Speech by FS at gala dinner for the 20th anniversary of the establishment of the HKSAR (English only) (with photo)
Distinguished guests, friends, ladies and gentlemen,
selamat malam (good evening).
It's my great pleasure to be here with you all in Jakarta, a fantastic, great global city pulsing with creative energy. It's a particular pleasure to be here in celebration of both the 20th anniversary of the establishment of the Hong Kong Special Administrative Region (HKSAR) and the official opening of the Hong Kong Economic and Trade Office (ETO).
My thanks to the Economic and Trade Office and the Hong Kong Trade Development Council (TDC), which also runs a busy office here, for organising this festive occasion.
Hong Kong has made considerable progress since reunification with our motherland 20 years ago, under the unique arrangement of "one country, two systems", which enables the indispensable building blocks of Hong Kong's continuous success and prosperity to continue. These include an open and free market, an efficient and clean public sector, a robust institutional framework, freedom of speech and travel, free movement of goods and capital, a simple and low tax regime, a deep pool of multi-cultural and talented businessmen and professionals, and a fine tradition of rule of law, underpinned by an independent judiciary.
Hong Kong's common law system and legal structure provides a robust and transparent framework of protection for all the entities in Hong Kong, effectively guarding the rights of people and businesses. All persons, businesses and organisations, regardless of nationality or size, are treated exactly the same.
And the independence of our judiciary has been enshrined in the constitutional document of Hong Kong, the Basic Law, which stipulates that the HKSAR enjoys independent judicial power, including that of final adjudication. And that the power of final adjudication of the HKSAR shall be vested in the Court of Final Appeal in Hong Kong.
The concept of rule of law and an independent judiciary is widely recognised, and is well respected, treasured and safeguarded in Hong Kong.
As I mentioned earlier, in Hong Kong, capital, goods, talent and information flow freely. There is essentially no restriction on foreign investment, and international companies enjoy the same equitable and business-friendly environment as their local counterparts. And that of course includes our low and simple tax system.
According to the 2016 Paying Taxes study of 189 economies, Hong Kong is one of the most tax-friendly economies in the world. We only impose three direct taxes, namely profits tax, salaries tax, and property tax. More importantly, we do not have sales tax, VAT or GST, no capital gains tax, no tax on dividends as well as no estate duty. Except for a few types of goods such as tobacco, gasoline and motor vehicles, we do not impose import duty.
Our success has not gone unrecognised. Over the past 23 years, the US-based Heritage Foundation has named Hong Kong the world's freest economy.
And for the past two years, the World Competitiveness Yearbook, published by the International Institute for Management Development in Switzerland, has selected Hong Kong as the world's most competitive economy.
Certainly, our economy has shone, despite significant regional and global challenges over the past 20 years. Our per capita GDP last year came in at USD 43,700 – a real increase of about 60 per cent since 1997. And I am confident that there will be a future full of opportunity – for Hong Kong and for those economies that work with us.
As the international financial centre in Asia, Hong Kong's stock market has consistently been placed among the world's top five for funds raised through initial public offerings over the past 15 years. In the recent two years, we had even been ranked number one. In fact, the market capitalisation of our stock market has grown 8 times from USD 410 billion in 1997 to about USD 3,600 billion in 2017. Our robust and versatile financial market, offering a wide range of other financial services from syndication loans and private equity funds to Islamic Sukuk, is an ideal platform for Indonesian enterprises seeking for funds to finance future projects and businesses.
Looking at the "one country" aspect, it's clear that being a part of China has given us advantages available to no other economy. Indeed, Hong Kong is the world's largest offshore Renminbi business hub. As at the end of June 2017, Renminbi deposits in Hong Kong exceeded RMB 600 billion. We offer diversified investment, financing and risk management products in Renminbi and handle more than 70 per cent of the world's offshore Renminbi transactions settlement.
With the establishment of the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect and, earlier this month, the Bond Connect, as well as the Mainland-Hong Kong Mutual Recognition of Funds arrangement, Hong Kong gives investors – from Indonesia and from around the world – unparalleled access to the Mainland's capital markets and financial products.
We are, as well, a logistics hub built on world-class infrastructure located right in the heart of Asia. In fact, Hong Kong was ranked number one in infrastructure by the World Economic Forum in its Global Competitiveness Report over the past seven years. The Hong Kong International Airport has been the world's busiest cargo airport for the past seven years, too. Within five hours of flying time, you can reach half the world's population from Hong Kong.
And construction is now underway to expand the airport into a three-runway system, which will double our cargo throughput capacity to nine million tonnes a year, and passenger capacity to 100 million per year.
In the nearer future, two other mega infrastructure projects, the Hong Kong-Zhuhai-Macao Bridge and the Guangzhou-Shenzhen-Hong Kong Express Rail Link, will be completed, further enhancing Hong Kong's connectivity with the Mainland and enlarging our hinterland.
With the Hong Kong-Zhuhai-Macao Bridge, the travelling time from Hong Kong to Macao, Zhuhai and Shenzhen will be cut down substantially. By then, most of the major cities in the Pearl River Delta are within three hours' drive. Cities in Indochina, such as Hanoi, can be reached in about one day. And with the Express Rail Link, the journey time between Guangzhou and Hong Kong will be reduced to 48 minutes, and passengers from Hong Kong can easily access to the over 20,000-km national high speed rail network connecting all the major cities in the Mainland. It can create a "One-hour Living Circle" within the Pearl River Delta area. It will take less than 9 hours from Hong Kong to Beijing and 8 hours to Shanghai.
Hong Kong will also play an important role in the Guangdong-Hong Kong-Macao Bay Area development, a plan announced by Premier Li Keqiang in March this year. The fast growing Bay Area covers Hong Kong, Macao and nine cities in Guangdong Province including Shenzhen, Guangzhou and Zhuhai, and has a total population of over 66 million. The gross domestic product of this city cluster is over USD 1.3 trillion, comparable to that of Australia or the Republic of Korea. Besides, the Bay Area is the most affluent region in China. This development plan will further facilitate the flow of people, goods, capital and information in the region, and presents enormous business opportunities for Hong Kong and overseas businesses.
Coming back to our ties with ASEAN and Indonesia. They are strong and fast growing. Indeed, trade between Hong Kong and ASEAN has grown by 72 per cent over the past ten years, reaching USD 107 billion in 2016. That makes ASEAN Hong Kong's second-largest trading partner. As you are, no doubt, aware, Hong Kong and ASEAN have been negotiating a free trade agreement. After three years of intensive work, I am pleased to report that the negotiation has almost concluded. We are hopeful of signing the FTA before the end of this year.
The confidence we have in the future of Hong Kong and ASEAN is, of course, what drove us to establish in June last year a Hong Kong Economic and Trade Office in Indonesia, the largest economy in Southeast Asia. After a year of preparation, I am happy to see that the office has moved into a long-term accommodation and is up and running. And I was pleased to officiate at its opening this afternoon. This office represents the Hong Kong SAR Government in matters between Hong Kong and ASEAN as a whole, and handle in particular bilateral matters between Hong Kong and Indonesia, Malaysia, Brunei and the Philippines. With this new office and the office of the Hong Kong Trade Development Council here in Jakarta, business opportunities between Hong Kong and Indonesia are set to boom.
Both offices will work closely with our long-established ETO and TDC office in Singapore to take our cooperation with ASEAN to another level.
This year also marks the 50th anniversary of ASEAN. And I'd say Hong Kong's anniversary celebration theme – "Together · Progress · Opportunity" – is a remarkably apt description of relations between Hong Kong and ASEAN today. And the heady promise we offer each other tomorrow.
Thank you for being with us tonight. We appreciate your friendship and support, and I sincerely wish everyone of you good health, and the best of business in the coming years.
Terima kasih. (Thank you very much.)
Ends/Wednesday, July 26, 2017
Issued at HKT 21:34
Issued at HKT 21:34