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Following is the speech by the Chief Secretary, Mr Stephen Lam, delivered at the Fourth Greater China Conference organised by Committee of 100 at Island Shangri-La this morning (December 5):
Donny, Ronny, Victor, Ambassador Locke, friends of C-100, distinguished guests, ladies and gentlemen,
First of all, on behalf of the Hong Kong Government, I extend a very warm welcome to all our friends from the US, from the Mainland, from Taiwan, from all over different parts of the world.
The Committee of 100 is quite well known in Hong Kong, and I like to recall that back in 1999 when I was spokesman and Information Co-ordinator for Chief Executive CH Tung, we visited California. On that occasion we had a meeting with the Committee of 100, and I got to know that your members are very accomplished individuals in the American society. You provide an excellent link between Asia and America, between China and the eastern part of the Pacific, the Atlantic, you straddle many continents.
I'm very pleased to see that today we have the presence of Ambassador Locke – a distinguished member of the Obama administration. Previously you had Elaine Chao, who also was closely involved with the Committee of 100. Ms Chao served as Labour Secretary in the Bush administration. So the Committee of 100 is very good at bridging political divides, and also you exercise your role as a bridge across the Pacific.
It is also very apt that Dominic chairs this conference. He carries the title of being Chairman of the East West Bank. That's what the Committee of 100 does – to bridge East and West. That's also what Hong Kong does. We like to pride ourselves on being Asia's world city and being the bridge between Mainland China and the rest of the world, the best conduit for conducting investments in this part of the world.
For today I'd like to bring to you three things concerning how Hong Kong is expected to develop as a service industry centre, how we're trying to promote culture in Hong Kong and to say a word about our relations with Taiwan.
Firstly, on service industries. For those of you in business and politics you like to know what's the latest, and I'll give you the latest. We in Hong Kong have been very successful in developing a service- oriented economy. Our GDP is 90 per cent service oriented, our per capita GDP is US$32,000 per annum and unemployment is about 3.4 per cent in Hong Kong, and we have been able to do this because we have maintained our economic momentum all these years.
In the last two years, in 2009 and 2010, the Hong Kong Exchange stock market has been top of the charts in terms of new capital raised through IPOs. In 2010 we raised 57 billion US dollars and our market capitalisation is now the seventh in the world. We're getting new listings from Russia, from France, from Italy, Mongolia, Brazil. Some of these are luxury brand goods, like Prada, and some of these are aluminium mining industries, and these industries are relatively new to Hong Kong in terms of stock listings.
We have been able to do this because we have maintained our tradition of being an open and free economy. And the US has acknowledged Hong Kong's position in this regard. The Heritage Foundation for 17 years in a row has rated Hong Kong as the freest economy on earth, and we want to maintain that momentum.
One of the key aspects which our friends from America and different parts of the world ought to know is that Hong Kong is fast becoming the the offshore Renminbi services centre. Beijing trusts Hong Kong to conduct experiments in liberalising the operation and running of the Renminbi exchange rate and how it interfaces with the outside world.
There are many transactions which you can do now in Hong Kong denominated in Renminbi.
On trade settlement, Hong Kong banks account for over 80 per cent of cross-border trade settled in Renminbi. Today we can hold the proceeds in Hong Kong in Renminbi. Just last year we started with about 40 billion Renminbi [deposits] accumulated here. During the summer we exceeded 600 billion, within a year we expect to hit and exceed [the] 1,000 billion limit.
Also since 2007 we have been able to issue bonds denominated in Renminbi. Caterpillar and McDonald's have done so; Chinese banks and Chinese enterprises are doing so. What's more important, the Hong Kong stock market, together with their counterparts in Shenzhen and Shanghai, are forming a joint venture company in order to sell products which will track the stock market indices in the Mainland. Also, Hong Kong can at some point in the near future sell ETF products in the Mainland.
The important thing is – and this is the key – Hong Kong can now do foreign direct investments denominated in Renminbi in the Mainland. This is a facility which we will offer to companies and banks who wish to use Hong Kong for that purpose.
Now I have cited all these examples to this audience because I know you care about these international financial arrangements. This is the place where outside of the Mainland of China we can do almost all necessary transactions in Renminbi. This is going to enhance and promote Hong Kong's position as an international financial centre – as the premier financial centre in this part of the world.
I was in Europe about a month ago and I went to Berlin. I talked to the German Finance Minister about the Euro crisis, I also had a meeting with the Foreign Minister. They gave every indication of resolve to solve the Euro crisis and I advised them that here in Hong Kong we look forward to stability in Euro, not so much [because] we hold part of our foreign exchange reserves in Euro, but much more important, because to Hong Kong international confidence is so key to our further development as an international financial centre.
I also expressed a warm welcome to German banks to take part in the further development of Hong Kong as a Renminbi offshore service centre, and likewise I extend a similar hand of thank you and welcome to American banks today. I think, with this sort of development, Hong Kong's position as an international financial, trading, shipping centre will be further enhanced and it is important for our friends around the Pacific rim to acknowledge and place importance on this trend.
Vice Premier Li Keqiang visited Hong Kong in August, and he pronounced on many of the policies I outlined just now. He also made one very important statement and that is, within the next five years the Government in Beijing would look forward to fundamental liberalisation of service industries between Mainland and Hong Kong.
So this means, aside from the financial and banking industries, the professionals in Hong Kong can look forward to further clientelles being developed in that vast market. Here in Hong Kong we have a population of 7 million people; in the Pearl River Delta, which Victor mentioned, we have 50 million people; in the Pan-Pearl River Delta, nine provinces in the Mainland, we have over 400 million people. So, in Hong Kong, our professionals and our service providers can look forward to tapping into that vast market and American professionals are included in that family.
So much for the prospects of Hong Kong as a Pacific economy. A word about cultural life in Hong Kong.
We are proud of the fact that we are progressing economically, but we want Hong Kong to progress also culturally. That is why across the harbour in West Kowloon, very close to Tsim Sha Tsui and the Star Ferry, we are developing an area of 40 hectares, and we want that West Kowloon Cultural District to be the home to many cultural institutions. We're developing over 10, 11 cultural venues there.
We're investing HK$21.6 billion in the hardware and the software. At some point in time, in the next 10 years, we want these facilities to be able to host European operas, London and New York musicals, we want to have a modern art museum which we call M+, 60,000 metres square of exhibition space. We want this place to reflect the progress which Hong Kong has made all these years, and we want to welcome cultural performing groups from all over the world.
I'm very pleased to note that actually the Savannah College has a branch in Hong Kong, and I am advised, Ambassador Locke, that that institute is attracting some of the top quality arts students from around the world to study and to develop this cultural expertise in Hong Kong. So in years to come we will focus not just on the hardware but also on the software and we will groom local arts talents.
Finally, a word about our progress in stabilising and putting on track Hong Kong-Taiwan relations. About six years ago we received here in Hong Kong Mr Liang Tian, the former Chairman of the Kuomintang, en route for a visit to the Mainland. He and Secretary Hu Jintao had a historic handshake in the Great Hall of the People in Beijing, and henceforth relations across the Taiwan Strait progressed and here in Hong Kong we have latched onto that also.
In the last few years we have established closer and stronger ties with Taiwan. Here in Hong Kong we have established what we call the Hong Kong-Taiwan Economic and Cultural Co-operation Promotion Council, and in Taiwan they have established the Taiwan-Hong Kong Economic Cultural Co-operation Council. These two councils are supposed to be non-official, but of course all the directors and the committee key members are officials from both sides, wearing that non-official hat. This is a convenient arrangement to enable the administrations in both places to discuss and conclude agreements concerning public policies.
During this last summer we reached a consensus for Hong Kong to establish a Hong Kong economic, trade and cultural office in Taipei. This will take place before the end of this year, and Taiwan can upgrade its former travel service office in Hong Kong to Taipei economic and cultural office. We have worked very hard to ensure that we make this progress in 2011 because in the coming 2012 we have elections in Taiwan, also in Hong Kong. Regardless of the results of those elections we want this stabilised and progressive relations between Hong Kong and Taiwan to move on.
Finally, talking about elections, I know we have an audience from America, and I want to let all my friends know, that here in Hong Kong we progress not just in running the economy, not just in promoting culture, not just in establishing closer ties between Hong Kong, the Mainland and Taiwan. We believe that competition brings improvement and that is why even in elections there must be competition.
During your stay in Hong Kong you will hear news about elections of all sorts, in particular elections leading to the Chief Executive Election in March next year. Whoever gets elected will have a key role to play to propose and determine the universal suffrage election model for returning Chief Executive one person one vote in 2017. And that will also pave the way for universal suffrage for the Legislative Council in 2020.
So Ronny, as and when the Committee of 100 returns for further visits in the next decade, you will see progress on the economic front, cultural front, political front. Welcome to Hong Kong.
Ends/Monday, December 5, 2011
Issued at HKT 18:17
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