEAN region, and so Hong Kong has good experience and the necessary expertise of managing production lines outside of Hong Kong. And so if Hong Kong can do that in Mainland China, in ASEAN, why shouldn't Hong Kong do it as well in India? And similarly, this shouldn't be one-way traffic. We welcome Indian business to look at prospects of working with Hong Kong, not just within Hong Kong physically itself, but also through Hong Kong with, for example, the Mainland of China.
I should slightly digress by highlighting a very important role that Hong Kong plays, and this is what I call the "super-connector" role. We leverage on the combined benefits of "one country", Hong Kong being part of China, which is a fast-growing major economy, and "two systems", because we practise so to speak the other system, which is different from the system practised by Mainland cities such as Shanghai, Beijing and Guangzhou. So when you are in Hong Kong or when you work with Hong Kong, you're in China. You work with a city in China but at the same time this city, Hong Kong, provides the benefit of the other system. Language, for example. English is widely spoken in India. It is also widely spoken in Hong Kong, so we have this common language in English, which is one of the official languages and definitely the business language in Hong Kong.
So these are very much the advantages that Hong Kong would like to offer. I cited manufacturing as one example in this spectrum of scope of co-operation between Hong Kong and India. Financial services is another. The Hong Kong Stock Exchange has been very active. It's been promoting the listing of overseas, including Mainland Chinese, enterprises. Last year the amount of IPO equity raised by HKEx, the Hong Kong exchange, was the highest of all stock exchanges in the world. I just visited BSE this morning. I'm very impressed by the amount of activity there and by the fact that it is the oldest stock exchange in the whole of Asia. Again, just looking at this particular sector of activities, namely stock exchange and other exchange-related activities, one shouldn't just look at IPOs. We have an arrangement with, for example, Shanghai whereby we have this mechanism known as Shanghai-Hong Kong Stock Connect, namely investors could buy Shanghai-listed shares through the Hong Kong exchange. That's something we could look at long-term because already there are Hong Kong-owned or Hong Kong-managed companies that operate in the Mumbai, in the Indian, markets. CLP, which is a power company from Hong Kong, already has a business in India. And the fact that this visit has attracted interest of 40 top business leaders must mean that they are hopeful about prospects of expanding their business in India or entering the Indian market for the first time. And sooner or later they'll need additional capital, and much of this additional capital could be in the form of new equity. And so the possibility of such Hong Kong-owned and Hong Kong-managed businesses listing on the BSE, that must be a possibility and there must be a prospect. So I could see collaboration between the two places, Hong Kong and Mumbai, also in the stock market as well.
Reporter: Sir, is there any move to stop visa-free entry to Indians?
Chief Executive: Hong Kong's an open society, is a welcoming society. We want to make Hong Kong as barrier-free as possible, but we are also mindful of, if you like, the side effects of providing visa-free entry when we have issues of overstaying. So these are the issues that we need to address.
Reporter: So there has been speculation last month about ending the Hong Kong dollar to US dollar link. So is there any reason that you should go ahead and end the tie-up with the USD?
Chief Executive: The exchange mechanism has served Hong Kong very well. So to speak the peg arrangement whereby the Hong Kong dollar is pegged at a fixed rate to the US dollar has served Hong Kong well for decades - not just for years but for decades. And the peg has served Hong Kong well during the ups and downs of the world economy and the changing value of the US dollar versus other currencies. So I can say this categorically: there is definitely no plan and no intention on the part of the Hong Kong Government to do anything to the peg arrangement. Thank you.
Ends/Wednesday, February 3, 2016
Issued at HKT 19:13
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