Speech by CE at BritCham Hong Kong Summit (English only) (with photos/video)
Dr Kerr (Chair of BritCham, Dr Anne Kerr), Mr Burnett (former Chair of BritCham Mr Peter Burnett), distinguished guests, ladies and gentlemen,
Good afternoon. I am delighted to join you today for the second BritCham Hong Kong Summit. I thank the British Chamber of Commerce, and its more than 1 000 members, for this welcome opportunity to speak to you.
Hong Kong has maintained close trade ties with the United Kingdom (UK). Last year, our bilateral merchandise trade amounted to US$17.7 billion, representing a growth of over 25 per cent from the previous year. Hong Kong is an important entrepot for merchandise trade between the UK and Mainland China, with trade amounting to US$9.9 billion between the two economies routing through Hong Kong last year. A total of 667 business operations with parent companies from the UK are in Hong Kong, making the UK the fourth in the world and the first in Europe in the number of businesses present here.
More than UK companies, BritCham represents Hong Kong businesses, Mainland enterprises and companies from all over the world. You're here because you believe in Hong Kong, and the bright future here for us. For all of us.
The theme of this year's Summit - "The Next 25 Years and Beyond" - is as ambitious as it is welcome. It marks the 25th anniversary of the Hong Kong SAR (Special Administrative Region), while politely asking what you can expect of the next 25 years and beyond.
One way of weighing such a long-term outlook is to look back 25 years ago. To see what opportunities weren't there, weren't available back then, to take advantage of.
Consider this: in 1997, the Guangdong-Hong Kong-Macao Greater Bay Area development plan was not in place yet. While ASEAN (Association of Southeast Asian Nations) was a close trading partner of Hong Kong, there was no ASEAN-Hong Kong, China Free Trade Agreement to run with. Neither was Hong Kong actively pursuing innovation and technology (I&T) as the main policy area. At that time, there was not much to talk about on climate change initiatives and environmental opportunities in financial services.
In short, any number of compelling and still entirely unknown opportunities - and challenges, too - will surely shape the next 25 years for Hong Kong ahead of us.
What I can tell you is that we are building the road to a bountiful future, to the economy and the community we want for Hong Kong - for ourselves, our businesses and our families. That road is planned as a multi-lane, multi-layered, superhighway. While there may be bends along the way, the road and the prospects it will bring are designed to deliver, to take us where we want to go.
Central to that future, whether five or 25 years down the road, is the "one country, two systems" principle that distinguishes Hong Kong from any other economy in the world.
Thanks to this innovative guiding principle, Hong Kong has thrived as the gateway connecting our country to the rest of the world. That has created countless opportunities for companies looking to tap into the Mainland economy, or connect with the rest of Asia and the world beyond.
That, certainly, is not going to change. There is no reason for us to change the good policy of "one country, two systems", and we must adhere to it in the long run.
Speaking here in Hong Kong at the 25th anniversary celebration on July 1, President Xi Jinping said, and I quote: "The Central Government fully supports Hong Kong in its effort to maintain its distinctive status and edges, to improve its presence as an international financial, shipping and trading centre, to keep its business environment free, open and regulated, and to maintain the common law, so as to expand and facilitate its exchanges with the world."
Ladies and gentlemen, those rewarding "exchanges" are rooted in Hong Kong's enviable connectivity, and it is this connectivity that has helped us overcome challenges before, connectivity that will ensure our prosperity over the next 25 years and beyond.
Consider, first, our international connectivity. Hong Kong is among the world's most externally oriented and open economies. We attach great importance to global and regional economic co-operation.
We have been a separate and full member of the Asia-Pacific Economic Cooperation (APEC) since 1991, and under the name "Hong Kong, China" since 1997. We work closely with our APEC members in accelerating regional economic integration, in building a more resilient regional economy amid the challenges of COVID-19.
No less important to Hong Kong, and our future, is ASEAN - the Association of Southeast Asian Nations. ASEAN today is an economic powerhouse. Taken as a single entity, it is now the world's fifth-largest economy.
Hong Kong, I'm pleased to say, has been ASEAN's second-largest trading partner since 2010. Last year, merchandise trade between Hong Kong and ASEAN grew 21 per cent, year-on-year, despite the pandemic, with bilateral trade hitting an all-time high of some US$160 billion. And in the first six months of this year, our bilateral trade in goods rose more than 12 per cent, year-on-year, to US$84 billion.
The ASEAN-Hong Kong, China Free Trade Agreement and related Investment Agreement entered into force, in full, this year, and will boost our bilateral trade down the long road. The agreements encompass a wide range of liberalisation measures. They include trading and protection for investment, mechanisms for economic and technical co-operation and much more. They have been designed to expand business opportunities, to ensure legal certainty for Hong Kong traders and service providers in ASEAN markets.
Then there's the Regional Comprehensive Economic Partnership, or RCEP. The world's largest free trade agreement, RCEP came into force at the beginning of the year. It is built on an open, inclusive and rules-based trade and investment framework.
RCEP economies are Hong Kong's major trading partners, accounting for more than 70 per cent of our total merchandise trade last year. Hong Kong is actively seeking early accession to RCEP, a point emphasised by Algernon Yau, Secretary for Commerce and Economic Development, in Cambodia last month.
On behalf of the Hong Kong SAR Government, Secretary Yau attended the ASEAN Economic Ministers - Hong Kong, China Consultation, and met with the ASEAN Deputy Secretary-General and other senior officials to discuss Hong Kong's preparatory work towards early accession to RCEP. ASEAN member states, I'm pleased to note, welcomed our readiness to launch RCEP accession discussions.
Also that month, Christopher Hui, the Secretary for Financial Services and the Treasury, was in the Philippines, another ASEAN member, to build on our strong ties with economies throughout the region.
I have, on various occasions, said that it's time we began to tell the world, loud and clear, the compelling stories of Hong Kong. Next month, I'll be doing that when I travel to Bangkok, Thailand, on my first overseas visit since taking up my office. I will be there for this year's APEC Economic Leaders' Meeting and to reaffirm our commitment to promoting international connectivity and co-operation.
Hand in hand with our growing connectivity with the region, and the world, is our deepening connectivity and indeed, integration, with the Mainland.
Nothing speaks more directly, and more powerfully, of those welling ties than our inclusion in the Greater Bay Area, a far-reaching cluster city development boasting a combined population of 86 million and a GDP (Gross Domestic Product) of over US$1.9 trillion.
Hong Kong plays a pivotal role in enhancing the interconnectivity of the Greater Bay Area's capital markets, thanks to our internationally aligned regulatory regime. Our status as the business and financial bridge between the Mainland and the world can be seen in the widely welcomed Cross-boundary Wealth Management Connect Scheme, launched last year.
It's also evident in the 18 measures, recently approved, to support Hong Kong venture capital investment in Shenzhen's Qianhai development.
While the pandemic has created temporary limitations to travel between the Mainland and Hong Kong, I can assure you that new cross-boundary railway and new boundary-control-point improvement projects are on the drawing board.
Creating and building on our connectivity with the Mainland and the world will, I'm confident, ensure that we stay connected in the future, as well.
That future will demand sustainability.
Which brings me to climate change, a central focus of the Summit tomorrow afternoon. For good reason. Like the rest of the world, Hong Kong faces rising temperatures and extreme weather, including super typhoons.
We have been among the earliest cities in Asia to combat climate change. Our decarbonisation efforts, I'm pleased to say, have yielded notable results. In 2020, Hong Kong's carbon emissions were about one-fifth lower than our levels in 2005, with a per capita emission of about 4.5 tonnes a year. That's a decrease of almost 30 per cent from the peak level of 6.2 tonnes per capita in 2014.
In 2020, President Xi Jinping said that China would work to achieve peak carbon emissions in 2030, and carbon neutrality before 2060. To align with the country's commitment, Hong Kong will strive to achieve carbon neutrality before 2050, reducing carbon emissions from the 2005 level by half before 2035.
Our quest for carbon neutrality does more than promote green recovery. It also generates fresh opportunities for Hong Kong. In the next 15 to 20 years, the Government will devote about HK$240 billion to mitigate and adapt to climate change. Hong Kong's decarbonisation efforts could create tens of thousands of job opportunities in energy supply, green finance, green technologies and ancillary industries.
Our green and sustainable finance market is blooming. The volume of green and sustainable debt issued in Hong Kong last year reached a record high of US$57 billion. That is fully four times more than the year before. Of this, the volume of green and sustainable bonds exceeded US$31 billion in 2021. That accounted for one-third of those issued in the Asian market, making Hong Kong No. 1 in the region.
We are also the first Asian government to issue 30-year and 20-year green bonds denominated in US dollars and euros, respectively. Last year, the Shenzhen Municipal Government became the first local government from the Mainland to issue offshore Renminbi green bonds in Hong Kong.
We count on the support of the business community in promoting low-carbon transformation and working towards a sustainable future for Hong Kong.
Innovation and technology is no less central to our inspired culture and future. Among others, the National 14th Five-Year Plan supports Hong Kong's development as an international I&T hub.
Our number of start-ups rose from about 1 000 in 2014 to nearly 4 000 last year, giving rise to 18 unicorns at last count. Hong Kong is the world's leading fundraising centre for biotechnology companies. At the end of June, 50 pre-revenue, pre-profit biotechnology companies had listed in Hong Kong, raising some HK$114 billion through IPOs.
There's more on the way, ladies and gentlemen. Much more. We are setting up a HK$5 billion Strategic Tech Fund. It will focus on technology enterprises with strategic value, considerable scale and high development potential. We will also roll out a strategic plan for Hong Kong's long-term I&T progress. It will include the San Tin Technopole I&T development, integrating the Hong Kong-Shenzhen Innovation and Technology Park with the neighbouring Lok Ma Chau/San Tin area.
Plans, of course, are one thing. Having the talent to execute and build on these plans is something else entirely. This Summit puts that point in emphatic perspective with its closing session about talent.
World-class education will certainly help get us there. We've got that covered. Hong Kong is the only city in Asia with as many as five universities in the world's top 100, according to the 2023 QS World University Rankings.
We are also looking to attract, and retain, talent from abroad. You will hear more about that in my first Policy Address next week.
As I mentioned earlier on, connectivity is key to Hong Kong's continued success. To that end, I am acutely aware of the community’s concern - of your concern - with our pace in opening up. And I can assure you that maintaining Hong Kong's international connectivity is close to my heart.
That is why we've removed entirely the requirement of hotel quarantine, less than three months since my taking office, and rolled out the "0+3" plan on September 26. We are already seeing a steady growth in arrival and departure figures at the airport. I believe the new arrangement will have a ripple effect on our economic activities, and help to rejuvenate our businesses, industries and, in turn, our city.
While I understand your aspiration of continuing to open up ourselves to the world, I must stress that it is also important to remain prudent in our way forward. Let me tell you why.
The hotel quarantine policy was first put in place in Hong Kong in July 2020. After two years and two months, we shelved this policy, and introduced the "0+3" plan a few weeks ago. This was a big change in our policy to fight the virus. Unavoidably, the change comes with uncertainties. As evidenced in our daily caseload, the number of imported cases in the past two weeks has been on a rise. With the ever-evolving variants and differences in anti-epidemic strategies across different economies and countries, the risks of spreading the virus to our community continue to be imminent, to say the least.
Why do we have to be careful in managing risks? Two reasons. First, we have to protect our high-risk population, especially the elderly and the very young. We are talking about human lives here. We cannot afford to do nothing. We want to reduce the number of critical cases and fatalities as much as we can. Second, we must do our utmost to ensure that our public health system would not be overwhelmed. Our hospitals must continue to provide adequate and efficient healthcare services to the people of Hong Kong.
Currently, the Government is monitoring the trend in caseload, in particular, whether there would be a rebound in our epidemic situation. We have to ensure that the arriving travellers who are subject to medical surveillance and testing strictly adhere to the rules and regulations. Above all, we have to strike a careful balance between protecting public health and ensuring economic activities.
Having said so much about the fight against COVID, let us look forward. There are a lot of exciting moments waiting for us, and for all of Hong Kong, in the months to come.
In three weeks, Hong Kong will host a Global Financial Leaders' Investment Summit, bringing together high-profile businesspeople from more than 100 major financial institutions.
The Hong Kong Rugby Sevens returns next month as well, with a series of much anticipated international matches - and rucks, mauls, tackles and more in the South Stand at Hong Kong Stadium.
That's just the beginning. Hong Kong FinTech Week, the Asia Summit on Global Health, Hong Kong Maritime Week, and the Asia Cultural Co-operation Forum, among many other regional and global gatherings, are on the way.
More than welcoming the world, the Hong Kong SAR Government is committed to creating a flourishing global economy and a vital and inclusive community. I'm confident that what we accomplish over the next five years will set Hong Kong on a rewarding course for the next 25 years and beyond.
Speaking of time, and the rewards it can realise, I would like to close by extending my congratulations to the British Chamber of Commerce in Hong Kong on its 35th anniversary.
Ladies and gentlemen, I know you will enjoy this timely Summit, and I wish you the best of business and health in the coming year.
Ends/Wednesday, October 12, 2022
Issued at HKT 19:12
Issued at HKT 19:12
Audio / Video
CE attends BritCham Hong Kong Summit