Budget Speech by the Financial Secretary (8)

Enhancing the Competitiveness of Our Pillar Industries

81. The four well-developed pillar industries, namely trading and logistics, financial services, business and professional services, and tourism, are the major driving forces of our economy.  In 2009, they made a contribution of 56 per cent to our GDP and brought about a total value added of $860 billion.  The number of employees in these industries was over 1.65 million, representing 47 per cent of the whole labour force.  I will now briefly describe the development of these four industries.

Trading and Logistics

82. Being the largest of all the pillar industries, trading and logistics accounted for 24.1 per cent of our GDP and employed nearly 790 000 people in 2009.  With Asia becoming the engine powering the global economy after the financial tsunami and the Mainland accelerating economic growth and expanding domestic demand, new development frontiers have been opened for the trading and logistics industry.  As I have mentioned before, we will further regional co-operation and seize business opportunities brought by CEPA.  We also need to explore the emerging markets more actively to help minimise the impact of a weakening economy in Europe and the US on us.  We have achieved some initial results over these years.  Among the BRIC countries, India emerged as the fifth largest market for Hong Kong exports last year.  The value of our exports to Russia and Brazil also sharply increased in the last five years.  The exports to Russia have tripled, and those to Brazil have increased by two-thirds.

83. Further reinforcing Hong Kong's position as an international and regional transport hub is vital to our economic development.  With the improvement in the external economic environment, the throughput of both sea and air cargoes registered significant growth last year.  In 2010, the passenger volume and cargo tonnage of the Hong Kong International Airport reached an all-time high of over 50 million and 4 million respectively.  We will continue to invest in transport infrastructure projects and optimise our highly efficient multimodal transport services, with a view to promoting the development of air, sea and land transport and logistics.

84. Hong Kong is a world-renowned maritime centre.  We will reinforce the maritime service cluster, strengthen manpower training, continue promotion activities both locally and abroad, and foster the development of our maritime services in collaboration with the industry.  Turning to the port, we have commissioned a preliminary feasibility study on the development of Container Terminal 10 at Southwest Tsing Yi and will assess the project's impact on the environment and on road and marine traffic.  The study is expected to be completed by the end of this year.

85. On the development of cross-boundary land transport networks, the works for the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge have commenced.  Upon their scheduled completion in 2015 and 2016 respectively, they will further consolidate Hong Kong's position as the main south gate of the Mainland's transport networks.

86. On air transport, the Airport Authority (AA) is implementing a midfield expansion project to increase the cargo handling capacity of the airport to six million tonnes a year.  This is expected to cope with air traffic demand up to 2020.  Upon the scheduled completion of the new air cargo terminal in early 2013, the cargo handling capacity of the airport will be substantially increased by 50 per cent.

87. In the long run, we must ensure that the Hong Kong International Airport can cope with air traffic growth.  There is the need to study the feasibility of constructing a third runway.  The AA will launch a public consultation on the findings of its Hong Kong International Airport Master Plan 2030 Study as soon as possible.

88. To further consolidate Hong Kong's position as a regional logistics hub and capitalise on our competitive edge in handling high-value goods and providing high value-added services, the Government is gradually making available long-term sites for the sector to develop a logistics cluster.  The tender for a site in Tsing Yi was awarded last December.  In parallel, we will continue to provide suitable sites for port backup uses to facilitate efficient port operations.

89. We will maintain close ties with the Mainland to facilitate cargo movement within the region.  The Framework Agreement on Hong Kong/Guangdong Co-operation signed last year sets out clearly the direction for advancing co-operation between Hong Kong and Guangdong.  This will help logistics industry to seize the opportunities brought about by the rapid growth in Mainland's external trade and domestic demand.  This will further reinforce Hong Kong's leading position in the global supply chain and enhance our strengths in trade and logistics.

(To be continued)

Ends/Wednesday, February 23, 2011
Issued at HKT 12:01