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Speech by CE at IUMI 2014 Hong Kong Conference (English only) (with photo/video)

     Following is the speech by the Chief Executive, Mr C Y Leung, at the opening ceremony of the International Union of Marine Insurance 2014 Hong Kong Conference this morning (September 22):

Mr Wikborg, Jimmy, Agnes, ladies and gentlemen,

     Good morning. It's a pleasure to welcome the International Union of Marine Insurance to Hong Kong in your 140th year.

     Clearly, you took the slow boat to China. It has, I note, taken Hong Kong a while to earn this privilege of hosting you and your annual conference.

     I understand that this year's conference will place particular emphasis on Asia, on the shift from West to East - in insurance as in business in general.

     Part of this shift has been driven by the reforms, the open door policies and the economic growth of China in the past 36 years. From day one, Hong Kong, including the many foreign businesses based here, has been part of the China success story.

     We have built up the largest talent pool of China experts, the best knowledge base of business operations on the Mainland of China. We would like to think that Hong Kong is the Chief Knowledge Officer and the Chief Information Officer of China.

     Hong Kong is an open society. We have open borders, and more importantly, open minds. Open-mindedness means the willingness to share business information and opportunities with people from other parts of the world. It means not closing rank. It means the willingness to adapt. It means offering level playing fields to all, regardless of nationality or country of origin. It means, above all, local government not competing with foreign business.

     Since the return of Hong Kong to China, we have been offering the combined advantages of "One Country" and "Two Systems". When your business is in Hong Kong, you are in China. But you are in a city in China that practises "the other" system.

     Back to the global business shift. Hong Kong, the world's eighth-largest trading economy, and a leading international financial centre, has benefitted from this shift. As have the companies that work with Hong Kong.

     When it comes to maritime services, we've long been a major player. The Hong Kong port remains one of the world's busiest. It's currently supported by some 380 liner services a week; these connect to some 550 destinations worldwide. The Hong Kong Shipping Register is the fourth-largest in the world, with a total gross tonnage of 89 million. This city's 700 shipping-related companies offer a flotilla of maritime services: ship management, broking and chartering, finance, marine insurance, maritime law and arbitration, support shipping services, and much more.

     My government is committed to ensuring that Hong Kong remains an international maritime centre. We also have the support from the Central Authorities of China. The National 12th Five-Year Plan clearly sets out the Central Authorities' support for Hong Kong to consolidate and enhance its status as an international centre for shipping.

     By "enhancing", it does not mean doing more of the same thing. It means diversifying our products and services. We are well positioned to develop high value-added maritime services, capitalising on our geographical and institutional advantages. And marine insurance will be a key contributor.

     Hong Kong offers a variety of marine insurance products and services. Indeed, we boast the highest concentration of insurers in Asia. There are currently more than 150 sanctioned insurers here, with 88 of them authorised to provide marine and cargo insurance. This includes seven of the 13 protection and indemnity clubs from the International Group of P&I Clubs - the largest cluster of P&I Club representatives outside London.

     And favourable developments in the insurance and maritime industries are clearly benefitting our local marine insurers. In 2013, gross premiums of marine and cargo insurance amounted to HK$2.1 billion, which is equivalent to US$260 million. The news is even better this year. In the first half of 2014, premiums reached HK$1.8 billion, equivalent to US$230 million.

     And there's more promise in the China sea. Hong Kong is well positioned to serve as a springboard for Mainland maritime companies looking to "go global". We are equally primed to provide services for overseas maritime companies eager to explore the Mainland China market. In short, Hong Kong has what it takes to become an important international maritime centre for the Mainland of China and the Asia-Pacific region in general. The burgeoning Renminbi business in Hong Kong is a notable example. With the Central Government's support, Hong Kong has emerged as the world's largest offshore Renminbi centre, offering cross-border trade settlements, fundraising, financing and asset management. Given the increasing use of the currency in cross-border trade settlements, we see promising business opportunities for marine insurance products denominated in Renminbi. In fact, Hong Kong insurers are already writing marine insurance in Renminbi.

     On the other hand, we should not miss out the significance of arbitration cases handled by Hong Kong. The Hong Kong International Arbitration Centre handled 456 arbitration cases in 2012, of which 60 per cent, or 274 were maritime-related. The Office of the International Court of Arbitration in Hong Kong handled 759 domestic and international arbitrations in the same period. Meanwhile, I note that the Supreme People's Court of the PRC announced earlier this month that China has handled the greatest number of maritime cases in the world. This would be another area where Hong Kong can further develop and in this regard, I am pleased to let you know that the China Maritime Arbitration Commission (CMAC) will set up a branch office in Hong Kong later this year, the first branch office of CMAC outside the Mainland of China.

     The maritime industry carries great importance for Hong Kong's economy. And for good reason: trade and logistics is one of Hong Kong's four key industries. Indeed, it accounts for more than 25 per cent of our GDP. To promote the long-term growth of the maritime industry, we are looking to establish a statutory maritime body. Given dedicated resources, it would generate the policy initiatives essential to the continuing development of Hong Kong's maritime industry, especially our maritime services.

     Expanding the industry's pool of talent is no less important. With that in mind, the Hong Kong Government in April launched a HK$100 million Maritime and Aviation Training Fund. It includes financial support for the professional training and skill enhancement of Hong Kong maritime insurance practitioners.

     A similar study is under way for the financial sector. I believe it is of paramount importance that Hong Kong's supply of talented, multi-skilled, international professionals is sustainable - in finance, in marine services, in every sector and industry that Hong Kong is engaged in. After all, we're in it for the long haul.

     Ladies and gentlemen, my thanks to the Hong Kong Federation of Insurers for hosting this prestigious conference. I wish you all a rewarding, and enjoyable, stay in Hong Kong.

     Thank you.

Ends/Monday, September 22, 2014
Issued at HKT 11:08


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