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Following is a speech by the Financial Secretary, Mr Donald Tsang, at the Opening Ceremony of the 12th International Travel Expo Hong Kong today (Thursday):
Mr Chu, ladies and gentlemen,
I am most honoured this morning to be here to open the 12th International Travel Expo 1998. On behalf of the Government of the Hong Kong Special Administrative Region, I would like to extend a warmest welcome to all of you, and in particular those of you who visit Hong Kong for the first time.
Being one of the most established travel trade expositions in the region, the International Travel Expo provides an excellent opportunity for members of the international travel trade to meet for business and exchange information on the latest development of tourism. I congratulate all of you who help organise this event and those who participate to make it a successful one.
Just as the International Travel Expo has firmly established itself as "the event" of its kind in the Asia Pacific region, Hong Kong has likewise established herself as one of the most popular travel destinations in the Far East over the years.
With the efforts put in by the travel industry, Hong Kong has enjoyed a phenomenal growth in tourism over the last 10 years. In 1997, Hong Kong received around 10.4 million visitors, an increase of 70% over 1987. At the same time, notwithstanding our small size, Hong Kong has also been an important outbound visitors source market. In 1997 alone, the total number of trips our people made outside Hong Kong more than doubled that made in 1987.
However, with the unexpected and unprecedented economic downturn in the region since late last year, our tourism industry has been facing one of the toughest times, for reasons well understood. To re-build our competitiveness as an attractive tourist spot, the Government, together with the Hong Kong Tourist Association as well as the tourism industry, have joint their efforts in this regard.
Right now, the Hong Kong Tourist Association is launching the "We are Hong Kong - City of Life" campaign which is aimed at introducing the new face of Hong Kong to the world. Through this campaign, Hong Kong's vibrant, exciting and varied life style, as well as her unique East-meets-West flavour will be brought home to potential customers overseas.
Given our close relationship with the Mainland, one of our campaign highlights this year will be promoting "complementary travel" to overseas visitors to visit Hong Kong and one or two Mainland cities in a package tour. To this end, we will be launching a joint promotion with five Mainland cities, namely Beijing, Shanghai, Xian, Guilin and Kunming, in Europe next month to publicise the idea of "complementary travel".
To put further impetus into the tourist industry, this year, the Government has provided a $100 million loan to the Hong Kong Tourist Association to set up the "International Events Fund" to support the staging of international events in Hong Kong. Our target is to host some 50 such events in the next 5 years. This is part and parcel of our overall efforts in the promotion of event tourism in Hong Kong and to foster our role as the Events Capital of Asia.
We are also discussing with the Mainland authorities on the relaxation for more Mainland visitors to come to Hong Kong. There are as well certain reductions since April in tourism-related tax and charges, such as the Hotel Accommodation Tax and a reduction from $100 to $50 for the Air Passenger Departure Tax when the new airport is opened on 6 July.
As Financial Secretary, I fully appreciate the difficulties that the tourist industry, and indeed the economy as a whole, are facing at this very moment. The austere economic situation and the uncertainties surrounding the region since the outbreak of the Asian financial turmoil loom large. The current sluggishness and financial sector troubles in Japan add to the stringency while the controversy over nuclear tests in the sub-continent creates new regional tensions. Indeed, after my recent trip to South America, I have seen that the effect of the Asian financial crisis goes much farther than I had first thought. Many of the economies in the region, and elsewhere, are suffering badly. Their growth forecasts for this year have been shaved down substantially, in certain cases to well in the negative range. Interest rates were in double digits. Hong Kong, being what we are, cannot be immune from this plight.
In the light of further deterioration in economic conditions across the region as well as locally in the more recent months, I share the view, which has been expressed by many commentators, that our earlier forecast of economic growth for the current year is likely to be unattainable. However, what lower level of growth it should be is impossible to assess with any precision at this stage, as the situation in the region continues to be volatile week by week. The efficiency of Hong Kong's economy tends to reflect these external events with their wide implications exceptionally promptly in various performance indicators. This compounds the difficulty of forecasting. The position that we are now in is, in my view, unprecedented. I have never experienced a situation as volatile as this over my 30 years of service as a public servant. The Government Economist will be providing a fuller analysis of the situation so far when he publishes our First Quarter Economic Report tomorrow.
Hong Kong people are well known for their perseverance. I am confident that, with our strong fundamentals, coupled with our flexibility of adaptation to external shock, and with the extent of price and cost adjustment that our free market economy has allowed us to go through up to now, our economy should be able to rebound expeditiously from the current doldrums, once the regional situation has settled, and our outlook beyond that remains bright.
Thank you.
End/Thursday, May 28, 1998
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