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Following is the speech by the Financial Secretary, Mr John C Tsang, at the Hong Kong Trade Development Council Annual Dinner in London on November 18 (London time):
Minister (Vince) Cable (Secretary of State for Business, Innovation and Skills of the UK Government), Jack (So), distinguished guests, ladies and gentlemen,
Good evening.
It's my great pleasure to be here again in London to enjoy a delightful evening with so many friends of Hong Kong.
First of all, thank you for coming to this Annual Dinner, which has become a great tradition since 1983. I would like to congratulate Jack and his team at the Hong Kong Trade Development Council (TDC) for bringing us together for this special 30th Anniversary dinner.
Although I only arrived in London this morning, I have already become aware of another important anniversary this week. I was alerted to it by a media headline which announced a Dalek invasion of Buckingham Palace. Yes, Doctor Who will turn 50 this Saturday, and some of the actors and their props are visiting the Palace today for a special reception to mark the occasion.
I remember Doctor Who from the time when I lived in London after the Reunification. At that time, I was the Director-General of Hong Kong's Economic and Trade Office here. Back then, Hong Kong was in its infancy as a Special Administrative Region of China, and no one could have accurately predicted our destiny, not even a Time Lord!
As a sci-fi enthusiast, I have watched many episodes of Doctor Who, but alas I have not had much time to do so in recent years. I'm reliably informed, however, that the good Doctor is still battling the evil Daleks in much the same way that he has done since the very first episode back in 1963.
They may not have realised it at the time, but the show's producers had hit on a winning formula - and they had the vision and wisdom to stick with it for the last fifty years.
Hong Kong has also had its own winning formula for decades. It is a formula that promotes free enterprise and enables businesses to capitalise on new opportunities quickly and efficiently.
It's no surprise, then, that some of the first Dalek toys were produced in Hong Kong back in 1964, one year after the initiation of the series.
Back in the 1960s, Hong Kong was a major manufacturing centre, and Dalek toys were among the myriad of great-value "Made in Hong Kong" products that were exported around the globe.
Hong Kong has evolved dramatically since then over the past half a century from a manufacturing base into a global financial centre and services economy.
The "Made in Hong Kong" label has been replaced by "Financed in …", "Designed in …", "Conceptualised in ..." and "Made by Hong Kong". But one thing for sure, we have all along stuck with our winning formula as a free and open economy and a great place to do business.
I mention this, not on the basis of science fiction but on facts:
* Hong Kong has been rated as the world's freest economy for the past 19 years by the Heritage Foundation and the Fraser Institute.
* Hong Kong is ranked as the second easiest place in the world to do business, so says the World Bank.
* Hong Kong is the most competitive economy in Asia, as assessed by the 2013 Institute for Management Development World Competitiveness Yearbook.
* Hong Kong also ranks as the best place for innovation in Asia according to the latest Global Innovation Index.
All this is encouraging and also testament to our winning formula. But Hong Kong's future has never been built on past glory. We are not accustomed to looking back, basking in successes of days gone by. We seek to manage the here and now, and prepare for the future.
In a highly open and competitive world, we set the bar high for ourselves. Our challenge is not just how to live up to expectations, but how to exceed them.
At the time of the first TDC London Dinner 30 years ago, the value of bilateral trade between Hong Kong and the UK was around US$2 billion. By 2003, it had grown to about US$10 billion and last year the figure exceeded US$14 billion. As to total trade, it amounted to US$46 billion 30 years ago. It ballooned to US$456 billion in 2003 and US$947 billion in 2012.
Alas, I don't have a TARDIS time machine to visit the future, and see what our bilateral trade will look like in 2043. But I do have a good idea of the direction in which Hong Kong is heading as a knowledge bank of global best practice in Asia, as a super network hub of ideas and information, and as China's most open and international city.
We are continuing to work hard to deepen and broaden our economic relationship with the Mainland of China on many different levels. Hong Kong has been given a huge responsibility and opportunity under the Central Government's 12th Five-Year Plan in key areas of financial services, trade and logistics, shipping and especially as an offshore centre for Renminbi business and asset management. We take these responsibilities seriously.
Massive infrastructure projects under construction will expand Hong Kong's capacity as a trade and logistics services centre for our region.
These projects include a new cross-boundary Express Rail Link, the XRL, that will plug Hong Kong into the national high-speed rail network. The XRL will reduce travelling time to 60 minutes between Hong Kong and Nansha, a new development zone of massive potential in Guangdong Province. Another new development zone, Qianhai is within an hour's drive of Hong Kong.
Also under construction is a mega 29 kilometer bridge connecting Hong Kong directly to the western part of the Pearl River Delta region. We are working to expand the capacity of our world-class international airport. We are also working with Shenzhen to jointly develop the Lok Ma Chau Loop at the boundary specifically for hi-tech and creative industries.
As China's global financial centre, Hong Kong has served as a reliable testing ground for the internationalisation of the Renminbi for the past decade. Today, we have by far the largest pool of Renminbi capital outside the Mainland of some 900 billion RMB, and we handle about 80 per cent of the total offshore Renminbi payments. This is just the tip of a huge financial iceberg when you consider that China has 100 trillion RMB in circulation and its external trade flows amounts 24 trillion RMB.
We keep in close touch with Beijing and with financial centres around the world, including London, to promote the wider use of Renminbi and to develop a broader range of financial products denominated in the Chinese currency.
Hong Kong's services sector is another area with huge potential to grow. Services account for 93 per cent of our GDP now, and this is where our strength lies today, and certainly tomorrow.
This brings me to another significant anniversary - this year marks the 10th anniversary of our cross-boundary free trade agreement, CEPA.
With the 10th round of new initiatives announced in August, CEPA now contains over 400 liberalisation measures and provides preferential access for Hong Kong companies in 50 services areas across the boundary. Under nationality-neutral provisions, all foreign firms incorporated in Hong Kong, including UK companies, can enjoy the full benefits of CEPA to reach the Mainland market. Apart from preferential access in the services sector, Hong Kong-made products meeting CEPA's rules of origin requirements enjoy tariff-free access to the Mainland market.
We are working hand-in-hand with the Mainland to realise our goal of full-liberalisation of trade in services between Hong Kong and the Mainland within the next few years. This will open up even greater opportunities for service companies in the Mainland. And that includes new opportunities for the 1000 British firms that currently operate in our city.
The China factor is just one aspect of Hong Kong's future development and prosperity; the other, equally important, is our international perspective and connectivity.
Here, we can safely count on some familiar strengths in terms of our competitiveness as a global business and financial centre.
These include our low and simple tax system, free flows of capital, information and ideas, and our common law legal system underpinned by an independent judiciary.
We can confidently count on these institutional strengths, not just because they have provided the foundation of our city's development over many decades, but because they are guaranteed under the "One Country, Two Systems" principle enshrined in our constitutional document, the Basic Law.
However, this alone is not enough, not nearly enough, for us to achieve our potential as Asia's world city.
For that, we need to continue thinking as an international city, living as an international city, learning as an international city, and enjoying the high-quality lifestyle of an international city. Only then, can we expect to nurture, to attract and to retain the best talent and to continue providing the opportunities that they expect.
One good example is our approach to developing key areas of Hong Kong. The development-first approach has been instilled with a new mindset of people-first development.
Undoubtedly, Victoria Harbour is our city's best-known and most valuable natural resource. Over the years, harbour reclamation has yielded some of the most valuable land in the world in terms of price-per-square-metre. Yet, it has an even greater value as a harbour for the people, similar to that of other great waterfront cities, such as Sydney and Vancouver.
And we are blessed with not one, but three, magnificent harbourfront greenfield sites that are being developed with the future very much in mind.
On Hong Kong Island, the new Central Waterfront is taking shape. We just hosted our first major event there earlier this month - the annual Wine and Dine Festival - and the feedback on the potential of this site was fantastic. The new Transformer movie has just taken some location shots there as well. So look out for it when the film is released.
In a few years, this 5.6km waterfront stretch from Central to Wan Chai, actually from Sheung Wan to Victoria Park for those who are familiar with the geography of Hong Kong Island, will gradually be opened and become the new focal point for tourism, leisure, commercial and civic activities. It will be a green and accessible area covering a total of 24 acres that is ideal for outdoor events with spectacular views across the water. It will also serve as the underground by-pass for vehicles going onto the Eastern Corridor without having to go through the already busy streets of the Central Business District (CBD).
On the other side of the harbour, on a 100-acre site at West Kowloon, work on Hong Kong's new cultural district is underway. In fact, we have already begun construction of a museum as well as a theatre following an international design competition. These are iconic architectural statements with spectacular designs that will highlight the harbour front.
When completed, West Kowloon will become a centrepiece for Hong Kong's creative and cultural development and part of the Victoria Harbour experience. The master plan is designed by Norman Foster, and appropriately titled "City Park". As well as green spaces for people to enjoy, the West Kowloon will feature a total of 17 arts and cultural venues, including a contemporary M+ museum and the Xiqu Centre that are under construction now, and several performing arts venues and concert hall.
You will be able to stroll along piazzas, take in open-air performances or relax at cafes and restaurants, and enjoy the magnificent views of Hong Kong. All this will be within easy walking distance of the West Kowloon terminus of the new high-speed Express Rail Link that I mentioned a little earlier.
Another strategically important development is Kowloon East, which will transform the old Kai Tak airport site and nearby area into a new CBD with an additional 4 million square metres of floor space. Putting that in context, this amount of office space is equivalent to twice the total area available in Central right now.
Kowloon East also houses our new cruise terminal, which started operation this year. This is an ambitious project that is huge in both physical as well as conceptual terms. The terminal is large enough for two QEIIs mooring there at the same time, and we are making plans for the terminal to become the centre for cruise activities in our region.
Kowloon East will also include a wide range of recreational, cultural, and sports facilities, as well as residential, retail and civic areas. It will also set new standards for urban development by using the latest energy-saving and environment-friendly technology. Our aim is not just to create a second CBD for Hong Kong, but to rejuvenate Kowloon East as a whole new modern and desirable district to live, work and relax; an area with fully integrated services and excellent connectivity to different parts of the city.
Ladies and gentlemen, I have mentioned a few of the ways that we are working to meet and exceed the expectations of Hong Kong in a highly competitive world.
In September, a pilot free-trade zone opened in Shanghai with a focus on trade and business facilitation. This will be a prototype that, if successful, may be replicated in other Mainland cities in future. We have heard sceptical noises that this development may mark the decline in Hong Kong's advantage. This is actually quite contrary to the truth.
We welcome this development because any further opening up of the Mainland market must be good for Hong Kong. We are already the biggest investor in almost every province in the Mainland. We have the business network that is unmatched. We have deeper knowledge of the Mainland market than anyone else.
We have that first mover advantage that has enabled us to build in anticipation the soft and hard infrastructure to sustain our role in the further economic development of the Mainland. The development of the free-trade zone is the opportunity that we have been preparing for, and together with the liberalisation measures discussed in the recent third plenum, we are getting ready for another massive expansion of activities.
We always welcome competition, especially when it involves initiatives that promote our nation's economic development. Perhaps, the biggest challenge for us will be to make the most of the new opportunities that will undoubtedly emerge, from across the boundary and from all corners of the world.
Ladies and gentlemen, I shall leave you with a timely thought, especially for those of you who plan to tune into the special 50th anniversary episode of Doctor Who this weekend.
Think of Hong Kong as something akin to Doctor Who's time machine, the TARDIS.
On the outside it looks small - but once you get inside you can see that its size and potential is limited only by your imagination. And even after half a century of non-stop action, you never quite know what will happen next, other than it's bound to be exciting!
Please do take this as an invitation to come and visit Hong Kong and join us on an extraordinary journey into the future.
Thank you very much and have a great evening.
Ends/Tuesday, November 19, 2013
Issued at HKT 08:47
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