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Following are the remarks made by the Hong Kong Commissioner to the USA, Mr Donald Tong, at Chinese New Year Reception in New York today (February 4, New York time):
Dear Friends,
First of all, a big welcome to you all for joining our Chinese New Year Reception this evening as we usher in the Year of the Ox. I am particularly honoured to welcome Permanent Representative of the PRC to the United Nations, Ambassador Zhang Yesui; and Chinese Consul-General to New York, Ambassador Peng Keyu. Thank you for joining us.
For friends anxious about their economic fortunes, you can perhaps take comfort in knowing that there is no Year of the Bear in the Chinese zodiac. The Ox is a sign of prosperity, but prosperity gained through patience and resilience. Through the close collaboration of all members of the global village, we are hopeful that we will be able to combat the financial turmoil, protect jobs, and bring back a bullish market to all stock markets, including certainly Wall Street in the Year of the Ox.
I am no stranger to the US, having served in the Hong Kong Economic and Trade Office in Washington DC in the early nineties. Although I only took up the Commissioner post last October, this is already my fourth visit to New York City. New York City is always one of my most favourite cities because its vibrant and energetic life style reminds me very much of Hong Kong; and because of the close ties between the two cities.
Freest Economy
The Year of 2009 was an auspicious start for Hong Kong as we were ranked the world's freest economy for the 15th consecutive year by The Heritage Foundation and The Wall Street Journal.
The ranking acknowledges Hong Kong's commitment to free market principles and devotion to our common law tradition. They are also good encouragement for us to maintain a free and open system, including open markets, free trade, low taxes, and a free flow of people, capital, ideas and information, in Hong Kong.
Hong Kong Economy in 2008
Hong Kong's economy performed reasonably well in 2008. Economic growth in 2008 was around 3 to 3.5 percent. Visitor arrivals increased by 4.7 percent to 29.5 million while total exports grew by 5.5 percent in 2008. For the first half of 2008, about US$34 billion foreign direct investment came into Hong Kong – 25 percent more than the same period in 2007. This underscores Hong Kong's appeal to a growing number of international companies as a platform to reach the Mainland China and the Asia Pacific region.
Financial Turmoil and our Solutions
As an externally oriented economy, Hong Kong is not immune to the current global financial crisis. Economic growth, export and re-export sectors faltered quickly in the last few months with the unemployment rate climbing to 4.1 percent. Like many economies, negative economic growth together with a rising unemployment rate in 2009 might be inevitable in Hong Kong. However, our Government has put in place a full range of measures to deal with these challenges.
Since the Asian financial crisis a decade ago, Hong Kong has reinforced its financial markets by improving risk management of banks and creating a more transparent regulatory system. This has helped our financial industry weather the current storm. To ease liquidity for the business community and bolster public confidence, our Government has guaranteed all bank deposits and established a mechanism to provide additional capital to banks, if requested, until at least 2010.
We also introduced a US$12.8 billion loan guarantee scheme to help unfreeze credit for the business community, particularly the small and medium enterprises. Hong Kong and Mainland China also agreed on a currency swap pact in value of US$25 billion to provide short-term liquidity support to Mainland operations of Hong Kong banks and the HK operations of Mainland banks in case of need. To tackle rising unemployment, our Government has also increased public expenditure largely in fast-tracking infrastructure projects so as to create more than 60,000 jobs this year. Public bodies and the private sector have also lately pledged to create several thousand short-term jobs and internship places, particularly targeting fresh graduates from high schools and universities.
We are confident that these measures will help us weather the storm.
New Initiatives
To pave way for Hong Kong's further development, we have taken some other new initiatives. To enhance Hong Kong's attractiveness as a business and trade hub, we have intensified our global effort in promoting Hong Kong as a destination for "Meetings, Incentives, Conventions, and Exhibitions" or MICE in short. We have waived our hotel accommodation tax. Following the completion of the expansion work at the Hong Kong Convention and Exhibition Centre in Wan Chai this year, its floor area will increase by 42 percent. Together with AsiaWorld Expo and the Hongkong International Trade and Exhibition Centre, these three world-class venues would provide ample space for holding conventions and exhibitions.
We have also waived our duty on wine with a view to developing Hong Kong into a regional hub for wine-related business. US companies have wasted no time in seizing the opportunity e.g. New York wine house - Acker Merrall and Condit - held successful wine auctions in Hong Kong last year. For visitors who might need an authentic guideline in choosing dining places from our 9,000 restaurants, I am pleased to tell you that Hong Kong together with Macau have just become China's first Michelin cities. With about 200 restaurants listed in the Michelin Guide, including 22 with one or more Michelin stars, I am sure you will have no difficulties in picking nice restaurants to wine and dine in Hong Kong. Just be sure that you would not spend all your time in our restaurants and do leave adequate time to do some shopping in Hong Kong, taking advantage of the absence of sales tax.
We will also build a 100-acre cultural hub in West Kowloon, which is about six times the size of Lincoln Center in New York. This US$2.8 billion project to be commissioned in 2015 will feature 15 performing arts venues, outdoor performance piazza areas, a new concept museum, an exhibition centre and galleries.
In addition, the Mainland Government has introduced measures to reinforce our status as a global financial centre and foster closer economic co-operation between Hong Kong and the Pearl River Delta. For example, we are working with the Mainland Government to further develop renminbi business in Hong Kong. Hong Kong will be one of the pilot areas for transforming renminbi into an international currency, with permission for qualified enterprises to settle their cross-border trade in yuan. Separately, we are now reaching out to other emerging markets. For example, we are establishing a platform for Islamic finance in Hong Kong and are making good progress.
Recently, we entered into agreement with the Guangdong Province to step up further co-operation in four priority areas - financial industry, service industry, infrastructural facilities and town planning, as well as innovation and technology. New infrastructure projects across the border including large-scale bridge and high-speed rail projects will also begin construction in the coming two years to cope with the increasing people and vehicular flow between Hong Kong and Southern China.
HK-US ties
Hong Kong and the US have long enjoyed close ties. We work in tandem on issues ranging from trade and port security to combating money-laundering and public health issues.
The US tops the list of countries with regional headquarters and regional offices in Hong Kong, increasing by more than 100 percent to about 900 in the past 10 years. This is a strong vote of confidence in our role as Asia's leading business hub and a reliable partner for US businesses.
As we move forward, I know that our friends in New York and the US will continue to support our efforts in bolstering Hong Kong-US ties.
I wish you all a healthy and prosperous New Year.
Kung Hei Fat Choi!
Ends/Thursday, February 5, 2009
Issued at HKT 11:45
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