***************************************
The following is the speech by the Chief Executive, Mr Tung Chee Hwa, at the reception for new foreign and Mainland investors at Government House this afternoon (June 24):
Ladies and gentlemen,
Let me first extend a very warm welcome to each and everyone of you to this reception and to Hong Kong - Asia's world city. It seems like only yesterday that I was holding the same reception to welcome over 100 new companies here last year. And this year we have an even greater number. In the past 12 months, some 135 external investors have set up offices or substantially expanded their presence here, no fewer than 70 of them in the first five months of this year alone, despite the SARS outbreak. This is a great vote of confidence in our city.
Over the past several years, because of the Asian financial turmoil, the bursting of the asset bubble in Hong Kong and the very rapid and successful developments in the Mainland economy, our own economy has been going through painful restructuring and adjustments. To promote economic restructuring and revitalise our economy, we have been working hard to forge closer economic cooperation with the Mainland, enhance the quality of our human resources, improve the business environment, and further strengthen the four pillars of our economy, namely, financial services, logistics, tourism, trade and trade-related support services.
In the last two quarters of 2002, our GDP grew by 3.4% and 5.1% respectively in real terms. This is followed by a very robust GDP growth of 4.5% in the first quarter of this year, before the SARS epidemic took its toll. The strong growth of our economy in the last three quarters shows that our economic policy is in the right direction, that our economy is on the road to recovery, and that the painful economic restructuring is beginning to bear fruit, slowly but surely is beginning to bear fruit. Unfortunately, the SARS outbreak has dealt a devastating blow to the recovery. And indeed, it has knocked our economy off course. We expect a sharp fall in the GDP figures in the second and third quarters this year as compared with previous quarters.
Ladies and gentlemen, Hong Kong has taken on the enormous challenge of fighting SARS in the past few months. With effective measures taken by the Government, and thanks to the concerted efforts of the whole community, we have successfully contained the disease. We are beginning to see the recovery of business in many sectors after the lifting of the travel advisory by the WHO. Following the removal of Hong Kong from WHO's list of SARS affected areas yesterday, we have announced a package of proposals to promote Hong Kong and to revive our economy after the SARS attack. We hope that business will resume normal as soon as possible.
With the general improvement of the external environment and the foundation work we have done, I am confident that the SARS impact on our economy, though severe, would be temporary. I am confident because the direction adopted by the Government in the past few years to reposition and restructure Hong Kong's economy is beginning to work. I am confident because Hong Kong continues to enjoy many competitive advantages, including our rule of law; free flow of capital, people and information; a level playing field; a cosmopolitan lifestyle; a transparent and efficient government; international standards and practices of doing business; and the list goes on and on. Our position as an international financial centre, a centre for trade and business, a centre for logistics and a premier tourist destination, together with our superb infrastructure and the pool of talents and professionals we possess makes us a perfect gateway for multinational companies to enter the Mainland market and for Mainland enterprises to go overseas.
Moreover, the Central People's Government has pledged strong support for Hong Kong. The Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Mainland, to be signed towards end of June 2003, this week or next week, will open up new and exciting opportunities for Hong Kong. CEPA will cover three main areas: trade in goods, trade in services, and trade and investment facilitation. On trade in goods, many Hong Kong products will enjoy zero tariff in the Mainland market. On trade in services, a number of sectors will have greater market access in the Mainland under CEPA, including construction related services, audio-visual services, advertising, medical services, logistics, legal services, accountancy, banking and insurance etc. This free trade agreement, the first for both the Mainland and Hong Kong, creates immense potential for Hong Kong to become a centre for higher value added manufacturing for a vast domestic market of 1.2 billion people, as well as a base for companies providing high-quality services to expand their businesses into Guangdong and the rest of the Mainland.
Let me hasten to add, we are going to sign this agreement in a few days. It does not mean the day after everything is going forward. There is still a lot of work needs to be done. The business sector particularly needs to pick the thing up and run with it. I hope many of you will do it too and in time, over the months and years, we will see the result coming through benefiting everybody including those who are here.
Ladies and gentlemen, the Mainland is widely recognised as one of the world's most dynamic economies with immense potential. After China's accession to the WTO and the signing of CEPA, Hong Kong's role as an international trade and business centre and a gateway to Mainland China will be further strengthened. It is our mission to help you position yourself to take full advantage of the new opportunities. We will continue to work closely with the Mainland authorities to ensure the smooth flow of people and goods across the boundary; simplify customs and immigration procedures particularly for foreign businessmen based in Hong Kong and managing their business in the Pearl River Delta; further improve the infrastructure and quality of our living environment; and simplify the rules and procedures for doing business both in Hong Kong and in the Pearl River Delta.
Your presence here is essential in helping us achieve our vision of being Asia's world city and a business-friendly city. Please let us know if you have any suggestion on how we can do better. And we would surely try to do better because we want you to succeed. Our motto is "Your success is Hong Kong's success".
Thank you very much.
End/Tuesday, June 24, 2003
NNNN
