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Speech by FS at networking reception in Sydney (English only)(with photo)

     Following is the speech by the Financial Secretary, Mr John C Tsang, at a networking reception co-organised by the Hong Kong Economic and Trade Office (HKETO) in Sydney and the Hong Kong Australia Business Association in Sydney today (November 18):

The Honourable John Barilaro, Mr (Mark) Speakman, the Honourable Ernest Wong, President (Peter) Sinn, distinguished guests, ladies and gentlemen,

     Good evening.

     It is a great pleasure for me to join you all at tonight's reception co-organised by the HKETO here in Sydney and the Hong Kong Australia Business Association. It is, by the way, 11 years ago this month that I last addressed the business community in Sydney. Some things have changed since then; some have not.

     Eleven years ago, I was, well, 11 years younger. Less gray hair perhaps. And, like some of you here, a few pounds, or kilos, lighter. Of course, we are all 11 years wiser. In my address here 11 years ago, I commiserated with you over the Wallabies' Rugby World Cup final loss to England.  

     In just 10 months, it is World Cup time again, with England hosting the eighth Rugby World Cup. If you are a rugby fan, you know that Australia is in the same pool with England, not to mention Wales. Well, no one said it would be easy - unless, of course, you are New Zealand, sitting there in Pool C, alongside rugby powerhouses like Namibia, Georgia, Tonga and Argentina.

     Eleven years ago, Hong Kong was recovering from the after effects of the SARS virus outbreak earlier that year. This year, we are all pretty much healthier, thank you.

     But, there is always something - something to be thankful for, and certainly something to "occupy" us as well - we now have a political situation to contend with. No doubt, you have been watching, and reading, about the protest that has gripped Hong Kong over these past seven weeks or so.  

     More than capturing global attention, it has taken over a few of Hong Kong's main thoroughfares. Pup tents, roadside sleepovers and impromptu entertainment may make it all look like an ambitious street carnival. But it is, of course, cause for concern for us. And we are working to bridge the divide that exists in our community, working hard to create a consensus rooted in the Basic Law, our constitution.  

     The divide, and hence the protests, are about the nomination procedure for the Chief Executive election in 2017. I am confident that, 11 years from now, you will not need any further updates on this issue from me or my future colleagues.

     Those are a few of the differences between Hong Kong in 2003 and Hong Kong today. Mostly, however, we continue to work from longstanding strengths to create business opportunities for Australian companies, and companies around the world.

     Thanks to our unparalleled location, our longstanding business connections, our professional knowledge and our deep cultural ties, Hong Kong serves as the bridge between Mainland China and the world.

     We are also a major player in the ASEAN region, home to more than 600 million people, with a rapidly growing middle class. In fact, half the world's population is within a five-hour flight of Hong Kong. And we have hourly flights to a dozen major Asian  destinations. About 7,500 overseas and Mainland Chinese companies have a presence in Hong Kong. More than half of them are regional headquarters or regional offices. Some 600 Australian companies do business in Hong Kong.

     The attractions are many, from the free flow of capital and information, to our independent judiciary and the confidence that comes from knowing that everyone - and every business in Hong Kong - is treated equally.  That Australian nationals and companies enjoy the same rights as locals do.  That Hong Kong presents a truly level playing field, unlike other so-called free markets in our region.

     No less important, in Hong Kong you get to keep most of your hard-earned income. Our tax regime is low and uncomplicated. The top salaries tax rate is 15 per cent; profits tax is fixed at a flat 16.5 per cent. There is no capital gains tax, no inheritance tax, and no sales tax of any kind in Hong Kong. I even eliminated the tax on wine and beer six years ago. Many people ask how do we do that. In short, we believe in small government - and big opportunities.  We have managed to keep the public sector at about 20 per cent of GDP, and allow the private sector to make more efficient use of the limited resources, creating opportunities for our community.

     For Australian business, Hong Kong is also the international financial centre in the Asian time zone.  More than 70 of the world's largest 100 banks operate in Hong Kong, including five Australian banks. We rank first and third respectively in the World Economic Forum's Financial Development Index and the City of London's Global Financial Centres Index. We maintain a highly open and internationalised market, and our regulatory regime is aligned with major markets around the world.

     As the region's international financial centre, Hong Kong is also the major provider of financial services for businesses in the Mainland. And this symbiotic relationship continues to strengthen.

     Indeed, Hong Kong has a unique role to play in contributing to our nation's financial reforms. We serve as both the laboratory for China's new reform measures as well as the firewall to shield the Mainland's fledgling financial market from international volatility against the background of its fast-changing financial landscape.

     And if it is changing, and changing fast, in Mainland China, the changes are no less fluid, no less promising, in Hong Kong.  To take one example, there is the Shanghai-Hong Kong Stock Connect. I am pleased to tell you that it launched just yesterday. Under the programme, investors from Hong Kong, from Australia and from around the world, can trade in the Hong Kong Stock Exchange some 570 Shanghai-listed shares, directly, for the first time. Mainland China investors, meanwhile, will be able to trade in the Shanghai Stock Exchange the 270 Hong Kong-listed shares directly.

     This brand-new initiative brings unprecedented opportunities to the financial world. One senior Western banker recently described it as the single most important development in China's intention to internationalise this market. The Shanghai-Hong Kong Stock Connect will also accelerate the development of our offshore Renminbi business.

     That began in earnest a decade ago. Today, it is perhaps the most vivid illustration of financial co-operation between Mainland China and Hong Kong. Over the past 10 years, our offshore Renminbi business has showcased Hong Kong's unique position to contribute to, and benefit from, the continuous economic and financial reform of China.

     At the end of September, our banks held  1.1 trillion yuan in deposits and certificates of deposit. In the first nine months of this year, Renminbi trade settlement handled by banks in Hong Kong totalled 4.5 trillion yuan. From 2007 to October this year, more than 460 Renminbi-denominated bond issuances had been held in Hong Kong, with an outstanding amount exceeding 360 billion yuan. Anyway you count it, it adds up to good business, and great promise, for Hong Kong - and Australia, too.

     I welcome the development of Renminbi business in Australia. It can only mean wider use of and expanded convertibility for the Renminbi. And that will surely open up more business, and investment prospects, for companies in Australia, Mainland China and Hong Kong.

     Ladies and gentlemen, let me close with the same ending I offered the business community here  11 years ago - and I quote, "As the old saying goes, seeing is believing. So, ladies and gentlemen, I urge you to come to Hong Kong to see for yourself, to assess the opportunities . . . to feel the pulse, the energy and the dynamism of Asia's world city. I am sure you will not be disappointed."

     That was then. Let me add only that I know you will not be disappointed. Yes, I am even more confident in Hong Kong these days, in the opportunities we can offer Australian business. Today and tomorrow.  

     Thank you.

Ends/Tuesday, November 18, 2014
Issued at HKT 16:35


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